Sep 6, 2017 - solution. Its services range from global sourcing, manufacturing, quality ... (backward integration in mob
INSTITUTIONAL EQUITY RESEARCH
Dixon Technologies Ltd Piggybacking on the consumer durable story INDIA | MID- CAP | IPO Note Dixon Technologies (Dixon) is the largest home-grown design-focused and solutions company engaged in manufacturing of consumer durables, lighting and mobile phones. It also provides solutions in reverse logistics i.e. repair and refurbishment. The company is leading manufacturer of lighting products (CFL & LED), FPD TVs and semi-automatic washing machines with market share of 39%, 50% and 43% respectively in India. Dixon is one of the most profitable companies in the domestic consumer durable manufacturing industry. In FY17, its revenues/EBITDA/PAT was Rs 24.5bn/922mn/504mn, with strong balance sheet (D/E 0.2x) and cash flow – having ROCE and ROE of 32% /26% with FCF generation of Rs 170mn. About company Incorporated in January 15, 1993, Dixon – is fully integrated end to end product and solution. Its services range from global sourcing, manufacturing, quality testing and packaging. The company has six state-of-the-art manufacturing units in Noida and Dehradun. It has in-house capability for panel assembly, PCB assembly, wound components, sheet metal and plastic moulding. IPO rationale: Raising funds for offer for sale & capex Dixon is raising Rs 6.0bn through this IPO offer from sale by Strategic investors & promoter (Rs 5.4bn), to meet part of its capex requirement (Rs 271mn) and repayment of debt (Rs 220mn). At the IPO price band of Rs 1760‐1766, the stock trades at 40x FY17 PE. Key strengths: Market leader in key product verticals Healthy relationship with top-tier customers One Stop Shop - End to End solution provider Improving margins through 1) New product addition 2) focussing more on ODM Increasing reverse logistics - Higher potential & healthy return ratios Improving Product base with existing and new customers Strong balance Sheet and Cash flows
6 September 2017
SUBSCRIBE COMPANY DATA ISSUE OPENS ISSUE CLOSES PRE- ISSUE EQUITY SHARES - LOWER BAND - UPPER BAND PRICE BAND - FRESH ISSUE - OFS NO OF SHARES TO BE ISSUED RETAIL AND EMPL SHARE (%) ISSUE SIZE POST- ISSUE EQUITY SHARES MKT CAP
06-September-2017 08-September-2017 11.0mn Rs 1760 Rs 1766 Rs 1760 - 1766 0.34mn 3.1mn 3.4mn 35% Rs 5.97-6bn 11.3mn Rs 19.9-20bn
Consolidated Financials Y/E Mar, Rs mn Net Sales Operating Profit PAT RoCE(%) ROE(%) P/E@Rs 1,766
FY14 FY15 FY16 FY17 10,937 12,013 13,894 24,568 260 322 588 907 136 119 427 504 13.7 15.4 24.8 32.1 18.4 14.0 34.7 25.5 147.2 168.7 46.9 39.7
Key risks 1) Dependency on few customers (Top two customers contribute ~59% of revenue – Panasonic~38% & Philips~20%) 2) Low entry barriers and lower bargaining power from customer 3) Volatility in commodity prices Our view: The company has a strong business model with healthy balance sheet and cash flow. It has reported revenue and earning CAGR of 34% and 78% over FY13 to FY17. With increasing product portfolio and services (Camera, reverse logistics) and margin improvement (backward integration in mobile phone, increasing ODM share), we expect a revenue and PAT CAGR of 16%/33% over next 2 years (FY17 to FY19). At upper band of the price Rs 1,766 stock is at PE of 26x/23x/ discounting FY18 and FY19 numbers and generating FCF of ~ Rs 950mn (over next 2 year) with the strong ROCE and ROE of 30%/21% in FY19e. We like the business model (lower working capital, higher return ratios) as well as the company is well placed to capitalize the growing consumption pattern in consumer durables and appliances. We recommend “Subscribe”.
Page | 1 | PHILLIPCAPITAL INDIA RESEARCH
Deepak Agarwal (+ 9122 6246 4112)
[email protected]
DIXON TECHNOLOGIES IPO NOTE
About the IPO
Issue size of Rs 5.9 – 6.0bn with 3.4mn shares at a price band of Rs 1760‐1766 per share. Issue includes 3.1mn shares offered for sale by strategic investors, promoter & management and fresh issue of 0.3mn shares. Market capitalisation at price band: Rs 19.9‐20.0bn.
Dixon - Issue details ISSUE OPENS ISSUE CLOSES PRE- ISSUE EQUITY SHARES - LOWER BAND 1 - UPPER BAND PRICE BAND - FRESH ISSUE - OFS NO OF SHARES TO BE ISSUED RETAIL AND EMPLOYEE SHARE (%) ISSUE SIZE POST- ISSUE EQUITY SHARES MKT CAP
06-September-2017 08-September-2017 11.0mn Rs 1760 Rs 1766 Rs 1760 - 1766 0.34mn 3.1mn 3.4mn 35% Rs 5.97-6bn 11.3mn Rs 19.9-20bn
Source: RHP, PhillipCapital India Research
Share holding pattern Pre-issue Management & others 25%
Share holding pattern post-issue Other public 32% Promoters 46%
Promoters 39%
Strategic invetors 29%
Management & others 18%
Strategic invetors 11%
Source: RHP, PhillipCapital India Research
Of the Rs 600mn proceeds from the fresh issue, Rs 220mn will be utilised for debt payment, Rs 76mn for setting up LED facility at Tirupati and Rs 106mn for upgrading IT infra.
Net proceeds will be used for Rs mn Repayment of borrowings Manufacturing facility of LED TVs at the Tirupati Enhancement lighting products at Dehradun Upgrading IT infra. General corporate purposes * Total
FY18 220 76 89 53 109 547
FY19 53 53
Source: RHP, PhillipCapital India Research, Note: On Upper band of Rs 1766, * Balancing Amount
Page | 2 | PHILLIPCAPITAL INDIA RESEARCH
Total 220 76 89 106 109 600
DIXON TECHNOLOGIES IPO NOTE
About - Dixon Technologies Ltd Company incorporated in 1993, in 1994, commenced manufacturing of consumer electronics such as colour televisions. In 2007, commenced manufacturing of LCD TVs and subsequently progressed into manufacturing of LED TVs in 2010. Dixon entered the lighting products in 2008 with the manufacturing of CFL products and gradually increased its product portfolio to LED products in 2016. In 2010, started manufacturing of semi-automatic washing machines. Company also started providing reverse logistics services in 2008. Recently entered into manufacturing of mobile phones through a JV. Company has continuously diversified its product portfolio to keep pace with changing consumer trends and development in technology.
Indian EMS/ODM Market 600
EMS/ODM (Rs bn)
500 400 300 200 100
Company’s diversified product portfolio includes (i) consumer electronics (like LED TVs); (ii) home appliances (like washing machines); (iii) lighting products (like LED bulbs and tubelights, downlighters and CFL bulbs); and (iv) mobile phones. Key customers include Panasonic India P Ltd, Philips Lighting I Ltd, Haier Appliance (I) Pvt. Ltd., Gionee, Surya Roshni Limited, Reliance Retail Limited, Intex Technologies (I) Ltd., Mitashi Edutainment Pvt. Ltd., Dish Infra Services Private Limited.
Jabil 13% Others 66%
PG Electrop last 2%
Dixon is a leading (ODM) for lighting products, LED TVs and semi-automatic washing machines in India. As an ODM, Company develop & design products in-house (has strong R&D team of 27 employees), manufacture and supply these products to wellknown companies in India who in turn distribute these products under their own brands. This segment has a revenue of Rs 5.4bn (22% of sales) and has healthy EBITDA margin of 9%.
Elin 3%
Source: RHP, PhillipCapital India Research Note: EMS - Electronic Manufacturing Services
ODM – Revenue Share
Consumer electronics Mobile phones
Lighting products
6,000
Home appliances Consumer electronics
Lighting products
18,000 5,000
16,000
1,880
8,107
14,000
4,000
12,000 10,000 8,000 6,000
2,969
200 2,568
1,306
3,000 3,010
2,498
2,000
2,614
4,000 2,000
2,632
6,382
7,428
7,000
7,449
1,000
3,981 0
0 FY13
FY14
FY15
FY16
FY17
1,067
534
374 327
701
996
FY13
FY14
FY15
FY16
FY17
Source: RHP, PhillipCapital India Research
In line with focus to provide end to end product solutions, Company has backward integrated its major manufacturing processes by developing in-house capabilities in plastic moulding products, sheet metal products, wound components and LED panel assembly. With this company has improved its cost efficiency, reduces dependency
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1,727
849 108 601
516
FY21e
Dixon 9% SFO 7%
In OEM, the company is fully integrated end-to-end product and solution provider. Ranging from global sourcing, manufacturing, quality testing, assembling and packaging to logistics. This segment contributes to ~78% of revenue and has an EBITDA margin of ~2%.
20,000
FY20e
Dixon – has highest market share in Indian EMS:
Dixon majorly operates under 2 business model: 1. OEM – Original Equipment Manufacturers 2. ODM – Original Design Manufacturer
OEM - Revenue Share
FY19e
FY17
FY18e
FY16
FY15
FY14
FY13
0
DIXON TECHNOLOGIES IPO NOTE
on third party suppliers and gives better control on production time and quality of critical components used in the manufacturing of products. Dixon – Product Wise detail break up: (Home Appliances & Reverse logistics has higher profitability) Products Installed Capacity (Units) Sales (Units- FY17) Revenue (Rs mn) EBITDA (Rs mn) OPM (%) ODM & OEM (%) Products
Consumer Electronic 1,200,000 747,383 8,445 250 3% 12% /88% LED TVs: 19” to 65” 4K2K Home Theatres: 2.1 channel 4.1 channel
HOME APPLIANCES 550,000 376,842 1,880 306 16.3% 100%/0% Semi-automatic washing machine: 6.2 kg to 8.0 kg
LIGHTING PRODUCTS 260,400,000 120,592,760 5,508 179 3.2% 45%/55% LED Products: LED bulbs 0.5W to 20 W Down lighters 5W to 15W Battens T- LEDs 20W to 24W CFL Lamps: CFL Lamps 5W to 27W Lamp Drivers: Indoor LED drivers 5W to 20W Outdoor LED drivers 20W to 150W Electronics lamp driver 10W to 40W
Customers & Revenue Share FY17 (%)
Panasonic I P LTD (65.2% ) Reliance Retail Ltd (9.54%) Intex Technologies (I) Ltd. (9.23%) Haier Appliance (I) Pvt. Ltd (3.15%) Others: Vijay Sales, Mitashi, Abaj LED TVs at Dehradun
Panasonic India Private Limited (21.0%) Haier Appliance (I) Pvt. Ltd. (16.16%) Intex Technologies (I) Ltd (16.17%)
Philips Lighting India Limited (90.1%) Surya Roshni Limited Bajaj Electricals
Manufacturing Facility
washing machines at Dehradun & Nodia Dehradun
MOBILE PHONES* 10,080,000 3,476,423 8,107 50 0.6% 0%/100% feature phones and smart phones (2G, 3G, 4G/LTE, VoLTE and CDMA).
REVERSE LOGISTICS 3,660,000 1,408,474 627 123 19.6% 0%/100% Repair & Refurbishment: Set top boxes Repair: Mobile phones LCD & LED TVs LED panel Home theatres (2.1 channel and 4.1 channel) Computer peripherals and other devices such as printers, CCTVs and speakers Panasonic India Intex Technologies (I) Ltd. Private Limited Dish Infra Services Private (43.72%) Limited Gionee (50.21%) Airtel – setupbox Jaina Marketing and Sony – LEDs Associates (6.05%)
Nodia
Noida + 17 service centers in major cities in India
Source: RHP, PhillipCapital India Research
Market leadership in key product verticals Dixon’s experience in manufacturing, successful backward integration and design capabilities, strong relationships with global suppliers and anchor customers has resulted in achieving leading position in key verticals: Dixon Product FPD TVs Washing machines LED & CFL Lights*
Industry Size (mn units) 1.2 0.6 227
Expected Industry CARG over next 5 years 50% 41% 43%
Source: RHP, PhillipCapital India Research Note: FPD - Flat Panel Display
Page | 4 | PHILLIPCAPITAL INDIA RESEARCH
Production (FY17) 0.6 0.3 88.4
OPM (%) ~3% ~16% ~3%
Market Share (%) 50% 43% 39%
DIXON TECHNOLOGIES IPO NOTE
Consumer Electrical – Television Market: Growing trust and confidence in EMS and ODM players, leading to outsourced manufacturing. Dixon is leader in the FPD TV with share of ~50% in Indian Market. FPD TV market to grow @ CAGR of 16%
OEP data segmented by OEM and EMS production ratio, FY16 Domestics manufacturing FY16
900
Revenue (Rs bn) Volume (mn)
800 700 600
Production by EMS/ODM FY16 (mn units)
30 25
CAGR: FY16-FY21 Vol: 16.9%
20
Dixon 17%
500
15
400 300
OEP by EMS, 85%
10
200
OEP by OEM, 15%
0
SVL 50%
8%
Videotex Noble
8%
5
100
MEPL
8%
9%
Others
0 FY13 FY14 FY15 FY16 FY17 FY18 FY19 FY20 FY21
Lighting Market: Currently Lighting is a small part of EMS, However EESL (led 7W/9W) LED bulb demand has seen capacity addition among EMS companies. Dixon is leader players with 39% market share. LED lighting taking the lead in the lighting sector
OEP data segmented by OEM and EMS production ratio, FY16 Domestics manufacturing FY16
350 300 250
Others
CFL
Production by EMS/ODM FY16 (mn units)
LED
CAGR: FY16-FY21 Total Mkt 16.6% LED: 59.2%
3% Dixon
EMS, 22%
200
Tier 1, 48%
28%
39%
Compact Lamps
150 Tier II, 30%
100
NTL
Others
30%
50 0 FY13 FY14 FY15 FY16 FY17 FY18 FY19 FY20 FY21 Source: RHP, PhillipCapital India Research
Washing Machines Market: In this segment semi-automatic WM product having limited scope for design & innovation, support increasing dependence on EMS companies. Dixon has a leadership with 43% market share. Washing machine market to grow @ CAGR of 15%
OEP data segmented by OEM and EMS production ratio, FY16 Domestics manufacturing FY16
180 160 140 120
Revenue (Rs bn) Volume (mn) CAGR: FY16-FY21 Vol: 14.6%
100
10 8 6
80 60
Production by EMS/ODM FY16 (mn units)
12
Dixon OEP by EMS, 87%
OEP by OEM, 13%
29% 43%
4 28%
40
2
20 0
0 FY13 FY14 FY15 FY16 FY17 FY18 FY19 FY20 FY21
Source: RHP, PhillipCapital India Research
Page | 5 | PHILLIPCAPITAL INDIA RESEARCH
Noble Others
DIXON TECHNOLOGIES IPO NOTE
Strong revenue visibility The company has reported revenue CAGR of 34% over FY13 to FY17. 1) New product addition 2) New customer addition 3) Increasing geography, gives company a strong growth visibility. Adding New products: Company is planning to increase its offerings in existing product as well as diversify into new verticals. Over last 6 years, Company has added LED lighting, washing machines, mobile phones and reverse logistics. In 2017 company will be entering into a manufacture of “security systems” including “CCTVs” & “Digital video recorders” (DVRs), Company will be putting up this facility in Tirupati.
Dixon – Product Portfolio Year Products 1994 Colour TV 2007 LCD TV 2008 CFL Lighting, Reverse logistics 2010 LED TV, Washing Machines 2016 Phones 2017 CCTV, Digital Video Recorder Source: RHP, PhillipCapital India Research
Going forward Company will be adding products in home appliances & lighting segments. In Lighting, Company will also be exploring export opportunities with existing customers or establishing relationships with new customers.(As In past, has exported CFL bulbs & LED bulbs - Thailand, Egypt, France, UK, Poland, Tanzania and Kenya and continues to export CFL and LED bulbs) Expansion of industrial footprint into new geographies Expand geographical footprint by enhancing current manufacturing capacities & setting up of new manufacturing facilities, in South India. Company also seeks to further enhance manufacturing capacity across product verticals as well as CCTVs and DVRs. This will help in strengthening relationships with existing customers and gaining new customers as able to penetrate in South India. Tirupati Facility being closer to the Krishnapatnam & Chennai ports would provide easier access to the exports market and will be well placed to offer export quality products for South East Asia market. Increasing focus on Reverse logistic (RL): In RL company offer repair & refurbishment services for STBs and repair of mobile phones, LCD and LED TVs, LED panels, home theatres, printers etc. Company is planning to further expand RL portfolio with support R&D team. RL has high potential and enjoys higher margins & return ratios. Dixon is focusing only on B2B RL and do not have consumer facing service centres which is in line with strategy of building relationships with brand owners and OEMs.( recently company has started giving RL service to “Sonay”). Company Operates with 17 centre spreads Pan India (Majorly in Metros cities). Increasing RL revenue share (Rs mn)
RL – has strong operating margin of ~20%
700
627
600
120
500
100
25%
OPM (%) (RHS)
123 20%
391
400
80
300
15%
71
60 184
200 100
EBITDA
140
24
10% 35
40 20
28
0
5% 5
6
FY13
FY14
0 FY13
FY14
FY15
Source: RHP, PhillipCapital India Research
Page | 6 | PHILLIPCAPITAL INDIA RESEARCH
FY16
FY17
0% FY15
FY16
FY17
DIXON TECHNOLOGIES IPO NOTE
Cost effective model and Focus on High Margin business Dixon has reported a margin of 3.7% in FY17. If adjusted to actual sales (value addition revenue) company has a margin of ~13%. Dixon is most cost-efficient player in each of the product verticals. The company has achieved cost leadership through backward integration & large manufacturing capacities. EBITDA Break up: (ODM contributes ~ 50% in EBITDA)
Mobile phones 5%
Dixon - EBITDA & OPM trend 1,000
Reverse logistics 14%
Consumer electronics 27%
5%
907
EBITDA (Rs mn)
900
4%
OPM (%) (RHS)
800
4%
700
3%
588
600
3%
500 2%
400 300 Home appliances 34%
Lighting products 20%
322
2%
260 201
200
1%
100
1%
0
0% FY13
FY14
FY15
FY16
FY17
Source: RHP, PhillipCapital India Research
Dixon has 2 high margin businesses, 1) ODM and 2) Reverse Logistic (RL). These business contribution have increased from 15%/1.5% in FY15 to 22%/3%/ in FY17. Company is planning to gradually expand its ODM & RL share. As an ODM, company control the entire manufacturing cycle of a product. This model requires additional investment in 1) R&D 2) working capital but provides higher margins as compared to the OEM model. Continuously increased its share form ODM - Revenue Rev. (Rs mn) As % of Rev. (RHS)
6000
5,374
5000
Home Appliance – 100% from ODM, Enjoys Higher Margins 30% 25%
3,734
4000
Revenue
2000
1,306
10%
1,050 5%
0
0% FY14
FY15
FY16
FY17
6%
516 400
3%
0
0% FY13
FY14
Source: RHP, PhillipCapital India Research
The company is moving towards the ODM model to service all major consumer requirements across the industry and product verticals. This also helps in improving overall profitability. Gradually, trend in certain product verticals wherein regional and private labels have been gaining market share and the ODM model allows servicing market as well.
Page | 7 | PHILLIPCAPITAL INDIA RESEARCH
9%
849 800
1,768
1000
FY13
12%
1,067
15% 1,558
18% 15%
20%
3000
1,880
1600
1200
2000
OPM (%)
FY15
FY16
FY17
DIXON TECHNOLOGIES IPO NOTE
Dixon - Strong Financial Performance Revenue CAGR of 34% over FY13 to FY17 30,000
PAT & PAT margin (%)
Revenue (Rs mn) Growth (%) (RHS)
24,568
25,000
80%
12,013
2.5%
400
2.0% 300
40%
1.5%
30%
7,669
200
136
20%
5,000
100
10%
0
0% FY13
FY14
FY15
FY16
943
Debt
0
FY17
Debt/Equity
823
0.0% FY13
1.8 30
FY15
1.2
600
466
500 400 300 200
0.2
FY16
FY17
0 4
21
23
20
0.8
15
0.6
16
10
0.4 5
0 3
28
1
0.2
100
29
25
1.4
700
2
FY14
35 1.6
796
800
1
0.5%
Lower working capital cycle – days @ 16 in FY17*
936
900
1.0%
119
50
Debt/Equity at 0.2x in FY17 1,000
3.0%
50%
13,894 10,937
504 427
60%
15,000
3.5%
PAT (Rs mn) Margin (%) (RHS)
500
70%
20,000
10,000
600
90%
-
5
FY13
FY14
FY15
FY16
FY17
Source: RHP, PhillipCapital India Research, Note: * Include - loans & advances
Lower Working Capital requirement & asset light mode (flexibility in manufacturing lines, higher utilisation), result in higher return ratios. Higher Return Ratios
Positive FCF from last 5 years 600
40
ROCE (%)
FCO
ROE (%)
35
FCF
500
30 400
25 20
300
15 200 10 100
5 0 FY13
FY14
FY15
Source: RHP, PhillipCapital India Research
Page | 8 | PHILLIPCAPITAL INDIA RESEARCH
FY16
FY17
0 FY13
FY14
FY15
FY16
FY17
DIXON TECHNOLOGIES IPO NOTE
Indian – Consumer Electrical & Appliance Industry at a cusp of growth Indian Consumer Electricals & Appliance (CEA) market (Rs bn) Appliances
7,000
Consumer Electronics
6,000 703 5,000
1,621
1,791
2,165
2,364
2,718
3,055
338
450
FY13
FY14
FY15
FY16
FY17
FY18e
306
4,326
407
3,615
370
504
FY13 to FY17 14% 10% 13%
FY17 to FY21e 18% 12% 17%
5,236
563
3,000
1,000
CAGR CE Appliances Total
628
4,000
2,000
Indian CEA Market:
FY19e
FY20e
FY21e
Source: RHP, Frost & Sullivan analysis, CEAMA
Indian Consumer Electricals break up: Higher contribution from Mobile FY13 – Rs2,364 bn
FY21e – Rs 5,236 bn
TV 15.8% TV 14.8%
Set top Boxes (STB) 7.1%
Mobiles 67.0%
Mobiles 75.4%
Digital Cameras 5.5% Others 1.3%
Set top Boxes (STB) 3.3% Digital Cameras 2.7%
Washing Machines 3.3%
Others 0.7%
Washing Machines 3.1%
Source: RHP, Frost & Sullivan analysis, CEAMA
Mobile phones market to grow @ CAGR of 20%
OEP data segmented by OEM and EMS production ratio Domestics manufacturing Apr 17-Dec 17 (mn)
5000
Production by EMS/ODM FY16 Apr 17-Dec 17 (mn)
The demand for mobile phones is expected to grow from 282.2mn units in FY16 to 509mn…
4000 OEP by EMS, 40%
3000
OEP by OEM, 60%
20%
1000
0 FY13 FY14 FY15 FY16 FY17 FY18 FY19 FY20 FY21 Source: RHP, Frost & Sullivan analysis, CEAMA
Page | 9 | PHILLIPCAPITAL INDIA RESEARCH
Foxconn Flextronics 35%
15% 22%
2000
Dixon
8%
BGM Others
DIXON TECHNOLOGIES IPO NOTE
Financials Income Statement
Cash Flow
Y/E Mar, Rs mn Net Sales Growth (%) Expenditure Inc/dec. Cost of Material Consumed Personnel Cost Other Op. Costs Operating Profit OPM (%) Growth (%) (+) Other income EBDIT ( - ) Depreciation EBIT ( - ) Interest & Finance charges PBT & exceptional items ( - ) Taxes Net Profit Share of Associates Minority Interest PAT Growth (%)
FY14 FY15 FY16 FY17 10,937 12,013 13,894 24,568 42.6% 9.8% 15.7% 76.8% 10,677 11,691 13,306 23,660 7 -109 -161 -255 9,955 10,953 12,284 22,056 323 369 550 640 393 479 634 1,219 260 322 588 907 2.4% 2.7% 4.2% 3.7% 29.2% 23.9% 82.5% 54.4% 34 18 18 15 294 340 605 922 53 69 84 106 240 271 521 816 112 98 131 128 128 173 390 688 34 42 80 185 148 130 427 504 2 3 0 0 10 9 0 0 136 119 427 504 172.8 -12.8 259.8 18.1
Balance Sheet Y/E Mar, Rs mn Equity Share Capital Stock Option Outstanding Reserves & Surplus Net worth Total Debt: Deferred Tax Liability Minority Interest Capital Employed Gross Block Less : Accumulated Depn Net Block Capital WIP Fixed Assets Goodwill on Consolidation Current Assets Cash & Bank Balances Receivables Inventories Loans, Adv & Deposits: Other Current Assets Current Liabilities & provisions Sundry Creditors & other liab Provisions: Net Current Assets Investments TOTAL ASSETS
Y/E Mar, Rs mn PBT Operating Profit before W.Cap (Increase)/Decrease in W Cap Trade & Other Receivables Inventories Loans & Advances Trade & Other Payables & Provisions Net Cash from Op Activities (I) Net addition to Fixed Assets (Purchase)/Sales of Investments Other Income Net Cash from Inv Activities (II) Increase in Share Capital Interest Paid Dividend Paid & Other Adjustments Increase in Borrowings Net Cash used in Fin Activities (III) Net Increase/ Decrease in Cash & Cash Equivalents (I+II+III) Cash & Cash Equivalents (Op Bal) Other Balance Cash & Cash Equivalents (Cl Bal)
FY14 182 275 -196 -55 -47 -65 -29 104 4 1 8 13
FY15 173 341 145 -85 -197 103 324 445 -213 -18 9 -223
FY16 507 617 -108 -337 -232 -87 549 423 -263 36 11 -216
FY17 688 935 -235 -1,925 -1,459 -152 3,302 546 -379 -67 15 -431 61 -127 -84 46 -104
-113 -7 -8 -128
-99 -11 -113 -223
-131 -42 -27 -201
-11 58 -1 46
-0 46 23 69
6 69 75
10 75 68 153
OPM (%) RoCE(%) ROE(%) Return on Assets (%) Sales/Total Assets (x) Sales/Gross Block (x) Debt: Equity (x) Current Ratio (x) Quick ratio (x) Working capital/Sales (x) Interest Cover (x) Debtors (days) Inventory (days) Loans & Advances (days) Creditors (days) Working Capital (days)
FY14 2.4 13.7 18.4 7.8 6.2 9.3 1.3 1.7 0.9 0.1 2.7 33.2 31.5 17.4 37.1 10.2
FY15 2.7 15.4 14.0 6.7 6.8 9.0 1.0 1.5 0.7 0.1 2.9 30.1 34.8 13.3 43.7 7.9
FY16 4.2 24.8 34.7 20.3 6.6 8.9 0.6 1.4 0.8 0.1 4.9 38.7 36.9 15.4 52.9 7.3
FY17 3.7 32.1 25.5 19.8 9.7 13.0 0.2 1.2 0.7 0.0 5.8 52.9 42.9 11.9 79.6 4.4
EV/Sales (x) EV/EBIDT (x) EV/EBIT (x) P/E (x) P/BV (x)
0.6 21.7 26.5 147.2 27.1
0.5 18.3 23.0 168.7 23.5
0.4 10.2 11.9 46.9 16.3
0.8 21.4 24.2 39.7 10.1
Valuation Ratios FY14 31 19 687 737 936 60 21 1,753 1,175 332 842
FY15 31 19 799 849 823 62 30 1,764 1,339 369 970
842 2,008 46 481 933 529 19 1,160 1,100 60 848 63 1,753
970 2,214 69 562 1,130 442 10 1,481 1,420 61 733 60 1,764
Source: Company, PhillipCapital India Research Estimates
Page | 10 | PHILLIPCAPITAL INDIA RESEARCH
FY16 31 20 1,179 1,230 796 72 0 2,097 1,562 437 1,125 0 1,125 111 2,937 75 900 1,363 594 6 2,077 1,955 122 860 1 2,097
FY17 110 1,867 1,977 466 98 0 2,542 1,891 520 1,371 20 1,391 6,599 153 2,802 2,822 810 12 5,449 5,229 219 1,151 2,542
COMPANY NAME COMPANY UPDATE
Rating Methodology We rate stock on absolute return basis. Our target price for the stocks has an investment horizon of one year. Rating Criteria Definition BUY
>= +15%
Target price is equal to or more than 15% of current market price
NEUTRAL
-15% > to < +15%
Target price is less than +15% but more than -15%
SELL