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Initiating Coverage Report NBCC Ltd- “Strong Balance Sheet Provides Visibility” Recommendation-STRONG BUY Target
Initiating Coverage Report NBCC Ltd- “Strong Balance Sheet Provides Visibility” Recommendation-STRONG BUY Target
Initiating Coverage Report NBCC Ltd- “Strong Balance Sheet Provides Visibility” Recommendation-STRONG BUY Target
Initiating Coverage Report NBCC Ltd- “Strong Balance Sheet Provides Visibility” Recommendation-STRONG BUY Target

Initiating Coverage Report

NBCC

Ltd-

“Strong

Balance

Sheet Provides Visibility”

Recommendation-STRONG BUY

Target Price- INR 224

CESC LTD

Research Analyst: Anik Das

Telephone- 033 3051-2020

Website- www.microsec.in

Table of Contents Topic Page Number Investment Highlights

Table of Contents

Topic

Page Number

Investment Highlights ………………………………………………………………………………

03-03

Company Background ………………………………………………………………………………

04-05

Investment Rationale ………………………………………………………………………………

06-07

Order Book ………………………………………………………………………………

07-08

Financial Analysis………………………………………………………………………………

09-10

Business Strategy………………………………………………………………………………

10-11

Peer Comparison ………………………………………………………………………………

11-12

Valuation ………………………………………………………………………………

13-13

Financial ………………………………………………………………………………

14-17

Disclaimer ………………………………………………………………………………

18-20

19 th December 2012

- 2 -

Microsec Research

National Building Construction Corp Ltd STRONG BUY   Market Data   Current Market Price (INR)

National Building Construction Corp Ltd

National Building Construction Corp Ltd

STRONG BUY

 

Market Data

 

Current Market Price (INR) 52 Week High / Low(INR) Target Price (INR) Upside Market Cap (In INR Cr)

 

167.00

175/77

 

224

 

34.1%

2,004

200

180

180

160

140

120

100

80

60

40

20

0

-Apr-12

22 -May-12

-Jun -12

21 -Jul-12

-Aug-12

-Sep -12

-Oct 12-

-Nov-12

-Dec -12

22

21

20

19

19

18

18

 

NBCC

SENSEX

19 th December 2012

Sector – Construction

National Building Construction Corporation Ltd (NBCC), a public sector company, primarily provides project management consultancy services for civil construction to various state and central government ministries and departments. With an order book of INR 150 bn, 4.4x FY12 revenues providing revenue visibility over the next couple of years coupled with company’s debt-free balance sheet with a cash surplus of INR 13.25 bn provides an attractive investment opportunity. A key trigger is revenue booking of real estate projects in Okhla and Gurgaon. Other positive factors include net cash per share of INR35 and negative working capital. The company’s uniqueness in project management services to government projects, Scalable model, sustainable free cash flows, healthy return ratios and reasonable valuations provide room for further upside. Hence, we are initiating coverage on the stock with a “STRONG BUY” rating and a target price of INR 224 per share.

Investment Highlights

Unique business model with impressive financial track record-NBCC has a unique business model & provides project management & consultancy (PMC) services (Which constitutes 91% of revenues & 76% of PBT) across civil construction segments ranging from residential complex to institutional buildings, hospitals etc. for central & state government agencies. NBCC also has a Real Estate Development segment (6% of revenues & 18% of PBT).NBCC’s strong relationship with its client & bargaining power with its sub-contractors has been the drivers of its robust cash generating business model. Also, company’s debt free status and negative working capital cycle is a clear evidence of its superior business fundamentals. Order-backlog at 4.4x FY12 revenues provides strong visibility–With an order backlog of INR 150bn or 4.4x FY12 revenues we see strong growth visibility for the company. Further NBCC bagged a massive INR45 bn worth PMC contract for the redevelopment work of Kidwai nagar (E) in Delhi which will pan across 86 acres entailing a total development of 12mn square feet to be executed over a period of 5 years. We believe the order will provide strong growth traction to NBCC beyond FY13e. In FY13 NBCC is likely to complete 2 real estate projects with saleable area of 2.4lac sq ft mainly comprising of a commercial complex in Okhla, Delhi. Debt free balance sheet with surplus cash, High return ratio-NBCC is a debt-free company with cash surplus of INR1325 crore. The significant cash surplus has been on account of better (negative) working capital management. The negative working capital has been on account of advances received from customers and retention margin from the subcontractor. It reported RoE and RoCE of 26% and 31% in FY12, respectively, backed by strong operating performance and asset light model.

Key Financials Highlights

(Figure in Rs CR)

Particulars

FY09

FY10

FY11

FY12

FY13E

FY14E

Net Sales

2041

2,982

3,146

3,448

3,930

4,520

Growth (%)

3.6%

46.1%

5.5%

9.6%

14.0%

15.0%

EBITDA

153

96

132

151

185

221

EBITDA Margin (%)

7.5%

3.2%

4.2%

4.4%

4.7%

4.9%

Net Profit

32

117

145

184

221

269

Growth (%)

-89.0%

265.6%

23.9%

26.9%

20.1%

21.7%

Net Profit Margin (%)

1.6%

3.9%

4.6%

5.3%

5.6%

6.0%

Diluted EPS (INR) P/E

13.26

9.71

11.69

15.85

18.45

22.43

12.90

17.61

14.63

10.79

9.27

7.62

BVPS

38.11

45.54

54.51

66.29

80.50

97.68

P/BV

4.38

3.67

3.06

2.52

2.07

1.71

EV/EBITDA

(3.30)

(4.60)

(5.00)

4.50

2.20

0.10

RoE

40.16

23.21

23.38

26.24

25.10

25.20

 

- 3 -

Source: Company, Microsec Research

Microsec Research

Company Background NBCC is a top rated project management & consultancy company with expertise in

Company Background

NBCC is a top rated project management & consultancy company with expertise in residential and commercial complexes, institutions, hospitals and other buildings, sewage treatment plants, roads; and civil infrastructure for power sector such as cooling towers, chimneys and other civil and structural works predominantly for State and Central government ministries, department & agencies and various public sector undertakings.

NBCC is engaged in the business of (i) project management consultancy services for civil construction projects (ii) civil infrastructure - power sector and (iii) real estate development.

In the PMC division, the company provides management and consultancy services for a range of civil construction projects such as residential and commercial complexes, redevelopment of buildings and colonies, hospitals, educational institutions, etc. As on January, 2012, NBCC has an outstanding order book of INR 110bn in this division.

In civil infrastructure for the power sector, the company provides engineering and construction services for power projects, including design and execution of (i) civil and structural works for power projects (ii) cooling towers and (iii) chimneys. It has an outstanding order book of INR 6bn in this division.

In the real estate development division, the company focuses on residential and commercial development. As on January, 2012, it had land reserves aggregating 125.2 acres with saleable and leaseable area of 10.7 million sq ft. It recently bagged a significant order of INR40bn for redevelopment of government colonies of east Kidwai Nagar (Delhi) which is spanning over 90 acres. Further, Management is confident of stable order inflow from various government agencies over the next 2-3 years.

NBCC’s Business Model

government agencies over the next 2-3 years. NBCC’s Business Model 19 t h December 2012 -

19 th December 2012

- 4 -

Microsec Research

Overview Of NBCC Profile of senior management team I n v e s t m

Overview Of NBCC

Overview Of NBCC Profile of senior management team I n v e s t m e

Profile of senior management team

I n v e s t m e n t
I
n
v
e
s
t
m
e
n
t

19 th December 2012

- 5 -

Microsec Research

Investment Rationale Unique player with strong order book- NBCC is a unique player, which provides

Investment Rationale

Unique player with strong order book-

NBCC is a unique player, which provides project management services to government projects. After its establishment in 1960, the company has established a relationship with different state and central government ministries, department, agencies and various public sector undertakings. The company has completed 54 projects in PMC and civil infrastructure for power segments.

NBCC enjoys automatic nomination status for PMC civil construction projects related to government projects. Currently, it has an order book of INR 15,000 crore i.e., 4.4x FY12 revenues providing revenue visibility over the next couple of years. The order book consists of PMC division INR 11,000 crore and civil infrastructure for power sector INR 600 crore.

Scalable business model & strong brand recognition in central & state agencies-

NBCC has a strong track record in the project management & consultancy field with strong brand recognition in the central & state government agencies. Over a period of time the company has achieved significant financial strength. Even after adopting a conservative strategy of not levering its balance sheet it has been able to achieve a 13% CAGR (FY08-12). With no debt, negative working capital & project pipeline the company will maintain the growth trajectory over future as well.

Over the past five decades, its ability to successfully manage projects as well as maintain quality standards has helped in developing its brand as a trusted service provider. This provides NBCC with access to business opportunities especially in its PMC segment. It intends to continue to leverage the goodwill of its brand to enhance relationships with existing clients, seek new clients as well as diversify its business in allied sectors to help it grow its operations.

Debt free balance sheet with surplus cash-

NBCC is a debt-free company with a cash surplus of INR 1325 crore. This is a key differentiator as other construction companies in the sector are finding it difficult to grow their earnings currently. The significant cash surplus has been on account of better (negative) working capital management. The negative working capital has been on account of advances received from customers and retention margin from the subcontractor. Hence, the company generates significant other income, which contributes significantly to its bottom line.

Conservative policy provides comfort-

The conservative accounting policy of recognising the contract revenues only on completed contracted method is also expected to result in significant ramp up of revenues for the Real estate division. In FY13, NBCC is expected to achieve completion of two projects entailing a saleable area of 2.4lac sq ft mainly comprising of a commercial complex in Okhla entailing 2.25lac sq ft which is expected to boost its Real estate revenues significantly.

19 th December 2012

- 6 -

Microsec Research

Order Book Order-backlog provides visibility at 4.4x FY12 revenues – NBCC has the preferred agency

Order Book

Order-backlog provides visibility at 4.4x FY12 revenues –

NBCC has the preferred agency status for executing public works & Civil infrastructure for government of India & a strong order backlog of INR 150bn or 4.4x FY12 revenues .The company boasts a strong order book accretion of INR 45bn for redevelopment of Kidwai nagar (E) in Delhi which will pan across 86 acres entailing a total development of 12mn square feet. The project is to be executed over a period of 5 years.

The project is to be executed over a period of 5 years. Source: Company, Microsec Research

Source: Company, Microsec Research

Segmental break-up of current order book-

Microsec Research Segmental break-up of current order book- 19 t h December 2012 Source: Company, Microsec

19 th December 2012

Source: Company, Microsec Research

- 7 -

Microsec Research

Break-up of ongoing PMC projects- Source: Company, Microsec Research NBCC has over the years, leveraged

Break-up of ongoing PMC projects-

Break-up of ongoing PMC projects- Source: Company, Microsec Research NBCC has over the years, leveraged its

Source: Company, Microsec Research

NBCC has over the years, leveraged its PMC expertise in diverse segments of the civil construction such as residential and commercial complexes, institutions, hospitals and other buildings, sewage treatment plants, roads; and civil infrastructure for power sector such as cooling towers, chimneys and other civil and structural works. As of Dec12, it’s Order Book of the PMC projects comprising of 38% - institution segment, 44% - infrastructure segment, 14% - commercial construction and 3% - residential construction.

Real Estate Development- Profit booking a key trigger

NBCC is focused primarily on residential and commercial projects. It has land bank in Delhi, Khekra (UP), Patna, Kolkatta, Kochi, Alwar (Rajasthan), Ahmedabad and Lucknow. The existing land bank is a mix of land either owned or acquired on lease through government or acquired through auction. It also intends to secure land available with central and state government agencies for development through joint ventures projects. This model helps it to spread the risk of its real estate projects’ portfolio in addition to reducing its capital investment and beneficially utilising its PMC, sales and marketing capabilities. The business segment is mostly funded through internal accruals.

It is currently working on three of its major projects in Okhla (1 project) and Gurgaon (2 projects). It has sold major portions in both the projects. Management expects to book part (50%) of the revenue from the Okhla project in 4QFY13e and the remaining in 1HFY14e. It plans to book revenue on the two Gurgaon projects in FY14e. These projects, so far, have been very successful, backed by strong prices in the NCR region.

19 th December 2012

- 8 -

Microsec Research

Financial Highlights We estimate revenues to grow at 10% CAGR in FY11-14E to INR 4520

Financial Highlights

We estimate revenues to grow at 10% CAGR in FY11-14E to INR 4520 crore. Revenue growth will be fuelled by strong order execution and profit booking in the real estate project. Management expects a top line growth of 15% and an EBITDA margin of 4.8% for the next two Years.

of 15% and an EBITDA margin of 4.8% for the next two Years . Source: Company,

Source: Company, Microsec Research

for the next two Years . Source: Company, Microsec Research Source: Company, Microsec Research 19 t

Source: Company, Microsec Research

19 th December 2012

Source: Company, Microsec Research 19 t h December 2012 Source: Company, Microsec Research Source: Company, Microsec

Source: Company, Microsec Research

19 t h December 2012 Source: Company, Microsec Research Source: Company, Microsec Research - 9 -

Source: Company, Microsec Research

- 9 -

Microsec Research

NBCC has reported RoE and RoCE of 26% and 31%, respectively, in FY12, backed by
NBCC has reported RoE and RoCE of 26% and 31%, respectively, in FY12, backed by
NBCC has reported RoE and RoCE of 26% and 31%,
respectively, in FY12, backed by strong operating
performance and asset light model.

Source: Company, Microsec Research

and asset light model. Source: Company, Microsec Research Source: Company, Microsec Research 19 t h December

Source: Company, Microsec Research

19 th December 2012

In FY12, NBCC has reported a Dividend pay put ratio of 22%.For the last 5
In FY12, NBCC has reported a Dividend pay put
ratio of 22%.For the last 5 years company has
able to maintain a payout ratio of 20%.

Source: Company, Microsec Research

5 years company has able to maintain a payout ratio of 20%. Source: Company, Microsec Research

- 10 -

Microsec Research

Key Business Strategy For NBCC PMC to benefit from economies of scale- In PMC segment,

Key Business Strategy For NBCC

PMC to benefit from economies of scale-

In PMC segment, NBCC intends to focus on undertaking projects having a high order value (above INR 1 Bn). It intends to focus on redevelopment projects whereby old buildings, complexes and colonies are redeveloped. It aims to focus on establishing itself as a leading player in the large order size projects so that it can take advantage of these barriers to entry leading to lower levels of competition and higher profit margins.

High growth opportunities in the infrastructure segment-

NBCC intends to take advantage of opportunities in the infrastructure space by Bidding for BOT / BOLT / BOOM projects under PPP mode. An additional advantage of BOT / BOLT / BOOM projects is that they offer long-term revenue streams. It also intends to leverage on its PMC and real estate development businesses to procure large infrastructure projects and to pursue strategic alliances with established domestic as well as international players, which will augment its prospects of securing such projects

Expand its real estate development business-

NBCC intends to secure lands available with Central and State Government agencies for its real estate development projects and to continue to selectively enter into joint ventures agreements to increase the amount of land or land development rights available to it for development. This model helps it to spread the risk of its real estate projects’ portfolio in addition to reducing its capital investment and beneficially utilising its PMC, sales and marketing capabilities. Company to focus on quality and timely project delivery NBCC intends to continue to focus on quality and timely project execution thereby maximizing customer satisfaction in all its business segments.

19 th December 2012

- 11 -

Microsec Research

Peer Comparison               ROE          

Peer Comparison

             

ROE

             

Order

   

Sales

EBITDA

PAT

EPS

EBITDA

PAT

(%)

D/E

EPS

P/EFY13E

No of

Book/

P/BV

EV/EBITDA

Company

FY12

FY12

FY12

FY12

(%)

(%)

FY12

FY12

FY13E

CMP

P/EFY12

Bloomberg

shares

MCAP

Sales

FY12

FY12

NCCLtd.

6665

898

55

2

13.5%

0.8%

2.6

2.0

3

54

25.4

16.4

25.7

1393

3.3

0.5

7.1

SimplexInfrastructuresLtd.

6019

466

84

17

7.7%

1.4%

7.2

1.8

11

215

12.7

19.4

5.0

1067

2.4

0.9

6.6

IL&FSTransportationNetworksLtd.

5605

1465

497

25

26.1%

8.9%

21.5

3.7

29

210

8.2

7.2

19.4

4074

2.3

1.4

8.5

EngineersIndiaLtd

3723

716

644

19

19.2%

17.3%

38.0

0.0

20

225

11.8

11.5

33.7

7588

1.2

4.5

7.2

PatelEngineeringLtd.

3592

466

67

10

13.0%

1.9%

4.7

1.8

15

81

8.5

5.4

7.0

567

2.5

0.5

5.9

SadbhavEngineeringLtd.

2866

414

122

8

14.5%

4.3%

11.7

3.0

5

136

16.9

29.9

15.0

2049

2.6

2.0

12.7

NationalBuildingsConstructionCorpn. Ltd

3448

151

184

15

4.4%

5.3%

25.4

0.0

18

168

11.0

9.1

12.00

2016

4.4

0.0

4.6

Source: Company, Microsec Research, Ace Equity

19 th December 2012

- 12 -

Microsec Research

Valuations A PSU construction company with no debt and good cash resources on its books

Valuations

A PSU construction company with no debt and good cash resources on its books becomes very attractive. A good execution track record and a diverse range of projects seem to be the key to its success. With more government spending in infrastructure and with a sound order book, we have a rosy outlook for the company. It is also a good proxy for dividend play.

The strong business model is depicted in its financial performance with negative working capital cycle clubbed with the return ratios which also signify its superior business model. Also the fact that NBCC has not relied on leverage to fund its growth reiterates our belief about the superior business model.

At the CMP of INR 168 per share, NBCC is quoting at 9.1x and 7.5x its FY13E and FY14E price

earnings (P/E), respectively.

assign a P/E multiple of 10x and arrive at a target price of INR 224 per share which reflects

We believe NBCC is better placed than most of its peers. We

34% upside over the current stock price of INR 168 per share.

Risk & Concerns

Dependence of Government for projects-

The Company’s PMC and Civil Infrastructure for power sector segments are fully dependent on projects awarded by government entities. Accordingly, any change in the government’s policy or in budgetary allocations may adversely affect its order book and future business prospects.

Land & real estate related risks-

NBCC title and development rights or other interests over land may be subject to legal uncertainties and defects which may have an adverse impact on its ability to develop and market projects developed on such lands.

Excessive dependence on PMC business-

NBCC derived 91%, 93.4 % and 90.9 % of total income for FY 2012 and FY 2011 & 2010, respectively from its PMC segment. Any decline or delay in this segment might have an adverse impact on the future business prospect s and the financial condition.

19 th December 2012

- 13 -

Microsec Research

Income Statement   National Buildings Construction Corpn. Ltd. Annual-Y-O-Y(%)- [INR-Crore]   DESCRIPTION

Income Statement

 

National Buildings Construction Corpn. Ltd. Annual-Y-O-Y(%)- [INR-Crore]

 

DESCRIPTION

FY 2008

FY 2009

FY 2010

FY 2011

FY 2012

FY 2013E

FY 2014E

Net Sales

1970

2041

2982

3146

3448

3930

4520

Other operating income

             

Net Sales & Other Operating Income

1970

2041

2982

3146

3448

3930

4520

%

growth

34.9%

3.6%

46.1%

5.5%

9.6%

14.0%

15.0%

Total Expenditure

1660.75

1887.98

2886.11

3014.30

3296.64

3746

4299

PBIDT (Excl OI)

309

153

96

132

151

185

221

EBDITA (%)

15.7%

7.5%

3.2%

4.2%

4.4%

4.7%

4.9%

%

growth

395.4%

-50.5%

-37.4%

37.4%

14.6%

22.3%

19.6%

Other Income

112.52

93.94

86.75

85.41

134.62

154

190

Operating Profit

422

247

183

217

286

339

411

Interest (Net)

3.56

3.22

4.87

0.00

0.00

0

0

 

PBDT

418

244

178

217

286

339

411

Depreciation

3.09

3.07

3.12

3.21

1.96

3

3

PBT

415

241

175

214

284

336

408

Tax

135.06

80.80

58.10

69.29

99.66

114

139

Profit After Tax

280

32

117

145

184

221

269

Minority Interest

             

Shares of Associates

             

Consolidated Net Profit

280

32

117

145

184

221

269

PAT (%)

14.2%

1.6%

3.9%

4.6%

5.3%

5.6%

6.0%

% Growth

246%

-89%

264%

24%

27%

20%

22%

Equity Capital

90

90

90

90

120

120

120

Face Value (In Rs)

1000

1000

1000

1000

10

10

10

No. of shares

0

0

0

0

12

12

12

Adjusted EPS

3112

355.56

1294.78

1607.33

15.34

18.45

22.43

19 th December 2012

- 14 -

Microsec Research

Balance sheet (Figure in Rs CR) DESCRIPTION FY 2008 FY 2009 FY 2010 FY 2011

Balance sheet

(Figure in Rs CR)

DESCRIPTION

FY 2008

FY 2009

FY 2010

FY 2011

FY 2012

FY 2013E

FY 2014E

SOURCES OF FUNDS:

Share Capital

90

90

90

90

120

120

120

Share Warrants & Outstandings

0

0

0

0

0

   

Total Reserves

245

367

457

564

675

846

1052

Shareholder's Funds

335

457

547

654

795

966

1172

Secured Loans

             

Unsecured Loans

             

Total Debts

0

0

0

0

0

0

0

Total Liabilities

335

457

547

654

795

966

1172

APPLICATION OF FUNDS :

Gross Block

22

23

36

35

35

38

41

Less: Accumulated Depreciation

9

10

11

12

12

15

18

Less: Impairment of Assets

             

Net Block

13

13

25

24

23

23

23

Lease Adjustment A/c

             

Capital Work in Progress

             

Goodwill on Consolidation

             

Investments

6

143

250

64

57

78

89

Toll receivable account

             

Current Assets, Loans & Advances

             

Inventories

269

196

267

409

450

470

480

Sundry Debtors

448

778

882

568

852

850

850

Cash and Bank

921

910

944

1170

1325

1644

1978

Other Current Assets

13

9

8

23

28

31

35

Loans and Advances

469

581

651

669

727

770

785

Total Current Assets

2119

2473

2752

2839

3383

3765

4128

Less : Current Liabilities and Provisions

             

Current Liabilities

1523

1876

2263

1981

2496

2658

2806

Provisions

283

302

224

296

176

246

265

Total Current Liabilities

1805

2178

2486

2277

2673

2904

3071

Net Current Assets

314

296

266

562

711

861

1057

Miscellaneous Expenses not written off

0

0

 

4

4

4

3

Deferred Tax Assets / Liabilities

3

5

5

-5

-8

   

Total Assets

335

457

547

654

795

966

1172

19 th December 2012

- 15 -

Microsec Research

Cash Flow (Figure in Rs CR) DESCRIPTION FY 2009 FY 2010 FY 2011 FY 2012

Cash Flow

(Figure in Rs CR)

DESCRIPTION

FY 2009

FY 2010

FY 2011

FY 2012

FY 2013E

FY 2014E

Profit before Tax

241

175

214

284

336

408

Depreciation

3

3

3

2

3

3

Interest/ Dividend Recd.

       

0

0

Change in Debtors

-330

-104

315

-285

2

0

Change in Loans & Adv

-112

-70

-18

-58

-43

-15

Change in Inventory

73

-71

-143

-41

-20

-10

Change in Other C/A

4

1

-15

-5

-3

-4

Change in CL

372

309

-209

395

231

167

Income Tax Paid

-81

-58

-69

-100

-114

-139

Net operating Cash Flow

     

193

393

410

Change in Fixed Assets

0

-12

2

0

-3

-3

Change in Capital WIP

0

0

0

0

0

0

Change in Investments

-138

-107

186

7

-21

-11

CF from Investing Activities

     

7

-23

-14

Change in Share Capital

0

0

0

30

0

0

Change in Long term Debt

0

0

0

0

0

0

Change in Short Term Debt

0

0

0

0

0

0

Dividend Paid

-7

-27

-28

-42

-51

-62

Interest Paid

-3

-5

0

0

0

0

Tax paid on Dividend

     

0

0

0

CF from Financing Activities

     

-12

-51

-62

Net Cash Flow from Business

     

188

319

334

Add : Opening Cash

     

1170

1325

1644

Closing Cash

     

1357

1644

1978

19 th December 2012

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Microsec Research

Ratio Analysis Particulars FY09 FY10 FY11 FY12 FY13E FY14E Profitability Ratios EBIDTA Ratio

Ratio Analysis

Particulars

FY09

FY10

FY11

FY12

FY13E

FY14E

Profitability Ratios

EBIDTA Ratio

7.5%

3.2%

4.2%

4.4%

4.7%

4.9%

PBT Ratio

11.8%

5.9%

6.8%

8.2%

8.5%

9.0%

Net Profit ratio

1.6%

3.9%

4.6%

5.3%

5.6%

6.0%

Sales/Total Asset (Times)

0.8

1.0

1.1

1.0

1.0

1.1

Return Ratios

ROCE

61.6%

35.8%

35.6%

39.1%

38.1%

38.1%

ROE

8.1%

23.2%

24.1%

25.4%

25.1%

25.2%

Liquidity Ratios

Debt / Equity

0.0

0.0

0.0

0.0

0.0

0.0

Current Ratio

1.1

1.1

1.2

1.3

1.3

1.3

Interest Cover(x)

1.4

2.7

2.3

NA

NA

NA

Investor Ratios

EPS

355.6

1294.8

1607.3

15.3

18.5

22.4

DPS

200.0

258.9

311.8

3.5

4.2

5.2

Dividend Payout Ratio (%)

56.3

20.0

19.4

23.0

23.0

23.0

BV per Share

38.1

45.5

54.5

66.3

80.5

97.7

P/BV

4.4

3.7

3.1

2.5

2.1

1.7

P/E

0.5

0.1

0.1

11.0

9.1

7.5

EV/Sales

-0.4

-0.3

-0.3

0.2

0.1

0.0

EV/EBITDA

-3.3

-4.6

-5.0

4.6

2.0

0.2

19 th December 2012

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Microsec Research

Microsec Research: Phone No.: 91 33 30512100 Email: microsec_research@microsec.in Ajay Jaiswal: President, Investment

Microsec Research: Phone No.: 91 33 30512100

Email: microsec_research@microsec.in

Ajay Jaiswal: President, Investment Strategies, Head of Research: ajaiswal@microsec.in
Ajay Jaiswal: President, Investment Strategies, Head of Research: ajaiswal@microsec.in

Fundamental Research

Name

Sectors

Designation

Email ID

Nitin Prakash Daga

IT, Telecom & Entertainment

AVP-Research

npdaga@microsec.in

Naveen Vyas

Midcaps, Market Strategies

AVP-Research

nvyas@microsec.in

Gargi Deb

Agriculture & Pharma

Research Analyst

gdeb@microsec.in

Sutapa Roy

Economy

Research Analyst

s-roy@microsec.in

Sanjeev Jain

BFSI

Research Analyst

sjain@microsec.in

Anik Das

Mid Cap

Research Analyst

adas4@microsec.in

Neha Majithia

Mid Cap

Research Analyst

nmajithia@microsec.in

Soumyadip Raha

Mid Cap

Executive Research

sraha@microsec.in

Saroj Singh

Mid Cap

Executive Research

ssingh2@microsec.in

Technical & Derivative Research

 

Vinit Pagaria

Derivatives & Technical

VP

vpagaria@microsec.in

Ranajit Saha

Technical Research

Sr. Manager

rksaha@microsec.in

Institutional Desk

 

Dhruva Mittal

Institutional Equities

Sr. Manager

dmittal@microsec.in

Puja Shah

Institutional Desk

Dealer

pdshah@microsec.in

PMS Division

Siddharth Sedani

PMS Research

AVP

ssedani@microsec.in

Research: Financial Planning Division

 

Shrivardhan Kedia

FPD Products

Manager Research

skedia@microsec.in

Research-Support

Subhabrata Boral

Research Support

Asst. Manager Technology

sboral@microsec.in

Recommendation

Expected absolute returns (%) over 12 months

Strong Buy

>20%

Buy

between 10% and 20%

Hold

between 0% and 10%

Underperform

between 0% and -10%

Sell

< -10%

MICROSEC RESEARCH IS ALSO ACCESSIBLE ON BLOOMBERG AT <MCLI>

19 th December 2012

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Microsec Research

19 t h December 2012 - 19 - Microsec Research

19 th December 2012

- 19 -

Microsec Research

Disclaimer: This document is prepared by the research team of Microsec Capital Ltd. (hereinafter referred

Disclaimer:

This document is prepared by the research team of Microsec Capital Ltd. (hereinafter referred as “MCL”) circulated for purely information purpose to the authorized

recipient and should not be replicated or quoted or circulated to any person in any form. This document should not be interpreted as an Investment / taxation/ legal

advice. While the information contained in the report has been procured in good faith, from sources considered to be reliable, no statement in the report should be considered to be complete or accurate. Therefore, it should only be relied upon at one’s own risk.

MCL is not soliciting any action based on the report. No indication is intended from the report that the transaction undertaken based on the information contained in this

report will be profitable or that they will not result in losses. Investors must make their own investment decisions based on their specific investment objectives and

financial position and using such independent advisors, as they believe necessary.

Neither the Firm, nor its directors, employees, agents nor representatives shall be liable for any damages whether direct or indirect, incidental, special or consequential

including lost revenue or lost profits that may arise from or in connection with the use of the information.

- 20 -

19 th December 2012

Microsec Research