2ndFeb,2011

MBL Infrastructure Ltd.

Construction & Engineering | Q4 FY11 Result Update

Buy

B P EQUITIES

3rd June 2011

Stock Rating BUY HOLD SELL

Results as per expectations, concern over order book inflow

Result Highlights The consolidated revenue of the company for FY11 stood at Rs 10,016 mn in line with our expectation. For the quarter the revenue was Rs 3,855 up 81.8% yoy and 44% sequentially due to faster execution of contracts in hands. The EBITDA margins for the quarter stands at 10.8% down 230 bps yoy and 512 bps sequentially. The margins were under pressure due to rise in operating expenditure such as sub contracting cost and cost of raw materials. The PAT margins for the quarter stands at 3.9% which declined by 179 bps yoy and 471 bps sequentially. The decline was due to rise in cost of borrowing and tax outgo. Effective tax rate for the quarter stands at 47.8%. Higher outgo was due to higher provisions made on a conservative basis. Other Highlights Order Book Status The order book position (cash contracts) of the company stands at Rs 15,410 mn of which the executable portion is Rs 10,698.5 mn which stands at 1.07x FY11 sales. The company has a pan India presence and currently executing 14 projects simultaneously. No fresh orders added during the quarter. The management has guided of executing up to Rs 7,500 mn orders during FY12 and the balance year after. Guided on addition of Rs 25,000 mn orders during FY12.

> 15%

-5% to 15%

< -5%

Sector Outlook Stock CMP (Rs) Target Price (Rs) Prev. Reco. (Rs) BSE code NSE Symbol Bloomberg Reuters Key Data Nifty 52WeekH/L(Rs) O/s Shares (mn) Market Cap (Rs mn) Face Value (Rs) Average volume 3 months 6 months 1 year

Medium

157.00 233.00 261.00 533152 MBLINFRA MBL IN MBLI.BO

Bid Status Position During the quarter the company had made bids for 7 orders (4 ADB funded, 1 MORTH, 1 MPRDC and 1 Rajasthan PWD) worth Rs 8,321.2 mn, where they were L2 and the gap between L1 and L2 bidder was substantial and so the company could not match it and opted out of it. At present the company has made bids for Rs 79,250 mn orders (11 NHAI Rs 27,860 mn , 7 MORTH Rs 10,010 mn, 3 ADB funded Rs 3,600 mn and balance 27 from different corporate) consisting of 48 tenders in all. The management is confident of adding cash contracts worth Rs 6,600 mn ( Rs 3,600 mn for Karnataka State Highway project funded by ADB and Rs 3,000 mn form MORTH) as these projects will get awarded by 30th of June,2011. We are expecting that the company would add orders worth Rs ~19,813 mn during FY12 on a conservative basis. The company has tied up with Engineer India Ltd. to bid for NHAI projects in JV. They are also planning to participate in Dedicated Freight Corridor (Western Region) by entering into JV with Japanese Companies and the appointed date for prequalification is expected to be out by 30th June,2011. Average cost of borrowing stands between 11% to 11.5% during the year. The company is presently executing projects in 8 states. Valuation and Outlook In view of efficient execution of ongoing projects and improving track record, we expect the companys top line to grow at a healthy rate of 28.5% and 27.1% for FY12E and FY13E to Rs 12.8 bn and 16.3bn.The company is well poised to capitalise on the opportunities and grow faster than its peers.MBL trades at a P/E of 3.5X and 3.2X FY12E and FY13E earnings which we think is available at a steep discount to its peers considering its high growth rate and healthy return ratios. Going forward we expect the valuation gap to narrow in the medium term and the company will trade at valuation in comparison to its peers. We maintain Buy on the stock with a target price of Rs 233 (Prev. Reco. Rs 261), an upside of 48% from the present levels based on SOTP method.
YE March (Rs. mn) Net Sales Sales Growth (Y-oY) EBIDTA EBIDTA Growth (Y-o-Y) Net Profit Net Profit Growth (Y-o-Y) Diluted EPS Diluted EPS Growth (Y-o-Y) No of Diluted shares (mn) EBIDTA (%) NPM (%) RoE (%) RoCE (%) Debt/Equity (x) Key Financials (Consolidated) FY08A FY09A 2,963 5,138 73.7% 73.4% 404 739 64.2% 82.9% 169 274 64.0% 61.9% 14.3 23.2 55.9% 61.9% 11.8 11.8 Key Ratios 13.6% 14.4% 5.7% 5.3% 24.9% 37.1% 17.3% 20.6% 1.7x 2.3x Valuation Ratios FY10A 6,331 23.2% 914 23.6% 370 35.0% 28.1 21.2% 13.2 14.4% 5.8% 24.8% 15.9% 1.0x FY11A 10,016 0.4% 1,371 -6.4% 616 1.6% 35.2 25.2% 17.5 13.7% 6.2% 23.3% 16.6% 1.0x 4.5x 1.0x 0.3x 3.9x FY12E 12,821 28.5% 1,706 16.4% 791 30.5% 45.2 30.5% 17.5 13.3% 6.2% 24.9% 16.1% 1.4x 3.5x 0.9x 0.2x 3.7x FY13E 16,294 27.1% 2,033 19.2% 865 9.4% 49.4 9.4% 17.5 12.5% 5.3% 22.9% 15.0% 1.4x 3.2x 0.7x 0.2x 3.6x

5516.75
292.85/138.35

17.51 2749 10

25,293 32,314 55,980

ShareHoldingPattern(%)
25.8% 12.6% 57.3%

4.3%

Promoter

FII

DII

Others

RelativePriceChart
302 282 262 242 222 202 182 162 142
Jun-10 Aug-10 Oct-10 Dec-10 Feb-11 Apr-11

0.05 0.05 0.04 0.04 0.03 0.03

Jun-11

Close Price

Performance over Nifty

P/E (x) P/Bv(x) Market Cap/Sales(x) EV/EBITDA (x) Source: Company Reports, BP Equities Research

Research Analyst Jiten Rushi jitenrushi@bpwealth.com 022-61596410

MBL Infrastructure Ltd.

Quarterly Result Analysis

Q4 FY11 Result

Financial Statement (Consolidated) Q4 QoQ % FY10 YoY % FY11 FY10 44.0% 2,121 81.8% 10,016 6,370

YE March (Rs mn) Total Income Less: (Increase)/ Decrease in Stock in Trade and work in progress Employee cost Operating Expenses Total Operating Expenditure EBITDA Depreciation Operating Profit Add: Income Less: Interest & Finance Charges Profit Before Tax Less: Total Tax Profit After Tax Less: Minority Interest Adjusted PAT Reported Diluted EPS (Rs)

Q4 FY11

Q3 FY11

YoY % FY11E 57.2% 9,976

Deviation in %

Q4 FY11E 3,815

Deviation in %

3,855 2,677

0.4%

1.0%

45

37

20.8%

48 35

NA 26.3%

162

39 103 5,315 5,457 914 67 847 7 303 551 181 370 370 28.1

NA 57.3%

168

1.5% -6.1% -4.1% 7.7% 2.7%

51 3,264 3,315

NA 3.9%

3,400 2,218 3,444 2,255 410 24 386 2 99 289 138 151 151 8.6 422 25 398 1 99 299 68 231 231 13.2

53.2% 1,763 52.7% 1,846 -2.8% -1.6% -2.8% 171.4% -0.6% -3.2% 104.3% -34.7% 275 6 268 0 75 193 72 121

92.8% 8,483 86.6% 8,645 49.5% 1,371 270.8% 96

59.6% 8,348 58.4% 8,516 50.1% 1,460 43.5% 130

499 -17.8% 59 -

44.1% 1,275 850.0% 31.4% 49.9% 92.1% 24.8% 5 358 923 306 617 -

50.6% 1,330 -19.7% 18.2% 67.5% 68.8% 66.9% 5 478 857 256 601

441 -12.4% 2 219 223 89 135 29.6% 12.1%

-34.7% -34.6% Change in bps

121 7.1

24.8% 22.4% Change in bps

617 35.3

66.9% 25.4% Change in bps

601 34.3

2.7% 2.8% Change in bps

135 7.7

12.1% 12.1% Change in bps (244) (154) 39 39 813

Margin Analysis % EBIDTA Margin Operating Margin NPM Adjusted NPM Effective Tax Rate Cost Analysis % Employee Cost/Sales Operating Expenditure/Sales Result Highlights

10.6% 15.8% 10.0% 14.8% 3.9% 3.9% 8.6% 8.6%

(512) 12.9% (483) 12.6% (471) (471) 5.7% 5.7%

(230) 13.7% 14.3% (262) 12.7% 13.3% (179) (179) 6.2% 6.2% 5.8% 5.8%

(65) 14.6% (56) 13.3% 36 6.0% 36 6.0%

(95) 13.1% (60) 11.6% 14 14 3.5% 3.5%

47.8% 22.7%

2,515 37.3% 1,050 33.1% 32.9% 25 29.9% Change Change Change in bps in bps in bps (22) 1.7% (51) 1.6% 1.6% 0 126

325 39.7%

1.2%

1.4%

88.2% 82.9%

534 83.1%

506 84.7% 83.4%

Source: Company Reports, BP Equities Research

The toll collection from Seoni-Balaghat-Rajegaon (SH11 & SH26) during the year stands at net Rs 102.2 mn and the management expects to collect toll revenue at the same pace in the future because one has to pass through SH11 to reach Gondia airport and so the we expect it to attract more traffic. The EBITDA margins for the year stands at 13.7% down 65 bps yoy and the PAT margins stands at 6.2% up 36 bps yoy. The EBIDTA margins were down by 95 bps and PAT margins were up 14 bps against our expectations. The management has guided that the margins will remain in line during FY12.

Institutional Research

BP Equities Pvt. Limited (www.bpwealth.com)

3/6/2011

MBL Infrastructure Ltd.

Q4 FY11 Result

Two BOT Toll projects in hand has been outlined below Seoni - Balaghat - Rajegaon/ MP (SH26 & SH11) Rimuli-Roxy-Rajmunda/ Orissa (NH215) Holding Concession Period 50% 19 yrs Financial Closure Achieved in Dec 2010 2.5 yrs 96.5 8150 2300 4250 1600 Srei Infrastructure Ltd. 100% Awaited

Holding Balance Concession Period Status Toll Operation Started on Kms Total Project cost (Rs mn) MPRDC Grant Debt - PNB Equity Debt - MBL EPC Concession Period Ends
Source: Company Reports, BP Equities Research

100% 13 yrs

Operational under its 100% subsidiary AAP Infrastructure Status Ltd.(SPV) Feb-08 Construction Period 114 1080 348 220 120 392 100% FY 2023 Kms Total Project cost (Rs mn) NHAI Grant Debt - Union Bank Equity Sharing EPC Appointed Date

The construction of the BOT project in Orissa has started and the company has completed Rs 400 mn of construction works till date and they will start booking the construction revenue in Q1FY12. Recently the company got its Seoni-Balaghat-Rajegaon Toll project securitized with a PSU bank for Rs. 500 mn for a period of 8 years. The money has been used to repay the debt raised to construct the same road project. The new debt now stands in the SPV books. Through this route it has helped the company to strengthen its standalone books of account, which will help the company in bidding for higher cost projects on a standalone basis.

Toll Securitization for Rs. 500 mn

In house execution capability

The company has invested in developing its own modern construction equipment & machinery and has also built a strong and technically experienced work of more than 670 employees which will lead to on-time execution of projects. It owns an entire range of state of the art road construction machinery which is enough to meet the present and future requirements. The equipment banks includes RMC plants, hot mix plants, bitumen divisions and leasehold quarries which enables it to earn relatively higher margins, timely supply of raw materials and reducing dependence on subcontractors. These factors has led to maintain a stable average operating margins and average net margins of 12.7% & 5.6% over FY08 to FY10 and going forward we expect it to remain at 12.0% & 6.0% over FY12E to FY13E. Figure: Margin Trend

Backward integration has helped in rapid mobilization at multiple location and given an edge over peers

16.0% 14.0% 12.0% 10.0% 8.0% 6.0% 4.0% 2.0% 0.0%

12.8%

13.4%

12.7% 6.2%

12.2% 6.1%

11.3% 5.4%

5.3%

5.8%

FY09A

FY10A NPM

FY11A OPM

FY12E

FY13E

Source: Company Reports, BP Equities Research

Institutional Research

BP Equities Pvt. Limited (www.bpwealth.com)

3/6/2011

MBL Infrastructure Ltd.

Q4 FY11 Result

Adoption of Asset light model

The company has adopted asset light model wherein the company targets specific high potential projects across the EPC and BOT segment. The strategy is to go for selective bidding of projects in Joint Ventures (JV) or bid it on their own. This model not only enables the company to execute big size projects by mitigating the risk through JV route but also facilitates to have panIndia presence. Thus, de-risking its business model.

Low Debt to Equity ratio ensures future growth without equity dilution

The debt to equity ratio of the company stands at 1.0x as end of FY11. This gives company an advantage of low leverage which will enable it to raise adequate capital through debt funding without going for equity dilution. Going forward we expect it to remain at 1.4x by FY13E. Figure: Leverage Ratio
6,000 5,000 4,000 3,000 2,000 1,000 FY09A FY10A Debt (Rs mn) FY11A FY12E Debt/Equity (x) FY13E 1,942 2,069 3,134

2.3x

2.5x 2.0x

1.4x 1.0x 1.0x

1.4x

1.5x 1.0x 0.5x 0.0x

Debt Equity ratio is expected to stand at 1.4x FY13E

5,394 4,367

Source: Company Reports, BP Equities Research

Margins protected because of Escalation clause

To protect its operating margins the company tries to mitigate the risk by including the escalation clause thereby protecting itself form rise in prices. As informed by the management almost 99% of the order book is protected by the escalation clause.

EPC income to push Revenue and consolidated PAT

The company has ~14 projects under construction which will generate huge revenue going forward. These projects are under various stages of construction. The construction revenue is likely to grow at a CAGR of ~42% from Rs.9,915 mn to Rs.16,156 mn during FY11A to FY13E. The consistent growth from EPC segment resulting in consolidated PAT to grow at a CAGR of ~20% from Rs.616 mn to Rs.876 mn during FY11A to FY13E. Figure: Construction Revenue & Revenue growth Figure: Consolidated PAT & PAT Margin
18000 16000 14000 12000 10000 8000 6000 4000 2000 0

73.4%

23.2%
5058 FY09A 6289 FY10A

80.0% 70.0% 58.2% 60.0% 50.0% 40.0% 28.0% 27.1% 30.0% 20.0% 9915 12700 16156 10.0% 0.0% FY11A FY12E FY13E

1000 900 800 700 600 500 400 300 200 100 0 FY09A FY10A 370 274 5.3% 5.8%

6.2%

6.4% 6.1% 6.2% 6.0% 783 5.8% 5.4% 876 5.6% 5.4% 5.2% 5.0% 4.8%

616

Revenue to grow at a CAGR of ~42% and PAT to grow at a CAGR of ~20% during FY11A to FY13E

FY11A

FY12E PAT Margins

FY13E

Sales (Rs mn)

Sales Growth (Y-oY)

PAT (Rs mn)

Source: Company Reports, BP Equities Research

Institutional Research

BP Equities Pvt. Limited (www.bpwealth.com)

3/6/2011

MBL Infrastructure Ltd.

Q4 FY11 Result
EBITDA to grow at a CAGR of ~22% during FY11A to FY13E

EBIDTA Margin to remain in line as guided by the management

EBITDA margins are expected to remain in line at 13.3% and 12.5% for FY12E and FY13E. Going ahead the margins are also expected to be maintained because of lucrative BOT business. Figure: EBITDA & EBITDA Margin
2500 14.4% 2000 1500 1000 1371 500 0 FY09A FY10A FY11A FY12E FY13E 914 739 1703 2029 14.4% 14.5% 13.7% 13.3% 12.5% 14.0% 13.5% 13.0% 12.5% 12.0% 11.5% 11.0% 15.0%

EBIDTA (Rs mn)

EBIDTA Margins

Source: Company Reports, BP Equities Research

EPS is expected to be at Rs.50 in FY13E and RoE to be at 22.9%

The diluted EPS of the company is expected to grow from Rs.35.2 in FY11A to Rs. 50 per share in FY13E, which is a CAGR growth of 19% during FY11A to FY13E . RoE of the company is expected to come down from 23.3% in FY11A to 22.9% in FY13E. Figure: RoE & RoCE
40.0% 35.0% 30.0% 25.0% 20.0% 15.0% 10.0% 5.0% 0.0% FY09A FY10A RoE (%) FY11A FY12E FY13E 20.6% 15.9% 16.6% 16.1% 15.0%
20.0 10.0 FY08A FY09A FY10A EPS (Rs) FY11A FY12E FY13E 14.3 11.8%

Figure: EPS
60.0 50.0 55.9% 44.7 35.2 28.1 23.2 21.2% 25.2% 29.2% 40.0% 30.0% 20.0% 10.0% 0.0% 61.9% 50.0 70.0% 60.0% 50.0%

37.1%

24.8%

23.3%

24.9%

22.9%

40.0 30.0

RoCE of the company is to remain steady at ~15.0% in FY13E

Linear growth in EPS from Rs.35.2 in FY11A to Rs. 50.0 in FY13E

RoCE (%)

EPS growth (YoY)

Source: Company Reports, BP Equities Research

Order Book Composition

28% 57% 15%

NHAI MORTH & Others

ADB/WB Funded

Source: Company Reports, BP Equities Research

Institutional Research

BP Equities Pvt. Limited (www.bpwealth.com)

3/6/2011

MBL Infrastructure Ltd.

Key Concerns

Q4 FY11 Result

Rise in Competition

The massive growth in infrastructure and reformation in the road construction segment has encouraged more private players into the segment. These opportunities have brought in competition into the segment.

BOT projects dependent on traffic growth

The toll revenue depends on traffic growth and any slow growth in traffic which is lower than our expectations will significantly impact the forecasted toll revenue.

Slow order book inflow

The company has not added any fresh order since last three quarters. The concern is on the order book growth as it is on a very slow pace. Going ahead if this is the situation than the revenue of the company would come under pressure.

Institutional Research

BP Equities Pvt. Limited (www.bpwealth.com)

3/6/2011

MBL Infrastructure Ltd.

Valuation The fair value of the company stands at Rs.233 per share using the SOTP method. We have measured the EPC business on P/E basis and BOT business on DCF (FCFE) basis Figure: Valuation Summary Business Rs Contribution EPC Contribution BOT Fair Value per share
Source: BP Equities Research

Q4 FY11 Result

194 39 233

EPC Business

We have valued the EPC business on relative valuation basis by assigning P/E multiple to its standalone business. MBL EPC Business trades at a P/E of 3.7X and 3.2X FY12E and FY13E EPS which we think is available at a steep discount to its peers considering its high growth rate and healthy return ratios. Going forward we expect the valuation gap to narrow in the medium term and the company will trade at valuation in comparison to its peers. However we took ~40% discount (due to 1) slow order book growth, 2) short term rise in interest cost, 3) increase in competition,4) revenue concentration) to the average FY13E P/E of peers (~6.5x) and reached at standalone target price of Rs 194 per share, which is ~4.0x FY13E EPS of Rs.48.5 per share.

BOT Business

Seoni - Balaghat - Rajegaon, BOT project which is operational has been valued using DCF basis which gives a value of Rs.39 per share. Figure: BOT Valuation Seoni-Balaghat-Rajegaon Cost of Equity 13% Average Traffic Growth 5% Toll Growth 7% Net Present Value (Rs. in mn) 687 No. of Equity share (mn) 17.51 Value per share (Rs.) 39 Concession Period ends FY2023
Source: BP Equities Research

Outlook In view of the growing order book flow form NHAI, efficient execution of ongoing projects, backward integration and improving track record, we expect the companys top line to grow at a healthy CAGR rate of ~42% during FY11A to FY13E.The company is well poised to capitalise on the opportunities and grow faster than its peers. The government initiative to achieve the target of 20 Kms per day of road construction will provide huge opportunity to the company. The company is also diversifying into dedicated freight corridor which will give company an opportunity in different line of segment.

Institutional Research

BP Equities Pvt. Limited (www.bpwealth.com)

3/6/2011

MBL Infrastructure Ltd.

Profit & Loss A/c (Consolidated) YE March (Rs. mn) FY09A FY10A FY11A Net Sales 5,138 6,331 10,016 YoY Growth(%) 74.7% 24.0% 58.2% Less: Opearting Expenses 4,331 5,315 8,483 Employee Remuneration & Benefits 68 103 162 Total Operating Expenditure 4,399 5,418 8,645 EBIDTA 739 914 1,371 YoY Growth(%) 82.9% 23.6% 50.1% Less: Depreciation 83 67 96 EBIT 656 847 1,275 Interest Paid 280 302 358 Non-operating Income 6 7 5 Profit Before tax 382 551 922 Tax 107 181 307 Minority Interest 0 0 0 Net Profit 275 370 615 YoY Growth(%) 61.9% 21.2% 66.4% Diluted EPS (Rs) 23.2 28.1 35.2 YoY Growth(%) 61.9% 21.2% 25.3% FY12E FY13E 12,819 16,290 28.0% 27.1% 10,862 13,898 254 364 11,116 14,261 1,703 2,029 24.2% 19.1% 135 190 1,568 1,839 459 600 7 8 1,116 1,247 333 372 0 0 782 876 27.1% 11.9% 44.7 50.0 27.1% 11.8%

Q4 FY11 Result
Balance Sheet (Consolidated) YE March( Rs. mn) FY09A FY10A FY11E Liabilities Equity Capital 118 175 175 Reserves & Surplus 864 2,066 2,484 Equity 982 2,241 2,659 Net Worth 982 2,241 2,659 Net Deferred tax liability/(Asset) 87 145 195 Total Loans 1,942 2,069 3,134 Capital Employed 3,011 4,454 5,988 Assets Gross Block 1,605 1,876 2,476 Less: Depreciation 360 426 556 Net Block 1,245 1,450 1,920 Capital WIP 0 49 0 Investments 0 0 180 Current Assets Inventories 402 977 1,633 Sundry Debtors 1,200 2,213 3,247 Cash and Bank Balance 450 336 239 Loans and Advances 345 541 1,037 Other Current Assets 298 276 296 Total Current Assets 2,695 4,342 6,451 Less: Current Liabilities & Provisions Sundry Creditors 226 705 847 Provisions 37 60 37 Other Current Liabilities 667 621 1,679 Total Current Liabilities & Provi929 1,387 2,563 sions Capital Applied 3,011 4,454 5,988 Free Cash Flow Statement FY09A FY10A 656 185 471 83 811 -258 185 83 -525 0 -525 -525 847 278 569 67 1,586 -951 320 -310 -961 0 -961 -961 FY12E 175 3,106 3,281 3,281 195 4,367 7,843 3,076 722 2,354 0 252 1,926 4,110 849 1,375 500 8,761 FY13E 175 3,829 4,004 4,004 195 5,394 9,593 3,676 949 2,727 0 492 2,466 5,232 774 1,751 637 10,858

1,074 74 2,375 3,524 7,843

1,373 88 3,024 4,485 9,593

YE March (Rs. mn) Key Operating Ratios EBITDA Margin (%) Tax / PBT (%) Net Profit Margin (%) RoE (%) RoCE (%) Current Ratio (x) Dividend Payout (%) Book Value Per Share (Rs.) Financial Leverage Ratios Debt/ Equity (x) Interest Coverage (x) Interest / Debt (%) Growth Indicators % Sales Growth (%) EBITDA Growth (%) Net Profit Growth (%) Diluted EPS Growth (%) Turnover Ratios Debtors (Days of net sales) (E) Creditors (Days of Raw Materials)(E) Inventory (Days of Optg. Costs)(E)

Key Ratios FY09A FY10A 14.4% 28.2% 5.3% 37.1% 20.6% 290.0% 9.8% 71 2.3x 2.6x 0.2x 74.7% 82.9% 61.9% 61.9% 14.4% 32.9% 5.8% 24.8% 15.9% 313.2% 11.0% 160 1.0x 3.0x 0.2x 24.0% 23.6% 35.0% 21.2%

FY11A 13.7% 33.2% 6.2% 23.3% 16.6% 390.0% 11.7% 160 1.0x 3.8x 0.1x 28.4% 16.2% 66.4% 25.2%

FY12E 13.3% 29.8% 6.1% 24.9% 16.1% 248.6% 9.2% 180 1.4x 3.7x 0.1x 27.1% 19.1% 27.1% 29.2%

FY13E 12.5% 29.8% 5.4% 22.9% 15.0% 242.1% 9.8% 221 1.4x 3.4x 0.1x 0.0% 0.0% 11.9% 11.8%

YE March (Rs. mn)

FY11E 1,330 398 933 130 1,193 -131 551 -145 -536 180 -716 -716

FY12E FY13E 1,631 489 1,142 166 928 380 600 -137 -83 72 -155 -155 1,964 589 1,375 227 1,429 173 600 -148 -279 240 -519 -519

EBITA Less: Adjusted Taxes NOPLAT Plus: Depreciation Less: Increase in Working Capital Operating Cash flow Less: Net Capex Less: Increase in Net Other Assets FCF From Operation Less: Inc./(Dec.) in Investment FCF after Investment Total FCF

85 19 33

127 48 66

119 36 70

117 35 63

117 35 63

YE March (Rs. mn) P/E (x) P/BV (x) EV/EBIDTA (x) EV/Sales Market Cap./ Sales (x)

FY08A 11.0x 3.1x 6.2x 0.9x 0.6x

Valuation Ratios FY09A FY10A 6.8x 5.6x 2.2x 1.0x 4.5x 4.2x 0.7x 0.6x 0.4x 0.3x

FY11A 4.5x 1.0x 3.9x 0.5x 0.3x

FY12E 3.5x 0.9x 3.7x 0.5x 0.2x

FY13E 3.1x 0.7x 3.6x 0.5x 0.2x

Source: Company Reports, BP Equities Research

Institutional Research

BP Equities Pvt. Limited (www.bpwealth.com)

3/6/2011

Research Desk Institutional Sales Desk Disclaimer Appendix

BP Equities Investment Rating : (Time range 12 months)

Tel: +91 22 61596464 Tel: +91 22 61596403/04/05

BUY (expected total return of 15% or more for Low-Risk stocks, 20% or more for Medium-Risk stocks and 30% or more for HighRisk stocks); ACCUMULATE (expected total return of 5%-15% for Low- Risk stocks, 10%-20% for Medium-Risk stocks and 15%30% for High-Risk stocks, ); REDUCE ( expected total return of less than 5% for Low Risk stocks, less than 10% for Medium Risk stocks and less than 15% for High Risk stocks) and SELL [expected total return of (-5%) or less for Low-Risk stocks, -10% or less for Medium-Risk stocks, (-15%) or less for High-Risk stocks, and -20% or less for Speculative stocks].

Analyst(s) holding in the Stock : Nil

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