Manpasand Beverages
BSE SENSEX
35,965
Bloomberg
Equity Shares (m)
M.Cap.(INRb)/(USDb)
52-Week Range (INR)
1, 6, 12 Rel. Per (%)
Avg Val, INRm
Free float (%)
S&P CNX
11,028
MANB IN
114.4
43.8 / 0.7
Vadodara capacity expansion to aid growth; Varanasi and Sri City’s
512 / 310
expansion pushed ahead
-19/-16/-10
85.0
Revenue in-line; EBITDA and PAT beat estimates:
MANB’s 3QFY18 revenue
increased 39.7% YoY on a like-to-like basis (after netting off excise of
55.9
31 January 2018
3QFY18 Results Update | Sector: Consumer
CMP: INR381
TP: INR467(+22%)
Buy
Distribution network expansion on track
Financials & Valuations (INR b)
2018E 2019E
Y/E Mar
Net Sales
9.8
14.4
EBITDA
1.8
2.8
PAT
1.0
1.5
EPS (INR)
9.0
13.2
Gr. (%)
41.6
47.2
BV/Sh (INR)
107.6
117.6
RoE (%)
7.4
11.8
RoCE (%)
8.6
13.6
P/E (x)
42.4
28.8
P/BV (x)
3.5
3.2
2020E
18.8
3.7
2.1
17.9
35.6
131.1
14.4
16.7
21.2
2.9
Estimate change
TP change
Rating change
INR37m from revenue of 3QFY17) to INR1,431m (est. of INR1,393m). EBITDA
margin shrunk 130bp YoY to 18.7% (est. of 18%) in 3QFY18, led by an
increase in raw materials cost (+250bp to 60.8% of net sales). However,
other expense and employee cost declined 60bp and 40bp YoY to 16.3% and
4.3%, respectively. EBITDA grew 30% YoY to INR267m (est. of INR251m) in
3QFY18. Accordingly, adj. PAT grew 65.5% YoY from INR72m to INR120m
(est. of INR103m).
Ramping up distribution through Parle network:
MANB had initiated
product supply through Parle’s distribution network in West Bengal in
2QFY18 (revenue contribution ~5% in 3QFY18). The company has thus far
profiled 150 distributors for 30,000 outlets and expects to reach a target of
1,000 distributors by 4QFY18. The distribution is expected to ramp up in line
with capacity expansion planned by the company, with the next geographies
to target being UP, Maharashtra and Gujarat.
Trial run at Vadodara commences; Varanasi to follow suit:
MANB has
commenced the trial run of recently completed expansion of Vadodara
facility, the benefit of which will be fully reflected in 4QFY18 and 1QFY19.
Expansion of Varanasi facility, however, is delayed by 1-2 months, and is
now expected to commence by April 2018.
Valuation view:
We cut our earnings estimate by ~11% for both FY19 and
FY20 on account of delay of 1-2 months in commissioning of Varanasi and Sri
City facilities, as well as the expected commissioning of the plant in north-
east (Orissa) being pushed to FY20. We value the stock at 26x FY20E EPS,
with a target price of INR467 (22% upside) and maintain our
Buy
rating.
Investors are advised to refer through important disclosures made at the last page of the Research Report.
Motilal Oswal research is available on www.motilaloswal.com/Institutional-Equities, Bloomberg, Thomson Reuters, Factset and S&P Capital.
Niket Shah – Research Analyst
(Niket.Shah@MotilalOswal.com); +91 22 6129 1535
Aksh Vashishth – Research Analyst
(Aksh.Vashishth@motilaloswal.com); +91 22 6129 1553

Manpasand Beverages
Exhibit 1: Revenue trend
Revenue(INR m)
80
23
762
918
2,126
2,369
76
63
35
12
1,025
1,025
29
27
23
1,258
40
Growth(%)
15
1,453
2,734
3,015
1,431
Source: Company, MOSL
Exhibit 2: EBITDA margins trend
23.3
EBITDA(INR m)
20.9
19.3 20.1 19.1
21.7
Margin(%)
20.0 18.9 18.7
17.1
18.7
Exhibit 3: PAT trend
PAT(INR m)
82
48
24
49
22
72
25
89
120
Growth(%)
65
65
339 159 177 428 453 222 205 518 563 215 267
157
43
49
256 286
54
313 359
Source: Company, MOSL
Source: Company, MOSL
Capacity expansion delayed by 1-2 months
MANB had planned to expand its capacity by adding three plants in Vadodara,
Varanasi and Sri City. Additionally, the company was in process of evaluating the
location to open another plant in north-east.
The company has commissioned its plant in Vadodara, where the trial run has
commenced.
However, the plants in Varanasi and Sri City are pushed by 1-2 months and are
now expected to get commissioned by April and July 2018, respectively.
Valuation view
We cut our earnings estimate by ~11% for both FY19 and FY20 on account of delay
of 1-2 months in commissioning of Varanasi and Sri City facilities, as well as the
expected commissioning of the plant in north-east (Orissa) being pushed to FY20.
We value the stock at 26x FY20E EPS, with a target price of INR467 (22% upside) and
maintain our
Buy
rating.
31 January 2018
2

Manpasand Beverages
Story in charts
Exhibit 4: Revenues to post 39% CAGR over FY18E–20E
181%
Revenues (INR m)
Growth (%)
Exhibit 5: Margins to remain stable
EBITDA (INR m)
Margins (%)
15.9% 15.2%
23%
22%
45%
35%
37%
47%
31%
17.5%
20.7% 19.5%
18.7% 19.4% 19.5%
2,440 3,003 3,669 5,320 7,171 9,797 14,389 18,809
FY13
FY14
FY15
FY16
FY17
FY18E FY19E FY20E
Source: MOSL, Company
387
FY13
457
FY14
641
FY15
1,103 1,398 1,832 2,792 3,668
FY16
FY17
FY18E FY19E FY20E
Source: MOSL, Company
Exhibit 1: PAT to post 41% CAGR over FY18E–20E
268%
PAT (INR m)
Growth (%)
Exhibit 2: Healthy cash flow generation
CFO (INR m)
2,422
1,563
1,669
3,116
46%
-8%
224
FY13
205
FY14
300
FY15
69%
44%
726
FY17
42%
47%
36%
314
FY13
521
17
FY14
FY15
763
505
FY16
1,029 1,514 2,053
FY18E FY19E FY20E
Source: MOSL, Company
FY16
FY17
FY18E FY19E FY20E
Source: MOSL, Company
Exhibit 6: Utilization to grow on expanded capacities
Capacity (cases/day,'000)
63%
56%
57%
56%
Utilisation (%)
Exhibit 7: RoCE to pick up
RoCE
24.3%
18.2%
53%
55%
55%
16.5%
12.2%
8.4%
8.6%
54%
13.6%
16.7%
35
FY13
56.7
FY14
72.5
FY15
125
FY16
175
FY17
225
325
450
FY13
FY14
FY15
FY16
FY17
FY18E FY19E FY20E
Source: MOSL, Company
FY18E FY19E FY20E
Source: MOSL, Company
31 January 2018
3

Manpasand Beverages
Exhibit 8: Key assumptions (INR m)
FY13
Installed Capacity cases per day
Tetra Pak Case - Fruit Drinks
Pet Bottle Case - Fruit Drinks
Pet Bottle Case - Carbonates
Total
Revenues Gross (INR m)
Fruit Drinks
Carbonates
Others
Revenue Growth (%)
Fruit Drinks
Carbonates
19,750
15,250
-
35000
2,396
2,345
-
52
180%
174%
26,667
30,000
-
56667
2,932
2,850
-
81
22%
22%
30,000
32,500
10,000
72500
3,597
3,332
113
153
23%
17%
40000
67500
17500
125000
5,567
5,233
334
-
55%
57%
196%
50000
82500
42500
175000
7,015
6,040
900
75
26%
15%
169%
50000
107500
67500
225000
9,797
8,008
1,639
150
40%
33%
82%
50000
157500
117500
325000
14,389
10,953
3,136
300
47%
37%
91%
FY14
FY15
FY16
FY17
FY18E
FY19E
Source: Company, MOSL
31 January 2018
4

Manpasand Beverages
Financials and Valuations
Standalone - Income Statement
Y/E March
Total Income from Operations
Change (%)
EBITDA
Margin (%)
Depreciation
EBIT
Int. and Finance Charges
Other Income
PBT bef. EO Exp.
EO Items
PBT after EO Exp.
Current Tax
Deferred Tax
Tax Rate (%)
Less: Mionrity Interest
Reported PAT
Adjusted PAT
Change (%)
Margin (%)
FY15
3,669
22.2
641
17.5
205
436
107
4
334
0
334
36
-2
10.2
0
300
300
46.2
8.2
FY16
5,320
45.0
1,103
20.7
571
533
57
91
567
0
567
61
1
10.9
0
505
505
68.6
9.5
FY17
7,171
34.8
1,398
19.5
738
660
12
179
827
0
827
86
15
12.2
0
726
726
43.8
10.1
FY18E
9,797
36.6
1,832
18.7
868
964
0
233
1,196
0
1,196
167
0
14.0
0
1,029
1,029
41.6
10.5
FY19E
14,389
46.9
2,792
19.4
1,161
1,631
0
120
1,751
0
1,751
236
0
13.5
0
1,514
1,514
47.2
10.5
(INR Million)
FY20E
18,809
30.7
3,668
19.5
1,438
2,230
0
144
2,374
0
2,374
320
0
13.5
0
2,053
2,053
35.6
10.9
Standalone - Balance Sheet
Y/E March
Equity Share Capital
Total Reserves
Net Worth
Deferred Tax Liabilities
Total Loans
Capital Employed
FY15
376
1,534
1,909
0
1,179
3,088
1,345
499
847
1,316
0
1,341
424
593
43
280
417
225
95
98
924
1
3,088
FY16
501
5,515
6,016
0
0
6,016
3,730
1,069
2,660
1,339
6
2,451
704
677
973
97
593
448
135
11
1,858
152
6,016
FY17
572
10,963
11,535
0
3
11,538
6,173
1,807
4,366
2,016
2,054
3,665
616
752
2,248
49
798
672
121
5
2,867
235
11,538
FY18E
1,144
11,166
12,311
0
3
12,313
8,673
2,675
5,997
2,016
2,054
3,237
829
913
1,397
98
1,226
928
294
5
2,011
235
12,313
FY19E
1,144
12,308
13,453
0
3
13,455
10,673
3,836
6,837
2,016
2,054
4,100
1,207
1,183
1,566
144
1,787
1,351
432
5
2,313
235
13,455
(INR Million)
FY20E
1,144
13,857
15,001
0
3
15,003
13,286
5,274
8,012
1,403
2,054
5,631
1,576
1,546
2,321
188
2,332
1,763
564
5
3,299
235
15,003
Gross Block
Less: Accum. Deprn.
Net Fixed Assets
Capital WIP
Total Investments
Curr. Assets, Loans&Adv.
Inventory
Account Receivables
Cash and Bank Balance
Loans and Advances
Curr. Liability & Prov.
Account Payables
Other Current Liabilities
Provisions
Net Current Assets
Deferred Tax assets
Appl. of Funds
31 January 2018
5

Manpasand Beverages
Financials and Valuations
Ratios
Y/E March
Basic (INR)
EPS
Cash EPS
BV/Share
DPS
Payout (%)
Valuation (x)
P/E
Cash P/E
P/BV
EV/Sales
EV/EBITDA
Dividend Yield (%)
Return Ratios (%)
RoE
RoCE
RoIC
Working Capital Ratios
Asset Turnover (x)
Inventory (Days)
Debtor (Days)
Creditor (Days)
Working Cap. Turnover (Days)
Growth (%)
Sales
EBITDA
PAT
Leverage Ratio (x)
Debt/Equity
FY15
2.6
4.4
16.7
0.4
19.7
145.6
86.4
22.8
12.2
69.8
0.1
18.8
16.5
23.2
1.2
42
59
22
88
22.2
40.4
46.2
0.6
FY16
4.4
9.4
52.6
0.4
12.2
86.3
40.5
7.2
8.0
38.6
0.1
11.4
12.2
17.5
0.9
48
46
31
61
45.0
72.0
68.6
0.0
FY17
6.3
12.8
100.8
0.6
12.3
60.0
29.8
3.8
5.8
29.6
0.2
7.3
8.4
13.0
0.6
31
38
34
31
34.8
26.7
43.8
0.0
FY18E
9.0
16.6
107.6
1.8
24.6
42.4
23.0
3.5
4.3
23.0
0.5
7.4
8.6
13.7
0.8
31
34
35
23
36.6
31.1
41.6
0.0
FY19E
13.2
23.4
117.6
2.6
24.6
28.8
16.3
3.2
2.9
15.1
0.7
11.8
13.6
19.2
1.1
31
30
34
19
46.9
52.4
47.2
0.0
FY20E
17.9
30.5
131.1
3.6
24.6
21.2
12.5
2.9
2.2
11.3
0.9
14.4
16.7
1.3
31
30
34
19
30.7
31.4
35.6
0.0
Standalone - Cash Flow Statement
Y/E March
OP/(Loss) before Tax
Depreciation
Interest & Finance Charges
Direct Taxes Paid
(Inc)/Dec in WC
CF from Operations
Others
CF from Operating incl EO
(Inc)/Dec in FA
Free Cash Flow
(Pur)/Sale of Investments
Others
CF from Investments
Issue of Shares
Inc/(Dec) in Debt
Interest Paid
Dividend Paid
Others
CF from Fin. Activity
Inc/Dec of Cash
Opening Balance
Closing Balance
FY15
333
205
102
-55
-65
521
6
527
-1,586
-1,059
0
4
-1,582
263
436
-101
-4
458
1,051
-4
47
43
FY16
567
571
-34
-154
-188
763
13
776
-2,316
-1,540
-6
72
-2,250
4,000
-1,179
-63
-110
-244
2,404
930
43
973
FY17
827
738
-167
-101
266
1,563
0
1,563
-3,120
-1,557
-2,048
179
-4,989
5,001
3
-12
-89
-201
4,701
1,275
973
2,248
FY18E
1,196
868
-233
-167
5
1,669
0
1,669
-2,500
-831
0
233
-2,267
0
0
0
-253
0
-253
-851
2,248
1,397
FY19E
1,751
1,161
-120
-236
-133
2,422
0
2,422
-2,000
422
0
120
-1,880
0
0
0
-373
0
-373
169
1,397
1,566
(INR Million)
FY20E
2,374
1,438
-144
-320
-231
3,116
0
3,116
-2,000
1,116
0
144
-1,856
0
0
0
-505
0
-505
755
1,566
2,321
31 January 2018
6

Manpasand Beverages
Corporate profile
Company description
MANB has the unique distinction of being the sole
listed company in the beverages sector. MANB
primarily focuses on mango-based drinks. Mango
Sip, launched in 1997, is the company’s flagship
product, contributing 80% to revenues in FY16 (97%
in FY14). Mango Sip is strategically focused on semi-
urban and rural markets; MANB derives ~55% of
revenues from rural areas, 20–22% through
railways and the remaining from urban areas.
Source: MOSL/Bloomberg
Exhibit 1: Sensex rebased
Exhibit 2: Shareholding pattern (%)
Dec-17
Promoter
DII
FII
Others
44.1
29.1
21.9
4.9
Sep-17
44.1
28.9
22.2
4.8
Dec-16
44.1
31.7
20.1
4.1
Source: Capitaline
Exhibit 3: Top holders
Holder Name
SAIF PARTNERS INDIA IV LIMITED
BARON EMERGING MARKETS FUND
SBI MAGNUM MULTIPLIER FUND
MOTILAL OSWAL MOST FOCUSED MULTICAP
35 FUND
NEW HORIZON OPPORTUNITIES MASTER
FUND
% Holding
17.6
4.8
4.8
4.6
2.6
Source: Capitaline
Note: FII Includes depository receipts
Exhibit 4: Top management
Name
Dhirendra Singh
Bhavesh Jingar
Designation
Chairman & Managing Director
Company Secretary
Exhibit 5: Directors
Name
Bharatkumar Vyas
Chirag Doshi
Milindkumar Babar
Abhishek Singh
Name
Bharti Naik
Dhruv Agarwal
Vishal Sood
Source: Capitaline
*Independent
Exhibit 6: Auditors
Name
Deloitte Haskins & Sells
Niraj Trivedi
Sharp & Tannan Associates
Type
Statutory
Secretarial Audit
Internal
Exhibit 7: MOSL forecast v/s consensus
EPS
(INR)
FY18
FY19
FY20
MOSL
forecast
9.0
13.2
17.9
Consensus
forecast
8.6
12.4
18.1
Variation (%)
4.2
6.6
-0.8
Source: Bloomberg
Source: Capitaline
31 January 2018
7

Explanation of Investment Rating
Investment Rating
BUY
SELL
NEUTRAL
UNDER REVIEW
NOT RATED
Expected return (over 12-month)
>=15%
< - 10%
> - 10 % to 15%
Rating may undergo a change
We have forward looking estimates for the stock but we refrain from assigning recommendation
Manpasand Beverages
*In case the recommendation given by the Research Analyst becomes inconsistent with the investment rating legend, the Research Analyst shall within 28 days of the inconsistency, take appropriate measures to make the recommendation consistent with the investment rating legend.
Disclosures:
The following Disclosures are being made in compliance with the SEBI Research Analyst Regulations 2014 (herein after referred to as the Regulations).
Motilal Oswal Securities Ltd. (MOSL) is a SEBI Registered Research Analyst having registration no. INH000000412. MOSL, the Research Entity (RE) as defined in the Regulations, is engaged in the business of providing Stock broking services,
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which are available on
www.motilaloswal.com.
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the end of the month immediately preceding the date of publication of the Research Report.
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a)
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b)
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c)
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Disclosure of Interest Statement
Analyst ownership of the stock
Manpasand Beverages
No
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Motilal Oswal Asset Management Company Ltd. (MOAMC): PMS (Registration No.: INP000000670) offers PMS and Mutual Funds products. Motilal Oswal Wealth Management Ltd. (MOWML): PMS (Registration No.: INP000004409) offers wealth
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