Dugad Finserv Private Limited

Institutional Analysis
Key Stock Summary
Current Market Price BSE Code Bloomberg Ticker Face Value Shares Outstanding (in crs) Market Cap (Rs crs) Enterprise Value (Rs crs) 52-week range (Rs)(H/L) Beta Avg. daily Volumes 2 Week Dividend Yield (%) 244.45 532715 GITG IN 10 8.51 2079.3 4674.6 253.20 / 94 0.851 1032926 0.8

Gitanjali Gems Ltd.

Outperformer 05 October, 2010

Investment Rationale
Gitanjali Gems plans to restructure its business which will unlock its value for shareholder's
Gitanjali Gems, which owns brands such as Nakshatra and Ddamas, is going in for restructuring. The company has roped in KPMG to help in restructuring its businesses. The board has decided to explore the potential merger of subsidiaries, demerger and other forms of restructuring, or acquisition, or spin-offs with the ultimate aim of enhancing and unlocking shareholder value. The restructuring initiative is expected to be completed over the next year. As per the company, they believe that their retail brands are worth Rs 5,000 crores. Hence we believe that its intrinsic value of the company would be much more than the existing market cap once the restructuring is done.

Demand and positive industry outlook defines promising growth potentials

Gems and Jewellery is primarily used to decorate and adorn. The demand for different types of Gems and Jewellery is influenced by several factors like buyers preferences, properties, varieties, unit values, applications, etc. According to World Gold Council (WGC), the Indian jewellery market currently is worth about Rs.700 bn (USD14.58 bn). Of this, the urban jewellery market is valued at Rs.280 bn (USD5.83 bn) and the rural & semirural market is valued at Rs.420 bn (USD 8.75 bn). Gold jewellery forms around 80% of the Indian jewellery market (approx. Rs.560 bn (USD 11.67 bn)), with the balance comprising fabricated studded jewellery that includes diamond studded as well as gemstone studded jewellery.

Source: Company, DFPL Research

Share Holding Pattern

Infratech business will unlock its value in the coming Years

Gitanjali is constructing the first privately owned and managed jewellery SEZ in India, the Rajiv Gems Park at Hyderabad, Andhra Pradesh, which is intended to become one of the largest gems and jewellery SEZs in India. Gitanjali's Rajiv Gems Park at Hyderabad SEZ, has developed five modern state of art manufacturing facilities for commercial production and a training center. These facilities are up and running and are employing nearly 1500 workers. There are further more projects in the pipeline. Hence we believe that Gitanjali Gems will unlock the hidden values on the realty in the coming years. Currently its land bank is valued at Rs 1500 crores.

Source: Company, DFPL Research

Share Price Movement

Valuation
20600 19800 19000 18200 17400 16600 15800 15000 Sep-09 Nov-09 Jan-10
SENSEX

240 220 200 180 160 140 120 100 80 Mar-10 May-10 Jul-10

We believe Gitanjali Gems Limited is all set to generate higher revenues with good margins and also unlock its hidden value by restructuring and real estate. At current price of Rs. 244.25, the stock is trading at a PE of 8.1x and 5.2x and P/BV of 0.8x and 0.7x for FY11E and FY12E respectively. The valuation looks attractive and we recommend OUTPERFORMER on the stock with a target price of Rs. 338 per share (PE of7.2 x for FY12E), an upside of 38%.

Gitanjali Gems

Financial Snapshot
Source: Company, DFPL Research

Particulars (Rs in Crs)

Net Sales EBITDA EBITDA (%) PAT PAT (%) EPS ROCE (%) ROE (%) P/E (x) EV/EBITDA (x)

FY09
5088.9 327.0 6.4% 150.6 3.0% 17.7 5.0% 7.2% 13.8 12.6

FY10
6527.6 446.0 6.8% 200.2 3.1% 23.8 6.9% 9.1% 10.3 10.4

FY11E
7833.2 509.2 6.5% 254.7 3.3% 30.2 7.4% 9.2% 8.1 8.6

FY12E
9243.1 693.2 7.5% 395.8 4.3% 47.0 8.9% 12.6% 5.2 6.6

Research Team
Email: research@dugad.co.in Contact: 022-32255002/32255003 Mobile: 9004094415

Source: Company, DFPL Research

Dugad Finserv Private Limited

Email : research@dugad.co.in

Dugad Finserv Private Limited

Institutional Analysis
Company Overview:
Gitanjali Gems Limited (GGL), a part of the Gitanjali Group of Companies, was established in 1986 as a diamond and jewellery manufacturer and retailer. Gitanjali, one of the pioneers of the jewellery branding and retailing revolution in India, is currently one of the largest and fastest growing jewellery businesses in the world. The products, on offer, are diamonds, gold and silver jewellery, watches, luxury artefacts and accessories. Gitanjali has several brands under its umbrella: Gili, Asmi, D'Damas and Nakshatra, the combined value of which stands is around Rs 1,500 crores. Gitanjali is a DTC (Diamond and Trading Company) Sight holder through the promoter group company. During the year, Gitanjali received the Star Trading House status from the Government of India for its export performance. It has also been designated as 'Nominated Agency' for the purpose of direct import of gold, silver and other precious metals. Gitanjali was the first to produce the world's smallest heart shaped diamond (0.03 carat). It has developed around 25 patented facet patterns. Gitanjali uses the latest technology (CAD and CAM) for creating designs. Till date, Gitanjali received more than 50 awards from the Ministry of Commerce for its export performance.

Gitanjali Gems Limited was established in the year 1986.

Gitanjali Gems Integrated Business Model:

Source: Company, DFPL Research

Dugad Finserv Private Limited

Email : research@dugad.co.in

Dugad Finserv Private Limited

Institutional Analysis
Investment Rationale:
According to World Gold Council (WGC), the Indian jewellery market currently is worth about Rs.700 bn (USD14.58 bn). Of this, the urban jewellery market is valued at Rs.280 bn (USD5.83 bn) and the rural & semirural market is valued at Rs.420 bn (USD 8.75 bn).

Favourable Macro Environment

India has the 2nd largest population and the largest youth population in the world. It is the World's third largest diamond jewelry market and it will be of the size $ 5 billion by 2013. India is one of the fastest growing economies in the world with 6% growth over the last decade. Currently the rating agency Fitch forecasted India's GDP will register a growth rate of 8.5% for the financial year FY'11.

Increase in demand and positive industry outlook defines promising growth potentials
Gems and Jewellery is primarily used to decorate and adorn. The demand for different types of Gems and Jewellery is influenced by several factors like buyers preferences, properties, varieties, unit values, applications, etc. According to World Gold Council (WGC), the Indian jewellery market currently is worth about Rs.700 bn (USD14.58 bn). Of this, the urban jewellery market is valued at Rs.280 bn (USD5.83 bn) and the rural & semirural market is valued at Rs.420 bn (USD 8.75 bn). Gold jewellery forms around 80% of the Indian jewellery market (approx. Rs.560 bn (USD 11.67 bn)), with the balance comprising fabricated studded jewellery that includes diamond studded as well as gemstone studded jewellery. The Indian gems and jewellery industry is competitive in the world market due to its low cost of production and availability of skilled labour. The industry employs over 1.30 mn people directly and indirectly. In addition, the industry has a worldwide distribution network, which has been established over a period of time. India is the largest consumer of gold in the world followed by China and Japan. India consumes nearly 800 tonnes of gold accounting for around 22% of the world gold consumption and nearly 550-600 tonnes of this goes into jewellery consumption. Comparing to the world production, India's share is negligible. India is the largest consumer of gold in the world followed by China and Japan. India consumes nearly 800 tonnes of gold accounting for around 22% of the world gold consumption and nearly 550-600 tonnes of this goes into jewellery consumption. The major suppliers to India include Switzerland, South Africa, Australia, Hong Kong, and UAE. India has well-established capabilities in making hand-made jewellery in traditional as well as modern designs. Indian hand-made jewellery has always had a large ethnic demand in various countries with sizeable Indian immigrant population such as the Middle East and South-East Asian countries. In recent times, India has also developed capabilities in machine-made jewellery. With imported or domestic processed studding, Indian machine made jewellery is expected to generate demand from nonethnic jewellery markets such as USA & Europe. India's exports of gold jewellery were US$ 9.424bn for the FY2009-10. Gold jewellery exports from India have grown at a CAGR of over 26.53% for the past five years. U.A.E., U.S.A. and Singapore are the major export destinations.

Dugad Finserv Private Limited

Email : research@dugad.co.in

Dugad Finserv Private Limited

Institutional Analysis
The diamond processing industry in India has traditionally been one of the largest components of the global trade in diamonds. India occupies a prominent place in the global diamond industry and has established its position as the largest exporter of cut and polished diamonds in the world. India, China, Israel and Belgium are the leading countries engaged in the diamond cutting and polishing industry globally. India accounts for approximately 80% share in terms of carat and 90% in terms of pieces. India's dominance in the cutting and polishing segment can be attributed to superior craftsmanship, low cost of Indian labour and superior technology. The major export destinations for cut and polished diamonds from India are USA, Hong Kong, Belgium and UAE.

India occupies a prominent place in the global diamond industry and has established its position as the largest exporter of cut and polished diamonds in the world. India, China, Israel and Belgium are the leading countries engaged in the diamond cutting and polishing industry globally.

Gold Supply and Demand Q2 2010

Gold Demand Trends for Q2 2010, suggests that the demand for gold for the rest of 2010 will be underpinned by the following market forces: FIndia and China will continue to provide the main thrust of overall growth in demand, particularly for gold jewellery, for the remainder of 2010. FRetail investment will continue to be a substantial source of gold demand in Europe. FOver the longer-term, demand for gold in China is expected to grow considerably. A report recently published by The People's Bank of China and five other organisations to foster the development of the domestic gold market will add impetus to the growth in gold ownership among Chinese consumers. FElectronics demand is likely to return to higher historic levels after the sector exhibited further signs of recovery, especially in the US and Japan.

Tonnes

2008

2009

% ch 2009 vs Q1'09 2008 -20 -15 -16 -18 -5 14 -15 -44 23 -19 6 92 -9 329.4 78.9 49.9 16 13 614.4 149.4 -23.1 69.9 3.9 98.7 465.1 1022.7

Q2'09

Q3'09

Q4'09

Q1'10

Q2'10

% ch Q2'10 vs Q2'09 -5 15 24 0 -6 118 29 29 22 21 41 414 36

Jewellery Consumption Industrial & dental Electronics Other Industrial Dentistry Identifiable Investment Net Retail investment Bar Hoarding Official Coin Medals /Lmitation Coin Other Identified retail Invest. ETFs & similar Products Total identifiable demand

2193 439.1 292.9 90.5 55.7 1179 858.1 385.7 187.3 69.6 215.4 320.9 3811.1

1758.9 373 246.4 73.9 52.7 1348.2 731.1 215.8 230.5 56.6 228.2 617.1 3480

430.6 93.6 60.2 20.2 13.2 245.4 188.7 74.8 56.5 13.8 43.6 56.7 769.6

488 97.2 66.3 17.8 13.2 237.9 196.5 93.6 49.4 17.7 35.7 41.4 823.1

510.9 103.2 70.1 19.9 13.2 250.5 196.5 70.6 54.7 21.2 50.1 54 864.6

473.6 102.8 69.9 20 12.8 205.9 201.5 113.7 44.7 19.7 23.3 4.5 782.3

408.7 107.2 74.6 20.2 12.4 534.4 243.1 96.3 68.7 16.7 61.4 291.3 1050.3

Source: www.gold.org, DFPL Research

Dugad Finserv Private Limited

Email : research@dugad.co.in

Dugad Finserv Private Limited

Institutional Analysis
Key demand statistics FTotal gold demand in Q2 2010 rose by 36% to 1,050 tonnes, largely reflecting strong gold investment demand compared to the second quarter of 2009. In US$ value terms, demand increased 77% to $40.4 billion. FInvestment demand was the strongest performing segment during the second quarter, posting a rise of 118% to 534.4 tonnes compared with 245.4 tonnes in Q2 2009. FThe largest contribution to this rise came from the ETF segment of investment demand, which grew by 414% to 291.3 tonnes, the second highest quarter on record. FPhysical gold bar demand, which largely covers the non-western markets, rose 29% from Q2 2009 to 96.3 tonnes. FGlobal jewellery demand remained robust in Q2 2010. In the face of surging price levels, consumption totalled 408.7 tonnes during the second quarter of 2010, just 5% below year-earlier levels. FGold jewellery demand in India, the largest jewellery market, was little changed from year-earlier levels, down just 2% at 123.0 tonnes. In local currency terms, this translates to a 20% increase in the value of demand to Rs216 billion. FChina saw demand for gold jewellery increase by 5% to 75.4 tonnes . While growth in demand in tonnage terms was hindered by extreme weather conditions, the growth in the local currency value measure of demand was 35% to RMB 19.8 billion.

Gold jewellery demand in India, the largest jewellery market, was little changed from year-earlier levels, down just 2% at 123.0 tonnes. In local currency terms, this translates to a 20% increase in the value of demand to Rs216 billion.

Global Supply and Demand (WGC Presentation)

2008 Supply Mine Production Net producer hedging Total Mine supply Official sector Sales Old gold scrap Total Supply Demand Fabrication Jewellery Industrial & dental Sub-total above fabrication Bar & coin retail investment Other retail investment ETFs & similar Total Demand "Inferred investment" 2009 % ch 2009 vs Q1'09 2008 7 . 13 -87 27 12 585 -1 584 62 606 1253 Q2'09 Q3'09 Q4'09 Q1'10 Q2'10 % ch Q2'10 vs Q2'09 3 6 35 18

2410 -352 2058 232 1316 3605

2575 -254 2322 30 1673 4024

637 -31 606 9 366 963

679 -97 582 11 297 869

674 -125 549 13 404 940

612 -26 586 38 350 897

659 -15 644 8 496 1132

2193 439.1 2632.1 643 215 321 3811 -206

1758.9 373 2131.9 503 228 617 3480 544

-20 -15 -19 -22 6 92 -9

329.4 78.9 408.3 51 99 465 1037 215

430.6 93.6 524.2 145 44 57 781 183

488 97.2 585.2 161 36 41 845 23

510.9 103.2 614.1 146 50 54 817 123

473.6 102.8 576.4 178 23 4 810 87

408.7 107.2 515.9 182 61 291 1047 84

-5 15 -2 25 41 414 34 -54

Source: www.gold.org, DFPL Research

Dugad Finserv Private Limited

Email : research@dugad.co.in

Dugad Finserv Private Limited

Institutional Analysis
Traditional demand Festivals and Wedding
The urban population which currently accounts for 30% of the total population is expected to increase to 40% by the year 2020. With rising young population, the jewellery industry has significant potential for growth. Indians have an inherent culture of buying gold during festivals like Diwali, Akshaya Tritiya, Dussehra etc and on the occasion of weddings. Even in modern times, gold is Indian bride's streedhan (considered as her personal wealth) which she receives from her parents during marriage and remains with her. Gold is bought more for its investment value than consumption.

Increasing affluent and middle class population

Data from National Council for Applied Economic Research (NCAER) indicates that India's income earning population will expand by 8% from 26% in FY06 to 34% in FY11. Even the upper-middle class population is expected to rise from 7% to 10% during the same period. These two segments are expected to fuel consumption growth of luxurious items and this bodes well for the jewellery industry. Disposable income in India increased at a CAGR of 11% since 1997. The median age of Indians is 24.8 years, one of the lowest in the world compared to 35 in US and 33.6 in China. The urban population which currently accounts for 30% of the total population is expected to increase to 40% by the year 2020. With rising young population, the jewellery industry has significant potential for growth.

Shift in buying patterns

Increasing urbanisation, higher percentage of younger population, more working women and easy availability of credit cards have all led to impulse buying and preference for a better lifestyle. The neo-rich with inclination to buy high-end gadgets like mobile phones, i-pods, watches etc are purchasing jewellery in modern and aesthetic designs as a fashion statement. As per the National Sample Survey data, in urban India the share of essential items like food, clothing, electricity & fuels and footwear in the total average annual per capita consumption expenditure has reduced whereas the share of durable goods has increased, which reflects the changing preferences of consumers. However, inspite of the increasing preference for luxury items, the per capita spending by an Indian is lowest in the world.

Gitanjali Gems plans to restructure its business which will unlock its value for shareholder's
The company has emerged as one of the largest intergraded player into jewellery, manufacturing to retail. Currently the business has grown and they have five different categoriesbasically manufacturing of diamond and jewellery, the retail business and they are also foraying into lifestyle retail. Gitanjali Gems, which owns brands such as Nakshatra and Ddamas, is going in for restructuring. The company has roped in KPMG to help in restructuring its businesses. The board has decided to explore the potential merger of subsidiaries, demerger and other forms of restructuring, or acquisition, or spinoffs with the ultimate aim of enhancing and unlocking shareholder value. The company has emerged as one of the largest intergraded player into jewellery, manufacturing to retail. Currently the business has grown and they have five different categoriesbasically manufacturing of diamond and jewellery, the retail business and they are also foraying into lifestyle retail. They are probably having the highest number of brands world over and they are reckoned as third or fourth or fifth largest in the world as a jewellery brands. Hence they are looking at giving a better visibility and unlocking value. The restructuring initiative is expected to be completed over the next year. As per the company, they believe that their retail brands are worth Rs 5,000 crores. Hence we believe that its intrinsic value of the company would be much more than the existing market cap once the restructuring is done.

Dugad Finserv Private Limited

Email : research@dugad.co.in

Dugad Finserv Private Limited

Institutional Analysis
Change in business mix (Retail Foray) and its Integrated Business Model will improve margins

Retail Expansion Plans

India's retail industry is expected to grow at 10- 12% to reach USD 416 billion by 2011-12; of which the organised retail market would be around USD 51 billion. Currently, there are three retail formats for jewellery in India. They are: Exclusive outlets at malls and shopping centres, Kiosks/displays in departmental outlets and malls, Display of branded jewellery in shops of local jewelers. Gitanjali is undertaking retail expansion through the organic, inorganic and partnership routes. Currently, Gitanjali occupies around 1 million square feet of retail space in India. Around 60% of the organized mall space in India within the jewellery category belongs to the Gitanjali Group. Gitanjali has more than 400 exclusive distributors, with distribution in more than 2000 retail outlets. The Company has PAN India presence through its over 185 exclusive stores and has more than 215 franchisee stores. At present, Gitanjali has 126 stores in the US. Gitanjali has plans to aggressively expand its domestic outlets. In the coming years, Gitanjali has planned for increasing contribution from jewellery segment to 65-70% of total sales by consolidating acquisitions and enhancing rural penetration. Gitanjali has planned for aggressive retail expansion (entered into Lifestyle Retail as well as Jewel Retail) and is aiming at increasing its retail presence to 2 million square feet in the next three years. It plans to capitalize upon the opportunities available in Tier 2 and Tier 3 cities, as organized retail as a whole, is expected to grow at 2530% in the next five years. Considering its Retail foray and its Integrated Business Model, we believe that Gitanjali gems will improve its margins in the coming years.

Infratech business will unlock its value in the coming Years

Gitanjali is constructing the first privately owned and managed jewellery SEZ in India, the Rajiv Gems Park at Hyderabad, Andhra Pradesh, which is intended to become one of the largest gems and jewellery SEZs in India. Gitanjali's Rajiv Gems Park at Hyderabad SEZ, has developed five modern state of art manufacturing facilities for commercial production and a training center. These facilities are up and running and are employing nearly 1500 workers. The unit provides extensive tax benefits and holidays including the 10 year income tax holiday and 5 year income tax breaks for all firms within the SEZ. World class in house facilities are being provided for all leading diamond/Jewellery manufacturers. A jewellery manufacturing facility, spread over 2 lakh sq. ft, is being developed, out of which 1 lakh sq. ft have already been developed. Gitanjali is planning launch a Residential project of 3,30,000 sq ft at Borivali, Mumbai during the year FY 2010-11. They are also planning commercial premises of 100,000 Sq ft at Andheri MIDC, Mumbai to be developed in FY 2010 11 for rental and outright sale. Hence we believe that Gitanjali Gems will unlock the hidden values on the realty in the coming years. Currently its land bank is valued at Rs 1500 crores.

Dugad Finserv Private Limited

Email : research@dugad.co.in

Dugad Finserv Private Limited

Institutional Analysis
Financial Analysis
On a Consolidated basis, the June quarter net sales rose by 38% to Rs 1865.91 crore from Rs 1352.16 crore during the corresponding previous year. The EBITDA margin increased by 130 basis points to 8.2% for the quarter ended June 2010. Thus, EBITDA stands at Rs 153.74 crore compared to Rs 93.54 crore in the corresponding previous period. Adjusted net profit registered a growth of 73% to Rs 78.7 crore from Rs 45.45 crore. During the year ended March 2010, Gitanjali Gems Limited's net sales increased by 28.3% to Rs 6527.63 crore from Rs 5088.88 crore during the corresponding previous year ended March 2009. The EBITDA margin increased by 36 per cent to 6.8% from 6.4%.

Gitanjali Gem's Revenue (in Rs crs)

10000.00 9000.00 8000.00 7000.00 6000.00 5000.00 4000.00 3000.00 2000.00 1000.00 0.00 FY08 FY09 FY10 FY11E FY12E

Source: Company, DFPL Research

Key Risk
Execution Risk
Gitanjali plans an aggressive roll-out in the retail segment. We believe the incremental roll-out will depend on the following factors: Success of recently launched stores. The pace of opening of new stores. The terms and conditions for the Jewellers under the associate model. The company's ability to streamline the operations of the stores with good logistics and advertising Support.

Slowdown in Key Markets

The key Jewellery consumer markets are the US, Europe, and Japan. The slowing economic growth in these regions may affect demand for Jewellery, which may affect the company's bulk export business.

Gold Price Volatility

Empirical evidence suggests an increase in gold price volatility inversely affects demand for gold. Any increase in gold price volatility, as a result of financial market instability or otherwise, may lead to a decline in Jewellery demand, which may also affect the company's bulk export business.

Rupee Appreciation
Some of the company's revenue comes from exports. The rupee appreciation against the US dollar could affect the overall competitive cost advantage of Indian Jewellery vis--vis other exporters.

Valuation
We believe Gitanjali Gems Limited is all set to generate higher revenues with good margins and also unlock its hidden value by restructuring and real estate. At current price of Rs. 244.25, the stock is trading at a PE of 8.1x and 5.2x and P/BV of 0.8x and 0.7x for FY11E and FY12E respectively. The valuation looks attractive and we recommend OUTPERFORMER on the stock with a target price of Rs. 338 per share (PE of7.2 x for FY12E), an upside of 38%.

Dugad Finserv Private Limited

Email : research@dugad.co.in

Dugad Finserv Private Limited

Institutional Analysis
Financial Detail
Consolidated Income Statement
(Rs Crs) Net Sales Net Sales Growth (%) Total Expenditure EBITDA EBITDA Margin (%) Depreciation Interest Other Income PBT Taxes Profit Before Minority Interest Miniority Interest Net Profit Net Profit Growth (%) Net Profit Margin (%) Adj. Net Profit Adj. Net Profit Growth (%) FY09 5088.88 5.3% 4761.86 327.02 6.4% 33.60 137.49 2.52 158.45 3.17 155.28 4.7 150.58 -5.6% 3.0% 150.58 -6.5% FY10 6527.63 28.3% 6081.63 446.00 6.8% 44.54 217.57 40.85 224.74 23.19 201.55 1.38 200.17 32.9% 3.1% 200.05 32.9% FY11E 7833.16 20.0% 7324.00 509.16 6.5% 48.55 218.50 40.85 282.96 28.30 254.66 0 254.66 27.2% 3.3% 254.66 27.3% FY12E 9243.12 18.0% 8549.89 693.23 7.5% 52.09 242.25 40.85 439.74 43.97 395.77 0 395.77 55.4% 4.3% 395.77 55.4%

Consolidated Balance Sheet

(Rs Crs) Share Capital (FV: Rs 10) Shareholder's Funds Total Debt Current Liabilities and Provisions Deffered Tax Liability Miniority Interest Total Liabilities Net Fixed Assets Capital WIP Deffered Tax Asset Investments Loans and Advances Inventory Cash & Bank balance Receivables Misc Expenditure not W/O Total Assets FY09 85.06 2077.48 2046.64 1754.52 18.31 9.85 5906.80 306.64 53.33 13.49 33.13 467.56 1975.82 297.20 2759.63 0.00 5906.80 FY10 84.27 2196.52 2595.29 1575.46 20.72 48.31 6436.30 308.74 62.61 22.57 35.91 457.49 2079.39 238.64 3230.93 0.02 6436.30 FY11E 84.85 2761.87 2300.00 1612.11 20.72 48.31 6743.01 283.57 70.00 22.57 35.91 500.00 2146.07 465.76 3219.11 0.02 6743.01 FY12E 84.85 3139.75 2550.00 1882.51 20.72 48.31 7641.29 263.70 80.00 22.57 35.91 550.00 2279.13 611.42 3798.54 0.02 7641.29

Source: Company, DFPL Research

Source: Company, DFPL Research

Consolidated Cash Flow

(Rs Crs) Pre-tax Profit Depreciation Chg in Working Capital Total Tax Paid Other Operating activities CF form Operations (I) Capital Expenditure Chg in Investments Other Investing activities CF form Investing (II) Equity Raised/(repaid) Debt Raised/(repaid) Dividend Other financing activities CF form Financing (III) Net Change in cash (I+II+III) Beginning Cash Ending Cash FY09 FY10 FY11E FY12E 158.46 224.74 282.96 439.74 33.59 44.54 48.55 52.09 (881.01) (246.58) (60.72) (492.09) (10.35) (23.01) (28.30) (43.97) 63.13 137.69 0.00 0.00 (636.18) 137.38 242.49 (44.23) (27.34) (15.85) (30.77) (42.22) (105.29) (8.43) 0.00 0.00 0.00 0.00 0.00 0.00 (132.63) (24.28) (30.77) (42.22) 0.00 0.00 328.58 0.00 (39.03) (153.77) (295.29) 250.00 (17.91) (17.89) (17.89) (17.89) 0.00 0.00 0.00 0.00 (56.94) (171.66) 15.40 232.11 (825.75) (58.56) 227.12 145.66 1122.95 297.20 238.64 465.76 297.20 238.64 465.76 611.42

Ratio Analysis
FY09 Growth Ratios Sales Growth (%) EBITDA Growth (%) EPS Growth (%) Profitability Ratios EBITDA Margin (%) PAT Margin (%) RONW (%) ROCE (%) Per Share Ratios Earnings Per Share Cash Per Share Book Value Per Share Valuation Multiples P/E (x) P/BV (x) EV/EBITDA FY10 FY11E FY12E

5.3% 20.9% -5.6% 6.4% 3.0% 7.2% 5.0% 17.7 21.7 244.2 13.8 1.0 12.6

28.3% 36.4% 34.2% 6.8% 3.1% 9.1% 6.9% 23.8 29.0 260.7 10.3 0.9 10.4

20.0% 14.2% 27.2% 6.5% 3.3% 9.2% 7.4% 30.2 35.7 325.5 8.1 0.8 8.6

18.0% 36.2% 55.4% 7.5% 4.3% 12.6% 8.9% 47.0 52.8 370.0 5.2 0.7 6.6

Source: Company, DFPL Research

Source: Company, DFPL Research

Dugad Finserv Private Limited

Email : research@dugad.co.in

Dugad Finserv Private Limited

Dugad Finserv Private Limited

We advices on New Issues, QIP's, Corporate Finance offerings like Placement of Equity & Debt with Different Institutional Investors, Short term funds arrangement like Debt and equity, Working capital and Debt syndication and structured Deals. Corporate Restructuring - Capital & Debt,Project Financing and Private Equity with Financial Joint Ventures. Dugad Finserv Private Limited also offer services on raising funds or capital through International Markets.

Contact us:
Vijay Dugad Managing Director Dugad Finserv Private Limited Intermediaires between Corporate and Institutions 120,Commodity Exchange Bldg, Plot No.2,3,&4, sector 19, Vashi, Navi Mumbai-400 705 PH;022-32255002/32255003 9004094415 vijay@dugad.co.in

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