High Risk High Return Pick of the Week 02 May 2017

RETAIL RESEARCH
Omkar Speciality Chemicals Ltd
Industry CMP Recommendation Add on Dips to band Sequential Targets Time Horizon
Chemicals Rs. 167 Buy at CMP and add on declines Rs. 152-156 Rs. 195 & Rs. 244 * 2-3 quarters
*& Rs.488 – 2 year target

HDFC Scrip Code OMKSPEEQNR Incorporated in 1983, Omkar Speciality Chemicals Ltd (OSCL) is primarily engaged in the production of Specialty Chemicals
and Pharma Intermediates. It manufactures a range of organic, inorganic and organo inorganic intermediates that find
BSE Code 533317 application in various industries like pharmaceutical, chemical, glass, cosmetic ceramic and poultry feeds. Its products are
NSE Code OMKARCHEM also exported to companies in Europe, Australia, North America and Asian countries. OSCL has decided to restructure its
group companies wherein its 4 wholly owned subsidiaries will be merged with itself and its veterinary API division will be
Bloomberg OSCL IN
demerged into a separate company.
CMP as on 28 Apr 17 167.00
Eq. Capital (Rs crs) 20.58 Investment Rationale:
 Restructuring of group to result in value unlocking for investors
Face Value (Rs) 10
 Margin expansion on back of higher API revenues
Equity Sh. Outs (Cr) 2.06  De-pledging of shares almost complete, selling pressure to ebb
Market Cap (Rs crs) 343.65  Speciality chemicals could do well going forward
 Capacity expansion done for the medium term
Book Value (Rs) 113.68
 Improving working capital, Debt reduction would result in higher return ratios
Avg. 52 Week Vol 275,000
52 Week High 193.75 Concerns:
52 Week Low 130.05  Falling institutional holding
 Decreasing share of export revenues
 Continued delays in commissioning of Unit V plant
Shareholding Pattern-% (Mar-2017)  Foreign exchange fluctuations
Promoters 41.01  Raw material price fluctuations

Institutions 3.58 Financial Summary - Consolidated

Non Institutions 55.40 (Rs Cr) Q3FY17 Q3FY16 YoY (%) Q2FY17 QoQ (%) FY16 FY17E FY18E FY19E
Operating Income 125.7 108.3 16.0 129.4 -2.9 413.4 497.0 559.7 652.3
Total 100.0
EBITDA 24.7 17.5 41.3 25.3 -2.3 80.8 98.4 113.9 137.0
PAT 10.5 9.4 11.9 11.6 -9.1 30.6 42.7 51.8 66.9
Research Analyst: Atul Karwa EPS (Rs) 5.1 4.6 5.6 14.9 20.7 25.1 32.5
atul.karwa@hdfcsec.com P/E (x) 11.7 8.4 6.9 5.4
EV/EBITDA (x) 6.8 5.6 4.8 4.0
RoNW (%) 19.6 19.8 20.4 21.0
(Source: Company, HDFC sec)

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View and Valuation

OSCL was facing three issues –
1. It underwent large capex over 2012-2016 without having liquidity margin for delay in commissioning of expansion
due to environmental clearances. This led to liquidity issues for the company and the promoters pledged their
shares to raise money for the company (beginning quarter ended Dec 2013). As the commissioning of the capacities
got delayed, promoters came under pressure to repay the loans borrowed and had to sell their free shares to repay
loans and unpledge the previously pledged shares. This unnerved some investors and the share price did not
perform despite improving financials.
2. Environmental clearance for the Unit 5 plant took longer than expected. This resulted in bloated CWIP, lower
depreciation and interest charges and postponement of revenues and margins from the new capacities.
3. The veterinary API intermediates business which was doing well did not get the required valuation (say in line with
the likes of Sequent Scientific in India and Zoetis abroad). This prompted the management to demerge the division
so that the division gets independent (higher) valuation.

While the third issue has got resolved with the NCLT tribunal approval being given on April 13, 2017 and the certified copy
of the order having been received on April 28,2017, the promoters have also depledged most of their shares by continuing
to sell their holding. Some of the expanded capacities have now gone on stream and the results thereof are reflected from
the results of Q2FY17. The balance capacities (Unit V) may soon go on stream. We hence think that the company and its
promoters are just coming out of a vicious circle and the stock price may now gradually rise reflecting this and the potential
value unlocking due to demerger.

The risk to this thesis is if the liquidity situation continues to be stiff and/or the demand supply situation of its key
products have undergone a bearish turn and/or the promoters have in their stress period committed some acts that are
not in the best interest of the company and/or their minority shareholders and now they come to light.

We feel investors could buy the stock at the CMP and add on dips to Rs 152-156 band (4.75x FY19E EPS) for sequential
targets of Rs. 195 (6.0x FY19E EPS) and Rs. 244 (7.5x FY19E EPS) in 2-3 quarters. Once all the capacities are commissioned
we believe the stock has the potential to rise even more and reach Rs 488 over the next 2 years. Even at that price the stock
would trade at 15xFY19E EPS and 1.5x Mcap/Sales as compare to 5.5x of Zoetis, the largest global animal health company.

Company Description
Incorporated in 1983, Omkar Speciality Chemicals Ltd (OSCL) is primarily engaged in the production of Specialty Chemicals
and Pharma Intermediates. It manufactures a range of organic, inorganic and organo inorganic intermediates that find
application in various industries like pharmaceutical, chemical, glass, cosmetic ceramic and poultry feeds. Its products are
also exported to companies in Europe, Australia, North America and Asian countries.

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OSCL has 7 manufacturing units (of which 4 are located at Badlapur, Thane) and 1 R&D centre. It manufactures more than
200 products and exports to around 40 countries including regulated markets of Europe, North America, China and other
Asian countries. Exports account for 10-15% of sales. It has a diversified customer base with top 30 customers accounting
for <30% of its sales. It has specialized process patented catalyst driven resulting in higher yield in production. OSCL is the
largest and only manufacturer of Selenium Sulphide in India

Products
Intermediates: An intermediate in the chemical industry refers to a stable product of a chemical reaction that is then used
as a starting material for another reaction. These are used in Digital applications, Reagent in pharma industry, Pigments and
as Building blocks in organic chemistry. Intermediates accounted for 39% of OSCL’s sales in FY16.

Veterinary APIs: API is the ingredient in a pharmaceutical drug that is biologically active. OSCL manufactures APIs largely for
use in veterinary products (mostly used as Anthelmintics (Deworming)). APIs contributed to 31% of revenues in FY16.

Iodine Derivatives: Iodine derivatives are used in a wide range of medical and industrial applications as well as in human
and animal nutrition products, such as antiseptics and disinfectants, pharmaceutical intermediates, polarizing films for
liquid crystal displays (LCD), chemicals, etc. Iodine is added in the form of potassium iodate or potassium iodide to edible
salt to prevent iodine deficiency disorders. Iodine derivatives accounted for 23% of revenues.

Revenue breakup (FY16)

(Source: Company, HDFC Sec)

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Selenium Derivatives: The largest commercial use of Se, accounting for about 50% of consumption, is for the production of
glass. Se compounds confer a red color to glass. This color cancels out the green or yellow tints that arise from iron
impurities typical for most glass. For this purpose, various selenite and selenate salts are added. Other uses include
Animal/Poultry feed, Anti-Dandruff Shampoo and Reagent for API & pharma industry. Share of selenium derivatives was 5%
in FY16 sales.

Resolving agents: Resolving agents are used in the chemical industry to separate molecules from each other, Catalyst across
industries and Feed additive. Resolving agents contributed to 2% of revenues.

Key company milestones

Year Milestone
1983 Started as a proprietary concern by Mr. Pravin Herlekar with a capacity of 6 MTPA for manufacture of
Molybdenum Derivatives
1995 Launched Iodine Derivatives
2005 Incorporated private limited company which took over the business of proprietary company with total
capacity of 318 MTPA. Launch of organic intermediaries.
2009 Commenced commercial production at Unit II. Total capacity of 750 MTPA
2010 Set up Unit III. Acquired Rishichem Research Ltd.
2011 Launched IPO and raised Rs 79.4 cr. Received FDA approval to manufacture selenium sulphide.
Acquired Desh Chemicals and Urdhwa Chemicals
2012 Received Star Export House status from Ministry of Commerce and Industry. Acquired Lasa Laboratory
2017 Merged all wholly owned subsidiaries and demerged the API business

OSCL has decided to restructure its group companies wherein its 4 wholly owned subsidiaries will be merged with itself and
its veterinary API division will be demerged.

Investment Rationale
Restructuring of group to result in value unlocking for investors
OSCL had filed plans for restructuring its group according to the business and collapse unwanted layers between
companies. It had proposed to merge all its wholly owned subsidiaries with itself and then demerge its Veterinary API
segment into a separate company (Lasa Supergenerics Ltd.) while speciality chemical segment would remain with the
parent. The company has taken this step as both the business segments are distinctively different with their own business
profile, growth potential, risk-rewards, regulatory and capital requirements. It will issue one share of the new company for
every one share held in the parent company. OSCL will get 10% shares of the demerged company against investments it had
currently made in the company. As per the scheme of arrangement, debt of the company as on Sep-2014 was to be split as
Rs.107 cr (LSL) & Rs.84 cr (OSCL). The total debt of the combined entity as on Sep 2016 is ~Rs.230 cr.

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Group structure post-merger and demerger

(Source: Company, HDFC Sec)

Margin expansion on back of higher API revenues

OSCL acquired Lasa Laboratory, an established player in veterinary API segment with state-of-the-art good manufacturing
practices (GMP) and FDA approved API manufacturing facility, in April 2012. Since then API business of the company has
witnessed a tremendous growth. Revenue share from API segment has increased from 5% in FY13 to 31% in FY16 and 37%
in 9MFY17. Lasa is manufacturing only those APIs for which OSCL has in house ability for manufacturing the raw materials
required by Lasa. This arrangement of forward-backward integration enables OSCL group in controlling the quality, reduce
dependence on external supplier and gain higher margins for its products.

Margins in the API segment are higher than speciality chemicals segment. In the API segment margins are ~25%,
intermediates is ~20%, iodine derivatives is ~13.5%, resolving agents ~ 20% and selenium derivatives is ~25-26%. Increasing
share of APIs is positive for the company as it would lead to margin expansion in the coming years.

This will also enable the API Intermediates division to get better valuation. Another listed company in the space is Sequent
Scientific in India. This company reported consolidated net sales of Rs 694.5 cr in 9MFY17 with an operating margin of 8.5%
and PAT margin of -2.6%. The stock is trades on a trailing EV/EBITDA of ~53x while the combined OSCL currently gets a
valuation of ~7xFY16EV/EBITDA. This reflects the scope for rerating/value unlocking by the demerger. Another global
company Zoetis trades at Mcap/Sales ratio of 5.5x while OSCL currently trades at 0.5x.

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Increasing share of API revenues

(Source: Company, HDFC Sec)

De-pledging of shares almost complete, selling pressure to ebb

The company was impaired by liquidity concerns as it had borrowed a substantial amount for expanding its capacity and
was finding it difficult to repay its loans. As a result the promoters had to offload their holding in the market to repay the
high cost borrowings and replace it with promoter loans at lower interest rates. 25% of the 41% promoter holding at the
end of FY17 was pledged amounting to ~21 lakh shares. The promoters were looking to de-pledge the shares before the
final approval of NCLT for restructuring which was received on April 13. Post Mar-17 the promoters have sold 1.92 lakh
shares and de-pledged 1.66% stake. We believe most of the selling for de-pledging has been done lifting the pressure on
the stock.

Falling Promoter holding

(Source: Company, HDFC Sec)

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Speciality chemicals could do well going forward

OSCL focuses on enhancing the value addition by way of backward and forward integrations. To avoid dependency on
imports and improve profitability of its existing finished products the company manufactures its own intermediates. The
backward integration enables the company to maintain complete cost control which has started yielding results.
Intermediates are generally high gross margin products and their increasing share would lead to margin expansion. The
manufacturing facilities at all locations are designed in such a manner that there is a total fungibility for manufacturing
various products as per the market requirements. This leads to a reasonably high level of capacity utilization. The backward
As of FY16 OSCL had filed 18 process patents to improve its process efficiency for proprietary catalysts with the Patents
Office, Govt. of India and had prepared 15 DMFs.

Capacity expansion done for the medium term

OSCL has been expanding its capacity over the last few years to meet the increasing requirement of intermediates, organic
and inorganic derivatives. It has incurred a capex of ~310 cr over FY12-16 in acquiring/expanding its capacities. The capex
has been completed and the management does not foresee and capex requirement in the near future. The biggest plant of
the company i.e. Unit 5, for organic intermediates has already received the consent from State’s Environmental
Department. However, as per the conditions laid down by the sanctioning authority OSCL has to put in additional
equipments particularly for keeping the effluent treatment under control. The management is in the process of installing
these additional facilities at the manufacturing unit and expected to commence the commercial production in near future.
The combined fungible manufacturing facilities at Chiplun, Urdhwa and Badlapur, have a total volumetric capacity of 5,400
MTPA and expected to increase to 10750 MTPA by FY18. Commissioning of Unit 5 and the expanded capacities of Unit 1,
Unit 6 and Lasa should set in motion higher growth trajectory for the company.

Volumetric capacities of various units (tonnes per annum)

Plant Activity FY14 FY15 FY16 FY17E FY18E
Unit No 1, Badlapur Inorganic Derivatives 600 600 600 900 900
Unit No 2, Badlapur Organic Intermediates 1025 1025 1,025 1025 1025
Unit No 3, Badlapur Selenium Sulphide 75 75 75 75 75
Unit No. 4, Badlapur Centralized Warehouse NA NA NA NA NA
Unit No. 5, Chiplun Organic Intermediates NA NA NA NA 4500
Unit No. 6, Chiplun Organic Intermediates NA 300 300 300 750
Lasa Labs Mahad APIs (Veterinary) 120 450 600 600 700
Urdhwa Chemicals, Chiplun Organic Intermediates 2800 2800 2800 2800 2800
TOTAL Capacity 4620 5250 5400 5700 10750
(Source: Company, HDFC Sec)

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Rated capacity, production and utilization (FY16)

(Source: Company, HDFC Sec)

Strong R&D facilities to develop innovative products

The knowledge based speciality chemicals sector has gained prominence, with new emerging pollution norms across the
globe especially China, making India the natural provider of speciality chemicals. OSCL is well equipped to take advantage of
this opportunity with a highly experienced R&D team of scientists and researchers focusing on process innovation and
developing better quality products. OSCL has emerged as one of the leading speciality chemicals companies in India and are
amongst the few players in India with a wide product with over 200 products manufactured in-house.

The company develops catalysts that are used in the manufacturing process of APIs and intermediates. This combined with
backward integration process, where OSCL has its own intermediates has led to higher yields and better profitability. OSCL
has filed for 18 process patents of which 3 have been granted by the Govt. of India. Besides it has also prepared 15 DMFs.
Its subsidiary Lasa Laboratory has also obtained Certificate of Suitability from European Directorate for the Quality of
Medicines & Healthcare (EDQM), for selling one of its premium products. OSCL was granted the patent for ‘Process for
Preparation of Higher Derivatives of β-Ketoester’ in Dec-2016. With this patent it now holds four process patents while 11
are under grant process.

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Wide and diverse customer base

OSCL commitment to process innovation and superior product development, has led to strong customer relationships
across the world. It exports to more than 40 countries across the world which is growing every year as the company enters
new geographies. More than 40% of its customers are repeat customers. It has a diverse base with the top 30 customers
contributing to less than 30% of sales.

Customers include the top names in Pharma and Chemicals industry

(Source: Company, HDFC Sec)

Improving working capital

Working capital days of the company had shot up to over 200 days in FY14 as the company had to extend longer credit
period in times of deteriorating demand due to the economic slowdown. Inventory levels also increased. Consequently
OSCL had to resort to higher borrowings leading to finance costs doubling in FY14 and PAT margins declining by over 400
bps from 9.7% in FY13 to 5.6% in FY14. With the economic scenario improving we expect working capital days to normalize
between 90-100 days.

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Working capital days expected to between 90-100 days

(Source: Company, HDFC Sec)

Debt reduction would result in higher return ratios

OSCL incurred capex of ~310 cr over FY12-16 to expand capacities at its various units. The company has completed its
expansions and the present capacities are sufficient to meet the anticipated demand for the near term. With no significant
capex requirement, we believe OSCL would utilize its cash flows to pare down its debt levels. This would result in higher
PAT margins

Return ratios to improve as debt levels come down

(Source: Company, HDFC Sec)

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Concerns
Falling institutional holding
Institutional shareholding in the company has come down over the last couple of years from ~15% in Q1FY16 to 4.4% in
Q3FY17. Institutional investors are long term investors and provide stability to the stock prices.

Decreasing share of export revenues

Exports accounted for 28% of the revenues in FY13 which has halved to 14% in FY16. Revenues from exports fell 14% in
FY16. In 9MFY17 it has further declined to 12%. Slowdown in exports is likely to impact topline growth.

Delays in commissioning plant

Delay in commissioning of its Unit V plant is taking a toll on OSCL’s finances as the company had taken loans and already
incurred capex for the same. Further delays would continue to escalate its costs.

Foreign exchange fluctuations

OSCL is a net forex earner and most of its exports are done in dollars. Recent strength of the rupee against the dollar could
hurt its profitability going forward.

Share sale by promoters

Promoters have sold their shares in the open market to repay loans taken by them. Their holding has declined significantly
making the company vulnerable and keeping share price under check.

Raw material price fluctuations:

OSCL faces the risk of fluctuations in its raw materials (~70% of sales) which it may not be able to pass over in
sluggish/competitive times.

Regulatory risks
The plants of the company run regulatory risks of inspections and environment clearances. Although the plants are fungible
its operations are likely to be impacted in the short term if a ban were to be imposed on any of its plants.

Debt equity ratio remains high

OSCL has funded its capacity expansion over FY12-FY16 largely through raising debt. As a result its debt-equity ratio has
remained on the higher side.

Q3FY17 results review

Revenues of OSCL grew by 16% yoy to Rs 125.7 cr driven by higher demand for its products. Share of API business grew to
42% as compared to 34% in Q2FY17 and 31% for FY16. Contribution of speciality chemicals segment accounted for 58%.
EBITDA increased by 41.3% yoy to Rs 24.7 cr while EBITDA margins expanded 352 bps to 19.7% mainly on account of higher
operating efficiencies and better product mix. PAT however grew at a slower rate of 11.9% yoy to Rs 10.5 cr on account of

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higher depreciation expenses as the company capitalized its expansion of Unit 1 in Q2FY17 and higher finance cost resulting
from higher borrowings for completing the expansions of its various units. PAT margins dipped 30 bps yoy to 8.4%.

Revenue breakup Q3 and 9MFY17

Segmental Geographic

(Source: Company, HDFC Sec)

Particulars (Rs Cr) Q3FY17 Q3FY16 YoY (%) Q2FY17 QoQ (%) 9MFY17 9MFY16 YoY (%)
Operating Income 125.7 108.3 16.0 129.4 -2.9 367.8 300.1 22.6
Material consumed 90.0 80.1 12.4 92.1 -2.3 259.3 214.8 20.7
Employee expenses 5.1 4.4 15.8 5.2 -2.9 15.2 12.6 20.8
Other expenses 5.9 6.4 -8.0 6.8 -13.3 20.0 19.7 1.6
Total expenses 101.0 90.8 11.1 104.1 -3.0 294.5 247.1 19.2
EBITDA 24.7 17.5 41.3 25.3 -2.3 73.3 53.0 38.3
Depreciation 5.0 2.0 150.7 4.0 27.3 12.5 5.9 114.0
Other Income 1.0 0.3 225.8 0.6 60.3 2.3 0.9 158.4
Finance cost 5.9 4.0 45.5 6.7 -12.2 18.1 12.1 49.3
PBT 14.8 11.8 26.0 15.3 -2.9 44.9 35.9 25.2
Tax expenses 4.3 2.4 81.5 3.7 16.1 11.9 9.3 27.6
Reported PAT 10.5 9.4 11.9 11.6 -9.1 33.0 26.6 24.3
EPS (Rs) 5.1 4.6 11.9 5.6 -9.1 16.0 12.9 24.3

EBITDA (%) 19.7% 16.2% 352 bps 19.6% 12 bps 19.9% 17.7% 226 bps
PAT (%) 8.4% 8.7% -30 bps 8.9% -57 bps 9.0% 8.9% 13 bps
(Source: Company, HDFC sec)

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View and Valuation

OSCL was facing three issues –
1. It underwent large capex over 2012-2016 without having liquidity margin for delay in commissioning of expansion
due to environmental clearances. This led to liquidity issues for the company and the promoters pledged their
shares to raise money for the company (beginning quarter ended Dec 2013). As the commissioning of the capacities
got delayed, promoters came under pressure to repay the loans borrowed and had to sell their free shares to repay
loans and unpledge the previously pledged shares. This unnerved some investors and the share price did not
perform despite improving financials.
2. Environmental clearance for the Unit 5 plant took longer than expected. This resulted in bloated CWIP, lower
depreciation and interest charges and postponement of revenues and margins from the new capacities.
3. The veterinary API intermediates business which was doing well did not get the required valuation (say in line with
the likes of Sequent Scientific in India and Zoetis abroad). This prompted the management to demerge the division
so that the division gets independent (higher) valuation.

While the third issue has got resolved with the NCLT tribunal approval being given on April 13, 2017 and the certified copy
of the order having been received on April 28,2017, the promoters have also depledged most of their shares by continuing
to sell their holding. Some of the expanded capacities have now gone on stream and the results thereof are reflected from
the results of Q2FY17. The balance capacities (Unit V) may soon go on stream. We hence think that the company and its
promoters are just coming out of a vicious circle and the stock price may now gradually rise reflecting this and the potential
value unlocking due to demerger.

The risk to this thesis is if the liquidity situation continues to be stiff and/or the demand supply situation of its key
products have undergone a bearish turn and/or the promoters have in their stress period committed some acts that are
not in the best interest of the company and/or their minority shareholders and now they come to light.

We feel investors could buy the stock at the CMP and add on dips to Rs 152-156 band (4.75x FY19E EPS) for sequential
targets of Rs. 195 (6x FY19E EPS) and Rs. 244 (7.5x FY19E EPS) in 2-3 quarters. Once all the capacities are commissioned we
believe the stock has the potential to rise even more and reach Rs 488 over the next 2 years. Even at that price the stock
would trade at 15xFY19E EPS and 1.5x Mcap/Sales as compare to 5.5x of Zoetis, the largest global animal health company.

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Financial Statements

Income Statement Cash Flow statement

Particulars FY15 FY16 FY17E FY18E FY19E Particulars FY15 FY16 FY17E FY18E FY19E
Income from operations 265.1 413.4 497.0 559.7 652.3 Profit Before Tax 28.3 52.4 58.5 71.9 96.9
Cost of materials consumed 167.7 290.0 350.4 392.4 454.0 Depreciation 10.3 9.0 17.7 22.7 24.0
Employee Cost 14.4 18.0 20.9 23.2 26.7 Others 15.3 30.2 24.0 21.8 19.1
Other expenses 30.9 24.6 27.3 30.2 34.6 Change in working capital 27.0 -24.3 -19.8 -24.7 -22.8
Total expenses 213.0 332.6 398.6 445.8 515.3 Tax expenses 0.0 0.0 -15.8 -20.1 -30.0
EBITDA 52.2 80.8 98.4 113.9 137.0 CF from Operating activities 80.8 67.3 64.6 71.5 87.2
Depreciation 10.3 9.0 17.7 22.7 24.0 Net Capex -93.5 -46.7 -7.0 -10.0 -10.0
Other Income 42.7 73.2 83.2 94.0 116.2 Other investing activities 0.2 0.4 0.0 0.0 0.0
EBIT 0.9 1.4 2.5 2.8 3.3 CF from Investing activities -94.0 -46.4 -7.0 -10.0 -10.0
Finance Cost 14.5 20.4 24.7 22.1 19.3 Proceeds from Eq Cap 10.7 0.0 0.0 0.0 0.0
Profit Before Tax 28.3 52.4 58.5 71.9 96.9 Borrowings / (Repayments) 17.5 6.3 -15.0 -35.0 -40.0
Tax Expenses 4.0 21.8 15.8 20.1 30.0 Dividends paid -3.4 -3.6 -4.2 -4.9 -7.4
Reported PAT 24.3 30.6 42.7 51.8 66.9 Interest paid -14.5 -28.9 -24.7 -22.1 -19.3
EPS 11.8 14.9 20.7 25.1 32.5 CF from Financing activities 10.3 -26.2 -43.9 -62.0 -66.7
Net Cash Flow -2.9 -5.3 13.7 -0.5 10.5

Balance Sheet Financial Ratios

Particulars FY15 FY16 FY17E FY18E FY19E Particulars FY15 FY16 FY17E FY18E FY19E
EQUITY AND LIABILITIES EPS (Rs) 11.8 14.9 20.7 25.1 32.5
Share Capital 20.6 20.6 20.6 20.6 20.6 Cash EPS (Rs) 16.8 19.3 29.3 36.2 44.2
Reserves and Surplus 148.0 174.9 213.4 260.2 319.7 BVPS (Rs) 81.9 95.0 113.7 136.4 165.3
Shareholders' Funds 168.6 195.5 234.0 280.8 340.2
Long Term borrowings 83.3 114.9 104.9 84.9 59.9 PE (x) 14.8 11.7 8.4 6.9 5.4
Deferred Tax Liabilities (Net) 0.8 11.3 11.3 11.3 11.3 P/BV (x) 2.1 1.8 1.5 1.3 1.1
Other Long Term Liabilities 0.0 0.0 0.0 0.0 0.0 Mcap/Sales (x) 1.4 0.9 0.7 0.6 0.6
Long Term Provisions 1.7 2.8 3.0 3.2 3.6 EV/EBITDA 10.5 6.8 5.6 4.8 4.0
Non-current Liabilities 85.7 129.0 119.2 99.4 74.8
Short Term Borrowings 140.6 113.1 108.1 93.1 78.1 EBITDAM (%) 19.7 19.6 19.8 20.4 21.0
Trade Payables 61.4 98.2 107.9 114.1 127.8 EBITM (%) 16.1 17.7 16.7 16.8 17.8
Other Current Liabilities 10.1 26.4 28.3 28.9 31.9 PATM (%) 9.2 7.4 8.6 9.2 10.3
Short Term Provisions 12.8 20.7 22.6 24.1 26.6
Current. Liabilities 224.9 258.5 266.9 260.3 264.4 ROCE (%) 11.6 17.9 19.1 20.8 24.8
TOTAL 479.2 582.9 620.1 640.5 679.4 RONW (%) 15.9 16.8 19.9 20.1 21.5

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ASSETS
Fixed Assets Current Ratio (x) 0.9 1.1 1.2 1.4 1.5
Net Block 149.2 160.7 218.8 271.1 262.1 Quick Ratio (x) 0.5 0.7 0.8 0.9 1.0
Capital work-in-progress 121.6 148.9 80.0 15.0 10.0 Debt-Equity (x) 1.3 1.2 0.9 0.6 0.4
Non current Investments 0.1 0.1 0.1 0.1 0.1
Long-Term Loans and Advances 1.0 0.9 1.4 1.7 1.7 Debtor days 118 91 97 93 89
Other Non-current Assets 0.0 0.4 0.5 0.6 0.6 Inventory days 188 119 108 107 104
Non-current Assets 1.1 1.3 2.0 2.3 2.4 Creditor days 116 100 107 103 97
Current Investments 0.0 0.0 0.0 0.0 0.0
Inventories 88.8 99.9 107.9 121.7 136.6
Trade Receivables 76.8 130.4 134.8 149.1 168.6
Cash and Bank Balances 15.5 10.3 24.0 23.5 34.0
Short-Term Loans and Advances 22.2 30.5 33.7 38.0 44.4
Other Current Assets 4.1 1.0 18.9 19.8 21.3
Current Assets 207.4 272.0 319.2 352.1 404.9
TOTAL 479.2 582.9 620.0 640.5 679.4
(Source: Company, HDFC sec)

One year Forward PE Price chart

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 RETAIL RESEARCH

Fundamental Research Analyst: Atul Karwa, atul.karwa@hdfcsec.com

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