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2QFY2013 Result Update | Trading

November 7, 2012

Cravatex
Strategic partnerships to be key driver
Y/E March (` cr) Total operating income EBITDA EBITDA Margin (%) Adj. PAT
Source: Company, Angel Research

BUY
CMP Target Price
2QFY12 54 5 9.1 3 % chg (yoy) 3.7 9.7 53bp (5.4)

`456 `545
12 Months

2QFY13 56 5 9.6 3

1QFY13 58 4 6.4 2

% chg (qoq) (2.8) 46.6 325bp 80.2

Investment Period
Stock Info Sector Market Cap (` cr) Net Debt Beta 52 Week High / Low Avg. Daily Volume Face Value (`) BSE Sensex Nifty Reuters Code Bloomberg Code

Trading 116 24.3 0.5 799 / 388 859 10 18,902 5,760 CRAV.BO CRAV.IN

Cravatex reported a marginally higher top-line of `56cr yoy on a consolidated basis, vis--vis our estimate of `70cr. On the operating front the EBITDA grew by 10% yoy to `5.4cr. Other expenses as a percentage of sales reduced by 406bps which were offset by a total 334bps increase in raw material and employee cost as a percentage of sales, thus leading to expansion of EBITDA margin by 53bps to 9.6%. The company reported a bottom-line of `2.9cr, lower by 5.4%, yoy vis-vis our estimate of `2.1cr.

FILAs extended agreement & other strategic partnerships to drive growth:


Cravatex represents FILA in India and distributes its products under the license agreement which has been further extended for 30 years starting from January 2013. The license permits the distribution of FILA products and use of its trademark in India, Bangladesh, Pakistan, Sri Lanka, Nepal and Bhutan thereby broadening its presence. FILA plans to set up 60-70 stores across India by 2014 and be present in almost all large retail formats such as Shoppers Stop, Westside and Lifestyle. Moreover, Cravatex has signed two new exclusive fitness equipment distribution agreements with Polar Electro OY (Finland) and Miha Body Tec (Germany). The company continues to provide high-quality equipment and customer service to reputed health club chains such as Talwalkars and Gold Gym.

Shareholding Pattern (%) Promoters MF / Banks / Indian Fls FII / NRIs / OCBs Indian Public / Others 75.0 1.9 0.3 22.8

Outlook and valuation: On the back of above developments, Cravatex net


revenue is expected to grow at CAGR of 12.2% over FY2012-14E to `308cr. The EBITDA is expected to be `23cr in while margin is to revive at 7.3% in FY2014E. The net profit is to post a CAGR of 9.8%, to `12cr in FY2014E. At the current market price of `456, the stock is trading at an attractive valuation of 10.0x for FY2014E earnings. We maintain our Buy recommendation on the stock with a revised target price of `545 based on target PE of 12x for FY2014E earnings. Key financials (Consolidated)
Y/E March (` cr) Net sales % chg Adj. net profit % chg EBITDA Margin (%) EPS (`) P/E (x) P/BV (x) RoE (%) RoCE (%) EV/Sales (x) EV/EBITDA (x)
Source: Company, Angel Research

Abs.(%) Sensex Crav

3m 6.9 12.4

1yr 7.6

3yr 14.6

(5.2) 490.2

FY2010 58 32.2 4 98.7 5.2 14.4 31.7 6.6 20.7 8.9 2.2 41.8

FY2011 97 66.4 6 73.6 7.5 25.0 18.2 5.0 27.3 14.8 1.5 19.7

FY2012 245 151.6 10 50.9 7.6 37.7 12.1 3.7 30.3 26.0 0.6 7.8

FY2013E 272 11.2 10 (0.5) 7.2 37.5 12.1 2.9 23.7 23.8 0.5 7.4

FY2014E 308 13.3 12 21.2 7.3 45.4 10.0 2.3 22.7 24.5 0.5 6.4

Twinkle Gosar Tel: 022- 3935 7800 Ext: 6848 Gosar.twinkle@angelbroking.com

Please refer to important disclosures at the end of this report

Cravatex | 2QFY2013 Result Update

Exhibit 1: 2QFY2013 performance (Consolidated)


Y/E March (` cr) Total operating income Net raw material (% of Sales) Employee cost (% of Sales) Other Expenses (% of Sales) Total expenditure EBITDA EBITDA Margin (%) Interest Depreciation Other income PBT (% of Sales) Tax (% of PBT) Adjusted PAT PATM (%)
Source: Company, Angel Research 2QFY13 1QFY13 % chg (qoq) 2QFY12 % chg (yoy) 1HFY13 1HFY12 % chg

56.2
33.9

57.8
36.5

(2.8)
(7.1) 2.1 (7.0) (6.2)

54.2
31.2

3.7
8.6 13.6 (13.6) 3.1

114.1
70.4

98.7
59.1

15.6
19.2 23.7 7.6 16.8

60.3
5.5

63.1
5.4

57.6
4.8

61.7
10.9

59.9
8.8

9.8
11.4

9.3
12.3

8.9
13.2

9.5
23.7

8.9
22.0

20.3
50.8

21.2
54.1

24.3
49.3

20.7
104.9

22.3
89.8

5.4
9.6

3.7
6.4

46.6
325bp

4.9
9.1

9.7
53bp

9.1
8.0

8.8
8.9

3.3
(96)bp

1.1
0.3

1.0
0.3

7.6
(0.7) 70.2 47.8 80.2

0.6
0.3

1278.3
5.8 (2.6) 5.9 (5.4)

2.2
0.6

1.3
0.6

62.6
11.9 (8.8) (8.0) (9.1)

0.0
4.0

0.0
2.3

0.0
4.1

0.0
6.3

0.0
6.9

7.1
1.1

4.1
0.7

7.6
1.0

5.6
1.8

7.0
2.0

26.8
2.9

30.9
1.6

24.6
3.1

28.3
4.5

28.1
5.0

5.2

2.8

5.7

4.0

5.1

Exhibit 2: Actual vs Estimates


Actual v/s Angel's Estimates Total Income EBITDA EBITDA Margin Adjusted PAT
Source: Company, Angel Research

Actual (` cr) 56 5 9.6 3

Estimates(` cr) 70 3 4.5 2

% variation (19.1) 74.8 518bp 37.8

Operating performance above expectations amid low top-line


Cravatex reported a marginally higher top-line of `56cr yoy on a consolidated basis, vis--vis our estimate of `70cr. The contribution from the domestic sales has reduced from 98% in 2QFY2012 to 88% in 2QFY2013 with subsequent increase in international segments share. On the operating front the EBITDA grew by 9.7% yoy to `5.4cr as compared to our estimates of `3.1cr mainly on account of lower than estimated raw material cost. Other expenses cost as a percentage of sales reduced by 406bps which was offset by a total 334bps increase in raw material and employee cost as a percentage of sales, thus leading to expansion of EBITDA margin by 53bp to 9.6%. However on the segmental front, the EBIT margin for the domestic segment contracted by 105 bps yoy while the international segment reported a margin of 8.2% as compared to a loss in the same quarter previous year. The company reported a bottom-line of `2.9cr, lower by 5.4% yoy, vis--vis our estimate of `2.1cr.

November 8, 2012

Cravatex | 2QFY2013 Result Update

Exhibit 3: Revenue growth trend


90 80 70 60 232 250 200 155 129 71 27 33 96 150

Exhibit 4: Margin rebounds owing to low other expenses


6 5 4 11.7 12.5 12.4 8.7 9.1 6.8 6.3 6.4 15 12 9.6 9 6 3 0

(` cr)

(` cr)

(%)

40 30 20 10 0

100 50

2.8

3.2

3.0

3.9

4.9

5.4

4.2

3.7

24

26

24

44

54

85

61

58

56

30

2QFY11

3QFY11

4QFY11

1QFY12

2QFY12

3QFY12

4QFY12

1QFY13

2QFY11

3QFY11

4QFY11

1QFY12

2QFY12

3QFY12

4QFY12

1QFY13

2QFY13

Revenue (LHS)

Revenue growth yoy (RHS)

EBITDA (LHS)

EBITDA Margin (RHS)

Source: Company, Angel Research

Source: Company, Angel Research

Investment arguments
Extended sub-license agreement for 30 years with FILA
FILA is a 100-year old Italian sportswear brand with a strong parentage in sports apparel, sports accessories and sports footwear industry. Cravatex represents FILA in India and distributes its products under the license agreement which has been further extended for 30 years starting from January 2013. The license permits the distribution of FILA products and use of its trademark in India, Bangladesh, Pakistan, Sri Lanka, Nepal and Bhutan. Further, the agreement requires Cravatex to invest 4-5% of the revenue on marketing activities. Cravatex has been currently distributing the FILA products largely in wholesale, shop-in-shop and retail formats but now plans to focus on own-store formats. Besides being present in over 1,200 footwear stores, 200 apparel outlets and over 25 mono brand FILA stores pan India, FILA has further plans to be present in almost all large retail formats such as Shoppers Stop, Westside and Lifestyle. FILA aims to more than double its stores to 100 in the next two years and thereby double its market share by 2015 from the current 5%. Kim Clijsters, US open singles champion is the brand ambassador for FILA.

Strategic partnership and organic growth to drive 24% growth


Cravatex is a market leader in fitness equipment distribution through its brand Proline Fitness. The company distributes products of Johnson Health Tech (third largest fitness company in the world) and during the year this distribution agreement has been extended till 2025. Cravatex operates through a wide network of 51 retail stores across India. The company also recently signed two new exclusive distribution agreements with Polar Electro OY of Finland for Heart Rate Monitors and Miha Body Tec of Germany. Both of these companies have cutting edge products. The company also has strategic partnership with reputed health club chains in India such as Talwalkars and Gold Gym to provide them with high-quality equipment and customer service. Talwalkars expectation of around 30% growth in its business coupled with new strategic alliances provide healthy growth visibility for Cravatex. Owing to robust organic growth and strategic partnerships the net revenue for the fitness equipment segment is expected to grow at 12.2% CAGR over FY2012-14E.
November 8, 2012

2QFY13

5.4

(%)

50

Cravatex | 2QFY2013 Result Update

Healthy lifestyle and underpenetration provide growth visibility


The base for people using fitness equipment or enrolling for fitness programs is expanding rapidly, with an improvement in the standard of living of people and increased awareness about fitness. In 2010, ~39% of Indias total population of 1.2bn was in the 20-44 years age group. According to Planning Commission of India, the countrys population is expected to increase to 1.3bn by 2020. Thus, the company will also have a significant base of potential consumers even if a modest 1% of the countrys population aged 20-44 years is concerned about fitness. The Indian fitness industry is highly underpenetrated compared to developed countries, with only 0.4% population compared to 16% in the US possessing membership in fitness clubs in 2008 (as per The IHRSA Asia Pacific Market Report 2008). This provides a potential opportunity to the company.

Favorable demographics to provide growth visibility


According to Mckinsey Global Institutes recent research study, Indias urban population is expected to rise from 340mn in 2008 to 590mn in 2030, ie an urbanization rate of 40% (lower than seen in most Asian countries due to strict definition of Indian Census). Moreover, India has a young demographic profile and the market for both, fitness and sports products and services, is showing healthy growth. Thus, such favorable demographics provide strong growth visibility for the company.

Sportswear segment to grow at 12% CAGR


Cravatex has acquired 100% of M/s BB (UK) Ltd, which is its wholly owned subsidiary with effect from February 2011. Through this subsidiary, Cravatex aims to acquire sub-license for certain distribution channels for FILA in the UK and Ireland. The subsidiary will design, develop and supply FILA apparel to other markets in Europe. Even in a very difficult economic environment, the subsidiary has achieved a turnover of `84cr in its first year of operation ended March12. Overall, the revenue from the sportswear segment is therefore expected to grow at a CAGR of 12% over FY2011-14E to `172cr in FY2014E.

Sports events to provide growth opportunities


The Indian sportswear industry is at a nascent stage with increasing organized retail space. Increasing number of sports events and activities such as CWG and IPL are also providing scope and growth opportunities for players in the industry. Thus, on the back of mounting popularity of sports with increasing number of events, the sportswear industry is expected to grow at a CAGR 15% over 2011-14 as per the companys estimation.

November 8, 2012

Cravatex | 2QFY2013 Result Update

Financials
Exhibit 5: Key assumptions
Particulars (%) Total revenue growth Sportswear segment Volume growth Change in price/unit Revenue growth Fitness equipment segment Volume growth Change in price/unit Revenue growth
Source: Angel Research

FY2013E 13.1 7.0 5.0 12.4 9.0 5.0 14.5

FY2014E 13.3 4.0 8.0 12.3 6.5 8.0 15.0

Revenue from the fitness equipment segment is expected to grow at a CAGR of 14.7% over FY2011-14E to `133cr in FY2014E on the back of new strategic alliances with Polar Electro OY (Finland) and Miha Body Tec (Germany), and on expansion plans of health club chains such as Talwalkars and Gold Gym to whom the company provides fitness equipments. Also, Cravatex plans to expand its existing network of retail stores, which will provide it greater visibility among retail consumers. In case of the sportswear segment, revenue is expected to grow at a CAGR of 12.3% over FY2011-14E to `172cr in FY2014E, owing to acquisition of the sublicense for distribution through specified channels in the UK and Ireland. It is also expected that the retail-led approach of FILA along with the governments potential reform to allow up to 51% FDI in the retail sector will enhance the companys earnings.

Exhibit 6: Change in estimates


Y/E March Net Sales (` cr) EBITDA Margin (%) EPS (`)
Source: Angel Research

Earlier estimates FY2013E 289 5.6 43 FY2014E 339 6.3 59

Revised estimates FY2013E 272 7.2 37 FY2014E 308 7.3 45

% change FY2013E (5.9) 164.4 (12.7) FY2014E (9.1) 109.8 (22.6)

November 8, 2012

Cravatex | 2QFY2013 Result Update

Net sales to grow at 12.2% CAGR over FY2012-14E


On the back of new strategic alliances and organic developments in fitness equipment and sportswear segment respectively, we expect the top-line to post a CAGR of 12.2% over FY2012-14E to `308cr in FY2014.

Exhibit 7: Net sales continue to move upwards


350 300 250 151.6 160 120 66.4 32.2 11.2 (12.6) 44 FY2009 58 FY2010 97 FY2011 245 FY2012 272 FY2013E 308 FY2014E 13.3 0 (40) 80 40

(`cr)

150 100 50 0

Net sales (LHS)


Source: Company, Angel Research

Net sales growth (RHS)

EBITDA to grow at a CAGR of 11.5% over FY2012-14E


On the back of healthy top-line growth of 12.2%, the companys EBITDA is expected to grow at a CAGR of 11.5% over FY2012-14E, from `18cr in FY2012 to `23cr in FY2014. The EBITDA margin which stood at 7.6% in FY2012 is expected to dip in FY2013 by 40bp due to expected increase in raw material cost as a percentage of sales. However, margins are expected to revive to 7.3% in FY2014.

Exhibit 8: EBITDA margins to revive marginally


24 20 16 7.5 5.2 7.6 7.2 7.3 10 8 6

(` cr)

8 4 0 (4) (2.5) (1) FY2009 3 FY2010 13 FY2011 18 FY2012 20 FY2013E 23 FY2014E

2 0

(2) (4)

EBITDA (LHS)
Source: Company, Angel Research

EBITDA margin (RHS)

November 8, 2012

(%)

12

(%)

200

Cravatex | 2QFY2013 Result Update

Despite an enhanced top-line and improved operating performance, the net profit of the company is expected to post a CAGR of 9.8% over FY2012-14E, from `10cr in FY2012 to `12cr in FY2014E.

Exhibit 9: PAT margin to normalise


16 6.4 12 6.6 8 7 6 4.2 8 4.0 5 3.6 3.8

(` cr)

3 4 1.9 FY2009 3.7 FY2010 6.4 FY2011 PAT (LHS)


Source: Company, Angel Research

2 9.7 FY2012 9.7 FY2013E 11.7 FY2014E 1 0

PAT margin (RHS)

November 8, 2012

(%)

Cravatex | 2QFY2013 Result Update

Outlook and valuation


Cravatex net revenue is expected to grow at 12.2% CAGR over FY2011-14E to `308cr in FY2014E. EBITDA for the company is expected to grow from `18cr in FY2012 to `23cr in FY2014, at 11.5% CAGR. The net profit of the company is expected to post a CAGR of 9.8% from `10cr in FY2012 to `12cr in FY2014E. At the current market price of `456, the stock is trading at an attractive valuation of 10.0x PE and EV/Sales of 0.5x for FY2014E earnings. We maintain our Buy recommendation on Cravatex with a target price of `545, based on target PE of 12x for FY2014E earnings.

Exhibit 10: One-year forward PE band


1,800 1,600 1,400 1,200
(`)

1,000 800 600 400 200 0


Nov-07 Nov-08 Nov-09 Nov-10 Nov-11 May-08 May-09 May-10 May-11 May-12 Nov-12

Price
Source: Company, Angel Research

6x

12x

18x

24x

Company Background
Cravatex is a trading company and mainly operates in two segments a) distribution of fitness equipment (reduced from 49% in FY2007 to 40% in FY2011) and b) distribution of sports footwear and apparel of the brand FILA (increased from 24% of the total revenue in FY2007 to 56% in FY2011). The company is a market leader (28% market share of organized sector) in providing fitness equipment distribution under its brand Proline Fitness and represents the 100-year old Italian brand, FILA, in India. Cravatex has acquired sub-license to distribute the products of FILA in the United Kingdom (UK) and Ireland through wholly owned subsidiary, BB Ltd. It also provides sourcing services to several FILA licensees across the world including Middle East and Africa. The company has also been forming strategic partnerships with various health club chains in India such as Talwalkars and Gold Gym in the fitness equipment segment. Cravatex issued bonus shares in the ratio of 1:1 by capitalizing the subsequent amount from the general reserve account of the company in July 2011.

November 8, 2012

Cravatex | 2QFY2013 Result Update

Concerns
High cost of equipment
India does not have quality equipment manufacturers due to which majority of the equipment are been imported (largely from USA). The duty structure on imported equipment is around 23%. Thus, considering the original cost of fitness equipment, import duties inflates their cost, which further leads to higher fixed cost for both individuals and institutional consumers.

Euro slowdown
The companys subsidiary in the UK which was recently acquired by Cravatex is expected to deliver a potential annual revenue of around 10mn in two years. This revenue potential may be adversely impacted due to recent slowdown in the Euro zone.

Currency Impact
Cravatex imports most of its equipment from outside the country. Rupee depreciation will make imports expensive and increase the cost of acquiring the equipment. High procurement cost will thereby impact the margins of the company.

Lack of government focus


Unlike most developed countries, the fitness equipment and sportswear sectors in India lack industry status. Consequently, the governments focus to enhance awareness regarding fitness and sports-related products is quite low.

Inflation to impact growth


Rising inflation has caused the Reserve Bank of India to continue interest rate hikes and, thereby, sacrifice growth to stabilize inflation. Higher inflation, rising interest rates and a weak economic environment are expected to hold up consumers disposable incomes and, thereby, impact growth.

November 8, 2012

Cravatex | 2QFY2013 Result Update

Profit and Loss (Consolidated)


Y/E March (` cr) Net Sales Other operating income Total operating income % chg Net Raw Materials % chg Other Mfg costs % chg Personnel % chg Other % chg Total Expenditure EBITDA % chg EBITDA Margin Depreciation & Amortisation EBIT % chg (% of Net Sales) Interest & other Charges Other Income (% of Net Sales) Recurring PBT % chg PBT (reported) Tax (% of PBT) PAT (reported) Extraordinary Expense/(Inc.) ADJ. PAT % chg (% of Net Sales) Basic EPS (`) Fully Diluted EPS (`) % chg FY2010 58 58 32.2 33 20.7 1 (25.4) 5 19.3 16 31.9 55 3 (378.9) 5.2 1 2 (218.4) 4.0 1 6 9.5 1 (146) 7 3 47.5 4 (0) 4 98.7 6.4 14.4 14.4 98.7 FY2011 97 97 66.4 50 50.1 2 63.0 8 71.7 25 50.5 84 13 125.0 7.5 1 12 159.3 6.6 2 0 0.1 10 205 9 3 30.3 6 6 73.6 6.6 25.0 25.0 73.6 FY2012 245 245 151.6 155 210.8 (100.0) 20 142.4 52 108.9 226 18 41.7 7.5 1 17 43.1 7.0 4 0 0.0 13 37 14 4 32.1 9 (1) 10 51 4.0 37.7 37.7 51 FY2013E 272 272 11.2 174 12.3 23 15.1 55 7.5 252 20 7.6 7.2 1 18 7.4 6.8 4 0 0.1 14 3.8 14 5 32.1 10 10 (0.5) 3.6 37.5 37.5 (0.5) FY2014E 308 308 13.3 197 13.1 26 13.3 63 13.3 286 23 15.5 7.3 1 21 16.1 7.0 4 0 0.1 17 21 17 6 32.1 12 12 21.2 3.8 45.4 45.4 21.2

November 8, 2012

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Cravatex | 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 Other long term liabilities Net Deferred tax liability Total Liabilities APPLICATION OF FUNDS Gross Block Less: Acc. Depreciation Net Block Capital Work-in-Progress Lease adjustment Goodwill Investments Other non-current assets Current Assets Cash Loans & Advances Other Current liabilities Net Current Assets Mis. Exp. not written off Total Assets 41 2 12 27 21 20 35 20 8 11 1 0 2 21 9 12 0 5 57 1 8 48 24 33 50 23 10 13 0 5 90 3 10 78 39 51 69 25 11 14 0 5 104 3 14 88 44 61 80 27 12 14 0 6 118 3 15 99 47 71 91 3 35 1 17 18 13 1 23 24 18 5 3 50 3 30 32 28 5 4 69 3 38 41 31 5 4 80 3 49 52 31 5 4 91 FY2010 FY2011 FY2012 FY2013E FY2014E

November 8, 2012

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Cravatex | 2QFY2013 Result Update

Cash flow statement (Consolidated)


Y/E March (` cr) Profit Before Tax Depreciation Other Income Change in Working Capital Direct taxes paid Cash Flow from Operations (Incr)/ Decr in Fixed Assets (Incr)/Decr In Investments Other Income Cash Flow from Investing Issue of Equity/Preference Incr/(Decr) in Debt Dividend Paid (Incl. Tax) Others Cash Flow from Financing Incr/(Decr) In Cash Opening cash balance Closing cash balance
Source: Company, Angel Research

FY2010 7 1 (6) (6) (3) (8) 1 0 6 7 0 3 (1) (2) 0 (1) 3 2

FY2011 9 1 (0) (14) (3) (6) (2) (3) 0 (5) 0 9 (1) 1 10 (1) 2 1

FY2012 14 1 (0) (16) (4) (6) (2) 0 0 (1) 1 11 (1) (0) 10 2 1 3

FY2013E 14 1 (0) (10) (5) 1 (2) (1) 0 (3) 0 3 (1) 2 (0) 3 3

FY2014E 17 1 (0) (9) (6) 3 (1) (1) 0 (2) 0 0 (1) (1) 1 3 3

November 8, 2012

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Cravatex | 2QFY2013 Result Update

Key Ratios (Consolidated)


Y/E March Valuation Ratio (x) P/E (on FDEPS) P/CEPS P/BV Dividend yield (%) EV/Net 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 TO (Gross Block) Inventory / Net sales (days) Receivables (days) Payables (days) WC cycle (ex-cash) (days) Solvency ratios (x) Net debt to equity Net debt to EBITDA Int. Coverage (EBIT/ Int.)

FY2010 31.7 26.5 6.6 0.5 2.2 41.8 3.7 14 14 17 2 69 4.0 0.5 2.2 4.7 3.3 0.5 5.4 6.6 8.9 20.7 3.0 59 70 110 95 0.5 3.1 2.7

FY2011 18.2 16.1 5.0 0.6 1.5 19.7 3.0 25 25 28 3 92 6.6 0.7 2.3 10.3 6.1 0.7 13.4 13.4 14.8 27.3 4.3 60 81 97 94 0.7 2.5 3.9

FY2012 12.1 10.9 3.7 0.9 0.6 7.8 2.1 38 38 42 4 124 7.0 0.7 3.7 17.7 8.9 0.8 24.6 25.0 26.0 30.3 10.6 39 75 104 94 0.8 1.4 4.6

FY2013E 12.1 10.9 2.9 0.9 0.5 7.4 1.8 37 37 42 4 158 6.8 0.7 3.5 16.2 9.8 0.7 20.5 23.0 23.8 23.7 10.7 49 75 104 78 0.7 1.4 4.1

FY2014E 10.0 9.1 2.3 0.9 0.5 6.4 1.6 45 45 50 4 200 7.0 0.7 3.5 16.6 9.8 0.5 20.2 23.6 24.5 22.7 11.6 47 75 104 80 0.5 1.2 4.8

November 8, 2012

13

Cravatex | 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 its affiliates may have investment positions in the stocks recommended in this report.

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

Cravatex 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%)

November 8, 2012

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