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Interaction with the CEO
Fortifying moat; Enhanced growth visibility
Aspiring to be a Total Foods player; margin expansion theme still relevant
Britannia Industries
Our meeting with Mr Varun Berry has reinforced our preference for Britannia as one of our top
ideas in the Consumer space. The key takeaways from the meeting are as below:
Vision to become a complete Foods player—replete with ideas for the next 10 years.
Several category adjacencies to be leveraged.
Multiple growth drivers besides Biscuits—Dairy, Bakery can be 3x-4x in five years;
Biscuits to benefit from industry premiumization.
Mr Varun Berry
Margin expansion not over yet—confluence of portfolio premiumization, raw material
Managing Director
tailwinds, and further cost efficiencies in supply chain.
Moat strengthened, growth visibility enhanced. Retain BUY and preferred idea
Mr. Varun Berry, holds a
graduate degree in BE
(recommend adding on every dip).
Route to success—six drivers of transformation:
Over FY12-15, Britannia has
delivered 13%, 40% and 42% CAGR in sales, EBITDA and PAT, respectively. After
seven years of sub-par performance (FY05-12 sales, EBITDA and PAT CAGR of 20%,
6% and 2%, respectively) and loss in market share, we believe that Britannia has
undergone massive transformation. This transformation is driven by six factors: 1)
Expansion of direct reach, higher throughput from existing outlets and reduced
dependence on Wholesale trade. 2) Five focus brands: Britannia used to advertize
16 brands with negligible spends behind each brand and limited effectiveness. This
has been cut to five focus brands, resulting in a significant improvement in visibility,
offtake and market share. 3) Fixed cost rationalization: Fixed costs increased
dramatically to prepare for high growth that the company had planned, but which
did not come through. Over the last three years, these costs have been rationalized.
4) Efficiencies in commodity sourcing, supply chain and logistics planning and waste
minimization. 5) People policy as a key driver of change: Promotion of several in-
house experienced hands by 2-3 levels of hierarchy by giving challenging roles has been the biggest contributor
to the turnaround, per Mr. Berry. 6) The Britannia promise: Britannia is actively working (training, benchmarking
v/s competition, etc) on recipe and taste of its products to make them best in class and minimize any quality
issues. Share of captive production has moved up from 30-35% a few years ago to 50% in FY15, and is expected
to rise to 60% in FY16
Vision to be a Total Foods company:
Mr. Berry wants to gradually transform Britannia from being a “Biscuits”
company to a “Total Foods” player. It is evaluating relevant food categories where the company can have a
“Right to Win” and leverage the strong brand equity of Britannia by potentially entering adjacent categories. In
the long term, it is aiming to move from its current positioning as “Side of the plate” player to “Centre of the
plate” player. However, it will not be gunning for mass segments.
Multiple growth drivers in place:
Within its existing portfolio, it believes there are multiple growth drivers. For
example, despite higher penetration levels, Britannia’s market share in rural is only 60% of its urban market
share and leaves enough scope for accruing share gains. Exploiting price point portfolio to augment its reach in
new markets and continued numeric distribution expansion will drive Britannia’s growth (it expanded its direct
reach from 7.3 lakh outlets in FY14 to 10 lack outlets in FY15.) As per media reports, Britannia has crossed Parle
in market share, per latest monthly Nielsen data.
Gautam Duggad
(Gautam.Duggad@MotilalOswal.com); +91 22 3982 5404
Manish Poddar
(Manish.Poddar@MotilalOswal.com); +91 22 3027 8029
Investors are advised to refer through disclosures made at the end of the Research Report.
Motilal Oswal research is available on
www.motilaloswal.com/Institutional-Equities,
Bloomberg, Thomson Reuters, Factset and S&P Capital.
Mechanical from the Punjab
University. He has also
attended a course in Strategic
Management from Wharton
University and the Global
Leadership Program at IMD,
Switzerland. Mr. Varun Berry
joined the Company as Vice
President & Chief Operating
Officer with effect from 1st
February, 2013. He has an
experience of over 27 years
with premier companies like
Hindustan
Unilever
and
Pepsico, both in India and
overseas and a successful
track record in leading start
ups,
turnarounds,
joint
ventures
and
growth
businesses.

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Pricing power strengthened; will withstand adverse commodity cycle:
One of the key investor concerns has
been around the sustainability of margin expansion, which Britannia delivered over the last three years, and
whether it will dissipate if commodity cycle turns. We believe Britannia will be able to retain margins even in
adverse commodity pricing environment. Our conviction is based on Britannia’s improved pricing power.
Britannia’s portfolio mix has changed substantially over the years with underlying industry premiumization and
its focus toward driving premium products through focused investments. Given the rational competition
coupled with ITC’s comfortable double-digit market share and its own focus on driving premium sub-segments,
we believe irrational competition is improbable in current circumstances. Also, Parle is fighting a separate battle
in its bread and butter Glucose segment (which has been de-growing since three years now); this will constrain
its ability to wage a pricing war in premium segment, in our view.
Margin expansion from current levels not difficult:
Despite robust execution of cost containment on supply
chain and overheads and consequent margin expansion of 480bps to 10% in three years, Mr. Berry believes
enough leeway still exists for cost reduction. For example, only 50% of the gains from productivity improvement,
supply chain efficiencies and other cost savings have been achieved. We are building in 270bp margin expansion
over FY15-17E, driven by mix improvement, modest demand recovery and raw material tailwinds. In the
medium to long term, given the continued premiumization in the segment, we believe even ~15% EBITDA
margins are not inconceivable in our view.
Near-term consumer demand challenging:
As per Mr. Berry, Britannia has negotiated the demand slowdown
well and witnessed healthy double-digit growth in FY15 (14% topline growth) despite low single-digit Biscuits
category growth. However, broader consumer demand in Foods segment has remained weak—e.g. Chocolates,
Snacks, and Soft Drinks (despite severe summer). Sustained weak industry growth may result in heightened
competitive intensity as companies fight for market share to grow in the absence of demand revival.
Non-Biscuits portfolio can grow disproportionately:
Britannia’s non-biscuits portfolio (Dairy, Bakery,
International business) has not achieved meaningful scale yet. For example, even after 14 years of presence in
Diary, its revenues stand at INR 4b. It is planning a quantum leap and targeting INR20b-25b in revenue over the
next 5 years by focusing on value added products and leveraging its reach. We understand that the fine print of
Dairy strategy is still being worked out. Even the Cakes and Rusk business can treble in the next five years, per
management. In International business, Britannia will focus on markets with Indian Diaspora, including Africa,
South East Asia, SAARC and Middle East. This segment generates sub-INR5b revenues and the company is
confident of a significant scale-up as it believes it has the Right to Win and has relevant knowhow and talent to
drive this business.
Remains amongst our top ideas; increased confidence in longevity of growth:
Britannia has been amongst our
top two ideas along with Emami since 2HFY14. Despite ~4.5x returns in two years and significant
outperformance, we believe Britannia still offers a good play on premiumizing Biscuits category with an added
potential to play a broader Foods theme over the medium term. Given our confidence in the strengthened moat
of Britannia and longevity of growth, we maintain BUY despite expensive valuations (and recommend adding on
every dip) with a revised target price of INR2,800 (35x FY17 EPS). Irrational competition and sustained macro
weakness are key risks.
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Key Charts reflecting Britannia’s transformation
Exhibit 1: Britannia’s P&L has transformed over FY12-15
FY05-12
FY12-15
39.6
42.1
20.2
12.5
6.3
2.3
PAT
Source: Company, MOSL
Sales
EBITDA
Exhibit 2: EBITDA margin has doubled over the last three years; fixed costs reigned in (%)
Margin break-up
Gross Margins
Manufacturing expenses
Consumption of stores &
spares
Heat light and power
Plant and machinery
Others
Conversion Cost
Employee costs
Other expenses
Rates and taxes
Freight
Overheads
Other Miscellaneous
expenses
Advertising
EBITDA
PAT
FY03
47.5
15.5
0.3
1.3
0.3
0.0
13.6
6.6
4.5
1.2
3.1
2.1
2.5
7.3
11.4
7.6
FY04
47.1
13.9
0.3
1.2
0.4
0.0
12.0
5.7
5.3
1.4
3.7
2.4
2.3
8.0
11.8
9.5
FY05
41.1
9.2
0.2
0.9
0.3
0.0
7.7
4.7
5.5
1.5
3.8
2.7
2.4
6.7
12.3
11.5
FY06
41.3
9.8
0.2
1.3
0.4
0.0
7.8
4.3
7.4
1.2
6.0
2.0
2.0
6.3
11.7
8.5
FY07
35.8
9.7
0.2
1.1
0.3
0.0
8.0
3.5
7.9
0.4
7.4
2.8
2.8
6.1
5.8
5.0
FY08
39.0
8.6
0.2
1.5
0.5
0.0
6.4
4.5
7.4
0.5
6.8
3.3
3.3
6.6
8.5
6.1
FY09
38.1
9.0
0.3
1.5
0.6
0.0
6.6
4.6
7.7
0.6
6.9
2.8
2.8
6.9
7.0
3.7
FY10
36.1
8.7
0.3
1.2
0.3
0.3
6.6
4.4
8.0
0.7
6.7
2.8
2.7
8.0
4.3
3.5
FY11
34.0
8.2
0.2
1.2
0.2
0.2
6.3
3.9
7.2
0.5
6.6
2.8
2.7
7.3
4.7
2.9
FY12
35.3
8.5
0.2
1.3
0.2
0.2
6.5
3.9
6.7
0.5
6.1
3.3
3.2
7.7
5.2
3.7
FY13
37.1
9.1
0.2
1.5
0.2
0.3
6.8
3.7
6.3
0.3
5.7
3.2
3.2
8.7
6.0
4.2
FY14 FY15*
38.9
9.1
0.3
1.6
0.2
0.3
6.6
3.8
6.2
0.4
5.7
2.9
2.9
8.8
8.0
5.8
8.4
10.0
7.4
6.3
3.6
11.3
39.7
*FY15 detailed break-up is not yet available pending release of Annual Report. We have clubbed Overheads + Manufacturing expenses
(excluding Conversion costs) in Other expenses.
Source: Company, MOSL
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Recent media interviews of Mr Varun Berry
Interview 1: “Our
long-term aim is to become a total foods company”
Source:
http://www.business-standard.com/article/companies/q-a-our-long-term-
aim-is-to-become-a-total-foods-company-115052200877_1.html
For the second quarter in a row, Britannia has managed revenue in excess of Rs
2,000 crore. How?
The fourth quarter has been pretty good, as our consolidated revenue grew
14.3% (over a year before) to INR 20.3b, mainly due to the continued growth
momentum. The operating margin expanded 200bp on an equalised basis for
the year, despite no pick-up in the market. We have grown in double digits,
even as the market remained in single digits.
The agenda we had set for ourselves has resulted in better numbers. This
quarter, we could reach out to a million outlets directly as compared to 730,000
previously, and a total of 3.5 million outlets. Overall, our distribution agenda
moved in the right direction. Our brands are stronger and we had a lot of action
in the quarter. We were visible in the Filmfare awards and cricket tournaments,
and had some brand launches. This was supported very ably by our supply
chain. The market is still in single digit growth, while we have grown in double
digits. All the activities we have run in sales and marketing helped us gain some
traction and some share.
Which of your brands performed well in the fourth quarter?
It's the same story. Premium cookies continued to do well. Marie has done well.
New launches that have come in, along with Nutrichoice and Good Day Chunkies
have all done well in the premium portfolio. The big five continue to do well and
our power brands continued to do well. However, the value portfolio was not so
good.
Any strategy to improve sales of value brands?
We are not going to do much hand-holding. There is a lot of discount sales and
promotion and we are cutting back on the discounts. We are certainly going to
look at improving our value portfolio and on how to distribute deeper into rural
areas and outlets not available currently. That, hopefully, will give us traction in
the long run.
How many more outlets are you targeting?
We are going to look at a 25 per cent rise in direct sales channels in FY16, mainly
in rural markets.
Strategy for the first quarter of this financial year?
I can’t disclose plans now. The overall agenda is clear. We want to strengthen
our brands and distribution and make these ever-efficient from an operation
standpoint. We want to make sure we get cost-savings and have the right
people with the right passion for sales. In the long term, our aim is to become a
total foods company.
What is the current distribution mix between rural and urban sales outlets?
Currently, 60 per cent of our sales come from urban areas and 40 per cent from
rural areas. In terms of outlets, it is the reverse — 60 per cent in rural and 40 per
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cent in urban areas. The distribution reach in rural areas is short. We want to
move forward aggressively in rural areas, while our agenda for urban ones also
continues.
Any specific product campaign or strategy for rural areas?
No campaign, as such. In urban areas, the product rationalisation on for about
two years is giving us good dividends. We are going to put more SKUs (stock
keeping units) in our outlets, so that we get depth in our distribution. In rural
areas, we are looking at a hub and spoke model, so that we reach more and
more villages and outlets. Expand to smaller villages and outlets and reach more
consumers in those areas. Frankly I have not gone to any outlet where people
say they don’t want to buy Britannia products. We are trying to enhance our
distribution, which gets us into more villages and more outlets.
How was the consumer response for Nutrichoice Heavens and Good Day Chunkies
in the quarter?
Very good. These are our super-premium products in the health and indulgence
range. The agenda is doing very well. Recently, we launched Pure Magic in the
super premium category, the same as Chunkies and Dark Fantasy.
When are you launching new brands?
We are not going to proliferate on brands. Anything we do will be in existing
brands. We will have more products under the existing brands -- more formats
of biscuits, cakes, different types of rusk. There will be no new brand launch, as
such, in the first quarter (of FY16).
You used the e-commerce platform to launch Good Day Chunkies. What will be
your strategy, going forward?
This will continue. We still sell Chunkies on Amazon and e-commerce sites. We
do see that it is growing. But, it is not going to be a large part of our portfolio
because it is very difficult to sell groceries online. We expect less than 1% of our
total sales to come from the -commerce route.
Britannia recently announced setting up of an Innovation Centre. When will it start
operations?
It will be ready for operations by December. It will be an innovation centre for
all our product categories -- all the bakery products, biscuits, cake, rusk, bread
and dairy products. We are also looking at setting up a facility for others like
snacks and foods. It is going to have a factory next to it, where we will have pilot
production. We are investing INR 550-600m for this project.
Your plans for expanding the bread business?
Breads are perhaps a very small business and not high margin. We don’t have a
plan to become a pan-India bread company; it is not our focus area. We sell in
Bengaluru. It is not going to be an investment-led strategy.
the
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Interview 2:
“We are focusing on five big power brands”
Source:
http://www.livemint.com/Companies/rSd5YNMODZ1yAsICrCgfkN/We-are-
focusing-on-five-big-power-brands-Britannias-Varun.html
How’s this quarter panned out for Britannia in terms of volume growth and
spends?
It’s all the groundwork that we’ve done thus far. We’ve ramped up distribution
this year. Direct distribution has gone by 33%, so we are now directly getting
into a million outlets which used to be about 7.3 lakh previously. We have a lot
of work going on in rural distribution and that’s helping us.
Also, this was a big quarter for us from a brand standpoint because Filmfare
(awards) happened. We were also involved with the cricket World Cup. We also
saw two big launches, including Good Day Chunkies. A lot of work happened this
quarter on marketing as well. So that’s the story on the top line. As for the
bottom line, it is in line with the commodity situation.
You started with product portfolio rationalization a few quarters ago. What’s the
progress on that front?
That’s going very well. We are focusing on the five big power brands. We are
focusing our spends on those power brands. We’ve reduced almost 15 SKUs
(stock-keeping units) this year; last year, we had reduced them even more. It
just simplifies our operations from a factory and a sales standpoint. And it’s
helping us a lot. We derive a lot more from reducing these SKUs and focusing on
bigger SKUs. It’s a continuous process and yes we will continue to evaluate our
portfolio and remove and add SKUs going forward.
While commodity costs have remained in your favour, any indications of price
hikes going forward?
No, not really. In fact, in the last six months what we’ve done is give consumers
a lot more value—whether you look at our Good Day, Milk Bikis or Marie
portfolios.
Any signs of a recovery in consumer demand?
None. There are some ups and downs which happen from month to month, but
overall the demand situation hasn’t changed; in fact, it’s only trended
downwards. Yes, we have seen a few months here and there but that doesn’t
make for a recovery. We’ve been lucky that we’ve been gaining share and that’s
why our growth is higher than the industry.
By when do you anticipate consumers starting to spend more?
We continue to believe that the government is taking the right steps. I think
they are doing all the right things from a demand-generation point of view, but I
don’t think they are getting the benefits of that just yet. But I do hope that in
the next six months or so we start to see some recovery. If that doesn’t happen
we will see a few fist fights in the market.
The good news is that the monsoon seems to be on track. But I think it will take
more than the monsoon. I think it’s consumer confidence which needs to come
back and I’m hopeful that in the next six months we will see a demand recovery.
Britannia announced an enhancement of capacity in the next 18 months. Is this
the right time to invest when consumers are wary of spending?
It’s always the right time to invest. We’ve put in a lot money to enhance our
capacity. We’ve also put up a new research and development centre which will
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be ready by the end of the year. This will be for the entire company—biscuits
and dairy. We’ve invested about INR 450m on the centre, plus the land cost—so
that would be about INR 600m-650m.
What are your plans for boosting your dairy portfolio over the next 12-18 months?
We are working on a plan for dairy. We’ve done one round of discussions with
our board and we need to do some more work. So I think it will take us about
three months to get to a final plan.
Exhibit 1:
Britannia
P/E (x)
50.0
38.0
26.0
14.0
2.0
23.8
14.7
PE (x)
Peak(x)
Avg(x)
37.5
Min(x)
37.5
the
Exhibit 2:
Britannia
P/E premium vs. Sensex
150
100
50
0
-50
49.2
Britannia PE Relative to Sensex PE (%)
LPA (%)
126.0
Source: Company, MOSL
Source: Company, MOSL
Exhibit 3: Valuation Matrix of coverage universe
Company
Consumer
Asian Paints
Britannia
Colgate
Dabur*
Emami*
Godrej Consumer
GSK Consumer
Hind. Unilever
ITC
Jyothy Labs
Marico*
Nestle
Pidilite Inds.
Radico Khaitan
United Spirits
Retail
Jubilant Foodworks
Shopper's Stop
Titan Company
Reco
Price Mkt Cap EPS Growth YoY (%)
P/E (x)
EV/EBITDA (x)
ROE (%) Div. (%)
(INR) (USD M) FY15 FY16E FY17E FY15 FY16E FY17E FY15 FY16E FY17E FY15
FY15
762
2,505
1,911
262
1,087
1,088
6,334
832
304
251
416
6,191
542
85
3,432
1,744
394
367
11,428
4,680
4,067
7,189
3,860
5,793
4,168
28,149
37,858
711
4,200
9,339
4,343
176
7,803
1,785
507
5,094
15.8 31.3
47.0 38.1
13.9 18.3
16.5 25.9
21.7 25.1
19.6 38.9
-13.5 23.2
5.5 18.0
9.8 11.3
-7.5 131.0
18.1 21.2
6.8 23.0
9.9 44.3
-10.4
8.6
Loss -187.7
4.5
8.1
11.1
64.3
60.5
15.4
23.4
18.2
21.5
15.8
22.0
21.6
20.5
18.1
13.4
-7.4
24.4
18.6
17.8
21.8
50.8
42.5
44.6
22.9
51.3
52.4
46.5
42.8
50.4
42.0
45.6
46.9
25.1
57.4
46.8
47.5
53.2
14.9
-72.8
92.4
80.5
39.6
39.1
38.0
39.3
34.0
40.3
30.2
37.0
39.7
22.5
24.9
38.6
38.6
36.9
13.7
83.0
56.2
50.2
34.3
31.7
32.1
32.3
29.4
33.0
24.9
30.7
33.6
19.9
26.9
31.0
32.6
31.3
11.3
55.0
39.4
34.7
27.9
34.5
38.0
31.1
34.5
44.4
29.9
33.8
69.6
16.9
33.2
30.8
28.4
35.2
11.1
69.9
43.3
17.8
30.0
26.1
26.0
25.5
27.0
34.5
22.4
26.5
57.5
15.1
20.6
25.0
22.9
24.0
9.3
45.3
27.6
14.3
25.8
21.0
21.6
20.4
23.1
27.9
18.9
21.7
47.1
13.3
16.8
19.9
19.4
20.2
7.8
34.2
20.0
11.6
20.6
32.4
61.9
88.0
35.9
45.3
20.4
29.6
109.6
34.8
16.6
33.5
48.2
23.1
8.6
-21.7
18.8
5.4
27.2
0.9
0.7
1.6
0.8
0.7
0.7
0.9
1.6
2.4
1.6
0.6
1.0
0.6
1.0
0.0
0.1
0.2
0.8
Neutral
Buy
Neutral
Neutral
Buy
Neutral
Neutral
Neutral
Neutral
Buy
Neutral
Neutral
Neutral
Buy
Buy
Buy
Neutral
Neutral
Note: For Nestle FY15E means CY14
Source: Company, MOSL
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Story in Charts
Exhibit 3: Revenues to post 15.6% CAGR over FY15-17E
Revenues (INR b)
23.2
21.6
19.0
12.4
11.3
13.8
14.7
Revenue growth (%)
16.5
6.6
6.9
Exhibit 4: Focused brand investments behind 5 power brands
Ad spends (%)
8.7
8.0
7.3
6.1
7.7
8.8
8.7
8.8
8.8
10.3
Source: Company, MOSL
Source: Company, MOSL
Exhibit 5: Gross margins to expand 300bp YoY over FY15-
17E…
Gross Margin (%)
39.7
42.3 42.7
38.9
36.1
34.0
37.1
35.3
Exhibit 6: …while EBITDA margin to expand 270bp over FY15-
17E
EBITDA Margin (%)
12.5 12.7
10.0
8.5
5.8
7.0
4.3
4.7
5.2
6.0
8.0
39.0
35.8
38.1
Source: Company, MOSL
Source: Company, MOSL
Exhibit 7: PAT to post 28% CAGR over FY15-17E
PAT (INR b)
48.8
30.1
6.9
-25.9
1.3
1.3
0.3
1.3
2.0
2.6
4.0
5.7
7.9
9.4
PAT growth (%)
52.3
44.8
38.1
18.2
Exhibit 8: Return ratios (x)
RoE (%)
54.3 54.1
44.1
26.7
17.7
26.7
58.9
61.9 62.4
54.0
Source: Company, MOSL
Source: Company, MOSL
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the
Financials and valuations
Income Statement
Y/E March
Net Revenues
Change (%)
Raw Material Cost
Gross Profit
Margin (%)
Advertising
% of Sales
Other Expenditure
EBITDA
Change (%)
Margin (%)
Depreciation
Int. and Fin. Charges
Financial Other Income
Operating Other Income
PBT
Change (%)
Margin (%)
Tax
Tax Rate (%)
PAT
Change (%)
Margin (%)
Reported PAT
Balance Sheet
Y/E March
Share Capital
Reserves
Networth
Loans
Capital Employed
Gross Block
Less: Accum. Depn.
Net Fixed Assets
Goodwill on consolidation
Capital WIP
Investments
Current
Non-current
Deferred Liability
Currents Assets
Inventory
Account Receivables
Cash and Bank Balance
Others
Curr. Liab. & Prov.
Account Payables
Other Liabilities
Provisions
Net Current Assets
Net Assets
2010
37,729
10.3
24,115
13,614
36.1
3,010
8.0
8,976
1,629
-31.6
4.3
582
235
547
36
1,394
-21.8
3.7
216
4.0
1,338
6.9
3.5
1,032
2011
45,897
21.6
30,276
15,621
34.0
3,328
7.3
10,123
2,170
33.3
4.7
649
436
472
314
1,871
34.2
4.1
409
28.3
1,342
0.3
2.9
1,343
2012
54,608
19.0
35,328
19,280
35.3
4,196
7.7
12,221
2,863
31.9
5.2
618
416
584
253
2,666
42.4
4.9
650
25.1
1,997
48.8
3.7
1,996
2013
61,359
12.4
38,614
22,746
37.1
5,343
8.7
13,691
3,711
29.7
6.0
732
413
514
504
3,584
34.5
5.8
934
27.5
2,599
30.1
4.2
2,595
2014
68,293
11.3
41,710
26,583
38.9
6,037
8.8
15,108
5,438
46.5
8.0
832
83
336
834
5,693
58.8
8.3
1,775
30.5
3,957
52.3
5.8
3,953
2015
77,751
13.8
46,918
30,833
39.7
6,517
8.4
16,527
7,788
43.2
10.0
1,445
39
880
833
8,018
40.8
10.3
2,288
28.5
5,730
44.8
7.4
6,886
2016E
89,159
14.7
51,441
37,718
42.3
7,846
8.8
18,709
11,164
43.3
12.5
1,683
32
1,092
924
11,465
43.0
12.9
3,554
31.0
7,911
38.1
8.9
7,911
(INR Million)
2017E
103,907
16.5
59,548
44,359
42.7
9,144
8.8
22,068
13,147
17.8
12.7
1,849
32
1,310
974
13,551
18.2
13.0
4,201
31.0
9,350
18.2
9.0
9,350
(INR Million)
2017E
240
19,567
19,807
1,501
21,308
20,466
-12,013
8,453
1,070
1,071
14,888
14,693
195
89
14,559
6,234
1,188
3,478
3,659
18,645
8,193
4,636
5,816
-4,086
21,308
2010
239
2,589
2,828
6,570
9,419
9,247
-5,112
4,135
858
102
3,664
2,776
889
-61
6,313
3,042
733
427
2,111
5,714
1,614
3,163
936
599
9,419
2011
239
3,021
3,260
6,188
9,469
9,691
-5,498
4,193
856
128
3,885
2,461
1,424
58
7,126
3,470
810
769
2,078
6,661
2,680
2,700
1,280
465
9,470
2012
239
3,853
4,092
6,042
10,155
11,211
-5,912
5,300
944
1,113
2,485
1,064
1,421
76
8,579
4,318
1,130
613
2,518
8,189
3,870
2,748
1,570
390
10,156
2013
239
5,268
5,507
3,800
9,401
12,893
-6,517
6,376
992
1,473
1,082
729
353
128
8,912
3,747
1,228
1,029
2,908
9,306
3,935
3,722
1,649
-394
9,401
2014
240
7,698
7,938
1,498
9,502
14,930
-7,524
7,406
1,070
1,071
1,979
1,629
350
89
9,543
4,203
1,087
1,091
3,163
11,477
5,567
3,799
2,111
-1,934
9,503
2015
240
10,329
10,569
1,501
12,070
16,966
-8,481
8,485
1,070
1,071
4,916
4,721
195
89
10,136
5,055
1,014
829
3,238
13,520
6,115
4,058
3,347
-3,384
12,070
2016E
240
14,563
14,803
1,501
16,304
18,466
-10,164
8,302
1,070
1,071
9,811
9,616
195
89
12,086
5,350
1,021
2,242
3,474
15,948
6,691
4,336
4,921
-3,862
16,304
E: MOSL Estimates
6 June 2015
9

C
orner
O
ffice
the
Financials and valuations
Ratios
Y/E March
Basic (INR)
EPS
BV/Share
DPS
Payout (%)
Valuation (x)
P/E
EV/Sales
EV/EBITDA
P/BV
Dividend Yield
Return Ratios (%)
RoE
RoCE
Working Capital Ratios
Debtor (Days)
Asset Turnover (x)
Leverage Ratio
Debt/Equity (x)
Cash Flow Statement
Y/E March
OP Profit
Dep
Financial Other Income
Interest Paid
Direct Taxes Paid
Inc in WC
CF from Operations
Extraordinary Items
(Inc)/Dec in FA
(Pur.)/Sale of Investments
Other Non Rec Exp
CF from Investments
Issue of Shares
Inc in Debt
Dividend Paid
Other Item
CF from Fin. Activity
Inc/Dec of Cash
Add: Beginning Balance
Closing Balance
2010
11.2
23.7
5.0
44.6
2011
11.2
27.3
6.5
57.9
2012
16.7
34.3
8.5
50.8
2013
21.7
46.1
8.5
39.1
2014
33.0
66.2
12.0
36.4
1.4479
2015
47.8
88.1
17.3
36.3
(INR Million)
2016E
66.0
123.4
26.4
40.0
2017E
77.9
165.1
31.2
40.0
223.5
8.0
185.2
105.8
0.2
222.9
6.6
138.6
91.8
0.3
149.8
5.5
105.5
73.1
0.3
115.2
4.9
81.1
54.4
0.3
75.9
4.4
55.0
37.8
0.5
52.4
3.8
38.0
28.4
0.7
38.0
3.3
26.0
20.3
1.1
32.1
2.7
21.6
15.2
1.2
26.7
10.8
44.1
16.1
54.3
22.9
54.1
30.5
58.9
48.7
61.9
58.8
62.4
66.8
54.0
60.1
7
4.0
6
4.8
8
5.4
7
6.5
6
7.2
5
6.4
4
5.5
4
4.9
2.3
1.9
1.5
0.7
0.2
0.1
0.1
0.1
(INR Million)
2010
1,394
582
-547
-235
216
-427
1,875
2011
1,871
649
-472
-436
409
-475
2,550
2012
2,666
618
-584
-416
650
81
2,385
2013
3,584
732
-514
-413
934
-1,200
4,481
2014
5,693
832
-336
-83
1,775
-1,602
6,099
2015
8,018
1,445
-880
-39
2,288
-1,188
7,522
2016E
11,465
1,683
-1,092
-32
3,554
-1,890
10,424
2017E
13,551
1,849
-1,310
-32
4,201
-1,461
11,381
-504
109
307
-87
0
3,821
1,118
4,752
-2,049
-261
688
428
-470
-221
0
-690
0
-381
696
441
-1,519
341
427
769
-2,505
1,400
0
-1,105
0
-146
902
387
-1,436
-155
769
613
-2,042
1,403
0
-639
0
-2,242
1,180
4
-3,426
416
613
1,029
-1,634
-897
0
-2,531
1
-2,302
1,189
15
-3,506
62
1,029
1,091
-2,036
-2,938
-1,157
-6,131
0
3
1,684
-28
-1,652
-261
1,091
829
-1,500
-4,895
0
-6,395
0
0
2,414
203
-2,617
1,413
829
2,242
-2,000
-5,077
0
-7,077
0
0
3,677
-610
-3,067
1,237
2,242
3,479
E: MOSL Estimates
6 June 2015
10

C
orner
O
ffice
NOTES
the
6 June 2015
11

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