Bharti airtel fin-quest_100513

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Bharti airtel fin-quest_100513

  1. 1. Bharti Airtel CMP : INR 324 Rating : Buy Target : INR 410 Margins contract due to higher network costs and fuel expenses… Operating matrics in India improves, while that of Africa disappoints … Voice realization in both India and Africa continues to remain under pressure, but higher AMOU in India is a major positive… Headline tariffs are set to improve… Maintain 'Buy' rating on the stock with revised price target of Rs 410 Bharti Airtel's consolidated net profit during Q4FY13 missed our estimates as well as the consensus estimates due to price realization pressure in India & Africa, high network rollout costs and sharp rise in interest cost and higher tax expenses during the quarter. Although the number of subscribers on the company's network increased both in India and Africa resulting in higher total minutes on the network (TMOU), the realized revenue per minute (ARPM) continued to remain under pressure. The average revenue per user (ARPU) though increased due to increased data usage from its 3G user base and higher voice minutes of usage (AMOU) per subscriber per month during the quarter. Nevertheless pressure on price realization implies that the competitive intensity continues to be chronic despite lower number of operators per circle. Lately though there are signs that the price is trending up and operators are cutting back on promotional & discount offers and free minutes. So this bodes well for the incumbents in the months ahead. The regulatory confusion with respect to 3G inter circle roaming (ICR), one time spectrum payment, license extension etc. continues to prevail. The regulatory pressure in Africa with respect to implementation of KYC norm, spectrum price etc also seen increasing lately, while higher rollout expenses in many regions of Africa and India continue to pressure the margins despite lower subscriber churn. The consolidated revenue for the quarter under review grew 9% Y-o-Y (1% Q-o-Q) to Rs 204.48 bn on the back of increased minutes on the company's network. As at the end of March 2013, the company had an aggregate of 271.2 mn customers consisting of 259.8 mn mobile (India, South Asia & Africa), 3.3 mn tele-media and 8.1 mn digital TV customers. Its total customer base increased by 8% compared to its customer base as on March 31, 2012. Margins contract due to pressure on voice realization and higher network costs Despite sharp fall in selling, general & administrative expenses due to improvement in customer acquisition process and improved bad debt collection, the network expansion cost and fuel cost caused the margins to contract. As a percentage of total revenue the network operations cost increased 200 bps Y-o-Y (20 bps lower Q-o-Q) to 27.8% while the selling, general & administrative expenses fell 40 bps Y-o-Y (85 bps Q-o-Q) to 19.9%. The access charges were lower by 25 bps Y-o-Y (100 bps Q-o-Q) at 13.4% of consolidated revenue due to lower volumes in the international wholesale voice business. Thus the EBIDTA margin contracted 155 bps Y-o-Y (improved 120 bps Q-o-Q) to 31.7%. Operating matrics of India improves, while that of Africa disappoints The mobile subscribers in India & south Asia increased 3.8% Y-o-Y (3.5% Q-o-Q) to 188.2 mn after two quarters of subscriber contraction. TMOU on the company's network increased 10.7% Y-o-Y (3.4% Q-o-Q) to 293.67 bn minutes due to higher number subscriber on the network and increase in AMOU per subscriber. The AMOU rose 5.6% Y-o-Y (4.6% Q-o-Q) to 455 minutes per subscriber per month, although the ARPM contracted 3.3% -o-Y (0.3% Q-o-Q) to Rs 0.42. May 9, 2013 For Private Circulation OnlyFINQUEST research also available on BLOOMBERG FSPL <GO> and REUTERS. Shareholding % 2Q 3Q 4Q Promoters 68.0 68.0 69.0 MF/Banks/Indian FIs 8.0 8.0 9.0 FII/ NRIs/ OCBs 17.0 18.0 17.0 Indian Public 7.0 6.0 5.0 KEY DATA Market Cap (INR bn) 1295.2 Market Cap (USD mn) 23984.4 52 WK High / Low 370 / 238 Avg Daily Volume (BSE) 507834 Face Value (INR) 5 BSE Sensex 19990 Nifty 6069 BSE Code 532454 NSE Code BHARTIARTL Reuters Code BRTI.BO Bloomberg Code BHARTI IN Performance Chart Result Update Daryl Philip Senior Research Analyst Tel. : 4000 2667 dphilip@finquestonline.com PRICE PERFORMANCE (%) 3 M 6 M 12 M Absolute (2.0) 17.0 1.5 Relative (2.2) 12.5 (14.9)
  2. 2. For Private Circulation OnlyMay 9, 2013 2 The operating metric in Africa though disappointed. Although the subscriber numbers increased, the usage and price realization fell during the quarter under review. The total subscribers in the 17 countries of Africa rose 20% Y-o-Y (3% Q-o-Q) to 64 mn, while the AMOU per subscriber fell 7% Y- o-Y (15% Q-o-Q) to 123 minutes per subscriber per month. The ARPM in rupee term fell 8% Y-o-Y (rose 10% Q-o-Q) to Rs 2.6, while the ARPU contracted 7% Y-o-Y (6% Q-o-Q) to 320 minutes in Q4FY13. On account of decline in voice realization across India and Africa, aggressive expansion of 3G networks in India and increasing operating expenses, the consolidated EBIDTA increased just 4% Y-o-Y (5% Q- o-Q) to Rs 64.82 bn in Q4FY13. Bottom-line disappoints due to higher finance costs and tax expenses The Depreciation allowance rose 15% Y-o-Y (2% Q-o-Q) to Rs 39.83 bn on the back of continuing investments in network rollout, while the interest cost rose 20% Y-o-Y (1% Q-o-Q) to Rs 11.67 bn. These sharp increase in finance cost resulted in the Profit before tax and minority interest to fall 24% to Rs 12.95 bn. The total tax expenses rose 13% to Rs 7.88 bn which included additional charge of Rs 959 mn on account of increase in surcharge from 5% to 10%), dividend distribution tax of Rs 374 mn and withholding taxes were Rs 355 mn. Thus the net income for Q4FY13 fell 49% Y-o-Y (79% Q-o- Q) to Rs 5.09 bn. Data to be the key driver of growth going ahead Although the performance during the quarter was disappointing, the broader macro trend especially on the pricing front shows improvement on the ground. The data business is picking up in India and Africa. So increased composition of data in the total business is expected to improve the ARPU and the ARPM. Data consumption continues to grow 20% every quarter and has reached 24 bn MBs during Q4FY13 and now contributes around 6.5% of the total mobile revenues (against 5.7% in Q3FY13). The company had 43.5 mn data (mobile Internet) customers, of which 6.4 mn used 3G data services. Data ARPU came in at Rs 55, aided by average data download of 187 MB per user per month (an increase of 26 MB per user over previous quarter), and blended data realization rate being stable at 29.27 paisa per MB. Data ARPU of Rs 55 is very low compared to global standards. So we see data as the major growth driver in the quarters ahead. Operational matrics of India thus are set to improve further, while the Africa would also improve. Thus we see margin improvement despite higher operating expenses. Regulatory uncertainties have become part of the telecom ecosystem Regulatory uncertainties would continue to prevail, but we believe overall the telecom Industry should be studied in isolation as the regulatory hindrances have become part of the telecom ecosystem. Nevertheless the short term pressure on profitability would remain considering the potential regulatory payments that needs to be made in the form of one time spectrum charges and the penalty due to 3G roaming arrangement that the company has entered into with other incumbents (if the TDSAT gives an adverse verdict on this front), especially at a time when the competitive intensity has again peaked due to which the operating costs may increase. We rollover our price target to FY14 end and revise upward our one year price target to Rs 410. We estimate the revenue and EPS of the company for FY14 to come in at Rs 855.03 bn and Rs 52.89 respectively. We value Bharti Cellular using discounted cash flow approach to arrive at intrinsic value of Rs 448 per share. After reducing the present value of one time excess spectrum charges and license renewal payment, we arrive at our new one year target price for Bharti Airtel at Rs 410.
  3. 3. For Private Circulation OnlyMay 9, 2013 3 Comparative Valuation Company Year End CMP Rating Total EBIDTA EPS EPS Sales EBIDTA ROE ROCE P/E EV/EBITDA P/BV Revenue Growth Growth Margin (bn Rs.) (bn Rs.) (Rs.) % % % % % (x) (x) (x) FY13E FY14E FY13E FY14E FY13E FY14E (14/13E) (14/13E) FY13E FY13E FY13E FY13E FY14E FY13E FY14E FY13E FY14E DomesticCompetitors Bharti Airtel Mar 325 Buy 803.1 855.0 248.6 282.0 6.0 13.9 132.4% 6.5% 31.0% 4.5% 3.2% 54.1x 23.3x 7.5x 6.7x 2.4x 2.2x Idea Cellular Mar 127 Buy 224.1 251.7 59.5 69.1 2.9 4.4 53.0% 12.3% 26.6% 7.0% 5.6% 41.4x 27.1x 8.7x 7.3x 2.8x 2.5x Reliance Communication Mar 111 NR 212.2 227.8 66.7 74.5 2.7 5.2 94.7% 7.3% 31.4% 1.6% 1.5% 41.6x 21.4x 9.2x 8.2x 0.7x 0.6x Tata Comm Mar 230 Buy 171.4 183.6 21.7 24.7 -22.1 -20.0 -9.6% 7.1% 12.7% -38.1% 2.1% NM NM 7.2x 6.1x 4.2x 6.7x Tulip Telecom Mar 18 NR 30.6 33.7 7.7 9.0 15.5 21.4 38.1% 9.9% 25.0% 13.9% 5.2% 1.2x 0.8x 4.2x 3.6x 0.2x 0.1x Source: FQ Research, Bloomberg *NR (Not Rated); NM (Not Meaningful) Revenue & Profit Growth Profit margin trend Source: Company, FQ Research Source: Company, FQ Research
  4. 4. For Private Circulation OnlyMay 9, 2013 4 Q4FY13 Results (Consolidated) Particulars (Mn. Rs) Q4 Q4 Y-o-Y Q3 Q-o-Q 12M 12M Y-o-Y FY13 FY12 change FY13 change FY13 FY12 change % % % Total Revenue 204,484 187,294 9.2% 202,395 1.0% 803,112 714,508 12.4% Less: Access charges 27,498 25,658 7.2% 29,157 (5.7%) 113,226 97,361 16.3% % of total revenue 13.4% 13.7% -25 14.4% -96 14.1% 13.6% 47 Licence fees, rev. sh. and spec. charges 16,933 16,218 4.4% 16,784 0.9% 66,486 61,099 8.8% % of adjusted total revenue 9.6% 10.0% -47 9.7% -12 9.6% 9.9% -26 Network operations costs 49,132 41,583 18.2% 48,461 1.4% 189,315 157,598 20.1% % of adjusted total revenue 27.8% 25.7% 203 28.0% -21 27.4% 25.5% 190 Personnel 10,848 8,717 24.4% 10,211 6.2% 40,098 35,159 14.0% % of adjusted total revenue 6.1% 5.4% 74 5.9% 24 5.8% 5.7% 12 Selling, general & admin. expenses 35,257 32,845 7.3% 35,991 (2.0%) 145,371 126,309 15.1% % of adjusted total revenue 19.9% 20.3% -40 20.8% -85 21.1% 20.5% 61 Total Expenditure 139,668 125,021 11.7% 140,604 (0.7%) 554,496 477,526 16.1% EBIDTA 64,816 62,273 4.1% 61,791 4.9% 248,616 236,982 4.9% Less: Depreciation 39,828 34,683 14.8% 39,005 2.1% 154,964 133,681 15.9% % of adjusted total revenue 22.5% 21.5% 105 22.5% -1 22.5% 21.7% 80 EBIT 24,988 27,590 (9.4%) 22,786 9.7% 93,652 103,301 (9.3%) Less: Interest 11,674 9,698 20.4% 11,573 0.9% 45,693 34,863 31.1% Add: Other income (367) (836) (56.1%) (1,698) (78.4%) 1,861 (3,317) (156.1%) Profit Before Tax 12,947 17,056 (24.1%) 9,515 36.1% 49,820 65,121 (23.5%) Less: Total Tax 7,884 6,976 13.0% 6,675 18.1% 27,151 22,602 20.1% Minority Interest 23 (21) (209.5%) (3) (866.7%) 88 69 27.5% Profit After Tax 5,086 10,059 (49.4%) 2,837 79.3% 22,757 42,588 (46.6%) Pro forma Net Profit 5,086 10,059 (49.4%) 2,837 79.3% 22,757 42,588 (46.6%) Shares Outstanding (mn) 3,798 3,798 3,798 3,798 3,798 Reported EPS (Rs.) 1.34 2.65 (49.4%) 0.75 79.3% 5.99 11.21 (46.6%) Pro forma EPS (Rs.) 1.34 2.65 (49.4%) 0.75 79.3% 5.99 11.21 (46.6%) EBIDTA Margin 31.7% 33.2% -155 30.5% 117 31.0% 33.2% -221 Proforma NPM 2.5% 5.4% -288 1.4% 109 2.8% 6.0% -313 Effective Tax Rate 60.9% 40.9% 1999 70.2% -926 54.5% 34.7% 1979 Segmental Revenue & profitability Particulars (Mn. Rs) Q4 Q4 Y-o-Y Q3 Q-o-Q 12M 12M Y-o-Y FY13 FY12 change FY13 change FY13 FY12 change % % % Segment Revenue Mobile services (India & South Asia) 112,853 105,096 7.4% 109,364 3.2% 440,235 403,091 9.2% Africa Operation 60,647 53,872 12.6% 61,694 -1.7% 240,439 198,262 21.3% Telemedia Services 9,621 9,159 5.0% 9,566 0.6% 38,158 37,271 2.4% Enterprise Services 13,143 11,209 17.3% 14,219 -7.6% 53,202 44,541 19.4% Passive Infrastructure 27,189 24,183 12.4% 26,350 3.2% 103,154 95,109 8.5% Others# 5,319 753 606.4% 821 547.9% 3,533 5,992 -41.0% Elimination (24,288) (20,543) 18.2% (23,899) 1.6% -91,903 -79,784 15.2% Total Revenue 204,484 183,729 11.3% 198,115 3.2% 786,818 704,482 11.7% Segment EBIT Mobile services (India & South Asia) 18,514 21,438 -13.6% 16,713 10.8% 70,677 82,242 -14.1% Africa Operation 3,355 5,131 -34.6% 4,354 -22.9% 15,472 14,002 10.5% Telemedia Services 1,669 1,517 10.0% 1,642 1.6% 6,447 7,150 -9.8% Enterprise Services 1,444 181 697.8% 888 62.6% 3,693 2,628 40.5% Passive Infrastructure 4,654 3,930 18.4% 4,200 10.8% 16,364 14,641 11.8% Others# (1,784) (2,631) -32.2% 0 NM (4,960) (11,700) -57.6% Total EBIT 27852 27,622 0.8% 25,969 7.3% 99,588 103,258 -3.6% Segment EBIT margin Change Change Change (bps) (bps) (bps) Mobile services (India & South Asia) 16.41% 20.40% -399.3 15.28% 112.3 16.05% 20.40% -434.8 Africa Operation 5.53% 9.52% -399.1 7.06% -152.4 6.43% 7.06% -62.8 Telemedia Services 17.35% 16.56% 78.5 17.16% 18.3 16.90% 19.18% -228.8 Enterprise Services 10.99% 1.61% 937.2 6.25% 474.2 6.94% 5.90% 104.1 Passive Infrastructure 17.12% 16.25% 86.6 15.94% 117.8 15.86% 15.39% 47.0 Others# -33.54% -349.40% 31586.2 0.00% -3354.0 -140.39% -195.26% 5487.0 Total EBIT margin 13.62% 15.03% -141.3 13.11% 51.3 12.66% 14.66% -200.0 # includes DTH business NA - Not Available, NM - Not meaningful Source : Company, FQ Research
  5. 5. For Private Circulation OnlyMay 9, 2013 5 Segmental performance Mobile Services- India & South Asia The mobile revenue of India & south Asia rose 7.4% to Rs 112.85 bn primarily driven by 10.7% Y-o- Y (3.4% Q-o-Q) increase in TMOU on the company's network, 5.6% Y-o-Y (4.6% Q-o-Q) increased in AMOU per subscriber. The AMOU rose to 455 minutes per subscriber per month during the quarter under review, although the ARPM contracted 3.3% Y-o-Y (0.3% Q-o-Q) to Rs 0.42. At the end of March 2013, the total subscribers on the company's network in India & South Asia reached 188.2 mn. The mobile business contributed 55% to the total revenues in Q4FY13 and the company incurred around Rs 13 bn in capex. Bharti Airtel's total subscribers and subscriber growth trend Source: Company, FQ Research ARPUs & MoUs growth trend Minute of usage (MoU) (mn min) & Average Revenue per User (ARPU) (Rs) Source: Company, FQ Research Out of the total ARPU of Rs 193, non voice ARPU was Rs 33.6 per user per month of which messaging & VAS revenue per user per month was Rs 17.6 and data revenue per user per month was Rs 12.5. Non-voice revenue as a percentage of mobile revenue increased to 17.4% in Q4FY13 as compared to 17.3% in the previous quarter and 16.2% in Q4FY12.
  6. 6. For Private Circulation OnlyMay 9, 2013 6 Average minutes of usage per subscriber trend Revenue per Minute (RPM) (Rs) Source: Company, FQ Research Source: Company, FQ Research Mobile Services- Africa The Africa operation added a healthy 2.03 mn subscribers in Q4FY13 as compared to the previous quarter to take the total subscribers in the region to 63.72 mn at the end March 2013. Such healthy growth was witnessed despite several political and social issues that haunted some of the markets in Africa. The company's operation in Africa witnessed 6% sequential fall in ARPU in rupee term to Rs 320. The ARPM in rupee term rose 10% Q-o-Q to Rs 2.6 per minute. The revenue of the company's Africa operation improved 13% Y-o-Y (fell 2% q-o-Q) to Rs 60.65 bn in Q4FY13. The net loss from Africa operation reduced to Rs 4.86 bn in Q4FY13 as compared to a net loss of Rs 5.2 bn in Q3FY13. Bharti Airtel incurred a capital expenditure of USD 235 mn in its Africa operation. The Africa business contribution to the total revenue rose to 29.6% in Q4FY13 as compared to 28.8% in 4FY12. Africa Business- Minute of usage (MoU) (mn min) Africa Business- Profit margin trend & Average Revenue per User (ARPU) (Rs) Source: Company, FQ Research Source: Company, FQ Research
  7. 7. For Private Circulation OnlyMay 9, 2013 7 Telemedia During Q4FY13, Bharti Airtel marginally increased customers on its Telemedia networks thus taking its total subscribers to 3.28 mn. Out of this total around 1.4 mn subscribers were the broadband (DSL) customers. The ARPU for the quarter rose 4.8% Y-o-Y (0.5% sequentially) to Rs 978. The average minutes of usage here in Q4FY13 was 405.2 min (lower by 3.4% Y-o-Y). The company incurred a capital expenditure of Rs 2.25 bn in its telemedia segment. Airtel Business The revenues from the Airtel Business services contributed to 6.43% of the total consolidated revenues of the company in Q4FY13. Passive Infrastructure The revenues from the Passive Infrastructure business contributed 13.3% of the total consolidated revenue of the company in Q4FY13. The company operates in the tower business through its own subsidiary- Bharti Infratel as well as through its joint venture with Idea and Vodafone- Indus Tower. As at the end of the quarter, Bharti Infratel had 35,119 towers with a tenancy ratio of 1.81 times. Indus Tower had 111,819 towers with a tenancy ratio of 1.99 times. Bharti Airtel has 42% stake in Indus Towers. DTH Airtel digital TV has over 8.1 mn customers and now has digital TV operations in 609 districts. The ARPU for the quarter was Rs 184 per month. During the quarter ended March 2013, the company incurred a capital expenditure of Rs 1.33 bn on its Digital TV Services.
  8. 8. For Private Circulation OnlyMay 9, 2013 8 Profit and Loss Statement Particulars (Mn. Rs.) FY12 FY13 FY14E FY15E Net Sales 714,508 803,112 855,029 1,000,443 % chg 20.2% 12.4% 6.5% 17.0% Cost of Services 351,217 409,125 433,994 495,044 Gross Profit 363,291 393,987 421,035 505,400 (% of Net Sales) 50.8% 49.1% 49.2% 50.5% SG&A Expenses 126,309 145,371 138,993 165,924 EBIDTA 236,982 248,616 282,042 339,475 (% of Net Sales) 33.2% 31.0% 33.0% 33.9% Depreciation 133,681 154,964 167,072 205,893 Operating Profit 103,301 93,652 114,970 133,582 (% of Net Sales) 14.5% 11.7% 13.4% 13.4% Non-operating Income (3,311) 1,861 5,547 6,833 Interest & Financing Charges 34,863 45,693 47,734 46,489 PBT 65,127 49,820 72,783 93,926 (% of Net Sales) 9.1% 6.2% 8.5% 9.4% Tax 22,602 27,151 21,194 28,987 Minority Interest (69) (88) (1,296) 1,299 Net Income from cont. operations 42,594 22,757 52,886 63,641 Net Income 42,594 22,757 52,886 63,641 Ratios Particulars FY12 FY13 FY14E FY15E Valuation Ratio (x) P/E 28.9x 54.1x 23.3x 19.3x P/BV 2.4x 2.4x 2.2x 2.0x EV / Sales 2.6x 2.3x 2.2x 1.9x EV / EBIDTA 7.9x 7.5x 6.7x 5.5x MCap/Sales 1.7x 1.5x 1.4x 1.2x Leverage Ratio Debt-Equity 1.36x 1.70x 1.46x 1.27x Interest Coverage 2.96x 2.05x 2.41x 2.87x Per Share Data (Rs) Diluted EPS 11.2 6.0 13.9 16.8 Diluted Cash EPS 46.4 46.8 57.9 71.0 Book Value 133.3 133.7 147.6 164.4 Returns (%) ROE 8.6% 4.5% 9.9% 10.7% ROCE 5.3% 3.2% 5.9% 6.4% Dividend Payout 0.0% 0.0% 0.0% 0.0% Du-Pont Analysis EBIDTA/Sales (%) 33.2% 31.0% 33.0% 33.9% Sales/Operating assets (x) 143.5% 159.3% 163.9% 178.4% EBIDTA/Operating Assets (%) 47.6% 49.3% 54.1% 60.5% Operating Assets/Net Assets (x) 40.6% 36.8% 35.4% 37.2% Net Earnings/EBIDTA (%) 18.0% 9.2% 18.8% 18.7% Net Assets/Net Worth (x) 247.0% 270.5% 276.1% 254.2% RoE (%) 8.6% 4.5% 9.9% 10.7% Margins (%) EBIDTA margin 33.2% 31.0% 33.0% 33.9% PBT margin 9.1% 6.2% 8.5% 9.4% PAT margin 6.0% 2.8% 6.2% 6.4% Growth Ratios (%) Net Sales 20.2% 12.4% 6.5% 17.0% EBIDTA 18.7% 4.9% 13.4% 20.4% EBIT 5.8% (9.3%) 22.8% 16.2% PAT (29.6%) (46.6%) 132.4% 20.3% APAT (29.6%) (46.6%) 132.4% 20.3% Operating Cycle Debtors Days 30 31 32 30 Inventory Days 2 1 1 1 Creditors Days 256 257 281 264 Balance Sheet Particulars (Mn. Rs.) FY12 FY13 FY14E FY15E SOURCES OF FUNDS Equity Capital 18,988 18,988 18,988 18,988 Reserves and Surplus 487,407 489,315 542,201 605,842 Treasury stocks (282) (674) (674) (674) Net Worth 506,113 507,629 560,515 624,156 Deferred Income Taxes 11,621 13,062 13,906 16,272 Minority Interests 27,695 40,886 40,886 40,886 Other Non-current Liabilities 39,160 44,458 47,275 55,163 Short term debt 193,078 246,194 233,884 226,868 Long term Debt 497,154 615,485 584,710 567,169 Total Liabilities 1,274,821 1,467,714 1,481,176 1,530,513 APPLICATION OF FUNDS Gross Block 1,114,186 1,322,900 1,541,972 1,793,365 Less: Depreciation 439,254 594,218 761,290 967,183 Net Block 674,932 728,682 780,682 826,182 Goodwill & Intangibles 660,889 678,366 700,343 728,431 Long Term Investments 19,866 22,545 23,986 28,024 Other Non-current Assets 66,845 75,134 79,991 93,595 Current Assets 148,084 345,566 288,987 293,525 Current Liabilities & Provisions 295,795 382,579 392,814 439,245 Net Current Assets (147,711) (37,014) (103,827) (145,720) Capital Applied 1,274,821 1,467,714 1,481,176 1,530,513 Cash Flow Statement YE March (Rs. mn) FY12 FY13 FY14E FY15E Cash Inflows From Operations Profit Before Tax 65,127 49,820 72,783 93,926 Depreciation 133,681 154,964 167,072 205,893 Less: Tax paid 22,602 27,151 21,194 28,987 Operating Cashflows 176,206 177,633 218,661 270,833 Changes in Capital Structure Increase in Other Reserves (24,066) (20,761) 1,296 (1,299) Increase in Others (1,734) 14,632 844 2,365 Inc/(Dec) in Loans (30,187) 123,629 (27,958) (9,653) Treasury Stocks (14) (392) 0 0 Inc/(Dec) in Equity/Loans 52,707 170,224 (38,127) (15,603) Adjustments Total Inflows 228,913 347,857 180,534 255,230 Cash Outflows Working Capital changes Inc/(Dec) in Current Liabilities 10,320 86,784 10,234 46,431 Less: Inc/(Dec) in Inventory (831) 214 100 269 Inc in Debtors 8,806 7,904 4,631 12,971 Inc/(Dec) in Cash 5,992 4,430 2,596 7,271 Inc/(Dec) in Others 5,886 7,037 2,370 6,639 Inc/(Dec) in Working Capital 9,533 (67,200) (538) (19,281) Capex/Investments Inc/(Dec) in Investment + Intangibles 33,510 20,156 23,419 32,126 Addition to Gross Block 157,187 208,714 219,072 251,393 Inc/(Dec) in Other Non-current Assets 12,529 8,289 4,857 13,604 Inc/(Dec) in Fixed Assets/Invest. 203,226 237,159 247,348 297,123 Inc/(Dec) in Excess Cash 16,154 177,898 (66,276) (22,613) Total Outflows 228,913 347,857 180,534 255,230 Recommendation Summary Event Date Price Rating Target Initiating Coverage 19-09-2011 387 Buy 495 Result Update (Q2F12) 04-11-2011 398 Buy 495 Result Update (Q3F12) 09-02-2012 354 Buy 495 Result Update (Q4F12) 04-05-2012 315 Buy 495 Company Update 07-08-2012 252 Buy 357 Result Update (Q4F13) 09-05-2013 324 Buy 410 Consolidated Financials
  9. 9. For Private Circulation OnlyMay 9, 2013 9 DISCLAIMER: This document is not for public distribution and has been furnished to you solely for your information and must not be reproduced or redistributed to any other person. Persons into whose possession this document may come are required to observe these restrictions. Opinion expressed is our current opinion as of the date appearing on this material only. While we endeavor to update on a reasonable basis the information discussed in this material, there may be regulatory, compliance, or other reasons that prevent us from doing so. Prospective investors and others are cautioned that any forward-looking statements are not predictions and may be subject to change without notice. Our proprietary trading and investment businesses may make investment decisions that are inconsistent with the recommendations expressed herein. The information in this document has been printed on the basis of publicly available information, internal data and other reliable sources believed to be true and are for general guidance only. While every effort is made to ensure the accuracy and completeness of information contained, the company takes no guarantee and assumes no liability for any errors or omissions of the information. No one can use the information as the basis for any claim, demand or cause of action. Recipients of this material should rely on their own investigations and take their own professional advice. Each recipient of this document should make such investigations as it deems necessary to arrive at an independent evaluation of an investment in the securities of companies referred to in this document (including the merits and risks involved), and should consult their own advisors to determine the merits and risks of such an investment. Price and value of the investments referred to in this material may go up or down. Past performance is not a guide for future performance. Certain transactions - futures, options and other derivatives as well as non-investment grade securities - involve substantial risks and are not suitable for all investors. Reports based on technical analysis centers on studying charts of a stock’s price movement and trading volume, as opposed to focusing on a company’s fundamentals and as such, may not match with a report on a company’s fundamentals. We do not undertake to advise you as to any change of our views expressed in this document. While we would endeavor to update the information herein on a reasonable basis, FINQUEST, its subsidiaries and associated companies, their directors and employees are under no obligation to update or keep the information current. Also there may be regulatory, compliance, or other reasons that may prevent FINQUEST and affiliates from doing so. Prospective investors and others are cautioned that any forward-looking statements are not predictions and may be subject to change without notice. FINQUEST and affiliates, including the analyst who has issued this report, may, on the date of this report, and from time to time, have long or short positions in, and buy or sell the securities of the companies mentioned herein or engage in any other transaction involving such securities and earn brokerage or compensation or act as advisor or have other potential conflict of interest with respect to company/ies mentioned herein or inconsistent with any recommendation and related information and opinions. FINQUEST and affiliates may seek to provide or have engaged in providing corporate finance, investment banking or other advisory services in a merger or specific transaction to the companies referred to in this report, as on the date of this report or in the past. BUY HOLD SELL More than 10% return Between 5-10% return Less than 5% return ANALYST DISCLAIMER: Each analyst of FINQUEST Securities (P) Ltd. whose name appears on page 1 of the research reports accessible on this website hereby certifies that (i) the recommendations and opinions expressed in the research report accurately reflect the research analyst's personal views about any and all of the securities or issuers discussed herein that are within the analyst’s coverage universe and (ii) no part of the research analyst's compensation was, is, or will be, directly or indirectly, related to the provision of specific recommendations or views expressed by the research analyst in the research report. FINQUEST Securities (P) Ltd. 602 Boston House, Next to Cinemax, Suren Road, Andheri (East) Mumbai 400 093. Tel.: 91-22-4000 2600 Fax: 91-22-4000 2605 Email: info@finquestonline.com Website: www.finquestonline.com

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