CRISIL Research Ier Report Alok Industries 2012 Q6FY13

CRISIL IERIndependentEquityResearch

Enhancing investment decisions

Alok Industries Ltd

Q6FY13 Results Update


Explanation of CRISIL Fundamental and Valuation (CFV) matrix

The CFV Matrix (CRISIL Fundamental and Valuation Matrix) addresses the two important analysis of an investment making process – Analysis of Fundamentals (addressed through Fundamental Grade) and Analysis of Returns (Valuation Grade) The fundamental grade is assigned on a five-point scale from grade 5 (indicating Excellent fundamentals) to grade 1 (Poor fundamentals) The valuation grade is assigned on a five-

point scale from grade 5 (indicating strong upside from the current market price (CMP)) to grade 1 (strong downside from the CMP).

CRISIL Fundamental Grade Assessment

CRISIL Valuation Grade Assessment

5/5 Excellent fundamentals 5/5 Strong upside (>25% from CMP) 4/5 Superior fundamentals 4/5 Upside (10-25% from CMP) 3/5 Good fundamentals 3/5 Align (+-10% from CMP) 2/5 Moderate fundamentals 2/5 Downside (negative 10-25% from CMP) 1/5 Poor fundamentals 1/5 Strong downside (<-25% from CMP)

About CRISIL Limited CRISIL is a global analytical company providing ratings, research, and risk and policy advisory services. We are India’s leading ratings agency. We are also the foremost provider of high-end research to the world’s largest banks and leading corporations. About CRISIL Research CRISIL Research is India's largest independent and integrated research house. We provide insights, opinions, and analysis on the Indian economy, industries, capital markets and companies. We are India's most credible provider of economy and industry research. Our industry research covers 70 sectors and is known for its rich insights and perspectives. Our analysis is supported by inputs from our network of more than 4,500 primary sources, including industry experts, industry associations, and trade channels. We play a key role in India's fixed income markets. We are India's largest provider of valuations of fixed income securities, serving the mutual fund, insurance, and banking industries. We are the sole provider of debt and hybrid indices to India's mutual fund and life insurance industries. We pioneered independent equity research in India, and are today India's largest independent equity research house. Our defining trait is the ability to convert information and data into expert judgements and forecasts with complete objectivity. We leverage our deep understanding of the macroeconomy and our extensive sector coverage to provide unique insights on micro-macro and cross-sectoral linkages. We deliver our research through an innovative web-based research platform. Our talent pool comprises economists, sector experts, company analysts, and information management specialists. CRISIL Privacy CRISIL respects your privacy. We use your contact information, such as your name, address, and email id, to fulfil your request and service your account and to provide you with additional information from CRISIL and other parts of McGraw Hill Financial you may find of interest.

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Last updated: May, 2013 Analyst Disclosure Each member of the team involved in the preparation of the grading report, hereby affirms that there exists no conflict of interest that can bias the grading recommendation of the company. Disclaimer: This Company commissioned CRISIL IER report is based on data publicly available or from sources considered reliable. CRISIL Ltd. (CRISIL) does not represent that it is accurate or complete and hence, it should not be relied upon as such. The data / report is subject to change without any prior notice. Opinions expressed herein are our current opinions as on the date of this report. Nothing in this report constitutes investment, legal, accounting or tax advice or any solicitation, whatsoever. The subscriber / user assume the entire risk of any use made of this data / report. CRISIL especially states that, it has no financial liability whatsoever, to the subscribers / users of this report. This report is for the personal information only of the authorised recipient in India only. This report should not be reproduced or redistributed or communicated directly or indirectly in any form to any other person – especially outside India or published or copied in whole or in part, for any purpose.

Alok Industries Ltd

Working capital cycle still remains high

Fundamental Grade 2/5 (Moderate fundamentals)

Valuation Grade 3/5 (CMP is aligned)

Industry Textiles, Apparels and Luxury Goods

1

December 31, 2013

Fair Value ₹9 CMP ₹8

For detailed initiating coverage report please visit: www.ier.co.in CRISIL Independent Equity Research reports are also available on Bloomberg (CRI <go>) and Thomson Reuters.

Alok Industries Ltd’s (Alok’s) standalone Q6FY13* results were higher than CRISIL Research’s expectations. Revenues increased 12.5% y-o-y driven by the fabric and home textile business. Working capital remains under pressure despite improvement during the quarter. Alok is focusing on exports to improve its working capital cycle. Given its large integrated scale of operations, we remain positive on growth in exports. However, its stressed working capital and delay in cash collections from the sale of non-core assets may lead to liquidity constraints and delay the debt reduction plans. Working capital cycle and high debt remain monitorables for us. For now, we maintain our fundamental grade of 2/5. Export drives top line growth ■ Revenues grew by 12.5% y-o-y to ₹37.4 bn driven by home textile (up by 52% to

₹5.21 bn) and fabrics (up by 8.7% to₹21.2 bn). Polyester business was flat y-o-y at ₹8.9 bn.

■ Domestic business’ revenues increased 6.7% y-o-y to ₹26.5 bn (71% of total revenues). Exports grew by 30% y-o-y due to home textiles, garments, terry towel and polyester segment revenues.

■ EBITDA margin declined by 448 bps y-o-y to 23.1% due to higher raw material cost. Raw material cost as a % of revenues grew 527 bps y-o-y to 60.1% due to increase in prices of raw material - cotton, PTA and MEG. Other expenses increased 9% y-o-y to ₹5.5 bn.

■ Adj PAT margin contracted by 211 bps y-o-y to 4.6% due to lower operating profitability and higher finance cost.

Debt and working capital at alarming levels: key concern Alok’s gross debt, receivable days and inventory days have increased significantly in FY13 from FY12 levels. Receivables days increased from 78 days in FY12 to 130 days (last quarter 182 days) in FY13. Inventory days went up to 224 days from 204 days during the same period. Consequently, working capital days increased from 218 days to 278 days. As a result, the company’s gross debt increased to 1,978 bn with debt-equity ratio of 5.1x in FY13.

Earnings estimates revised downwards Revenue estimates have been increased by 3% for FY14 and by 2% for FY15. EBITDA margin estimates have been increased to 24.8% and 25.2%, respectively, to factor in benefits from savings in power cost and reduction in losses in its retail chain business. We have also built in the benefits of savings in power cost for the explicit period and expect improvement in working capital cycle with company focussing more on exports where debtor days are lower. However, we remove the benefit of land bank monetisation; Alok has not been able to monetise as the macro environment remained challenging. We factor in higher interest and depreciation as actual capex in FY13 has been much higher than our expectation. Overall, PAT estimates has been lowered to ₹3,415 mn for FY14 and ₹7,723 mn for FY15 on account of higher finance cost and depreciation.

Fair value revised We continue to use the DCF method to value Alok. We revise our fair value to ₹9 from ₹8 per share. At current market price of ₹8 per share, our valuation grade is 3/5.

KEY FORECAST

(₹ mn) FY11 FY12 18MFY13 6MFY14E FY15E Operating income 66,114 97,909 213,808 74,485 155,877 EBITDA 18,094 23,978 52,634 18,498 39,203 Adj net income 3,267 1,785 9,124 3,415 7,723 Adj EPS (₹) 4.1 2.2 6.6 2.5 5.6 EPS growth (%) 40.8 (47.9) NM NM NM Dividend yield (%) 1.3 4.1 3.5 1.2 3.5 RoCE (%) 9.4 9.9 12.2 12.0 13.5 RoE (%) 11.8 6.6 19.2 17.8 17.6 PE (x) 5.4 3.9 1.3 3.4 1.5 P/BV (x) 0.6 0.3 0.3 0.3 0.2 EV/EBITDA (x) 7.0 6.3 3.8 10.1 4.3

NM: Not meaningful; CMP: Current market price *(Q6=Jul-Sep, as accounting year has been extended from Jun to Sep, 2013) Source: Company, CRISIL Research estimates

CFV MATRIX

KEY STOCK STATISTICS NIFTY/SENSEX 6304/21170

NSE/BSE ticker ALOKTEXT/

ALOKIND Face value (₹ per share) 10 Shares outstanding (mn) 1,377 Market cap (₹ mn)/(US$ mn) 11,705/189 Enterprise value (₹ mn)/(US$ mn) 202/3 52-week range (₹)/(H/L) 13/6 Beta 1.5 Free float (%) 61.8% Avg daily volumes (30-days) 4,232,403 Avg daily value (30-days) (₹ mn) 33.8

SHAREHOLDING PATTERN

PERFORMANCE VIS-À-VIS MARKET

Returns

1-m 3-m 6-m 12-mAlok 10% 7% 22% -23%CNX 500 3% 12% 9% 4%

ANALYTICAL CONTACT Mohit Modi (Director) [email protected] Gaurav Samota [email protected] Vishal Rampuria [email protected]

Client servicing desk +91 22 3342 3561 [email protected]

1 2 3 4 5

1

2

3

4

5

Valuation Grade

Fund

amen

tal

Gra

de

Poor Fundamentals

ExcellentFundamentals

Stro

ngDo

wns

ide

Stro

ngU

psid

e34.2% 34.2% 36.4% 38.2%

4.1% 3.9% 3.2% 3.9%10.9% 12.1% 9.3% 9.4%

50.8% 49.9% 51.1% 48.5%

0%10%20%30%40%50%60%70%80%90%

100%

Dec-12 Mar-13 Jun-13 Sep-13

Promoter FII DII Others


2

Q6FY13 Results Summary (Standalone) (₹ mn) Q6FY13 Q5FY13* Q2FY13 q-o-q (%) y-o-y (%) 18MFY13 12MFY12 y-o-y (%)Net sales 37,407 29,952 33,248 24.9 12.5 199,178 89,009 NMRaw materials cost 22,488 16,358 18,235 37.5 23.3 113,997 43,931 NMRaw materials cost (% of net sales) 60.1% 54.6% 54.8% 550 bps 527 bps 57.2% 49.4% NMEmployees cost 702 764 729 (8.1) (3.6) 4,370 2,673 NMOther expenses 5,572 3,086 5,112 80.6 9.0 26,584 16,813 NMEBITDA 8,645 9,744 9,172 (11.3) (5.8) 54,226 25,592 NMEBITDA margin 23.1% 32.5% 27.6% -942 bps -448 bps 27.2% 28.8% NMDepreciation 2,449 2,361 2,183 3.8 12.2 13,608 7,134 NMEBIT 6,196 7,384 6,989 (16) (11) 40,619 18,457 NMInterest and finance charges 4,180 4,153 3,230 0.6 29.4 22,607 11,496 NMOperating PBT 2,016 3,230 3,759 (37.6) (46.4) 18,012 6,962 NMOther income 153 99 44 53.8 244.4 624 656 NMExtraordinary Income/(expense) (746) (2,831) 671 NM NM (4,637) (1,213) NMPBT 1,423 499 4,474 185.4 (68.2) 13,999 6,405 NMTax 453 170 1,578 167.4 (71.3) 4,797 2,600 NMReported PAT 970 329 2,896 194.7 (66.5) 9,202 3,805 NMAdjusted PAT 1,715 3,160 2,226 (45.7) (22.9) 13,839 5,018 NMAdjusted PAT margin 4.6% 10.6% 6.7% -596 bps -211 bps 6.9% 5.6% NMNo of equity shares (mn) 1,377.1 1,377.1 826.3 - - 1,377.1 787.8 NMAdjusted EPS (₹) 1.2 2.3 2.7 (45.7) (53.8) 10.0 6.4 NM

* For the period April to June 2013 Source: Company, CRISIL Research

Consolidated results summary (₹ mn) 18MFY13 12MFY12 Operating income 213,884 97,909 EBITDA 52,012 23,978 EBITDA margin 24.3% 24.5% PBT 7,790 3,809 Tax provision 4,843 3,004 PAT (Reported) 2,967 805 Less: Exceptionals (6,344) (980) Adjusted PAT 9,311 1,785

Source: Company, CRISIL Research

Higher raw material cost led to decline in margins PAT fell y-o-y due to lower EBITDA and high finance cost

Source: Company, CRISIL Research Source: Company, CRISIL Research

25,9

54

24,2

28

33,2

92

35,2

08

39,1

35

29,9

52

37,4

07

28.1%

30.9%

26.7% 27.1%24.6%

32.5%

23.1%

16%18%20%22%24%26%28%30%32%34%

05,000

10,00015,00020,00025,00030,00035,00040,00045,000

Q4F

Y12

Q1F

Y13

Q2F

Y13

Q3F

Y13

Q4F

Y13

Q5F

Y13

Q6F

Y13

(₹ mn)

Sales EBITDA margin (RHS)

559 1,930 1,897 2,611 2,006 3,160 1,715

2.2%

8.0%

5.7%7.4%

5.1%

10.6%

4.6%

0%

2%

4%

6%

8%

10%

12%

0

500

1,000

1,500

2,000

2,500

3,000

3,500

Q4F

Y12

Q1F

Y13

Q2F

Y13

Q3F

Y13

Q4F

Y13

Q5F

Y13

Q6F

Y13

(₹ mn)

Adj PAT Adj PAT margin (RHS)

Alok Industries Ltd

3

Share of exports increased y-o-y Share of apparel fabric and home textiles increased y-o-y

Source: Company, CRISIL Research Source: Company, CRISIL Research

Share price movement Fair value movement since initiation

-Indexed to 100

Source: NSE, CRISIL Research Source: NSE, BSE, CRISIL Research

25,9

53

24,2

28

33,2

48

35,2

08

39,1

36

29,9

52

37,4

07

31%35%

25%

20%24% 24%

29%

0%

5%

10%

15%

20%25%

30%

35%

40%

05,000

10,00015,00020,00025,00030,00035,00040,00045,000

Q4F

Y12

Q1F

Y13

Q2F

Y13

Q3F

Y13

Q4F

Y13

Q5F

Y13

Q6F

Y13

(₹ mn)

Total sales Export % (RHS)

4.7 2.3 1.6 1.1 0.9 1.1 1.311.8 14.8 12.1 9.2 10.6 9.2 13.9

51.3 46.9 59.7 66.9 71.7 65.5 60.9

32.1 36.126.6 22.8 16.8 24.2 24.0

0%10%20%30%40%50%60%70%80%90%

100%

Q4F

Y12

Q1F

Y13

Q2F

Y13

Q3F

Y13

Q4F

Y13

Q5F

Y13

Q6F

Y13

Cotton yarn Home textiles Apparel fabric Polyester yarn

0

20

40

60

80

100

120

Jan-

08

May

-08

Sep

-08

Jan-

09

May

-09

Oct

-09

Feb-

10

Jun-

10

Oct

-10

Feb-

11

Jul-1

1

Nov

-11

Mar

-12

Jul-1

2

Nov

-12

Apr

-13

Aug

-13

Dec

-13

Alok CNX500

0

10,000

20,000

30,000

40,000

50,000

60,000

70,000

0

5

10

15

20

25

30

35

Jul-1

1

Sep

-11

Dec

-11

Feb-

12

Apr

-12

Jun-

12

Au g

-12

Nov

-12

Jan-

13

Mar

-13

Ma y

-13

Au g

-13

Oct

-13

Dec

-13

('000)(₹)

Total Traded Quantity (RHS) CRISIL Fair Value Alok


4

Key Developments Delay in monetisation of non-core assets to affect liquidity and gearing levels Alok has sold 18 floors (out of the 20 floors) of its real estate venture Peninsula Business Park

(PSB); of the eight floors of Ashford Centre, three floors have been sold and four have been

leased out. The estimated deal size of these two projects is ₹9.6 bn (PSB: ₹9 bn and Ashford:

₹600 mn). The company has received only ₹6.9 bn of the total payment. Alok has used the

proceeds from PSB to repay debt of ₹7.5 bn in the books of its subsidiary, Alok Realtors Pvt.

Ltd, and the remaining ₹1.5 bn to repay the debt of the parent company. Any further delay in

receiving the payment will lead to higher leverage and interest cost. Also, a monetisation plan

of its land in Silvassa and Vapi has not been successful due to a weak macro environment.

Hence we have not factored the same in our projections.

Alok has decided to limit its capital expenditure up to ₹6,000 mn per year for the next few

years, beginning FY14; we have factored in the same in our projections until FY20. Domestic revenues and debtors Export revenues and debtors

Source: Company, CRISIL Research Source: Company, CRISIL Research Working capital movement

Sep-13 Mar-13 Sep-12 Mar-12 Debtor days 138 161 86 88 Inventory days 158 116 109 139 Creditor days 27 61 41 21 Working capital days 269 216 154 206

Retail business performance FY13

₹ mn Turnover PAT Grabal Alok (UK) Limited 11,857 (2,102) Mileta 2,102 204 Alok Singapore Pte. Ltd. 8,910 25 Alok International, Inc 3,321 83

15,8

61

24,9

18

28,1

14

29,9

12

22,6

96

26,5

87

18,7

71

24,7

88

41,0

31

55,9

27

62,1

58

47,3

91

-

10,000

20,000

30,000

40,000

50,000

60,000

70,000

Q1FY13 Q2FY13 Q3FY13 Q4FY13 Q5FY13 Q6FY13

(₹ mn)

Revenues Debtors

8,36

6

8,33

0

7,09

4

9,22

4

7,25

6

10,8

19

3,18

0

2,40

1

2,09

6

3,12

6

2,48

7

2,86

9

-

2,000

4,000

6,000

8,000

10,000

12,000

Q1FY13 Q2FY13 Q3FY13 Q4FY13 Q5FY13 Q6FY13

(₹ mn)

Revenues Debtors

Alok Industries Ltd

5

Earnings Estimates Revised Downwards

Particulars Unit 6MFY14E FY15E

Old New % change Old New % change Revenues (₹ mn) 72,577 74,485 3% 152,509 155,877 2% EBITDA (₹ mn) 17,743 18,498 4% 36,671 39,203 7% EBITDA margin % 24.4 24.8 39 bps 24.0 25.2 110 bps Interest (₹ mn) 8,990 11,066 23% 17,405 20,829 20% PAT (₹ mn) 3,829 3,415 -11% 8,379 7,723 -8% PAT margin % 5.3 4.6 -69 bps 5.5 5.0 -54 bps EPS ₹ 2.8 2.5 -11% 6.1 5.6 -8%

Source: CRISIL Research estimates Reasons for changes in estimates Line item FY14E FY15E Revenues Higher than expected revenues from export business owing to

rupee depreciation Higher revenues from export business owing to rupee depreciation

EBITDA margins Increased to factor in savings in power cost and reduction in losses of its retail chain business

Increased to factor in savings in power and reduction in losses of its retail chain business

PAT margins Lowered due to higher finance cost and depreciation Lowered due to higher finance cost and depreciation


6

Valuation Grade: 3/5 We continue to use the DCF method to value Alok. We have revised our fair value to ₹9 from

₹8 per share as we expect improvement in margins due to savings in power cost and also

working capital with the company’s increased focus on exports where debtor days are lower.

At the current market price of ₹8, the valuation grade is 3/5.

One-year forward P/E band One-year forward EV/EBITDA band

Source: NSE, CRISIL Research Source: NSE, CRISIL Research

P/E – premium / discount to CNX 500 P/E movement

Source: NSE, CRISIL Research Source: NSE, CRISIL Research

0

10

20

30

40

50

60

70

Jan-

09A

pr-0

9Ju

n-09

Sep

-09

Dec

-09

Mar

-10

Jun-

10S

ep-1

0D

ec-1

0M

ar-1

1Ju

n-11

Sep

-11

Dec

-11

Mar

-12

Jun-

12S

ep-1

2D

ec-1

2M

ar-1

3Ju

n-13

Sep

-13

Dec

-13

(₹)

Alok 2x 4x 6x 8x 10x

050,000

100,000150,000200,000250,000300,000350,000400,000450,000

Jan-

09A

pr-0

9Ju

n-09

Sep

-09

Dec

-09

Mar

-10

Jun-

10S

ep-1

0D

ec-1

0M

ar-1

1Ju

n-11

Sep

-11

Dec

-11

Mar

-12

Jun-

12S

ep-1

2D

ec-1

2M

ar-1

3Ju

n-13

Sep

-13

Dec

-13

(₹ mn)

EV 2x 4x 6x 8x

-100%

-80%

-60%

-40%

-20%

0%

20%

40%

Jan-

09A

pr-0

9Ju

l-09

Sep

-09

Dec

-09

Mar

-10

Jun-

10S

ep-1

0D

ec-1

0M

ar-1

1Ju

n-11

Sep

-11

Dec

-11

Mar

-12

Jun-

12S

ep-1

2D

ec-1

2M

ar-1

3Ju

n-13

Sep

-13

Dec

-13

Premium/Discount to CNX 500Median premium/discount to CNX 500

0

5

10

15

20

25

Jan-

09A

pr-0

9Ju

n-09

Sep

-09

Dec

-09

Mar

-10

Jun-

10S

ep-1

0D

ec-1

0M

ar-1

1Ju

n-11

Sep

-11

Dec

-11

Mar

-12

Jun-

12S

ep-1

2D

ec-1

2M

ar-1

3Ju

n-13

Sep

-13

Dec

-13

(Times)

1yr Fwd PE (x) Median PE

+1 std dev

-1 std dev

We revise our fair value to ₹9

from ₹8 per share

Alok Industries Ltd

7

CRISIL IER reports released on Alok Industries Ltd

Date Nature of report Fundamental

grade Fair value Valuation

grade CMP

(on the date of report) 26-Jul-11 Initiating coverage 3/5 ₹31 4/5 ₹26 04-Aug-11 Q1FY12 result update 3/5 ₹31 5/5 ₹24 15-Nov-11 Q2FY12 result update 3/5 ₹29 5/5 ₹19 05-Mar-12 Q3FY12 result update 3/5 ₹29 5/5 ₹21 08-Jun-12 Q4FY12 result update 3/5 ₹29 5/5 ₹19 11-Jul-12 Detailed Report 3/5 ₹29 5/5 ₹18 21-Aug-12 Q1FY13 result update 3/5 ₹29 5/5 ₹16 12-Sept-12 Event Update 2/5 ₹21 5/5 ₹12 19-Nov-12 Q2FY13 result update 2/5 ₹21 5/5 ₹11 26-Feb-13 Q3FY13 result update 2/5 ₹18 5/5 ₹9 15-July-13 Q4FY13 result update 2/5 ₹9 5/5 ₹7

05-Sept-13 Q5FY13 result update 2/5 ₹8 5/5 ₹6

31-Dec-13 Q6FY13 result update 2/5 ₹9 3/5 ₹8


8

Annexure: Financials (Consolidated)

Source: CRISIL Research

Income statement Balance Sheet(₹ mn) FY11 FY12 18MFY13 6MFY14E FY15E (₹ mn) FY11 FY12 18MFY13 6MFY14E FY15EOperating income 66,114 97,909 213,808 74,485 155,877 LiabilitiesEBITDA 18,094 23,978 52,634 18,498 39,203 Equity share capital 7,878 8,263 13,771 13,771 13,771 EBITDA margin 27.4% 24.5% 24.6% 24.8% 25.2% Reserves 20,045 17,756 23,497 25,586 34,859 Depreciation 5,310 7,491 14,182 4,810 9,905 Minorities 46 46 - - - EBIT 12,784 16,487 38,452 13,689 29,298 Net worth 27,969 26,065 37,268 39,358 48,630 Interest 10,413 15,183 29,965 11,066 20,829 Convertible debt - - Operating PBT 2,371 1,303 8,487 2,622 8,468 Other debt 121,243 158,786 197,800 180,079 167,079 Other income 2,682 3,486 5,548 2,552 3,232 Total debt 121,243 158,786 197,800 180,079 167,079 Exceptional inc/(exp)* (148) (980) (5,748) (1,165) 639 Deferred tax liability (net) 5,003 6,181 6,531 6,883 7,678 PBT 4,905 3,809 8,287 4,009 12,339 Total liabilities 154,215 191,032 241,600 226,319 223,387 Tax provision 1,786 3,004 4,911 1,759 3,977 AssetsMinority interest - - - - - Net fixed assets 75,060 88,112 95,542 93,710 89,007 PAT (Reported) 3,119 805 3,377 2,250 8,362 Capital WIP 22,636 11,471 9,786 10,286 11,536 Less: Exceptionals (148) (980) (5,748) (1,165) 639 Total fixed assets 97,695 99,583 105,327 103,996 100,542 Adjusted PAT 3,267 1,785 9,124 3,415 7,723 Investments 4,532 15,505 17,279 15,323 15,323

4.9% 1.8% 4.3% 4.6% 5.0% Current assetsRatios Inventory 21,499 36,971 60,385 55,250 54,237

FY11 FY12 18MFY13 6MFY14E FY15E Sundry debtors 18,471 21,425 51,802 53,325 53,510 Growth Loans and advances 7,880 16,937 16,960 11,918 12,470 Operating income (%) 49.6 48.1 NM NM NM Cash & bank balance 12,023 6,730 7,993 5,799 8,361 EBITDA (%) 42.4 32.5 NM NM NM Marketable securities 395 7,713 12 - - Adj PAT (%) 40.8 (45.4) NM NM NM Total current assets 60,267 89,777 137,152 126,291 128,578 Adj EPS (%) 40.8 (47.9) NM NM NM Total current liabilities 10,299 15,808 20,266 19,569 21,335

Net current assets 49,968 73,969 116,886 106,722 107,243 Profitability Intangibles/Misc. expenditure 2,000 1,974 2,108 279 279 EBITDA margin (%) 27.4 24.5 24.6 24.8 25.2 Total assets 154,195 191,032 241,600 226,320 223,387 Adj PAT Margin (%) 4.9 1.8 4.3 4.6 5.0 RoE (%) 11.8 6.6 19.2 17.8 17.6 Cash flowRoCE (%) 9.4 9.9 12.2 12.0 13.5 (₹ mn) FY11 FY12 18MFY13 6MFY14E FY15ERoIC (%) 13.7 13.9 16.0 16.7 16.3 Pre-tax profit 5,053 4,789 14,035 5,174 11,700

Total tax paid (813) (1,827) (4,560) (1,407) (3,182) Valuations Depreciation 5,310 7,491 14,182 4,810 9,905 Price-earnings (x) 5.4 3.9 1.3 3.4 1.5 Working capital changes (9,484) (21,976) (49,355) 7,957 2,042 Price-book (x) 0.6 0.3 0.3 0.3 0.2 Net cash from operations 66 (11,522) (25,698) 16,534 20,466 EV/EBITDA (x) 7.0 6.3 3.8 10.1 4.3 Cash from investmentsEV/Sales (x) 2.0 1.6 0.9 2.5 1.1 Capital expenditure (23,335) (9,354) (20,059) (1,649) (6,452) Dividend payout ratio (%) 7.4 35.8 12.2 6.1 4.9 Investments and others (655) (18,291) 180 803 - Dividend yield (%) 1.3 4.1 3.5 1.2 3.5 Net cash from investments (23,990) (27,645) (19,880) (846) (6,452)

Cash from financingB/S ratios Equity raised/(repaid) - 1,518 5,509 (0) - Inventory days 179 204 224 201 192 Debt raised/(repaid) 24,517 37,543 39,014 (17,721) (13,000) Creditors days 72 71 58 53 56 Dividend (incl. tax) (230) (288) (493) (161) (483) Debtor days 103 78 130 128 123 Others (incl extraordinaries) (2,427) (4,919) (2,937) (1,165) 2,032 Working capital days 208 218 274 242 228 Net cash from financing 21,860 33,854 41,093 (19,047) (11,451) Gross asset turnover (x) 0.8 1.0 1.1 1.1 1.1 Change in cash position (2,064) (5,313) (4,484) (3,360) 2,563 Net asset turnover (x) 1.0 1.2 1.6 1.6 1.7 Closing cash 12,023 6,730 7,993 5,799 8,361 Sales/operating assets (x) 0.7 1.0 1.4 1.4 1.5 Current ratio (x) 5.9 5.7 6.8 6.5 6.0 Debt-equity (x) 4.3 6.1 5.3 4.6 3.4 (₹ mn) Q2FY13 Q3FY13 Q4FY13 Q5FY13 Q6FY13Net debt/equity (x) 3.9 5.5 5.1 4.4 3.3 Net sales 33,292 35,208 39,135 29,952 37,407 Interest coverage (EBIT/Interest) 1.2 1.1 1.3 1.2 1.4 Change (q-o-q) 37% 6% 11% -23% 25%Interest coverage (EBITDA/Interest) 1.7 1.6 1.8 1.7 1.9 EBITDA 8,888 9,556 9,617 9,744 8,645 Per share Change (q-o-q) 19% 8% 1% 1% -11%

FY11 FY12 18MFY13 6MFY14E FY15E EBITDA margin 26.7% 27.1% 24.6% 32.5% 23.1%Adj EPS (₹) 4.1 2.2 6.6 2.5 5.6 PAT 2,896 2,398 2,307 329 970 CEPS 10.9 11.2 16.9 6.0 12.8 Adj PAT 1,897 2,611 2,006 3,160 1,715 Book value 35.5 31.5 27.1 28.6 35.3 Change (q-o-q) -7% 38% -26% 58% -46%Dividend (₹) 0.3 0.3 0.3 0.1 0.3 Reported PAT margin 8.7% 7.4% 5.9% 1.1% 2.6%Actual o/s shares (mn) 787.8 826.3 1,377.1 1,377.1 1,377.1 Reported EPS 3.5 2.9 2.8 0.2 0.7

Quarterly financials (Standalone)

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CRISIL Research Ier Report Alok Industries 2012 Q6FY13

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