BAV PROJECT REPORT

TITAN COMPANY LIMITED

GROUP 18
Abhave Sharma B13001
Girish Deshpande B13025
Ketan Lukhi B13031
Vishap Rana B13061
Vinay Goyal B13123

Titan Company Limited

Executive Summary
Titan Company Ltd is an Indian manufacture of life style goods such
as watches, Jewellery, Eyewear, Perfumes, Precision Engineering
Goods and others. The brands owned by Titan Company Ltd are Titan,
Tanishq, Fastrack, Skinn, Titan Eye+, Xylys, Sonata and Helios.

Valuation
The Current Market price of Titan Company Ltd is 350.9 Rs per share
and intrinsic value is Rs. 392.49 per share based on FCF valuation. The
share price based on Relative Valuation using P/E multiple is Rs.
355.99 now and Rs. 476.63 in FY 2015. So the recommendation is to
buy the share.
In a scenario where a stable Government at the Centre is anticipated,
the rupee is expected to remain stable, the stock market is expected
to be buoyant and overall consumer sentiment is expected to be
good, the company is targeting aggressive growth1. The company is
planning aggressive store expansion plans in FY15, and revenue
growth for Watches and Jewellery is expected to increase because of
improved customer sentiments. The margins on jewellery should
benefit from overseas gold hedging, incremental direct gold imports,
and scale leverage2. The company is also taking various initiatives to
driver higher sale of wedding/studded/fashion jewellery and also
planning for more product innovation across watches and new
lifestyle segments1. Titan has started jewellery exports to Singapore
and Dubai (focusing on NRI population). This would help to use the
direct gold import license which would be more cost effective2.

About Titan Company Limited

Buy
Current Price: Rs. 350.9
FCF Valuation Intrinsic Price: Rs. 392.49
Relative Valuation based Price: Rs. 355.99
Company Information
Shares

888 mn

Price
52wk Range

350.9
203.00 - 362.70

Beta

0.81

Market Cap

311.52 B

BSE Sensex

26,103.23

NSE Nifty

7,791.70
Returns

1 Week
30 Days
3 Months
6 Months
1 Year

The company started in 1984 as a joint venture between the Tata

Group and the Tamil Nadu Industrial Development Corporation. Titan
changed the Indian Watch market with the launch of Titan Quartz
watched. The second watch brand launched by the company is Sonata
which is value for money brand. After Sonata, Titan Company reached
out to the youth segment with Fastrack, its third brand which is priced higher than Sonata.

2.59%
7.18%
14.36%
51.51%
28.37%

After successful venture into watch industry, Titan Company launched Tanishq, a Jewellery brand in highly fragmented
Indian jewellery market. Titan Company has also entered into eyewear with brand Titan Eye+, and offers a variety of
differentiated products to consumers consisting of frames, lenses, contact lenses and accessories.

Financial Highlights of FY 2013-14

The Indian economy faced tough times in FY 2014-15 with growth falling below 5%. The rupee was volatile with respect
to other currencies which led to substantial impact on imports and exports. The customs duty on Gold import has been
increased by RBI to keep the CAD in check.

1. Titan Company Limited Annual Report FY 2014

2. JP Morgan Asia Pacific Equity Research report on Titan Company Limited dated 02nd August 2014

For Titan Company Ltd, the sales increased Rs. 738.78 crores by 7.34% to Rs. 10,995.14 crores. Profit Before Tax grew
by Rs. 9.66 crores from Rs. 1006.27 crores to Rs. 1015.93 crores. Net Profit (PAT) also increased by 2.2% to Rs. 741.14
crores.3
Watches: The watches segment growth is 6.9% in FY 2014. The jewellery segment grew by 6.5%.3
Jewellery: The jewellery segment sales was affected by the RBI decision of increasing customs duty on Gold imports.
RBI also put a ban on Gold on Lease facility and because of this ban, the company could not take advantage of Natural
hedge of gold rate provided by Gold on Lease.3
Others: The Eyewear, Precision Engineering and Accessories revenue increased by 20.7%. The number of stores for
Titan Eye+ increased by 72 to 280.3
The total number of stores in watches, jewellery and eyewear segments increased by 125. Total number of retail
outlets is 1078 as of March 2014. The company achieved exports of Rs. 220.39 crores during FY 2014. The exports grew
by 11.7%.3

REVENUE GROWTH
IN FY 2014
12000.00
10123.29

10927.39

PAT GROWTH IN
FY2014
800.00

724.50

734.57

2012-2013

2013-2014

700.00

10000.00

600.00
8000.00

500.00

6000.00

400.00
300.00

4000.00

200.00

2000.00

100.00
0.00

0.00
2012-2013

2013-2014

Shareholding Pattern
As on 30.6.2014
1 Public shareholding
Number of shares
Percentage of shareholding
2 Promoters and Promoter group shareholding
a) Pledged / Encumbered
Number of shares
% of shares (as a % of the total shareholding of promoter and promoter group)
% of shares (as a % of the total share capital of the Company)
b) Non-encumbered
Number of shares
% of shares (as a % of the total shareholding of promoter and promoter group)
% of shares (as a % of the total share capital of the Company)
3 Total Shares

3. Titan Company Limited Annual Report FY 2014

4167,78,240
46.90%

25,59,589
0.50%
0.30%
4684,48,331
99.50%
52.80%
8877,86,160

Companys Business analysis

The company has a strong presence in the segment it is operating in and has a strong retail network. With a stable
government and lifting up of consumer sentiments, the company will be poised to take an advantage of increased
demand. Sales Growth and Low cost of equity is a value driver for the company. The company is also working towards
achieving increased profit margins. This will help improve the profitability for the company.

Assumptions in Forecast and Valuation

1. Cost of Equity Calculation:
Risk Free Rate
The longest duration bond was for 20 years in the ZCYC curve. The yield curve is getting almost flat towards the extreme
right, therefore, we assume the spot rates to remain at 8.88%4 for longer than 20 year periods and use this spot rate
for all the cash flows while valuing the company. Also, there were no CDS issues for zero coupon bonds of this duration.
Therefore, we took the 8.88% rate to be risk-free.
Market Risk Premium
For calculating the historic market risk premium, we calculated the geometric mean of the difference of daily returns
of Nifty and daily returns of zero coupon government bond of 20 year duration (in accordance with the above taken
risk free rate). We took Nifty as the market proxy as it is highly liquid and captures the overall mood of the market. We
preferred geometric average over arithmetic average as we believe the stock prices overreact and therefore have a
tendency to mean-revert. We took the excess returns data for the past 3 years only as daily ZCYC data prior to this
period could not be found by us. This provided us with more than 600 data points. Our market risk premium came out
to be 3.84%.5
Beta
For calculating Beta we regressed the daily returns of Titan with the daily returns of Nifty for the past 5 years 6. Thus
we had more than a 1000 data points. We took this period as the financial and operating risk of the company did not
change and we were provided with sufficient data points. As public data for comparable firms was not available for
Titan we did not compare its beta with its peers. Our calculated beta came out to be 0.81. This beta also takes into
account cash but cash is considered to be non-operating asset and hence we need to calculate Beta after removing
effect of tax. The Beta matching operating risk is 0.84.
Cost of debt
Titan did not have any long term debt. We treated its short term debt as short term operating liability and all the
existing short term borrowings is paid back in FY 2015. So Titan Company Limited is debt free company.
Cost of Equity
Using the CAPM equation and using risk free rate, market risk premium, and Beta, we have calculated the cost of equity
using the formula Ke = Rf+ Beta*(Market Risk Premium)
Our cost of equity comes out to be 12.10%
WACC
As our cost of debt is 0, WACC comprises of solely cost of equity. Therefore, WACC= Ke= 12.10%
2. Forecasting P&L, Balance Sheet and Cash Flow Statement:

4.
4. Source
Source for
for 20
20 Year
Year ZCYC
ZCYC Yield:http://www.nseindia.com/products/content/debt/wdm/archieve_debt.htm
Yield:http://www.nseindia.com/products/content/debt/wdm/archieve_debt.htm
5.
Source
for
Nifty
Returns
5. Source for Nifty Returns and
and ZCYC
ZCYC data:
data: Bloomberg
Bloomberg
6.
Source
for
Titan
Daily
Returns
and
6. Source for Titan Daily Returns and Nifty
Nifty Daily
Daily Returns:
Returns: https://in.finance.yahoo.com/
https://in.finance.yahoo.com/

As mentioned in Annual report, the company is working on improving Asset Utilization, reduction in other expenses
such as fuel and electricity consumption through various initiatives and inventory turnover ratio. These effects
would be accounted in forecasting the accounting statements
Revenue Growth:
Revenue Growth is forecasted based on segment wise growth assumptions.
o Watches: Revenue of Watch segment is expected to grow by 11.7% in FY 2015, by 15% in FY 2016 and by
15% in FY 20177. 2018 onwards revenues are forecasted to converge with Long Term GDP growth of 8.4%8
by FY 2020 which is terminal year for explicit forecast period.
o Jewellery: Revenue of Jewellery segment is expected to grow by 13.85 in FY 2015, by 15% in FY 2016 and
by 16.1% in FY 20177. Revenues 2018 onwards are expected to converge with Long term GDP growth.
o Others: Revenues in Others segment are expected to grow by 20% in FY 2015, FY 2016 and in FY 2017 9.
Revenues after 2017 are expected to converge to long term GDP growth by 2020.
Other Operating Income:
o Other Operating Income is derived from sales of precious stones, gold, platinum and scrap materials and
the sales of these items is directly related to total sales and hence, it is expected to grow at the same rate
of total product sales
Other Income: Though other income is derived from Loans and deposits, we have used regression beta which also
takes into account the effect of these assets as well and hence considered to be operating income and assumed
to remain the same over the explicit forecast period.
Cash is not used to generate any income and hence, will not be counted as operating asset. Cash will be added to
present value of FCF to derive total equity value.
Excise duty for explicit forecast period is assumed to be the average of excise duty as % of sales in FY 2013 and FY
2014.
Cost of materials and components consumed is assumed to be as % of Gross Sales for explicit forecast period. The
% of sales figure is calculated based on FY 2014 value.
Purchase of traded goods is assumed to be as % of Gross Sales for explicit forecast period. The % of sales figure is
calculated based on FY 2014 value.
Changes in Finished Goods, WIP and stock in trade is considered to be as % of Net Revenue. The % of sales is
calculated based on FY 2014 value.
Employees Benefits Expenses is assumed to be as % of Gross Sales for FY 2014 and same is assumed to continue
thereon.
Other expenses are reduced to 10% of net sales from 11%. This reduction is due to reduction in fuel and electricity
consumption by various initiatives taken by the company for the same.
Depreciation: Depreciation is calculated as % of Average Gross Block based on Straight line method.
For Capex, Gestation period is assumed to be zero. Capital WIP is assumed to be zero 2014 onwards as the
gestation period is zero.
Inventories is calculated based on inventory turnover ratio; Inventory turnover ratio is assumed to improve slightly
to 3 as the company is moving towards effective inventory management as mentioned in annual report. Inventory
turnover ratio is calculated based on net sales divided average inventory.
Trade receivables is calculated based on Debtors turnover; Debtors turnover is assumed to be average of Debtors
turnover of FY 2013 and FY 2014.
Trade payables is calculated based on creditors turnover; Creditor turnover is calculated by dividing sum of cost of
Material Purchased, purchase of traded Goods, employee benefits expenses with average account payables.
Short Term loan are mostly used for working capital financing and gold loan/lease payments which are paid in year
2015 and are not expected to occur every year and hence, considered as non-operating liabilities. Also, short term
loans are considered as non-operating liabilities and not source of capital as it is very less as compared to market
value of equity [In FY 2014, it is 2.58% of market value of equity10
7. JP Morgan Asia Pacific Equity Research report on Titan Company Limited dated 02nd August 2014
8. http://rbi.org.in/scripts/SPF18.aspx
9. HDFC Securities Institutional Research Results review on Titan Company Limited dated on 2nd August 2014
10. Source for Market Value of Equity: https://in.finance.yahoo.com/

Since Titan is highly profitable company, its marginal tax rate equal the statutory tax rate which is 33.99% 11. But as
the debt for the company is zero, effective tax rate can be calculated using the formula given below:
T= (taxes paid + Int*t)/ EBIT Book
Dividend and Dividend Distribution Tax is assumed to remain same over explicit forecast period.
Long Term Provision and Deferred Tax Liabilities are assumed to remain same
Other current liabilities are considered to be % of net sales
Short Term provisions are considered to be % of net sales
Non-current investments and Deferred Tax Asset are assumed to remain same over explicit forecast period.
Long Term Loans and advances are assumed to remain same over explicit forecast period.
Short Term Loans and advances are considered to be % of net sales
Other current assets are considered to be % of net sales
Operating Invested capital is considered to be equal to book value of equity as there is no debt with the company.
Cash is not included in FCF calculation and hence, will be added to the present value of FCF.

3. Terminal Value:
Long term GDP growth is considered to be 8.4% and current GDP growth is assumed to be 4%. Terminal growth rate is
considered to be the average of these two growth rates.
Cost of Equity after explicit forecast period is also expected to reduce to 9.9% from 12.1% based on reduction in long
term growth/terminal growth rate.

Valuation of Titan Company Limited

1. FCF Valuation
(Rs. in crore)
MV of Equity
tax rate
Cost of Equity
Long Term GDP Growth
Current Growth
Cost of Equity after explicit forecast

OIC
EBITDA
D&A
EBIT/PBT
NOPAT
ROIC
Capex
Inc in WC
NI
Investment Rate
FCF
Terminal Growth Rate (g)
Terminal Value

2015
2405.27
1602.52
53.65
1548.87
1145.50
47.62%
70.08
-69.03
1.06
0.00
1144.44

2016
3174.72
1833.07
66.73
1766.35
1306.34
41.15%
339.21
563.69
902.90
0.69
403.44

2017
3287.45
2109.06
73.02
2036.04
1505.80
45.80%
225.09
33.69
258.77
0.17
1247.03

2014
31157.00
26.04%
12.10%
8.40%
4.00%
9.90%
2018
4194.69
2427.63
89.12
2338.52
1729.50
41.23%
427.11
658.36
1085.47
0.63
644.03

2019
4178.14
2711.87
93.20
2618.67
1936.69
46.35%
192.44
-22.59
169.85
0.09
1766.84

2020
4994.74
2978.03
107.97
2870.06
2122.61
42.50%
418.17
614.37
1032.54
0.49
1090.07

2021 (Terminal Year)

2561.41
44.11%

360.03
14.06%
2201.38
6.20%
63185.56

11. Source
Source for
for Marginal
Marginal Tax:
Tax: http://www.kpmg.com/global/en/services/tax/tax-tools-and-resources/pages/corporate-tax-rates-table.aspx
http://www.kpmg.com/global/en/services/tax/tax-tools-and-resources/pages/corporate-tax-rates-table.aspx
11.

 33,575.96

Present Value of FCFs

Add:
Cash
Investments
Total Equity Value
Share Price

892.67
375.84
34,844.47
392.49

[Note: Supporting Calculations are shown in Appendices]

Sensitivity Analysis:
It is always important to carry out sensitivity analysis so that we can find the variation in our valuation based on changes
in different parameters such as Sales growth, Cost of Equity and Terminal growth rate.
1. Change in Cost of Equity and Terminal Growth Rate Analysis:
g\Ke
3.20%
4.20%
5.20%
6.20%
7.20%
8.20%
9.20%

9.10%
2224.79
2192.29
2158.77
2124.24
2088.69
2052.13
2014.55

10.10%
906.34
893.59
880.44
866.91
852.98
838.66
823.95

11.10%
565.20
557.55
549.67
541.55
533.20
524.63
515.81

12.10%
408.93
403.61
398.13
392.49
386.69
380.73
374.61

13.10%
319.51
315.51
311.40
307.16
302.81
298.35
293.76

14.10%
261.73
258.58
255.34
252.02
248.60
245.09
241.49

15.10%
221.40
218.85
216.22
213.52
210.75
207.91
204.99

2. Change in Gross Sales Growth:

Change in Growth
-5%
-3%
-2%
-1%
1%
2%
3%
5%

Intrinsic Value
321.73
347.77
361.90
376.80
409.00
426.37
444.62
483.87

% Change
-18.03%
-11.39%
-7.79%
-4.00%
4.21%
8.63%
13.28%
23.28%

3. Change in Terminal Growth Rate:

Change in Ke

Intrinsic Value

% Change

-3%

2124.24

441.23%

-2%

866.91

120.88%

-1%

541.55

37.98%

1%

307.16

-21.74%

2%

252.02

-35.79%

3%

213.52

-45.60%

Key Ratios:
2014 E

2015 E

2016 E

2017 E

2018 E

2019 E

2020 E

GPM

21.37%

21.96%

21.96%

21.96%

21.96%

21.96%

21.96%

EBITDA Margin
EBIT Margin
NPM
ROE

9.86%
9.24%
6.72%
29.12%

12.93%
12.50%
9.24%
33.20%

12.80%
12.33%
9.12%
28.78%

12.68%
12.24%
9.06%
25.85%

12.58%
12.12%
8.96%
23.57%

12.52%
12.09%
8.94%
21.39%

12.46%
12.01%
8.88%
19.37%

ROCE

38.88%

43.94%

38.29%

34.51%

31.55%

28.68%

26.01%

Asset Turnover
Invetory Days

1.79
128.76

1.78
128.53

1.73
130.52

1.59
129.34

1.56
130.26

1.46
125.77

1.40
127.69

Debtors Days
Payables

5.13
36.09

6.70
40.12

5.41
37.46

6.55
39.92

5.57
37.77

6.26
38.55

5.54
37.22

CCC
Current Ratio

97.79
1.49

95.11
1.79

98.47
1.98

95.97
2.05

98.05
2.22

93.48
2.35

96.00
2.56

Quick Ratio

1.24

1.46

1.59

1.48

1.57

1.49

1.56

EPS
EPS Growth

8.27

12.90
55.94%

14.71
14.04%

16.96
15.27%

19.48
14.86%

21.81
11.98%

23.91
9.60%

2. Relative Valuation
Relative valuation of Titan company Limited is carried out using P/E multiples based on peers data 12.
P/E
FY 14

FY 15 E

ITC

32.18

27.7

HUL

38.06

38

Dabur

41.82

33.4

Godrej Consumer

39.91

31

Colgate India

36.5

38

Nestle India

45.56

38.9

GSK Consumer

41.16

33

Asian Paints

48.62

40.8

Jubilant Foodworks

63.41

51.8

Average

43.02444

36.95556

Titan Co Ltd Earnings (in Rs. Cr)

734.568

1145.499

Equity Value (in Rs. Cr)

31604.38

42332.54

355.99

476.83

Price Per Share

12. Sources for P/E ratios of peers:

1. JP Morgan ER report on Titan Company Ltd
2. https://in.finance.yahoo.com/

APPENDICES
Appendix A: Ratios/parameters used in Forecast
Ratio/Parameter

2013-14

2012-13

Average

Sales to Gross Block Tangible Assets ( No. of times)

11.58

11.94

11.76

Sales to Gross Block InTangible Assets ( No. of times)

149.62

138.57

144.10

Sales to Debtors ( No. of times)

68.30

61.04

64.67

Sales to Inventory ( No. of times)

2.89

2.75

3.00

Sales to Creditors (No of Times)

10.11

4.19

7.15

Short Term Borrowings (No of times)

13.54

13.54

Other Current Liabilities (No of times)

7.11

6.94

7.03

Short-term provisions (No of times)

35.10

34.52

34.81

Short Term Loan and advances (No of times)

34.75

34.75

34.75

Other current assets (No of times)

654.11

1063.04

858.57

Appendix B: Revenue Forecast

Segment Wise Sales Projection
(Rs. in crores)

2013

2014

2015 E

2016 E

2017 E

2018 E

2019 E

2020 E

1,74,591.23

1,82,687.31

2,04,061.73

2,34,670.98

2,69,871.63

3,10,352.38

3,50,698.19

3,89,274.99

4.6%

11.70%

15%

15%

15%

13%

11.00%

8,52,576.52

9,70,232.08

11,19,647.82

12,99,911.12

15,09,196.81

16,90,300.43

18,59,330.47

7.3%

13.80%

15%

16%

16%

12%

10.00%

49,199.04

59,038.85

70,846.62

85,015.94

1,00,318.81

1,15,366.63

1,29,210.63

21.9%

20.00%

20%

20%

18%

15%

12.00%

Sale of products
Watches
yoy growth
Jewellery

7,94,464.69

yoy growth
Others

40,355.56

yoy growth
Total - Sale of products (a)

10,09,411.48 10,84,462.87 12,33,332.65 14,25,165.42 16,54,798.69 19,19,868.00 21,56,365.24 23,77,816.08

yoy growth
Other operating revenue (b)
yoy growth
Revenue from operations (gross)
(a+b)

12,387.48

Revenue from operations (net)

yoy growth

13.7%

15.6%

16.1%

16.0%

12.3%

10.3%

12,437.59

14,144.96

16,345.07

18,978.71

22,015.31

24,723.19

27,269.68

0.4%

13.7%

15.6%

16.1%

16.0%

12.3%

10.3%

10,21,798.96 10,96,900.46 12,47,477.61 14,41,510.49 16,73,777.40 19,41,883.30 21,81,088.43 24,05,085.76

yoy growth
Less : Excise duty

7.4%

7.3%

13.7%

15.6%

16.1%

16.0%

12.3%

10.3%

9,469.57

4,161.28

8,146.79

9,413.94

10,930.79

12,681.68

14,243.84

15,706.68

0.93%

0.38%

0.65%

0.65%

0.65%

0.65%

0.65%

0.65%

10,12,329.39 10,92,739.18 12,39,330.83 14,32,096.55 16,62,846.62 19,29,201.62 21,66,844.59 23,89,379.08

7.9%

13.42%

15.55%

16.11%

16.02%

12.32%

10.27%

Appendix C: Balance Sheet Forecast

31.03.2013 31.03.2014 31.03.2015 E 31.03.2016 E 31.03.2017 E 31.03.2018 E 31.03.2019 E 31.03.2020 E
EQUITY AND LIABILITIES
Shareholders funds
Share capital
Reserves and surplus
Total Equity
Non-current liabilities
Long-term provisions
Deferred tax liabilities (net)
Total Non Current Liabilities
Current liabilities
Short-term borrowings
Trade payables
Other current liabilities
Short-term provisions
Total Current Liabilities
Total (1+2+3)
ASSETS
Non-current assets
Fixed assets
Tangible assets
Intangible assets
Capital work-in-progress
Total Fixed Asset
Non-current investments
Deferred tax asset (net)
Long-term loans and advances
Total Non Current Asset
Current assets
Inventories
Trade receivables
Cash and bank balances
Short-term loans and advances
Other current assets
Total Current Asset
Total (1+2)

88.78
1881.07
1969.85

88.78
2433.96
2522.74

88.78
3361.35
3450.13

88.78
4449.58
4538.36

88.78
5737.27
5826.05

88.78
7248.66
7337.44

88.78
8967.24
9056.02

88.78
10871.74
10960.52

65.10
0.22
65.33

74.05
0.55
74.61

74.05
0.55
74.61

74.05
0.55
74.61

74.05
0.55
74.61

74.05
0.55
74.61

74.05
0.55
74.61

74.05
0.55
74.61

2097.99
1457.82
293.28
3849.09
5884.27

806.84
859.44
1536.49
311.32
3514.09
6111.44

0.00
1075.53
1948.73
394.85
3419.11
6943.85

0.00
1160.40
2078.58
421.16
3660.14
8273.11

0.00
1435.81
2597.63
526.33
4559.77
10460.43

0.00
1576.27
2827.61
572.93
4976.81
12388.85

0.00
1806.84
3265.93
661.74
5734.51
14865.14

0.00
1923.71
3453.42
699.73
6076.86
17111.99

446.62
17.28
41.76
505.67
2.91
8.04
173.60
690.21

600.50
13.73
32.87
647.10
3.09
9.35
204.55
864.09

574.28
35.61
0.00
609.89
3.09
9.35
204.55
826.88

784.05
31.60
0.00
815.65
3.09
9.35
204.55
1032.64

837.35
57.34
0.00
894.69
3.09
9.35
204.55
1111.68

1086.95
56.62
0.00
1143.57
3.09
9.35
204.55
1360.56

1072.90
76.70
0.00
1149.61
3.09
9.35
204.55
1366.60

1279.48
72.35
0.00
1351.83
3.09
9.35
204.55
1568.82

3680.33
165.83
1139.04
199.33
9.52
5194.06
5884.27

3869.39
154.13
892.67
314.45
16.71
5247.35
6111.44

4392.81
229.12
1119.46
356.63
18.95
6116.97
6943.85

5154.50
213.74
1438.25
412.10
21.89
7240.48
8273.11

5931.14
300.48
2613.21
478.50
25.42
9348.75
10460.43

6930.20
296.10
3217.36
555.15
29.49
11028.30
12388.86

7515.43
373.97
4952.49
623.53
33.13
13498.54
14865.14

8413.76
364.92
6040.39
687.57
36.53
15543.17
17111.99

Appendix D: Profit & Loss Statement Forecast

(Rs. in crores)
2012-2013
Revenue from operations (gross)
10217.99
Less: Excise duty
94.70
Revenue from operations (net)
10123.29
yoy growth
Other Income
100.89
yoy growth
Total Revenue (i+ii)
10224.18
Expenses:
Cost of materials and components consumed
6752.38
% of Gross Sales
Purchase of traded goods
1554.93
% of Gross Sales
(Increase)/ decrease in finished goods, work-in-progress and stock-in-trade
-813.15

2013-2014
10969.00
41.61
10927.39
7.94%
120.22
19.17%
11047.61

2014-2015 E
12474.78
81.47
12393.31
13.42%
120.22
0.00%
12513.53

2015-2016 E
14415.10
94.14
14320.97
15.55%
120.22
0.00%
14441.19

2016-2017 E
16737.77
109.31
16628.47
16.11%
120.22
0.00%
16748.69

2017-2018 E
19418.83
126.82
19292.02
16.02%
120.22
0.00%
19412.24

2018-2019 E
21810.88
142.44
21668.45
12.32%
120.22
0.00%
21788.67

2019-2020 E
24050.86
157.07
23893.79
10.27%
120.22
0.00%
24014.01

7360.12
59.00%
1809.69
14.51%
-112.75
-0.91%
614.62
4.93%
1239.33
10.00%
10911.01
88.04%
1602.52
12.9%
53.65

8504.91
59.00%
2091.17
14.51%
-130.28
-0.91%
710.21
4.93%
1432.10
10.00%
12608.11
88.04%
1833.07
12.8%
66.73

9875.29
59.00%
2428.12
14.51%
-151.27
-0.91%
824.65
4.93%
1662.85
10.00%
14639.63
88.04%
2109.06
12.7%
73.02

11457.11
59.00%
2817.06
14.51%
-175.50
-0.91%
956.74
4.93%
1929.20
10.00%
16984.60
88.04%
2427.63
12.6%
89.12

12868.42
59.00%
3164.07
14.51%
-197.12
-0.91%
1074.59
4.93%
2166.84
10.00%
19076.80
88.04%
2711.87
12.5%
93.20

14190.01
59.00%
3489.02
14.51%
-217.37
-0.91%
1184.95
4.93%
2389.38
10.00%
21035.99
88.04%
2978.03
12.5%
107.97

Employee benefits expense

% of Gross Sales
Other expenses

1126.81

Total Expenses
% of Net Revenue from operations
EBITDA (iii-iv)
% of Net Revenue from operations
Depreciation and amortization expense

9110.80
90.00%
1113.38
11.0%
56.23

6560.03
59.00%
1591.25
14.51%
-99.41
-0.91%
540.43
4.93%
1290.76
11.00%
9883.06
90.44%
1164.55
10.7%
67.55

Earnings before Finance Cost

% of Net Revenue from operations
Finance costs
EBIT/PBT
Tax Expense:
Current Tax
Deferred tax
Taxes of earlier years
Total Tax
Profit before share of profit of associate
Less/ (Add): Share of loss/(profit) of associate
Net profit (PAT)

1057.15
10.4%
50.65
1006.50

1097.01
10.0%
87.13
1009.87

1548.87
12.5%
0.00
1548.87

1766.35
12.3%
0.00
1766.35

2036.04
12.2%
0.00
2036.04

2338.52
12.1%
0.00
2338.52

2618.67
12.1%
0.00
2618.67

2870.06
12.0%
0.00
2870.06

285.88
-4.32
281.56
724.94
-0.44
724.50

263.00
-0.98
13.10
275.12
734.76
-0.19
734.57

403.37
0.00
0.00
403.37
1145.50
0.00
1145.50

460.01
0.00
0.00
460.01
1306.34
0.00
1306.34

530.24
0.00
0.00
530.24
1505.80
0.00
1505.80

609.02
0.00
0.00
609.02
1729.50
0.00
1729.50

681.97
0.00
0.00
681.97
1936.69
0.00
1936.69

747.44
0.00
0.00
747.44
2122.61
0.00
2122.61

489.83

Appendix E: Cash flow statement forecast

Cash flow from operating activities
Net profit before tax
Depreciation/ Amortisation
Unrealised exchange difference (net)
Marked to Market loss
Loss on sale/ disposal/ scrapping (net)
Bad debts written off
Provision for doubtful debts/ (net)
Interest income
Dividend income
Finance cost
Operating profit before working capital changes
(Increase)/decrease in trade receivables
(Increase)/decrease in inventories
(Increase)/decrease in short-term loans and advances
(Increase)/decrease in long-term loans and advances
Increase/(decrease) in trade payables
Increase/(decrease) in other current liabilities
Increase/(decrease) in long-term provisions
Increase/(decrease) in short-term provisions
Cash generated from operations
Direct taxes paid
Net cash from/(used in) operating activities
Cash flow from investing activities
Additions to fixed assets
Proceeds from sale of fixed assets
Inter-corporate deposits (net)
Interest received
Net cash used in investing activities
Cash flow from financing activities
Proceeds from borrowings
Repayment of borrowings
Dividends paid
Tax on dividends paid
Interest paid
Net cash from/ (used in) financing activities
Net cash flows during the year (A + B + C)
Cash and bank balances (opening balance)
Cash and bank balances (closing balance)

2013

2014

2015 E

2016 E

2017 E

2018 E

2019 E

2020 E

1,006.50
56.23
(12.01)
0.15
1.86
1.55
(99.99)
(0.00)
50.65
1,004.94
(1.93)
(798.31)
(8.05)
(18.89)
222.38
403.79
5.78
18.95
828.66
(275.69)
552.96

1,009.87
67.55
1.02
0.23
2.90
0.02
0.01
(119.48)
(0.00)
87.13
1,049.24
11.73
(189.06)
10.94
(17.16)
(1,238.62)
76.39
8.95
18.05
(269.54)
(285.19)
(554.74)

1,548.87
53.65
0.00
0.00
0.00
0.00
0.00
(119.48)
(0.00)
0.00
1,483.04
(75.00)
(523.42)
(44.42)
0.00
216.10
412.24
0.00
83.53
1,552.06
(403.37)
1,148.69

1,766.35
66.73
0.00
0.00
0.00
0.00
0.00
(119.48)
(0.00)
0.00
1,713.59
15.39
(761.69)
(58.42)
0.00
84.87
129.85
0.00
26.31
1,149.90
(460.01)
689.90

2,036.04
73.02
0.00
0.00
0.00
0.00
0.00
(119.48)
(0.00)
0.00
1,989.58
(86.74)
(776.64)
(69.93)
0.00
275.40
519.06
0.00
105.17
1,955.89
(530.24)
1,425.65

2,338.52
89.12
0.00
0.00
0.00
0.00
0.00
(119.48)
(0.00)
0.00
2,308.15
4.38
(999.06)
(80.72)
0.00
140.46
229.98
0.00
46.60
1,649.79
(609.02)
1,040.77

2,618.67
93.20
0.00
0.00
0.00
0.00
0.00
(119.48)
(0.00)
0.00
2,592.38
(77.87)
(585.23)
(72.02)
0.00
230.57
438.32
0.00
88.81
2,614.97
(681.97)
1,933.00

2,870.06
107.97
0.00
0.00
0.00
0.00
0.00
(119.48)
(0.00)
0.00
2,858.54
9.05
(898.33)
(67.44)
0.00
116.87
187.49
0.00
37.99
2,244.17
(747.44)
1,496.73

(168.84)
3.87
(100.00)
123.24
(141.74)

(212.84)
1.69
(90.00)
112.30
(188.85)

(16.43)
0.00
0.00
119.48
103.05

(272.49)
0.00
0.00
119.48
(153.00)

(152.06)
0.00
0.00
119.48
(32.58)

(337.99)
0.00
0.00
119.48
(218.51)

(99.24)
0.00
0.00
119.48
20.24

(310.20)
0.00
0.00
119.48
(190.71)

0.00
(5.42)
(154.35)
(25.20)
(50.65)
(235.62)
175.60
967.09
1,139.04

1,756.27
(954.85)
(185.23)
(31.68)
(87.13)
497.38
(246.21)
1,139.04
892.67

(806.84)
0.00
(186.43)
(31.68)
0.00
(1,024.95)
226.79
892.67
1,119.46

0.00
0.00
(186.43)
(31.68)
0.00
(218.11)
318.78
1,119.46
1,438.25

0.00
0.00
(186.43)
(31.68)
0.00
(218.11)
1,174.96
1,438.25
2,613.21

0.00
0.00
(186.43)
(31.68)
0.00
(218.11)
604.15
2,613.21
3,217.36

0.00
0.00
(186.43)
(31.68)
0.00
(218.11)
1,735.13
3,217.36
4,952.49

0.00
0.00
(186.43)
(31.68)
0.00
(218.11)
1,087.90
4,952.49
6,040.39

Appendix F: Tangible Asset Deprecation Schedule

Tangible Assets (Rs. in crore)
Land
Land - leasehold
Buildings
Plant, machinery and equipment
Furniture, fixtures and equipment
Office equipment
Vehicles
Total Gross Block
Accumulated Depreciation
Land
Land - leasehold
Buildings
Plant, machinery and equipment
Furniture, fixtures and equipment
Office equipment
Vehicles
Total Accumulated Depreciation
Depreciation for the year
Net Gross Block
Land
Land - leasehold
Buildings
Plant, machinery and equipment
Furniture, fixtures and equipment
Office equipment
Vehicles
Total Net Block

Dep Rate
0.00%
0.03%
2.67%
2.66%
13.83%
6.97%
19.90%

% Gross Block
7.33%
1.60%
11.47%
59.73%
16.40%
2.15%
1.32%
100.00%

2013
21.39
16.96
82.38
560.30
149.95
19.03
13.28
863.28

2014
77.65
16.96
121.45
632.46
173.69
22.73
13.95
1058.88

2015 E
79.36
17.33
124.12
646.38
177.51
23.23
14.26
1082.19

2016 E
99.29
21.68
155.28
808.68
222.08
29.06
17.84
1353.92

2017 E
108.15
23.62
169.14
880.83
241.89
31.66
19.43
1474.71

2018 E
132.52
28.94
207.25
1079.31
296.40
38.79
23.81
1807.01

2019 E
137.80
30.09
215.50
1122.28
308.20
40.33
24.75
1878.96

2020 E
160.28
35.00
250.66
1305.41
358.49
46.92
28.79
2185.56

0.00
0.11
26.17
310.55
70.09
2.81
6.94
416.67

0.00
0.11
28.89
326.43
92.46
4.26
6.22
458.38
41.71

0.00
0.12
32.20
343.64
117.00
5.88
9.06
507.91
49.53

0.00
0.12
36.34
365.18
147.70
7.91
12.61
569.87
61.96

0.00
0.13
40.85
388.64
181.15
10.12
16.48
637.36
67.49

0.00
0.14
46.38
417.38
222.12
12.82
21.21
720.06
82.70

0.00
0.15
52.13
447.27
264.73
15.64
26.14
806.05
85.99

0.00
0.16
58.81
482.03
314.30
18.91
31.87
906.08
100.02

21.39
16.85
56.20
249.75
79.86
16.22
6.34
446.62

77.65
16.85
92.55
306.03
81.22
18.47
7.73
600.50

79.36
17.21
91.91
302.73
60.51
17.35
5.20
574.28

99.29
21.56
118.94
443.50
74.38
21.15
5.23
784.05

108.15
23.49
128.28
492.19
60.75
21.54
2.95
837.35

132.52
28.80
160.87
661.93
74.27
25.97
2.59
1086.95

137.80
29.94
163.37
675.02
43.47
24.70
-1.39
1072.90

160.28
34.84
191.85
823.38
44.20
28.01
-3.08
1279.48

Appendix G: Intangible Asset Amortization Schedule

Intangible Assets (Rs. in crore)
Gross Block
Accumulated Amortization
Net Block
Amortization for the year

Amo Rate
4.79%

2013
73.06
55.78
17.28

2014
73.01
59.28
13.73
3.50

2015 E
99.01
63.40
35.61
4.12

2016 E
99.76
68.16
31.60
4.76

2017 E
131.04
73.70
57.34
5.53

2018 E
136.73
80.11
56.62
6.42

2019 E
164.02
87.32
76.70
7.21

2020 E
167.62
95.26
72.35
7.95