ADITYA BIRLA NUVO LTDbreport.myiris.com/firstcall/INDRAYIN_20140214.pdf · telecom, fashion and...
Transcript of ADITYA BIRLA NUVO LTDbreport.myiris.com/firstcall/INDRAYIN_20140214.pdf · telecom, fashion and...
CMP 1180.85
Target Price 1189.00
ISIN: INE069A01017
FEBRUARY 14th
2014
ADITYA BIRLA NUVO LTD
Result Update: Q3 FY14
BUYBUYBUYBUY
Index Details
Stock Data
Sector Diversified
BSE Code 500303
Face Value 10.00
52wk. High / Low (Rs.) 1290.10/930.00
Volume (2wk. Avg.) 19000
Market Cap (Rs. in mn.) 140596.97
Annual Estimated Results (A*: Actual / E*: Estimated)
YEARS FY13A FY14E FY15E
Net Sales 254902.00 259157.72 279890.34
EBITDA 41423.20 49769.55 53782.47
Net Profit 10588.90 12474.58 13518.55
EPS 88.09 95.90 103.92
P/E 12.27 11.27 10.40
Shareholding Pattern (%)
1 Year Comparative Graph
ADITYA BIRLA NUVO LTD S&P BSE SENSEX
SYNOPSIS
Aditya Birla Nuvo Ltd. (ABNL), a US$ 4.75 billion diversified conglomerate by revenue size, is a part of Aditya Birla Group, a US$ 42 billion Indian business house.
The company’s net profit jumps to Rs. 3452.70 mn against Rs. 3232.10 mn in Q3 FY13, an increase of 6.83%.
Revenue for the quarter rose by 3.80% to Rs. 65448.00 mn from Rs. 63050.60 mn, when compared with the prior year period.
EBITDA is Rs. 12965.10 mn as against Rs. 10901.10 mn in Q3 FY13.
Aditya Birla Financial Services posted revenue of Rs. 14750.00 mn and earnings before tax of Rs. 1840.00 mn during the quarter.
The lending book of Aditya Birla Finance grew to Rs. 1,01,000 mn, growing YoY by 56% and QoQ by 22%.
Revenue of Fashion & Lifestyle business rose by 12% to Rs. 15632.80 mn and EBITDA by 41% to Rs. 1920 mn.
Idea is consistently outperforming the industry and revenue market share surged from 14.3 per cent to 15.8 per cent.
Revenue from the manufacturing businesses at Rs. 11089.00 mn and EBITDA at Rs. 1180.00 mn.
Standalone net debt to annualized EBITDA improved to 2.1 and net debt to equity improved to 0.33 compared to 3.3 and 0.53 respectively in March 2012-13.
Net Sales and PAT of the company are expected to grow at a CAGR of 9% and 13% over 2012 to 2015E respectively.
PEER GROUPS CMP MARKET CAP EPS P/E (X) P/BV(X) DIVIDEND
Company Name (Rs.) Rs. in mn. (Rs.) Ratio Ratio (%)
Aditya Birla Nuvo Ltd 1080.85 140596.97 88.09 12.27 1.42 65.00
Balmer Lawrie & Co.Ltd 297.95 8491.80 47.70 6.25 1.37 308.00
Kesoram Industries Ltd 59.80 6564.80 - - 0.66 10.00
Empire Industries Ltd 485.00 2910.00 47.92 10.12 2.91 240.00
Recommendation & Analysis - ‘BUY’
For Q3 FY14, Aditya Birla Nuvo Limited posted the top-line growth of 3.80% to Rs. 65448.00 mn. Aditya Birla
Financial Services (ABFS) is one of the largest players in the non-banking financial services space. With funds
under management of Rs. 11,72,780 mn, ABFS ranks among the top 5 fund managers in India, excluding LIC. It
posted revenue of Rs.14750.00 mn and earnings before tax of Rs.1840.00 mn during the quarter. It is generating
ROACE of 27 per cent per annum. As on 31st December 2013, the lending book of Aditya Birla Finance grew to Rs.
1,01,000 mn, growing y-o-y by 56% and q-o-q by 22%. Revenue of Fashion & Lifestyle business rose by 12% to
Rs. 15632.80 mn and EBITDA by 41% to Rs. 1920 mn. It expanded its retail presence to 1,670 exclusive brand
outlets / stores, spanning nationwide across 4.11 million square feet. It is generating an operating ROACE of 31%
per annum.
Idea is consistently outperforming the industry. Its revenue market share surged from 14.3 per cent to 15.8 per
cent. It posted a strong growth in earnings and ROACE led by robust voice and data usage, improved voice
realization, scale benefit and cost efficiency. Its revenue soared by 19% to Rs. 16697.60 mn. Idea is generating
healthy cash profits and is strengthening its balance sheet quarter after quarter. The revenue of Aditya Birla
Minacs increased by 19% to Rs. 7419.30 mn and EBITDA grew by 5% to Rs. 730.00 mn. Revenue from the
manufacturing businesses at Rs. 11089.00 mn and EBITDA at Rs. 1180.00 mn are lower by 19% mainly on
account of discontinuance of trading in imported P&K fertilizers. Rayon business recorded its highest ever
quarterly earnings. The new superfine yarn unit currently operates at full, will help in enhancing the product
quality and range.
Standalone net debt to annualized EBITDA improved to 2.1 and net debt to equity improved to 0.33 compared
to 3.3 and 0.53 respectively in March 2012-13. In November 2013, the promoters infused Rs. 6710 mn on
conversion of remaining warrants. The strengthening of the company's balance sheet will support its growth
plans, going forward. Over FY2012-15E, we expect the company to post a CAGR of 9% and 13% in its top-line
and bottom-line respectively. We recommend ‘BUY’ for ‘Aditya Birla Nuvo Limited’ on the stock with a
price target of Rs. 1189.00.
QUARTERLY HIGHLIGHTS (CONSOLIDATED)
Results updates- Q3 FY14,
Aditya Birla Nuvo Limited, together with its
subsidiaries, engages in the financial services,
telecom, fashion and lifestyle, IT-ITeS, and
manufacturing businesses in India and worldwide,
reported its financial results for the quarter ended
31st Dec, 2013.
Months Dec-13 Dec-12 % Change
Net Sales 65448.00 63050.60 3.80
PAT 3452.70 3232.10 6.83
EPS 26.54 28.47 (6.77)
EBITDA 12965.10 10901.10 18.93
The company’s net profit jumps to Rs. 3452.70 million against Rs. 3232.10 million in the corresponding quarter
ending of previous year, an increase of 6.83%. Revenue for the quarter rose by 3.80% to Rs. 65448.00 million
from Rs. 63050.60 million, when compared with the prior year period. Reported earnings per share of the
company stood at Rs. 26.54 a share during the quarter, registering 6.77% decrease over previous year period.
Profit before interest, depreciation and tax is Rs. 12965.10 million as against Rs. 10901.10 million in the
corresponding period of the previous year.
Break up of Expenditure
Break up of Expenditure
Rs. Millions
Q3 FY14 Q3 FY13
Cost of Material Consumed 8186.40 10493.20
Purchase of Stock-In-Trade 6005.30 5686.00
Employee Benefit Expenses 9906.20 8790.40
Depreciation & Amortization Expense
4071.30 3341.80
Other Expenses 23292.90 21171.30
Benefits paid - Life Insurance Business
9121.10 10398.10
Segment Revenue
Quarterly Business-wise performance
• Aditya Birla Financial Services
Aditya Birla Financial Services (ABFS) is one of the largest players in the non-banking financial services
space. With funds under management of Rs.11,72,780 million, ABFS ranks among the top 5 fund managers in
India, excluding LIC. It posted revenue of Rs.14778.10 million and earnings before tax of Rs.1840.00 million
during the quarter. It is generating ROACE of 27 per cent per annum.
� Birla Sun Life Asset Management is the 4th largest asset management company in India, with a market
share of 9.7%. Its average AUM is up by 12 per cent to Rs. 9,26,110 million.
� The lending book of Aditya Birla Finance expanded by 56% to Rs. 1,01,000 million as on 31st December
2013. To support its growth, a share capital of Rs.2500 million was infused, taking its net worth to
Rs.14,480 million.
• Fashion & Lifestyle
Revenue of Fashion & Lifestyle business rose by 12 per cent to Rs. 15632.80 million and EBITDA by 41% to
Rs. 1920 million. It expanded its retail presence to 1,670 exclusive brand outlets / stores, spanning
nationwide across 4.11 million square feet. It is generating an operating ROACE of 31% per annum.
� Madura posted all round growth in top-line, margins and free cash flows. During the quarter, its revenue
grew by 23% to Rs. 8550 million and EBITDA doubled to Rs. 1160 million, led by growth in wholesale
channel, retail stores expansion and 4% like-to-like retail stores sales growth. Madura added 276 stores
and generated free cash flows of about Rs. 2500 million during nine months.
� Pantaloons is in the investment phase and are strengthening its retail presence, brand positioning and
merchandise to enhance sell through. It has launched 9 new Pantaloons stores and 1 factory outlet during
nine months.
� To strengthen its market leadership, Jaya Shree has expanded linen yarn capacity from 2,300 to 3,400
tonnes per annum and Linen fabric capacity expansion from 7.3 to 10.1 million meters per annum.
• Telecom
� Idea is consistently outperforming the industry. Its revenue market share surged from 14.3 per cent to
15.8 per cent.
� It posted a strong growth in earnings and ROACE led by robust voice and data usage, improved voice
realization, scale benefit and cost efficiency.
� Its revenue soared by 19% to Rs. 16697.60 million. Idea is generating healthy cash profits and is
strengthening its balance sheet quarter after quarter.
• IT-ITeS
� The revenue of Aditya Birla Minacs increased by 19% to Rs. 7419.30 million and EBITDA grew by 5% to
Rs. 730.00 million.
� The business is posting steady cash profit.
• Manufacturing
� Revenue from the manufacturing businesses at Rs. 11089.00 million and EBITDA at Rs. 1180.00 million
are lower by 19% mainly on account of discontinuance of trading in imported P&K fertilizers, which has
also led to rationalization of capital employed through reduction in the outstanding subsidy and
receivables.
� The Rayon business recorded its highest ever quarterly earnings. The new superfine yarn unit, currently
operating at full, will help in enhancing the product quality and range.
• Balance sheet
� The standalone net debt to annualized EBITDA improved to 2.1 and net debt to equity improved to 0.33
compared to 3.3 and 0.53 respectively in March 2012-13. In November 2013, the promoters infused
Rs.671 crore on conversion of remaining warrants.
� The strengthening of the company's balance sheet will support its growth plans, going forward.
Latest Updates
• During the quarter, the Company has approved Grant of 104,272 Employee Stock Options and 101,731
Restricted Stock Units to the eligible Employees of the Company under "Aditya Birla Nuvo Limited Employee
Stock Option Scheme 2013".
• The Company has approved allotment of 98.20 Lakhs Equity Shares of Rs. 10 each at a premium of Rs. 900.86
each on 8th November 2013 against warrant allotted on a preferential basis to the promoter and promoter
group Company.
• ABNL IT & ITeS Limited, a wholly owned subsidiary of the Company has approved the divestment of shares
held by it in its IT-ITeS subsidiary, Aditya Birla Minacs Worldwide Limited, and has executed a Share
Purchase Agreement with a group of investors led by Capital Square Partners and CX Partners at an
Enterprise Value of USD 260 Million.
COMPANY PROFILE
Aditya Birla Nuvo Ltd. (ABNL) is a US$ 4.75 billion conglomerate by revenue size. It is part of Aditya Birla Group,
a US$ 42 billion Indian multinational operating in 36 countries in six continents. Having a market cap of ~US$ 2.5
billion as on 23 July 2013, ABNL is present across Financial Services, Telecom, Fashion & Lifestyle, IT-ITeS and
Manufacturing businesses. Anchored by over 136,000 employees belonging to 42 nationalities and derives more
than 50 per cent of its revenue from its overseas operations.
It is a leading player in most segments, including viscose filament yarn, carbon black, branded garments, agri-
business, textiles and insulators. Over the past few years, Aditya Birla Nuvo, through its subsidiaries and joint
ventures, has made successful forays into life insurance, telecom, business process outsourcing (BPO), IT
services, asset management and financial services.
Aditya Birla Financial Services ranks among the top 5 fund managers in India (excl. LIC), managing AUM of ~USD
20 billion and having an annual revenue size of over USD 1.2 billion (2012-13).
Madura Fashion & Lifestyle is the largest premium branded apparel player in India selling one branded apparel
every second. With the acquisition of Pantaloons, its annual revenue has reached USD 1 billion. Madura sells
leader brands viz., Louis Philippe, Van Heusen, Allen Solly and Peter England through 1587 exclusive brand
outlets spanning across 3.9 million square feet area besides more than 4750 departmental stores and multi
brand outlets.
As a leading player, Aditya Birla Nuvo ranks as:
• Aditya Birla Financial Services ranks among the top 5 fund managers in India (excl. LIC), with AUM (assets
under management) of ~USD 20 billion and having an annual revenue size of over USD 1.2 billion (2012-13).
• Birla Sun Life Insurance (BSLI) is a 74:26 joint venture between ABNL and Sun Life Financial, Canada. BSLI
improved its ranking to 5th among private players with an enhanced market share of 8 per cent in FY13. It
reported Embedded Value of Rs.4,015 crore as on 31st March 2012 and VNB margin at 22.8 per cent.
• ABNL holds 25.27 per cent in Idea Cellular, a ~USD 8.5 billion company by market cap as on 23 July 2013. It
posted revenue of ~USD 4 billion in FY12. Idea is the 3rd largest cellular operator in India with revenue
market share at 15.7 per cent (Q4FY13) and it has been the highest gainer of revenue market share since past
four years.
• Aditya Birla Minacs is the 6th largest Indian BPO company with revenue size of over USD 450 million in FY13.
• Manufacturing businesses (Agri, Rayon and Insulators) posted combined revenue of USD 770 million
(Rs.4155 crore) in FY13.
Business Area and its Brands
• Garments — Madura Fashion & Lifestyle
a) Louis Philippe
b) Van Heusen
c) Allen Solly
d) Peter England
e) Espirit
f) People
g) The Collective- Retailing International Brand
• Viscose Filament Yarn — Indian Rayon
• Garments — Madura Fashion & Lifestyle
• Carbon Black — Hi-Tech Carbon
• Agri solutions — Indo Gulf Fertilisers, Birla Shaktimaan
• Textiles — Jaya Shree Textiles
• Insulators — Aditya Birla Insulators
Joint Ventures and Subsidiaries
• Life Insurance — Birla Sun Life Insurance Company Limited (A 74:26 joint venture between ABNL and
Sun Life Financial, Canada)
• Asset Management — Birla Sun Life Asset Management Company Limited (A 50:50 joint venture
between ABNL and Sun Life Financial, Canada)
• NBFC - Aditya Birla Finance Limited (100 per cent subsidiary of ABNL)
• Other Financial services —Aditya Birla Capital Advisors Private Limited (Private Equity), Aditya Birla
Money Limited (Broking), Aditya Birla Money Mart Limited (Wealth Management), Aditya Birla
Insurance Brokers Limited (General Insurance Advisory)
• Telecom — Idea Cellular Limited (A joint venture, ABNL owns 25.27 per cent)
• IT-ITeS — Aditya Birla Minacs Worldwide Limited (~100 per cent subsidiary of ABNL)
Global Exposure
Over 50 per cent of the Aditya Birla Group’s revenues flow from its overseas operations.
The Group operates in 36 countries
Australia, Austria, Bangladesh, Brazil, Canada, China, Egypt, France, Germany, Hungary, India, Indonesia, Italy,
Ivory Coast, Japan, Korea, Laos, Luxembourg, Malaysia, Myanmar, Philippines, Poland, Russia, Singapore, South
Africa, Spain, Sri Lanka, Sweden, Switzerland, Tanzania, Thailand, Turkey, UAE, UK, USA, and Vietnam.
FINANCIAL HIGHLIGHT (CONSOLIDATED) (A*- Actual, E* -Estimations & Rs. In Millions)
Balance Sheet as at March31, 2012 -2015E
ADITYA BIRLA NUVO LTD. FY12A FY13A FY14E FY15E
SOURCES OF FUNDS
Shareholder's Funds
Share Capital 1136.20 1203.10 1300.80 1300.80
Reserves and Surplus 74029.80 90398.70 103932.25 118361.52
Money Received against Share Warrants 0.00 2236.20 2236.20 0.00
1. Sub Total - Net worth 75166.00 93838.00 107469.25 119662.32
2. Preference Share issued by Subsidiary and Joint Venture
Companies 4.90 4.90 0.30 0.32
3. Minority Interest 3009.30 9404.30 7711.53 8097.10
Non Current Liabilities
long term borrowing 52835.40 88957.10 96073.67 102318.46
Deferred Tax Liabilities 3325.40 4495.40 5124.76 5739.73
Other Long term liabilities 3580.30 5114.70 5626.17 6076.26
Long term Provisions 757.70 1300.90 2029.40 2394.70
Policyholders' Fund 192302.80 210747.30 225499.61 237676.59
Fund for Future Appropriations 1775.90 667.70 460.80 483.84
4. Sub Total - Non Current liabilities 254577.50 311283.10 334814.41 354689.57
Current Liabilities
Short term borrowings 56848.80 71939.20 50357.44 42300.25
Trade payables 23513.80 31729.30 34902.23 37694.41
Other Current liabilities 30521.30 45757.70 43012.24 46023.09
Short term Provisions 2366.80 2761.40 2347.19 2581.91
Policyholders' Fund 3378.60 2920.10 3328.91 3595.23
Fund for Future Appropriations 2183.00 1428.00 683.80 724.83
5. Sub Total - Current liabilities 118812.30 156535.70 134631.81 132919.72
Total Liabilities (1+2+3+4+5) 451570.00 571066.00 584627.30 615369.03
APPLICATION OF FUNDS
Non-Current Assets
Fixed Assets 93651.60 118394.20 125108.04 130362.58
Goodwill on consolidation 31254.70 36046.70 39507.18 41877.61
Non-current investments 26143.10 33382.10 37387.95 40378.99
Assets Held to Cover Linked Liabilities of Life Insurance
Business 151585.80 162157.10 163778.67 166235.35
Deferred Tax Assets (Net) 159.50 212.50 315.50 372.29
Long-term Loans and Advances 15513.30 46511.80 52093.22 56260.67
Other non-current assets 82.40 45.70 74.50 78.23
1. Sub Total - Non Current Assets 318390.40 396750.10 418265.06 435565.72
Current Assets
Current Investment 11561.80 28696.40 18962.48 22208.43
Assets Held to Cover Linked Liabilities of Life Insurance
Business 29778.40 31213.60 30901.46 31550.39
Inventories 13649 18150.30 15972.26 16770.88
Trade receivables 22206.80 33645.80 26580.18 28068.67
Cash and Bank Balances 14159.10 8243.90 12365.85 14468.04
Short-terms loans & advances 35291.10 47464.00 53159.68 57306.14
Other current assets 6533.40 6901.90 8420.32 9430.76
2. Sub Total - Current Assets 133179.60 174315.90 166362.24 179803.31
Total Assets (1+2) 451570.00 571066.00 584627.30 615369.03
Annual Profit & Loss Statement for the period of 2012 to 2015E
Value(Rs.in.mn) FY12A FY13A FY14E FY15E
Description 12m 12m 12m 12m
Net Sales 218402.90 254902.00 259157.72 279890.34
Other Income 3087.40 3606.20 3240.20 3402.20
Total Income 221490.30 258508.20 262397.92 283292.54
Expenditure -188899.30 -217085.00 -212628.37 -229510.08
Operating Profit 32591.00 41423.20 49769.55 53782.47
Interest -8367.30 -13211.60 -15092.68 -16601.95
Gross profit 24223.70 28211.60 34676.87 37180.52
Depreciation -10923.30 -12954.90 -16145.49 -18728.77
Exceptional Items -1038.80 0.00 240.60 0.00
Profit Before Tax 12261.60 15256.70 18771.98 18451.75
Tax -2160.10 -3417.80 -5238.43 -4022.48
Profit After Tax 10101.50 11838.90 13533.55 14429.27
Minority Interest -1200.20 -1250.00 -1058.97 -910.71
Net Profit 8901.30 10588.90 12474.58 13518.55
Equity capital 1135.20 1202.10 1300.80 1300.80
Reserves 74029.80 90398.70 103932.25 118361.52
Face value 10.00 10.00 10.00 10.00
EPS 78.41 88.09 95.90 103.92
Quarterly Profit & Loss Statement for the period of 30th June, 2013 to 31st March, 2014E
Value(Rs.in.mn) 30-Jun-13 30-Sep-13 31-Dec-13 31-Mar-14E
Description 3m 3m 3m 3m
Net sales 57445.40 64926.00 65448.00 71338.32
Other income 948.80 732.00 725.30 834.10
Total Income 58394.20 65658.00 66173.30 72172.42
Expenditure -46655.50 -53625.20 -53208.20 -59139.47
Operating profit 11738.70 12032.80 12965.10 13032.95
Interest -3772.70 -3565.50 -3557.10 -4197.38
Gross profit 7966.00 8467.30 9408.00 8835.57
Depreciation -3876.80 -3841.10 -4071.30 -4356.29
Exceptional Items 240.60 0.00 0.00 0.00
Profit Before Tax 4329.80 4626.20 5336.70 4479.28
Tax -773.80 -1552.50 -1577.30 -1334.83
Profit After Tax 3556.00 3073.70 3759.40 3144.45
Minority Interest -242.70 -172.20 -306.70 -337.37
Net Profit 3313.30 2901.50 3452.70 2807.08
Equity capital 1202.30 1202.60 1300.80 1300.80
Face value 10.00 10.00 10.00 10.00
EPS 27.56 24.13 26.54 21.58
Ratio Analysis
Particulars FY12A FY13A FY14E FY15E
EPS (Rs.) 78.41 88.09 95.90 103.92
EBITDA Margin (%) 14.92% 16.25% 19.20% 19.22%
PBT Margin (%) 5.61% 5.99% 7.24% 6.59%
PAT Margin (%) 4.63% 4.64% 5.22% 5.16%
P/E Ratio (x) 13.78 12.27 11.27 10.40
ROE (%) 13.44% 12.92% 12.86% 12.06%
ROCE (%) 23.54% 21.54% 26.19% 27.44%
Debt Equity Ratio 1.46 1.76 1.39 1.21
EV/EBITDA (x) 9.01 10.02 7.92 7.28
Book Value (Rs.) 662.13 762.01 808.99 919.91
P/BV 1.63 1.42 1.34 1.17
Charts
OUTLOOK AND CONCLUSION
� At the current market price of Rs.1080.85, the stock P/E ratio is at 11.27 x FY14E and 10.40 x FY15E
respectively.
� Earning per share (EPS) of the company for the earnings for FY14E and FY15E is seen at Rs.95.90 and
Rs.103.92 respectively.
� Net Sales and PAT of the company are expected to grow at a CAGR of 9% and 13% over 2012 to 2015E
respectively.
� On the basis of EV/EBITDA, the stock trades at 7.92 x for FY14E and 7.28 x for FY15E.
� Price to Book Value of the stock is expected to be at 1.34 x and 1.17 x respectively for FY14E and FY15E.
� We recommend ‘BUY’ in this particular scrip with a target price of Rs.1189.00 for Medium to Long term
investment.
INDUSTRY OVERVIEW
Financial Services in India
India’s financial services sector is diversifying and growing at a good rate. The sector is bank dominated with
commercial banks holding over 60 per cent of the total assets, followed by the insurance industry. The sector
comprises commercial banks, insurance firms, cooperatives, non-banking institutions, mutual funds, pension
funds and other financial entities.
Over the last 20 years, the sector has developed a more modern outlook. The government introduced several
reforms to liberalise, regulate and enhance the country's financial services by embracing best international
practices. The results have been encouraging, with India today globally recognised as among the most vibrant
and transparent capital markets regarding market efficiency and transparency.
While challenges still remain for the future, the prospects for India’s financial services are brighter than ever
before.
Insurance Sector
Insurance companies will now have greater freedom to invest in sectors such as IT and pharma. The Insurance
Regulatory and Development Authority (IRDA) has increased the sector specific exposure limit for investments
by insurers to 20 per cent of the total investment, from 15 per cent. Up till now, life and non-life insurers were
allowed to take an exposure in a specific sector – excluding banking, financial services and infrastructure sectors
– to 15 per cent of total investments (which included debt and equity).
Investment corpus in the Indian pension sector is projected to go beyond US$ 1 trillion by 2025 following the
passing of the Pension Fund Regulatory and Development Authority (PFRDA) Act 2013, according to an industry
report.
The insurance sector also has bright times ahead. Life Insurance Council, the industry body of life insurers in
India, has estimated a CAGR of 12–15 per cent over the next five years for the segment. The country’s insurable
population is projected to touch 750 million by 2020.
Retail Industry
Estimated to be worth more than US$ 500 billion, the Indian retail industry is considered as one of the world’s
top five retail markets in terms of economic value. The industry is experiencing exponential growth, with retail
development taking place not just in major cities and metros, but also in Tier-II and Tier-III cities.
The Indian retail market is expected to touch US$ 1.3 trillion by 2020 from its existing level of around US$ 500
billion, according to Union Ministry for Food and Consumer Affairs.
The foreign direct investment (FDI) inflows in single-brand retail trading during the period April 2000–
September 2013 stood at US$ 97.29 million, according to Department of Industrial Policy and Promotion (DIPP).
The upcoming years of Indian retail industry are highly favourable for luxury goods. The overall Indian retail
sector is expected to grow 9 per cent during 2012–16, with organised retail growing at 24 per cent or three times
the pace of traditional retail (which is expected to expand at 8 per cent).
Indian Telecom Industry
India is the world’s second-largest telecommunications market. The telecom infrastructure in India is expected to
increase at a compound annual growth rate (CAGR) of 20 per cent during the period 2008–2015 to reach
571,000 towers in 2015.
The telecommunications industry attracted foreign direct investments (FDI) worth US$ 12,889 million in the
period April 2000–September 2013, according to Department of Industrial Policy and Promotion (DIPP).
The country’s GSM operators added 1.66 million rural subscribers in October, taking their overall user base to
274.32 million, according to data released by the Cellular Operators’ Association of India (COAI). The telecom
companies are looking at rural India to add users and revenues.
The Government of India's decision to allow 100 per cent foreign direct investment (FDI) in telecommunication
sector will enable foreign telecommunication companies to buy out their Indian partners. At present, India
permits up to 74 per cent FDI in the sector – 49 per cent through the automatic route and the rest after Foreign
Investment Promotion Board (FIPB) approval.
IT & ITeS Industry in India
The Indian Information Technology (IT) and Information Technology enabled Services (ITeS) sectors go hand-in-
hand in every aspect. The industry has not only transformed India’s image on the global platform, but also fuelled
economic growth by energising higher education sector (especially in engineering and computer science). The
industry has employed almost 10 million Indians and hence, has contributed a lot to social transformation in the
country.
India's IT-business process outsourcing (BPO) industry revenue is expected to cross US$ 225 billion mark by
2020. India is expected to become world's second-largest online community after China with 213 million internet
users by December 2013 and 243 million by June 2014, according to a report by Internet and Mobile Association
of India (IAMAI) and IMRB International. IT spending by the Government of India is projected to reach US$ 6.4
billion in 2013, a growth of 7 per cent year-on-year.
Disclaimer:
This document prepared by our research analysts does not constitute an offer or solicitation for the purchase or sale
of any financial instrument or as an official confirmation of any transaction. The information contained herein is
from publicly available data or other sources believed to be reliable but do not represent that it is accurate or
complete and it should not be relied on as such. Firstcall India Equity Advisors Pvt. Ltd. or any of it’s affiliates shall
not be in any way responsible for any loss or damage that may arise to any person from any inadvertent error in the
information contained in this report. This document is provide for assistance only and is not intended to be and must
not alone be taken as the basis for an investment decision.
Firstcall India Equity Research: Email – [email protected]
C.V.S.L.Kameswari Pharma
U. Janaki Rao Capital Goods
B. Anil Kumar Auto, IT & FMCG
Suhani Adilabadkar Pharma & Banking
M. Vinayak Rao Diversified
Firstcall India also provides
Firstcall India Equity Advisors Pvt.Ltd focuses on, IPO’s, QIP’s, F.P.O’s,Takeover
Offers, Offer for Sale and Buy Back Offerings.
Corporate Finance Offerings include Foreign Currency Loan Syndications,
Placement of Equity / Debt with multilateral organizations, Short Term Funds
Management Debt & Equity, Working Capital Limits, Equity & Debt
Syndications and Structured Deals.
Corporate Advisory Offerings include Mergers & Acquisitions(domestic and
cross-border), divestitures, spin-offs, valuation of business, corporate
restructuring-Capital and Debt, Turnkey Corporate Revival – Planning &
Execution, Project Financing, Venture capital, Private Equity and Financial
Joint Ventures
Firstcall India also provides Financial Advisory services with respect to raising
of capital through FCCBs, GDRs, ADRs and listing of the same on International
Stock Exchanges namely AIMs, Luxembourg, Singapore Stock Exchanges and
other international stock exchanges.
For Further Details Contact:
3rd Floor,Sankalp,The Bureau,Dr.R.C.Marg,Chembur,Mumbai 400 071
Tel. : 022-2527 2510/2527 6077/25276089 Telefax : 022-25276089
E-mail: [email protected]
www.firstcallindiaequity.com