sadbhav engg 4q fy 2013

7/28/2019 Sadbhav Engg 4Q FY 2013

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Please refer to important disclosures at the end of this report 1

Quarterly highlights - StandaloneY/E March (` cr) 4QFY13 4QFY12 % chg (yoy) 3QFY13 % chg (qoq)Net sales 702 905 (22.4) 353 98.5Operating profit 52 86 (39.3) 33 57.6

Net profit 12 47 (75.4) 4 210.3Source: Company, Angel Research

Sadbhav Engineering (SEL) reported a mix set of numbers for 4QFY2013.

While revenues were better than expected; however, owing to abysmal

operational performance, the earnings were in-line with our estimate. SEL has

an order book of `10,143cr (5.6x tailing revenues) as of 4QFY2013, which

provides good revenue visibility.Execution momentum picks up:On the top-line front, SEL reported a revenue of

`702cr for 4QFY2013, a decline of 22.4% yoy, but significantly higher than our

estimate of `456cr. This was mainly on account of pick up in the pace of

execution in the remaining under-construction projects (mainly Chhindwara

project, which contributed ~`200cr). On the margin front, the EBITDAM came in

at 7.4%, a dip of 207bp yoy and was lower than our estimate of 10.4%. The

interest cost grew by 94.1% yoy/42.8% qoq to `29cr, and was above our

estimate. On the bottom-line front, the company reported a PAT of`12cr (in-line

with our estimate of`12cr) for the quarter, indicating a decline of 75.4% yoy. This

was mainly due to an abysmal operational performance and higher interest

expense during the quarter.

Outlook and valuation: The Management has given a revenue guidance of`2,500cr for FY2014. It expects the recently won BOT projectsGomti-ka-

Chauraha, Solapur-Bijapur and Rajsamand-Bhilwara to contribute revenue during

the year. Given the healthy order book (5.6x trailing revenue), we expect the

company to report revenues of `2,462cr and`2,731cr for FY2014 and FY2015

respectively. We continue to maintain our Buy view on the stock with a SOTPbased target price of `139, owing to robust order backlog of `10,143cr (5.6xtrailing revenues), strong balance sheet and on the expectation that the companywould be able to meet the equity requirement for its under-construction/development projects through internal accruals or securitisation.Key financials (Standalone)Y/E March (` cr) FY2012 FY2013E FY2014E FY2015ENet sales 2,676 1,811 2,462 2,731% chg 21.1 (32.3) 36.0 10.9

Adj. net profit 141 13 89 101% chg 17.5 (90.7) 579.0 13.2

EBITDA (%) 10.8 8.6 10.6 10.6

FDEPS (`) 9.3 0.9 5.9 6.7P/E (x) 11.6 124.8 18.4 16.2

P/BV (x) 2.1 2.0 1.8 1.6

RoE (%) 20.3 1.6 10.2 10.5

RoCE (%) 23.1 8.9 14.0 14.3

EV/Sales (x) 0.2 0.4 0.4 0.3EV/EBITDA (x) 1.9 5.2 3.3 3.2

OB/Sales (x) 2.8 5.6 4.9 5.1

Order inflows 3,265 4,400 4,439 4,606

% chg 2.7 34.8 0.9 3.8

Source: Company, Angel Research

BUYCMP `108

Target Price `139

Investment Period 12 Months

Stock Info

Sector

Net Debt (` cr) 651

Bloomberg Code

Shareholding Pattern (%)

Promoters 47.3

MF / Banks / Indian Fls 24.1

FII / NRIs / OCBs 19.2

Indian Public / Others 9.5

Abs. (%) 3m 1yr 3yr

Sensex 3.5 22.2 14.2

Sadbhav 2.5 (11.7) (12.7)

1

19,546

5,919

SADE.BO

SADE@IN

1,633

0.9

156/99

32,179

Infrastructure

Avg. Daily Volume

Market Cap (` cr)

Beta

52 Week High / Low

Face Value (` )

BSE Sensex

Nifty

Reuters Code

Viral Shah022-39357800 Ext: 6842

[email protected]

Sadbhav EngineeringPerformance Highlights

4QFY2013 Result Update | Infrastructure

June 4, 2013


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Sadbhav Engineering | 4QFY2013 Result Update

June 4, 2013 2

Exhibit 1:4QFY2013 performance (Standalone)

Y/E March (` cr) 4QFY13 4QFY12 % chg (yoy) 3QFY13 % chg (qoq) FY2013 FY2012 % chgNet Sales 702 905 (22.4) 353 98.5 1,811 2,676 (32.3)Total Expenditure 649 819 (20.7) 320 102.7 1,655 2,385 (30.6)Operating Profit 52 86 (39.3) 33 57.6 156 290 (46.3)OPM (%) 7.4 9.5 (207)bp 9.4 (2) bp 8.6 10.8 (193)bp

Interest 29 15 94.1 21 42.8 84 65 29.6

Depreciation 8 7 18.9 9 (7.1) 32 27 16.0

Non Operating Income 3 4 (15.7) 2 99.2 10 11 (4.4)

Non recurring items - - - - - 61 - -

Profit Before Tax 18 68 (73.2) 6 218.1 111 209 (46.9)Tax 7 21 (68.5) 2 232.4 37 68 (45.9)

Reported Profit After Tax 12 47 (75.4) 4 210.3 74 141 (47.3)PAT (%) 1.6 5.2 (354)bp 1.1 59bp 4.1 5.3 (116)bp

EPS (`) 0.1 0.3 (75.4) 0.0 210.3 0.5 0.9 (47.3)Source: Company, Angel Research

Exhibit 2:Actual vs Estimates

Particulars (` cr) Estimates Actual Variation (%)Revenues 456 702 53.9

EBITDA 47 52 10.0

Interest 21 29 41.3

Tax 6 7 3.6

PAT 12 12 (4.0)


Execution momentum picks up

On the top-line front, SEL reported a revenue of `702cr for 4QFY2013, a decline

of 22.4% yoy, but significantly higher than our estimate of`456cr. This was mainly

on account of pick up in the pace of execution in the remaining under-construction

projects (mainly Chhindwara project, which contributed ~`200cr). A majority of

the contribution to the revenue came from the road segment, ie `504cr (`172cr

from BOT projects and `332cr from cash contracts), while irrigation and mining

contributed`129cr and`68cr, respectively.

The upcoming opportunities for the company are in the form of its outstanding

bids in the mining sector for a total value of`2,070cr, while it has no pending bids

in the irrigation vertical as on date.

Operational BOT projects Toll collection

On the toll collection front, SEL reported a revenue of `19.2cr (a decline 3.5% yoy)

for the Ahmedabad Ring road project during the quarter. For the Aurangabad-

Jalna project, the revenue declined by 1.3% yoy to`7.1cr for the quarter. The toll

collection stood at `21.4lakh/day for the Ahmedabad Ring road project;

`7.9lakh/day for the Aurangabad-Jalna project, and `26.4lakh/day for the

Bijapur-Hungund project.


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June 4, 2013 3

Exhibit 3:Execution improves


Exhibit 4:Road segment Lions share of overall revenue (%)


Project update

Dhule-Palesnar project: The commercial operational date (COD) for thebalance 25% of the Dhule-Palesnar project has been issued by the NHAI which is

November 2, 2012. However, tolling on the balance 25% portion will start in

1QFY2014, as it is awaiting the final fee validation letter from the NHAI. The

average collection from the Dhule-Palesner project is ~`22.8lakh/day (up 12%

qoq). Further, SEL expects toll revenue of ~`36-38lakh/day, once all the three

sections of the project are operational (expected in 1QFY2014).

Maharashtra border check post project: An approval for commercial operation forfour check posts has been received by the company. The company hascommenced tolling in two check posts and expects to start toll collection in

1QFY2014 for the remaining check post. Further, another six check posts are

expected to be operational by August 2013 and the company is expecting an

average toll revenue to the tune of ~`40lakh/day in FY2014.

Bijapur-Hungund: The Bijapur-Hungund project has commenced toll revenuegeneration from May 2, 2012. Currently, the project has a daily toll collection of

`26.4lakh/day.

Hyderabad-Yadgiri: The COD for the 100% of Hyderabad-Yadgiri project hasbeen issued by the NHAI. The company has started toll collection on the balance

25% portion from December 10, 2012. Currently, the project has a daily toll

collection of`9.7lakh/day.

Rohtak Panipat: The scheduled time for completion of the project is October 2013.However the company has already completed `871cr of construction work and

expects early completion of the project.

Chhindwara project: Execution momentum has picked up from June 2012.During the quarter, SEL has booked revenues of ~`200cr in 4QFY2013.

Shreenathji-Udaipur: The company has received the appointed date (18 th April2013) for the Shreenathji Udaipur project and has started construction activity on

the project.

433

724

905

421

335

353

702

66.0

52.0

(13.6)

(31.2)

(22.8)

(51.2)

(22.4)

(60.0)

(40.0)

(20.0)

-

20.0

40.0

60.0

80.0

0

100

200

300

400

500

600

700

800

900

1000

2QFY12 3QFY12 4QFY12 1QFY13 2QFY13 3QFY13 4QFY13

Sales (` cr, LHS) Growth (yoy %, RHS)

77.9 77.583.8

70.6 70.5 69.8

6.0 10.08.0

13.6 15.3 15.6

16.1 12.68.2

15.8 14.2 14.6

0

10

20

30

40

50

60

70

80

90

100

FY2010 FY2011 FY2012 FY2013 FY2014E FY2015ERoad Irrigation Mining


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June 4, 2013 4

Under-development projects

During the quarter, SEL has been declared the successful bidder for 4-laning of

Rohtak to Hissar section of NH-10 on a BOT toll basis. The estimated total project

cost is`1,210cr which includes a grant of ~`211cr and has a concession period

of 22 years. The company has also bagged a project worth ~`245cr in the

irrigation sector from the Narmada Development Halon division. It has received

the appointed date for Gomti ka Chauraha BOT project (TPC `1,150cr;

EPC `976cr) and expects for Solapur Bijapur (TPC `1,185cr; EPC `999cr)

project to be received by 1HFY2014.

High interest cost dents PAT growth

On the margin front, EBITDAM came in 7.4%, a dip of 207bp yoy and was lower

than our estimate of 10.4%. Interest cost grew by 94.1% yoy/42.8% qoq to `29cr

and was above our estimate. On the bottom-line front, the company reported aPAT of`12cr (was in-line with our estimate of`12cr) for the quarter, a decline of

75.4% yoy. This was mainly due to abysmal operational performance and higher

interest expense during the quarter.

Exhibit 5:EBITDAM lower than estimate


Exhibit 6:High interest cost hurts profitability


Equity requirement for BOT projects

SELs subsidiary, Sadbhav Infrastructure Project Ltd (SIPL), has a total equity

requirement of `880cr (including Solapur-Bijapur, Gomti-ka-Chauraha andRajsmand-Bhilwara projects) over the period of next three years. SEL is confident of

funding this requirement from internal accruals and through securitization of its

two BOT assets- Ahmedabad Ring road and Nagpur-Seoni BOT project. For the

recently won Solapur-Bijapur, Gomati-ka-Chauraha and Rajsmand-Bhilwara

projects, SEL would invest an equity of ~`295cr during FY2014.

51

75

86

39

31

33

52

11.9

10.49.5 9.3 9.4 9.4

7.4

-

2.0

4.0

6.0

8.0

10.0

12.0

14.0

-

10

20

30

40

50

60

70

80

90

100


EBITDA (` cr, LHS) EBITDAM (%, RHS)

18

42

47

-9

6

4

12

4.2

5.8

5.2

(2.0)

1.9

1.11.6

(3.0)

(2.0)

(1.0)

-

1.0

2.0

3.0

4.0

5.0

6.0

7.0

(20)

(10)

0

10

20

30

40

50


PAT (` cr, RHS) PATM (%, RHS)


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June 4, 2013 5

Outlook and valuation

Exhibit 7:Change in estimates

FY2014E FY2015EEarlier Estimates Revised Estimates Variation (%) Earlier Estimates Revised Estimates Variation (%)

Revenue 2,511 2,462 -1.9 2,731 2,731 0.0

EBITDA Margin 10.6 10.6 0.0 10.6 10.6 0.0

Adj. PAT 109 89 -18.6 101 101 0.0


The Management has given a revenue guidance of `2,500cr for FY2014. It

expects the recently won BOT projects Gomti-ka-Chauraha, Solapur-Bijapur and

Rajsamand-Bhilwara to contribute to E&C revenue. Given the healthy order book

(5.6x trailing revenue), we expect the company to report revenues of`2,462cr and

`2,731cr for FY2014 and FY2015 respectively. We continue to maintain our Buyview on the stock with a SOTP based target price of `139, owing to robust orderbacklog of `10,143cr (5.6x trailing revenues), strong balance sheet and on theexpectation that the company would be able to meet the equity requirement for itsunder-construction/development projects through internal accruals orsecuritisation.

Exhibit 8:SOTP break-up

Particulars Segment Value (` cr) Value /share (`) Proportionate stake (%) BasisEngg. & Construction biz Construction 704 47 33.5 P/E of 7x one year rolling forward earnings

Total 704 47 33.5Road BOT projectsAhmedabad Ring Road Toll 277 18 13.2 NPV at CoE of 14%

Aurangabad- Jalna Toll 184 12 8.7 NPV at CoE of 14%

Mumbai-Nashik Toll 82 5 3.9 NPV at CoE of 14%

Nagpur-Seoni Annuity 18 1 0.9 NPV at CoE of 14%

Dhule-Palasner Toll 91 6 4.3 NPV at CoE of 14%

Maharashtra Border Toll 278 18 13.2 NPV at CoE of 14%

Rohtak Panipat Toll 359 24 17.1 NPV at CoE of 14%

Bijapur- Hungund Toll 267 18 12.7 NPV at CoE of 14%

Hyderabad-Yadgiri Toll 96 6 4.6 NPV at CoE of 14%

Solapur Bijapur Toll 313 21 14.9 NPV at CoE of 14%

Shreenathji-Udaipur Toll 385 25 18.3 NPV at CoE of 14%

Rajsamand-Bhilwara Toll 210 14 10.0 NPV at CoE of 14%

Total SIPL value 2,560 170 121.9SEL's stake in SIPL @ 80% 136 97.5

Net debt (651) (43) (31.0) Standalone net debt

Grand Total 2,612 139 100.0Source: Company, Angel Research


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June 4, 2013 6

Exhibit 9:Key assumptions

FY2010 FY2011 FY2012 FY2013E FY2014E FY2015EOrder inflow 2,911 3,180 3,265 4,400 4,439 4,606

Revenue 1,257 2,209 2,676 1,811 2,458 2,727Order backlog (Y/E) 5,994 6,965 7,554 10,143 12,124 14,003

Order bookto-sales ratio (x) 4.8 3.2 2.8 5.6 4.9 5.1


Exhibit 10:BOT assumptions

Project ARRIL AJIT MNEL NSEL DPTL MBCPNL RPTL BHTL HYTLType Toll Toll Toll Annuity Toll Entry Fees Toll Toll Toll

Status Oper. Oper. Oper. Oper. Oper. Under Dev. Under Dev. Oper. Under Dev.

KM 76 66 100 57 97 - 66 100 35

Issuing Auth. AUDA MSRDC NHAI NHAI NHAI MSRDC NHAI NHAI NHAIState Gujarat Mah. Mah. MP Mah./MP Mah. Haryana Karnataka AP

Concession (Yrs) 20 24 20 20 18 25 25 20 23

Con. Start Jan-07 Jan-07 Dec-09 May-07 Dec-09 Apr-12 Sep-10 Mar-13 Aug-10

Con. End Jan-27 Jul-30 Dec-29 Nov-27 Dec-27 Aug-34 Sep-35 Sep-30 Aug-33

TPC (`cr) 515.0 277.0 753.0 269.8 1,420.0 1,426.4 1,213.6 1,257.1 480.2

Equity (`cr) 74.0 83.0 52.0 31.5 355.0 285.4 242.8 137.0 100.0

Debt (`cr) 405.0 194.0 650.0 238.3 1,065.0 1,141.0 970.8 846.5 380.2

Grant (`cr) 36.0 - 51.0 - - - - 273.6 -

Traffic Growth (%) 5.0 5.0 5.0 - 5.0 5.0 5.0 5.0 5.0

Toll inc (%) 5.0 5.0 5.0 - 5.0 5.0 5.0 5.0 5.0

Interest Rate (%) 11.0 11.0 11.0 8.9 11.8 12.8 12.3 10.5 12.8


Exhibit 11:Angel EPS forecast vs consensus

Angel Forecast Bloomberg consensus Variation (%)FY2014E 5.9 6.7 (11.8)

FY2015E 6.7 8.7 (23.0)



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June 4, 2013 7

Investment arguments

Sound balance sheet: SEL has a sound balance sheet with parent net debt/equityof 0.8x as of FY2013. The companys working capital position is also much better

than its peers. This has insulated the companys earnings to a great extent in the

prevailing high interest rate scenario (which has been a key concern impacting the

sectors earnings), and has aided the company to outperform on the bourses.

Funds tied up for projects in hand: SEL had successfully raised `400cr throughstake dilution in SIPL (22.2% in August 2010). With the money raised, SEL is fully

tied up for the projects in hand. This money raising was a timely move by SEL,

given its then huge equity commitment towards under-development projects. Also,

this helped the company to focus on project execution, which is SELs forte, leading

to early completion of projects a rare phenomenon in the industry.

Key concernsInterest rate: Road BOT projects are vulnerable to interest rate fluctuations and anyhike in interest rates would increase SELs interest costs.

Commodity risks: Road players are facing pressures from the recent price inflationin commodities such as cement, steel, bitumen and diesel, which have a direct

impact on margins.

Awarding from NHAI: Slowdown in awarding activity by NHAI would hit orderinflow for road-focused players such as SEL.

Company background

SEL was incorporated in 1988. The company is a leading EPC and infrastructure

development company based in Ahmedabad. SEL is present in the roads and

highways (65% of order book), irrigation (15%) and mining (20%) sectors. The

company forayed into the road sector in 1995 and has since then executed several

projects for NHAI and state governments. Currently, SEL is one of the largest BOT

players in India with 11 projects in its portfolio through its 80.0% owned

subsidiary, SIPL.


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June 4, 2013 8

Exhibit 12:Recommendation summary

Company CMP TP Rating Top line (` cr) EPS (`) P/E OB/FY13 FY14E FY15E CAGR (%) FY13 FY14E FY15E CAGR (%) FY13 FY14E FY15E Sales(x)

ABL 201 255 Buy 1,853 1,928 2,234 9.8 16.0 18.0 22.2 17.7 12.5 11.2 9.0 2.3

CCCL 12 - Neutral 1,931 2,281 2,492 13.6 (3.3) 0.7 2.0 - (3.5) 16.9 5.7 2.2

IRB Infra 115 157 Buy 3,687 3,997 4,312 8.1 16.7 15.7 16.6 (0.3) 6.9 7.3 6.9 2.4

ITNL 174 230 Buy 6,645 7,444 8,041 10.0 26.8 29.8 32.1 9.4 6.5 5.8 5.4 2.2

IVRCL 18 35 Buy 3,773 6,287 6,836 34.6 (3.9) 2.3 3.0 - - 7.5 5.7 4.9

JP Assoc. 66 90 Buy 13,358 14,850 15,631 8.2 2.2 2.5 2.9 13.8 30.1 26.2 23.2 -

L&T 1,409 1,761 Buy 60,873 68,946 78,040 13.2 67.5 77.9 88.3 14.4 20.9 18.1 16.0 2.5

NCC 31 42 Buy 5,725 6,167 6,945 10.1 2.4 2.7 3.6 22.0 12.7 11.6 8.6 3.2

Punj Lloyd 44 - Neutral 11,717 12,954 14,740 12.2 (0.2) 0.5 0.9 - - 86.1 46.9 1.9

Sadbhav 108 139 Buy 1,811 2,462 2,731 22.8 0.9 5.9 6.7 177.2 124.8 18.4 16.2 5.6Simplex In. 100 131 Buy 5,897 6,308 7,033 9.2 10.8 11.9 18.7 31.9 9.3 8.4 5.3 2.7

Unity Infra 29 45 Buy 2,040 2,174 2,472 10.1 12.5 9.6 11.2 (5.2) 2.3 3.0 2.6 1.6


Exhibit 13:SOTP break-up

Company Core Const. Real Estate Road BOT Invst. In Subsidiaries Others Total` % to TP ` % to TP ` % to TP ` % to TP ` % to TP `

ABL 87 34 - - 168 66 - - - - 255

CCCL 16 100 - - - - - - - - 16

IRB Infra 45 29 - - 112 71 - - - - 157

ITNL 80 35 - - 120 52 - - 30 13 230

IVRCL 15 43 - - - - 20 57 - - 35

JP Assoc. 24 27 23 25 - - - - 43 48 90

L&T 1,318 75 - - - - 443 25 - - 1,761

NCC 23 55 - - 7 17 - - 12 29 42

Punj Lloyd 64 100 - - - - - - - - 64

Sadbhav 47 33 - - 93 67 - - - - 139Simplex In. 131 100 - - - - - - - - 131

Unity Infra 39 87 - - 6 13 - - - - 45



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June 4, 2013 9

Profit & loss statement (Standalone)

Y/E March (` cr) FY2010 FY2011 FY2012 FY2013E FY2014E FY2015ENet Sales 1,257 2,209 2,676 1,811 2,462 2,731Other operating income - - - - - -Total operating income 1,257 2,209 2,676 1,811 2,462 2,731% chg 18.4 75.8 21.1 (32.3) 36.0 10.9

Total Expenditure 1,120 1,972 2,385 1,655 2,201 2,441Net Raw Materials 211 160 330 225 308 341

Other Mfg costs 843 1,706 1,916 1,295 1,756 1,947

Personnel 19 34 40 43 44 49

Other 47 71 99 93 94 104

EBITDA 137 238 290 156 261 289% chg 26.7 73.9 22.1 (46.3) 67.6 10.9

(% of Net Sales) 10.9 10.8 10.8 8.6 10.6 10.6

Depreciation& Amortisation 23 27 27 32 37 42

EBIT 113 211 263 124 224 248% chg 23.0 85.9 24.7 (52.9) 81.0 10.5

(% of Net Sales) 9.0 9.5 9.8 6.8 9.1 9.1

Interest & other Charges 33 54 65 84 105 112

Other Income 17 19 11 10 12 14

(% of PBT) 17.5 10.8 5.2 20.8 9.3 9.2

Share in profit of Associates - - - - - -

Recurring PBT 97 176 209 50 132 149% chg 15.8 80.4 18.7 (76.1) 164.4 13.2

Extraordinary Expense/(Inc.) 0.6 - - 60.9 - -

PBT (reported) 98 176 209 111 132 149Tax 44.1 56.2 68.0 36.8 43.0 48.6

(% of PBT) 45.0 32.0 32.6 33.2 32.6 32.6

PAT (reported) 54 120 141 74 89 101Add: Share of earnings of asso. - - - - - -

Less: Minority interest (MI) - - - - - -

Prior period items - - - - - -

PAT after MI (reported) 54 120 141 74 89 101ADJ. PAT (excl. income from sub.) 53 120 141 13 89 101% chg (17.4) 124.4 17.5 (90.7) 579.0 13.2(% of Net Sales) 4.2 5.4 5.3 0.7 3.6 3.7

Reported EPS (`) 4.3 8.0 9.3 0.9 5.9 6.7Fully Diluted Adj. EPS (`) 4.3 8.0 9.3 0.9 5.9 6.7% chg (17.4) 87.2 17.2 (90.7) 579.0 13.2


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June 4, 2013 10

Balance sheet (Standalone)Y/E March (` cr) FY2010 FY2011 FY2012 FY2013E FY2014E FY2015ESOURCES OF FUNDSEquity Share Capital 13 15 15 15 15 15Preference Capital - - - - - -

Reserves & Surplus 379 611 747 817 896 986

Shareholders Funds 392 626 762 833 911 1,001Minority Interest - - - - - -Total Loans 424 400 449 673 723 773

Deferred Tax Liability 14 16 23 32 32 32

Total Liabilities 830 1,042 1,235 1,537 1,666 1,806APPLICATION OF FUNDSGross Block 332 372 444 518 592 666

Less: Acc. Depreciation 122 142 155 187 224 266

Net Block 210 230 288 330 368 400Capital Work-in-Progress - - - - - -

Goodwill - - - - - -

Investments 144 327 332 538 553 568Current Assets 1,009 1,435 1,519 1,622 1,749 1,934Inventories 54 69 88 102 121 134

Debtors 441 687 791 888 931 1,033

Cash 45 85 56 22 24 19

Loans & Advances 467 575 565 594 650 722

Other 3 19 18 16 24 26

Current liabilities 534 949 905 954 1,004 1,096

Net Current Assets 476 485 614 669 745 837Misc. Exp. not written off - - - - - -

Total Assets 830 1,042 1,235 1,537 1,666 1,806


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June 4, 2013 11

Cash flow statement (Standalone)Y/E March (` cr) FY2010 FY2011 FY2012 FY2013E FY2014E FY2015EProfit Before Tax 98 176 209 111 132 149

Depreciation 16 20 14 32 37 42Change in Working Capital (155) 30 (157) (89) (74) (97)

Less: Other income (17) (19) (11) (10) (12) (14)

Direct taxes paid (44) (56) (68) (37) (43) (49)

Cash Flow from Operations (102) 150 (14) 7 39 31(Inc.)/ Dec. in Fixed Assets (72) (39) (72) (74) (74) (74)

(Inc.)/ Dec. in Investments (20) (183) (5) (206) (15) (15)

Inc./ (Dec.) in loans and adv. - - - - - -

Other income 17 19 11 10 12 14

Cash Flow from Investing (74) (203) (66) (270) (77) (75)Issue of Equity - 2 0 0 - -

Inc./(Dec.) in loans 213 (24) 48 224 50 50

Dividend Paid (Incl. Tax) (6) (6) (10) (10) (11) (11)

Others 4 120 14 15 0 (0)

Cash Flow from Financing 211 93 52 229 39 39Inc./(Dec.) in Cash 35 40 (28) (35) 2 (5)

Opening Cash balances 10 45 85 56 22 24Closing Cash balances 45 85 56 22 24 19


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June 4, 2013 12

Key Ratios

Y/E March FY2010 FY2011 FY2012 FY2013E FY2014E FY2015EValuation Ratio (x)P/E (on FDEPS) 25.4 13.6 11.6 124.8 18.4 16.2

P/CEPS 17.7 11.1 9.7 36.3 13.0 11.5

P/BV 3.5 2.6 2.1 2.0 1.8 1.6

Dividend yield (%) 0.4 0.6 0.6 0.6 0.6 0.6

EV/Sales 0.4 0.2 0.2 0.4 0.4 0.3

EV/EBITDA 4.0 2.0 1.9 5.2 3.3 3.2

EV / Total Assets 0.7 0.5 0.4 0.5 0.5 0.5

Per Share Data (`)EPS (Basic) 4.3 8.0 9.3 0.9 5.9 6.7

EPS (fully diluted) 4.3 8.0 9.3 0.9 5.9 6.7

Cash EPS 6.1 9.8 11.2 3.0 8.3 9.4

DPS 0.4 0.6 0.6 0.6 0.6 0.6

Book Value 31.3 41.8 50.7 55.2 60.3 66.3

Dupont AnalysisEBIT margin 9.0 9.5 9.8 6.8 9.1 9.1

Tax retention ratio 55.0 68.0 67.4 66.8 67.4 67.4

Asset turnover (x) 1.9 2.5 2.5 1.3 1.6 1.6

ROIC (Post-tax) 9.3 16.5 16.6 6.1 9.6 9.7

Cost of Debt (Post Tax) 5.7 8.9 10.3 10.0 10.1 10.1

Leverage (x) 0.8 0.7 0.5 0.6 0.8 0.8

Operating ROE 12.1 22.0 19.8 3.6 9.2 9.5

Returns (%)ROCE (Pre-tax) 16.3 22.5 23.1 8.9 14.0 14.3

Angel ROIC (Pre-tax) 16.9 24.2 24.6 9.2 14.2 14.5

ROE 14.5 23.5 20.3 1.6 10.2 10.5

Turnover ratios (x)Asset Turnover (Gross Block) 4.2 6.3 6.6 3.8 4.4 4.3

Inventory / Sales (days) 12 10 11 19 17 17

Receivables (days) 104 93 101 169 135 131

Payables (days) 32 28 27 57 42 29

WC cycle (ex-cash) (days) 103 69 65 121 101 103Solvency ratios (x)Net debt to equity 1.0 0.5 0.5 0.8 0.8 0.8

Net debt to EBITDA 2.8 1.3 1.4 4.2 2.7 2.6

Interest Coverage 3.4 3.9 4.0 1.5 2.1 2.2


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Research Team Tel: 022 - 39357800 E-mail: [email protected] Website: www.angelbroking.com

DISCLAIMERThis document is solely for the personal information of the recipient, and must not be singularly used as the basis of any investment

decision. Nothing in this document should be construed as investment or financial advice. Each recipient of this document should make

such investigations as they deem necessary to arrive at an independent evaluation of an investment in the securities of the companies

referred to in this document (including the merits and risks involved), and should consult their own advisors to determine the merits and

risks of such an investment.

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Reports based on technical and derivative analysis center on studying charts of a stock's price movement, outstanding positions and

trading volume, as opposed to focusing on a company's fundamentals and, as such, may not match with a report on a company's

fundamentals.

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Angel Broking Pvt. Limited and its affiliates may seek to provide or have engaged in providing corporate finance, investment banking

or other advisory services in a merger or specific transaction to the companies referred to in this report, as on the date of this report or

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or in connection with the use of this information.

Note: Please refer to the important `Stock Holding Disclosure' report on the Angel website (Research Section). Also, please refer to thelatest update on respective stocks for the disclosure status in respect of those stocks. Angel Broking Pvt. Limited and its affiliates mayhave investment positions in the stocks recommended in this report.

Disclosure of Interest Statement Sadbhav Engg

1. Analyst ownership of the stock No

2. Angel and its Group companies ownership of the stock No

3. Angel and its Group companies' Directors ownership of the stock No

4. Broking relationship with company covered No

Note: We have not considered any Exposure below `1 lakh for Angel, its Group companies and Directors.

Ratings (Returns): Buy (> 15%) Accumulate (5% to 15%) Neutral (-5 to 5%)Reduce (-5% to -15%) Sell (< -15%)

sadbhav engg 4q fy 2013

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