CRISIL Research Ier Report Navin Fluorine 2011 Q4FY12

7/31/2019 CRISIL Research Ier Report Navin Fluorine 2011 Q4FY12

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MAKINGMARKETS

FUNCTIONBETTE

R

YEARS

Apollo HospitalsEnterprise Ltd

CRISIL IERIndependentEquityResearch

Enhancing investment decisions

Detailed Report

Navin FluorineInternational Ltd

Q4FY12 Result Update


2/14


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 afive-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 (


3/14

MAKINGMARKETS

FUNCTION

BETTE

R

YEARSNavin Fluorine International LtdPositive surprise on revenues, earnings lower than expected

Fundamental Grade 3/5 (Good fundamentals)

Valuation Grade 3/5 (CMP is aligned)

Industry Chemicals

1

May 25, 2012

Fair Value Rs 396**

CMP Rs 396

For detailed initiating coverage report please visit: www.ier.co.in

CRISIL Independent Equity Research reports are also available on Bloomberg (CRI ) and Thomson Reuters.

Navin Fluorine International Ltds (Navins) Q4FY12 earnings were below CRISIL Researchs

estimates even though revenues outperformed, driven by higher-than-expected income from

the core business as well as income from certified emission reductions (CER). However,

adjusted PAT margin of 2.2% was below our estimates as an increase in raw material and

employee costs led to lower operating margins. Going forward, we expect fluorspar prices to

remain high on account of export restrictions from China (major producer and consumer of

fluorspar). However, given the strong demand for refrigerants, especially in the domestic

market, we believe that Navin will be able to maintain its EBITDA margin at ~10% as far as

the chemicals business is concerned. We have, accordingly, revised our FY13 estimates.

Further, we expect a significant decline in CER income on account of a decline in CER

prices. We maintain our fundamental grade of 3/5 on Navin.

Q4FY12 result analysis

Revenues declined 8% y-o-y to Rs 979 mn (lower by 7% q-o-q) as income from the

chemicals business as well as CER income declined 8% and 12%, respectively, y-o-y.

According to the management, realisations were lower in Q4 compared to average

realisations in 9MFY12, which led to lower sales volumes in the chemicals business.

EBITDA margin at 13.2% is significantly lower y-o-y as well as q-o-q (36.2% in Q4FY11

and 31.9% in Q3FY12) due to rise in raw material costs. While fluorspar prices declined

in the latter half of the year, advance purchases by Navin led to higher raw material

costs in Q4. Raw material costs as a percentage of sales was 47% compared to ~40%

in Q3FY12. Employee costs also grew by 37% y-o-y during Q4FY12 as the company

ramped up its employee strength in the specialty and CRAMS businesses.

During Q4, Navin has written back the provision for diminution in value of its investments

in Mafatlal Industries Ltd (MIL) and Mafatlal Denim Ltd (MDL), amounting to Rs 749 mn,

as net worth of both companies has turned positive. Adjusting for one-time write-back of

provision for diminution, adjusted PAT of Rs 35 mn is 91% lower y-o-y (-90% q-o-q).Adjusted PAT margin is 2.2% compared to 23.9% in Q4FY11 (21.1% q-o-q).

Valuation: Current market price is aligned**

We have rolled forward our valuation to FY14, and arrived at cum-dividend fair value of

Rs 396 per share and ex-dividend fair value of Rs 329 per share. Navin has announced the

final and a special dividend of Rs 6.5/share and Rs 60/share, respectively. Subject to

shareholders approval, the special and final dividends will be paid on June 21, 2012. As

CMP of Rs 396 is aligned with our cum-dividend fair value, the valuation grade is 3/5.

KEY FORECAST

(Rs mn) FY10 FY11 FY12# FY13E FY14EOperating income 4,318 4,315 7,246 5,967 5,880

EBITDA 1,464 1,213 2,505 1,167 652Adj Net income 824 712 1,425 758 408

Adj EPS-Rs 81.6 72.9 146.0 77.7 41.8

EPS growth (%) 44.6 (10.7) 100.1 (46.8) (46.3)

Dividend Yield (%) 4.1 4.5 18.9 6.3 1.9

RoCE (%) 45.8 30.8 48.0 16.2 6.8

RoE (%) 31.3 22.4 34.6 14.9 7.4

PE (x) 4.9 5.4 2.7 5.1 9.5

P/BV (x) 1.3 1.1 0.8 0.7 0.7

EV/EBITDA (x) 2.3 3.4 1.5 3.0 5.7

**Cum dividend fair value of Rs 396. Ex-dividend fair value is Rs 329

# based on abridged financials

NM: Not meaningful; CMP: Current market price

Source: Company, CRISIL Research estimates

CFV MATRIX

KEY STOCK STATISTICS

NIFTY/SENSEX 4921/16222

NSE/BSE ticker NAVINFLUOR/NAVIN

Face value (Rs per share) 10

Shares outstanding (mn) 9.8

Market cap (Rs mn)/(US$ mn) 3,865/69

Enterprise value (Rs mn)/(US$ mn) 4,874/87

52-week range (Rs)/(H/L) 440/269

Beta 1.1

Free float (%) 61%

Avg daily volumes (30-days) 83,544Avg daily value (30-days) (Rs mn) 34.5

SHAREHOLDING PATTERN

PERFORMANCE VIS--VIS MARKET

Returns

1-m 3-m 6-m 12-m

NAVIN 9% 16% 15% 43%

NIFTY -6% -9% 3% -9%

ANALYTICAL CONTACTMohit Modi (Director) [email protected]

Anant Damani [email protected]

Bhaskar Bukrediwala [email protected]

Client servicing desk

+91 22 3342 3561 [email protected]

1 2 3 4 5

1

2

3

4

5

Valuation Grade

FundamentalGrade

PoorFundamentals

ExcellentFundamentals

Strong

Downs

ide

Stron

g

Upsid

e

38.5% 38.5% 38.5% 38.7%

1.1% 4.0%5.3% 5.1%

2.5%3.7% 4.2% 4.2%

57.9% 53.9%52.0% 52.0%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Jun-11 Sep-11 Dec-11 Mar-12Promoter FII DII Others


4/14


2

Q4FY12 Result Summary (Standalone)

(Rs mn) Q4FY12 Q3FY12 Q4FY11 q-o-q (%) y-o-y (%) FY12 FY11 y-o-y (%)

Revenue from core business 979 1,051 1,063 -7% -8% 4,492 3,514 28%

Revenue from CER 567 544 645 4% -12% 2,519 783 222%

Other operating income 20 4 3 NM NM 27 11 160%Operating income 1,566 1,599 1,711 -2% -8% 7,039 4,307 63%

Raw material cost 738 636 512 16% 44% 2,468 1,716 44%

Raw material cost (% of net sales) 47.1% 39.8% 29.9% 733 bps 1716 bps 54.9% 48.8% 610 bps

Employee cost 138 93 100 48% 37% 409 298 37%

Other expenses 484 359 479 35% 1% 1,665 1,166 43%

EBITDA 207 511 620 -60% -67% 2,497 1,127 121%

EBITDA margin 13.2% 31.9% 36.2% -1875 bps -2303 bps 35.5% 26.2% 930 bps

Depreciation 48 47 38 3% 26% 177 135 31%

EBIT 158 464 582 -66% -73% 2,320 992 134%

Interest and finance charges 7 13 14 -45% -52% 35 36 -1%

Operating PBT 151 451 567 -66% -73% 2,284 956 139%

Other Income 35 47 40 -26% -13% 161 104 55%

Extraordinary income / (expense) 749 - - - 749 - n.m.PBT 935 498 607 88% 54% 3,194 1,060 201%

Tax 151 160 198 -6% -24% 882 343 157%

Reported PAT 784 338 409 132% 92% 2,312 716 223%

Adj PAT 35 338 409 -90% -91% 1,563 716 118%

Adj PAT margin 2.2% 21.1% 23.9% -1891 bps -2167 bps 22.2% 16.6% 557 bps

No of equity shares (mn) 9.8 9.8 9.8 0% 0% 9.8 9.8 0%

Adj EPS (Rs) 3.6 34.6 41.9 -90% -91% 160.2 73.4 118%

Source: Company, CRISIL Research

Q4FY12 Result Summary (Consolidated)

(Rs mn) FY12 FY11 y-o-y (%)

Revenue from core business 4,700 3,514 34%Revenue from CER 2,519 783 222%

Other operating income 27 11 160%

Operating income 7,247 4,307 68%

Raw material cost 2,553 1,716 49%

Raw material cost (% of net sales) 54.3% 48.8% 547 bps

Employee cost 490 298 64%

Other expenses 1,698 1,168 45%

EBITDA 2,505 1,125 123%

EBITDA margin 34.6% 26.1% 845 bps

Depreciation 188 138 36%

EBIT 2,317 987 135%

Interest and finance charges 36 36 -1%

Operating PBT 2,282 951 140%Other Income 8 106 -92%

Extraordinary income / (expense) 749 - NM

PBT 3,039 1,057 187%

Tax 886 344 158%

Reported PAT 2,153 713 202%

Share of profit / (loss) in associates 22 - NM

Minority interest 1 0 NM

Reported PAT after minority interest 2,174 713 205%

Adj PAT 1,425 713 100%

Adj PAT margin 19.7% 16.6% 310 bps

No of equity shares (mn) 9.8 9.8 0%

Adj EPS (Rs) 146.0 73.1 100%

Source: Company, CRISIL Research

The core chemicals business

grew by 34% in FY12, led by

strong growth in realisations

both in domestic and export

markets

Adjusting for non-recurring

expenses, the core business

posted EBITDA margin of ~9%

in FY12


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MAKINGMARKETS

FUNCTIONBETTE

R

YEARSNavin Fluorine International Ltd

3

Revenue and growth trend PAT and PAT margin

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

Strong growth across all segments of core business CER prices on a decline

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

Share price movement Fair value movement since initiation**

-indexed to 100

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

** Ex-dividend fair value of Rs 329/share

726 784 941 1,096 1,309 1,153 1,055 1,000

139 611

641 768

544 567

29.2%

11.5%

16.7%

35.9%

46.0% 45.7%

31.9%

13.2%

0%

5%

10%

15%

20%

25%

30%

35%

40%

45%

50%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Q1FY11

Q2FY11

Q3FY11

Q4FY11

Q1FY12

Q2FY12

Q3FY12

Q4FY12

(%)(Rs mn)

Revenue-Core Business CER Income

EBITDA margin (RHS)

31 15255

100 409 602 633 338 352.6%

17.6%

7.1%

10.6%

23.9%

30.9%33.0%

21.1%

2.2%

0%

5%

10%

15%

20%

25%

30%

35%

0

100

200

300

400

500

600

700

Q4FY10

Q1FY11

Q2FY11

Q3FY11

Q4FY11

Q1FY12

Q2FY12

Q3FY12

Q4FY12

(Rs mn)

PAT PAT margin (RHS)

1,1621,121 1,030

1,604 1,968

671808 596

770 987

853 1,075 908 1,178 1,608

0%10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

FY08 FY09 FY10 FY11 FY12

(Rs mn)

Regrigerants Bulk Speciality/CRAMS

2.0

4.0

6.0

8.0

10.0

12.0

14.0

16.0

Mar-09

May-09

Jul-09

Sep-09

Dec-09

Feb-10

Apr-10

Jun-10

Aug-10

Nov-10

Jan-11

Mar-11

May-11

Aug-11

Oct-11

Dec-11

Feb-12

Apr-12

EUR/CER

0

20

40

60

80

100

120

140

160

Oct-07

Jan-08

Apr-08

Jul-08

Oct-08

Dec-08

Mar-09

Jun-09

Sep-09

Dec-09

Mar-10

Jun-10

Sep-10

Dec-10

Mar-11

May-11

Aug-11

Nov-11

Feb-12

May-12

Navin NIFTY

0

500

1,000

1,500

2,000

2,500

0

50

100

150

200250

300

350

400

450

500

Sep-10

Oct-10

Nov-10

Dec-10

Jan-11

Mar-11

Apr-11

May-11

Jun-11

Jul-11

Aug-11

Oct-11

Nov-11

Dec-11

Jan-12

Feb-12

Mar-12

May-12

('000)(Rs)

Total Traded Quantity(RHS) CRISIL Fair Value Navin


6/14


4

MANAGEMENT MEETINGS KEY TAKEAWAYS

On current business environment

Raw material prices have corrected during Q4FY12. However, the management expects

long-term prices of fluorspar to remain high on account of restrictions on exports by the

Chinese government.

The demand environment for refrigerant gases is expected to remain strong, especially in

the domestic market, driven by growth in the air conditioner market. HCFC 22 is a cost-

effective product compared to its alternatives, so will remain in demand in developing

nations. Further, with uncertainty on the current CER framework, the global

manufacturing capacity of refrigerants will also reduce in the future, benefitting refrigerant

producers in other countries including India.

The specialty chemicals and CRAMS businesses will be key growth drivers going

forward. Navin plans to enhance their engagement with global and Indian pharma and

agrochemical companies. It may also add more capacity in the specialty chemicals

business during FY13.

On CER income

There is uncertainty on what the CER framework would be beyond 2013. It is difficult to

predict how it will shape up.

Costs incurred by Navin for incineration of harmful gases are not significant. Therefore,

compliance with emission regulations will not be expensive even in the absence of a

CER incentive.


7/14

MAKINGMARKETS

FUNCTIONBETTE

R


5

EARNINGS ESTIMATES REVISED DOWNWARDS

FY13E FY14E

Particulars Unit Old New % change New

Core revenues (Rs mn) 4,404 5,183 17.7% 5,880

CER income (Rs mn) 1,102 784 -28.9% -

Total revenue (Rs mn) 5,506 5,967 8.4% 5880

EBITDA (Rs mn) 1,437 1,167 -18.8% 652

EBITDA margin % 26.1 19.6 -653 bps 11.1%

PAT (Rs mn) 1,032 758 -26.5% 408

PAT margin % 18.7 12.7 -603 bps 6.9

EPS Rs 105.7 77.7 -26.5% 41.8

Source: CRISIL Research estimate

Reasons for changes in estimates

Line item FY13 FY14

Revenues We expect the core chemicals business to continue its

growth momentum in FY13 led primarily by domestic

demand. However, we expect growth in the chemicals

business to be 10% compared to 33% in FY12 on

account of flat growth in export realisations and slower

realisation growth in the domestic market.

Our earlier estimate of CER income factored in CER

realisation of EUR 7/ CER and sales volume of 2.4 mn

CERs. Since the traded CER prices are quoting at ~EUR

3.5-4.0 per CER, we have factored in realisation of EUR

4.0 per CER for Navin. We have also assumed sales

volume of 2.8 mn CERs as guided by the management.

Introducing FY14 estimates.

We expect the core chemicals business to register revenue

growth of 13% over FY13. Our projections factor in realisation

growth of ~7% and volume growth of 6%. Both domestic and

export markets are expected to grow.

We have not assumed any CER income due to the

uncertainty on the current framework of incentivising the cut

in emissions of HFC 23

EBITDA margins The chemicals business reported EBITDA margin of ~9%

in FY12, adjusted for non-recurring expenses. We believe

the current margin is sustainable and expect the

chemicals business to post EBITDA margin of 9.3% in

FY13.

Expect EBITDA margin to expand to 11.1% due to higher

realisations compared to FY13 and rise in revenue

contribution of specialty chemicals and CRAMS businesses,

which are expected to have higher margins.

PAT margins Lower on account of lower operating profitability as we

have factored in lower CER income.

Lower on account of absence of CER income. However, the

core chemicals business PAT margin is expected to expand

to 6.6%, 80 bps higher compared to FY13.


8/14


6

Valuation Grade: 3/5

We have used the SoTP method to value Navin. The core business operations are valued by

the price-to-earnings (P/E) method and the non-operating assets are valued on a case-to-

case basis. We have arrived at ex-dividend fair value of Rs 329 per share per share. Our cum-dividend fair value is Rs 396 per share. Based on the current market price (currently trading

cum-dividend) the assigned valuation grade is 3/5.

Valuation

Value per

share (Rs) Discount

Value per

share post

discount

(Rs) Rationale

Post tax CER income in

FY1347 25% 35 Expect Navin to sell 2.8 mn CERs at EUR 4.0 per CER

Investments in FD, FMP

and other liquid

instruments

80 25% 60

Includes investments in FDs, FMPs and liquid funds by Navin as of FY12. We

have lowered the 40% discount rate on cash applied earlier to 25% as we

believe that Navin is more likely to pay surplus funds as dividends. Further,

remaining cash worth Rs 32 per share has not been included in the fair value as

the same is expected to be utilised towards future capex plans and on-going

operations

Commercial real estate

property in Lower Parel55 55 Rental income from the property valued at 10% capitalisation rate

Commercial real estate

property in Nariman Point,

owned by Navins

subsidiary Sulakshana

Securities Ltd

42 42 Rental income from the property valued at 10% capitalisation rate

Preference shares in

Mafatlal Industries Ltd31 25% 23

Preference shares worth Rs 300 mn redeemed in FY12 and another Rs 300 mn

expected to be redeemed in FY13. We had earlier discounted the receivables

from this investment at 50%. However, due to an increased likelihood of

redemption in FY13, we have lowered the discount rate to 25%

Equity investment in

Mafatlal Denim Ltd16 50% 8

We remain conservative about the timing of cash flows to Navin, although MDL

has turned profitable

Value from non-core

assets263 223

Core business valuation 106 106 Based on P/E multiple of 4x the core business EPS of FY14

Fair value (ex-dividend) 369 329

Final and special dividend

for FY1267 67

Fair value (cum-

dividend)396


9/14

MAKINGMARKETS

FUNCTIONBETTE

R


7

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 NIFTY P/E movement

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

CRISIL IER reports released on Navin Fluorine International Ltd

Date Nature of report

Fundamental

grade Fair value

Valuation

grade

CMP

(on the date of report)

13-Sept-10 Initiating coverage* 2/5 Rs 300 3/5 Rs 292

25-Oct-10 Q2FY11 result update 2/5 Rs 300 3/5 Rs 296

16-Feb-11 Q3FY11 result update 2/5 Rs 265 3/5 Rs 261

23-May-11 Q4FY11 result update 2/5 Rs 304 3/5 Rs 279

01-Nov-11 Detailed report 3/5 Rs 329 2/5 Rs 391

05-Mar-12 Q3FY12 result update 3/5 Rs 329 3/5 Rs 354

24-May-12 Q4FY12 result update 3/5 Rs 396** 3/5 Rs 396

**Cum-dividend fair value is Rs 396. Ex-dividend fair value of Rs 329

0

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(Rs mn)

EV 1x 2x 3x 4x

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(Times)

1yr Fwd PE (x) Median PE

+1 std dev

-1 std dev


10/14


8

Annexure: Financials

Source: CRISIL Research

Income statement Balance Sheet(Rs mn) FY10 FY11 FY12# FY13E FY14E (Rs mn) FY10 FY11 FY12# FY13E FY14E

Operating income 4,318 4,315 7,246 5,967 5,880 Liabilities

EBITDA 1,464 1,213 2,505 1,167 652 Equity share capital 101 98 98 98 98

EBITDA margin 33.9% 28.1% 34.6% 19.6% 11.1% Reserves 2,878 3,287 4,679 5,154 5,477

Depreciation 114 138 188 204 227 Minorities - 0 63 63 64

EBIT 1,351 1,074 2,317 963 425 Net worth 2,979 3,384 4,840 5,315 5,639

Interest 25 31 36 44 40 Convertible debt - - - - -

Operating PBT 1,326 1,043 2,281 920 386 Other debt 114 491 946 796 796

Other income (22) 13 8 180 191 Total debt 114 491 946 796 796

Exceptional inc/(exp) 1 0 749 - - Deferred tax liability (net) 210 191 286 286 286

PBT 1,305 1,056 3,039 1,100 576 Total liabilities 3,303 4,066 6,072 6,398 6,721

Tax provision 480 344 886 363 190 Assets

Minority interest - - (21) (21) (21) Net fixed assets 1,664 1,837 2,265 2,161 2,307

PAT (Reported) 825 712 2,174 758 408 Capital WIP 278 364 364 364 364

Less: Exceptionals 1 0 749 - - Total fixed assets 1,942 2,201 2,629 2,525 2,671

Adjusted PAT 824 712 1,425 758 408 Investments 8 478 1,590 1,612 1,634

Current assets

Ratios Inventory 472 551 886 819 934

FY10 FY11 FY12# FY13E FY14E Sundry debtors 390 578 665 776 886Growth Loans and advances 884 1,069 394 324 319

Operating income (%) 2.6 (0.1) 67.9 (17.7) (1.4) Cash & bank balance 808 177 1,068 1,200 1,026

EBITDA (%) 42.8 (17.2) 106.6 (53.4) (44.2) Marketable securities - - - - -

Adj PAT (%) 44.6 (13.6) 100.1 (46.8) (46.3) Total current assets 2,554 2,376 3,013 3,120 3,165

Adj EPS (%) 44.6 (10.7) 100.1 (46.8) (46.3) Total current liabilities 1,359 1,137 1,569 1,269 1,159

Net current assets 1,194 1,238 1,444 1,851 2,006

Profitability Intangibles/Misc. expenditure 158 149 410 410 410

EBITDA margin (%) 33.9 28.1 34.6 19.6 11.1 Total assets 3,303 4,066 6,072 6,398 6,721

Adj PAT Margin (%) 19.1 16.5 19.7 12.7 6.9

RoE (%) 31.3 22.4 34.6 14.9 7.4 Cash flow

RoCE (%) 45.8 30.8 48.0 16.2 6.8 (Rs mn) FY10 FY11 FY12# FY13E FY14E

RoIC (%) 34.1 27.5 45.6 29.9 17.4 Pre-tax profit 1,304 1,056 2,290 1,100 576

Total tax paid (441) (363) (791) (363) (190)

Valuations Depreciation 114 138 188 204 227

Price-earnings (x) 4.9 5.4 2.7 5.1 9.5 Working capital changes 288 (666) 425 (275) (330)Price-book (x) 1.3 1.1 0.8 0.7 0.7 Net cash from operations 1,264 166 2,112 666 283

EV/EBITDA (x) 2.3 3.4 1.5 3.0 5.7 Cash from investments

EV/Sales (x) 0.8 1.0 0.5 0.6 0.6 Capital expenditure (142) (398) (616) (100) (373)

Div idend payout ratio (%) 20.1 24.3 33.7 32.2 18.0 Investments and others 71 (469) (1,112) (22) (22)

Dividend yield (%) 4.1 4.5 18.9 6.3 1.9 Net cash from investments (71) (867) (1,728) (122) (395)

Cash from financing

B/S ratios Equity raised/(repaid) 0 (136) 0 - -

Inventory days 65 70 68 68 70 Debt raised/(repaid) (413) 377 455 (150) -

Creditors days 159 113 59 60 60 Dividend (incl. tax) (165) (173) (854) (284) (85)

Debtor days 53 56 52 55 55 Others (incl extraordinaries) 42 2 906 22 22

Working capital days 45 61 36 31 51 Net cash from financing (536) 71 507 (411) (63)

Gross asset turnover (x) 1.7 1.6 2.4 1.8 1.6 Change in cash position 657 (630) 891 132 (175)

Net asset turnover (x) 2.6 2.5 3.5 2.7 2.6 Closing cash 808 177 1,068 1,200 1,026

Sales /operating assets ( x) 2.2 2.1 3.0 2.3 2.3

Current ratio (x) 1.9 2.1 1.9 2.5 2.7 Quarterly financialsDebt-equity (x) 0.0 0.1 0.2 0.1 0.1 (Rs mn) Q4FY11 Q1FY12 Q2FY12 Q3FY12 Q4FY12

Net debt/equity (x) (0.2) 0.1 (0.0) (0.1) (0.0) Operating income 1,711 1,949 1,920 1,599 1,566

Interest coverage 54.1 34.4 65.0 22.1 10.7 Change (q-o-q) 82% 14% -1% -17% -2%

EBITDA 620 896 878 511 207

Per share Change (q-o-q) 294% 45% -2% -42% -60%

FY10 FY11 FY12# FY13E FY14E EBITDA margin 36.2% 46.0% 45.7% 31.9% 13.2%

Adj EPS (Rs) 81.6 72.9 146.0 77.7 41.8 PAT 409 602 633 338 784

CEPS 92.9 87.1 165.2 98.6 65.0 Adj PAT 409 602 633 338 35

Book value 295.1 346.7 495.8 544.5 577.7 Change (q-o-q) 308% 47% 5% -47% -90%

Dividend (Rs) 16.4 17.7 75.0 25.0 7.5 Adj PAT margin 23.9% 30.9% 33.0% 21.1% 2.2%

Actual o/s shares (mn) 10.1 9.8 9.8 9.8 9.8 Adj EPS 41.9 61.7 64.9 34.6 3.6


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CRISIL Research Team

President

Mukesh Agarwal CRISIL Research +91 22 3342 3035 [email protected]

Analytical Contacts

Tarun Bhatia Senior Director, Capital Markets +91 22 3342 3226 [email protected]

Prasad Koparkar Senior Director, Industry & Customised Research +91 22 3342 3137 [email protected]

Binaifer Jehani Director, Customised Research +91 22 3342 4091 [email protected]

Manoj Mohta Director, Customised Research +91 22 3342 3554 [email protected]

Sudhir Nair Director, Customised Research +91 22 3342 3526 [email protected]

Mohit Modi Director, Equity Research +91 22 4254 2860 mohit.modi@crisil .com

Jiju Vidyadharan Director, Funds & Fixed Income Research +91 22 3342 8091 [email protected]

Ajay D'Souza Director, Industry Research +91 22 3342 3567 [email protected]

Ajay Srinivasan Director, Industry Research +91 22 3342 3530 [email protected]

Rahul Prithiani Director, Industry Research +91 22 3342 3574 [email protected]

Business Development

Siddharth Arora Director, Customised Research +91 22 3342 4133 siddharth.arora@crisi l.com

Vinaya Dongre Director, Industry & Customised Research +91 22 3342 8025 [email protected]

Sagar Sawarkar Associate Director, Equity Research +91 22 3342 8012 [email protected]

Deepak Mittal Associate Director, Funds & Fixed Income Research +91 22 3342 8031 deepak.mittal@cris il.com

Prosenjit Ghosh Associate Director, Industry & Customised Research +91 22 3342 8008 [email protected]

Business Development Equity Research

Ahmedabad / Mumbai

Vishal Shah Regional Manager, Business Development

Email : [email protected] I Phone : 9820598908

Bengaluru / Mumbai / Pune

Vivek Tandon Regional Manager, Business Development


Chennai / Hyderabad

Urmil Shah Regional Manager, Business Development


Delhi

Arjun Gopalkrishnan Regional Manager, Business Development


Kolkata

Priyanka Murarka Regional Manager, Business Development



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Our Capabilities

Making Markets Function Better

Economy and Industry Research

Largest team of economy and industry research analysts in India Coverage on 70 industries and 139 sub-sectors; provide growth forecasts, profitability analysis, emerging trends,

expected investments, industry structure and regulatory frameworks

90 per cent of Indias commercial banks use our industry research for credit decisions Special coverage on key growth sectors including real estate, infrastructure, logistics, and financial services Inputs to Indias leading corporates in market sizing, demand forecasting, and project feasibility

Published the first India-focused report on Ultra High Net-worth Individuals All opinions and forecasts reviewed by a highly qualified panel with over 200 years of cumulative experience Largest independent equity research house in India, focusing on small and mid-cap companies; coverage

exceeds 100 companies

Released company reports on all 1,401 companies listed and traded on the National Stock Exchange; a globalfirst for any stock exchange

First research house to release exchange-commissioned equity research reports in India

Funds and Fixed Income Research

Largest and most comprehensive database on Indias debt market, covering more than 14,000 securities Largest provider of fixed income valuations in India Value more than Rs.33 trillion (USD 650 billion) of Indian debt securities, comprising 85 per cent of outstanding

securities

Sole provider of fixed income and hybrid indices to mutual funds and insurance companies; we maintain 12standard indices and over 80 customised indices

Ranking of Indian mutual fund schemes covering 73 per cent of assets under management and Rs.5 trillion(USD100 billion) by value

Retained by Indias Employees Provident Fund Organisation, the worlds largest retirement scheme covering over 50 million individuals, for selecting fund managers and monitoring their performance

Equity and Company Research Largest independent equity research house in India, focusing on small and mid-cap companies; coverage

exceeds 100 companies

Released company reports on all 1,401 companies listed and traded on the National Stock Exchange; a globalfirst for any stock exchange

First research house to release exchange-commissioned equity research reports in India Assigned the first IPO grade in India


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CRISIL Research Ier Report Navin Fluorine 2011 Q4FY12

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