Multibase India clocks FY15 net profit of INR72.21m, Firstcall recommend 'Buy'

1. CMP 209.60
Target Price 240.00
ISIN: INE678F01014
JUNE 10th
2015
MULTIBASE INDIA LTD
Result Update (PARENT BASIS): Q4 FY15
BUY
Index Details
Stock Data
Sector Auto Tyres & Rubber Products
BSE Code 526169
Face Value 10.00
52wk. High / Low (Rs.) 342.50/61.65
Volume (2wk. Avg.) 5436
Market Cap (Rs. in mn.) 2645.15
Annual Estimated Results (A*: Actual / E*: Estimated)
YEARS FY15A FY16E FY17E
Net Sales 616.47 690.45 759.49
EBITDA 117.03 139.65 153.84
Net Profit 72.21 86.36 95.65
EPS 5.72 6.84 7.58
P/E 36.63 30.63 27.66
Shareholding Pattern (%)
1 Year Comparative Graph
MULTIBASE INDIA LTD S&P BSE SENSEX
SYNOPSIS
Multibase India Ltd is engaged in the manufacture
and sale of thermoplastic compounds.
In Q4 FY15, Net profit jumps to Rs. 19.29 million an
increase of 19.59% against Rs. 16.13 million in the
corresponding quarter of previous year.
The company’s net sales registered 5.26% increase
in Q4 FY15 and stood at Rs. 158.65 million from Rs.
150.72 million over the corresponding quarter of
previous year.
During the quarter operating profit is Rs. 31.95
million as against Rs. 25.18 million in the
corresponding period of the previous year, grew by
26.89%.
During the quarter, EPS stood at Rs. 1.53 as
compared to Rs. 1.28 over the corresponding quarter
of previous year.
Profit before tax stood at Rs. 31.08 million in Q4
FY15 as against Rs. 23.93 million in Q4 FY14, an
increase of 29.88%.
Total income stood at Rs. 161.87 million in Q4 FY15
as against Rs. 153.00 million in the corresponding
period of the previous year, registering a growth of
5.80%.
Net profit grew by 42% to Rs. 72.21 million for the
end of FY15 from Rs. 50.79 million for the end of
FY14.
For the end of FY15, the company registered a
growth of 13% in Net sales to Rs. 616.47 million
from Rs. 545.64 million for the end of FY14.
Net Sales and PAT of the company are expected to
grow at a CAGR of 14% and 21% over 2014 to 2017E
respectively.
PEER GROUPS CMP MARKET CAP EPS P/E (X) P/BV(X) DIVIDEND
Company Name (Rs.) Rs. in mn. (Rs.) Ratio Ratio (%)
Multibase India Ltd 209.60 2645.15 5.72 36.63 6.43 0.00
Pix Transmissions Ltd 45.10 614.50 2.53 17.83 0.40 10.00
Rubfila International Ltd 44.10 1905.90 3.14 14.04 2.69 15.00
Indag Rubber Ltd 154.00 4042.50 12.41 12.41 2.98 120.00

2. QUARTERLY HIGHLIGHTS (PARENT BASIS)
Results Updates- Q4 FY15
Multibase India Limited was incorporated in 1991 and is
engaged in the manufacture and sale of thermoplastic
compounds has reported its financial results for the
quarter ended 31st March, 2015.
The company’s net profit jumps to Rs. 19.29 million against Rs. 16.13 million in the corresponding quarter
ending of previous year, an increase of 19.59%. Revenue for the quarter rose by 5.26% to Rs. 158.65 million from
Rs. 150.72 million, when compared with the prior year period. Reported earnings per share of the company
stood at Rs. 1.53 a share during the quarter as against Rs. 1.28 over previous year period. Profit before interest,
depreciation and tax is Rs. 31.95 million as against Rs. 25.18 million in the corresponding period of the previous
year.
Break up of Expenditure
Months Mar-15 Mar-14 % Change
Net Sales 158.65 150.72 5.26
PAT 19.29 16.13 19.59
EPS 1.53 1.28 19.59
EBITDA 31.95 25.18 26.89
Break up of Expenditure
(Rs in millions)
Q4 FY15 Q4 FY14
%
CHNG
Cost of materials
consumed
83.99 87.96 -5%
Purchase of stock in Trade 8.12 9.03 -10%
Employee benefits
expense
8.82 6.03 46%
Depreciation &
Amortization Expense
0.70 1.12 -38%
Other expenses 19.17 15.77 22%

3. COMPANY PROFILE
Multibase India Limited was incorporated in 1991 and is engaged in the manufacture and sale of thermoplastic
compounds in India. The company also offers polypropylene compound, thermoplastic elastomer, silicon master
batch, and thermoplastic master batch products. Its products are used in a range of applications, including
automotive, personal care, personal hygiene, stationery, telecommunications, engineering polymers, etc.
Multibase India Limited is a subsidiary of Multibase S.A, France.
Brands
• Dow Corning SiMB
• Multiflex®
• Multibatch®
• Multipro
• TPSiV®

4. FINANCIAL HIGHLIGHT (PARENT BASIS) (A*- Actual, E* -Estimations & Rs. In Millions)
Balance Sheet as at March 31, 2014 -2017E
FY14A FY15A FY16E FY17E
SOURCES OF FUNDS
Shareholder's Funds
Share Capital 126.20 126.20 126.20 126.20
Reserves and Surplus 214.17 285.43 371.79 467.43
1. Sub Total - Net worth 340.37 411.63 497.99 593.63
Non Current Liabilities
Deferred Tax Liabilities 2.34 1.69 1.79 1.85
Long term Provisions 2.80 3.82 4.32 4.71
2. Sub Total - Non Current Liabilities 5.14 5.51 6.11 6.55
Current Liabilities
Trade Payables 55.63 40.00 35.20 38.02
Other Current Liabilities 5.78 7.75 9.38 10.69
Short Term Provisions 1.65 3.07 3.56 4.02
3. Sub Total - Current Liabilities 63.06 50.82 48.14 52.73
Total Liabilities (1+2+3) 408.57 467.96 552.23 652.91
APPLICATION OF FUNDS
Non-Current Assets
a) Fixed Assets 50.36 52.72 56.94 60.35
b) Long Term loans and advances 9.49 9.89 10.48 11.01
1. Sub Total - Non Current Assets 59.85 62.61 67.42 71.36
Current Assets
Inventories 111.42 93.51 104.73 117.30
Trade receivables 106.14 100.70 108.76 120.72
Cash and Bank Balances 106.69 177.63 232.45 299.22
Short-terms loans & advances 24.47 33.51 38.87 44.31
2. Sub Total - Current Assets 348.72 405.35 484.81 581.55
Total Assets (1+2) 408.57 467.96 552.23 652.91

5. Annual Profit & Loss Statement for the period of 2014 to 2017E
Value(Rs.in.mn) FY14A FY15A FY16E FY17E
Description 12m 12m 12m 12m
Net Sales 545.64 616.47 690.45 759.49
Other Income 8.19 12.31 13.29 14.09
Total Income 553.83 628.78 703.74 773.58
Expenditure -473.19 -511.75 -564.09 -619.74
Operating Profit 80.64 117.03 139.65 153.84
Interest -0.72 -0.60 -0.66 -0.71
Gross profit 79.92 116.43 138.99 153.13
Depreciation -4.72 -7.07 -8.34 -9.51
Profit Before Tax 75.20 109.36 130.64 143.62
Tax -24.41 -37.15 -44.29 -47.97
Net Profit 50.79 72.21 86.36 95.65
Equity capital 126.20 126.20 126.20 126.20
Reserves 214.17 285.43 371.79 467.43
Face value 10.00 10.00 10.00 10.00
EPS 4.02 5.72 6.84 7.58
Quarterly Profit & Loss Statement for the period of 30th Sep, 2014 to 30th Jun, 2015E
Value(Rs.in.mn) 30-Sep-14 31-Dec-14 31-Mar-15 30-Jun-15E
Description 3m 3m 3m 3m
Net sales 148.59 162.59 158.65 168.17
Other income 2.88 3.67 3.22 3.41
Total Income 151.47 166.26 161.87 171.58
Expenditure -126.72 -130.56 -129.92 -139.75
Operating profit 24.75 35.70 31.95 31.83
Interest -0.20 -0.13 -0.17 -0.14
Gross profit 24.55 35.57 31.78 31.69
Depreciation -2.11 -2.16 -0.70 -0.78
Profit Before Tax 22.44 33.41 31.08 30.91
Tax -6.82 -11.26 -11.79 -10.38
Net Profit 15.62 22.15 19.29 20.52
Equity capital 126.20 126.20 126.20 126.20
Face value 10.00 10.00 10.00 10.00
EPS 1.24 1.76 1.53 1.63

6. Ratio Analysis
Particulars FY14A FY15A FY16E FY17E
EPS (Rs.) 4.02 5.72 6.84 7.58
EBITDA Margin (%) 14.78 18.98 20.23 20.26
PBT Margin (%) 13.78 17.74 18.92 18.91
PAT Margin (%) 9.31 11.71 12.51 12.59
P/E Ratio (x) 52.08 36.63 30.63 27.66
ROE (%) 14.92 17.54 17.34 16.11
ROCE (%) 25.08 30.15 29.72 27.52
EV/EBITDA (x) 31.48 21.08 17.28 15.25
Book Value (Rs.) 26.97 32.62 39.46 47.04
P/BV 7.77 6.43 5.31 4.46
Charts

7. OUTLOOK AND CONCLUSION
At the current market price of Rs. 209.60, the stock P/E ratio is at 30.63 x FY16E and 27.66 x FY17E
respectively.
Earnings per share (EPS) of the company for the earnings for FY16E and FY17E are seen at Rs. 6.84 and Rs.
7.58 respectively.
Net Sales and PAT of the company are expected to grow at a CAGR of 14% and 21% over 2014 to 2017E
respectively.
On the basis of EV/EBITDA, the stock trades at 17.28 x for FY16E and 15.25 x for FY17E.
Price to Book Value of the stock is expected to be at 5.31 x and 4.46 x for FY16E and FY17E respectively.
We recommend ‘BUY’ in this particular scrip with a target price of Rs. 240.00 for Medium to Long term
investment.
INDUSTRY OVERVIEW
The Indian auto components industry has experienced healthy sequential growth over the last one-and-a-half
years. The growth can be attributed to factors such as strong buoyancy in the end-user industry, recovery of the
global economy, improved consumer sentiment and return of adequate liquidity in the financial system. The
revival of the auto industry was initially driven by the fiscal stimulus programme of the government.
The industry currently accounts for almost seven per cent of India’s gross domestic product (GDP) and employs
about 19 million people, both directly and indirectly. The ever-increasing development in infrastructure, big
domestic market, increasing purchasing power and stable government framework have made India a favourable
destination for investment, as per the vision of Automotive Mission Plan (AMP) 2006–2016.
The Indian auto component industry is expected to register a turnover of US$ 66 billion by FY 15–16 with the
likelihood to touch US$ 115 billion by FY 20–21 depending on favourable conditions, as per the estimates by
Automotive Component Manufacturers Association of India (ACMA). In addition, industry exports are projected
to reach US$ 12 billion by FY 15–16 and add up to US$ 30 billion by FY 20–21. Revenues for the auto industry in
2014-15 are expected to grow by 11-12 per cent supported by healthy recovery by major original equipment
manufacturers (OEMs) in the medium and heavy commercial vehicles (M&HCV) and passenger vehicle (PV)
segment.
The Government of India’s Automotive Mission Plan (AMP) 2006–2016 has come a long way in ensuring the
growth of this sector in the global market. It is expected that this sector's contribution to the GDP will double

8. reaching a turnover of US$ 145 billion in 2016 due to the government’s special focus on exports of small cars,
multi-utility vehicles (MUVs), two and three-wheelers and auto components.
Outlook
The rapidly globalising world is opening new avenues for the transportation industry, generating the need for
more efficient, safe and reliable modes of transportation, which is subsequently adding to the auto component
industry’s growing opportunities. According to a report by the Confederation of Indian Industry (CII), the Indian
auto component industry is set to become the third largest in the world by 2025. Also, by that time, newer
verticals and opportunities for component manufacturers will open up as the automobile market will shift
towards electric, electronic and hybrid cars, and newer technologies will have to be adopted via systematic
research and development.
Indian auto component makers are well positioned to benefit from the globalisation of the sector as exports
potential could be increased by up to four times to US$ 40 billion by 2020.
Disclaimer:
This document is prepared by our research analysts and it does not constitute an offer or solicitation for the
purchase or sale of any financial instrument or as an official confirmation of any transaction. The information
contained herein is from publicly available data or other sources believed to be reliable but we do not represent that
it is accurate or complete and it should not be relied on as such. Firstcall Research or any of its affiliates shall not be
in any way responsible for any loss or damage that may arise to any person from any inadvertent error in the
information contained in this report. Firstcall Research and/ or its affiliates and/or employees will not be liable for
the recipients’ investment decision based on this document.

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