GICS Industry: Chemicals l Sub Industry: Fertilizers & Agricultural Chemicals l Website: www.ariesagro.

com

Aries Agro Ltd

Key Stock Indicators
NSE Ticker: Bloomberg Ticker: Face value / Share: Div. Yield (%): ARIES ARIE: IN 10.0 1.2 CMP (as on 16 Mar 2011Rs/share): 52-week range up to 16 Mar 2011 (Rs) (H/L): Market Cap as on 16 Mar 2011 (Rs mn): Enterprise Value as on16 Mar 2011 (Rs mn): Div. Yield (%): 0.0 116.5 204.00/96.75 1,515 2,265 Shares outstanding (mn): Free Float (%): Average daily volumes (12 months): Beta (2 year): 13.0 47.4 41,712 1.4

Incorporated in 1969, Aries Agro Limited (AAL) is the leading manufacturer and supplier of chelated micronutrients, value added secondary nutrient fertilizers and water soluble NPK fertilizers. Agromin (chelated micronutrients) and chelamin (chelated zinc) are the company's flagship brands.

Key Financial Indicators

Revenue (Rs mn) EBITDA ma rgins (%) PAT (Rs mn) PAT ma rgins (%) Gea ring (x) EPS (Rs /s ha re) PE (x) P/BV (x) RoCE (%) RoE (%) EV/EBITDA (x)
n.m.: Not meaningful

KEY HIGHLIGHTS
Leading player in micronutrients market with strong distribution network The AAL group is the largest player in the domestic chelated micronutrients market, with an overall market share of close to 50% in this segment. The company pioneered the concept of chelated micronutrients in the country, and has over the years, steadily established a strong marketing network to educate farmers and market its products. AAL products are marketed all over India. It has a strong distribution reach with 5,600 distributors and more than 79,000 retailers spread across the country. The companys products are currently being sold in 1,75,000 villages across 24 Indian states, with distribution access to two out of every three districts of the country.

New product launches and new markets captured AAL launched 15 new products during FY10, taking the total number of products to 76 brands. The 15 new products included 4 India-first concepts of European bio degradable chelated, 5 natural amino acids chelates, a marine plant extract from Norway, a water treatment formulation, 2 calcium nitrate derivatives and 2 imported agricultural sprayers. The company also entered into new markets like Kerala and Kashmir.

Mar-08 1,046.1 21.0 88.4 8.4 0.2 6.8 17.8 1.7 20.2 15.1 7.4

Mar-09 1,118.9 15.8 38.8 3.5 0.7 3.0 9.3 0.4 10.6 4.1 5.8

Mar-10 1,509.9 20.9 159.6 10.6 0.8 12.3 9.5 1.4 16.1 15.3 7.2

Shareholding (As on December 31, 2010)

FII 4% DII 7% Others 37%

KEY RISKS

Volatility in raw material prices such as metal, sulphur etc Unfavourable monsoon and climatic conditions Introduction of government controls/regulations on pricing of micronutrients

Stock Performances vis--vis market

Returns (%) YTD ARIES NIFTY
Note: 1) YTD returns are since April 1, 2010 to Mar 16, 2011. 2) 1-m, 3-m and 12-m returns are up to Mar 16, 2011.

Promoter 52%

1-m 2 1

3-m -7 -7

12-m 9 6

Indexed price chart

(index) 200 180 160 140 120 100 80 60 40 20 0 Nov-10 Apr-10 Dec-10 Aug-10 Sep-10 Oct-10 Jun-10 Mar-10 May-10 Jul-10 Jan-11 ('000) 700 600 500 400 300 200 100 0 Feb-11 NIFTY

-5 4

Volumes (RHS)

ARIES

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Aries Agro Ltd

BACKGROUND
AAL is engaged in manufacture and sale of micronutrients and other nutritional products for plants and animals under various brands primarily in India and the United Arab Emirates. The company provides bio degradable chelates, organic chelates, sea weed extracts, seeds, synthetic chemical pesticides, bio fertilizers, bio pesticides and farm equipments. Its product portfolio includes farm sprayers and plant protection chemicals, including pesticides, insecticides, fungicides and herbicides. Its product line covers bio degradable chelates, organic chelates, sea weed extracts, seeds, synthetic chemical pesticides, bio fertilizers, bio pesticides and farm equipments. The company has enviable product base of 76 brands. As of March 2010, the company has an installed manufacturing capacity of 84,600 metric tones (MT) per annum spread across 6 factories in India and an additional 70,.000 MT per annum at companys 2 units in Fujairah (UAE) and Sharjah (UAE). The companys Indian manufacturing operations are spread over 6 cities namely Mumbai, Hyderabad, Bengaluru, Kolkata, Ahmedabad and Lucknow. AALs largest manufacturing unit is located at Hyderabad with a capacity of 37,800 MT per annum which manufactures brands like Chelamin and Agromin Max.

COMPETITIVE POSITION
Peer Comparison

Aries Agro Ltd Mar-10 1,509.9 20.9 159.6 10.6 0.8 12.3 9.5 1.4 16.1 15.3 7.2

Revenue ( Rs mn) EBITDA margins (%) PAT (Rs mn) PAT margins(%) Gearing (x) EPS (Rs/share) PE (x) P/BV (x) RoCE (%) RoE (%) EV/EBITDA (x)
n.m: Not meaningful

Insecticides India Excel Crop Care Ltd Limited Mar-10 Mar-10 3,775.4 6,444.7 9.0 11.5 282.2 370.5 7.5 5.7 0.2 0.8 22.2 33.7 13.1 7.4 3.0 1.5 26.1 20.3 25.7 22.6 11.3 5.5

Bayer Cropscience Ltd. Mar-10 17,339.1 14.0 1,272.5 7.3 0.2 37.5 21.8 4.6 30.1 23.3 13.6

FINANCIAL PROFILE
Strong top-line growth in FY10; bottom-line improved significantly

Key Financial Indicators Units Revenue Rs mi ll ion Rs mi ll ion Per cent Per cent Per cent Times Per cent Per cent EBITDA ma rgins Per cent PAT PAT ma rgins EBITDA growth PAT growth Gea ring RoCE

Mar-08
1,046.1 21.0 88.4 8.4 44.0 29.8 4.6 0.2 20.2 15.1

Mar-09
1,118.9 15.8 38.8 3.5 7.0 -19.7 -56.1 0.7 10.6 4.1

Mar-10
1,509.9 20.9 159.6 10.6 34.9 78.3 311.1 0.8 16.1 15.3

AALs top-line grew by ~34.9% to Rs 1.5 bn in FY10 from Rs 1.1 bn in FY09 mainly due to higher volumes and realisations. The companys end-user markets witnessed adequate rainfall in second and third quarters which boosted overall sales backed by 15 new products which were launched during FY10 which resulted in higher volumes and realizations. The company also entered into new markets like Kerala and Kashmir. Exports also increased by 469% in FY10 contributing to the overall revenue growth. EBITDA margins improved by ~590 basis points to 20.9% in FY10 from 15.8% in FY09, mainly on account of better inventory management and decrease in selling expenses as a percentage of sales PAT grew significantly from Rs 38 mn in FY09 to Rs 159 mn in FY10, a growth of ~311% on y-o-y basis. Increase in operating profits coupled with forex gain, profit on sale of assets and interest income contributed to the overall PAT growth.

Revenue growth Per cent

RoE

INDUSTRY PROFILE
Pesticides The pesticides industry comprises two basic product segments - technical and formulations. The technical segment forms the basis of formulations, which are manufactured via the batch-mixing process to develop palatable dosage forms. In 2008-09, total pesticide consumption stood at 43.9 thousand metric tonnes (TMT; technical grade) vis--vis production of 85.3 TMT. Exports are expected to drive production, with domestic demand likely to remain moderate over the medium term. Further, the government`s decision to recognise product patents limits the growth of domestic players to an extent. However, it provides multinational innovator companies greater competitive advantage and pricing flexibility. Despite the seasonal nature of demand, players have maintained operating margins at 10-15 per cent over the last 5 years, backed by high-value product offerings.

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Aries Agro Ltd

ANNUAL RESULTS
Income Statement (Rs million ) Net Sales Operating Income EBITDA EBITDA Margin Depreciation Interest Other Income PBT PAT PAT Margin No. of shares (Mn No.) Earnings per share (EPS) Cash flow (Rs million ) Pre-tax profit Total tax paid Depreciation Change in working capital Cash flow from operating activities Capital Expenditure Investments and others Balance sheet (Rs million ) Equity share capital Reserves and surplus Tangible net worth Deferred tax liablity:|asset| Long-term debt Short-term-debt Total debt Current liabilities Total provisions Total liabilities Gross block Net fixed assets Investments Current assets Receivables Inventories Cash Total assets Ratio Mar-08 180.9 -49.6 7.2 -205.2 -66.7 -334.6 -1.8 Mar-09 76.2 -11.3 13.2 -671.1 -593.0 -13.7 -3.5 Mar-10 238.6 -54.2 23.6 -41.5 166.5 -12.1 -183.5 Revenue growth (%) EBITDA growth(%) PAT growth(%) EBITDA margins(%) Tax rate (%) PAT margins (%) Dividend payout (%) Dividend per share (Rs) BV (Rs) Return on Equity (%) Return on capital employed (%) Gearing (x) Interest coverage (x) Debt/EBITDA (x) Asset turnover (x) Current ratio (x) Gross current assets (days) Mar-08 44.0 29.8 4.6 21.0 39.1 8.4 17.7 1.2 70.6 15.1 20.2 0.2 6.7 1.0 5.2 3.4 301 Mar-09 7.0 -19.7 -56.1 15.8 19.5 3.5 0.0 0.0 75.9 4.1 10.6 0.7 1.9 3.9 3.8 1.8 420 Mar-10 34.9 78.3 311.1 20.9 24.2 10.6 12.2 1.5 84.5 15.3 16.1 0.8 4.7 2.6 3.9 1.5 358 Mar-08 1,016.7 1,046.1 220.2 21.0 7.2 32.7 0.5 127.0 88.4 8.4 13.0 6.8 Mar-09 1,114.7 1,118.9 176.7 15.8 13.2 90.8 3.5 57.9 38.8 3.5 13.0 3.0 Mar-10 1,508.6 1,509.9 315.1 20.9 23.6 66.4 13.4 224.4 159.6 10.6 13.0 12.3 Mar-08 130.0 788.6 918.7 -3.4 191.9 20.9 212.9 234.8 5.0 1,368.0 231.0 482.4 13.1 872.5 430.2 243.3 152.6 1,368.0 Mar-09 130.0 856.6 986.7 4.3 286.4 396.7 683.2 324.0 16.9 2,015.1 362.3 482.8 16.6 1,515.6 561.5 544.5 23.6 2,015.0 Mar-10 130.0 969.4 1,099.4 14.9 243.5 588.9 832.4 361.7 47.6 2,356.0 408.3 471.3 200.1 1,684.6 662.2 559.0 82.8 2,356.0

Cash flow from investing activities Equity raised/(repaid) Debt raised/(repaid) Dividend (incl. tax) Others (incl extraordinaries)

-336.4 535.0 20.1 -18.3 9.1

-17.2 0.0 470.3 0.0 10.9

-195.6 0.0 149.2 -22.7 -38.3

Cash flow from financing activities Change in cash position Opening cash Closing cash
n.m : Not meaningful;

545.9 142.8 9.8 152.6

481.2 -129.0 152.6 23.6

88.2 59.1 23.6 82.8

QUARTERLY RESULTS
Profit and loss account (Rs million) No of Months Revenue EBITDA Interes t Depreci a tion PBT PAT Dec-10 3 548.1 147.5 24.9 4.6 118.0 78.1 100.0 26.9 4.5 0.8 21.5 14.2 % of Rev Dec-09 % of Rev 3 517.4 119.0 20.6 4.3 93.9 64.4 100.0 23.0 4.0 0.8 18.1 12.4 Sep-10 3 466.4 97.5 26.8 4.6 66.1 48.3 100.0 20.9 5.7 1.0 14.2 10.4 % of Rev Dec-10 % of Rev 9 1,231.4 296.1 77.6 13.7 204.8 134.7 100.0 24.0 6.3 1.1 16.6 10.9 Dec-09 9 1,035.3 221.0 52.1 11.2 157.5 101.7 100.0 21.3 5.0 1.1 15.2 9.8 % of Rev

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Aries Agro Ltd

FOCUS CHARTS & TABLES
Rs mn 600 500 400 300 200 100 0 Dec-08 Dec-09 Sep-09 Mar-09 Mar-10 Sep-10 Jun-09 Jun-10

Quarterly sales & y-o-y growth

Dec-08

Dec-09

Mar-09

Sales

Sales growth y-o-y (RHS)

Dec-10

Net Profit

Rs/share 8 6 4 2 0 -2 -4 -6 Dec-08

EPS

Per cent 30 20 10 0 -10 -20 -30

Movement in operating and net margins

Dec-08

Mar-10

Net profit growth y-o-y (RHS)

Dec-09

Dec-10 Dec-10 Sep-10

Sep-09

Sep-08

Sep-09

Jun-08

Jun-09

Mar-08

Mar-09

Dec-09

Mar-08

Mar-09

Mar-10

Dec-10

Sep-08

Sep-09

Sep-10

Jun-08

Jun-09

Jun-10

OPM

Mar-10

Shareholding Pattern (Per cent) Mar 2010 Jun 2010 Promoter 52.6 52.6 FII 0.2 DII 6.4 6.6 Others 40.8 40.7

Sep 2010 52.6 3.4 6.5 37.4

Dec 2010 52.6 3.5 6.9 36.9

Board of Directors Director Name Jimmy T. Mirchanda ni (Dr.) Chakradha r Bha rat Chhaya (Mr.) D.S. Jadha v (Dr.) R.S.S. Mani (Prof.) Aksha y Mi rcha ndani (Mr.) Rahul T. Mi rcha ndani (Mr.)

Designation Cha irma n & Ma na ging Director Non-Executive Di rector Non-Executive Di rector Non-Executive Di rector Non-Executive Di rector Di rector

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Jun-10

Sep-10

Jun-09

Jun-10

Per cent 80 70 60 50 40 30 20 10 0 -10 -20

Rs mn 100 80 60 40 20 0 -20 -40 -60 -80

Quarterly PAT & y-o-y growth

Per cent 2,000 1,500 1,000 500 0 -500 -1,000 -1,500

NPM