Dixon Technologies Ltd - PhillipCapital (India)

INSTITUTIONAL EQUITY RESEARCH

Dixon Technologies Ltd Piggybacking on the consumer durable story INDIA | MID- CAP | IPO Note Dixon Technologies (Dixon) is the largest home-grown design-focused and solutions company engaged in manufacturing of consumer durables, lighting and mobile phones. It also provides solutions in reverse logistics i.e. repair and refurbishment. The company is leading manufacturer of lighting products (CFL & LED), FPD TVs and semi-automatic washing machines with market share of 39%, 50% and 43% respectively in India. Dixon is one of the most profitable companies in the domestic consumer durable manufacturing industry. In FY17, its revenues/EBITDA/PAT was Rs 24.5bn/922mn/504mn, with strong balance sheet (D/E 0.2x) and cash flow – having ROCE and ROE of 32% /26% with FCF generation of Rs 170mn. About company Incorporated in January 15, 1993, Dixon – is fully integrated end to end product and solution. Its services range from global sourcing, manufacturing, quality testing and packaging. The company has six state-of-the-art manufacturing units in Noida and Dehradun. It has in-house capability for panel assembly, PCB assembly, wound components, sheet metal and plastic moulding. IPO rationale: Raising funds for offer for sale & capex Dixon is raising Rs 6.0bn through this IPO offer from sale by Strategic investors & promoter (Rs 5.4bn), to meet part of its capex requirement (Rs 271mn) and repayment of debt (Rs 220mn). At the IPO price band of Rs 1760‐1766, the stock trades at 40x FY17 PE. Key strengths:  Market leader in key product verticals  Healthy relationship with top-tier customers  One Stop Shop - End to End solution provider  Improving margins through 1) New product addition 2) focussing more on ODM  Increasing reverse logistics - Higher potential & healthy return ratios  Improving Product base with existing and new customers  Strong balance Sheet and Cash flows

6 September 2017

SUBSCRIBE COMPANY DATA ISSUE OPENS ISSUE CLOSES PRE- ISSUE EQUITY SHARES - LOWER BAND - UPPER BAND PRICE BAND - FRESH ISSUE - OFS NO OF SHARES TO BE ISSUED RETAIL AND EMPL SHARE (%) ISSUE SIZE POST- ISSUE EQUITY SHARES MKT CAP

06-September-2017 08-September-2017 11.0mn Rs 1760 Rs 1766 Rs 1760 - 1766 0.34mn 3.1mn 3.4mn 35% Rs 5.97-6bn 11.3mn Rs 19.9-20bn

Consolidated Financials Y/E Mar, Rs mn Net Sales Operating Profit PAT RoCE(%) ROE(%) P/E@Rs 1,766

FY14 FY15 FY16 FY17 10,937 12,013 13,894 24,568 260 322 588 907 136 119 427 504 13.7 15.4 24.8 32.1 18.4 14.0 34.7 25.5 147.2 168.7 46.9 39.7

Key risks 1) Dependency on few customers (Top two customers contribute ~59% of revenue – Panasonic~38% & Philips~20%) 2) Low entry barriers and lower bargaining power from customer 3) Volatility in commodity prices Our view: The company has a strong business model with healthy balance sheet and cash flow. It has reported revenue and earning CAGR of 34% and 78% over FY13 to FY17. With increasing product portfolio and services (Camera, reverse logistics) and margin improvement (backward integration in mobile phone, increasing ODM share), we expect a revenue and PAT CAGR of 16%/33% over next 2 years (FY17 to FY19). At upper band of the price Rs 1,766 stock is at PE of 26x/23x/ discounting FY18 and FY19 numbers and generating FCF of ~ Rs 950mn (over next 2 year) with the strong ROCE and ROE of 30%/21% in FY19e. We like the business model (lower working capital, higher return ratios) as well as the company is well placed to capitalize the growing consumption pattern in consumer durables and appliances. We recommend “Subscribe”.

Page | 1 | PHILLIPCAPITAL INDIA RESEARCH

Deepak Agarwal (+ 9122 6246 4112) [email protected]

DIXON TECHNOLOGIES IPO NOTE

About the IPO   

Issue size of Rs 5.9 – 6.0bn with 3.4mn shares at a price band of Rs 1760‐1766 per share. Issue includes 3.1mn shares offered for sale by strategic investors, promoter & management and fresh issue of 0.3mn shares. Market capitalisation at price band: Rs 19.9‐20.0bn.

Dixon - Issue details ISSUE OPENS ISSUE CLOSES PRE- ISSUE EQUITY SHARES - LOWER BAND 1 - UPPER BAND PRICE BAND - FRESH ISSUE - OFS NO OF SHARES TO BE ISSUED RETAIL AND EMPLOYEE SHARE (%) ISSUE SIZE POST- ISSUE EQUITY SHARES MKT CAP

06-September-2017 08-September-2017 11.0mn Rs 1760 Rs 1766 Rs 1760 - 1766 0.34mn 3.1mn 3.4mn 35% Rs 5.97-6bn 11.3mn Rs 19.9-20bn

Source: RHP, PhillipCapital India Research

Share holding pattern Pre-issue Management & others 25%

Share holding pattern post-issue Other public 32% Promoters 46%

Promoters 39%

Strategic invetors 29%

Management & others 18%

Strategic invetors 11%




Of the Rs 600mn proceeds from the fresh issue, Rs 220mn will be utilised for debt payment, Rs 76mn for setting up LED facility at Tirupati and Rs 106mn for upgrading IT infra.

Net proceeds will be used for Rs mn Repayment of borrowings Manufacturing facility of LED TVs at the Tirupati Enhancement lighting products at Dehradun Upgrading IT infra. General corporate purposes * Total

FY18 220 76 89 53 109 547

FY19 53 53

Source: RHP, PhillipCapital India Research, Note: On Upper band of Rs 1766, * Balancing Amount


Total 220 76 89 106 109 600


About - Dixon Technologies Ltd Company incorporated in 1993, in 1994, commenced manufacturing of consumer electronics such as colour televisions. In 2007, commenced manufacturing of LCD TVs and subsequently progressed into manufacturing of LED TVs in 2010. Dixon entered the lighting products in 2008 with the manufacturing of CFL products and gradually increased its product portfolio to LED products in 2016. In 2010, started manufacturing of semi-automatic washing machines. Company also started providing reverse logistics services in 2008. Recently entered into manufacturing of mobile phones through a JV. Company has continuously diversified its product portfolio to keep pace with changing consumer trends and development in technology.

Indian EMS/ODM Market 600

EMS/ODM (Rs bn)

500 400 300 200 100

Company’s diversified product portfolio includes (i) consumer electronics (like LED TVs); (ii) home appliances (like washing machines); (iii) lighting products (like LED bulbs and tubelights, downlighters and CFL bulbs); and (iv) mobile phones. Key customers include Panasonic India P Ltd, Philips Lighting I Ltd, Haier Appliance (I) Pvt. Ltd., Gionee, Surya Roshni Limited, Reliance Retail Limited, Intex Technologies (I) Ltd., Mitashi Edutainment Pvt. Ltd., Dish Infra Services Private Limited.

Jabil 13% Others 66%

PG Electrop last 2%

Dixon is a leading (ODM) for lighting products, LED TVs and semi-automatic washing machines in India. As an ODM, Company develop & design products in-house (has strong R&D team of 27 employees), manufacture and supply these products to wellknown companies in India who in turn distribute these products under their own brands. This segment has a revenue of Rs 5.4bn (22% of sales) and has healthy EBITDA margin of 9%.

Elin 3%

Source: RHP, PhillipCapital India Research Note: EMS - Electronic Manufacturing Services

ODM – Revenue Share

Consumer electronics Mobile phones

Lighting products

6,000

Home appliances Consumer electronics

Lighting products

18,000 5,000

16,000

1,880

8,107

14,000

4,000

12,000 10,000 8,000 6,000

2,969

200 2,568

1,306

3,000 3,010

2,498

2,000

2,614

4,000 2,000

2,632

6,382

7,428

7,000

7,449

1,000

3,981 0

0 FY13

FY14

FY15

FY16

FY17

1,067

534

374 327

701

996

FY13

FY14

FY15

FY16

FY17


In line with focus to provide end to end product solutions, Company has backward integrated its major manufacturing processes by developing in-house capabilities in plastic moulding products, sheet metal products, wound components and LED panel assembly. With this company has improved its cost efficiency, reduces dependency


1,727

849 108 601

516

FY21e

Dixon 9% SFO 7%

In OEM, the company is fully integrated end-to-end product and solution provider. Ranging from global sourcing, manufacturing, quality testing, assembling and packaging to logistics. This segment contributes to ~78% of revenue and has an EBITDA margin of ~2%.

20,000

FY20e

Dixon – has highest market share in Indian EMS:

Dixon majorly operates under 2 business model: 1. OEM – Original Equipment Manufacturers 2. ODM – Original Design Manufacturer

OEM - Revenue Share

FY19e

FY17

FY18e

FY16

FY15

FY14

FY13

0


on third party suppliers and gives better control on production time and quality of critical components used in the manufacturing of products. Dixon – Product Wise detail break up: (Home Appliances & Reverse logistics has higher profitability) Products Installed Capacity (Units) Sales (Units- FY17) Revenue (Rs mn) EBITDA (Rs mn) OPM (%) ODM & OEM (%) Products

Consumer Electronic 1,200,000 747,383 8,445 250 3% 12% /88% LED TVs: 19” to 65” 4K2K Home Theatres: 2.1 channel 4.1 channel

HOME APPLIANCES 550,000 376,842 1,880 306 16.3% 100%/0% Semi-automatic washing machine: 6.2 kg to 8.0 kg

LIGHTING PRODUCTS 260,400,000 120,592,760 5,508 179 3.2% 45%/55% LED Products: LED bulbs 0.5W to 20 W Down lighters 5W to 15W Battens T- LEDs 20W to 24W CFL Lamps: CFL Lamps 5W to 27W Lamp Drivers: Indoor LED drivers 5W to 20W Outdoor LED drivers 20W to 150W Electronics lamp driver 10W to 40W

Customers & Revenue Share FY17 (%)

Panasonic I P LTD (65.2% ) Reliance Retail Ltd (9.54%) Intex Technologies (I) Ltd. (9.23%) Haier Appliance (I) Pvt. Ltd (3.15%) Others: Vijay Sales, Mitashi, Abaj LED TVs at Dehradun

Panasonic India Private Limited (21.0%) Haier Appliance (I) Pvt. Ltd. (16.16%) Intex Technologies (I) Ltd (16.17%)

Philips Lighting India Limited (90.1%) Surya Roshni Limited Bajaj Electricals

Manufacturing Facility

washing machines at Dehradun & Nodia Dehradun

MOBILE PHONES* 10,080,000 3,476,423 8,107 50 0.6% 0%/100% feature phones and smart phones (2G, 3G, 4G/LTE, VoLTE and CDMA).

REVERSE LOGISTICS 3,660,000 1,408,474 627 123 19.6% 0%/100% Repair & Refurbishment: Set top boxes Repair: Mobile phones LCD & LED TVs LED panel Home theatres (2.1 channel and 4.1 channel) Computer peripherals and other devices such as printers, CCTVs and speakers Panasonic India Intex Technologies (I) Ltd. Private Limited Dish Infra Services Private (43.72%) Limited Gionee (50.21%) Airtel – setupbox Jaina Marketing and Sony – LEDs Associates (6.05%)

Nodia

Noida + 17 service centers in major cities in India


Market leadership in key product verticals Dixon’s experience in manufacturing, successful backward integration and design capabilities, strong relationships with global suppliers and anchor customers has resulted in achieving leading position in key verticals: Dixon Product FPD TVs Washing machines LED & CFL Lights*

Industry Size (mn units) 1.2 0.6 227

Expected Industry CARG over next 5 years 50% 41% 43%

Source: RHP, PhillipCapital India Research Note: FPD - Flat Panel Display


Production (FY17) 0.6 0.3 88.4

OPM (%) ~3% ~16% ~3%

Market Share (%) 50% 43% 39%


Consumer Electrical – Television Market: Growing trust and confidence in EMS and ODM players, leading to outsourced manufacturing. Dixon is leader in the FPD TV with share of ~50% in Indian Market. FPD TV market to grow @ CAGR of 16%

OEP data segmented by OEM and EMS production ratio, FY16 Domestics manufacturing FY16

900

Revenue (Rs bn) Volume (mn)

800 700 600

Production by EMS/ODM FY16 (mn units)

30 25

CAGR: FY16-FY21 Vol: 16.9%

20

Dixon 17%

500

15

400 300

OEP by EMS, 85%

10

200

OEP by OEM, 15%

0

SVL 50%

8%

Videotex Noble

8%

5

100

MEPL

8%

9%

Others

0 FY13 FY14 FY15 FY16 FY17 FY18 FY19 FY20 FY21

Lighting Market: Currently Lighting is a small part of EMS, However EESL (led 7W/9W) LED bulb demand has seen capacity addition among EMS companies. Dixon is leader players with 39% market share. LED lighting taking the lead in the lighting sector


350 300 250

Others

CFL


LED

CAGR: FY16-FY21 Total Mkt 16.6% LED: 59.2%

3% Dixon

EMS, 22%

200

Tier 1, 48%

28%

39%

Compact Lamps

150 Tier II, 30%

100

NTL

Others

30%

50 0 FY13 FY14 FY15 FY16 FY17 FY18 FY19 FY20 FY21 Source: RHP, PhillipCapital India Research

Washing Machines Market: In this segment semi-automatic WM product having limited scope for design & innovation, support increasing dependence on EMS companies. Dixon has a leadership with 43% market share. Washing machine market to grow @ CAGR of 15%


180 160 140 120

Revenue (Rs bn) Volume (mn) CAGR: FY16-FY21 Vol: 14.6%

100

10 8 6

80 60


12

Dixon OEP by EMS, 87%

OEP by OEM, 13%

29% 43%

4 28%

40

2

20 0

0 FY13 FY14 FY15 FY16 FY17 FY18 FY19 FY20 FY21



Noble Others


Strong revenue visibility The company has reported revenue CAGR of 34% over FY13 to FY17. 1) New product addition 2) New customer addition 3) Increasing geography, gives company a strong growth visibility. Adding New products: Company is planning to increase its offerings in existing product as well as diversify into new verticals. Over last 6 years, Company has added LED lighting, washing machines, mobile phones and reverse logistics. In 2017 company will be entering into a manufacture of “security systems” including “CCTVs” & “Digital video recorders” (DVRs), Company will be putting up this facility in Tirupati.

Dixon – Product Portfolio Year Products 1994 Colour TV 2007 LCD TV 2008 CFL Lighting, Reverse logistics 2010 LED TV, Washing Machines 2016 Phones 2017 CCTV, Digital Video Recorder Source: RHP, PhillipCapital India Research

Going forward Company will be adding products in home appliances & lighting segments. In Lighting, Company will also be exploring export opportunities with existing customers or establishing relationships with new customers.(As In past, has exported CFL bulbs & LED bulbs - Thailand, Egypt, France, UK, Poland, Tanzania and Kenya and continues to export CFL and LED bulbs) Expansion of industrial footprint into new geographies Expand geographical footprint by enhancing current manufacturing capacities & setting up of new manufacturing facilities, in South India. Company also seeks to further enhance manufacturing capacity across product verticals as well as CCTVs and DVRs. This will help in strengthening relationships with existing customers and gaining new customers as able to penetrate in South India. Tirupati Facility being closer to the Krishnapatnam & Chennai ports would provide easier access to the exports market and will be well placed to offer export quality products for South East Asia market. Increasing focus on Reverse logistic (RL): In RL company offer repair & refurbishment services for STBs and repair of mobile phones, LCD and LED TVs, LED panels, home theatres, printers etc. Company is planning to further expand RL portfolio with support R&D team. RL has high potential and enjoys higher margins & return ratios. Dixon is focusing only on B2B RL and do not have consumer facing service centres which is in line with strategy of building relationships with brand owners and OEMs.( recently company has started giving RL service to “Sonay”). Company Operates with 17 centre spreads Pan India (Majorly in Metros cities). Increasing RL revenue share (Rs mn)

RL – has strong operating margin of ~20%

700

627

600

120

500

100

25%

OPM (%) (RHS)

123 20%

391

400

80

300

15%

71

60 184

200 100

EBITDA

140

24

10% 35

40 20

28

0

5% 5

6

FY13

FY14

0 FY13

FY14

FY15



FY16

FY17

0% FY15

FY16

FY17


Cost effective model and Focus on High Margin business Dixon has reported a margin of 3.7% in FY17. If adjusted to actual sales (value addition revenue) company has a margin of ~13%. Dixon is most cost-efficient player in each of the product verticals. The company has achieved cost leadership through backward integration & large manufacturing capacities. EBITDA Break up: (ODM contributes ~ 50% in EBITDA)

Mobile phones 5%

Dixon - EBITDA & OPM trend 1,000

Reverse logistics 14%

Consumer electronics 27%

5%

907

EBITDA (Rs mn)

900

4%

OPM (%) (RHS)

800

4%

700

3%

588

600

3%

500 2%

400 300 Home appliances 34%

Lighting products 20%

322

2%

260 201

200

1%

100

1%

0

0% FY13

FY14

FY15

FY16

FY17


Dixon has 2 high margin businesses, 1) ODM and 2) Reverse Logistic (RL). These business contribution have increased from 15%/1.5% in FY15 to 22%/3%/ in FY17. Company is planning to gradually expand its ODM & RL share. As an ODM, company control the entire manufacturing cycle of a product. This model requires additional investment in 1) R&D 2) working capital but provides higher margins as compared to the OEM model. Continuously increased its share form ODM - Revenue Rev. (Rs mn) As % of Rev. (RHS)

6000

5,374

5000

Home Appliance – 100% from ODM, Enjoys Higher Margins 30% 25%

3,734

4000

Revenue

2000

1,306

10%

1,050 5%

0

0% FY14

FY15

FY16

FY17

6%

516 400

3%

0

0% FY13

FY14


The company is moving towards the ODM model to service all major consumer requirements across the industry and product verticals. This also helps in improving overall profitability. Gradually, trend in certain product verticals wherein regional and private labels have been gaining market share and the ODM model allows servicing market as well.


9%

849 800

1,768

1000

FY13

12%

1,067

15% 1,558

18% 15%

20%

3000

1,880

1600

1200

2000

OPM (%)

FY15

FY16

FY17


Dixon - Strong Financial Performance Revenue CAGR of 34% over FY13 to FY17 30,000

PAT & PAT margin (%)

Revenue (Rs mn) Growth (%) (RHS)

24,568

25,000

80%

12,013

2.5%

400

2.0% 300

40%

1.5%

30%

7,669

200

136

20%

5,000

100

10%

0

0% FY13

FY14

FY15

FY16

943

Debt

0

FY17

Debt/Equity

823

0.0% FY13

1.8 30

FY15

1.2

600

466

500 400 300 200

0.2

FY16

FY17

0 4

21

23

20

0.8

15

0.6

16

10

0.4 5

0 3

28

1

0.2

100

29

25

1.4

700

2

FY14

35 1.6

796

800

1

0.5%

Lower working capital cycle – days @ 16 in FY17*

936

900

1.0%

119

50

Debt/Equity at 0.2x in FY17 1,000

3.0%

50%

13,894 10,937

504 427

60%

15,000

3.5%

PAT (Rs mn) Margin (%) (RHS)

500

70%

20,000

10,000

600

90%

-

5

FY13

FY14

FY15

FY16

FY17

Source: RHP, PhillipCapital India Research, Note: * Include - loans & advances

Lower Working Capital requirement & asset light mode (flexibility in manufacturing lines, higher utilisation), result in higher return ratios. Higher Return Ratios

Positive FCF from last 5 years 600

40

ROCE (%)

FCO

ROE (%)

35

FCF

500

30 400

25 20

300

15 200 10 100

5 0 FY13

FY14

FY15



FY16

FY17

0 FY13

FY14

FY15

FY16

FY17


Indian – Consumer Electrical & Appliance Industry at a cusp of growth Indian Consumer Electricals & Appliance (CEA) market (Rs bn) Appliances

7,000

Consumer Electronics

6,000 703 5,000

1,621

1,791

2,165

2,364

2,718

3,055

338

450

FY13

FY14

FY15

FY16

FY17

FY18e

306

4,326

407

3,615

370

504

FY13 to FY17 14% 10% 13%

FY17 to FY21e 18% 12% 17%

5,236

563

3,000

1,000

CAGR CE Appliances Total

628

4,000

2,000

Indian CEA Market:

FY19e

FY20e

FY21e

Source: RHP, Frost & Sullivan analysis, CEAMA

Indian Consumer Electricals break up: Higher contribution from Mobile FY13 – Rs2,364 bn

FY21e – Rs 5,236 bn

TV 15.8% TV 14.8%

Set top Boxes (STB) 7.1%

Mobiles 67.0%

Mobiles 75.4%

Digital Cameras 5.5% Others 1.3%

Set top Boxes (STB) 3.3% Digital Cameras 2.7%

Washing Machines 3.3%

Others 0.7%

Washing Machines 3.1%

Source: RHP, Frost & Sullivan analysis, CEAMA

Mobile phones market to grow @ CAGR of 20%

OEP data segmented by OEM and EMS production ratio Domestics manufacturing Apr 17-Dec 17 (mn)

5000

Production by EMS/ODM FY16 Apr 17-Dec 17 (mn)

The demand for mobile phones is expected to grow from 282.2mn units in FY16 to 509mn…

4000 OEP by EMS, 40%

3000

OEP by OEM, 60%

20%

1000

0 FY13 FY14 FY15 FY16 FY17 FY18 FY19 FY20 FY21 Source: RHP, Frost & Sullivan analysis, CEAMA


Foxconn Flextronics 35%

15% 22%

2000

Dixon

8%

BGM Others


Financials Income Statement

Cash Flow

Y/E Mar, Rs mn Net Sales Growth (%) Expenditure Inc/dec. Cost of Material Consumed Personnel Cost Other Op. Costs Operating Profit OPM (%) Growth (%) (+) Other income EBDIT ( - ) Depreciation EBIT ( - ) Interest & Finance charges PBT & exceptional items ( - ) Taxes Net Profit Share of Associates Minority Interest PAT Growth (%)

FY14 FY15 FY16 FY17 10,937 12,013 13,894 24,568 42.6% 9.8% 15.7% 76.8% 10,677 11,691 13,306 23,660 7 -109 -161 -255 9,955 10,953 12,284 22,056 323 369 550 640 393 479 634 1,219 260 322 588 907 2.4% 2.7% 4.2% 3.7% 29.2% 23.9% 82.5% 54.4% 34 18 18 15 294 340 605 922 53 69 84 106 240 271 521 816 112 98 131 128 128 173 390 688 34 42 80 185 148 130 427 504 2 3 0 0 10 9 0 0 136 119 427 504 172.8 -12.8 259.8 18.1

Balance Sheet Y/E Mar, Rs mn Equity Share Capital Stock Option Outstanding Reserves & Surplus Net worth Total Debt: Deferred Tax Liability Minority Interest Capital Employed Gross Block Less : Accumulated Depn Net Block Capital WIP Fixed Assets Goodwill on Consolidation Current Assets Cash & Bank Balances Receivables Inventories Loans, Adv & Deposits: Other Current Assets Current Liabilities & provisions Sundry Creditors & other liab Provisions: Net Current Assets Investments TOTAL ASSETS

Y/E Mar, Rs mn PBT Operating Profit before W.Cap (Increase)/Decrease in W Cap Trade & Other Receivables Inventories Loans & Advances Trade & Other Payables & Provisions Net Cash from Op Activities (I) Net addition to Fixed Assets (Purchase)/Sales of Investments Other Income Net Cash from Inv Activities (II) Increase in Share Capital Interest Paid Dividend Paid & Other Adjustments Increase in Borrowings Net Cash used in Fin Activities (III) Net Increase/ Decrease in Cash & Cash Equivalents (I+II+III) Cash & Cash Equivalents (Op Bal) Other Balance Cash & Cash Equivalents (Cl Bal)

FY14 182 275 -196 -55 -47 -65 -29 104 4 1 8 13

FY15 173 341 145 -85 -197 103 324 445 -213 -18 9 -223

FY16 507 617 -108 -337 -232 -87 549 423 -263 36 11 -216

FY17 688 935 -235 -1,925 -1,459 -152 3,302 546 -379 -67 15 -431 61 -127 -84 46 -104

-113 -7 -8 -128

-99 -11 -113 -223

-131 -42 -27 -201

-11 58 -1 46

-0 46 23 69

6 69 75

10 75 68 153

OPM (%) RoCE(%) ROE(%) Return on Assets (%) Sales/Total Assets (x) Sales/Gross Block (x) Debt: Equity (x) Current Ratio (x) Quick ratio (x) Working capital/Sales (x) Interest Cover (x) Debtors (days) Inventory (days) Loans & Advances (days) Creditors (days) Working Capital (days)

FY14 2.4 13.7 18.4 7.8 6.2 9.3 1.3 1.7 0.9 0.1 2.7 33.2 31.5 17.4 37.1 10.2

FY15 2.7 15.4 14.0 6.7 6.8 9.0 1.0 1.5 0.7 0.1 2.9 30.1 34.8 13.3 43.7 7.9

FY16 4.2 24.8 34.7 20.3 6.6 8.9 0.6 1.4 0.8 0.1 4.9 38.7 36.9 15.4 52.9 7.3

FY17 3.7 32.1 25.5 19.8 9.7 13.0 0.2 1.2 0.7 0.0 5.8 52.9 42.9 11.9 79.6 4.4

EV/Sales (x) EV/EBIDT (x) EV/EBIT (x) P/E (x) P/BV (x)

0.6 21.7 26.5 147.2 27.1

0.5 18.3 23.0 168.7 23.5

0.4 10.2 11.9 46.9 16.3

0.8 21.4 24.2 39.7 10.1

Valuation Ratios FY14 31 19 687 737 936 60 21 1,753 1,175 332 842

FY15 31 19 799 849 823 62 30 1,764 1,339 369 970

842 2,008 46 481 933 529 19 1,160 1,100 60 848 63 1,753

970 2,214 69 562 1,130 442 10 1,481 1,420 61 733 60 1,764

Source: Company, PhillipCapital India Research Estimates


FY16 31 20 1,179 1,230 796 72 0 2,097 1,562 437 1,125 0 1,125 111 2,937 75 900 1,363 594 6 2,077 1,955 122 860 1 2,097

FY17 110 1,867 1,977 466 98 0 2,542 1,891 520 1,371 20 1,391 6,599 153 2,802 2,822 810 12 5,449 5,229 219 1,151 2,542

COMPANY NAME COMPANY UPDATE

Rating Methodology We rate stock on absolute return basis. Our target price for the stocks has an investment horizon of one year. Rating Criteria Definition BUY

>= +15%

Target price is equal to or more than 15% of current market price

NEUTRAL

-15% > to < +15%

Target price is less than +15% but more than -15%

SELL