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May 28, 2013

Jyothy Laboratories
Shining bright
Company details Price target: Market cap: 52-week high/low: NSE volume: (no. of shares) BSE code: NSE code: Sharekhan code: Free float: (no. of shares) Shareholding pattern
Others 8% FIIs 17%

Reco: Buy CMP: Rs180

Key points
Rs254

Rs2,903 cr Rs208/104 1.23 lakh 532926 JYOTHYLAB JYOTHYLAB 5.6 cr

Chip off the old block: With the successful integration of Henkel, which it had acquired in early FY2012, and the induction of a new management team led by a professional chief executive office (CEO; S Raghunanadan, who successfully built brands like Moov among other notable achievements) Jyothy Laboratories Ltd (JLL) is transforming itself from a one-brand wonder to an aggressive fast moving consumer goods (FMCG) player focused on gaining market share in a wide range of categories (including premium detergents, household insecticides, dishwash and deodorants). The new team has taken bold decisions including the restructuring of the distribution network and the margins for the channel partners, the implementation of technological solutions to modernise the supply chain and the adoption of better manufacturing practices. Set to grow exponentially: Given the companys highly focused strategy to leverage on its strong brand portfolio, the management is confident of surpassing the industry growth rates and gaining significant market share in categories like detergents (Henko and Ujala) dishwash (Exo and Pril), household insecticides (Maxo coils and liquids) and personal care (Fa deodorants and talc; and Margo soap). We estimate JLLs top line would grow at a compounded annual growth rate (CAGR) of close to 25% over the next three years (FY2013-16). Whats more, the strong revenue growth is likely to be accompanied by a considerable improvement in the operating profit margin (OPM; resulting from lower distribution margins and efficiency gains; margin improvement of over 300 basis points expected over the next three years) and a declining interest burden (through the repayment of the debt taken to acquire Henkel using internal accruals). This would result in an exponential growth in its earnings. Focus on improving balance sheet: JLL has taken steps to reduce its working capital requirements by revamping its supply chain network. It also plans to reduce the debt on the consolidated books by improving its profitability and selling some of its non-core assets. The company targets to achieve a debt/ equity ratio of 0.5x by FY2015 as against 0.9x at present. With an improvement in the margin, the return ratios of the company are expected to get back in double digits by FY2014 and cross 20% by FY2016. Recommend Buy; price target of Rs254: For the company FY2013 was a year of integration and implementation of several initiatives that would reflect in its financial performance from FY2014. With a close to 25% growth in revenues

Promoters 65% Domestic institutions 10%

Price chart
200 180 160 140 120 100 May-12 Nov-12 Feb-13 May-13 Aug-12

Valuations Net sales (Rs cr) Operating profit (Rs cr) Adjusted PAT (Rs cr) EPS (Rs) OPM (%) PE (x) EV/EBIDTA (x) RoE (%) RoCE (%)

FY2011 626.4 79.4 65.9 4.3 12.7 42.1 33.9 12.9 14.8

FY2012 913 84.1 38.4 2.8 9.2 65.1 40.4 6.2 8.6

FY2013 1106 129.7 16.1 1.2 11.7 147.7 26.3 2.6 5.8

FY2014E 1372.5 196.8 69.3 4.2 14.3 43.1 17.3 10.8 10.8

FY2015E 1691.5 252.9 138 8.3 15 21.7 12.8 20.3 17

FY2016E 2048.8 306.2 203.4 12.3 14.9 14.7 10 26.3 22.5

Price performance (%) Absolute 1m 2.7 3m 14.4 9.2 6m 12m 1.1 -5.2 70 35.3

Relative -1.2 to Sensex

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Jyothy Laboratories

and a potential for substantial improvement in the OPM, we expect JLLs consolidated bottom line to grow exponentially over the next three years. Hence, we are initiating coverage on the stock with a Buy recommendation. Our price target for the stock is Rs254 (we have valued the stock at a 25% discount to the average multiple of some of the large FMCG companies). Our price target is based on an investment horizon of 18 months. At the current market price the
JLLs consolidated portfolio of brands Category Company Brands Ujala Supreme (fabric whitener) Jyothy Labs Ujala Stiff and Shine (fabric conditioner) Ujala Technobright (detergent) Fabric care (total size: Rs15,000 crore) Henko (detergent) Presence

stock is trading at 21.7x FY2015E earnings per share (EPS) of Rs8.3 and enterprise value (EV)/earnings before interest, depreciation, tax and amortisation (EBIDTA) of 12.8x. Company background JLL, incorporated in 1983, is engaged in manufacturing products (including fabric care, household insecticides, utensil cleaners, detergents and personal care) that
Market share 73% of fabric whitener market (Rs440 crore) 3.4% market (Rs60 crore) Negligible Competitors, their market share Robin Blue (Reckitt Benckiser): 3.5%; Rin (HUL): 2%; and balance with regional players Comfort (HUL): 5%

All over India

Roll-out in various southern states underway Available in Kerala and a few other southern markets Positioned well in southern and northern markets

Surf (HUL): 11%; Ariel (P&G): 4% Surf (HUL): 11%; Ariel (P&G): 4% Tide (P&G) has close to 14% market share; Rin and Sunlight (HUL)

1%

Henkel India

Mr. White (detergent)

Positioned well in Less than 1% southern, northern and eastern states with a strong hold in modern trade formats Strong presence in Less than 1% eastern and southern markets 19.4%

Chek (detergent)

Wheel (HUL) ~16.9%; Ghari ~17.5%; Nirma less than 6% Goodknight (Godrej): 30%; Mortein (Reckitt Benckiser): 26%; All-Out (SC Johnson): 10%

Mosquito repellent (coil only; Rs800 crore) Dishwash (Rs600-1,000 crore)

Jyothy Labs

Maxo

Jyothy Labs

Exo (bar)

Doing well in southern part of India

11% Vim (HUL): 65%; rest fragmented among players like Nip (FENA), Expert (Rohit Surfactants)

Henkel India Personal care Deodorants (Rs1,600 crore)

Pril (liquid)

18%

Henkel India

Fa

Strong presence across markets except in the eastern markets Well accepted brand in West Bengal and south especially in modern trade formats

4%

Axe, Rexona, Dove (HUL): 25%; Set Wet Zatak (Paras): 9%; balance with other players

Henkel India Soap (Rs10,00012,000 crore)

Margo

1% Medimix (Cholayil): 2%; Chandrika (Wipro): 1%; Hamam (HUL): 3%

Jyothy Labs

Jeeva

Negligible
Source: Company, Sharekhan Research

Sharekhan

May 2013

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Jyothy Laboratories

provide tangible benefits to the end consumer through a portfolio of value-for-money brands. It is the market leader in the fabric whitener segment with a market share of 73% while in the household insecticide and surface cleaner segments it is positioned among the top three players. After the acquisition of Henkel in early FY2012 the companys product portfolio improved with product offerings across the straddle of pyramid. JLL has 28 manufacturing facilities in 16 locations across India and some of these are tax-efficient units. The company has one of the strongest distribution networks with its products available in about 2.9 million outlets in India. With the completion of the integration process of Henkel the company expects a strong improvement in the revenue growth and profitability in the coming years.

Investment arguments Strategic benefits of Henkels acquisition Portfolio expansion with strong brands: After Henkels acquisition JLLs portfolio strengthened with the addition of strong brands in the fabric care, dishwash and personal care segments. Henkels products not only strengthened JLLs existing product lines but also filled in the gaps by catering to different market segments. Besides adding brands in the core categories, Henkel added personal products to JLLs product portfolio. The segment has products such as Margo soap (which is well accepted in West Bengal and south India) and Fa deo (which has a strong presence in the domestic

JLLa well balanced detergent portfolio Segment Product portfolio Product price (per kg) Rs30 NA Rs60 Rs72 Wheel; Ghari; Nirma; Tide Naturals; Kite Rs20-40 Competitors Avg. price of competitors products (per kg)

Popular/Economy Chek (45% of the detergent More Light market) Mid premium (40% of the detergent market) Ujala detergent powder Mr. White

Tide Plus detergent; Tide Plus jasmine and rose; Rin Matic, Rin advanced powder, Wheel Active Gold

Rs75-90

Henko Stain Champion Premium (15% of the detergent market) Henko Matic Stain Champion Ujala Techno Bright Ujala Techno Matic

Rs125 Rs185 Surf Excel Easy Wash (Surf Excel Blue); Surf Excelmatic, Ariel Oxy Blue; Ariel Green; Ariel 2-in-1 Rs170-220

Rs120 NA
Source: Company, Sharekhan Research

JLLs dishwashing portfolio Category Product portfolio Exo anti-bacterial dishshine bar Exo dishshine round Pril dishwash bar Pril lime perfect Liquid Exo anti-bacterial lemon power gel Rs45/250ml Dettol Lime Splash Healthy Kitchen Rs40/200ml
Source: Company, Sharekhan Research

JLL's product price Rs20/300gm Rs40/500gm Rs20/349gm Rs75/425ml

Competitors Vim dishwash bar Pitambari dishwash bar

Avg. price of competitors products Rs22/300gm Rs55/950gm

Bar

Vim dishwash active gel

Rs52/250 ml

Sharekhan

May 2013

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Jyothy Laboratories

market except in the east). The company is planning to extend the Margo brand in the herbal face wash segment. Hence, with an enhanced distribution reach, an integrated supply chain and an innovative marketing strategy, JLLs product portfolio is expected to achieve a strong growth in the coming years. Leveraging on distribution synergies: JLL was traditionally strong in the rural market. It has a rural/urban mix of 70/30 in terms of sales. With Henkels integration JLL has direct access to the urban market especially in the modern trade formats. Henkel gets one-third of its revenues from Canteen Stores Department (22%) and modern trade (12%) which JLL can leverage upon in the coming years. After the integration of Henkels distribution network, JLL will almost have an equal presence in the rural and urban markets which can be leveraged upon in the long run.

Strong revenue growth visible: The portfolio of strong brands along with an enhanced distribution reach (in both urban and rural India) should help JLL to clock a good revenue growth in the coming years. Most of its business segments, such as dishwash, household insecticides and deodorants, have a low penetration and strong growth rates in the domestic market. JLL would be focusing on gaining a large market share of these segments. Though the detergent segment is almost 100% penetrated and highly competitive in India, but the company is confident of achieving above 10% value growth in this segment on the back of a categorised detergent portfolio and enhanced distribution reach. Going ahead, the company is focusing on building brands with renovations and innovations in the portfolio. This move will be supported with a higher advertisement spending (10% of sales) and an enhanced distribution reach. We expect JLLs revenues to grow at a CAGR of 25% over FY2013-16.

Distribution synergiesJLLs pan-India presence Geographical distribution of JLL

West 13% North 22%

Geographical distribution of Henkel

West 14% North 27%

East 13%

East 22%
South 52%
Source: Company, Sharekhan Research

South 37%
Source: Company, Sharekhan Research

Geographical distribution (combined)

West 13%

North 22%

East 19%

South 46%
Source: Company, Sharekhan Research

Sharekhan

May 2013

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Product strategy going ahead Products Ujaja fabric whitener Going ahead

Jyothy Laboratories

Relaunched Ujala fabric whitener in new packaging to revitalise the brand along with a new jingle; the TV commercials would be seen from June 2013 Being the market leader its focus is on growing the category, which is currently worth Rs440 crore The company is aiming at improving the volume market share of the brand in the coming years

Ujala detergent

JLL has decided to restrict Ujala detergent as a mid-priced brand in the southern states to avoid competition with Henko detergent Ujala detergent has about 17% market share in Kerala The company is planning to increase the market share of the brand in the other southern states (including Tamil Nadu, Karnataka and Andhra Pradesh) JLL would be relaunching Ujala detergent in a new packaging

Henko

Henko has a market share of 2% in the premium detergent segment; the company aims at increasing the market share to 5% by end of FY2014 The company has inched up the media spending on the brand; it has also hinted at big relaunch of Henko in H2FY2014 making it a national brand Premiumisation as a strategy is playing out well for FMCG companies in India and JLL believes that Henko has strong potential to grow at a CAGR of 10%

Exo and Pril dishwash

Exo dish wash is the second-largest brand in the dish wash bar category in India with around 11% market share across India The newly launched Exo Round gained good acceptance in the market The management is confident the new anti-bacterial variant, which is likely to be launched in H1FY2014, will get good traction in the market The company believes these initiatives should help it improve the market share of Exo dishwash by at least 200 basis points in the coming years Pril had a market share of about 18% in the liquid dishwash segment in FY2013; the liquid dishwashing segment is worth around Rs300 crore in India and is growing at the rate of 40% per annum; Pril grew by almost 50% YoY in revenue terms in FY2013

Maxo

The company is riding on low penetration of household insecticides in India (especially in rural India, where it has a strong presence) It has approximately 19% market share in coils and around 5% in liquids; it aims to achieve 25% market share in coils and 10% market share in liquids in FY2014 It intends to improve the market share by supporting the brand with adequate media and promotional spending coupled with innovations in the portfolio It would largely focus on liquids, which have better margins than coils and are gaining good acceptance in the domestic market

Fa

JLL is relaunching Fa and positioning it as a woman's deo and talc brand with smaller pack sizes and new advertisement campaign The company's target is to make Fa a Rs100-crore brand in the next three years from current size of Rs15 crore Indias deodorant market is pegged at Rs1,600 crore with an annual growth of about 30% and a penetration level of just 9%

Margo

Margo currently has a market share of 10% in the ayurvedic soap segment in India; the company's target is to increase the market share to 12% by end of FY2014 The brand, which is currently available in the eastern and southern parts of the country, will be a pan-India brand by FY2014 Also, the company would focus on enhancing the presence of the brand by introducing new variants and getting into herbal face wash segment in the coming quarters

Sharekhan

May 2013

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Jyothy Laboratories

Margin improvement on cards: JLL has implemented a slew of measures such as rationalisation of traders margin and restructuring of the distribution system to improve its profitability over a period of time. The encouraging results of these actions were seen in the performance of Q3FY2013 when the stand-alone margin had improved sequentially and year on year by over 500 basis points each to about 18%. JLL has ended FY2013 with an OPM of about 12%. However, the large benefits of the cost-saving initiatives would be seen in FY2014. This along with a strong top line growth should help JLL to achieve an OPM of around 14.5% in FY2014 and that of over 15% in FY2015.
Actions implemented to improve margin profile Steps undertaken Better sourcing and packaging Consolidating the distribution channel through C&F Rationalising the channel margins Improvement in margins 200 basis points in OPM 200 basis points in OPM 400 basis points in GPM

A substantial portion of the savings achieved through the above actions would be utilised in brand building and promotional activites. Overall, we expect an improvement of over 300 basis points in the OPM over the next three years. Actions taken by JLL to improve profitability Restructuring of distribution network: JLL has moved from a three-tier distribution model to a two-tier distribution model and eliminated the intermediary in the distribution chain. This has not only reduced the cost related to the intermediaries but also aided working capital management. Also, with the integration of sales and distribution with Henkel, we expect further savings in cost at distribution level.
Consolidation of distribution network

Significant improvement in margins anticipated

Source: Company

Rationalisation of channel margins: The company has rationalised the channel margins to match the same with the industry standards. With the rationalisation of the gross profit margin (GPM) the company expects a substantial improvement in the GPM in the coming quarters.
Source: Company, Sharekhan Research

Direct impact of improving S&OP processes Impact on value drivers Improve forecast accuracy Improve promotion effectiveness Increase fill rates/consistency Improve sales & product planning Prevent revenue leakage Improve delivery performance Best practices Reduce cost of goods sold Reduce distribution/expediate costs Increase inventory turns Reduce inventory levels Shorten cash to cash cycle times Improve capacity utilisation

Revenue Gross margins

Operating costs

Capital employed

Working capital

Source: Company

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Channel margin rationalisation Brand Exo Maxo Maya More Light Ujala Industry Stockists margin Old Revised 6-8 6-8 6-8 6-8 6-8 6 6 6 6 6 4-5 Retailers margin Old Revised 8-15 10 10-20 10-15 10-14 8-10 10 10-15 10 10 8-10
Source: Company

Jyothy Laboratories

on increasing the top line and profitability, as it will help in reducing the interest cost. After the merger of JLL and Henkel, the company would exercise the option of selling some portion of the land bank available on the consolidated books. The amount raised through the sale of assets would be largely utilised to repay debt. JLL is planning to wipe off its debt in the next three to four years.
Improvement in operating cash flows to reduce debt
600.0 0.9 500.0 Rs in crore 400.0 300.0 0.4 200.0 100.0 0.0 FY2011 0.0 FY2012 0.1 FY2014E FY2015E FY2016E FY2013 0.9 0.7 1.0 0.9 0.8 0.7 0.6 0.5 0.4 0.3 0.2 0.1 0.0

Streamlining of manufacturing facilities: JLL has streamlined and restructured its manufacturing facilities by integrating most of Henkels production facilities with its own. This will ensure production and logistic efficiencies. The purchase and supply chain activities are centrally undertaken which lead to cost efficiencies. Savings in other operational cost: The company is looking at cost-saving opportunities in sourcing and packaging which will boost the overall OPM. Focus on improving the balance sheet: JLL is keen to improve its balance sheet over a period of time. The company has undertaken steps to reduce its working capital requirements by revamping its supply chain network. It also plans to reduce the debt on the consolidated books by improving its profitability and selling some of its unused assets. The company targets to achieve a debt/equity ratio of 0.5x by FY2015 as against the existing 0.9x. Also, with an improvement in the margin, the return ratios of the company are expected to improve substantially in the coming years. Improvement in cash conversion cycle: The company has undertaken various initiatives to improve its working capital. It plans to reduce the working capital days by almost half in FY2014. Focus on reducing debt on books: JLLs consolidated debt on books went up significantly to Rs551.8 crore in FY2013. The company has plans to reduce a significant amount of the debt by improving its free cash flows and selling unutilised assets. In the near term, the larger focus would be

Operating cash flow s

Debt

Debt: Equity

Source: Company, Sharekhan Research

Expected improvement in return ratios

30.0 25.0 20.0 15.0 10.0 5.0 0.0 FY2014E FY2015E FY2016E FY2011 FY2012 FY2013

RoE (% )

RoCE (% )
Source: Company, Sharekhan Research

JFSLs fundamentals on the verge of improvement: Jyothy Fabric Care Service Ltd (JFSL) is the countrys biggest laundry chain with 122 retail outlets and brands like Wardrobe and Fabric Spa. The laundry chain currently operates in cities such as Bangalore, Delhi, Mumbai, Pune and Chennai. The turnover of the business grew by 16.5% year on year (YoY) to Rs44.2

Laundry chaina big opportunity in India: The laundry market in India is worth around Rs5,200 crore. The opportunity in the segment is too big with the surge in the countrys working population. The growing population of the working professionals, their desire for convenience and a lack of time for household chores are driving this trend. The investment for setting up a laundry is in the range of Rs25 lakh to Rs1 crore depending on the location, types of equipment installed and market economies. The average transaction size in the city is around Rs300 to Rs700 per customer (on an average Rs40 to Rs120 charged per garment). The investment on brand building is high in the initial years. However, it reduces over time. The pay-back period for the business is around three years depending on the size of the laundry and its location. Sharekhan
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Debt:Equity (x)

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Jyothy Laboratories

crore and its losses at the profit before interest and tax (PBIT) level were down by 11% to Rs12.9 crore in FY2013. ILFS has committed an investment to the tune of Rs100 crore for a stake of 25% in JFSL. It has invested Rs50 crore through convertible debentures and another Rs50 crore would be invested over a period of time. JLL has a stake of 75% in JFSL (post-dilution stake of 62.5%). With Mr Raghunandan taking active interest in improving the fundamentals of the laundry business, we expect JFSL to report an improved performance in the coming fiscals.

New management team to improve the growth prospects: JLLs new management team of 15 members is in place to improve the growth prospects of the company in the long run. The new team is working under the guidance of Mr Raghunandan (CEO of JLL). Some of the team members have vast experience (of 18-25 years) of having worked in some large FMCG companies such as Hindustan Unilever Ltd (HUL), Johnson & Johnson and Marico. We believe Mr Raghunandan and his team will play an important role in improving the growth prospects of the company and making JLL one of the big names in the Indian FMCG market.

New management team

Source: Company

Sharekhan

May 2013

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Jyothy Laboratories

Key concerns Increased competition in key segments would affect sales: The detergent segment is highly penetrated (with a close to 100% penetration) and competitive in India. Any increase in the competition due to the presence of top players (such as Hindustan Unilever, and Procter and Gambles [P&G]) and regional brands will affect the sales of JLLs detergent segment. The household insecticide segment is growing strongly due to a strong demand from the urban as well as rural markets. Hence, players like Godrej Consumer Products are enhancing their reach to grab the large share of this pie. Debt/Equity ratio at 0.9x: After Henkels acquisition JLLs net debt stood at around Rs505 crore in FY2013 with the average cost of debt standing at 11%. The debt/equity ratio currently stands at 0.9x, which, we believe, is slightly higher compared with the industry average. With a restructured business model and expectation of a strong performance in the coming

years, the company is likely to pay off a substantial amount of its debt in the coming years (which is one of the key focus areas). Outlook and valuation For the company FY2013 was a year of integration and implementation of several initiatives to improve its business fundamentals in the long run. The company would start reaping the benefits of portfolio enhancement and distribution restructuring from FY2014. With a close to 25% growth in revenues and a potential for substantial improvement in the OPM, we expect JLLs consolidated bottom line to grow exponentially over the next three years. Hence, we are initiating coverage on the stock with a Buy recommendation. Our price target for the stock is Rs254 (we have valued the stock at a 25% discount to the average multiple of some of the large FMCG companies). Our price target is based on an investment horizon of 18 months. At the current market price the stock is trading at 21.7x FY2015E EPS of Rs8.3 and enterprise value EV/ EBIDTA of 12.8x.

Sharekhan

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Jyothy Laboratories

Financials (consolidated)
Profit & Loss account Particulars Net sales Raw material cost Employee cost Other expenditure Advertisement expenditure Total expenditure Operating profit Other income Interest & other f.c Depreciation PBT Tax Adjusted PAT Extraordinary item Minority interest Reported PAT Key ratios Particulars Gross margins (%) OPM(%) NPM(%) Adjusted EPS (Rs) P/E (x) Price / Book value (BV) EV / EBIDTA (x) EV / sales (x) Price / sales (X) RoE (%) RoCE (%) FY12 44.9 9.2 4.2 2.8 65.1 2.4 40.4 3.7 3.2 6.2 8.6 FY13 47.2 11.7 1.5 1.2 147.7 4.5 26.3 3.1 2.6 2.6 5.8 FY14E 49.1 14.3 5.1 4.2 43.1 4.6 17.3 2.5 2.2 10.8 10.8 FY15E FY16E 49.2 15.0 8.2 8.3 21.7 4.2 12.8 1.9 1.8 20.3 17.0 49.1 14.9 9.9 12.3 14.7 3.6 10.0 1.5 1.5 26.3 22.5 FY12 913.0 503.0 113.7 142.7 69.5 828.9 84.1 22.7 23.8 24.7 58.3 19.9 38.4 0.0 6.2 44.6 FY13 1106.0 584.4 130.5 165.9 95.5 976.3 129.7 5.2 68.2 65.4 1.2 -14.9 16.1 0.0 -3.5 12.6 FY14E 1372.5 698.7 156.6 190.1 130.4 1175.7 196.8 4.1 54.6 76.9 69.3 0.0 69.3 0.0 0.0 69.3 FY15E 1691.5 858.9 184.8 225.8 169.1 1438.6 252.9 3.9 40.9 78.0 138.0 0.0 138.0 0.0 0.0 138.0 Rs (cr) FY16E 2048.8 1042.1 218.0 273.5 209.0 1742.6 306.2 3.9 27.7 79.1 203.4 0.0 203.4 0.0 0.0 203.4 Balance Sheet Particulars FY12 FY13 16.1 55.3 567.2 638.6 4.9 0.9 551.8 1196.1 1273.3 210.9 1062.4 7.3 1.5 448.1 172.2 80.8 46.3 142.3 6.5 323.1 123.5 112.7 86.9 125.0 1196.1 FY14E 16.6 0.0 633.0 649.6 0.0 0.9 441.8 1092.3 1290.6 287.8 1002.8 8.0 1.5 467.3 162.7 109.8 24.0 163.7 7.1 387.3 193.3 135.7 58.3 80.1 1092.3 FY15E 16.6 0.0 Rs (cr) FY16E 16.6 0.0

Equity capital 8.1 Share capital suspense account Res. & surplus 604.4 Net worth 612.4 Minority interest 6.7 Def. tax liabilities 16.1 Total loans 561.6 Capital employed 1196.8 Gross block 1174.3 Less: Depreciation 145.5 Net block 1028.8 Capital WIP 6.3 Investments 1.5 Current assets 382.8 Inventories 118.8 Sundry debtors 80.7 Cash and bank balance 67.7 Loans and advances 109.4 Other current assets 6.2 CL & provisions 222.5 Sundry creditors 154.5 Other current liab 31.0 Provisions 37.0 Net current assets 160.2 Capital deployed 1196.8

693.3 819.0 709.9 835.6 0.0 0.0 0.9 0.9 301.8 201.8 1012.6 1038.3 1308.6 1326.6 365.8 444.8 942.8 881.7 8.0 8.0 1.5 1.5 540.6 712.4 200.0 242.7 102.0 123.5 42.6 121.2 188.2 216.4 7.9 8.6 480.3 565.3 236.5 286.5 166.1 201.2 77.7 77.7 60.3 147.1 1012.6 1038.3

Cash flow statement snapshot Particulars Operating cash flow before working capital changes Changes in working capital Cash flow from operating activities Cash flow from financing activities Cash flow from investing activities Net change in cash and cash equivalents Opening cash balance Closing cash balance FY12 63.1 28.0 91.1 444.4 -747.4 -211.9 279.6 67.7 FY13 81.5 13.9 95.4 -16.8 -100.0 -21.4 67.7 46.3 FY14E 146.3 22.6 168.8 -173.1 -18.0 -22.3 46.3 24.0 FY15E 215.9 38.3 254.2 -217.7 -18.0 18.5 24.0 42.6

Rs (cr) FY16E 282.5 -8.2 274.3 -177.7 -18.0 78.6 42.6 121.2

Sharekhan

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JyothyCirculation Laboratories For Private only

Sharekhan Ltd, Regd Add: 10th Floor, Beta Building, Lodha iThink Techno Campus, Off. JVLR, Opp. Kanjurmarg Railway Station, Kanjurmarg (East), Mumbai 400042, Maharashtra. Tel: 022 - 61150000. Sharekhan Ltd.: SEBI Regn. Nos. BSE-Cash-INB011073351 ; F&O-INF011073351 ; NSE INB/INF231073330; CD - INE231073330 ; MCX Stock Exchange: INB/INF-261073333 ; CD - INE261073330 ; United Stock Exchange: CD - INE271073350 ; DP-NSDL-IN-DP-NSDL-2332003 ; CDSL-IN-DP-CDSL-271-2004 ; PMS-INP000000662 ; Mutual Fund-ARN 20669 ; Commodity trading through Sharekhan Commodities Pvt. Ltd.: MCX10080 ; (MCX/TCM/CORP/0425) ; NCDEX -00132 ; (NCDEX/TCM/CORP/0142) ; NSEL-12790 ; For any complaints email at igc@sharekhan.com; Disclaimer: Client should read the Risk Disclosure Document issued by SEBI & relevant exchanges and Dos & Donts by MCX & NCDEX and the T & C on www.sharekhan.com before investing.

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Sharekhan

11

May 2013