HG Infra Engineering Ltd. - Choice

“SUBSCRIBE” to

H.G. Infra Engineering Ltd. Strong player in government’s renewed focus sector

19th Feb. 2018 Salient features of the IPO: • H.G. Infra Engineering Ltd. (HGIEL) is an infrastructure construction, development and management company with extensive experience in road projects, including highways, bridges and flyovers. • The issue is a combination of fresh and OFS. The company will not receive any proceeds from the OFS. Of the net proceeds, around Rs. 1,156mn would be utilized to prepay and/or repayment of the debts availed by the company. Another, Rs. 900mn would be utilized for the purchase of capital equipment and rest for general corporate purposes. Key competitive strengths: • Established roads & highways sector focused construction developer • Efficient business model • Strong project management and execution capabilities • Visible growth through its growing order book and improved prequalification credentials • Experienced management team

Risk and concerns: • Slow down in the economic activities • Changes in government policies and budgetary allocations for investments in road infrastructure • Inability to win road tenders and delay in project execution • Rise in the material and employee cost • Deterioration in the working capital cycle Valuation & recommendation: At the higher price band of Rs. 270 per share, HGIEL’s share is valued at a P/E multiple of 33x (to its restated FY17 EPS of Rs. 8.2), which is in-line to the peer average of 33.8x. Below are few key observations of the issue: (For detailed valuation, refer to page 9 of the report)

•

Recommendation Price Band (Rs.) Face Value (Rs.) Shares for Fresh Issue (mn) Shares for OFS (mn) Fresh Issue Size (Rs. mn) OFS Issue Size (Rs. mn) Total Issue Size (Rs. mn) Bidding Date MCAP at Higher Price Band Enterprise Value at Higher Price Band Book Running Lead Manager Registrar Sector/Industry

SUBSCRIBE Rs. 263 - 270 per Share Rs. 10 11.1 – 11.4mn Shares 6mn Shares Rs. 3,000mn Rs. 1,578 - 1,620mn Rs. 4,578 - 4,620mn 26th Feb. - 28th Feb. 2018 Rs. 17,596mn Rs. 16,105mn

SBI Capital Markets Ltd. and HDFC Bank Ltd. Link Intime India Pvt. Ltd. Roads & Highways Mr. Harendra Singh, Mr. Promoters Vijendra Singh and Mr. Girish Pal Singh Pre and Post - Issue Shareholding Pattern Pre – Issue Post - Issue Promoter and Promoter 100.00% 73.74% Group 0.00% 26.26% Public Total 100.00% 100.00% Retail Application Money at Higher Cut-Off Price per Lot Number of Shares per Lot 55 Application Money Rs. 14,850 per Lot Analyst Rajnath Yadav Research Analyst (022 - 6707 9999; Ext: 912) Email: [email protected] Note: Choice Equity Broking Pvt. Ltd. (publisher of this report) and Choice Capital Advisors Pvt. Ltd. (advisor to this issue) are the group companies.

HGIEL is a road infrastructure construction company, mainly involved into the execution of EPC contracts. In the last five years, it has completed 13 projects in the roads & highways sector aggregating to a total contract value of Rs. 16,749mn. • As on 30th Nov. 2017, the company had 21 ongoing projects in the roads & highways sector amounting to Rs. 35,853mn, which formed 96.7% of the total order book of Rs. 37,078mn. Apart from road & highway projects, the company has four civil construction projects and two water supply projects under execution. • As on 31st Mar. 2017, HGIEL had a total order book of Rs. 40bn, i.e. 3.8 times the FY17 revenue. In the current fiscal, it has received fresh orders of around Rs. 5bn. According to the management, these orders are expected to be completed by Nov. 2019, thereby providing a certainty in revenue generation over 1.5-2 years. • HGIEL is one of the few players in India to have an owned large fleet of modern construction equipment and transportation vehicles. In the last three years, the company has invested around Rs. 1.7bn towards the procurement of plant & machineries. In H1 FY18, the investment over the plant & machinery formed around 90% of the gross block of Rs. 4.3bn. This bodes well for the company, as the availability of modern construction equipment reduces its dependence on third party suppliers for execution of a project, which in turn enables it to control the cost of the project, and minimizes occurrence of events resulting in stoppage of work due to non-availability or breakdown of machinery. This also ensures that the company is able to offer high quality construction work in the required time period. • On financial performance front, HGIEL has demonstrated solid and impressive results over FY14-17. During the period with the execution of the projects, the company has reported a 30.8% and 33.2% CAGR rise in the operating revenue and EBITDA. EBITDA margin expanded by 60bps over FY14-17 to 11.4% in FY17. Reported PAT increased by 69.8% CAGR with expansion in PAT margin by over 2.7ppts over FY14-17 to 5.1% in FY17. Average RoIC and RoE stood at 28.5% and 19.6%, respectively, over FY14-17. • The company business is seasonal in nature. It generates around 30-35% of the business in the first half of the fiscal, while the rest in second half. In H1 FY18, HGIEL has generated a top-line and EBITDA of Rs. 5,673.4mn and Rs. 798.4mn. As per our quick estimate, we are forecasting a top-line and EBITDA of Rs. 14,410.7mn and Rs. 2,019.1mn, respectively for FY18E. In FY19E, the same is estimated to Rs. 19,686.1mn and Rs. 2,758.2mn, respectively. EPS is likely to increase from Rs. 8.2 per share in FY17 to Rs. 13.8 and Rs. 21.2in FY18E and FY19E, respectively. • On valuation front, at higher price band, the company is demanding a P/E valuation of 33x (to its restated FY17 EPS of Rs. 8.2) as compared to peer average of 33.8x. Though the issue seems to be fairly priced with respect to FY17 earnings, it look attractive considering the FY18E and FY19E earnings. (The company is asking a P/E multiple of 19.6x and 12.7x, respectively, for FY18E and FY19E, as compared to peer average of 21.5x and 18.4x). On other valuation metric front too, the company is demanding a discounted valuation with respect to FY18E and FY19E financials. Thus considering the above observations, we assign a “SUBSCRIBE” rating for the issue.

1

About the issue: •

HGIEL is coming up with an initial public offering (IPO) with 17.1 - 17.4mn shares (fresh issue: 11.1 - 11.4mn Shares; OFS shares: 6mn shares) in offering. The offer represents around 26.3% of its post issue paid-up equity shares of the company. Total IPO size is Rs. 4,578 - 4,620mn.

•

The issue will open on 26th Feb. 2018 and close on 28th Feb. 2018.

•

The issue is book building with a price band of Rs. 263 - 270 per share.

•

50% of the issue shall be allocated on a proportionate basis to qualified institutional buyers, while rest 15% and 35% is reserved for non-institutional bidders and retail investors, respectively.

•

The issue is a combination of fresh and OFS. The company will not receive any proceeds from the OFS. Of the net proceeds, around Rs. 1,156mn would be utilized to prepay and/or repayment of the debts availed by the company. Another, Rs. 900mn would be utilized for the purchase of capital equipment and rest for general corporate purposes.

•

Its promoter holds 100% stake in the company and post IPO this will come down to 73.74%. Public holding will increase from current nil to 26.26%.

Pre and Post Issue Shareholding Pattern (%) Promoter & Promoter Group (%)

Pre Issue

Post Issue (at higher price band)

100.00%

73.74%

0.00%

26.26%

Public (%) Source: Company RHP

Indicative IPO Process Time Line:

Unblocking of ASBA Account 07-Mar-2018

Offer Closes on 28-Feb-2018

Offer Opens on 26-Feb-2018

Finalization of Basis of Allotment 06-Mar-2018

Listing on Stock Exchanges 09-Mar-2018

Credit to Demat Accounts 08-Mar-2018

2

Company Introduction: HGIEL is an infrastructure construction, development and management company with extensive experience in road projects, including highways, bridges and flyovers. The company’s main business operations include (i) providing EPC services on a fixed-sum turnkey basis and (ii) undertaking civil construction and related infrastructure projects on item rate and lump sum basis, primarily in the roads & highway sector. It also forayed into executing water pipeline projects and is currently undertaking two water supply projects in Rajasthan on turnkey basis, which includes the designing, construction, operation and maintenance of the project. HGIEL has executed or is executing projects across various states in India covering Rajasthan, Uttar Pradesh, Haryana, Uttarakhand, Maharashtra and Arunachal Pradesh. Over the last five years, it has completed 13 projects above the contract value of Rs. 400mn in the roads and highways sector aggregating to a total contract value of Rs. 16,748.9mn, which included construction, improving, widening, strengthening of two and four lane highways, construction of high level bridge and construction of earthen embankment, culverts and cart track underpasses.

Source: Company RHP

3

Company Introduction (Contd…): As on 30th Nov. 2017, the company had 21 ongoing projects in the roads & highways sector which includes construction, improving, widening, strengthening, upgradation and rehabilitation of two, four and six lane highways construction of high level bridge and construction of road network. Its order book for these ongoing projects in the roads & highways sector amounted to Rs. 35,853.1mn, accounting for 96.7% of the total order book. The total order book of Rs. 37,078.1mn, consisting of 21 projects in the roads and highways sector, four civil construction projects and two water supply projects. As of 31st Mar. 2017, based on its technical and financial capacity the company is pre-qualified to bid independently on an annual basis for bids by NHAI and MoRTH for contract values of up to Rs. 8,066.6mn. While HGIEL independently execute the projects where it is pre-qualified to bid on an independent basis, while forms a project specific joint ventures and consortiums with other infrastructure and construction companies, where it is not pre-qualified to bid independently.

Source: Company RHP

3

Company Introduction (Contd…): HGIEL has a track record of executing projects of different sizes particularly in the roads & highways sector and over the years it has become an established construction developer in the roads & highways sector with strong execution capabilities and with a reputation of delivering quality projects. Public sector clients include NHAI, PWD, MES and Jaipur Development Authority. HGIEL has also executed road construction contracts as a sub-contractor for some of the private sector clients such as Tata Projects Ltd. and IRB-Modern Road Makers Pvt. Ltd. Over the years, HGIEL has added a fleet of modern construction equipment and employed manpower to supplement the growth of its construction business. As of 30th Nov. 2017, its equipment base comprised of 1,064 construction equipment.

Source: Company RHP

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Company Introduction (Contd…): Financial performance: Over FY14-17, HGIEL reported a 30.8% CAGR rise in consolidated operating revenue to Rs. 10,548.9mn in FY17. This was mainly due to the increase in the execution of construction contracts. For the half year ended Sept. 2017, top-line stood at Rs. 5,673.4mn. Total operating expenses increased in-line with top-line. Cost of material consumed and contract & site expenses increased by 18.8% and 46.1% CAGR, respectively, over FY14-17. Employee expenses increased by 25.1%, mainly on account of higher employee base. As a result, consolidated EBITDA increased by 33.2% CAGR to Rs. 1,201.8mn in FY17. EBITDA margin expanded by 60bps over FY14-17 to 11.4% in FY17. For H1 FY18, EBITDA stood at Rs. 798.4mn with margin of 14.1%. Depreciation charges and financial expenses increased with the expansion in the business and increased by 24.1% and 12.4% CAGR, respectively. Consequently, reported PAT increased by 69.8% CAGR to Rs. 533.3mn in FY17. PAT margin expanded by over 2.7ppts over FY14-17 to 5.1% in FY17. In H1 FY18, reported PAT stood at Rs. 292.8mn with a margin of 5.2%. Given below is the snapshot of the consolidated financial performance: Revenue from Operations EBITDA Reported PAT

FY14 4,710.5 508.3 109.0

FY15 3,650.8 439.6 46.4

FY16 7,408.8 781.3 353.5

FY17 10,548.9 1,201.8 533.3

H1 FY18 5,673.4 798.4 292.8

CAGR (%) 30.8% 33.2% 69.8%

Y-o-Y (%) 42.4% 53.8% 50.9%

Cash Flow from Operating Activities NOPLAT RoIC (%)

384.2 249.3 38.2%

336.9 183.0 22.1%

294.7 390.6 29.3%

643.9 590.2 24.2%

22.0 377.3 12.2%

18.8% 33.3% (1,392) bps

118.5% 51.1% (509) bps

-22.5% -13.5% 12.0% -28.4% 7.3% -57.4% 1.3%

102.9% 77.7% 10.5% 123.0% 8.1% 662.2% 4.8%

42.4% 53.8% 11.4% 58.2% 9.0% 50.9% 5.1%

14.1%

60 bps

85 bps

10.2%

102 bps

89 bps

5.2%

274 bps

28 bps

10,677.0

14,462.7

40,190.9

37,078.1

94.0%

178%

Revenue Growth Rate (%) EBITDA Growth Rate (%) EBITDA Margin (%) EBIT Growth Rate (%) EBIT Margin (%) Reported PAT Growth Rate (%) Reported PAT Margin (%)

10.8% 7.9% 2.3%

Order Book (Rs. mn) Inventories Turnover Ratio (x) Trade Receivable Turnover Ratio (x) Accounts Payable Turnover Ratio (x) Fixed Asset Turnover Ratio (x) Total Asset Turnover Ratio (x)

23.0 16.2 15.4 5.5 2.1

17.3 10.3 12.3 4.4 1.5

22.7 11.0 18.6 6.1 1.9

22.8 10.3 16.8 5.1 1.8

8.8 6.9 4.7 1.7 0.7

-0.3% -14.2% 2.9% -2.1% -4.5%

0.3% -6.6% -9.5% -16.0% -0.6%

Current Ratio (x) Debt to Equity (x) Net Debt to EBITDA (x)

0.8 0.8 1.2

1.0 0.6 1.1

1.1 0.7 1.1

1.1 0.9 1.2

0.9 1.2 3.2

10.0% 4.8% 0.2%

7.3% 24.9% 9.3%

13.7% 4.9% 42.9%

5.5% 1.9% 24.6%

28.8% 8.9% 37.3%

30.3% 9.4% 35.1%

14.3% 3.5% 16.3%

1,666 bps 444 bps (786) bps

148 bps 48 bps (220) bps

RoE (%) RoA (%) RoCE (%) Note: All data are pre-issue; Source: Company RHP

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Competitive Strengths: • • • • •

Established roads and highways sector focused construction developer Efficient business model Strong project management and execution capabilities Visible growth through its growing order book and improved prequalification credentials Experienced management team

Business Strategy: • • •

•

Continued focus on EPC business and improve the execution efficiency Expansion in the geographical footprint Explore opportunities in the hybrid annuity based model to optimize the project portfolio Diversify beyond roads and highways projects

Risk and Concerns: • • • • •

Slow down in the economic activities Changes in government policies and budgetary allocations for investments in road infrastructure Inability to win road tenders and delay in project execution Rise in the material and employee cost Deterioration in the working capital cycle

6 © CHOICE INSTITUTIONAL RESEARCH

Peer Comparison and Valuation: Face Value (Rs.) H.G. Infra Engineering Ltd. 10 Dilip Buildcon Ltd. 10 KNR Constructions Ltd. 2 PNC Infratech Ltd. 2 J Kumar Infraprojects Ltd. 5 Sadbhav Engineering Ltd. 1 Ashoka Buildcon Ltd. 5 Average Company Name

Company Name H.G. Infra Engineering Ltd. Dilip Buildcon Ltd. KNR Constructions Ltd. PNC Infratech Ltd. J Kumar Infraprojects Ltd. Sadbhav Engineering Ltd. Ashoka Buildcon Ltd. Average

MCAP EV (Rs. mn) (Rs. mn)

270.0 955.5 314.2 169.8 328.4 398 223

17,596 16,105 130,677 166,846 2.2% 44,182 49,873 0.3% 43,548 44,666 -9.4% 24,845 24,050 0.8% 68,328 162,054 -3.4% 41,809 86,754 -5.2%

EPS BVPS DPS (Rs.) (Rs.) (Rs.) 8.2 26.2 8.2 4.6 14.0 (3.1) (0.5)

Stock Return (%)

CMP (Rs.)

78.6 125.7 62.5 61.3 183.6 73.1 113.3

0.0 1.0 0.5 0.5 2.0 0.7 0.8 0.9

Debt Equity Ratio 0.3 2.2 0.8 0.1 0.3 7.6 2.2 2.2

1M

Fixed Asset Turnover Ratio 5.1 2.2 1.3 6.3 2.7 0.4 0.3 2.2

3M

6M

13.0% 20.5% -4.8% 28.5% 26.6% 10.1%

81.0% 42.4% 21.3% 60.3% 48.8% 17.2%

Total Operating Revenue 1Y (Rs. mn) 10,548.9 265.1% 53,191.6 74.0% 16,795.9 67.8% 22,523.3 46.7% 15,728.1 43.8% 45,700.1 18.0% 29,049.5

RoE (%)

RoCE (%)

P/E (x)

10.4% 20.8% 13.1% 7.5% 7.6% -4.3% -0.5% 7.4%

P / B EV / Sales (x) (x)

15.6% 33.0 3.4 16.0% 36.5 7.6 9.2% 38.5 5.0 20.3% 36.8 2.8 10.6% 23.5 1.8 7.6% (126.5) 5.4 6.5% (419.6) 2.0 11.7% 33.8 4.1

1.5 3.1 3.0 2.0 1.5 3.5 3.0 2.7

EBITDA PAT (Rs. mn) (Rs. mn) 1,201.8 11,599.5 2,639.6 6,240.8 2,493.5 12,621.9 8,946.2 EV / EBITDA (x) 13.4 14.4 18.9 7.2 9.6 12.8 9.7 12.1

533.3 3,576.8 1,149.0 1,182.8 1,055.6 -540.3 -99.6

MCAP / Sales (x) 1.7 2.5 2.6 1.9 1.6 1.5 1.4 1.9

EBITDA Margin (%) 11.4% 21.8% 15.7% 27.7% 15.9% 27.6% 30.8% 23.3%

PAT Margin (%) 5.1% 6.7% 6.8% 5.3% 6.7% -1.2% -0.3% 4.0%

Order Earnings Book / Yield (%) Sales (x) 3.8 3.0% 3.3 2.7% 2.2 2.6% 2.4 2.7% 6.4 4.2% 1.7 -0.8% 2.4 -0.2% 3.1 3.1%

Note: FY17 financials; Source: Choice Broking Research

At the higher price band of Rs. 270 per share, HGIEL’s share is valued at a P/E multiple of 33x (to its restated FY17 EPS of Rs. 8.2), which is in-line to the peer average of 33.8x.

Below are few key observations of the issue: •

•

•

•

•

The current government has continued its focus on improving the road & highway infrastructure. In the recent Union Budget 2018, the budget allotted for the highways has increased from Rs. 580bn in FY17 to Rs. 650bn for the FY18. For overall infrastructure creation, it has increased the allocation by 21% to Rs. 5.97lakh crore. Also the government is confident of completing national highways exceeding 9000 kilometers length in FY18. The ambitious “Bharatmala Pariyojana” has been approved to develop about 35000kms in Phase-I at an estimated cost of Rs. 5.4tn. According to CRISIL, the investment in the road projects is expected to double to Rs. 10.7tn over next five years, implying a bright outlook for the road infrastructure company. Further, with continued poor financial position of build-operatetransfer players, it expects the share of EPC contract projects to increase (especially in low-traffic-volume projects), over the next five years. HGIEL is a road infrastructure construction company, mainly involved into the execution of EPC contracts. In the last five years, it has completed 13 projects above the contract value of Rs. 400mn in the roads & highways sector aggregating to a total contract value of Rs. 16,749mn, which included construction, improving, widening, strengthening of two and four lane highways, construction of high level bridge etc. As on 30th Nov. 2017, the company had 21 ongoing projects in the roads & highways sector which includes construction, improving, widening, strengthening, upgradation and rehabilitation of two, four and six lane highways construction of high level bridge and construction of road network. Its order book for these ongoing projects in the roads & highways sector amounted to Rs. 35,853mn, which formed 96.7% of the total order book of Rs. 37,078mn. Apart from road & highway projects, the company has four civil construction projects and two water supply projects under execution. HGIEL is one of the few players in India to have an owned large fleet of modern construction equipment and transportation vehicles. In the last three years, the company has invested around Rs. 1.7bn towards the procurement of plant & machineries. In H1 FY18, the investment over the plant & machinery formed around 90% of the gross block of Rs. 4.3bn. This bodes well for the company, as the availability of modern construction equipment reduces its dependence on third party suppliers for execution of a project, which in turn enables it to control the cost of the project, and minimizes occurrence of events resulting in stoppage of work due to non-availability or breakdown of machinery. This also ensures that the company is able to offer high quality construction work in the required time period.


Peer Comparison and Valuation (Contd…): •

•

• •

•

•

As on 31st Mar. 2017, the company had a total order book of Rs. 40bn, i.e. 3.8 times the FY17 revenue. In the current fiscal till Jan. 2018, it has received fresh orders of around Rs. 5bn. According to the management, these orders are expected to be completed by Nov. 2019, thereby providing a certainty in revenue generation over 1.5-2 years. On financial performance front, HGIEL has demonstrated solid and impressive results over FY14-17. During the period, with the execution of the projects the company has reported a 30.8% CAGR rise in the operating revenue. Total operating expenses increased in-line with top-line. As a result, consolidated EBITDA increased by 33.2% CAGR to Rs. 1,201.8mn in FY17. EBITDA margin expanded by 60bps over FY14-17 to 11.4% in FY17. Depreciation charges and financial expenses too increased with the expansion in the business. Consequently, reported PAT increased by 69.8% CAGR to Rs. 533.3mn in FY17 and margin expanded by over 2.7ppts over FY14-17 to 5.1% in FY17. Average RoIC and RoE stood at 28.5% and 19.6%, respectively, over FY14-17. Additionally, the company has maintained an average working capital cycle of around 29 days, which is better than the peer average of around 50 days. This can be mainly attributed to its tight operational cost control management and timely execution of the projects. HGIEL is looking to raise around Rs. 3bn from the fresh issue. Of the net proceeds, around Rs. 1.1bn would be utilized to prepay and/or repayment of the debts availed by the company. Another, Rs. 900mn would be utilized for the purchase of capital equipment. We are forecasting a debt equity ratio of 0.3-0.4x post the repayment as against the ratio of 0.9x in FY17. Majority of the benefit of lower debt would be realized in FY19 fiscal. The company business is seasonal in nature. It generates around 30-35% of the business in the first half of the fiscal, while the rest in second half. In H1 FY18, HGIEL has generated a top-line and EBITDA of Rs. 5,673.4mn and Rs. 798.4mn. As per our quick estimate, we are forecasting a top-line and EBITDA of Rs. 14,410.7mn and Rs. 2,019.1mn, respectively for FY18E. In FY19E, the same is estimated to Rs. 19,686.1mn and Rs. 2,758.2mn, respectively. EPS is likely to increase from Rs. 8.2 per share in FY17 to Rs. 13.8 and Rs. 21.2in FY18E and FY19E, respectively. On valuation front, at higher price band, the company is demanding a P/E valuation of 33x (to its restated FY17 EPS of Rs. 8.2) as compared to peer average of 33.8x. Though the issue seems to be fairly priced with respect to FY17 earnings, it look attractive considering the FY18E and FY19E earnings. (The company is asking a P/E multiple of 19.6x and 12.7x, respectively, for FY18E and FY19E, as compared to peer average of 21.5x and 18.4x). On other valuation metric front too, the company is demanding a discounted valuation with respect to FY18E and FY19E financials.

Thus considering the above observations, we assign a “SUBSCRIBE” rating for the issue


Financial Statements: Consolidated Profit and Loss Statement (Rs. mn)

Revenue from Operations Cost of Material Consumed Contract and Site Expenses Employee Benefits Expense Other Expenses EBITDA Depreciation and Amortization Expenses EBIT Finance Costs Other Income PBT Tax Expenses PAT Before Restatement Adjustments Net Adjustments Reported PAT

FY14

FY15

FY16

FY17

H1 FY18

4,710.5 (2,437.5) (1,519.7) (213.0) (32.0) 508.3 (133.9) 374.5 (135.6) 19.1 257.9 (86.2) 171.7 (62.7) 109.0

3,650.8 (1,196.7) (1,768.3) (207.3) (38.8) 439.6 (171.5) 268.2 (158.2) 25.2 135.1 (42.9) 92.2 (45.8) 46.4

7,408.8 (2,830.9) (3,335.1) (299.6) (162.0) 781.3 (183.4) 597.9 (159.9) 24.0 462.0 (160.2) 301.8 51.7 353.5

10,548.9 (4,088.7) (4,735.6) (416.6) (106.3) 1,201.8 (256.0) 945.7 (192.7) 36.9 789.9 (297.0) 493.0 40.4 533.3

5,673.4 (2,464.5) (2,020.1) (326.1) (64.4) 798.4 (217.2) 581.2 (152.0) 21.8 451.0 (158.3) 292.8 292.8

CAGR over FY14-17 (%) 30.8% 18.8% 46.1% 25.1% 49.2% 33.2% 24.1% 36.2% 12.4% 24.6% 45.2% 51.0% 42.1% -186.3% 69.8%

Annual Growth over FY16 (%) 42.4% 44.4% 42.0% 39.1% -34.4% 53.8% 39.6% 58.2% 20.5% 53.5% 71.0% 85.4% 63.3% -21.9% 50.9%

Consolidated Balance Sheet Statement (Rs. mn)

Equity Share Capital Reserves and Surplus Long Term Borrowings Other Long Term Liabilities Long Term Provisions Deferred Tax Liabilities (Net) Short Term Borrowings Trade Payables Other Current Liabilities Short Term Provisions Total Liabilities Tangible Assets Intangible Assets Capital Work in Progress Deferred Tax Assets (Net) Long Term Loans and Advances Other Non Current Assets Inventories Trade Receivables Cash and Bank Balances Short Term Loans and Advances Other Current Assets Total Assets

540.6 1,511.1 1,130.1 378.2 9.8

CAGR over FY14-17 (%) 5.7% 34.7% 144.0% 173.1% 32.9%

Annual Growth over FY16 (%) 0.0% 51.0% 123.1% 233.9% 33.0%

932.9 744.9 1,267.0 62.1 5,703.4

1,428.2 1,212.2 2,014.7 129.4 8,354.2

17.6% 34.6% 39.3% 242.9% 36.9%

58.2% 45.4% -0.4% 1271.1% 43.2%

2,041.3 2.5 6.9 20.1 180.9 60.7 492.0 1,127.8 170.3 991.6 609.4 5,703.4

3,073.5 4.1 348.4 21.8 304.6 151.5 643.0 826.9 33.9 1,128.1 1,818.5 8,354.2

33.5% 114.9%

75.8% 198.8% -85.8% 143.4% -5.8% -15.7% 13.0% 21.7% 291.4% 44.9% 48.4% 43.2%

FY14

FY15

FY16

FY17

H1 FY18

152.5 645.5 43.7 14.5 3.2 12.8 573.5 305.4 468.6 1.5 2,221.2

152.5 691.8 155.0 87.1 4.0

180.2 1,045.3 284.5 88.5 5.7

180.2 1,578.7 634.8 295.4 7.5

377.9 286.4 630.6 3.2 2,388.5

589.9 512.3 1,271.9 4.5 3,982.6

857.7 0.3

835.8 0.5

136.4 82.6 205.0 289.9 29.8 306.2 313.4 2,221.2

1.5 163.3 98.6 217.9 420.9 47.2 293.3 309.6 2,388.5

1,160.9 0.8 48.3 8.2 191.9 72.0 435.3 926.6 43.5 684.5 410.5 3,982.6

9.9% -9.7% 33.9% 57.3% 78.8% 48.0% 24.8% 36.9%

Source: Company RHP


Financial Statements (Contd…):

Consolidated Cash Flow Statement (Rs. mn) Particulars (Rs. mn) Cash Flow from Operations Cash Flow from Investing Activities Cash Flow from Financing Activities Net Cash Flow Opening Balance of Cash and Bank Balances Closing Balance of Cash and Bank Balances

22.0 (1,510.3) 1,351.9

CAGR over FY14-17 (%) 18.8% 220.9% -222.6%

Annual Growth over FY16 (%) 118.5% 71.8% 70.6%

(136.4) 170.3 33.9

114.5% 36.9% 78.8%

-3499.5% -7.9% 291.4%

FY14

FY15

FY16

FY17

H1 FY18

384.2 (34.4) (336.9)

336.9 (170.2) (149.2)

294.7 (661.9) 363.4

643.9 (1,137.2) 620.1

12.9 17.0 29.8

17.4 29.8 47.2

(3.7) 47.2 43.5

126.8 43.5 170.3

Source: Company RHP

Particulars (Rs. mn) Revenue Growth Rate (%) EBITDA Growth Rate (%) EBITDA Margin (%) EBIT Growth Rate (%) EBIT Margin (%) Reported PAT Growth Rate (%) Reported PAT Margin (%) Current Ratio Debt Equity Ratio Net Debt to EBITDA Inventories Days Trade Receivable Days Accounts Payable Days Cash Conversion Cycle Days Fixed Asset Turnover Ratio (x) Total Asset Turnover Ratio (x) RoE (%) RoA (%) RoCE (%) Restated Adjusted EPS (Rs.) Restated DPS (Rs.) BVPS (Rs.) Restated Operating Cash Flow Per Share (Rs.) Restated Free Cash Flow Per Share (Rs.)

Consolidated Financial Ratios FY14 FY15 -22.5% -13.5% 10.8% 12.0% -28.4% 7.9% 7.3% -57.4% 2.3% 1.3% Liquidity Ratios 0.8 1.0 0.8 0.6 1.2 1.1 Turnover Ratios 23.0 17.3 16.2 10.3 15.4 12.3 5.5 4.4 2.1 1.5 23.0 17.3 Return Ratios 13.7% 5.5% 4.9% 1.9% 42.9% 24.6% Per Share Data 1.7 0.7 12.2 5.9

13.0 5.2 (0.8)

FY16 102.9% 77.7% 10.5% 123.0% 8.1% 662.2% 4.8%

FY17 42.4% 53.8% 11.4% 58.2% 9.0% 50.9% 5.1%

H1 FY18

1.1 0.7 1.1

1.1 0.9 1.2

0.9 1.2 3.2

22.7 11.0 18.6 6.1 1.9 22.7

22.8 10.3 16.8 5.1 1.8 22.8

8.8 6.9 4.7 1.7 0.7 8.8

28.8% 8.9% 37.3%

30.3% 9.4% 35.1%

14.3% 3.5% 16.3%

5.4

8.2

4.5

18.8 4.5 (2.8)

27.0 9.9 (8.7)

31.5 0.3

14.1% 10.2% 5.2%

Note: Pre-issue data; Source: Company RHP
