Savita Oil RR

Table of Contents

These reports were compiled using a product of Thomson Reuters www.thomsonreuters.com

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Rpt. 17084229 SAVITA OIL TECHNOLOGIES LTD 2 - 10

28-Dec-2010 CNI RESEARCH LIMITED

- SHAH, RITIN


23-Nov-2010 GLOBALDATA

- GLOBALDATA


22-Oct-2010 ANTIQUE STOCK BROKING - AUERBACH GRAYSON

- ANTIQUE STOCK BROKING GILBERT

www.cniglobalbiz.com 28/12/2010

BUY Price 519 Target 683 Implied Upside (%) 31 Sensex 20028 Nifty 5,998 28-12-2010

Stock Details Industry Petrochemical Market Cap (Rs Mn) 7578.4 O/S Shares (Mn) 14.60 Free Float (Mn) 2.49 52 Week H/L 610/367 Face Value (Rs) 10 Bloomberg STEC IN Reuters SAOL.BO BSE Code 524667 NSE Code SOTL

Shareholding Pattern (%) Sept’10 Jun’10 Mar’10 Promoters 71.53 71.53 71.53 Institution 11.38 11.37 11.3 Corp Bodies 2.01 1.69 1.62 Public 15.08 15.41 15.55 Source: BSE

Price Chart

Ritin Shah [email protected] +91-22-28220323

Savita Oil Technologies Ltd Petrochemical Product continue to upstream

Company has started operations in 1961, manufacturing liquid paraffin, an import substitute, for the first time in India at its plant in Bombay. Since then, it has expanded its product profile and is today one of the leading manufacturers of petroleum specialties, which include products such as petroleum sulphonates, transformer oils / white oils and petroleum jellies, among other specialty products. The company has tied up with Japanese oil major, Idemitsu, which will supply the technical know-how to manufacture and market its entire range of automotive and industrial lubricants. It launched the automotive range of lubricants under the Idemitsu brand name in Nov.'94 for this project company came with public issue. The demand for company's product is increasing, for this company has plan to expand its network in Western, Northern and Southern India. SCL has initiated steps for obtaining the ISO 9001 certificate. Company has established of power plant to generate, distribute & Supply electric based on Wind Energy at Satara District, Maharashtra. This power generate plant will be used for captive consumption & also supply to third parties on commercial basis. The Indian lubricant industry comprises primarily of the Automotive, Industrial and Marine Sectors. The lubricant products' demand in these three sectors is determined by the general industrial and economic conditions. The sharp appreciation of Indian rupee has meant fall in landed cost of imports. As a result, the domestic prices are not moving up in line with the global rise in prices. But the players are able to improve their profitability due to strong demand on the one hand, and better delta (excess of product prices over the weighted average cost of inputs).

Financial Highlights Year FY 08 FY 09 FY 10 FY11E FY 12E Net Sales 905.04 1137.89 1167.36 1295.77 1438.30 EBITDA 102.25 49.81 153.47 171.16 190.88 RPAT 61.96 17.23 86.38 96.27 107.64 EPS (Rs) 40.48 10.95 56.68 65.94 73.72 BVPS (Rs) 171.39 177.34 219.02 266.98 320.70 EBITDA M (%) 11.30 4.38 13.15 13.21 13.27 EBIT M (%) 9.71 2.71 11.41 11.49 11.56 PAT M (%) 6.85 1.51 7.40 7.43 7.48 ROE (%) 27.03 6.77 29.85 27.14 25.09 ROCE (%) 23.47 7.40 26.12 23.92 22.43

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Valuation The company has tied up with Japanese oil major, Idemitsu, which will supply the technical know-how to manufacture and market its entire range of automotive and industrial lubricants. It launched the automotive range of lubricants under the Idemitsu brand name in Nov.'94 for this project company came with public issue. At CMP of Rs519, share is trading at 2.37x P/BV FY10 BV, 1.94x P/BV FY11E BV and 1.62x P/BV FY12E BV. At CMP share is available at 5.23x FY10 EV/EBITDA, 4.71x FY11E EV/EBITDA and 4.24x FY12E EV/EBITDA. At CMP of Rs 519, share is trading at 9.16x FY10 EPS, 7.84x FY11E EPS and 7.04x FY12E EPS. At our target of Rs 683, share is trading at 12.05x FY10 EPS, 10.36x FY11E EPS and 9.26x FY12E EPS. For valuation purpose we have considered 5.50x EV/EBIDTA of for calculation of target price. The total valuation of Firm is INR 1049.84 crs and FY12E total expected outstanding debt is INR 79.67 crs and FY11E expected cash is INR 27.35 crs. Fair valuation of equity is INR. 997.52 crs and total no. of outstanding share is 1.46 crs. Each share Fair valuation comes to Rs 683 which is 31% upside from its current level in a medium period. At our target price of Rs 683, share is available at 12.05x FY10 EPS, 10.36x FY11E EPS and 9.26x FY12E EPS. At CMP of Rs 519 we initiate for buying the share for a period on 6 month to 1 year with a target of 683 which is an upside of 31%. We strongly recommend buy. Financial Highlights Year FY 08 FY 09 FY 10 FY11E FY 12E Net Sales 905.04 1137.89 1167.36 1295.77 1438.30 EBITDA 102.25 49.81 153.47 171.16 190.88 RPAT 61.96 17.23 86.38 96.27 107.64 EPS (Rs) 40.48 10.95 56.68 65.94 73.72 BVPS (Rs) 171.39 177.34 219.02 266.98 320.70 EBITDA M (%) 11.30 4.38 13.15 13.21 13.27 EBIT M (%) 9.71 2.71 11.41 11.49 11.56 PAT M (%) 6.85 1.51 7.40 7.43 7.48 ROE (%) 27.03 6.77 29.85 27.14 25.09 ROCE (%) 23.47 7.40 26.12 23.92 22.43 P/BVPS 3.03 2.93 2.37 1.94 1.62 PE @ CMP 12.82 47.40 9.16 7.87 7.04 PE @ Target Price 16.87 62.37 12.05 10.36 9.26 EV/EBITDA @ CMP 7.52 15.75 5.23 4.71 4.24 Valuation EV/EBITDA Multiple 5.50 EBITDA 190.88 Total value of Firm 1049.84 FY12E: DEBT 79.67 FY12E: Cash 27.35 Fair Value of Equity 997.52 No. of Share 1.46 Fair value of share 683.23

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Product of company Transformer Oils, White Oils/Liquid Paraffin’s and Lubricating Oils are the constituents of this Sector for Company. Base Oils which are a refined fraction derived from Crude Oil are the main raw materials for all these products. Company procures these Base Oils predominantly from the international markets and to some extent from the domestic market. The development and growth of the power generation and transmission infrastructure within the country mainly decides the demand for Transformer Oils in India. The demand for Liquid Paraffin’s and White Oils is determined by, the market for cosmetics, pharmaceuticals and personal care products. The Indian lubricant industry comprises primarily of the Automotive, Industrial and Marine Sectors. The lubricant products' demand in these three sectors is determined by the general industrial and economic conditions. After the widespread recession of 2008-09 faced by the global economies, the year 2009-10 witnessed a definite recovery in demand particularly in the Asian economies. In India, most sectors of the economy including industrial production, automotive and industrial sales, etc. Showed resurgence in demand. The Crude Oil prices which had shown extreme volatility in 2008-09 showed signs of moderation in 2009-10, though there was still a steady increase in prices. The Indian Rupee also recovered significantly against the loss it had suffered vis-a-vis USD in the previous year. This revival in the general economy has resulted in growing demand in all sectors of the economy. It appears that this would restore earlier planned investments in power generation, transmission and distribution infrastructure. This augurs well for the demand for Transformer Oil which would show good growth. The growth in the automotive, industrial, and the marine and engineering sectors would decide the growth momentum for the Lubricant Products. With the recession getting out of the mindsets of the general masses, the spending capacity would grow and this augurs well for the market for Liquid Paraffins and White Oils, being essential ingredients of personal care products. Wind Power SOTL added 9.05 MW wind power projects in its portfolio, the highest ever capacity addition in a year. Of these, 3 of 1500 KW each were commissioned in the state of Tamil Nadu and 3 of 1250 KW each and 1 of 800 KW were commissioned in the state of Maharashtra. With this, the total installed capacity in Wind Power Sector of your Company now stands at 43.15MW. During the Year 2009-10, your Company's Wind Power Plants situated in the states of Maharashtra, Karnataka and Tamilnadu generated 64.0 MU against 55.4 MU generated in the previous year. Power is a critical infrastructural component for multidimensional growth and basic human needs. Globally most of the power is produced by using fossil fuels presently. However, due to the global warming potential of the Fossil fuels, every country in the world is making efforts to promote use of green power. Wind power is gaining wider acceptance due to technological improvements, low gestation period and well established network for implementation and is therefore, the fastest growing renewable energy source in the world.

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1 Year Forward PE

1 Year Forward P/BV

Quarterly Highlights

Year Q2 FY10 Q3 FY10 Q4 FY10 Q1 FY11 Q2 FY11 Gross Sales 272.99 299.69 342.34 324.73 368.26 Net Sales 272.99 299.69 342.34 324.73 368.26 Other Operating Income 2.52 4.40 2.59 4.02 4.84 Other Income 1.45 2.35 3.43 1.92 4.02 Total Income 276.96 306.44 348.36 330.67 377.12 Total Expenditure 238.34 268.21 307.54 295.42 324.70 EBITDA 38.62 38.23 40.82 35.25 52.42 Depreciation 5.04 5.07 5.23 6.06 6.31 EBIT 33.58 33.16 35.59 29.19 46.11 Interest 1.44 1.05 1.08 2.18 1.70 PBT 32.14 32.11 34.51 27.01 44.41 Tax 11.40 11.25 5.90 8.70 13.80 Deferred Tax -0.73 -0.40 4.45 0.30 0.60 RPAT 21.47 21.26 24.16 18.01 30.01 EPS (Rs.) 14.83 14.56 16.55 12.33 20.55 EBITDAM (%) 14.15 12.76 11.92 10.86 14.23 EBITM (%) 12.30 11.06 10.40 8.99 12.52 PATM (%) 7.86 7.09 7.06 5.55 8.15

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Industry Detail The market seems to have seen the back of the recession which raised its ugly head in the year 2008-09. Though some or the other bad news for the markets have been trickling in from some European and US markets and some political fronts, still the global economies and especially the Indian economy in particular seem to be well prepared to absorb and digest these problems. Though India cannot operate in isolation from the global economy, growth in India largely depends on the domestic spending and consumption. The present high inflation though could be a bit of a dampener in the India growth story. The various monetary and fiscal policy supports to the economy combined with the continuous measures taken have stabilized the financial system and have had a significant positive impact on the course of the economic events in our country. Though it is difficult to predict the future, the road ahead seems to be much smoother than before. The speedy revival of the Indian economy has, as was expected last year, brought back the consumer demand in almost all sectors. The price of Crude Oil and in turn that of Base Oil seems to be rising since the last 6 months or so and this augurs well for the industries in this sector. As Base Oils are the major raw material for the Company's products, the prices of Base Oils coupled with the demand for Company's products will play a significant role in determining the profitability of the Company. Wind Power Industry India’s peak power capacity deficit is expected to widen in 2010 to 12.6% of total capacity, up from 11.9% last year. This deficit is also enhanced by the inefficiencies in the transmission and distribution systems and electricity theft. Wind power is set to witness large scale technological advantage in turbine design through extensive research and development with new players coming in the market. Wind Industry is set to move from Tax driven to Generation driven industry. In order to achieve energy independence and energy security, Government of India is giving more emphasis on use of renewable power and has set the target to reduce fossil fuel dependence and increase share of renewable energy from present 10% to 27% by 2030. With this objective in mind, two new generation linked schemes have been introduced to give boost to the sector. The Generation Based Incentive (GBI) Scheme is introduced to be applicable to the projects commissioned after December 17, 2009 till March 31, 2012. Up to 4000 MW Wind Power Projects will be entitled for Generation Based Incentive of Rs. 0.50 per unit apart from preferential tariff offered by various State utilities. Central Electricity Regulatory Commission (CERC) has also introduced Renewable Energy Certificates (RECs) from April 1, 2010 in order to make Renewable Purchase Obligations (RPO) mandatory throughout the country. RECs will be traded on CERC approved Power Exchanges which will give additional revenue to Wind Power generators apart from revenue generated from sale of power. Since there are no limits to FDI in the RE sector, many corporate and the foreign investors are expected to set up Renewable Energy projects in India in Independent Power Producer mode (IPP).

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Profit & Loss A/C (INR: Crores) Year FY 08 FY 09 FY 10 FY11E FY 12E Net Sales 905.04 1137.89 1167.36 1295.77 1438.30 Total Income 930.07 1168.66 1194.29 1325.39 1470.89 Total Expenditure 827.82 1118.85 1040.82 1154.23 1280.01 EBITDA 102.25 49.81 153.47 171.16 190.88 EBIT 87.86 30.87 133.16 148.82 166.31 PBT 85.00 26.00 128.49 143.69 160.65 RPAT 61.96 17.23 86.38 96.27 107.64 EPS (Rs) 40.48 10.95 56.68 65.94 73.72 BVPS (Rs) 171.39 177.34 219.02 266.98 320.70 EBITDA M (%) 11.30 4.38 13.15 13.21 13.27 EBIT M (%) 9.71 2.71 11.41 11.49 11.56 PAT M (%) 6.85 1.51 7.40 7.43 7.48 ROE (%) 27.03 6.77 29.85 27.14 25.09 ROCE (%) 23.47 7.40 26.12 23.92 22.43 EV/Sales 0.85 0.69 0.69 0.62 0.56 EV/EBITDA 7.52 15.75 5.23 4.71 4.24 PE 12.82 47.40 9.16 7.87 7.04 P/BVPS 3.03 2.93 2.37 1.94 1.62 Balance Sheet (INR: Crores) Year FY 08 FY 09 FY 10 FY 11E FY 12E Share Capital 14.60 14.60 14.60 14.60 14.60 Reserves Total 235.63 244.32 305.17 375.18 453.62 Total Shareholders’ Funds 250.23 258.92 319.77 389.78 468.22 Total Debt 35.79 52.55 65.84 72.42 79.67 Total Liabilities 286.02 311.47 385.61 462.21 547.89 Gross Block 184.35 236.26 297.61 342.25 379.90 Net Block 111.71 144.76 186.13 208.43 221.50 Capital WIP 12.43 4.54 2.92 3.21 3.53 Investments 55.08 64.06 46.14 50.75 55.83 Inventories 179.72 177.50 229.35 261.46 290.22 Sundry Debtors 210.27 247.22 279.75 307.73 341.57 Cash and Bank 24.70 25.97 20.31 23.93 27.35 Loans and Advances 35.63 42.77 53.29 60.22 68.65 Total Current Assets 450.32 493.46 582.70 653.33 727.79 Current Liabilities 295.74 356.86 366.43 381.09 381.09 Provisions 26.16 8.62 31.18 34.30 37.73 Total Current Liabilities 321.90 365.48 397.61 415.39 418.82 Net Current Assets 128.42 127.98 185.09 237.95 308.97 Net Deferred Tax -21.62 -29.87 -34.67 -38.14 -41.95 Total Assets 286.02 311.47 385.61 462.21 547.89

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Ratio Analysis Profitability Ratio Y e (March) FY08 FY09 FY10E FY11E FY12E EBITDA M (%) 11.30 4.38 13.15 13.21 13.27 EBIT M (%) 9.71 2.71 11.41 11.49 11.56 PAT M (%) 6.85 1.51 7.40 7.43 7.48 ROE (%) 27.03 6.77 29.85 27.14 25.09 ROCE (%) 23.47 7.40 26.12 23.92 22.43

Working Capital & Liquidity Ratio Y e (March) FY08 FY09 FY10E FY11E FY12E Receivable (days) 80.49 73.37 82.38 82.74 82.39 Inventory (days) 69.03 57.29 63.61 69.13 70.00 Current Ratio 1.40 1.35 1.47 1.57 1.74 Quick Ratio 0.84 0.86 0.89 0.94 1.04

Turnover Ratio Y e (March) FY08 FY09 FY10E FY11E FY12E Gross Assets Turnover 5.29 5.41 4.37 4.05 3.98 Total Assets Turnover 3.28 3.81 3.35 3.06 2.85 Interest Coverage ratio 30.72 6.34 28.51 28.97 29.43 Adjusted D/E 0.14 0.20 0.21 0.19 0.17

Valuation Ratio Y e (March) FY08 FY09 FY10E FY11E FY12E EV/Sales 0.85 0.69 0.69 0.62 0.56 EV/EBITDA 7.52 15.75 5.23 4.71 4.24 PE 12.82 47.40 9.16 7.87 7.04 P/BVPS 3.03 2.93 2.37 1.94 1.62

DU-Pont Analysis Y e (March) FY08 FY09 FY10E FY11E FY12E Tax Burden 0.73 0.66 0.67 0.67 0.67 Interest Burden 0.97 0.84 0.96 0.97 0.97 EBIT M 0.10 0.03 0.11 0.11 0.12 Assets T/O 3.28 3.81 3.35 3.06 2.85 Financial Leverage 1.20 1.17 1.20 1.19 1.18 ROE (%) 27.03 6.77 29.85 27.14 25.09

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Valuation Matrix Y e (March) FY08 FY09 FY10E FY11E FY12E PE @ CMP 12.82 47.40 9.16 7.87 7.04 PE @ Target Price 16.87 62.37 12.05 10.36 9.26 EV/EBITDA @ CMP 7.52 15.75 5.23 4.71 4.24 P/Sales @ CMP 0.57 0.46 0.44 0.40 0.36 Sales/PS 619.89 779.38 799.56 887.51 985.14

Recommendation The company has tied up with Japanese oil major, Idemitsu, which will supply the technical know-how to manufacture and market its entire range of automotive and industrial lubricants. It launched the automotive range of lubricants under the Idemitsu brand name in Nov.'94 for this project company came with public issue. At CMP of Rs519, share is trading at 2.37x P/BV FY10 BV, 1.94x P/BV FY11E BV and 1.62x P/BV FY12E BV. At CMP share is available at 5.23x FY10 EV/EBITDA, 4.71x FY11E EV/EBITDA and 4.24x FY12E EV/EBITDA. At CMP of Rs 519, share is trading at 9.16x FY10 EPS, 7.84x FY11E EPS and 7.04x FY12E EPS. At our target of Rs 683, share is trading at 12.05x FY10 EPS, 10.36x FY11E EPS and 9.26x FY12E EPS. For valuation purpose we have considered 5.50x EV/EBIDTA of for calculation of target price. The total valuation of Firm is INR 1049.84 crs and FY12E total expected outstanding debt is INR 79.67 crs and FY11E expected cash is INR 27.35 crs. Fair valuation of equity is INR. 997.52 crs and total no. of outstanding share is 1.46 crs. Each share Fair valuation comes to Rs 683 which is 31% upside from its current level in a medium period. At our target price of Rs 683, share is available at 12.05x FY10 EPS, 10.36x FY11E EPS and 9.26x FY12E EPS. At CMP of Rs 519 we initiate for buying the share for a period on 6 month to 1 year with a target of 683 which is an upside of 31%. We strongly recommend buy.

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Stock Rating Scale Particulars Price Appreciation (%) Strong Buy : >25% Accumulate : 12-25% Hold : 7-12% Reduce : 0- 7% Sell : < 0 %

CNI Research Limited A/120, Gokul Arcade, Sahar Road, Vile Parle (East). Mumbai- 400 057. Tel no. 022 28383889; Fax –022- 28242220

DISCLAIMER STATEMENT This document is provided for assistance only and is not intended to be and must not alone be taken as the basis for an investment decision. Nothing in this document should be construed as investment or financial advice, and nothing in this document is solicitation to buy or sell the securities of companies referred to in this document. The intent of this document is not in recommendary nature. Each recipient of this document should make such investigations as it deems necessary to arrive at an independent evaluation of an investment in the securities of companies referred to in this document (including the merits and risks involved), and should consult its own advisors to determine the merits and risks of such an investment. The investment discussed or views expressed may not be suitable for all investors. The Disclosures of Interest Statement incorporated in this document is provided solely to enhance the transparency and should not be treated as endorsement of the views expressed in the report. This information is subject to change without any prior notice. The Company reserves the right to make modifications and alternations to this statement as may be required from time to time without any prior approval. This document is being supplied to you solely for your information and may not be reproduced, redistributed or passed on, directly or indirectly, to any other person or published, copied, in whole or in part, for any purpose. The distribution of this document in other jurisdictions may be restricted by law, and persons into whose possession this document comes should inform themselves about, and observe, any such restrictions. Neither the Firm, not its directors, employees, agents or representatives shall be liable for any damages whether direct or indirect, incidental, special or consequential including lost revenue or lost profits that may arise from or in connection with the use of the information. Copyright in this document vests exclusively with CNI RESEARCH LTD.

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Savita Oil Technologies Limited (524667) - Financial Analysis Review Reference Code: GDGE32787FA

Source : www.globalcompanyintelligence.com Page 1

Savita Oil Technologies Limited (524667) - Financial Analysis Review

Reference Code: GDGE32787FA Publication Date: NOV 2010

66/67, Nariman Bhavan, 6th Floor, Nariman Point

Phone +91 22 22883061 Revenue 11,780 (million INR)

Mumbai, Maharashtra Fax +91 22 22029364 Net Profit 172.76 (million INR)

400 021 Website www.savita.com Employees NA

India Exchange 524667 [Bombay Stock Exchange]

Industry Energy and Utilities

Company Overview Savita Oil Technologies Limited (Savita Oil) formerly known as Savita Chemicals Ltd. is a petrochemical company. The company is principally engaged in the business of manufacturing and distributing varied range of petrochemicals. Its product portfolio includes liquid paraffin, transformer oil, white oil, petroleum jellies, cable filling compound, emulsifiable polyethylene wax, automotive and industrial lubricants amongst others. The products manufactured by the company have wide industrial applications in pharmaceuticals, cosmetic, plastic, agriculture and veterinary sectors. Savita Oil sells its products in the domestic Indian market.

Key Executives

Name Title

G. N. Mehra Chairman Source: Annual Report, Company Website, Primary and Secondary Research GlobalData

Key Competitors

Name

Himadri Chemicals & Industries Ltd.

Jupiter Bioscience Limited

ICI India Limited

Narmada Chematur Petrochemicals Limited

GeeCee Ventures Limited

Source: Annual Report, Company Website, Primary and Secondary Research GlobalData

Share Data

Savita Oil Technologies Limited

Price (INR) as on 01-Nov-2010 562.30

EPS (INR) 11.83

Market Cap (million INR) 821

Enterprise Value (million INR) 0.00

Shares Outstanding (million) 15Source: Annual Report, Company Website, Primary and Secondary Research GlobalData

Financial Performance


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Table of Contents Table of Contents........................................................................................................................................................................................................... 2 List of Tables.................................................................................................................................................................................................................. 3 List of Figures................................................................................................................................................................................................................. 3 Section 1 - About the Company ..................................................................................................................................................................................... 4 Savita Oil Technologies Limited - Key Facts.................................................................................................................................................................. 4 Savita Oil Technologies Limited - Key Employees......................................................................................................................................................... 5 Savita Oil Technologies Limited - Major Products and Services.................................................................................................................................... 6 Savita Oil Technologies Limited - History ...................................................................................................................................................................... 7 Savita Oil Technologies Limited - Company Statement................................................................................................................................................. 8 Savita Oil Technologies Limited - Locations And Subsidiaries ...................................................................................................................................... 9

Head Office.............................................................................................................................................................................................................. 9 Other Locations & Subsidiaries ............................................................................................................................................................................... 9

Section 2 – Company Analysis .................................................................................................................................................................................... 10 Savita Oil Technologies Limited - Business Description .............................................................................................................................................. 10 Savita Oil Technologies Limited - Key Competitors ..................................................................................................................................................... 11 Section 3 – Company Financial Ratios ........................................................................................................................................................................ 12

Financial Ratios - Capital Market Ratios................................................................................................................................................................ 12 Financial Ratios - Annual Ratios............................................................................................................................................................................ 12 Performance Chart ................................................................................................................................................................................................ 14 Financial Performance........................................................................................................................................................................................... 14 Financial Ratios - Ratio Charts .............................................................................................................................................................................. 15

Section 4 – Appendix ................................................................................................................................................................................................... 16 Methodology .......................................................................................................................................................................................................... 16 Ratio Definitions..................................................................................................................................................................................................... 16 About GlobalData .................................................................................................................................................................................................. 20 Contact Us ............................................................................................................................................................................................................. 20 Disclaimer .............................................................................................................................................................................................................. 20

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List of Tables Savita Oil Technologies Limited, Key Facts .................................................................................................................................................................. 4

Savita Oil Technologies Limited, Key Employees......................................................................................................................................................... 5

Savita Oil Technologies Limited, Major Products and Services.................................................................................................................................... 6

Savita Oil Technologies Limited, History....................................................................................................................................................................... 7

Savita Oil Technologies Limited, Other Locations......................................................................................................................................................... 9

Savita Oil Technologies Limited, Key Competitors ..................................................................................................................................................... 11

Savita Oil Technologies Limited, Ratios based on current share price....................................................................................................................... 12

Savita Oil Technologies Limited, Annual Ratios.......................................................................................................................................................... 12

Currency Codes .......................................................................................................................................................................................................... 16

Capital Market Ratios .................................................................................................................................................................................................. 16

Equity Ratios ............................................................................................................................................................................................................... 17

Profitability Ratios........................................................................................................................................................................................................ 17

Cost Ratios.................................................................................................................................................................................................................. 18

Liquidity Ratios ............................................................................................................................................................................................................ 18

Leverage Ratios .......................................................................................................................................................................................................... 19

Efficiency Ratios.......................................................................................................................................................................................................... 19

List of Figures Savita Oil Technologies Limited, Performance Chart (2005 - 2009)........................................................................................................................... 14

Savita Oil Technologies Limited, Ratio Charts ............................................................................................................................................................ 15

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Section 1 - About the Company

Savita Oil Technologies Limited - Key Facts

Savita Oil Technologies Limited, Key Facts

Corporate Address 66/67, Nariman Bhavan, 6th Floor, Nariman Point, Mumbai, Maharashtra, 400 021, India

Ticker Symbol, Exchange 524667 [Bombay Stock Exchange]

Telephone +91 22 22883061 No. of Employees NA Fax +91 22 22029364 Fiscal Year End March URL www.savita.com Revenue (in USD Million) 241.2 Industry Chemicals, Energy and

Utilities

Revenue (in INR Million) 11,780.1

Locations India Source: Annual Report, Company Website, Primary and Secondary Research GlobalData

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Savita Oil Technologies Limited - Key Employees

Savita Oil Technologies Limited, Key Employees

Name Job Title Board Level Since Age

G. N. Mehra Chairman, Managing Director Executive Board


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Savita Oil Technologies Limited - Major Products and Services

Savita Chemicals is a petrochemical manufacturing company. The key products of the company include the following:

Savita Oil Technologies Limited, Major Products and Services

Products:

Liquid Paraffin

Transformer Oil

White Oil

Petroleum Jellies

Cable Filling Compound

Emulsifiable (Oxidized) Polyethylene Wax

Optic Fibre Cable Filling Compound

Pour Point Depressants

Lubricants

Waxes

Automotive and Industrial Lubricants

Speciality Wax Emulsion

Brands:

SAVONOL

TRANSOL

TECHNOL

SAVOGEL

SAVOFIL

SAVOFLOD

SAVOX BW300

VITAGEL

SAVOFLOW

SAVSOL

SAVOWAX

IDEMITSU


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Savita Oil Technologies Limited - History

Savita Oil Technologies Limited, History

1961 Incorporation/Establishment Savita Chemicals Ltd. was incorporated in the year 1961.


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Savita Oil Technologies Limited - Company Statement A statement by Mr. G. N. Mehra, the Chairman and the Managing Director of Savita Oil Technologies Limited is given below. The statement has been taken frm the company's website. Our founder, N. K. Mehra drew inspiration from the sun - the perpetuality of its radiance, its credibility and the ability to fulfil everybody's requirements. And the strong value system he built became a part of the group's work culture. The spirit to continuously offer value-added products to the market, to build credibility through integrity in thought and action and to venture into new areas to meet unfulfilled customer-requirements, are all contributions of his enduring value system. Imbibing his values and following his vision, our untiring efforts are always towards quality improvement with the help of our strong R&D bias and new technological inputs. This approach has paid us rich dividends by way of total customer satisfaction. The assured consistency of our product quality and a steady investment in Human Resources Development has won us the confidence of our customers, apart from ISO-9001 certification. Finally, we would like to reiterate our promise of total satisfaction to our customers by designing our technology to their needs.

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Savita Oil Technologies Limited - Locations And Subsidiaries

Head Office

Savita Oil Technologies Limited 66/67, Nariman Bhavan 6th Floor, Nariman Point Mumbai Maharashtra 400 021 India Tel: +91 22 22883061 Fax: +91 22 22029364

Other Locations & Subsidiaries

Savita Oil Technologies Limited, Other Locations

LUBES DIVISION

71, Maker Chamber VI, Nariman Point

Mumbai

Maharashtra

400 021

India

Tel: +91 22 22027452

CENTRAL REGION

190, Bharat Nagar, J. K. Road, P.O. Piplani

Bhopal

Madhya Pradesh

462 021

India

Tel: +91 755 757987

EASTERN REGION

209, Acharya Jagdish Chandra Bose Road, Kamani Estate, 4th Floor

Kolkata

West Bengal

700 017

India

Tel: +91 033 2471872

SOUTHERN REGION

Plot No. 7, P&T Colony, Trimulgherry

Hyderabad

Andhra Pradesh

500 015

India

Tel: +91 040 7747880

NOTHERN REGION

1004, Akash Deep, Barkhamba Road

New Delhi

110 001

India

Tel: +91 011 3312447


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Section 2 – Company Analysis

Savita Oil Technologies Limited - Business Description Savita Oil Technologies is an India based petrochemical manufacturing company, which produces and distributes varied range of chemicals from the petroleum. Savita is currently serving as India's largest exporter of petroleum specialities products. Savita Oil operates business in two segments, namely, Petrochemical Products and Wind Power. In the Petrochemical Products segment, the company manufactures and distributes varied range of chemicals from the petroleum. The product portfolio comprises liquid paraffin, transformer oil, lubricating oils and greases, petroleum sulfonates, petroleum jellies and several other specialty petroleum compound chemicals. The products manufactured by the company are sold under varied brand names such as liquid paraffin as SAVONOL, transformer oil as TRANSOL, white oil as TECHNOL, petroleum jellies as SAVOGEL, cable filling compound as SAVOFIL and SAVOFLOD, and emulsifiable polyethylene wax as SAVOX BW300. Furthermore, the company sells several other petrochemicals under various brand names include optic fibre cable filling compound as VITAGEL, pour point depressants as SAVOFLOW, lubricants as SAVSOL, waxes as SAVOWAX, automotive and industrial lubricants as IDEMITSU, and chemicals used for leather finishing, water based paints and printing inks as SPECIALITY WAX EMULSION. These chemicals have wide industrial usage such as liquid paraffin are used in the acetate and rayon processing, egg preservatives, horticulture sprays, pesticides, hair oils etcetera. Cable filling chemical compound produced by the company are used extensively as a filling compound in PIJF copper telephone cables. Emulsifiable polyethylene wax is used for textile finishing that enhance the stitching properties of the fabric, yarn sizing, leather finishing, shoe polish, car polish, floor polish etcetera. Pour point depressants are widely used for transportation of different types of petroleum crude, crank case lubricating oils, adhesives, and etcetera. The segment of the company also provides range of automotive and industrial lubricants in coordination with Idemitsu of Japan. The company also manufactures customized chemical as per the specifications of the customers. In the Wind Power segment, the company engages in providing vast range of oils and lubricants required in wind mills. Savita Oil operates in the domestic market as well as across the globe through well connected distribution channels. It exports its major products across the US, Europe and Asia Pacific. The company offers its products through its three manufacturing plants spread across India, those located at Navi Mumbai, Mahad and Silvassa.

20



Savita Oil Technologies Limited - Key Competitors

Savita Oil Technologies Limited, Key Competitors

Name Headquarters Revenue (US$ m)

GeeCee Ventures Limited India 79

Narmada Chematur Petrochemicals Limited

ICI India Limited India 204

Jupiter Bioscience Limited India 42

Himadri Chemicals & Industries Ltd. India Source: Annual Report, Company Website, Primary and Secondary Research GlobalData

21



Section 3 – Company Financial Ratios

Financial Ratios - Capital Market Ratios

Savita Oil Technologies Limited, Ratios based on current share price

Key Ratios 01-Nov-2010

P/E (Price/Earnings) Ratio 47.52

EV/EBITDA (Enterprise Value/Earnings Before Interest, Taxes, Depreciation and Amortization)

17.84

Enterprise Value/Sales 0.70

Enterprise Value/Operating Profit 30.81

Dividend Yield 0.01Note: Above ratios are based on share price as of 01-Nov-2010, the above ratios are absolute numbers

Source: Annual Report, Company Website, Primary and Secondary Research

GlobalData

Financial Ratios - Annual Ratios

Savita Oil Technologies Limited, Annual Ratios

Key Ratios Unit/Currency 2005 2006 2007 2008 2009

Equity Ratios

EPS (Earnings per Share) INR 20.22 25.64 32.51 42.44 11.83

Dividend per Share INR 6 7.50 9 11.50 5

Dividend Cover Absolute 3.37 3.42 3.61 3.69 2.37

Book Value per Share INR 103.79 120.68 142.66 171.44

Cash Value per Share INR 13 10.51 14.10 17.01

Profitability Ratios

Gross Margin % 20.62 19.57 16.15 19.42 12.84

Operating Margin % 8.49 8.34 7.31 9.25 2.26

Net Profit Margin % 6.03 6.08 5.72 6.74 1.50

Profit Markup % 26.42 24.79 19.82 24.58 14.92

PBT Margin (Profit Before Tax) % 8.49 8.34 7.31 9.25 2.26

Return on Equity % 19.49 21.24 22.79 24.75

Return on Capital Employed % 23.04 24 21.11 27.19

Return on Assets % 9.57 8.63 9.12 9.77

Return on Fixed Assets % 49.93 61.86 50.39 46.25

Return on Working Capital % 42.79 39.21 36.32 65.96

Growth Ratios

Sales Growth % 5.84 25.60 33.56 11.59 25.83

Operating Income Growth % 14.07 23.68 18.08 40.09 -69.36

EBITDA Growth % 14.98 24.54 16.74 40.90 -54.74

Net Income Growth % 4.83 26.76 26.81 30.53 -72.12

EPS Growth % 4.83 26.76 26.81 30.53 -72.12

Working Capital Growth % 0.34 34.97 27.49 -22.86 -100

Cost Ratios

Operating Costs (% of Sales) % 91.51 91.66 92.69 90.75 97.74

Administration Costs (% of Sales) % 1.82 1.47 1.20 1.62 1.11

Liquidity Ratios

22



Current Ratio Absolute 1.76 1.60 1.72 1.40

Quick Ratio Absolute 1.01 0.83 1.02 0.84

Cash Ratio Absolute 0.15 0.07 0.09 0.08

Leverage Ratios

Debt to Equity Ratio % 13.36 15.05 27.91 14.30

Net Debt to Equity % 0.83 6.34 18.02 4.37

Debt to Capital Ratio % 11.23 12.38 20.22 11.45

Efficiency Ratios

Asset Turnover Absolute 1.59 1.42 1.59 1.45

Fixed Asset Turnover Absolute 8.14 8.92 7.96 7.43

Inventory Turnover Absolute 4.01 2.90 4.16 4.04

Current Asset Turnover Absolute 2.17 1.76 2.07 2.04

Capital Employed Turnover Absolute 3.23 3.50 3.98 3.67

Working Capital Turnover Absolute 5.04 4.70 4.97 7.13

Capex to Sales % 4.03 2.96 5.50 3.74 Source: Annual Report, Company Website, Primary and Secondary Research GlobalData

23



Performance Chart

Savita Oil Technologies Limited, Performance Chart (2005 - 2009)


Financial Performance

The company reported revenues of (Rupee) INR 11,507.58 million during the fiscal year ended March 2009, an increase of 25.22% over 2008. The operating profit of the company was INR 260.46 million during the fiscal year 2009, a decrease of 69.36% from 2008. The net profit of the company was INR 172.76 million during the fiscal year 2009, a decrease of 72.12% from 2008.

24



Financial Ratios - Ratio Charts

Savita Oil Technologies Limited, Ratio Charts

EPS

Operating Margin

Return on Equity

Return on Assets

Debt to Equity Ratio

Current Ratio

Source: Annual Report, Company Website, Primary and Secondary Research

GlobalData

25



Section 4 – Appendix

The data and analysis within this report is driven by Global Markets & Companies. Global Markets & Companies gives you key information to drive sales, investment and deal making activity in your business. Our coverage includes 140,000+ reports on 125,000+ companies (including 85,000+ private) across 200+ countries and 29 industries. The key industries include Alternative Energy, Oil & Gas, Clean Technology, Technology and Telecommunication, Pharmaceutical and Healthcare, Power, Financial Services, Chemical and Metal & Mining.

Methodology

GlobalData company reports are based on a core set of research techniques which ensure the best possible level of quality and accuracy of data. The key sources used include:

Company Websites Company Annual Reports SEC Filings Press Releases Proprietary Databases

Currency Codes

Currency Code Currency

INR Rupee GlobalData

Ratio Definitions

Capital Market Ratios

Capital Market Ratios measure investor response to owning a company's stock and also the cost of issuing stock. Price/Earnings Ratio (P/E)

Price/Earnings (P/E) ratio is a measure of the price paid for a share relative to the annual income earned per share. It is a financial ratio used for valuation: a higher P/E ratio means that investors are paying more for each unit of income, so the stock is more expensive compared to one with lower P/E ratio. A high P/E suggests that investors are expecting higher earnings growth in the future compared to companies with a lower P/E. Price per share is as of previous business close, and EPS is from latest annual report.

Calculation: Price per Share / Earnings per Share Enterprise Value/Earnings before Interest, Tax, Depreciation & Amortization (EV/EBITDA)

Enterprise Value/EBITDA (EV/EBITDA) is a valuation multiple that is often used in parallel with, or as an alternative to, the P/E ratio. The main advantage of EV/EBITDA over the PE ratio is that it is unaffected by a company's capital structure. It compares the value of a business, free of debt, to earnings before interest. Price per share is as of previous business close, and shares outstanding last reported. Other items are from latest annual report.

Calculation: (Market Cap + Debt + Preferred Stock - Cash & Cash Equivalents) / (Net Income + Interest + Tax + Depreciation + Amortization)

Enterprise Value/Sales

Enterprise Value/Sales (EV/Sales) is a ratio that provides an idea of how much it costs to buy the company's sales. EV/Sales is seen as more accurate than Price/Sales because market capitalization does not take into account the amount of debt a company has, which needs to be paid back at some point. Price per share is as of previous business close, and shares outstanding last reported. Other items are from latest annual report.

Calculation: (Market Cap + Debt + Preferred Stock - Cash & Cash Equivalents) / Sales Enterprise Value/Operating Profit

Enterprise Value/Operating Profit measures the company's enterprise value to the operating profit. Price per share is as of previous business close, and shares outstanding last reported. Other items are from latest annual report.

Calculation: (Market Cap + Debt + Preferred Stock - Cash & Cash Equivalents) / Operating Income Enterprise Value/Total Assets

Enterprise Value/Total Assets measures the company's enterprise value to the total assets. Price per share is as of previous business close, and shares outstanding last reported. Other items are from latest annual report.

26



Calculation: (Market Cap + Debt + Preferred Stock - Cash & Cash Equivalents) / Total Assets Dividend Yield

Dividend Yield shows how much a company pays out in dividends each year relative to its share price. In the absence of any capital gains, the dividend yield is the return on investment for a stock.

Calculation: Annual Dividend per Share / Price per Share GlobalData

Equity Ratios

These ratios are based on per share value. Earnings per Share (EPS)

Earnings per share (EPS) is the portion of a company's profit allocated to each outstanding share of common stock. EPS serves as an indicator of a company's profitability. Calculation: Net Income / Weighted Average Shares

Dividend per Share

Dividend is the distribution of a portion of a company's earnings, decided by the board of directors, to a class of its shareholders.

Dividend Cover

Dividend cover is the ratio of company's earnings (net income) over the dividend paid to shareholders. Calculation: Earnings per share / Dividend per share

Book Value per Share

Book Value per Share measure used by owners of common shares in a firm to determine the level of safety associated with each individual share after all debts are paid accordingly. Calculation: (Shareholders Equity - Preferred Equity) / Outstanding Shares

Cash Value per Share

Cash Value per Share is a measure of a company's cash (cash & equivalents on the balance sheet) that is determined by dividing cash & equivalents by the total shares outstanding. Calculation: Cash & equivalents / Outstanding Shares

GlobalData

Profitability Ratios

Profitability Ratios are used to assess a company's ability to generate earnings, based on revenues generated or resources used. For most of these ratios, having a higher value relative to a competitor's ratio or the same ratio from a previous period is indicative that the company is doing well. Gross Margin

Gross margin is the amount of contribution to the business enterprise, after paying for direct-fixed and direct-variable unit costs. Calculation: {(Revenue-Cost of revenue) / Revenue}*100

Operating Margin

Operating Margin is a ratio used to measure a company's pricing strategy and operating efficiency.Calculation: (Operating Income / Revenues) *100

Net Profit Margin

Net Profit Margin is the ratio of net profits to revenues for a company or business segment - that shows how much of each dollar earned by the company is translated into profits. Calculation: (Net Profit / Revenues) *100

Profit Markup

Profit Markup measures the company's gross profitability, as compared to the cost of revenue. Calculation: Gross Income / Cost of Revenue

PBIT Margin (Profit Before Interest & Tax)

Profit Before Interest & Tax Margin shows the profitability of the company before interest expense & taxation. Calculation: {(Net Profit+Interest+Tax) / Revenue} *100

PBT Margin (Profit Before Tax)

Profit Before Tax Margin measures the pre-tax income over revenues. Calculation: {Income Before Tax / Revenues} *100

Return on Equity Return on Equity measures the rate of return on the ownership interest (shareholders' equity) of the common stock owners. Calculation: (Net Income / Shareholders Equity)*100

Return on Capital Employed

Return on Capital Employed is a ratio that indicates the efficiency and profitability of a company's capital investments. ROCE should always be higher than the rate at which the company borrows; otherwise any increase in borrowing will reduce shareholders' earnings. Calculation: EBIT / (Total Assets – Current Liabilities)*100

27



Return on Assets

Return on Assets is an indicator of how profitable a company is relative to its total assets, the ratio measures how efficient management is at using its assets to generate earnings. Calculation: (Net Income / Total Assets)*100

Return on Fixed Assets

Return on Fixed Assets measures the company's profitability to its fixed assets (property, plant & equipment). Calculation: (Net Income / Fixed Assets) *100

Return on Working Capital

Return on Working Capital measures the company's profitability to its working capital. Calculation: (Net Income / Working Capital) *100

GlobalData

Cost Ratios

Cost ratios help to understand the costs the company is incurring as a percentage of sales. Operating costs (% of Sales)

Operating costs as percentage of total revenues measures the operating costs that a company incurs compared to the revenues. Calculation: (Operating Expenses / Revenues) *100

Administration costs (% of Sales)

Administration costs as percentage of total revenue measures the selling, general and administrative expenses that a company incurs compared to the revenues. Calculation: (Administrative Expenses / Revenues) *100

Interest costs (% of Sales)

Interest costs as percentage of total revenues measures the interest expense that a company incurs compared to the revenues. Calculation: (Interest Expenses / Revenues) *100

GlobalData

Liquidity Ratios

Liquidity ratios are used to determine a company's ability to pay off its short-terms debts obligations. Generally, the higher the value of the ratio, the larger the margin of safety that the company possesses to cover short-term debts. A company's ability to turn short-term assets into cash to cover debts is of the utmost importance when creditors are seeking payment. Bankruptcy analysts and mortgage originators frequently use the liquidity ratios to determine whether a company will be able to continue as a going concern. Current Ratio

Current Ratio measures a company's ability to pay its short-term obligations. The ratio gives an idea of the company's ability to pay back its short-term liabilities (debt and payables) with its short-term assets (cash, inventory, receivables). The higher the current ratio, the more capable the company is of paying its obligations. A ratio under 1 suggests that the company would be unable to pay off its obligations if they came due at that point. Calculation: Current Assets / Current Liabilities

Quick Ratio

Quick ratio measures a company's ability to meet its short-term obligations with its most liquid assets. Calculation: (Current Assets - Inventories) / Current Liabilities

Cash Ratio

Cash ratio is the most stringent and conservative of the three short-term liquidity ratio. It only looks at the most liquid short-term assets of the company, which are those that can be most easily used to pay off current obligations. It also ignores inventory and receivables, as there are no assurances that these two accounts can be converted to cash in a timely matter to meet current liabilities. Calculation: {(Cash & Bank Balance + Marketable Securities) / Current Liabilities)}

GlobalData

28



Leverage Ratios

Leverage ratios are used to calculate the financial leverage of a company to get an idea of the company's methods of financing or to measure its ability to meet financial obligations. There are several different ratios, but the main factors looked at include debt, equity, assets and interest expenses. Debt to Equity Ratio

Debt to Equity Ratio is a measure of a company's financial leverage. The debt/equity ratio also depends on the industry in which the company operates. For example, capital-intensive industries tend to have a higher debt-equity ratio. Calculation: Total Liabilities / Shareholders Equity

Debt to Capital Ratio

Debt to capital ratio gives an idea of a company's financial structure, or how it is financing its operations, along with some insight into its financial strength. The higher the debt-to-capital ratio, the more debt the company has compared to its equity. This indicates to investors whether a company is more prone to using debt financing or equity financing. A company with high debt-to-capital ratios, compared to a general or industry average, may show weak financial strength because the cost of these debts may weigh on the company and increase its default risk. Calculation: {Total Debt / (Total assets - Current Liabilities)}

Interest Coverage Ratio

Interest Coverage Ratio is used to determine how easily a company can pay interest on outstanding debt, calculated as earnings before interest & tax by interest expense. Calculation: EBIT / Interest Expense

GlobalData

Efficiency Ratios

Efficiency ratios measure a company's effectiveness in various areas of its operations, essentially looking at maximizing its use of resources. Fixed Asset Turnover

Fixed Asset Turnover ratio indicates how well the business is using its fixed assets to generate sales. A higher ratio indicates the business has less money tied up in fixed assets for each currency unit of sales revenue. A declining ratio may indicate that the business is over-invested in plant, equipment, or other fixed assets. Calculation: Net Sales / Fixed Assets

Asset Turnover

Asset turnover ratio measures the efficiency of a company's use of its assets in generating sales revenue to the company. A higher asset turnover ratio shows that the company has been more effective in using its assets to generate revenues. Calculation: Net Sales / Total Assets

Current Asset Turnover

Current Asset Turnover indicates how efficiently the business uses its current assets to generate sales. Calculation: Net Sales / Current Assets

Inventory Turnover

Inventory Turnover ratio shows how many times a company's inventory is sold and replaced over a period. A low turnover implies poor sales and, therefore, excess inventory. A high ratio implies either strong sales or ineffective buying. Calculation: Cost of Goods Sold / Inventory

Working Capital Turnover

Working Capital Turnover is a measurement to compare the depletion of working capital to the generation of sales. This provides some useful information as to how effectively a company is using its working capital to generate sales. Calculation: Net Sales / Working Capital

Capital Employed Turnover

Capital employed turnover ratio measures the efficiency of a company's use of its equity in generating sales revenue to the company. Calculation: Net Sales / Shareholders Equity

Capex to sales

Capex to Sales ratio measures the company's expenditure (investments) on fixed and related assets' effectiveness when compared to the sales generated. Calculation: (Capital Expenditure / Sales) *100

Net income per Employee

Net income per Employee looks at a company's net income in relation to the number of employees they have. Ideally, a company wants a higher profit per employee possible, as it denotes higher productivity. Calculation: Net Income / No. of Employees

29



Revenue per Employee

Revenue per Employee measures the average revenue generated per employee of a company. This ratio is most useful when compared against other companies in the same industry. Generally, a company seeks the highest revenue per employee. Calculation: Revenue / No. of Employees

Efficiency Ratio

Efficiency Ratio is used to calculate a bank's efficiency. An increase means the company is losing a larger percentage of its income to expenses. If the efficiency ratio is getting lower, it is good for the bank and its shareholders. Calculation: Non-interest expense / Total Interest Income

GlobalData

Notes

Financial information of the company is taken from the most recently published annual reports or SEC filings The financial and operational data reported for the company is as per the industry defined standards Revenue converted to USD at average annual conversion rate as of fiscal year end

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30

www.agco.com | login request

STERLITE TECHNOLOGIES HOLD 2QFY2011 RESULTS REVIEW

• Revenues for 2QFY11 rose 9% YoY to INR5.1bn. Sales from the Power Transmission business were flat YoY at INR3.3bn while Telecom Solutions contributed INR1.8bn (+31%).

• Volumes and revenues in the Power Transmission business were flat on

account of a lower tendering by customers. Volumes in the telecom solutions business witnessed a 15% jump in OF and OFC volumes, while realisations across product line rose in a range of 10-14%. As a result, income from this segment improved by 31% YoY.

• PBIT margins in the telecom vertical dipped due to higher fixed costs and

expenses incurred for stabilisation of new capacities while those of the power conductor business declined marginally on account of inventory carrying costs and lower margins on orders in hand.

• Interest costs in 2QFY11 were 8% lower YoY at INR92m on account of lower

term debt. After lower tax provisioning (19% v/s 21%); STL’s PAT rose 5% to INR576m.

• In the OF space, STL is expanding its capacity from 12m km to ~ 20m km by

the end of FY12e at an outlay of INR2.5bn. Of this, INR1.5bn will be expended in FY11e and the remainder in FY12e. The entire exercise is being funded through internal accruals.

• Additionally, the company has firmed up plans to increase its OFC capacity

from 3m Fkm to 6m Fkm in the next 12-18 months at a cost of INR400m. This too, will be accomplished through internal accruals.

• The international demand for OFC is picking up dramatically with bandwidth

demand doubling every 16 months (vs. 24 months prior to CY08). Global demand is currently the strongest in China, with visibility emerging from countries like Britain, Brazil, Malaysia and Australia.

• We maintain our revenue, EBIDTA and profit estimates for FY12e but have

marginally lowered our estimates for FY11e.

• At the CMP of INR95, STL is trading at a P/E of 11x and EV/EBIDTA of 6.9x discounting its FY11e numbers.

YE MAR Sales

(INR m) EBITDA (INR m)

PAT (INR m)

EPS (INR)

PER (X)

EV/EBITDA (X)

2012E 35,677.00 4,932.00 3,227.00 8.60 11.10 6.90 2011E 29,408.00 4,311.00 2,718.00 7.30 13.10 8.30 2010A 24,316.00 3,810.00 2,461.00 6.60 13.80 8.50 2009A 22,892.00 2,320.00 902.00 2.40 17.10 7.90

October 22, 2010

Price: INR 91.00

India [Communications

Equipment] Bloomberg: [SOTL IN]

Market Cap:

USD 671.00 m Outstanding Shares:

356.20 m Six Month Avg.

Daily Trading Vol. (USD m): 3.14

52 Week High/Low:

INR 124.20 / INR 51.20

Asian Sales

John Burge Head of Global Client Relations

[email protected] 212-453-3528

Charlie Gushee Head of Global Equity Sales


Richard Kim [email protected] 212-453-3543

Anshuman Ray [email protected] 212-453-3546

Abhijit Kukreja [email protected]

212-453-3520 Ailsa Carpenter


Alice Fricke [email protected]

212-453-3561

Trading 212-557-4444

Garth Ballantyne Head of Trading

[email protected]

Asian Trading

Geoffrey Gimber [email protected]

David Sweet [email protected]

Selim Sari [email protected]

Mike LoPiano [email protected]

Anthony Santostefano South Asian Trading

[email protected]

John Geron U.S. Trading

[email protected]

Also view Auerbach Grayson Research on Reuters, Bloomberg, FirstCall, FactSet, CapitalIQ, and TheMarkets.com

This report has been prepared by our correspondent named above on the date set forth above. This report was not prepared by Auerbach Grayson & Company and the correspondent named above is not an associated person of Auerbach Grayson & Company. The correspondent named above and its research analysts are not members of the Financial Industry Regulatory Authority and are not subject to the FINRA Rules on Research Analysts and Research Reports and the attendant restrictions and required disclosures required by that rule.[If the report is to be distributed to more than major U. S. Institutional Investors Auerbach Grayson & Company accepts responsibility for the contents of this report as provided for in SEC Releases and SEC staff no-action letters.] All persons receiving this report and wishing to buy or sell any of the securities discussed herein should do so through a representative of Auerbach Grayson & Company. Auerbach Grayson & Company and its affiliates do not own one per cent (1%) or more of any class of equity securities issued by any of the companies discussed in this report. Auerbach Grayson & Company and its affiliates have not received any investment banking compensation from any of the issuers discussed in this report in the past twelve months, and does not intend to seek or expect to receive investment banking compensation from any of the issuers discussed in this report in the next three (3) months. Auerbach Grayson & Company has not acted as manager or co-manager of any public offering of securities issued by any of the companies discussed in this report in the past three (3) years. Neither Auerbach Grayson & Company nor any of its officers own options, rights or warrants to purchase any of the securities of the issuers whose securities are discussed in this report. Auerbach Grayson & Company does not make a market in any of the securities discussed in this report, and it and its associated persons do not stand ready to buy from or sell to any customers, as principal, any of the securities discussed in this report.

31

Antique Stock Broking Limited 1 1

Antique’s Morning Presentation (AMP) October 22, 2010

Sterlite Technologies Limited: 2QFY11 results review - Muted performance, maintain HOLD

Amol Rao, +91 22 4031 3435, [email protected]

HOLD CMP: INR91 Target Price: INR97 Potential Upside: 7%

Key highlightsRevenues for 2QFY11 rose 9% YoY to INR5.1bn. Sales from the Power Transmissionbusiness were flat YoY at INR3.3bn while Telecom Solutions contributed INR1.8bn (+31%).

Volumes and revenues in the Power Transmission business were flat on account of alower tendering by customers. Volumes in the telecom solutions business witnessed a15% jump in OF and OFC volumes, while realisations across product line rose in arange of 10-14%. As a result, income from this segment improved by 31% YoY.

Operational performance

Telecom Solutions Power Transmission

Volumes Increment Volumes Increment

Sales 2.3m Fkm 15% 27,000 MT 0%

PBIT margins (%) 23.5 (170bps) 12.0 (200bps)

Source: Company, Antique

PBIT margins in the telecom vertical dipped due to higher fixed costs and expensesincurred for stabilisation of new capacities while those of the power conductor businessdeclined marginally on account of inventory carrying costs and lower margins on ordersin hand.

Interest costs in 2QFY11 were 8% lower YoY at INR92m on account of lower term debt.After lower tax provisioning (19% v/s 21%); STL’s PAT rose 5% to INR576m.

STL’s order book currently stands at INR22bn, with ~INR16bn being accounted for bypower conductors and the remainder by telecom products and solutions. INR3.5bn ofthese orders are for international markets. Most of the order book is to be executed overthe next 2 quarters.

Quarterly financials

INRm 2QFY11 2QFY10 Chg (%)

Net sales 5,094 4,658 9.4

EBITDA 906 888 1.9

EBITDA margin (%) 17.8 19.1 (1.3)

PAT 576 547 5.3

EPS (INR) 1.6 1.5 5.1

Source: Company, Antique

Segmental financials

2QFY11 2QFY10 Chg (%)

Net revenues (INRm)

Power transmission business 3,304 3,294 0.3

Telecom products & solutions 1,790 1,365 31.2

Net revenues (incl. other income) 5,094 4,658 9.4

Segment PBIT (INRm)

Power transmission business 385 448 (14.1)

Telecom products & solutions 420 344 22.1

Total PBIT 805 792 1.6

PBIT margin (%)

Power transmission business 11.6 13.6

Telecom products & solutions 23.5 25.2

Total PBIT margin 15.8 17.0

RoCE (%)

Power transmission business 16.8 33.0

Telecom products & solutions 19.3 19.9

Total RoCE 17.7 26.0Source: Company, Antique

32

Antique Stock Broking Limited 1 2

Antique’s Morning Presentation (AMP) October 22, 2010

Future plansIn the OF space, STL is expanding its capacity from 12m km to ~ 20m km by the end ofFY12e at an outlay of INR2.5bn. Of this, INR1.5bn will be expended in FY11e andthe remainder in FY12e. The entire exercise is being funded through internal accruals.

Additionally, the company has firmed up plans to increase its OFC capacity from 3mFkm to 6m Fkm in the next 12-18 months at a cost of INR400m. This too, will beaccomplished through internal accruals.

Lastly, STL is contemplating an expansion of its Power Transmission Business through acapacity addition of 40,000MT at a cost of INR800m.

The UMTP project secured by the company (2 X 462km, 400KVA, and running throughthree states) is expected to entail an investment of INR10bn till FY13e, which STL isexpected to fund in a DER of 4:1.

STL will be investing INR500m in the project in FY11, with another INR1bn beinginfused through debt. The company is in the process of achieving financial closure forthe UMTP project and is simultaneously in talks with several SEBs. It is targeting an IRRof 15-20% from this project.

Business outlookTelecom products & solutions

The international demand for OFC is picking up dramatically with bandwidth demanddoubling every 16 months (vs. 24 months prior to CY08). Global demand is currentlythe strongest in China, with visibility emerging from countries like Britain, Brazil, Malaysiaand Australia.

On the domestic front, the defence forces have outlined plans for 60,000kms of OFC,which should result in crystallisation of 3m Fkms of orders. BSNL is scheduled to tenderfor its ambitious rural connectivity program which should result in 0.5m Fkm of demandin FY11e. This demand is set to crystallise into firm orders from 2HFY11.

Power cables

With bulk of capex in the power segment now focused on the generation side, demandfor T&D infrastructure is yet to materialise. Presently, the demand from this segment is forupgrading existing grid infrastructure as well as new lines.

Potential power cable orders from PGCIL (to the tune of INR64bn over the next fiveyears) will be converted into firm Purchase Orders (POs) from FY11 onwards. However,a change in the evaluation process has resulted in a delay in bids being awarded.

Valuation and outlookWe maintain our revenue, EBIDTA and profit estimates for FY12e but have marginallylowered our estimates for FY11e.

At the CMP of INR95, STL is trading at a P/E of 11x and EV/EBIDTA of 6.9x discountingits FY11e numbers.

We feel a lack of traction in the power cables industry coupled with a ramp up incapacities will result a muted performance of company in FY11. While the prospectsfor growth in FY12e are bright, we have adopted a cautious approach and hencereiterate our HOLD recommendation on the stock with a price target of INR97. We willre-visit the same in case of any significant development in the macro environment.

Financials

Year ended 31st March 2009 2010 2011e 2012eNet revenue (INRm) 22,892 24,316 29,408 35,677EBITDA (INRm) 2,320 3,810 4,311 4,932EBITDA growth (%) 20.1 64.2 13.2 14.4PAT (INRm) 902 2,461 2,718 3,227PAT growth (%) (10.5) 172.9 10.4 18.7EPS (INR/share) 2.4 6.6 7.3 8.6EPS growth (%) (10.5) 172.9 10.4 18.7PE (x) 17.1 13.8 13.1 11.1PB (x) 2.5 3.7 2.9 2.3EV/Sales (x) 1.3 0.8 1.4 1.2EV/EBIDTA (x) 7.9 8.5 8.3 6.9RoE (%) 15.5 32.0 25.1 23.1Source: Company, Antique

Sterlite Technologies Limited: 2QFY11 results review - Muted performance, maintain HOLD

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Trading:Operations:

Auerbach Grayson & Company Incorporated 25West 45th Street New York, NY 10036Telephone: (212) 557-4444 800 31-WORLD facsimile (212) 557-9066 www.agco.com

[email protected]

(212) 557-4444(212) 557-4478

Jonathan L. Auerbach (212) 453-3535David S. Grayson (212) 453-3553

Sales:

Abhijit Kukreja, South Asian Sales [email protected] (212) 453-3520John Burge, Head of Global Client Relationships [email protected] (212) 453-3528Charlie Gushee, Head of Global Equity Sales [email protected] (212) 453-3511

Alexander Doncov, EMEA Sales [email protected] (212)453-3509

Johan Lundin, Western European Sales [email protected] (212)453-3531

Ailsa Carpenter, GEM Sales [email protected] (212)453-3507

Alice Fricke, Asia Sales [email protected] (212) 453-3561Anshuman Ray, South Asian Sales [email protected] (212) 453-3546

Kristian Persson, Western European Sales [email protected] (212) 453-3540Michael Daoud, MENA Sales [email protected] (212) 453-3586

Mike LoPiano, Asia Trading [email protected] (212) 453-3508

Kate Korolkevich, Urainian Sales [email protected] (212) 453-3562

Reitze Oenema, Western European Sales [email protected] (212) 453-3574Oskar Rundolf, Western European Sales [email protected] (212) 453-3510

Richard Kim, South Korean Sales [email protected] (212) 453-3543Rene Saner, Swiss Sales [email protected] (212) 453-3526

Trading:

Information Systems & Research Services:

Operations:Frank Muller, Global Operations [email protected] (212) 453-3518

Isaac Matzner, Research Coordinator [email protected] (212) 453-3549Richard Ross, Technical Research [email protected] (212) 453-3575

Ismael Sadek, Information Technology [email protected] (212) 453-3512

Steve Pollicino, Asian Trading [email protected] (212) 557-4444Selim Sari, EMEA Trading [email protected] (212) 557-4444Sarkis Iliozer, EMEA Trading [email protected] (212) 557-4444

John Geron, U.S. Trading [email protected] (212) 557-4444Humberto Cruz, LATAM Trading [email protected] (212) 557-4444Harold Warren, Russian Trading [email protected] (212) 557-4444Geoffrey Gimber, Asian Trading [email protected] (212) 557-4444Garth Ballantyne, European Trading [email protected] (212) 557-4444David Sweet, Trading [email protected] (212) 557-4444Danielle Simon, Trading [email protected] (212) 557-4444Anthony Santostefano, Trading [email protected] (212) 557-4444

Ugur Sarman, Turkish Sales [email protected] (212) 453-3589Zoran Milojevic, EMEA Sales [email protected] (212) 453-3563

Thomas Furda, Russian Sales [email protected] (212) 453-3585

Simon Mandel, EMEA Sales [email protected] (212) 453-3571Stephan Lueck, Austrian & German Sales [email protected] (212) 453-3538

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