2QFY2013 Result Update | Infrastructure

November 6, 2012

IL&FS Transportation Networks

Performance Highlights
Quarterly highlights - Consolidated
Y/E March (` cr) Net sales Op. profit Net profit 2QFY13 1,370 453 116 2QFY12 1,256 357 116 % chg(yoy) 9.1 26.9 (0.3) 1QFY13 1,580 466 122 % chg(qoq) (13.2) (2.9) (4.7)

BUY
CMP Target Price
Investment Period
Stock Info Sector Market Cap (` cr) Net Debt (` cr) Beta 52 Week High / Low Avg. Daily Volume Face Value (`) BSE Sensex Nifty Reuters Code Bloomberg Code Infrastructure 3,673 7,777 0.9 224/143 19,203 10 18,817 5,724 ILFT.BO ILFT@IN

`189 `225
12 Months

Source: Company, Angel Research

For 2QFY2013, on a consolidated basis, IL&FS Transportation Networks (ITNL) posted a mixed set of numbers with modest growth on the top-line front. However the bottom-line was ahead of our estimate mainly due to better-thanexpected performance at the operating level. During the quarter EBITDAM was higher mainly on account of higher revenue contribution of fee income from projects under development. Given it being a leader with a robust order book and diversified portfolio we believe ITNL is well placed to leverage on the upcoming opportunities in the road sector. Hence, we maintain our Buy recommendation on the stock. High interest cost dents PAT growth: Companys revenue for the quarter came in at `1,370cr (`1,256cr), registering a 9.1% yoy growth, which was lower than our estimate of `1,507cr. EBITDA margin for the quarter stood at 33.0%, an improvement of 462bp yoy and 351bp qoq respectively. ITNLs interest cost during the quarter grew by 65.6% yoy/11.3% qoq to `280cr, ahead of our expectation of `265cr. On the earnings front, ITNL reported a marginal decline of 0.3% yoy to `116cr on the back of higher interest cost and tax expense (40%). Outlook and valuation: Going forward, we expect ITNL to report revenue CAGR of 12% over FY2012-2014. This would be on the back of an order book of `10,879cr, indicating order book-to-sales ratio of 1.8x. The stock trades at FY2013 and FY2014 P/BV of 1.1x and 1.0x respectively. We maintain a Buy rating with a SOTP-based target price of `225.

Shareholding Pattern (%) Promoters MF / Banks / Indian Fls FII / NRIs / OCBs Indian Public / Others 72.5 3.1 3.7 20.8

Abs. (%) Sensex

#
#

3m 8.1 9.1

1yr 7.1 (7.3)

3yr 16.5 -

ITNL

Note: since listing in March 2010

Key financials (Consolidated)

Y/E March (` cr) Net Sales % chg Adj.Net Profit % chg EBITDA (%) FDEPS (`) P/E (x) P/BV (x) RoE (%) RoCE (%) EV/Sales (x) EV/EBITDA (x) OB/sales(x) Order inflow %chg
Source: Company, Angel Research

FY2011 4,048 68.1 433.5 25.8 28.5 22.3 8.5 1.6 21.8 16.4 2.1 7.5 3.3 3,036 12.1

FY2012 5,606 38.5 497.0 14.6 26.1 25.6 7.4 1.3 19.6 12.9 2.4 9.3 2.8 7,142 135.3

FY2013E 6,564 17.1 510.0 2.6 27.2 26.3 7.2 1.1 17.0 10.8 2.7 9.8 2.3 5,185 (27.4)

FY2014E 7,054 7.5 563.6 10.5 27.4 29.0 6.5 1.0 16.3 9.7 2.7 9.9 2.6 5,423 4.6

Viral Shah
022-39357800 Ext: 6842 viralk.shah@angelbroking.com

Please refer to important disclosures at the end of this report

ITNL | 2QFY2013 Result Update

Exhibit 1: 2QFY2013 performance (Consolidated)

Y/E March (` cr) Income from Operations Total Expenditure Operating Profit OPM (%) Interest Depreciation Non Operating Income Nonrecurring items/Dividend from SPV's Profit Before tax Tax PAT Share of Profits/ (Losses) of Asso. Share of Profits/ (Losses) of MI PAT after MI and Share of Assoc. PAT (%) FDEPS (`)
Source: Company, Angel Research

2QFY13 1,370 918 453 33.0 280 18 42 197 79 117 3 5 116 8.5 6.0

2QFY12 1,256 899 357 28.4 169 16 26 198 65 132 (3) 13 116 9.3 6.0

% chg(yoy) 9.1 2.1 26.9 462bp 65.6 11.5 61.5 (0.4) (11.3) (0.3) (80)bp (0.3)

1QFY13 1,580 1,113 466 29.5 252 24 35 225 91 134 (3) 9 122 7.7 6.3

% chg(qoq) (13.2) (17.6) (2.9) 351bp 11.3 (26.2) 21.2 (12.6) (13.0) (12.3) (4.7) 75bp (4.7)

1HFY2013 2,950 2,031 919 31.2 532 42 77 422 171 251 1 14 238 8.1 12.2

1HFY2012 2,349 1,661 688 29.3 312 32 49 393 142 251 (3) 16 232 9.9 11.9

% chg 25.6 22.3 33.6 (186)bp 70.7 31.0 58.6 7.4 20.3 0.1 2.5 (182)bp 2.5

Exhibit 2: Actual vs Estimates

(` cr) Net sales EBITDA Interest Tax PAT
Source: Company, Angel Research

Estimates 1,507 408 265 52 98

Actual 1,370 453 280 79 116

Variation (%) (9.1) 10.9 5.8 52.6 18.3

Modest top-line performance

Companys revenue for the quarter came in at `1,370cr (`1,256cr), registering a 9.1% yoy growth, which was lower than our estimate of `1,507cr. E&C division reported revenues of `920cr, indicating a growth of 3.7% yoy. Toll and Annuity income grew by 56.9% yoy to `212cr in 2QFY2013. This was mainly due to (a) higher traffic on toll road projects, (b) inclusion of toll revenues of YuHe project from 1QFY2013 and (c) increase in finance income recognized from annuity projects. During the quarter, Elsamex revenues reported a growth of 6.9% yoy to `196cr. Standalone performance: ITNLs standalone revenue, representing C&EPC revenue and fee income, reported revenues of `616.4cr (`648.3cr) in 2QFY2013, indicating a decline of 4.9% yoy. C&EPC revenue contributed majorly (`387.7cr) to the standalone revenue, owing to ramp-up in execution of under construction projects; and the balance was contributed by fee income (`208.8cr) from SikarBikaner project, Baleshwar-Kharagpur and Kiratpur-Ner-Chowk project and usual supervision fee from other projects under construction.

November 6, 2012

ITNL | 2QFY2013 Result Update

Exhibit 3: Modest revenue growth in 2QFY2013

2,500 125.7 2,000 1,500 1,000 1,656 500 4QFY11 1QFY12 2QFY12 3QFY12 4QFY12 1QFY13 2QFY13 Net Sales (` cr) Growth (qoq %, RHS) (34.0) 56.8 (20.6) 14.9 1.0 (13.2) 140.0 120.0 100.0 80.0 60.0 40.0 20.0 1,093 1,256 1,268 1,989 1,580 1,370 (20.0) (40.0) (60.0)

Exhibit 4: Construction income forms a major share (%)

100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% 4QFY11 1QFY12 2QFY12 3QFY12 4QFY12 Construction Elsamex Toll/Annuity 1QFY13 Other 2QFY13 73 69 71 71 72 68 67 7 15 11 15 11 15 12 12 9 13 13 13 15 14

Source: Company, Angel Research

Source: Company, Angel Research

Operational BOT projects update

During 2QFY2013, ITNLs toll collection from Ahmedabad-Mehsana, RIDCOR (PH. 1), Rajkot-Jetpur and Vadodra-Halol grew by 5.6%, 33.6%, 7.1% and 2.5% on a yoy basis, respectively. However, the Beawer-Gomti project reported a decline of 2.2% on a yoy basis.

Exhibit 5: Subdued growth in toll income across operational projects (` cr)

Operational Projects Abad Mehsana Vadodra Halol NoidaToll Bridge RIDCOR (Ph 1) Rajkot to Jetpur Beawer Gomti# 2QFY13 0.17 0.12 0.23 0.53 0.11 0.05 2QFY13 0.16 0.12 0.20 0.40 0.10 0.05 yoy growth (%) 5.6 2.5 17.8 33.6 7.1 (2.2) 1QFY13 0.17 0.13 0.22 0.57 0.13 0.05 qoq growth (%) 0.0 (3.1) 3.6 (6.5) (15.2) (4.3)

Source: Company, Angel Research, Note: #Operational from August 25, 2010

Higher interest dents PAT growth despite strong performance on the operating front
EBITDA margin for the quarter stood at 33.0% in 2QFY2013, an increase of 462bp and 351bp on a yoy and qoq basis respectively, against our estimate of 27.1%. This was mainly on account of higher revenue contribution from the relatively high-margin toll/annuity segment during the quarter. ITNLs interest cost grew by 65.6% yoy/11.3% qoq to `280cr in 2QFY2013, ahead of our estimate of `265cr. On the earnings front, ITNL reported flat yoy earnings of `116cr in 2QFY2013 which was higher than our estimate of `98cr. This was mainly on the back of better-than-expected performance at the operating level. Standalone performance: On a standalone basis, EBITDAM came in at 31.4% (20.5%), registering a growth of 1,084bp yoy, owing to higher share of revenues from fee income comprising mainly of project development fee from under construction projects. On the earnings front, ITNLs PAT grew by 54.6% yoy to `94cr on back of robust operating performance.

November 6, 2012

IT TNL | 2QFY2 2013 Result Update

Exhibit 6: Fall in E t EBITDAM hig gher than e expectations s

500 450 400 350 300 250 200 150 411 331 357 321 457 466 453 100 50 4QFY11 1QFY12 2QFY12 3QFY1 4QFY12 1QF 4 12 FY13 2QFY13 EBITDA (` cr, LHS) A EBITDAM (% RHS) %, 24.8 30.3 28.4 25 5.3 23.0 29.5 33.0 35.0 30.0 25.0 20.0 15.0 10.0 5.0 -

Exhib 7: Higher interest cost de PAT growt bit ents wth

200 180 160 140 120 100 80 60 158 116 116 177 122 20 FY12 4QFY12 1Q QFY13 2QFY13 4QFY11 1QFY12 2QFY12 3QF PAT (` cr, LHS) PATM (%, RHS) 116 40 88 9.6 10.6 9.3 6.9 8.9 7.7 8.5 12.0 10.0 8.0 6.0 4.0 2.0 -

Source: Company, Ange Research el

Source Company, An e: ngel Research

Order bo ook
ITNLs out tstanding ord der book cu urrently stand at `10,879cr (1.8x trailing ds revenues), w which lends decent revenu visibility ove the next few years. d ue er w

Exhibit 8: State-w t wise order bo break-u (%) ook up

4 6 6 20 Himachal Prade esh Haryana J&K 2 Jharkhand Kerala 23 20 Maharashtra Madhya Pradesh Meghalaya 2 3 7 2 5 Rajasthan

Exhib 9: Client-wise order book break bit r k-up (%)

7 33

60

NHAI

Non NHA roads AI

Non road projects

Source: Company, Ange Research el

Source Company, An e: ngel Research

Equity in nvestment of ~`1,300 over ne 3-4 yea 0cr ext ars

The company has alr ready investe ~`2,952cr in under ed r-developmen BOT nt ll e ment of portfolio til 1HFY2013 and would require an incremental equity investm ~`1,300cr over the next three to four years. We believe it would be able to f t r fund its equity requ uirements through intern nal accruals from operat tional projec and cts construction business. n

Novem mber 6, 2012

ITNL | 2QFY2013 Result Update

Outlook and valuation

We are changing our numbers for FY2013 and FY2014 to factor in ITNLs performance in 1HFY2013. On the revenue front, we have marginally reduced our estimate to `6,564cr and `7,054cr for FY2013 and FY2014 respectively. In terms of EBITDAM we are increasing our estimate to 27.2% and 27.4% for FY2013 and FY2014, respectively. Our interest cost estimates now stand at `1,037cr and `1,195cr for FY2013 and FY2014, respectively. Hence, our PAT estimates are revised to `510cr from `564cr for FY2013 and FY2014, respectively.

Exhibit 10: Change in estimates

FY2013E Earlier Estimates Revenue (` cr) EBITDAM (%) APAT (` cr)
Source: Company, Angel Research

FY2014E Variation (%) (4.0) 3.4 7.4 Earlier Estimates 7,767 26.8 588 Revised Estimates 7,054 27.4 564 Variation (%) (9.2) 2.2 (4.1) 6,564 27.2 510.0

Revised Estimates

6,840 26.3 475

During 1HFY2013, ITNL secured orders worth ~ `1,777cr taking the order book to `10,879cr (a growth of 22% yoy). This converts into an order book-to-sales ratio of 1.8x trailing revenues providing comfortable revenue visibility. During the quarter, ITNLs debt to equity has also increased to 1.47x from 1.40x and to 3.81x from 3.70x in FY2012 on a standalone and consolidated basis respectively. We have used sum-of-the-parts (SOTP) valuation method for ITNL. We value the construction business at a P/E of 5x FY2014 earnings estimate and the BOT projects on a DCF basis at a CoE of 14%. Also, we have valued the international business, Elsamex, and three surface transport projects (other than road projects) using P/BV multiple. We maintain a Buy rating with a SOTP-based target price of `225, indicating an upside of 19%.

November 6, 2012

ITNL | 2QFY2013 Result Update

Exhibit 11: SOTP Valuation

Particulars ITNL's construction business Total Road BOT projects Noida Toll Bridge Gujarat Toll Roads West Gujarat E'way RIDCOR Phase-I & II Beawar-Gomti Pune Sholapur Moradabad Bareilly Chandrapur Warora Narkatpally Addanki Kiratpur Ner-Chowk Sikar Bikaner Baleshwar Kharagpur North Karnataka E'way Thiruvananthapuram Phase - I & II AP E'way Hyderabad Ring Road East Hyderabad E'way Hazaribagh Ranchi E'way Jharkhand roads Ph-I & II Chenani Nashri Jorabat Shillong Total Elsamax Bus transport project Metro Rail Gurgaon MP Entry Point project Net debt Grand Total
Source: Company, Angel Research

Segment Construction

Driver Multiple 289 5

Value Value per share (`) (` cr) 1,446 1,446 74 74 7 33 7 25 1 20 36 4 5 40 8 5 7 3 1 2 4 4 29 17 2 260 14 1 10 5 (140) 225

Proportionate stake (%) 33.1 P/E of 5x 33.1

Basis

Toll Toll Toll Toll Toll Toll Toll Toll Toll Toll Toll Toll Annuity Annuity Annuity Annuity Annuity Annuity Annuity Annuity Annuity

545 765 132 981 29 388 700 220 187 771 162 106 140 108 11 135 113 104 562 336 89 6,584 270 16 326 203

25% 84% 100% 50% 100% 100% 100% 35% 50% 100% 100% 100% 94% 50% 100% 26% 74% 74% 100% 100% 50% 1.0 1.0 59% 51%

136 640 132 490 29 388 700 77 94 771 162 106 131 54 11 35 84 77 562 336 45 5,059 270 16 194 103 (2,722) 4,365

3.1 NPV at CoE of 14% 14.7 NPV at CoE of 14% 3.0 NPV at CoE of 14% 11.2 NPV at CoE of 14% 0.7 NPV at CoE of 14% 8.9 NPV at CoE of 14% 16.0 NPV at CoE of 14% 1.8 NPV at CoE of 14% 2.1 NPV at CoE of 14% 17.7 NPV at CoE of 14% 3.7 NPV at CoE of 14% 2.4 NPV at CoE of 14% 3.0 NPV at CoE of 14% 1.2 NPV at CoE of 14% 0.2 NPV at CoE of 14% 0.8 NPV at CoE of 14% 1.9 NPV at CoE of 14% 1.8 NPV at CoE of 14% 12.9 NPV at CoE of 14% 7.7 NPV at CoE of 14% 1.0 NPV at CoE of 14% 115.9 6.2 Valued at 1x its investment 0.4 Valued at 1x its investment 4.4 Valued at 1x its investment 2.4 Valued at 1x its investment (62.4) Standalone net debt 100.0

Exhibit 12: Angel EPS forecast vs consensus

Angel Forecast FY2013E FY2014E
Source: Company, Angel Research

Bloomberg Consensus 27 29.7

Variation (%) (2.8) (2.3)

26.3 29.0

November 6, 2012

ITNL | 2QFY2013 Result Update

Exhibit 13: Key assumptions BOT segment

Project Client Rev. Lane Direct Beneficial ITNL's stake TPC SPV Equity Grant kms (%) Operational NKEL Thiruvan. Phase 1 Andhra Pradesh Exp Gujarat Toll Roads Noida Toll Bridge RIDCOR, Phase 1 West Gujarat Exp East Hyderabad Exp. Beawar-Gomti Under-Dev. Projects Jharkhand Phase 1 Thiruvan. Phase 2 Hazaribaug Ranchi RIDCOR, Phase 2 Warora Chandrapur Pune Sholapur Moradabad Bareilly Narketpalli Addanki Jorbat Shillong Chenani Nashri Kiratpur Ner Chowk Sikar Bikaner State State State State NHAI NHAI State Annuity Annuity Toll Toll Toll Toll Toll 466 107 319 698 275 571 522 888 262 38 327 540 477 100 50 74 0 35 100 100 50 50 100 100 100 100 0 0 0 50 0 0 0 0 0 0 0 0 0 100 50 74 50 35 100 100 50 50 100 100 100 100 1,408 263 869 750 700 1,403 1,984 1,670 810 3,740 2,291 803 654 170 125 131 186 176 160 222 236 162 748 501 167 196 46 176 285 443 467 135 247 1,238 138 738 518 348 958 1,319 967 648 2,992 1,656 389 458 NHAI Annuity State State State State NHAI State State Annuity Toll Toll Toll Annuity Toll NHAI Annuity 472 51 328 523 60 389 173 248 75 50 49 84 25 0 49 74 100 19 0 51 0 0 50 51 0 0 94 50 100 84 25 50 100 74 100 600 110 863 466 589 1,618 276 428 355 101 30 34 232 331 100 40 29 40 215 18 78 76 499 80 829 234 258 1,303 218 321 240 564 55 863 390 147 809 276 317 355 1,408 132 643 375 245 1,403 1,984 835 405 3,740 2,291 803 196 Mar-10 Jun-09 Aug-10 Jan-11 Sep-11 Dec-10 Jan-11 Jan-11 May-11 10.5 11.0 10.0 11.0 11.0 11.0 11.0 11.0 11.0 10.0 11.8 11.8 11.0
#

Debt

ITNL's stake

Con. sign/ App date

Int. Toll Traffic rate inc in (%) (%) (%)

(%)

(%)

Jun-02 Jul-07 Sep-06 Jun-00 Dec-98 Jan-06 Sep-05 Dec-07 Oct-09

11.0 9.5 8.6 10.0 11.0 11.0 12.8 12.0 10.0

#

5 8 5 5

5 5 5 5

Toll 2106

8 5 8 5 5 5 5

5 5 8 5 5 5 5

NHAI Annuity

NHAI Annuity NHAI Annuity NHAI NHAI Toll Toll Toll

Kharagpur Baleshwar NHAI

22,650 4,117 2,186 16,349 18,236 Source: Company, Angel Research; Note: Once in two years
#

November 6, 2012

ITNL | 2QFY2013 Result Update

Investment arguments
Market leader in the growing BOT space
ITNL is a surface transport player, with an established track record of successfully bidding, developing and operating road BOT projects on a commercial basis. ITNL was one of the first movers in the road development segment. The company bagged the Noida toll bridge project in 1998. Since then, ITNL has come a long way and has a sizeable portfolio currently. The company has one of the largest portfolios in the country, encompassing ~12,000 lane kms. ITNLs experience and technical capability give it an edge over competition to bid for new projects.

Pan-India presence
ITNL has 23 road projects spread across the country. The company has decent exposure to state highways, which differentiates it from peers. The one major advantage that state highway projects enjoy over national highways is that they can be bundled with land, making the projects viable. Such diversification prevents fluctuation in the companys revenue stream due to limited exposure to any one region or project.

Hedged revenue stream

We believe ITNL has a hedged road BOT asset portfolio currently, as it is bifurcated into toll and annuity projects in revenue terms, thereby reducing its dependence on traffic-related revenue inflow. Going ahead as well, we expect the company to continue to have balanced revenue, considering its projects in the pipeline.

ITNL in a sweet spot

We believe ITNL, being a market leader, is well poised to leverage on the growing opportunities in the BOT space, owing to 1) strong parentage (belongs to the IL&FS Group); 2) experienced management at the helm of affairs (rich experience of over 22 years in the infrastructure business); and 3) unique business model (present across the value chain).

Key concerns
Interest rate: BOT projects are inherently high-leverage projects. Hence, ITNLs
business model is vulnerable to interest rate fluctuations and any hike in interest rates could increase the companys interest costs. Commodity risks: Road players are facing pressures from the recent price inflation in commodities such as cement and steel, which directly affect margins. Execution delays: ITNL has faced delay in the execution of few projects as the appointment date was not received by the NHAI due to pending environmental clearances. Awarding from NHAI: Any slowdown in award activity from NHAI could affect road-focused players such as ITNL.

November 6, 2012

ITNL | 2QFY2013 Result Update

Exhibit 14: Recommendation summary

Company ABL CCCL IRB Infra ITNL IVRCL JP Assoc. L&T Madhucon NCC Punj Lloyd Sadbhav Simplex In. CMP (`) 212 13 123 189 42 89 1,665 31 45 53 141 200 TP (`) Rating FY12 304 164 225 51 Buy Buy Buy Buy 1,495 2,048 3,133 5,606 4,971 - Neutral Top line (` cr) FY13E 2,029 2,262 3,843 6,564 5,510 FY14E CAGR (%) 2,310 2,522 4,212 7,054 6,722 24.3 11.0 15.9 12.2 16.3 16.7 14.5 17.8 11.4 11.5 8.5 14.2 23.7 (0.5) 14.9 25.6 0.9 4.8 64.3 4.9 1.4 2.8 9.3 16.8 EPS (`) FY12 FY13E FY14E CAGR (%) 27.1 1.5 16.8 26.3 2.5 4.2 66.1 4.6 3.0 1.7 7.5 23.4 31.7 2.7 17.8 29.0 4.6 5.0 76.5 4.7 3.5 3.1 10.4 29.4 15.7 9.3 6.5 125.5 1.9 9.1 (2.6) 58.0 5.7 5.7 32.2 8.9 8.2 7.4 46.6 18.4 25.9 6.2 32.2 19.1 15.1 11.8 P/E 7.8 8.8 7.3 7.2 16.6 20.9 25.2 6.6 14.9 31.1 18.7 8.5 6.7 4.9 6.9 6.5 9.2 17.7 21.8 6.5 12.9 17.1 13.5 6.8 OB/ 2.7 2.2 2.9 1.8 4.9 2.5 3.2 3.5 2.3 2.9 2.3 FY12 FY13E FY14E Sales(x)

- Neutral 12,853 15,259 17,502 - Neutral 53,171 61,031 69,753 56 Buy 1,802 5,250 2,676 6,010 2,206 5,804 2,506 6,732 2,502 6,513 3,147 7,837 - Neutral 182 265 Buy Buy

- Neutral 10,557 11,892 13,116

Source: Company, Angel Research

Exhibit 15: SOTP break-up

Company ` ABL CCCL IRB Infra ITNL IVRCL JP Assoc. L&T Madhucon NCC Punj Lloyd Sadbhav Simplex In. 118 16 52 74 32 28 1,377 14 25 69 83 265 Core Const. % to TP 39 100 32 33 63 31 79 25 54 100 46 100 Real Estate ` 30 2 2 % to TP 33 3 4 Road BOT ` 186 113 121 28 4 99 % to TP 61 69 54 50 8 54 Invst. In Subsidiaries ` 4 19 371 % to TP 3 37 21 ` 30 33 12 15 Others % to TP 13 36 21 34 Total ` 304 16 164 225 51 91 1,748 56 45 69 182 265

Source: Company, Angel Research

November 6, 2012

ITNL | 2QFY2013 Result Update

Profit & loss statement (Consolidated)

Y/E March (` cr) Net Sales Other operating income Total operating income % chg Total Expenditure R.M. consumed Construction expenses Employee expenses SG&A EBITDA % chg (% of Net Sales) Depreciation & Amortisation EBIT % chg (% of Net Sales) Interest & other Charges Other Income (% of PBT) Share in profit of Associates Recurring PBT % chg Extraordinary Expense/(Inc.) PBT (reported) Tax (% of PBT) PAT (reported) Add: Share of earnings of asso. Less: Minority interest (MI) Prior period items PAT after MI (reported) ADJ. PAT % chg (% of Net Sales) Basic EPS (`) Fully Diluted EPS (`) % chg 10.0 476.1 48.3 10.1 427.8 (2.7) 3.2 421.9 431.9 26.6 24.6 24.6 524.2 185.8 35.4 338.4 8.7 2.6 344.5 344.5 14.3 17.7 17.7 0.6 674.0 224.2 33.3 449.7 (4.8) 12.1 432.9 433.5 10.7 22.3 22.3 784.6 245.7 31.3 538.9 3.9 45.8 497.0 497.0 8.9 25.6 25.6 794.8 248.9 31.3 545.9 3.4 39.2 510.0 510.0 7.8 26.3 26.3 804.7 252.0 31.3 552.7 (1.0) (12.0) 563.6 563.6 8.0 29.0 29.0 34.2 174 107 21.9 486.1 30.7 294 79 15.1 524.2 27.0 498 79 11.7 674.6 24.8 728 124 15.8 784.6 25.6 1,037 149 18.7 794.8 25.8 1,195 178 22.2 804.7 36.3 35 554 33.2 60 739 28.5 61 1,093 26.1 77 1,389 27.2 102 1,684 27.4 112 1,821 1,032 104 150 299 479 589 1,609 73 528 357 651 799 2,893 125 1,790 352 626 1,155 4,140 124 3,051 369 595 1,466 4,779 203 3,610 394 571 1,785 5,121 226 3,866 423 607 1,933 FY2009 FY2010 FY2011 FY2012 FY2013E FY2014E 1,621 1,621 2,408 2,408 4,048 4,048 5,606 5,606 6,564 6,564 7,054 7,054

Note: Some of the figures from FY2011 onwards are reclassified; hence not comparable with previous year numbers

November 6, 2012

10

ITNL | 2QFY2013 Result Update

Balance sheet (Consolidated)

Y/E March (` cr) SOURCES OF FUNDS Equity Share Capital Preference Capital Reserves & Surplus Shareholders Funds Minority Interest Total Loans Deferred Tax Liability Total Liabilities APPLICATION OF FUNDS Gross Block Less: Acc. Depreciation Net Block Capital Work-in-Progress Goodwill Receivables under SCA Investments Current Assets Cash Loans & Advances Other Current liabilities Net Current Assets Mis. Exp. not written off Total Assets 1,306 263 1,043 8 285 732 201 1,418 160 344 915 725 693 2,963 2,103 295 1,808 6 271 1,205 433 2,324 550 992 782 787 1,537 5,260 3,532 365 3,167 3 280 2,527 194 3,235 528 1,813 895 1,355 1,881 4 8,056 7,036 478 6,558 34 527 4,679 395 3,055 284 1,700 1,071 1,767 1,288 13,481 10,370 580 9,790 34 527 6,328 395 2,729 138 1,416 1,175 2,104 625 17,698 11,355 692 10,663 34 527 7,826 395 2,759 195 1,391 1,173 2,335 424 19,869 171 35 715 921 123 1,854 65 2,963 194 35 1,474 1,704 157 3,322 78 5,260 194 35 2,045 2,274 183 5,467 132 8,056 194 35 2,570 2,799 258 10,219 204 13,481 194 35 2,987 3,216 258 14,019 204 17,698 194 35 3,458 3,687 258 15,719 204 19,869 FY2009 FY2010 FY2011 FY2012 FY2013E FY2014E

Note: Some of the figures from FY2011 onwards are reclassified; hence not comparable with previous year numbers

November 6, 2012

11

ITNL | 2QFY2013 Result Update

Cash flow statement (Consolidated)

Y/E March (` cr) Profit before tax Depreciation Change in Working Capital Less: Other income Direct taxes paid Cash Flow from Operations (Inc.)/ Dec. in Fixed Assets (Inc.)/ Dec. in Investments Other income Cash Flow from Investing Issue of Equity Inc./(Dec.) in loans Dividend Paid (Incl. Tax) Others Cash Flow from Financing Inc./(Dec.) in Cash Opening Cash balances Closing Cash balances FY2009 476 263 (533) (107) (48) 51 (1,314) (201) 107 (1,409) 171 1,854 (25) (568) 1,483 125 35 160 FY2010 524 32 (454) (79) (186) (163) (795) (232) 79 (947) 23 1,467 (74) (64) 1,500 390 160 550 FY2011 674 69 (366) (79) (224) 74 (1,426) 239 79 (1,108) 2,145 (79) (1,213) 1,012 (23) 550 528 FY2012 785 114 348 (124) (246) 877 (3,535) (201) 124 (3,612) 4,752 (91) (2,352) 2,491 (244) 528 284 FY2013E FY2014E 795 102 518 (149) (249) 1,018 (3,334) 149 (3,186) 3,800 (91) (1,868) 2,023 (145) 284 138 805 112 257 (178) (252) 743 (985) 178 (807) 1,700 (91) (1,670) 120 56 138 195

Note: Some of the figures from FY2011 onwards are reclassified; hence not comparable with previous year numbers

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ITNL | 2QFY2013 Result Update

Key Ratios
Y/E March Valuation Ratio (x) P/E (on FDEPS) P/CEPS P/BV Dividend yield (%) EV/Sales EV/EBITDA EV / Total Assets Per Share Data (`) EPS (Basic) EPS (fully diluted) Cash EPS DPS Book Value Dupont Analysis EBIT margin Tax retention ratio Asset turnover (x) ROIC (Post-tax) Cost of Debt (Post Tax) Leverage (x) Operating ROE Returns (%) ROCE (Pre-tax) Angel ROIC (Pre-tax) ROE Turnover ratios (x) Asset Turnover (Gross Block) Inventory / Sales (days) Receivables (days) Payables (days) Wcap cycle (ex-cash) (days) Solvency ratios (x) Net debt to equity Net debt to EBITDA Interest Coverage 1.8 2.9 3.2 1.6 3.5 2.5 2.2 4.3 2.2 3.5 6.8 1.9 4.3 7.8 1.6 4.2 8.0 1.5 2.5 6 177 135 283 1.4 4 109 148 230 1.4 2 63 117 202 1.1 2 54 121 178 0.8 1 50 131 149 0.6 1 46 142 133 37.4 44.1 93.8 18.0 21.3 26.2 16.4 18.7 21.8 12.9 14.0 19.6 10.8 11.4 17.0 9.7 10.1 16.3 34.2 89.9 1.2 35.5 16.9 1.8 (0.4) 30.7 64.6 0.6 12.7 7.3 1.7 22.0 27.0 66.7 0.7 11.9 7.6 1.9 20.2 24.8 68.7 0.5 9.2 6.4 2.9 17.3 25.6 68.7 0.4 7.5 5.9 3.9 14.0 25.8 68.7 0.4 6.7 5.5 4.3 11.8 24.6 24.6 26.7 1.3 53.7 17.7 17.7 20.8 3.3 87.7 22.3 22.3 25.4 3.5 117.1 25.6 25.6 29.5 4.0 144.1 26.3 26.3 31.5 4.0 165.6 29.0 29.0 34.8 4.0 189.8 7.7 7.1 3.5 0.7 3.3 9.1 1.8 10.7 9.1 2.2 1.8 2.7 8.1 1.2 8.5 7.4 1.6 1.9 2.1 7.5 1.1 7.4 6.4 1.3 2.1 2.4 9.3 1.0 7.2 6.0 1.1 2.1 2.7 9.8 1.0 6.5 5.4 1.0 2.1 2.7 9.9 1.0 FY2009 FY2010 FY2011 FY2012 FY2013E FY2014E

Note: Some of the figures from FY2011 onwards are reclassified; hence not comparable with previous year numbers

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ITNL | 2QFY2013 Result Update

Research Team Tel: 022 - 39357800

E-mail: research@angelbroking.com

Website: www.angelbroking.com

DISCLAIMER
This document is solely for the personal information of the recipient, and must not be singularly used as the basis of any investment decision. Nothing in this document should be construed as investment or financial advice. Each recipient of this document should make such investigations as they deem necessary to arrive at an independent evaluation of an investment in the securities of the companies referred to in this document (including the merits and risks involved), and should consult their own advisors to determine the merits and risks of such an investment. Angel Broking Limited, its affiliates, directors, its proprietary trading and investment businesses may, from time to time, make investment decisions that are inconsistent with or contradictory to the recommendations expressed herein. The views contained in this document are those of the analyst, and the company may or may not subscribe to all the views expressed within. Reports based on technical and derivative analysis center on studying charts of a stock's price movement, outstanding positions and trading volume, as opposed to focusing on a company's fundamentals and, as such, may not match with a report on a company's fundamentals. The information in this document has been printed on the basis of publicly available information, internal data and other reliable sources believed to be true, but we do not represent that it is accurate or complete and it should not be relied on as such, as this document is for general guidance only. Angel Broking Limited or any of its affiliates/ group companies shall not be in any way responsible for any loss or damage that may arise to any person from any inadvertent error in the information contained in this report. Angel Broking Limited has not independently verified all the information contained within this document. Accordingly, we cannot testify, nor make any representation or warranty, express or implied, to the accuracy, contents or data contained within this document. While Angel Broking Limited endeavours to update on a reasonable basis the information discussed in this material, there may be regulatory, compliance, or other reasons that prevent us from doing so. This document is being supplied to you solely for your information, and its contents, information or data may not be reproduced, redistributed or passed on, directly or indirectly. Angel Broking Limited and its affiliates may seek to provide or have engaged in providing corporate finance, investment banking or other advisory services in a merger or specific transaction to the companies referred to in this report, as on the date of this report or in the past. Neither Angel Broking Limited, nor its directors, employees or affiliates shall be liable for any loss or damage that may arise from or in connection with the use of this information. Note: Please refer to the important `Stock Holding Disclosure' report on the Angel website (Research Section). Also, please refer to the latest update on respective stocks for the disclosure status in respect of those stocks. Angel Broking Limited and

Disclosure of Interest Statement 1. Analyst ownership of the stock 2. Angel and its Group companies ownership of the stock 3. Angel and its Group companies' Directors ownership of the stock 4. Broking relationship with company covered

ITNL No No No No

Note: We have not considered any Exposure below ` 1 lakh for Angel, its Group companies and Directors.

Ratings (Returns):

Buy (> 15%) Reduce (-5% to 15%)

Accumulate (5% to 15%) Sell (< -15%)

Neutral (-5 to 5%)

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