V-Guard - Initiating Coverage

52 Week High/Low INR 457/141

Bloomberg code VGRD IN

Reuters code VGUA BO

Issued Equity

(shares in mn) 29.85

Mkt. Cap in mn

Mkt. Cap in bn USD

INR 11,700

$ 0.2Avg. Daily Vol. (‘000) 249.99

Avg. Daily Vol. (mn) INR 96.9/$ 1.7

Shareholding Jun11 Mar12 Jun12

Promoters(%) 67.34 67.38 66.04

FII (%) 5.92 7.42 9.68

DII (%) 2.81 2.22 2.50

Others (%) 23.93 22.98 21.78

Pledge (% of

promoter

holding)

- - -

Performance% 1M 3M 12M

V-Guard -19.9 38.0 104.4

Sensex 1.3 4.7 11.2

Vinayakamp +91-44-30007360 [email protected]

Play on the consumer theme

Growing consumer spend to aid VGIL

VGIL has a wide product profile catering to the mass consumption market in the household electrical

appliances segment. With growing per capita income, higher disposable income, nuclearisation of

families & increasing aspirational levels, demand for these products is expected to remain strong.

According to NCAER, the number of high income households rose from 13.8 million households in

2001-02 to 46.7 million households in 2009-10. Going ahead, the numbers of middle income

households are expected to increase by 70% to 238 million by 2015. Moreover, VGIL is likely to gain

on increasing urbanization and change in consumer preference. The robust rise of middle income

households, growing disposable income, strong demand, expansion into new geographies by

increasing outlets and new product lines will drive revenues for VGIL in the next two years.

Outlook & Valuation

VGIL, at CMP of INR 392, trades at 19.37X and 15.63X to its FY13 & FY14 earnings respectively. The

EPS of the company has been growing at a CAGR of about 21.39%.Given the growing consumer

demand, entry into new products, successful diversification into newer segments, increasing market

share, increasing outlets, and strong distribution network provide earnings visibility for the stock. We

expect V-Guard to report an EPS of INR 20.24 in FY13E and INR 25.08 in FY14E. At the CMP of INR

392, the stock trades at 19.37X EPS of FY13E and 15.63X EPS of FY14E. We Initiate coverage of V-

Guard with an OUTPERFORMER rating and price target of INR 426 based on a target PE multiple of

17x its FY14E EPS (PEG-0.79).Key Risks to our recommendation include steep increase in raw

material cost and slow down in the Indian economy which will lower consumption demand.

Valuation Summary

Y/E March ( INRmn) FY11 FY12 FY13E FY14E

Revenue 7,266 9,936 11,461 13,517

EBIDTA 730 935 1,081 1,311

PAT 426.36 508 604.02 748.44

EPS 14.28 17.02 20.24 25.08

EPS growth (%) 67.46 19.15 18.90 23.91

FCF / Share NA 25.88 23.92 37.83

PE 27.44 23.03 19.37 15.63

P/ BV 6.80 5.55 4.55 3.68

EV / EBIDTA 17.84 13.93 12.05 9.94

EV / Sales 2.9 1.3 1.1 1.0

Dividend Yield (%) 0.89 0.89 1.02 1.02

ROCE (%) 25% 27% 29% 29%

ROE (%) 25% 24% 23% 24%

Net Debt / Equity 0.79 0.32 0.30 0.02

Sensex Nifty 18,832 5,704

3 October 2012

V-Guard(VGIL) Sector: Midcap

October 3, 2012 Initiating Coverage

Background: V-Guard Industries (VGIL) was started in 1977 by Shri.Kochouseph Chittilappily to manufacture and market Voltage Stabilizers under the brand name

V-Guard. VGIL emerged as a leading player in the stabilizer segment and became a household brand. V-Guard began to aggressively diversify from 1992 and

became a multi product company with presence in Stabilizers, Pumps, Cables, UPS, Water Heaters, Fans, Switch Gear and Induction Cooker. VGIL manufactures as

well as outsources in all these products with share of manufacturing and outsourced at 59% and 41% respectively in FY12. VGIL has a strong distribution network with

230 exclusive distributors, 1,200 channel partners and 11,000 dealers across India.

Price: INR 392 Target Price: INR 426 OUTPERFORMER

Growth driven by new product launches: V-Guard started its business as a single product company namely

stabilizers and has expanded its product portfolio to Cables, Stabilizers, Water Pumps, Solar Water Heaters,

Geysers, Digital UPS for computers, Inverters for households and Fans. The company has introduced two new

products – domestic switch gear and induction cooker in the market. Both these are in the pilot phase. Launch of

induction cooker marks VGIL’s entry in the kitchen appliances segment. A pilot project has been carried out in central

Kerala prior to launching the switchgear which includes Earth Leakage Circuit Breakers (ELCBs) before making an

entry in domestic switchgear market. Looking at the positive response in central Kerala, VGIL plans to launch the

product in North and South Kerala in the coming six months before entering the North Indian market. The company

also plans to tap the market through the same kind of channel and using same marketing team. The share of

revenues from outsourced goods in FY12 was at INR 5902.42mn vs INR 4371.54mn an increase of about 35.01%.

The overall share of manufactured goods and traded goods in FY12 stood at 59% and 41% respectively.

The company has launched induction cookers recently and it turned out to be a very successful pilot launch. It plans

to launch this product in South India. VGIL is in talks with vendors to manufacture induction cookers in India. The

company is targeting a turnover of INR 1000mn from the kitchen appliances segment in the next four years by adding

a few other products such as Mixers, Grinders in this segment.

Capacity expansion: VGIL has planned a capex of INR 250mn for fiscal 2013. VGIL is investing about INR 150mn

towards doubling of expansion of its house wiring and cable factory at Kashipur plant in Uttaranchal. This plant is

running at near full capacity producing 0.27mn coils a month. The company has plans to double this capacity to

0.55mn coils per month to take advantage of excise duty and the incentives which will accrue till 2018. Further, a

second solar water heater manufacturing plant is also coming up at Perundurai near Erode; for which INR 30mn will

be spent out of capex. And the remaining capex is likely to be spent on incremental expansion, manufacturing

facilities, extension of existing factories etc.

Strong distribution network: VGIL has about 230 distributors of whom 100 are in South India, 1200 Channel

Partners (large retailers with many outlets) and plans to add more distributors in the markets, apart from South India.

VGIL expects each distributor to generate minimum of INR 50mn per year on an average, which will generate

revenues of INR 15bn per annum. VGIL has recently opened an office in Guwahati apart from plans to add

distributors in the Northeast, West Bengal, and Chhattisgarh. VGIL intends to focus to improve the penetration levels

of its products in the Eastern market in fiscal 2013.

Increasing market share: V-Guard Industries, over the past few years, has successfully gained market share in all

of its product categories. In Stabilizers, it had a market share of about 12% which has now improved to 16% over

three years. And in the wires industry, with size of roughly about INR 65bn the company used to be a very small

player about three years back having about 1% market share which has now improved significantly to 4%. In the

geyser segment, VGIL has increased its market share to 10% from 3.5%. The company holds number three position

in India in solar water heater segment, enjoying roughly 10% market share. In the single phase domestic water pump

segment with a market size estimated at about INR 20bn, VGIL’s market share has improved to 7% from 5% three

years back.

Diversified Product Growth: The success of VGIL lies in its diverse product portfolio which is directly related to

the rise in disposable income of the middle class consumer in India. VGIL’s major chunk of revenues in FY12 was

generated through cables and stabilizer contributing 30% and 20% respectively. Both the products grew by 36% and

20% YoY. Further, LT Cables, Digital UPS and Fans individually registered growth of 39%, 236% and 20%

respectively in FY12. During FY12 other products such as Pumps, Water Heaters and Solar Water Heater reported

expansion in its sales by 25%, 44% and 21% respectively.

Expanding Pan India to de-risk business: VGIL’s sales are currently predominantly from the southern region led by

its strong brand name as well as its distribution network. It had been primarily focusing on these markets and has

built a wide product portfolio. Moreover, over the past few years it has widened its distribution network to pan-India.

The company ventured into Maharashtra, Haryana, Madhya Pradesh, Orissa, Himachal Pradesh, Chhattisgarh, Uttar

Pradesh and Gujarat in FY10, with an objective to focus on pan-India presence. Going ahead the company wants to

expand its presence in Bihar and the north-eastern states. This strategy, although margin dilutive in the initial years

would enable VGIL to become a formidable player in all its product categories in a few years from now.

Growing distribution network aid growth: Currently, VGIL’s products are sold through 230 exclusive distributors,

1200 Channel Partners and 11,000 dealers with 52% of sales concentrated in four southern Indian states of Andhra

Pradesh, Karnataka, Kerala and Tamil Nadu. Its network is also spread across all states in India except North East

and Jammu & Kashmir. The company has a diversified client base which differs from product to product and includes

Cable, 28%

Stabilizers, 20%

Pumps, 15%

Water Heater, 9%

Digital UPS, 7%

Fan, 6%

UPS, 6%

LT Cable, 4%

Solar Water Heater, 3% Others, 2%

% of Revenues

direct marketing agents, distributors and retailers. VGIL is offering a cash discount to dealers who provide cash

immediately and is also talking to banks for channel financing for distributors .This should ease its working capital

position going forward.

Higher Advertisement spending boost brand perception and visibility across India: During FY12, the company

incurred INR 924.59 mn as selling and distribution expenses, out of which the advertisement expenses stood at INR

380 million for FY12. Higher spending on marketing, promotion and branding will enable the company to compete

against its established peers in the organized segment and help improve brand perception on a national scale.

Outsourcing model provides flexibility and aids growth: VGIL operates a unique business model which is a mix

of manufacturing and outsourcing for its product portfolio. It manufactures products such as cables and solar water

heater, whereas it outsources the manufacturing of stabilizers, pumps, electric water heater, Fans, UPS and Digital

UPS from around 69 organizations, with whom the company has a tie-up. Given the short lifecycle of a consumer

electronic product, its design capabilities along with outsourcing operations has helped to rationalize its capex

requirement and simultaneously branch out into new product lines. The share of revenues from manufactured goods

in FY12 was at INR 4094.71mn vs INR 2972.92mn in FY11 an increase of about 37.73%. The share of revenues

from traded goods in FY12 was at INR 5902.42mn vs INR 4371.54mn an increase of about 35.01%. The overall

share of manufactured goods and traded goods in FY12 stood at 59% and 41% respectively. VGIL is looking at

launching 2 new product categories in the form of mixers & grinders in consumer appliances space which will drive

growth in the next 4 years All new products are developed at its R&D centre and then given to vendors for

manufacturing. This arrangement also helps in keeping the costs under control as it saves on overheads and can

have the vendors near the market, which saves on transportation cost. Moreover, since the product portfolio of the

company demands intense market penetration through proper branding, promoting and strong network channel, VGIL

can focus on new product development, branding and distribution rather than manufacturing all products in house.

Product No. of Units Remarks

Own Manufacturing Units

PVC Wiring Cables 2 Coimbatore , Kasipur

LT Cables 1 Coimbatore

Pumps & Motors 1 Coimbatore

Fans 1 Kala Amb, Himachal Pradesh

Water Heaters 1 Kala Amb, Himachal Pradesh

Solar Water Heaters 1 Coimbatore

Outsourced Production Facilities

Products No. of Units Remarks

Stabilizers 63

Across India

Pump 20

Fan 6

UPS 12

EWH 6

Industry Overview:

Stabilizers: A voltage regulator is an electrical regulator designed to automatically maintain a constant voltage level. It may use

an electromechanical mechanism, or passive or active electronic components. Depending on the design, it may be

used to regulate one or more AC or DC voltages. At many industrial automation processes, measurement and control

installations and also at network PCs it is necessary to supply different types of electrical devices with stabilized AC

voltage. It is very important that the stabilized AC voltage is not dependent on external variations such as: supply

voltage, frequency and load. The poor voltage conditions has made it imperative for every house hold to use a

stabilizer for Refrigerators and Air Conditioners The stabilizer market in India is around INR.20bn with the organized

segment size being pegged at around INR 10bn. The company has about 35 models with different capacities varying

from 100 VA to 5 KVA. The company enjoys a 16% market share in the stabilizer segment. Sales from the segment

in FY12 was INR.2009mn contributing 20% to the company’s revenues. The key competitors are Keeline, Bluebird,

Premier and Logicstat.

Cables

Cables are one of the basic inputs therefore they are very critical for the entire industrial sector. Cables can be

broadly classified into domestic PVC Cables and LT Cables . The construction and infrastructure sector is one of the

major end markets for the domestic cable segment. LT Cables are used for low voltage transmission of electricity and

are used for last mile connectivity from the step down transformer onwards.The telecom and industrial sector are the

user industry for power cables in India. Whether made of Copper, Aluminium or other non-ferrous materials - cables

and wires play decisive role in our daily lives and in almost every industry. Cables are used by Power, Steel, Cement,

Refineries, Petro-Chemicals, Fertilizers and Communication Sector as well as Railways including Metro Rail.

The Indian cable industry is highly fragmented with large number of cable producers. Many of these companies are

Small-scale cable producers, the smallest of which are family-run operations which use the most basic production

equipments. There has been very limited consolidation amongst the major players in the industry. The tendency of

Cable companies to grow organically, rather than by acquisition of competitors, means that no dominant groups have

emerged in the industry.

Domestic, Industrial wiring Cable: The Indian PVC cable market is estimated to be around INR 73.5bn. The market for this segment is growing at

around 10% - 15%. The industry is highly fragmented with large number of cable producers. The organized players

have a market share of about 75%-80% with top ten players having a share of around 45%. The sales from this

segment in FY12 was around INR 2825mn contributing around 28% of total turnover. The key competitors in this

segment are Finolex Cables, Havells, KEI and Polycab.

LT Power Cable: The market for the LT power cable segment is around INR 65bn. V-Guard is having a range of armored and

unarmored variants in both copper and aluminium up to the size of 400 sq.mm. The sales from this segment in FY12

was around INR 580mn. Key players in this segment are Finolex, Havells, RPG, Unicab and Polycab.

Pump Industry A pump is service equipment but has a role in almost every sector of national economy. Water Pumps are the vital

elements in an enormous range of fluid handling applications & range from small household pumps to immense units

utilized in the water, chemical and energy industries. The market size of pumps in India is around INR 45bn. There

are more than 400 different models with capacities ranging from 0.25HP to 25HP, ideal to suit all domestic and

agricultural requirements. The water pump range includes Mono block, Centrifugal, Submersible, Jet pumps

compressor and regenerative self – prime pumps. The sales from the motor pump segment in FY12 was around INR

1520mn amounting to 15% of total turnover. The key competitors in the pump industry are CRI Pumps, Kirloskar,

Crompton Greaves, Havells and Texmaco.

Uninterrupted Power Supply (UPS) Electronic equipment, medical equipment and computers often require highly reliable power supply. Also the supply

should be without fluctuations. In India, the electric power projections depict a shortfall in power generation. The

quality of power is also not as desired. Therefore, a suitable power conditioning system is needed to buffer the

equipment from electric utility supply variations and fluctuations. In major metro cities the power cuts are for about an

hour and in Tier II, III cities, smaller towns & villages the power cuts extend up to 8 hours a day which necessitates

the need to own a UPS. Further, the power that is made available is of very poor quality with low voltage which drives

demand for UPS.

There are two types of UPS - on line UPS and offline UPS. Online UPS systems are the UPS which is in operation

constantly. It also compensates power discrepancies, if any and provides a pure sine wave AC supply. Offline UPS

on the other hand are normally on standby status and are manually or automatically switched on. The mains are fed

directly to the load through a transfer switch. UPS can be classified into two segments; those systems with power

output greater than 1 KVA and those with less than 1 KVA. The former finds applications in small offices, hospitals,

defense, process industry, telephone exchanges, remote microwave relays and so on, while the latter largely caters

to single PC use.

The UPS market in India is having a market size of around INR 40bn .VGIL entered this market in FY1998 and have

got around 13 different models. The sales from this segment in FY12 was about INR 420mn. The key competitors in

this segment are Numeric,Su-kam, APC and Emerson.

Inverter: The digital UPS commonly known as Inverter market in India is having a market size of around INR 57bn including

batteries. VGIL entered the market in FY2010 with three capacity variants 1400 VA, 800 VA and 600 VA with Sine

wave models and Pseudo Sine wave models. Tubular batteries are also available with 12 V 100 AH capacity. The

sales from Inverter segment in FY2012 was around INR 730mn contributing about 7% of total sales. The major

competitors in this segment are Crompton Greaves, Usha, Numeric, Microtec, Sukam, Mahindra Powerol, Xenon and

Luminous.

Electric Fans According to NCAER, Electric fan, which is an item of necessity and mass consumption, is the second 'most wanted'

consumer durable in rural India after bicycle. It features in the high-market penetration product category and is very

high in terms of purchase priority amongst entry level / basic necessity category durable. Being a tropical country the

electric fan is an essential item for the lower to middle class people of the country. But due to involvement of lesser

technological input and low entry barrier the market is equally divided among the organized and unorganized players

The increase of input prices like copper and alloy steel along with stiff competition from the SSI manufacturers (who

are exempt from excise duty), the manufacturers are currently facing severe margin pressure. With Boom in housing

construction, increasing industrial activity, rising disposable incomes, the demands for fans remain healthy.

The market size of the fan segment is around INR.50bn out of which ceiling fan has the largest share with 65%

market, Table, Pedestal and Wall fans with 30% market and Exhaust and Ventilating fans occupy the remaining 5%.

VGIL entered the segment in 2006 and currently has more than 30 models, with variants of Ceiling, Pedestal, Table,

Wall, Ventilating and Exhaust Fans. The sales in the segment during FY12 was around INR 640mn which amounted

to 6% of total turnover. The key competitors in this segment are Crompton Greaves, Bajaj, Usha, Orient and Havells.

Geyser: The organized market size of Electric water heaters is around INR 7bn. VGIL entered the segment in FY1996 and is

available in more than 35 models with capacities ranging from 1,6,10,15,25,35 and 50 litre in different shapes and

sizes. VGIL has also got a Instant gas water heater with capacity of 5 ltr. The sales during FY2012 was INR 860mn

contributing 9% of total turnover.

Solar Water Heater: The solar water heater market in India consists of segments like domestic and commercial / industrial with a market

size of around INR.6bn. VGIL entered the market in FY2001, and has more than 23 different models capacities

ranging from 100 lpd to 5000 lpd. The sales from this segment was about INR 260mn. Tata BP Solar and Racold are

the major players in the market. The Government of India provides for subsidy to promote solar water heater under

the JNNSM solar policy. Capital subsidy equivalent to upfront interest subsidy INR 1850 per sq. m. to registered

institutions and Rs 1400 per sq. m. of collector area to registered commercial establishments. In the case of housing

complexes INR 1900/ sq. m. of collector area is provided as capital subsidy. Further,85% of the cost of the project will

be provided loans for 5 years from IREDA/Banks at interest rates of 2% for domestic users, 3% for institutional and

5% for commercial users.

Financials Revenues to grow 15% and 18% in FY13 & FY14

VGIL is likely to benefit from growing consumer demand for durables which is likely to drive its revenues in FY13 and

FY14. The company is likely to report revenues of INR 11,461mn and INR 13,517mn in FY13 and FY14 respectively

which provides revenue growth of about 15% and 18%. The growing consumer market with strong population

demography provides the company with revenue visibility for the next couple of years. Apart from this the company

has forayed into Switch Gear and Induction Cooker, the pilot launch of these two products is very encouraging. The

company’s focus to become a Pan India player is likely to de-risk its business across geographies.

EBITDA margins stable

VGIL is likely to maintain stable EBITDA margins of about 9.43% and 9.70% in FY13 and FY14 with EBITDA of about

INR 1,080.7mn in FY13 and INR 1,311.1mn in FY14. EBITDA margins are likely to improve on account of lower

copper prices which have seen a decline in LME prices due to slower growth of leading economies of the world.

0

200

400

600

800

1000

1200

1400

2012 2013E 2014E

EBITDA(CAGR -18.39%)

7266

9936

11461

13517

0

2000

4000

6000

8000

10000

12000

14000

16000

2011 2012 2013E 2014E

Revenues (Rs.mn)(CAGR-16.64%)

Working Capital management to strengthen Balance sheet

VGIL has got a strong balance sheet with low leverage. Net debt to equity in FY12 stood at 0.52X as compared to -

0.81X in FY11. VTWL follows an asset light model which enables it to utilize its assets optimally. The asset turnover

ratio of the company in FY12 was at 3.10X and this is likely to be 3.04X and 3.02X in FY13 and FY14 respectively.

VGIL is also looking at improving the working capital due to better management of inventories and debtors apart from

negotiating better terms with suppliers. As a result of these initiatives the Inventory days which stood at 55 days in

FY12 is likely to improve to 50 days and 45 days in FY13 and FY14 respectively. The debtor days in FY12 which

stood at 50 days is likely to improve to 45 days and 40 days in FY13 and FY14 respectively. The creditor days of the

company which stood at 20 days in FY12 will improve to about 40 and 50 days in FY13 and FY14 respectively.

Valuation

VGIL, at CMP of INR 392, trades at 19.37X and 15.63X to its FY13 & FY14 earnings respectively. The EPS of the

company has been growing at a CAGR of about 21.39%.Given the growing consumer demand, entry into new

products, successful diversification into newer segments, increasing market share, increasing outlets, and strong

distribution network provide earnings visibility for the stock. We expect V-Guard to report an EPS of INR 20.24 in

FY13E and INR 25.08 in FY14E. At the CMP of INR 392, the stock trades at 19.37X EPS of FY13E and 15.63X EPS

of FY14E. We Initiate coverage of V-Guard with an OUTPERFORMER rating and price target of INR 426 based on a

target PE multiple of 17x its FY14E EPS (PEG-0.79).

Concerns: Steep increase in raw material cost: Copper is the key raw material for VGIL. Any steep increase in copper prices

and inability to pass on the same to customers will impact the company’s revenues and profitability.

Unorganized sector penetration: In most of the segments where VGIL has presence there is penetration by

unorganized players which affects the organized players in the industry. In the case of any downtrend in the economy

the share of unorganized players will increase which will impact organized players like VGIL.

Slowdown in the economy: Though India has a strong consumption trend which attracts capital to these sectors,

any slowdown in the economy will result in lower consumer spending which will impact companies in that segment.

Financials

*CCC – Cash Conversion Cycle

Per Share Ratios

Particulars FY11 FY12 FY13E FY14E

Adjusted EPS (INR) 14.3 17.0 20.2 25.0

Cash EPS 16.9 20.3 23.9 29.2

BV/Share (INR) 57.6 70.6 86.1 106.5

FCF/Share(INR) -12.8 25.9 23.9 37.8

DPS (INR) 3.0 3.5 4.0 4.0

Key Ratios


Dividend payout (%) 24.5 20.6 17.3 14.0

EBIDTA margin (%) 10.1 9.4 9.4 9.7

PBT Margin (%) 7.6 7.0 7.4 7.8

RoCE (%) 25% 27% 29% 29%

RoE (%) 25% 24% 23% 24%

Current Ratio 3.3 2.3 2.6 2.5

Debt/Equity 0.8 0.5 0.5 0.4

Inventory Days 60 55 50 45

Debtor Days 50 50 45 40

Creditor Days 20 20 40 50

CCC* 90 85 55 35

Interest Cover Ratio 6.2 5.1 6.9 7.8

DuPont Analysis


Net Profit Margin (%) 5.9 5.1 5.3 5.5

Asset Turnover 2.3 3.1 3.0 3.0

Leverage factor 1.8 1.5 1.5 1.4

RoE (%) 25% 24% 23% 24%

Valuation Ratios


P/E 27.4 23.0 19.4 15.6

P/BV 6.8 5.5 4.5 3.7

EV/Sales 2.9 1.3 1.1 1.0

EV/EBIDTA 17.8 13.9 12.0 9.9

Div Yield (%) 0.9 0.9 1.0 1.0

Income Statement (Abstract)

INR(million)


Net Revenue 7,266 9,936 11,461 13,517

Growth (%) 60 37 15 18

Operating Exp. 6,536 9,001 10,380 12,206

EBIDTA 730 935 1,081 1,311

Growth (%) 43 28 16 21

Depreciation 79 97 110 125

Other Income 17 24 24 24

Interest 113 170 144 156

Tax Paid 165 184 247 306

Tax Rate (%) 30 27 29 29

Reported PAT 426 508 604 748

Adjusted PAT 426 508 604 748

Growth (%) 67% 19% 19% 24%

Balance Sheet (Abstract)

INR(million)


Share Capital 299 299 299 299

Reserves & Surplus 1,421 1,808 2,272 2,881

Net worth 1,720 2,106 2,571 3,179

Current Liabilities 871 1,462 1,497 1,984 Non-Current Liabilities 1,459 1,138 1,200 1,300

Total Liabilities 4050 4707 5268 6464

Net Fixed Assets 1,158 1,348 1,450 1,591 Other Non-Current Assets 0 0 0 0 Cash & marketable securities 71 34 428 1245 Other Current Assets 2,821 3,325 3,390 3,628

Total Assets 4050 4707 5268 6464

Cash Flow statement (Abstract)

INR(million)


Cash flow from operations -386 794 762 1,255 Cash flow from investing -11 -237 -188 -241 Cash flow from financing 394 -594 -179 -196

Free cash flow

37 24 38

Net change in cash -3 -37 394 818

Cholamandalam Securities Limited Member: BSE,NSE,MSE Regd. Office: Dare House,2 (Old) # 234) N.S.C Bose Road, Chennai – 600 001. Website : www.cholawealthdirect.com Email id – [email protected]

RESEARCH Singaravelu K P Head of Research +91-44 - 4505 6003 [email protected] Alagappan Ar Financial Services +91-44 - 3000 7363 [email protected] Sathyanarayanan M Consumption +91-44 - 3000 7361 [email protected] Vinayakam P Engineering +91-44 - 3000 7360 [email protected] Michel Charles C Technicals +91-44 - 3000 7353 [email protected] Rajasekhar R IT & Auto Ancillary +91-44 - 3000 7266 [email protected] Sreedevi K Associate +91-44 - 3000 7266 [email protected]

INSTITUTIONAL SALES

Venkat Chidambaram Head of FII Business & Corporate Finance +91-44 - 24473310 [email protected] Lakshmanan T S P Chennai +91 - 9840019701 [email protected] Ananthanarayan J Mumbai +91 - 9930103070 [email protected]

RETAIL SALES Chetan Dilipkumar Daxini AHMEDABAD 079 - 64500318 / 19 [email protected] Sathyanarayana N BANGLORE 080 - 41503340 / 44 [email protected] Baskaran S CHENNAI - Annanagar 044 - 26208911 / 14 [email protected] Sridharan P S CHENNAI - Adyar 044 - 2452 2111 / 2333 [email protected] Chandrasekar K COIMBATORE 0422 - 4292041 / 4204620 [email protected] Maneesh Gupta DELHI 011 - 30461161 / 62 / 63 [email protected] Murthy A S L N HYDERABAD 040 - 23316567 / 68 [email protected] Shibarjun Mukherjee KOLKATA 033 - 44103638 / 39 [email protected] Sheetal Bheda MUMBAI 022 - 22617210 / 7203 [email protected] Gowthaman G MADURAI 0452 - 2601195 / 96 [email protected] Deepak V Kshirsagar PUNE 020 - 30225432 / 33 /34 [email protected] Gangadhar M VIZAG 0891 - 6642718 [email protected]

COMPLIANCE Balaji H Compliance +91-44 - 3000 7370 [email protected]

DISCLAIMER:

This report is for private circulation and for the personal information of the authorized recipient only, and we are not soliciting any action based upon it. This report is not to be construed as an offer to sell or the solicitation of an offer to buy any security in any jurisdiction where such an offer or solicitation would be illegal. It does not provide individually tailor-made investment advice and has been prepared without regard to any specific investment objectives, financial situation, or any particular needs of any of the persons who receive it.

The research analyst who is primarily responsible for this report certifies that: (1) all of the views expressed in this report accurately reflect his or her personal opinions about any and all of the subject securities or issuers; and (2) no part of any of the research analyst’s compensation was, is, or will be directly or indirectly related to the specific recommendations or views expressed in this report. This report has been prepared on the basis of information that is already available in publicly accessible media or developed through analysis of Cholamandalam Securities Limited makes every effort to use reliable, comprehensive information, but we make no representation that it is accurate or complete.

The views expressed are those of the analyst and the Company may or may not subscribe to all the views expressed therein Cholamandalam Securities Limited reserves the right to make modifications and alterations to this statements as may be required from time to time without any prior approval. Cholamandalam Securities Limited, its affiliates, directors and employees may from time to time, effect or have effect an own account transaction in or deal as agent in or for the securities mentioned in this report. The recipient should take this into account before interpreting the report.

All investors may not find the securities discussed in this report to be suitable. Cholamandalam Securities Limited recommends that investors independently evaluate particular investments and strategies. Investors should seek the advice of a financial advisor with regard to the appropriateness of investing in any securities / investment strategies recommended in this report. The appropriateness of a particular investment or strategy will depend on an investor’s individual preference. Past performance is not necessary a guide to future performance. Estimates of future prospects are based on assumptions that may not be realized. Re-publication or redistribution in any form, in whole or in part, is prohibited.

No part of this material may be duplicated in any form and/or redistributed without Cholamandalam Securities Limited prior written consent.

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