Sinindus 20120215 (Good)

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Building&Construction

PrefabricatedBuildings

Industrial

ElectricalEngineering

CustomMolding

Interiors

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2nd Feb,2011

B P EQUITIESSintex Industries Limited

Share Holding Pattern (%)

Sector Outlook Bullish

CMP (Rs) 96

Target Price (Rs) 122

BSE code 502742

NSE Symbol SINTEX

Bloomberg SINT IN

Reuters SINT.BO

Key Data

Nifty 5,416

52WeekH/L(Rs) 195/58.7

O/s Shares (mn) 272.99

Market Cap (Rs mn) 26,153

Average volume

3 months 71,47,890

6 months 46,09,633

1 year 30,74,823

Stock

Face Value (Rs) 1.00

Relative Price Chart

Research Analyst

Jinit Mehta

[email protected]

022-61596408

Company Description

The Sintex group is one of the leading providers of plastics and niche textile-related

products in India. With global footprints spanning 9 countries, Sintex has a strong presence in the

European, American, African, and Asian markets including countries like France, Germany and USA.In the textile division, the company manufactures high-value, yarn-dyed structured fabrics, corduroy

and items relating to home textiles. In the plastic division, the company manufactures the following:

storage solutions for water, oil and fuel; prefabricated structures, monolithic structures, industrial cus-

tom moulded products, consumer custom moulded products and interiors products.

Investment Rationale

Monolithic Business-Short term pain but long term gain

Sintexs monolithic business is witnessing a temporary slowdown due to government inefficiencies

regarding payment delays and inaction on passing of orders which has prompted the company to

moderate its execution of existing orders. However this will help the company to conserve its cash and

also reduce its working capital days as monolithic business is more working capital intensive than

capital intensive. We believe that Sintexs strong order book of ~Rs 30 bn which is to be executed

over the next two years and governments continued thrust on various low cost housing schemes forlow and middle income groups would provide this business strong growth momentum in the long run.

Robust growth in prefabrication business

The companys prefab business witnessed a decline in the last two years due to a slowdown in BT

shelter business (telecom). However we expect the company to achieve ~19% CAGR over FY11-

FY14E on the back of governments increased spending on social welfare programmes like National

Rural Health Mission and Sarva Shiksha Abhiyan which are the key growth drivers for this business.

Sintex enjoys high margins (~18-20%) in this business and we believe with utilizations expected to

reach optimum levels in FY13 the company would be able to sustain ~19% margins going forward.

Custom Mouldings to benefit from synergies due to foreign acquisit ions

The companys custom moulding business grew at 26% CAGR over FY08-FY11 as the use of com-

posites in place of metals grew substantially. The company has increased its geographical presenceand tapped new markets and clients via its overseas subsidiaries which has helped augment its reve-

nues and margins. We believe that as more processes are transferred to India and as more compos-

ites from India are supplied overseas synergies would be achieved which would help expand margins

going forward.

Valuation & Outlook

The company currently is facing pressure due to slowdown in its monolithic and custom moulding

business, high working capital days and issues regarding its FCCB repayment. However we believe

all these issues are short term in nature and the stock price has already factored in these issues. We

expect the companys revenues to grow at 9% CAGR on a conservative basis. At CMP the stock is

trading at 6.3x FY13E P/E and 5.2x FY13E EV/EBITDA. We initiate coverage on Sintex Industries Ltd

with a BUY rating and have arrived at target price of Rs 122 which implies ~27% upside from the

current levels. We have valued the stock at 8x FY13E EPS which is ~33% discount to its long termaverage P/E. (We had issued a pre-initiating coverage report on 19th J an 2012 when price was Rs 73

with a target price of Rs 95)

Diversified | Initiating Coverage 15th February 2012

Buy

BUY HOLD SELL

>15% -5% to 15%

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Sintex Industries Limited Initiating Coverage

Inst i t u t io na l Research BP Equ i t ies Pvt . L im i ted (www.bpwea l th .com) 15 /2 /2012 3

BP Equ i t ies repor ts a re a lso ava i lab le on Bloomberg [BPEP ]

Investment rationale

Monoli thic Business (~30% FY11 revenues) - Short term pain but long term gain

Savings in cost and time

Monolithic Construction is used in low cost mass housing solutions like slum rehabilitation, J anta hous-

ing and low & middle income group houses. The construction method involves filling the hollow plastic

frame work with concrete at the site. Under Monolithic, the time taken to cast an entire floor is ~7days

as compared to 20 days taken under the conventional brick and mortar method. Apart from saving

substantial time, cost under monolithic is also 8-10% less than the traditional method. These benefits

have encouraged various housing boards to implement monolithic construction for its housing projects

due to which 90% of Sintexs order book consists of government orders.

Higher EBITDA margins compared to peers

Sintex has pioneered the monolithic construction business in India and currently is the leader in this

business having an order book of Rs 30 bn and enjoys EBITDA margins higher than any of its com-

petitors in this space. The company enjoys ~18-20% margins compared to that of its competitors who

on average enjoy 10-12% margins primarily due to the fact that Sintex uses plastic formwork com-

pared to aluminium formwork used by its competitors like L&T, Shapoorji Pallonji and BE BIllimora.

Sintexs cost of manufacturing plastic formwork is lower as it manufactures the plastic in-house and is

able to recycle and use them again. Also as the company is an experienced player with superior tech-

nology, it is able to execute large scale projects, thus enabling it to enjoy higher margins on the back

of better economies of scale. Efficiencies comes in executing large order size rather than constructing

single buildings in this business. Average revenue per site for the company is Rs 750 mn now as com-

pared to Rs 350-500 mn earlier.

Working capital intensive

Monolithic construction is more working capital intensive than capital intensive in nature. For Rs 1,000

mn monolithic order, Rs 400-450 mn would be working capital requirement whereas only Rs 150 mn

would be the capital expenditure requirement due to which smaller players find it difficult to compete

with Sintex Industries which being an experienced and premier player has the expertise to execute

large working capital intensive orders.

Source: Company Presentation

MonolithicConstruction

Market Opputunity:

Rs 15,000 bn

Growth Drivers:

1) Higher spending onmass housing

2) Participation with privatesector

3) Huge shortage (>50mnhouses)

4) Decongestion of cities

5) Slum rehabilitation

6) Owning house than

renting (easy finance)

Competitive Advantage:

1) Fast implementation

2) Innovative and costcompetitive

3) Lean and Meanorganisation with leadtime advantages

Stategy:

1) Building executioncapabilities

2) Bidding for largerprojects

3) J oint developer model

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Delay tactics used by government hurting Monolithi c Business currently

The companys monolithic business is currently facing a slow down due to governments inactivity on

growth oriented projects. As mentioned earlier, 90% of this business order book consists of govern-

ment orders due to which any slowdown in governments activity directly affects Sintexs business.

Monolithic segment is currently facing headwinds due to delay in payments by the government, delay

in site clearances and deferring of orders.

Increase in the working capital cycle

The sluggish government activities has led to execution delays in Sintexs monolithic business. Being

a working capital intensive business, the average working capital days in this segment has remained

high due to the previously mentioned government delays faced by the company. This has prompted

the company to moderate its execution of orders to conserve more cash which would help the com-

pany improve its working cycle.

Long-term prospect looking good for monolith ic business

Although the monolithic business is facing a slow down currently, the long term potential for this busi-

ness is huge on the back of continued thrust in government spending on various social infrastructure

programmes. Programmes such as Indira Awas Yojana, J NNURM and Rajiv Awas Yojana focuses on

building low cost housing & slum rehabilitation which provides Sintex Industries with huge business

opportunities. Going forward, the government is expected to increase its spend on such programmes

through its 12th Five Year Plan (2012-13 to 2016-17).

Rs bn Indira AwasYojana JNNURM(BSUP) JNNURM(IHSDP) Rajiv Awas Yo-jana

FY 2006 28 3

FY 2007 26 10 5

FY 2008 40 15 5

FY 2009 54 19 6

FY 2010 89 23 11 2

FY 2011 100 29 12 13

FY 2012 100 13

Figure: Governments capex on social infrastructure p rogrammes

Source: www.indiabudget.nic.in, BP Equities Research

Figure: Monolithic Construction Order Book

Source: BP Equities Research

0

5,000

10,000

15,000

20,000

25,000

30,000

35,000

Q1FY11 Q2FY11 Q3FY11 Q4FY11 Q1FY12 Q2FY12 Q3FY12

Monolithic Order Book (Rs mn)

Govts spend on social infra-

structure programmes is ex-

pected to increase considerably

in 12th Five year plan (2012-13

to 2016-17)

Current order book is ~Rs 30 bn

and the company has guided to

a slowdown in execution of or-

ders to conserve cash and im-

prove working capital

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Monolithic Business: Revenue growth

The companys monolithic business has grew at 85.2% CAGR from FY08-FY11 to Rs 13,350 mn

(~30% of FY11 revenues) on the back of continuous spend by the government on various social infra-

structure programmes. However we expect the company to achieve 2.3% CAGR in its revenues over

FY11-FY14E due to considerable slowdown in its order book execution and delay in payments by the

government.

Monolithic Business: EBITDA marginsThis segment enjoys high EBITDA margins due to its superior technology and manufacturing capabili-

ties. However going forward we expect the margins to decline as competition in this business is ex-

pected to increase due to low entry barriers in this business due to which we believe the margins to

decrease by 400 bps over FY11 to FY14 to ~16%.

Figure: Monolithic Business Revenue Growth


115%

59%

86%

-10%

8% 10%

-20%

0%

20%

40%

60%

80%

100%

120%

0

2,500

5,000

7,500

10,000

12,500

15,000

FY08 FY09 FY10 FY11 FY12E FY13E FY14E

Monoli thic Revenues (Rs mn) Y-o-Y Growth

Figure: Monolithic Business EBITDA Margin


19.0% 18.5% 19.0%

20.0%

17.3% 17.0%16.0%

0.0%

5.0%

10.0%

15.0%

20.0%

25.0%

0

500

1,000

1,500

2,000

2,500

3,000


EBITDA (Rs mn) EBITDA Marg in

We expect the company to postnegative growth of 10% in FY12

due to slowdown in order exe-

cution and delay in payments.

We expect decrease in the

EBITDA margins to 16-17% from

19-20% earlier going fo rward

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Robust g rowth in prefabrication business (~14.5% FY11 revenues)

Considerable saving in execution time

Prefabs are used worldwide and are common in housing and construction and have been revolutioniz-

ing construction methods in India. They can be used for building temporary as well as permanentresidences, setting up of schools, dispensaries, orphanages, police stations, defense shelters and

telecom BT shelters. Prefabs are structures which are made out of plastic, steel and concrete in the

factory and are than transported to the sites where they are assembled. Prefab construction results in

10-15% cost saving and 60-70% saving in execution time compared to conventional construction

methods. Typically a prefabrication structure can be put together in ~10 days starting from the fabrica-

tion process in the manufacturing plant to completion of the installation work at the site.

Large geographical presence

The companys prefab business was not initially accepted by the state governments and the company

was finding it difficult to get approvals for its projects. However after the Bhuj earthquake in 2001, Sin-

tex built lot of shelters and clinics within a short period of time which helped the companys product

and technology being accepted due to which the company started receiving new orders. Currently thecompany has approvals from 17 state governments and covers~65 to 70% of Indias geography due to

its six state-of-the-art manufacturing plants across India with each plant catering to ~1,500 km radius

geographical area. The company may set up a manufacturing plant in the North-Eastern part of India

considering the robust demand being witnessed for prefab from that region. Currently ~70% of the

companys prefab business comes from the government and the balance 30% from private players

with private players generally placing orders to construct cold-storage chains, agricultural sheds and

bunk houses.

Maintaining high EBITDA margins

The company has been performing well in this segment and has been delivering healthy EBITDA mar-

gins of 18-20% consistently over the past few years. The key to deliver healthy margins in this busi-

ness is the speedy execution of the project as the construction site is usually located in far off remoteregions. Logistics, raw materials and kit making constitute 25%, 25-30% and 25% of total cost respec-

tively. Since logistics cost forms a major part of the total cost it is important for the team to take all the

necessary tools & equipment and components required for installation before leaving the factory. If

any necessary component is left behind, it becomes unviable for the team to return to the factory to

get that component considering the high logistics cost involved due to which the company assures that

all required items are taken along with the team before leaving the factory.

Existing Prefab Plant Location Approved States

Baddi (Himachal Pradesh)

Delhi

PunjabHaryana

Himachal Pradesh

Uttar Pradesh

Kalol (Gujarat)Gujarat

Rajasthan

Kolkata (West Bengal)

West Bengal

Assam

Bihar

Nagpur (Maharashtra)

Maharashtra

Madhya Pradesh

Chhattisgarh

Salem (Tamil Nadu) Tamil NaduKerala

Dadri (Uttar Pradesh)Uttar Pradesh

Bihar

Figure: Companys prefab plants location and serving of states

Source: Company, BP Equities Research

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Robust growth

Companys prefab business has grown 14.6% over FY10 to FY11 even though there has been a slow-

down in the BT shelter business. The key demand drivers for the companys prefab business is gov-

ernments spend on social infrastructure programmes like Sarva Shiksha Abihyan and National Rural

Health Mission which has provided Sintex ample business opportunities in the education, healthcare

and sanitation space. We expect the government to increase its spend on such social infrastructure

programmes in its 12th Five Year Plan (2012-13 to 2016-17) on the back of which we expect Sintex to

post robust growth of 20% CAGR over FY12E-FY14E. Also Sintexs prefab division is currently better

positioned than its monolithic business which is facing delays in order approval and release of pay-

ments. The prefab business has a smaller ticket size of ~Rs 1 mn compared to monolithics average

ticket size of ~Rs 75mn due to which the likelihood of payment delay in the prefab business is signifi-

cantly less. The average execution time of project is also considerably less in prefab compared to

monolithic business (~10 days in prefab) due to which postponement/cancellation of order is less in

the prefab business.

Figure: Governments capex on social infrastructure p rogrammes

Source: www.indiabudget.nic.in, BP Equities Research

72

100107

131 131

150

210

66

82100

121

141154

178

0

50

100

150

200

250

FY 2006 FY 2007 FY 2008 FY 2009 FY 2010 FY 2011 FY 2012

Sarva Shiksha Abhiyan (Rs bn) National Rural Health Mission (Rs bn)


PrefabBusiness

Market Opputunity:Rs 100 bn

Growth Drivers:

1) Increasing Govt.spending on rural infra,education, health,sanitation, orphanages,police stations, armybarracks, agri-sheds, coldchain solution and workershelters

2) Higher infra spending willspur demand


1) Product portfolio

2) Presence acrosscountry gives leadinglogistics edge

3) Lead time advantage

4) Multiple solutions,multiple market segments

Stategy:

1) New products inwarehousing andagrisheds

2) Expansion in remainingstates

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Figure: Prefab Business Revenue Growth


1.2%

-15.7%

14.6%15.5%

20.0% 20.0%

-20%

-10%

0%

10%

20%

30%

0

2,000

4,000

6,000

8,000

10,000

12,000


Prefab Revenues (Rs mn) Y-o-Y Growth

Figure: Prefab Business EBITDA Margin


18.7%19.7%

16.6%

20.5%19.0%

19.0%

18.0%

0%

5%

10%

15%

20%

25%

0

500

1,000

1,500

2,000

2,500


EBITDA (Rs mn) EBITDA Margin

Companys prefab business is

expected to show robust

growth going forward and we

believe it would grow at 18.5%

CAGR over FY11-FY14E

The prefab business, we be-

lieve, might face some pressure

on its margins due to which we

expect its margins to decrease

by 250 bps by FY14E.

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Custom Mouldings to benefit from synergies (~41% FY11 revenues)

Long term replacement for metals

The custom moulding business manufactures composites which is potentially seen as a long term

replacement for metals. Composites are made by combining two or more different materials to manu-

facture a new material, for e.g. a mixture of polymer and high end epoxy can produce fiberglass which

is an immensely versatile material combining its light weight with an inherent strength to provide a

weather resistant finish. Fiberglass finds its applications in various products and industries

such as aviation industry, building of boats and spots car bodies, telecommunications industry,

storage tanks etc.

Key benefits o f composi tes

Lightweight yet strong

Higher strength

Leading p layer in India

The raw materials cost of composites are 15-20% costlier than metal prices. However costs

are driven down as application and volumes grow since 60-65% of total cost is raw material

cost whereas the rest is employee cost. Sintex is a leading player in the custom moulding seg-

ment in India with manufacturing plants across the country and having presence in various

segments.

Market Segments

Automotive

Electrical

Aerospace & Defense

Medical

Mass Transit

Margin expansion due to synergies

The company, in the past few years has grown inorganically having made acquisitions in India

and abroad to move up the product value chain and gain access to new clients and superior

technology. It acquired six companies in OECD countries thereby having presence in four con-

tinents and eight countries with low cost manufacturing bases. The acquisitions would help the

company expand its margins due to deployment of superior technology at India and outsourc-

ing by overseas subsidiaries for low cost manufacturing in India.

Industrial Trucks & Tractors

Construction

Recreation

Wind Energy

Doormatics & House hold products

Corrosion and chemical resistance

Elastic and non conducive

Figure: Custom Moulding Business-Acquisition History


Company Name Country Acquisition Date Custom Moulding Business Acquisition Price FY 11 Revenues

Wausaukee Composites USA J un-07Auto & medical imaging, Mass

transit, etc.USD 20.5 mn INR 1,700 mn

Nief Plastics S.A. (further acquired AIPand Simop/Simco)

France Jun-07Automotive, electrical, aeronautics

and defence sectorEUR 40.2 mn INR 9,470 mn

Bright Autoplast Pvt Ltd India Sep-07 Automotive sector INR 1489.0 mn INR 2,730 mn

Nero Plastic USA Dec-07Structural plastic and composite

componentsUSD 4.7 mn

Merged with Wausau-kee

Geiger Technik Germany J ul-08Plastic products for the automotive

industryUSD 10 mn Written Off

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Main Processes Secondary Processes

Rotational molding (multi layer, Insert molding) Tooling

PVC extrusion Design and development

Injection molding of thermoplastics (gas assisted, In mould inserts) J igs and Fixtures

Blow molding Insitu Foaming

Singe/twin sheet thermoforming PU painting and others

Custom molding and custom extrusion Powder coating

Injection molding of thermosets Silk screening

Sheet molding compounds Pad printing

Pultrusion Cosmetic improvement (Decorations)

Resin transfer molding Laser etchingChop-hoop-winding Ultrasonic welding

Light RTM and vacuum bag infusion molding Plastic and metal welding

Liquid composite molding Plastic fabrication

Open mold (Hand Lay-up) Metal fabrication

Reaction injection molding Sheet metal cutting, bending, sheering

Soft-touch Press breaking

Continuous/Discontinuous panels Roll forming

Robotic water jet cutting and bonding

Assembly and sub-component assemblies

Figure: Custom Mouldings Main and Secondary Processes


CustomMoulding

Market Opputunity:

~$ 15 bn Global

Growth Drivers:

1) Higher usage ofcomposites as replacementto metals

2) New verticals

3) Weight reduction for fuelefficciency

4) Light weight yet strong

5) Resilent weather ability

6) Chemically inert and highelectrical inulation


1) Technology

2) Penetration in OEMs

3) Fortune 500 customers

4) Foot print across 4

continents5) Low cost manufacturingbases

Stategy:

1) Collaboration amongsubsidiaries

2) Increasing client mining

3) Acquired tecnology and

clients through acquisition4) Labor arbitrage andsynergy drives

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Domestic Custom Moulding Business (~9% FY11 revenues)

Sintexs domestic custom moulding business caters to the electrical equipment, automotive and

household space and manufactures tamper-proof SMC Meter Boxes, cross arms for power transmis-

sion grids, polymeric insulators etc. This segment has grown at 7.4% CAGR over FY09-FY11 and weexpect the segment to grow at~12% CAGR over FY11-FY14E on the back of growing demand from

the electrical and automotive industry. We believe that the various government initiatives undertaken

to provide electricity to rural India and continued impressive growth in the automobile sector would

drive the demand for the companys domestic composites products going forward. Sintex has been

able to achieve margins in the range of 22-24% in the past few years in this segment and we expect

the company to maintain margins at 21-23% going forward.

2.0%

13.0%

15.0%

10.0% 10.0%

0%

3%

6%

9%

12%

15%

18%

0

1,000

2,000

3,000

4,000

5,000

6,000

FY09 FY10 FY11 FY12E FY13E FY14E

Revenues (Rs mn) Revenue Growth

Figure: Domestic Custom Moulding Business Revenue Growth


22.0%

23.0%

24.3%

21.0%

22.5%

23.5%

18.0%

19.5%

21.0%

22.5%

24.0%

25.5%

0

250

500

750

1,000

1,250

1,500



Figure: Domestic Custom Moulding Business EBITDA Margins


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Acquis it ion of Bright Brothers (~6.2% FY11 revenues)

Sintex acquired Bright Brothers in September 2007 for Rs 1,489 mn to enter the domestic automotive

segment. The company today is a Full Solution Supplier and has been offering innovative solutions to

its customers for the past 34 years. The company employs range of plastic technologies like Injectionmoulding with gas assisted PEP & Sequential flow technology , Blow moulding , Vacuum forming , PU

foaming , Vibration welding , Ultrasonic welding , PU painting and sub-assemblies. The company has

six manufacturing plants across India and manufactures products like Instrument panels, Dash boards,

Pillar Trims, Radiator Grills, Air vents, Grab handles and under the hood components. Bright Brothers

has grown at ~46.6% CAGR over FY09-FY11 to post revenues of Rs 2,730 mn in FY11 and we have

estimated a very conservative 12.5% CAGR over FY11-FY14E as we expect a slowdown in the In-

dian automobile sector. We expect the EBITDA margins to remain in the 14-16% range going forward.

Sintex believed that it would benefit from synergies between Nief (acquired in J une 2007) and Bright

and would cater to clients like Maruti, Hyundai, Tata Motors, M&M, General Motors, Ashok Leyland,

Nissan, Force Motors, TVS, Honda etc.

50.4%

42.9%

10.0%12.5%

15.0%

0%

10%

20%

30%

40%

50%

60%

0

800

1,600

2,400

3,200

4,000


Bright 's Revenues (Rs mn) Revenue Grow th

Figure: Bright Brothers Revenue Growth



16.0%

14.0%

16.1%

14.0%

14.5%

15.0%

12.0%

13.0%

14.0%

15.0%

16.0%

17.0%

0

150

300

450

600

750



Figure: Bright Brothers EBITDA Margins

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Acquis it ion of Nief Plast ics (~22% FY11 revenues)

Sintex acquired Nief Plastics in J une 2007 for EUR 34.77 mn. Nief currently has 9 plants in France, 2

in Eastern Europe (Hungary and Slovakia) and 2 in Northern Africa (Tunisia and Morocco) and deliver

customers in the fields of automotive, electrical/electromechanical industry, aeronautics/defense,household appliances, medical, construction, sport and leisure etc with a strong client base like Schei-

der, Faurecia, Siemens, Legrand, ABB, Areva and Alstom. Nief has provided Sintex access to superior

manufacturing technology and strong client base and has helped the company gain a foothold in the

European plastic components market due to its competitive pricing and technical qualifications. Sintex

has also crated a strong presence in the automotive and electrical composite market due to the syner-

gies achieved between Nief Plastics and Bright Autoplast. Niefs revenues has been growing at 16.4%

CAGR over FY09-FY11 and we expect the company to grow at 9.5% CAGR over FY11-FY14E. Nief

has been achieving ~12% EBITDA margins in this business and we expect the margins to remain in

the range of 10-11% going forward.

Figure: Nief Plastics Revenue Growth

10.1%

23.2%

8.5%10.0% 10.0%

0%

5%

10%

15%

20%

25%

0

2,000

4,000

6,000

8,000

10,000

12,000

14,000


Nief Revenues (Rs mn) Revenue Growth


11.5%

12.0% 12.0%

10.0%

10.5%

11.0%

9.0%

9.5%

10.0%

10.5%

11.0%

11.5%

12.0%

12.5%

0

250

500

750

1,000

1,250

1,500



Figure: Nief Plastic s EBITDA Margins


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Acquis it ion of Wausaukee Composites Inc (~3.8% FY11 revenues)

Sintex acquired Wausaukee Composites Inc in J une 2007 for USD 20.5 mn. The acquisition helped

Sintex to enter the US composite market and gain access to a number of Fortune 500 companies.

Wausaukee is based in Wisconsin (USA) and is a leading manufacturer of highly-engineered compos-ite components for Original Equipment Manufacturer (OEM) customers in the Construction Equipment,

Agricultural Equipment, Mass Transportation, Wind Energy, Medical and Security Imaging, Commer-

cial Site Furnishing, Therapeutic Systems, Corrosion-Resistant Materials Handling and recreation In-

dustries. The company has total four manufacturing plants located in the Midwestern United States

and provides composite plastic and fiberglass components to more than 35 OEM customers globally,

producing more than 100,000 units annually. Wausaukee acquired Nero P lastics in December 2007

for USD 4.7 mn and generated revenues of Rs 603.4 mn in CY10. Nero Plastics is a custom moulder

of low and medium volume and structural plastic and composite components. Wausaukees revenues

had a negative CAGR of ~7.5% over FY09-FY11 and is expected to grow at 6.6% CAGR over FY11-

FY14E with EBITDA margins in the range of 9-10%.

Figure: Wausaukees Revenue Growth


-26.0%

15.7%

0.0%

10.0% 10.0%

-30%

-20%

-10%

0%

10%

20%

0

500

1,000

1,500

2,000

2,500


Wausaukee's Revenues (Rs mn) Revenue Growth

Figure: Wausaukees EBITDA Margins

7.0%

10.0% 10.1%

9.0%9.5%

10.0%

0.0%

2.0%

4.0%

6.0%

8.0%

10.0%

12.0%

0

50

100

150

200

250


EBITDA (Rs mn) EBITDA Marg in


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Figure: Custom Moulding Business-Segmental break-up of revenues and EBITDA


Figure: Custom Mould ing FY11 Revenue Mix


42.1%

6.2%15.8%

35.0%

Nief Plastics Wausau kee Com po sit es

Bright Autoplas t L td Domest ic Custom Moulding

52.6%

8.5%

16.0%

22.9%

Nief Plast ics Wau sau kee Co mp osit es

Bright Autoplast L td Domest ic Custom Moulding


Figure: Custom Mould ing FY11 EBITDA Mix

Rs mn FY09 FY10 FY11 FY12E FY13E FY14ENief Plastics

Revenue 7,183 7,906 9,740 10,568 11,625 12,787

Revenue Growth (%) 105.8% 10.1% 23.2% 8.5% 10.0% 10.0%

EBITDA 826 949 1,169 1,057 1,221 1,407

EBITDA Margin (%) 11.5% 12.0% 12.0% 10.0% 10.5% 11.0%

Wausaukee Compos ites

Revenue 1,987 1,469 1,700 1,700 1,870 2,057

Revenue Growth (%) 94.8% -26.0% 15.7% 0.0% 10.0% 10.0%

EBITDA 139 147 172 153 178 206

EBITDA Margin (%) 7.0% 10.0% 10.1% 9.0% 9.5% 10.0%

Bright Autoplast Ltd

Revenue 1,270 1,910 2,730 3,003 3,378 3,885

Revenue Growth (%) 217.5% 50.4% 42.9% 10.0% 12.5% 15.0%

EBITDA 203 267 440 420 490 583

EBITDA Margin (%) 16.0% 14.0% 16.1% 14.0% 14.5% 15.0%

Domestic Custom Moulding

Revenue 3,470 3,540 4,000 4,600 5,060 5,566

Revenue Growth (%) -15.8% 2.0% 13.0% 15.0% 10.0% 10.0%

EBITDA 763 814 972 966 1,139 1,308

EBITDA Margin (%) 22.0% 23.0% 24.3% 21.0% 22.5% 23.5%

Total Custom Moulding

Revenue 13,910 14,825 18,170 19,871 21,933 24,295

Revenue Growth (%) 54.0% 6.6% 22.6% 9.4% 10.4% 10.8%

EBITDA 1,932 2,177 2,752 2,596 3,027 3,503

EBITDA Margin (%) 13.9% 14.7% 15.1% 13.1% 13.8% 14.4%

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Textile Business (~9.9% FY11 revenues)

Sintexs textile division is a profitable and high-margin segment operating under the brand name of

BVM. The division is the largest producer of corduroy and structured fabric in India and specializes in

distinctive products catering to the niche upper segment of fashion industry. Sintex operates a state-of-the-art composite mill at Kalol in Gujarat and it is the only organized corduroy mill in India which is

into continuous fabric processing. The company manufactures unique fabrics with new designs (nearly

50,000 per annum) and finishes which cannot be duplicated and has the capability to deliver designs

with variety of weaving including Dobby, J acquard and double beam etc. Sintex has alliances with

various European design houses and a UK bases textile marketing company which helps the company

gain traction in its business. The company provides fabrics to reputed brands like Arrow and Van

Heusen and indirectly sells fabrics to global retail majors like Armani, Hugo Boss, Diesel, Burberry,

DKNY, S.Oliver, Zara, Mexx, Meggimo Dotti, Banana Republic etc. The company focuses on high-end

structured dyed yarn fabrics considering its niche market positioning and provides fibre to fabric facili-

ties. The textile division can be segregated into 1) High end mens structured shirting fabrics and 2)

Yarn-dyed corduroy and ultima cotton yarn based corduroy. The textile divisions revenue has grown

at 9% CAGR over FY08-FY11 and we expect it to grow at 7% CAGR over FY11-FY14E. Sintexs tex-

tile business is a high margin business and we expect the company to achieve EBITDA margins in the

range of 22-23% going forward.

Storage tanks business (~4.5%vFY11 revenues)

Sintex has become synonymous with water storage tanks since the time it began to manufacture tanks

in 1975. The company manufactures both overhead and underground storage tanks and is the market

leader in this segment. In the initial years there was great demand for this product as customers pre-

ferred this over the traditional brick and mortar tanks and there were few competitors. Currently this

business contributes ~4.5% to the total business and enjoys EBITDA margins in the range of 11%.

The business has grown at 18.5% CAGR over FY08-FY11 and we expect it to grow at 12.3% CAGR

over FY11-FY14E with EBITDA margins in the range of 8-10%.

Figure: Textile Divisions Revenue & EBITDA Growth


-6.5%

27.0%

7.0% 7.0% 7.0%

29.0%

20.0% 24.0%

23.0% 22.5%22.0%

-10%

0%

10%

20%

30%

40%

0

1,000

2,000

3,000

4,000

5,000

6,000


Textile Revenues (Rs mn) EBITDA (Rs mn)

Reven ue Grow th EBITDA Marg in

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Financial Analysis

Sintexs Revenue Growth

The companys net sales has grown at ~25% CAGR over FY08-FY11 to Rs 44,344 mn on the back of

85.2% CAGR in monolithic business and 26.2% CAGR in custom moulding business during the same

period. We expect the company to grow at 9% CAGR over FY11-FY14E on the back of 18.5% CAGR

in prefab business and 10.2% CAGR in custom moulding business. We believe monolithic business to

witness a considerable slowdown and expect its revenue contribution to fall from 30% in FY11 to 25%

in FY14 on the back of muted revenue growth of 2.3% CAGR over FY11-FY14E.

Sintexs EBITDA Margins

We expect the companys EBITDA margin to decline to 15% by FY14 from 18.2% in FY11 due to de-

clining trend in margins of monolithic and prefab business. The companys net profit margins are also

expected to show a sharp decline in FY12 to 6.4%. However we believe it to improve in FY13 and

FY14 on account of lower interest outgo and achieve 8% and 9.6% respectively.

36.5%

5.9%

35.1%

4.6%

10.2%11.8%

0.00%

10.00%

20.00%

30.00%

40.00%

-

10,000

20,000

30,000

40,000

50,000

60,000


Revenues (Rs m n) Grow th %

Figure: Companys Consolidated Revenue Growth


17.7% 16.6% 16.2%18.2%

16.1%15.5%

15.0%

10.0%10.4%

9.9% 10.3%

6.4%

8.0%9.6%

0.0%

4.0%

8.0%

12.0%

16.0%

20.0%

-

1,500

3,000

4,500

6,000

7,500

9,000


EB ITDA (Rs m n) PA T (Rs m n) EB ITDA Marg in (%) NPM (%)

Figure: Companys Consolidated EBITDA and Profit Margins


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Sintexs FCCB analysis

Sintex had raised USD 225 mn of FCCBs in FY08 to finance its overseas acquisitions. The conversion

price is set at Rs 246.5 and looking at the current market price it seems highly improbable that the

FCCBs would be converted due to which the company would have to redeem the FCCBs. The com-pany has to redeem USD 290 mn of FCCBs including the premium payable. It has USD 110 mn of

FCCBs lying unutilized in an escrow account outside India and the balance the company is going to

raise via ECB of USD 110 mn and raise USD 70mn from its subsidiaries and the holding company to

redeem its FCCBs. The companys RoCE would improve after redemption of its FCCBs as there

would be reduction in capital employed (denominator) due to which we believe companys RoCE to

increase from 7.3% in FY12E to 9.1% in FY13E. We believe the company would generate enough free

cash flow in FY13E to redeem its FCCBs comfortably.

20.9%19.9%

17.9%

21.1%

11.8%

14.2%16.4%

11.2%10.0%

8.7%10.5%

7.3%9.1%

12.1%

0.0%

5.0%

10.0%

15.0%

20.0%

25.0%


Ro E (%) Ro CE (%)

Figure: Companys Consolidated RoE and RoCE


(7,708)

(5,802)(4,484)

433

(494)

3,7344,729

(8,000)

(5,000)

(2,000)

1,000

4,000

7,000


Free Cash Flow (Rs mn)

Figure: Company s Free Cash Flow


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Figure: Assumptions-Revenue Growth and EBITDA Margins for Subsidiaries and Business Segments


Monolithics

Revenues (Rs mn) 2,100 4,520 7,190 13,350 12,015 12,976 14,274Growth % 115.2% 59.1% 85.7% -10.0% 8.0% 10.0%

EBITDA (Rs mn) 400 836 1,366 2,670 2,073 2,206 2,284

EBITDA Margin (%) 19.0% 18.5% 19.0% 20.0% 17.3% 17.0% 16.0%

% of Revenues 9.2% 15.0% 22.0% 30.1% 25.9% 25.2% 24.8%

Prefabs (excluding Zep Infratech)

Revenues (Rs mn) 5,340 5,580 4,300 5,294 6,115 7,337 8,805

Growth % 4.5% -22.9% 23.1% 15.5% 20.0% 20.0%

EBITDA (Rs mn) 1,080 1,116 774 1,088 1,162 1,394 1,585

EBITDA Margin (%) 20.2% 20.0% 18.0% 20.6% 19.0% 19.0% 18.0%

% of Revenues 23.5% 18.5% 13.1% 11.9% 13.2% 14.3% 15.3%

Zep Infratech

Revenues (Rs mn) 1,270 1,110 1,340 1,170 1,351 1,622 1,946

Growth % -12.6% 20.7% -12.7% 15.5% 20.0% 20.0%

EBITDA (Rs mn) 150 200 161 234 257 308 350

EBITDA Margin (%) 11.8% 18.0% 12.0% 20.0% 19.0% 19.0% 18.0%

% of Revenues 5.6% 3.7% 4.1% 2.6% 2.9% 3.2% 3.4%

Custom Moulding Domestic

Revenues (Rs mn) 4,120 3,470 3,540 4,000 4,600 5,060 5,566

Growth % -15.8% 2.0% 13.0% 15.0% 10.0% 10.0%

EBITDA (Rs mn) 1,090 763 814 972 966 1,139 1,308

EBITDA Margin (%) 26.5% 22.0% 23.0% 24.3% 21.0% 22.5% 23.5%

% of Revenues 18.1% 11.5% 10.8% 9.0% 9.9% 9.8% 9.7%

Nief Plastics

Revenues (Rs mn) 3,490 7,183 7,906 9,740 10,568 11,625 12,787

Growth % 105.8% 10.1% 23.2% 8.5% 10.0% 10.0%

EBITDA (Rs mn) 314 826 949 1,169 1,057 1,221 1,407

EBITDA Margin (%) 9.0% 11.5% 12.0% 12.0% 10.0% 10.5% 11.0%% of Revenues 15.3% 23.8% 24.2% 22.0% 22.8% 22.6% 22.2%

Wausaukee Compos ites

Revenues (Rs mn) 1,020 1,987 1,469 1,700 1,700 1,870 2,057

Growth % 94.8% -26.0% 15.7% 0.0% 10.0% 10.0%

EBITDA (Rs mn) 31 139 147 172 153 178 206

EBITDA Margin (%) 3.0% 7.0% 10.0% 10.1% 9.0% 9.5% 10.0%

% of Revenues 4.5% 6.6% 4.5% 3.8% 3.7% 3.6% 3.6%

Bright Autoplast

Revenues (Rs mn) 400 1,270 1,910 2,730 3,003 3,378 3,885

Growth % 217.5% 50.4% 42.9% 10.0% 12.5% 15.0%

EBITDA (Rs mn) 80 203 267 440 420 490 583

EBITDA Margin (%) 20.0% 16.0% 14.0% 16.1% 14.0% 14.5% 15.0%

% of Revenues 1.8% 4.2% 5.8% 6.2% 6.5% 6.6% 6.8%Tanks

Revenues (Rs mn) 1,560 1,410 1,620 1,980 2,317 2,548 2,803

Growth % -9.6% 14.9% 22.2% 17.0% 10.0% 10.0%

EBITDA (Rs mn) 140 85 162 257 232 229 224

EBITDA Margin (%) 9.0% 6.0% 10.0% 13.0% 10.0% 9.0% 8.0%

% of Revenues 6.9% 4.7% 5.0% 4.5% 5.0% 5.0% 4.9%

Textiles

Revenues (Rs mn) 3,440 3,680 3,440 4,370 4,676 5,003 5,353

Growth % 7.0% -6.5% 27.0% 7.0% 7.0% 7.0%

EBITDA (Rs mn) 963 1,067 688 1,049 1,075 1,126 1,178

EBITDA Margin (%) 28.0% 29.0% 20.0% 24.0% 23.0% 22.5% 22.0%

% of Revenues 15.1% 12.2% 10.5% 9.9% 10.1% 9.7% 9.3%

Total Consolidated Business

Revenues (Rs mn) 22,740 30,210 32,715 44,334 46,344 51,420 57,477

Growth % 32.8% 8.3% 35.5% 4.5% 11.0% 11.8%

EBITDA (Rs mn) 4,248 5,236 5,328 8,050 7,394 8,290 9,124

EBITDA Margin (%) 18.7% 17.3% 16.3% 18.2% 16.0% 16.1% 15.9%

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Company Overview

Sintex Industries Ltd is one of the leading providers of plastics and niche textile-related products in

India. Sintex has a global presence with its footprints spanning nine countries and having strong pres-

ence in the European, American, African and Asian markets.The company was established in 1931 and has pioneered innovative concepts in plastics and textile

sectors in India. The company has 36 manufacturing plants in India and abroad and manufacture vari-

ous products such as custom moulding products, prefabricated structures, monolithic construction,

FRP products, textile products and water storage tanks.

Management Team

Rahul A Patel - Managing Director - He holds a bachelors degree in communications and has

completed his MBA from USA. He has more than 24 years of experience in textile and plastics

Amit D Patel - Managing Director - He holds a bachelors degree in commerce and has com-

pleted his MT from USA. He has 18 years of experience in textiles, chemical and plastics.

S B Dangayach - Managing Director - He has a B.Sc (Hons) degree and has done his PGDBA

from IIM Ahmedabad. He has 3 decades of experience in plastics.

L.M. Rathod - Group CFO and CS - He is a graduate in commerce and law and has completed

his MBA and FCS. He has 2 decades of experience in corporate finance, company law and taxation.

Sunil Kanojia - Group President - He is a graduate in engineering and a MBA from IIM Ahmeda-

bad. He has 23 years of domestic and international experience across industries.


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Key Concerns

Government inaction affecting monolithic business

The companys monolithic business is facing execution slowdown and payment delays due to govern-

ment inaction in releasing payments and passing orders which is impacting Sintexs working capital as

monolithic business is a working capital intensive business. Further any slowdown in government ini-

tiatives on its social infrastructure spending would hurt the company as 90% of its monolithic order

book consists of government orders.

Slowdown in US and Europe economy

Sintexs overseas subsidiaries may face pressures on its revenue and margin front on the back of con-

tinuing slowdown in the global economy especially in the Euro zone.

Slowdown in automotive segmentThere has been a considerable hike in interest rates in India which has caused a slowdown in the

automobile sector in India during FY12 along with other factors. Sintexs domestic custom moulding

business is driven by the automobile segment (Bright Autoplast Ltd) and any further interest rate hikes

would hurt Sintexs custom moulding business.

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Valuation

Sintex Industries Ltds revenues grew at ~25% CAGR over FY08-FY11and we have in our estimates

taken a very conservative revenue growth of 9% CAGR over FY11-FY14E. However we believe that

the current market price has already factored in the slowdown in business, concerns over FCCB re-

payment and issues regarding the power venture. We expect the company to generate considerable

free positive cash flow in FY13E to be able to redeem its FCCB comfortably which will also improve its

D/E ratio to 0.3 by FY14. At CMP the stock is trading at 6.3x FY13E P/E and 5.2x FY13E EV/EBITDA.

We initiate coverage on Sintex Industries Ltd with a BUY rating and have arrived at target price of Rs

122 which implies ~27% upside from the current levels. We have valued the stock at 8x FY13E EPS

which is ~33% discount to its long term average P/E.

Peer Comparison

Figure: Peer Comparison

Source: Bloomberg Estimates, BP Equities Research

0

50

100

150

200

250

300

350

400

450

Apr-07

Jun-07

Aug-07

Oct-07

Dec-07

Feb-08

Apr-08

Jun-08

Aug-08

Oct-08

Dec-08

Feb-09

Apr-09

Jun-09

Aug-09

Oct-09

Dec-09

Feb-10

Apr-10

Jun-10

Aug-10

Oct-10

Dec-10

Feb-11

Apr-11

Jun-11

Aug-11

Oct-11

Dec-11

Feb-12

Apr-12

Sintex Ind Ltd 5.0 X 10.0 X 15.0 X 20.0 X 25.0 X

Figure: 1 year forward P/E Band

Source: C.Line, BP Equities Research

Mcap (Rs bn)P/E (x) EV/EBITDA (x) RoE EBITDA Margins

FY12E FY13E FY12E FY13E FY12E FY13E FY12E FY13E

Sin tex Ind Ltd 26.0 8.6 6.3 6.1 5.2 11.8% 14.2% 16.1% 15.5%

IVRCL Ltd 15.5 23.6 14.5 7.9 6.8 1.1% 1.4% 11.2% 11.5%Nagarjuna Construction 15.6 13.5 10.3 9.6 8.5 3.7% 4.7% 10.2% 10.4%

L&T 822.3 17.1 15.2 12.0 10.5 18.3% 17.7% 13.9% 13.8%

Const ruc tion Average 18.0 13.3 9.8 8.6 7.7% 7.9% 11.8% 11.9%

Supreme Ind 24.8 12.1 9.5 7.5 6.0 32.9% 33.4% 14.0% 14.8%

Time Technoplast 10.0 8.8 6.9 5.8 4.8 15.1% 16.9% 17.6% 17.7%

Plast ics Average 10.5 8.2 6.7 5.4 0.2 0.3 0.2 0.2

Motherson Sumi 67.8 19.0 12.8 9.2 6.7 19.2% 25.1% 8.6% 9.2%

Sona Koyo Steering 2.8 7.9 5.1 4.0 3.3 16.4% 23.4% 12.0% 12.7%

Auto Anci llaries Average 13.4 8.9 6.6 5.0 17.8% 24.3% 10.3% 10.9%

Raymond 22.9 11.7 10.2 6.5 5.8 14.4% 14.8% 15.2% 15.4%

Arvind Mills 26.1 9.2 7.4 7.3 7.0 24.0% 15.0% 15.2% 14.1%

S Kumar Nationwide 11.6 2.7 2.2 4.1 3.4 14.4% 16.0% 19.8% 20.6%

Textiles Average 7.9 6.6 6.0 5.4 17.6% 15.3% 16.7% 16.7%

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Income Statement Balance Sheet



YE March (Rs mn) FY10 FY11 FY12E FY13E FY14E

Net Sales 32,816 44,752 46,809 51,420 57,477

Y-o-Y Growth (%) 7% 36% 5% 10% 12%Other Operating Income 375 86 102 257 287

Total Revenues 33,192 44,837 46,910 51,677 57,764

Less:

Operating Expenses 27,811 36,683 39,347 43,653 49,104

EBITDA 5,380 8,155 7,563 8,024 8,660

Y-o-Y Growth (%) 3% 52% -7% 6% 8%

Less: Depreciation 1,445 1,491 1,793 1,832 1,890

EBIT 3,936 6,664 5,771 6,191 6,770

Less: Interest Paid 731 1,089 1,534 1,080 752

Add: Non Operating Income 878 518 509 1,034 1,155

Profit Before Tax 4,083 6,092 4,746 6,145 7,173

Less: Taxes 772 1,508 1,132 1,413 1,650

Prof it After Tax 3,311 4,584 3,614 4,732 5,524Adjusted Prof it Af ter Tax 3,290 4,600 3,468 4,579 5,524

Y-o-Y Growth (%) 40% 40% -25% 32% 21%

Adjusted Di luted EPS 12.14 16.97 12.80 16.90 20.38

Y-o-Y Growth (%) 1.2% 40% -25% 32% 21%


Liabilities:

Equity Capital 271 271 271 271 271Reserves & Surplus 19,198 23,745 26,658 30,673 35,983

Net Worth 19,469 24,016 26,929 30,944 36,255

Minority Interest 190 0 0 0 0

Total Loans 26,303 27,738 28,988 16,610 11,570

Deferred Tax Liability 2,050 2,495 2,495 2,495 2,495

Capital Employed 48,012 54,248 58,411 50,048 50,319

Assets:

Gross Block 25,581 33,276 36,976 38,176 39,376

Less: Depreciation 7,746 9,156 10,931 12,763 14,653

Net Block 17,834 24,120 26,045 25,413 24,723

Capital WIP 1,716 1,363 1,363 600 600

Investments 2,222 3,216 3,775 3,775 3,775

Goodwill 2,665 2,190 2,190 2,190 2,190Deferred Tax Assets 357 438 438 438 438

Current Assets:

Inventories 3,411 3,770 4,057 4,664 5,112

Sundry Debtors 10,121 14,229 15,617 16,905 18,109

Cash & Bank Balance 9,295 9,861 9,233 768 677

Loans & advances 8,157 5,147 6,952 7,713 8,621

Total Current Assets 30,983 33,007 35,859 30,051 32,520

Less: Current Liabilities & Provi-sions:

Sundry Creditors 3,947 6,417 7,027 7,982 9,225

Provisions 3,317 3,420 3,454 3,496 3,548

Total Current Liabilities & Provi-sions

8,015 10,644 11,259 12,418 13,926

Capital Applied 48,012 54,248 58,411 50,048 50,319

Free Cash Flow Analysis



EBITA 3,936 6,664 5,771 6,191 6,770

Less: Adjusted Taxes 744 1,650 1,413 1,425 1,557

NOPLAT 3,192 5,014 4,358 4,766 5,213

Plus: Depreciation 1,445 1,491 1,793 1,832 1,890

Gross Cash flow 4,636 6,505 6,151 6,599 7,103

Less: Increase in Working Capital 7,504 (959) 2,820 1,916 1,291

Operating Cash flow (2,867) 7,464 3,331 4,683 5,812

Less: Net Capex 1,197 7,423 3,718 437 1,200Less: Increase in Net Other Assets 269 (688) 77 (88) (117)

FCF From Operation (4,333) 729 (463) 4,334 4,729

Less: Inc./(Dec.) in Investment 130 312 (559) 0 0

FCF after Investment (4,463) 417 96 4,334 4,729

Plus: Gain/(loss) on Exceptional Items 0 0 (611) (600) 0

Prior Period and Minority Interest(Adjustments)

(21) 16 21 0 0

Total FCF (4,484) 433 (494) 3,734 4,729

Key Ratios



Key Operating Ratios:

EBITDA Margin (%) 16.2% 18.2% 16.1% 15.5% 15.0%

Tax / PBT (%) 18.9% 24.8% 27.4% 25.5% 23.0%

Net Profit Margin (%) 9.9% 10.3% 6.4% 8.0% 9.6%

RoE (%) 17.9% 21.1% 13.6% 15.8% 16.4%

RoCE (%) 8.6% 10.6% 8.1% 9.9% 12.1%

Current Ratio (x) 3.9x 3.1x 3.2x 2.4x 2.3x

Dividend Payout (%) 5.8% 4.5% 3.9% 4.6% 5.2%

Book Value Per Share (Rs.) 72 89 99 114 134

Financial Leverage Ratios

Debt/ Equity (x) 1.4x 1.2x 1.1x 0.5x 0.3x

Interest Coverage (x) 7.4x 7.5x 4.9x 7.4x 11.5x

Interest / Debt (%) 3.0% 4.0% 5.4% 4.7% 5.3%

Growth Indicators %

Growth in Gross Block (%) 7.5% 30.1% 11.1% 3.2% 3.1%

Sales Growth (%) 7.1% 36.4% 4.6% 9.9% 11.8%

EBITDA Growth (%) 3.1% 51.6% -7.2% 6.1% 7.9%

Net Profit Growth (%) 1.2% 39.8% -34.3% 36.6% 33.7%

Diluted EPS Growth (%) 1.2% 39.8% -34.3% 36.6% 33.7%

Turnover Ratios

Debtors (Days of net sales) 108 112 117 115 110

Creditors (Days of Raw Materials) 52 64 65 67 69

Inventory (Days of Optg. Costs) 45 38 38 39 38

Valuation Ratios



Adjusted P/E (x) 7.9x 5.6x 7.5x 5.7x 4.7x

P/BV (x) 1.3x 1.1x 1.0x 0.8x 0.7x

P/CEPS (x) 5.5x 4.3x 4.9x 4.0x 3.5x

EV/EBIDTA (x) 8.0x 5.4x 6.1x 5.2x 4.3x

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Research Desk Tel: +91 22 61596464

Disclaimer Appendix

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such an offer or solicitation would be illegal.

BP WEALTH Pvt. Ltd. and BP EQUITIES Pvt. Ltd have exercised due diligence in checking the correctness and authenticity of the infor-

mation contained herein, so far as it relates to current and historical information, but do not guarantee its accuracy or completeness. The

opinions expressed are our current opinions as of the date appearing in the material and may be subject to change from time to time. Pro-

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We analysts and the authors of this report, hereby certify that all of the views expressed in this research report accurately reflect our per-

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Analyst (s) holding in the Stock : Nil

Sinindus 20120215 (Good)

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