ELGI Compressors

PRIVATE CLIENT RESEARCH
INITIATING COVERAGE
JUNE 18, 2012
Ruchir Khare
ruchir.khare@kotak.com
+91 22 6621 6448
Elgi Equipment Ltd (EEL)

PRICE : RS.79
TARGET PRICE : RS.98
Stock details
BSE code
522074
NSE code
ELGIEQUIP
Market cap (Rs mn)
12,518
Free float (%)
68.2
52-wk Hi/Lo (Rs)
83.45 / 62.75
Avg. Daily Volume BSE+NSE :
51,760
Shares o/s (mn)
158
Summary table
(Rs mn)
FY11
FY12E
FY13E
Sales
9,390
Growth (%)
39.8
EBITDA
1,411
EBITDA margin (%)
15.0
PBT
1362
Net profit
890
EPS (Rs)
5.6
Growth (%)
34.8
CEPS (Rs)
6.3
BV (Rs/share)
21.4
DPS (Rs)
1.0
ROE (%)
29.6
ROCE (%)
32.7
Net cash (debt)
1,349
NW Capital (Days)
36.1
EV/Sales (x)
1.2
EV/EBITDA (x)
7.9
P/E (x)
14.1
P/Cash Earnings (x)
12.5
P/BV (x)
3.7
9,897
4.8
1,083
10.9
1106
756
4.8
(15.1)
5.6
24.9
1.0
20.6
23.7
1,486
39.9
1.1
10.3
16.6
14.1
3.2
11,267
14.1
1,484
13.2
1417
949
6.0
25.5
6.9
29.6
1.1
22.0
24.8
1,652
45.1
1.0
7.5
13.2
11.4
2.7
Source: Company,
Kotak Securities - Private Client Research
One-year performance (Rel to Sensex)
Source: ACE Equity
One-year performance (Rel to Sensex)
RECOMMENDATION : BUY
FY13E P/E: 13.2X
Elgi Equipment Ltd (EEL) is Asia's leading manufacturer of air compressors

and automobile service station equipment. The company enjoys a healthy
market share of over 30% in Indian market and its products find application across industries ranging from mining, transport pharmaceuticals,
power, hydrocarbons, ship building, textiles etc. Driven by gradual pick up
in global industrial capex outlook, we believe that the company is well
poised for 23% growth in net profits in FY13E.
We project 14.1% growth in revenues from Rs. 9.8 bn in FY12 to Rs.11.2
bn in FY13E. Within the revenue streams, we expect compressor business
that accounts for nearly 80% of company's business to grow by 15% and
automotive to grow by 7% in FY13E mainly driven by 1) pick up in the
domestic infrastructure spending viz. hydrocarbons, mining, construction
and water segments 2) revival in international demand for compressors
and 3) increased contribution from company's key overseas subsidiaries.
At the current price, company's stock looks attractively valued on a discounted cash flow basis. We therefore initiate coverage on EEL stock with
a BUY rating and one year DCF based target price of Rs.98.
Key Investment Rationale

Leadership position in the domestic air compressor market; one of the
few end to end player catering to numerous industries. Elgi is one of
the prominent players which enjoys 30% market share in Indian compressor
manufacturing segment on back of 1) strong brand in medium range
compressors 2) robust distribution network offering pan India presence 3)
efficient cost controls providing price advantage to the end user and 4)
effective after sales services. Over the past few decades, it has emerged as a
market leader in the domestic market and has developed strong relationship
with key players like Tata Motors, Sony, M&M, ESAB, BHEL, Bosch, HP, Bayer,
Crompton Greaves etc.
International presence offers geographical diversification; favorable
Joint ventures and strategic domestic/overseas tie ups strengthens
company's offering. In order to widen the spectrum of offerings and
exploring new geographies for growth, EEL has envisaged a strategy of
entering into strategic alliances through joint ventures and acquiring
companies overseas that offer strategic fitment. Company through its
subsidiaries is present in all major markets across the globe which includes
Europe, North America, Latin America, Africa, Australia, Middle East, South
East Asia, West Asia and the Far East. It will likely report meaningful growth
in export revenues from current 20% of consolidated revenues to nearly 3540% over next two to three years.
Sustained emphasis on research & development initiatives provides
competitive edge to the company. EEL is a technologically driven company
and pays invariable emphasis on the research and development capabilities. It
constantly ventures into new initiative related to technological advancement.
It consistently deploys resources for adding and modifying current product
specifications making it valuable to the end users.
Source: ACE Equity
Registered Office: Kotak Securities Limited, Bakhtawar, 1st floor, 229 Nariman Point, Mumbai 400021 India.
INITIATING COVERAGE
June 18, 2012
Company to maintain high growth in financials; higher operating

margins and shorter cash conversion cycle likely to aid to free cash
flow generation. We project 14.1% growth in revenues from Rs. 9.8 bn in
FY12 to Rs. 11.2 bn in FY13E on back of 1) pick up in the domestic
infrastructure spending viz. hydrocarbons, mining, construction and water
segments 2) revival in international demand for compressors and 3) increased
contribution from company's key overseas subsidiaries.
We initiate coverage on EEL with
a BUY rating and one year DCF
based target price of Rs 98
We expect that the company will likely maintain its revenue mix at current
levels with compressor business contributing to nearly 80% of revenue pie. We
opine that the company would continue to prudently manage its overheads
mitigating any increase in input prices. In our projected financials we build 13%
EBITDA margins for FY13.
Current valuations appear favorable vis--vis the potential growth in revenues.
At current price of Rs.79, stock is trading at 13.2x P/E and 7.5x EV/EBITDA
multiples on FY13E earnings. We believe that stock is attractively valued at the
current price. We therefore initiate coverage on EEL stock with a BUY rating
and one year DCF based target price of Rs.98.
Key Concerns
Sharp increase in raw material prices. Sharp increase in the raw material
prices especially steel and aluminum would negatively affect company's
profitability. In our estimates, we build a moderate increase in key raw material
costs which is likely to get absorbed by the company achieving economies of
scale going ahead.
Increasing competition. Low HP (< 20 HP) compressor segment is highly
fragmented and there exists stiff competition between various players both
from unorganized sector and organized players. In large HP category, company
faces competition mainly from multi-national players. We believe that the
company has grown commendably in the past amidst higher competitive
intensity in the industry and is likely to maintain meaningful growth going
ahead.
Slowdown in domestic industrial activity. Compressor segment growth is
highly correlated with the overall economic activity mainly mining,
hydrocarbon, transport, power, oil, railways etc. Any slowdown in the industrial
capex program would imply lower off take of company's products.
Please see the disclaimer on the last page
For Private Circulation
INITIATING COVERAGE
June 18, 2012
COMPANY OVERVIEW
EEL is one of Indias leading
manufacturers of air compressors
with nearly 30% market share in
the domestic market
Incorporated in year 1960, Elgi Equipment Limited (EEL) is one of Indias leading
manufacturers of air compressors with nearly 30% market share in the domestic
market. It is engaged in the manufacturing of borewell, reciprocating, centrifugal
and screw compressors. Company also manufactures automotive garage equipment
that includes lifting equipment, body shop equipment, wheel servicing equipment
etc.
Companys business is aligned into two major segments 1) Compressors business
that accounts for over 80% of the total revenue pie and 2) Automotive Equipment
(AE). Over the past few decades, it has emerged as a market leader in the
domestic compressor market and has developed strong relationship with key players
like Tata Motors, Sony, M&M, ESAB, BHEL, Bosch etc. It has two state of the art
manufacturing plants in Coimbatore with combined installed capacity of 32500
compressors per annum.
Key Revenue Streams

Elgi Equipment Ltd
Air
Compressors
Rotary Screw Air

Compressors
Electric powered Screw

Air Compressor
Airends
Worlds smallest Screw
Air Compressor
Oil-Free Screw Air
Compressor
Centrifugal Air
Compressor
Portable Screw Air
Compressor
Reciprocating Air
Compressors
Single stage (SS)/ Two

stage (TS) Horizon
series
Borewell Compressors
High pressure/ Volume
reciprocating Air
compressors
High Volume Tank
mounted Air
Compressors
Automotive
Equipment
Railway Compressors
and OE
Electrical Locomotives
Lifting Equipment
Diesel Locomotives
Expressors
Wheel Service
Equipment
Auxiliary Compressors
Diasgnostic Equipment
Exhausters
Lube Equipment
Wind Screen Wipers
Body Shop Equipment
Water raising
apparatus
Flume Exhaust
Extraction Systems
LG Series Reciprocating
Washing Equipment
Pneumatic Tools
Air Compressor
Source: Company, Kotak Securities - Private Client Research
Benefitting from the low cost operating model, company has effectively leveraged
its strong foothold in India to expand its operations into the overseas markets. To
differentiate EEL has envisaged a strategy of entering into strategic alliances
through joint ventures and acquiring companies overseas that offer strategic
fitment. Company through its subsidiaries is present in all major markets across the
globe which includes Europe, North America, Latin America, Africa, Australia,
Middle East, South East Asia, West Asia and the Far East.
EEL is a technologically driven company and pays adequate emphasis on the
research and development capabilities. It constantly ventures into new initiative
related to technological advancement.
INITIATING COVERAGE
June 18, 2012
Over the last five years, EEL has grown consolidated revenues and profits by 22%
and 38% CAGR respectively mainly boosted by the compressor business growth in
domestic as well as overseas markets. It has commendably gained market share in
domestic market competing with some of the multinational players like Atlas
Copco, Ingersoll rand etc.
Company has a strong balance sheet and its major capex programs have been
funded through internal accruals. With an extensive distribution network and highly
qualified and motivated personnel base, ELGI aims at establishing itself as
meaningful global player in its core products.
INITIATING COVERAGE
June 18, 2012
INDUSTRY OVERVIEW
XII five-year plan projected
investments of USD 1025 billion
and its impact on the growth of
heavy industries is expected to
spur the growth for compressors
The global market for compressed air equipment and aftermarket is characterized
by a diversified customer base. Air compressors are used in wide spectrum of
applications in which compressed air is used as a source of power or as an
integrated part of industrial process. Gas compressors find use in any industry where
gases are handled as part of the manufacturing process, such as vanaspati,
fertilizers, refineries, etc. apart from usage in gas purification and bottling plants
including LPG bottling.
Some of the applications of air compressors other than mining and construction are
stated below:
Application of air compressors
Industry
Applications
Utility for Compressed Air
Textile
Spinning, Weaving, Processing etc.
Pneumatic operations
Chemicals
Dyes & Intermediates
Filter pres, Spray driers,

Material transfer
Pharmaceuticals
Blister pack machines
Plastics
Blow Moulding Machines,

Injection Moulding Machines
Pneumatic operations, Blowing
Dairy
FFS Machines
Electrical locomotives, dieseal

locomotoves, auxiliary compressors
Tap changers, contactors,

brakes etc.
Automobiles
Railways
pneumatic operations, tyre/tubes
Source: Kotak PCG-Research
Availability of technically skilled manpower, coupled with cheap unskilled labor has been drawing many multinational companies to either establish manufacturing facilities into the country directly or
through joint ventures with indigenous suppliers. Also, given the
economic downturn in the Western countries, several global companies are looking at India as a viable destination for business.
Since the beginning of the establishment of the compressor industry in India, Air
and Gas compressors have been manufactured with foreign technical collaboration.
Most of the established manufacturers continue to enter into foreign collaborations
for producing new types of compressors or for updating and expanding the present
range. The industry has huge entry barrier with respect to technology and initial
capital outlay.
Indian compressor industry size is estimated at Rs 30 bn currently. Compressors of
power rating up to 5 hp have been dominated by small scale sector. It is estimated
that there are around 35 40 manufacturers of these small compressors spread all
over the country. These small compressors are mainly used for garage type
applications and the technology involved is very simple and does not require
sophisticated machinery.
Government initiatives on infrastructure have led to a healthy growth in heavy
industries in India. Considering the possibility of over 6.5-7% percent economic
growth over the coming years, high growth can be anticipated in the majority of the
heavy industries like metals and mining, hydrocarbons, cement and power. The
planning commissions infrastructure-related investment projection for the 12th fiveyear plan of USD 1025 billion and its impact on the growth of heavy industries is
expected to spur the growth of pumps, valves and compressors over the next couple
of years.
INITIATING COVERAGE
June 18, 2012
Planning commissions five year plan projections (US$ bn)
1200
1025
900
514
600
300
227
0
XPlan
XIPlan
XIIPlan
Source: Planning Commision
End user emphasis on efficiency

has resulted in preference for
integrated solution providers
who offer equipment along with
necessary spares, services and
support
We believe that buyer preference for compressors has also witnessed a shift over
the last few years. End user emphasis on efficiency and energy saving has resulted
in preference for integrated solution providers who offer equipment along with
necessary spares, services and support.
Only a few indigenous suppliers like EEL along with multinational companies are
able to offer desired cost-effective solutions to the customers. We believe that this is
one of the major challenges for most of the small and medium-scale manufacturers
who lack the required capital and technical expertise. As a consequence, we
believe that this is likely to reduce growth prospects for small participants and
eventually will lead to consolidation in the industry.
Indian Oil & Gas Industry
According to Ministry of Petroleum and Natural Gas (MoPNG), domestic crude oil
refining sector currently has combined annual installed capacity of 185.40 mmt per
annum and capacity additions of 23.88 mmt per annum has been planned under XII
Five Year Plan in the existing refineries. Additionally, during the XII Five Year Plan,
54.00 mmt p.a. capacity additions is planned under new refineries to be set up by
companies such as IOCL, Essar Oil Limited, and HPCL-Mittal Energy Limited.
According to the MoPNG, XII year plan would entail total investment of Rs 1.2
trillion.
Indian infrastructure sector
India has been witnessing meaningful growth in the infrastructure spends, both from
Government and the private sector. The primary growth in the infrastructure is
driven by power, transportation, petroleum and urban infrastructure.
According the Planning Commissions report on Projections of Investment in
Infrastructure, the Twelfth Five Year Plan envisages a total investment of US$ 1
trillion in the infrastructure sector to bridge the infrastructure deficit and sustain a
growth momentum of 9% per annum. This will lead to commissioning of large
number of construction projects and is likely to auger well for companys operations.
Indian Mining and Metallurgy sector
India is one of the leading countries possessing mineral resources like mica, bauxite,
iron ore, manganese ore, zinc and aluminum.
Growing global demand for minerals and metals, particularly in Asia is expected to
result in new opportunities for Indian mining companies. This is expected to
increase demand for compressors in the Indian mining and metallurgy sector
INITIATING COVERAGE
June 18, 2012
Water
According to the Planning Commission, India accounts for 16% of the worlds
population and has only 4.0% of the total available fresh water. 85-89% of the
usable water is consumed for irrigation in India. The increasing population along
with the demand for crops like wheat and rice that require a greater quantity of
water is likely to put increasing pressure on the available water resources in near
future.
Recently government has increased its budgetary allocations on various projects
related to the availability of fresh water that includes desalination, preserving water
bodies, sewerage treatment and strengthening distribution channels.
A committee appointed by the government, led by Dr Ahluwalia has envisaged a
spending of USD 174 bn over next 20 years across water purification, storage and
supply projects.
Overseas Markets: While US markets witnesses some signs

of revival, resurrection in European demand remains a
concern
Leveraging on the low cost and
skilled manpower base domestic
compressor manufacturers have
started to focus on export
markets
Leveraging on the low cost and skilled manpower base in India domestic
compressor manufacturers have started to focus on export markets. EEL, IngersollRand (I) and Atlas Copco have been very successful in their export efforts. USA, UK,
USSR, Belgium and Italy are the major countries to which compressors are exported
from India.
Currently US markets have been witnessing revival in the infrastructure spending
generating significant demand for compressors. Europe along with emerging
markets such as China, Brazil, India etc are likely to witness pick-up in demand
through FY13 driven mainly by 1) continued momentum in mining segment and 2)
pick up in construction sector.
EEL has been positioning itself as a service oriented company in the overseas
market especially in geographies like China where it faces stiff competition from
multinational players like Atlas Copco, Ingersoll Rand, Sullair compare etc along
with host of local manufacturers.
INITIATING COVERAGE
June 18, 2012
Competitive landscape
EEL faces competition from
domestic as well as international
players across segments
The Indian market for compressors has traditionally been oligopolic in nature. Being
capital intensive, industry has been dominated by international companies like Atlas
Copco and Ingersoll Rand. Apart from players like BHEL, ELGI, KPCL and few
others, there are no major indigenous manufacturers of compressors in India.
Competition in the industry has been intensifying, with many multinational
companies setting up operations in India. Existing multinationals are also making
additional investments to aggressively target the expanding Indian markets.
The major international players in the field of Air & Gas compressors are:
Company
Country of origin
Ingersoll-Rand
USA
Atlas Copco
Sweden
Kobe Steels
Japan
Hitachi
Japan
Joy Compressors
USA
MAN GHH Sterkrade
Germany
Sundyne Compressors
USA
Hokuetsu Industries
Japan
Fives Cail Babcock
France
Elliot
USA
Nuovo Pignone
Italy
Dresser-Rand
USA
Demag
Germany
MHI, Japan Ebara
Japan
Borsig
Germany
Sullair Corporation
USA
Sulzer
Germany
Burckhardt Compression
Switzerland
Source: Kotak Securities - Private Client Research
Bharat Heavy Electricals Limited (BHEL) and Bharat Pumps and Compressors Ltd are
two public sector units in the field of Centrifugal compressors in domestic market.
They manufacture large heavy duty compressors for customized/tailor-made
applications. Kirloskar Pneumatic has also been bidding aggressively for expanding
its market share.
EEL with its extensive distribution network and direct sales channel enjoys market
share of nearly 30% in the domestic market. It has also been increasing its
presence in the overseas markets through organic and inorganic route. It is mainly
present in medium segment compressor ranging from 0.75 to 1500 HP and
competes mainly on price and service with its competitors.
INITIATING COVERAGE
June 18, 2012
KEY INVESTMENT ARGUMENTS

Leadership position in the domestic air compressor market; one of
the few end to end player catering to numerous industries
EELs business is aligned into two
principal segments 1)
Compressors and 2) Automotive
Equipment (AE)
EELs business is aligned into two principal segments 1) Compressors and 2)

Automotive Equipment (AE).
Compressor segment; price leadership and service differentiate Elgi from
competition
Elgi is one of the prominent players which enjoys 30% market share in Indian
compressor manufacturing segment on back of 1) strong brand in medium range
compressors 2) robust distribution network offering pan India presence 3) efficient
cost controls providing price advantage to the end user and 4) effective after sales
services. Established as a reciprocating compressor manufacturing company in
1960, it has grown several folds to become a multi-product, multi-market company
manufacturing high value added products.
Company has emerged as a

market leader in the domestic
market and has developed strong
relationship with key customers
Over the past few decades, it has emerged as a market leader in the domestic
market and has developed strong relationship with key players like Tata Motors,
Sony, M&M, ESAB, BHEL, Bosch, HP, Bayer, Crompton Greaves etc. Company
product line consists of Rotary Compressors, Reciprocating Compressors, Centrifugal
Compressors, Automotive Equipment, Diesel Engines and Manufacturing and
engineering services.
Companys domain knowledge and effective overseas alliances with players like J.P
Sauer & Sohn, Germany has enabled the company to provide global standards
products to its end customer. By earning the tag of one stop garage solution
provider, company has steadily grown to capture a large market share in India.
ELGI manufactures compressors covering a range from 0.75HP to 1500HP for
volumes from 1.8 cfm (cubic feet per minute) to 80000 cfm. ELGIs has envisaged
its marketing strategy which involves partnering with customers to provide
customized solutions for their operations.
Company manufactures almost all of its products in house and sources key
components domestically. This facilitates company in producing superior products at
nearly 10-12% discounts vis--vis competitors. EEL also has the license to
manufacture SDS series of Hitachi compressors. These are marketed as Elgi NH
Series Compressors in India.
Compressor segment consists of following major sub-divisions
Division
Core Competencies
Rotary Compressor Division (ROCD)
Design, development and manufacture of

electric and diesel powered screw air
compressors.
Reciprocating Compressors,
Railway Compressors and Original
Equipment Division (RCD)
Design, development and manufacture of single

and two stage reciprocating compressors, railway
compressors and a variety of compressor
solutions for railway applications.
Companys competence also lies in customized
packages for applications like circuit breakers,
engine starting etc.Bottom of Form
Source: Company, Kotak PCG-Research
EEL derives nearly 80% of its

revenue from the compressor
business and caters to a wide
range of end user industry
EEL derives a major part of its revenue pie (nearly 80%) from the compressor
business catering to a wide range of end user industry including mining, transport
pharmaceuticals, power, hydrocarbons etc. It has two state of the art manufacturing
plants in Coimbatore with combined installed capacity of 32500 compressors p.a.
INITIATING COVERAGE
June 18, 2012
EEL has commendably

established its strong
positioning in the market
amidst stiff competition from
various established players
Competition in domestic in medium HP segment arises from MNC players like Atlas
Copco and Ingersoll Rand. Kirloskar Pneumatic and EEL are among the domestic
players having meaningful market presence. We believe that cost effectiveness and
efficient aftersales are the key for success for any player. We highlight that EEL
has commendably established its strong positioning in the market amidst
stiff competition from various established players and new entrants. It has
grown its revenues at a much faster pace (approximately 23% CAGR in last
6 years) than several established players.
Major players growth trend
EEL
FY05
FY06
FY07
FY08
FY09
FY10
FY11 CAGR (%)
2,316.10
2,374.10
2,999.50
4,180.70
4,711.50
5828
7964
22.9
Ingersoll Rand
2,537
2,828
3,326
4,222
4,046
3,717
4,790
11.2
Atlas Copco (Industrial division)
3,356
4,614
6,344
7,982
7,759
10,888
N.A
N.A
Kirloskar Pneumatic
2,404
2,635
3,081
3,231
4,269
3,904
4,353
10.4
Source: Kotak Securities - Private Client Research
From historical perspective, water-well segment has been an important driver for
the domestic compressor demand in India. Over the last few years, company has
successfully increased market share in other segments such as mining, construction,
cement, power, transport etc. We highlight that despite the fact that the water well
segment has been experiencing cyclical slowdown since past three years, company
has commendably managed to derive and grow its revenues from other segments
across geographies. In future, company focus would continue on industrial
applications and high potential oriented international markets.
Consolidated revenue and margin trend
EBITDA(RsmnLHS)
Sales(RsmnLHS)
EBITDA(%RHS)
10500
Water-well segment has been an
important driver for the domestic
compressor demand in India and
is currently observing cyclical
slowdown
8500
16.5
Diversified revenue
streams counters
slowdown in
waterwell industry
Slowdown in
waterwell
segment
15.0
6500
13.5
4500
12.0
2500
10.5
9.0
500
FY04
FY05
FY06
FY07
FY08
FY09
FY10
FY11
Source: Company
Automotive segment
EEL through its fully owned subsidiary ATS ELGI, caters to the automotive segment.
ATS Elgi is a leading manufacturer and distributor of automotive service equipment
in India. Automotive segment thrives mainly on the passenger car sales and
constitutes to nearly 12% of the overall revenue pie.
It manufactures nearly 35 equipment and 150 tools and accessories including
lubrication equipment, two-wheeler and four-wheeler hoists, paint booths, AC
recovery units, crash repair systems, wheel balancers and other diagnostic
equipment.
10
INITIATING COVERAGE
June 18, 2012
ATS ELGI manufactures or deals in garage equipment under the following eight
verticals:
Product profile
Automotive segment thrives
mainly on the passenger car sales
and constitutes to nearly 12% of
the overall revenue pie.
Category
Key products
Lifting Equipment
Two post lifts, Four post lifts, Inground lifts,

Washing hoist etc.
Body Shop Equipment
Paint booths, Spot Welders, MIG Welders, Panel repair

systems etc.
Wheel Servicing Equipment
Wheel aligner, Wheel balancer, Tyre changer, Tyre

Inflation air, etc.
Washing Equipment
Car washer, Auto car washer
Lube Equipment
Grease pumps, Oil pumps, Lube management systems
Diagnostic Equipment
Gas analyzer, AC recovery Semi-Automatic, AC recovery

fully automatic
Pneumatic Tools
Impact wrench, Ratchet wrenchers, Drills, Disc Grinders etc.
Special Products
Mobile service unit, Effluent Treatment plant.
This segment is highly fragmented and the company has established itself as a
major organized player on back of new product inclusions and superior service
offerings. Company has grown at 15% CAGR between FY06-12 in the segment.
We believe that the company is well poised to grow in the Automotive segment on
account of 1) Indian passenger car segment growing at an average rate of 12-15%
per annum and 2) launching of new passenger car models in India that is bound to
fuel the demand for strengthened service network.
Automotive segment sales trend
1200
900
600
300
0
FY02
FY03
FY04
FY05
FY06
FY07
FY08
FY09
FY10
FY11
FY12
Source: Company
International presence offers geographical diversification; favorable Joint ventures and strategic domestic/overseas tie ups
strengthens companys offering
For expanding inorganically
company has envisaged the
strategy of acquiring multi-local
companies of small to medium
size with strong brand names
and market access.
In order to widen the spectrum of offerings and explore new geographies for
growth, EEL has envisaged a strategy of entering into strategic alliances through
joint ventures and acquiring companies overseas that offer strategic fitment. In
Europe, company follows the strategy of acquiring multi-local companies of small to
medium size with strong brand names and market access.
Company through its subsidiaries is present in all major markets across the globe
which includes Europe, North America, Latin America, Africa, Australia, Middle
East, South East Asia, West Asia and the Far East. It has been positioning itself as a
service oriented player in order to differentiate itself in highly competitive
international markets.
11
INITIATING COVERAGE
June 18, 2012
EELs Key Subsidiaries and JVs

Entity
Relationship
SAS Belair
Subsidiary
Elgi Equipment
Zhejiang Limited
(China)/ Elgi
Compressors
Trading (Shanghai)
Co. Ltd. (China)
Elgi-Gulf (FZE)
Elgi Sauer
Compressors
Limited
Adisons Precision
Instruments
Manufacturing
Company Limited
% Ownership
Geography
Focus Area
Rationale
Current Status
100
France
Assembly sales and

service of industrial
compressors, piping,
fittings and accessories
Adding to the
current product
range of Belair
and leveraging
upon its 25 years
old presence in
European region
Company expected
to grow better than
industry and break even
in next few quarters
Subsidiary
100
China
large screw compressors

and rotary screw
compressor market
Highly competitive
region, capture market
share in local market
over next two to three
years. Also start
exporting to other
regions from China
in longer run.
Continue investing over

next two to three years
for long term strategic
gains. Expected to break
even in FY14.
Subsidiary
100
Middle East
Medium range
compressors finding
application construction
activity
Several Indian
organizations are
engaged in the
construction activity
and they offer
reasonable opportunity
to the company.
Company has been able to

establish itself as a
successful player and
earns reasonable
profits from the
middle east market.
26
India
Defense, shipping,
industrial and
offshore market
Consolidating the
engineering,
indigenization and
product support
capabilities of both
the entities
JV has been successful

since inception in the
year 2008.
Achievements in the
defense sector include
building aircraft carrier
fitted with JVs state of
the art high pressure and
low pressure compressors
100
India
Joint Venture
Subsidiary
EEL has acquired Belair S.A France in the year 2010 at the EV of EUR 0.7 mn.
Belair S.A is engaged in assembly, sales and service of industrial compressors,
piping, fittings and accessories for over 25 years. It enjoys nearly 3% share in
French market. Management aims at adding to the current product range of Belair
and has already started the complete units of Air compressors from India.
In china, EEL operates through its subsidiary Elgi Equipment (Zhejiang) Limited,
Jiaxing, China. Company has been focusing on large screw compressors and rotary
screw compressor market and expects to break even in FY14. However,
management eyes Chinese market as a long term strategic investment and plans to
keep investing for over the next two to three years before it starts generating
meaningful profits.
A large proportion of its
international business comes
from repeat sales and established
customer base
Company has also entered into highly attractive Brazilian market in the year 2008
to tap the local market growing at meaningful rate and also to use it as a base to
tap neighbouring countries such as Chile, Columbia and Argentina.
EELs success in overseas markets in evident from the fact that a large proportion of
its international business comes from repeat sales and established customer base.
Its expertise in compressed air technology, backed by an efficient manufacturing
base and competent distribution network provides competitive edge to the
company.
12
INITIATING COVERAGE
June 18, 2012
Currently exports constitutes to nearly 20% of companys total revenue pie.

However, given companys new initiative in Europe, China, Brazil and Australia
markets and eventual global economic recovery, we believe that the share of
exports is likely to increase substantially and reach 40% of total revenue pie by
2015.
Sustained emphasis on research & development initiatives provides
competitive edge to the company
EEL is a technologically driven company and pays considerable amount of emphasis
on the research and development initiatives. It constantly ventures into new
initiative related to technological advancement. It consistently deploys resources for
adding and modifying current product specifications making it valuable to the end
users.
We highlight that R&D efforts become extremely important in the highly
competitive mid- range compressor segment where profitability is determined by
the products cost effectiveness.
Recently, company has launched lower end compressors ranging from 3-20 hp. The
reception of these machines have been extremely satisfactory in Indian as well as in
France and United States.
EEL takes pride in launching worlds smallest industrial screw compressor. Lot of
designing and engineering excellence has gone into building an air compressor of
such small dimensions which is capable of supplying compressed air for industrial
applications. Also in FY12, company has successfully launched oil free screw
compressor in Indian and Chinese market. Company aims at substantially ramping
up the production of these Equipment and expects to deliver over 200 units of the
same over FY13.
Company to maintain high growth in financials; higher operating
margins and shorter cash conversion cycle likely to aid to free cash
flow generation
We project 14.1% growth in
revenues from Rs. 9.8 bn in FY12
to Rs. 11.2 bn in FY13E
We project 14.1% growth in revenues from Rs. 9.8 bn in FY12 to Rs. 11.2 bn in
FY13E on back of 1) pick up in the domestic infrastructure spending viz. hydrocarbons, mining, construction and water segments 2) revival in international
demand for compressors and 3) increased contribution from company's key
overseas subsidiaries.
We highlight that stationary industrial air compressors and associated air treatment products and after market represents 60-70% of sales. Large gas and process compressors represents almost 10% and the balance is represented by portable compressors, generators.
Revenue Trend
15000
Revenues(RsmnLHS)
AssetTurnover(xRHS)
5.5
12000
5.0
9000
4.5
6000
4.0
3000
3.5
3.0
FY10
FY11
FY12E
FY13E
Within the revenue streams, we expect compressor business to grow by 15%

and Automotive to grow by 7% in FY13E.
13
INITIATING COVERAGE
June 18, 2012
Segment Revenues (Rs mn)

12000
Compressors
AutoEquip
9000
6000
3000
0
FY10
FY11
FY12E
FY13E
We expect the company to leverage its effective track record in India to expand
its operations internationally. We believe that being stationed in India, company
is likely to immensely benefit from its low cost operating model providing competitive edge vis--vis peer group.
In the past few years company has recorded growth in geographies like Middle
East, Europe, Australia and Brazil. Company is likely to break even in China in
FY13E where it is present through its subsidiary.
Over the next 3-4 years, we
believe that the share of exports
is likely to increase to 35-40% of
total revenues of the company
We believe that over FY13-15E, company is likely to report significant growth in

its overseas business on back of 1) increased contribution from newly added
markets like Brazil 2) likely inorganic initiatives, 3) expected economic recovery
in European region and 4) current lower base of exports in the overall revenue
pie. However we also highlight that the company is likely to continue incur sunk
costs in overseas geographies mainly China for setting up and expanding its
presence through FY13.
We highlight that currently exports constitutes to nearly 20% of the consolidated
revenue pie. Over the next 3-4 years, we believe that the share of exports is
likely to increase to 35-40% of total revenues of the company.
We expect that the company is likely to maintain its revenue mix at current levels with compressor business contributing to nearly 80% of revenue pie. We
opine that the company would continue to prudently manage its overheads mitigating any increase in input prices.
The major raw-materials used for the manufacture of compressors are castings,
aluminum and steel. The major finished and semi-finished components used are
bearings, crankshafts, switches, gauges, rotors and housings. The major boughtout items are motors, starters, control panels, inter and after coolers and filters.
Operating margins have contracted sharply in FY12 due to increase in input
price and employee expense. We believe that the margins would bottom out in
current year and build 13% EBITDA margins for FY13.
14
INITIATING COVERAGE
June 18, 2012
Steel US$/t FOB Price
1200
1000
800
600
400
Source: Bloomberg
Consolidated Margin Trend
EBITDA(RsmnLHS)
EBITDA(%RHS)
1600
16%
1200
15%
800
13%
400
12%
10%
0
FY10
FY11
FY12E
FY13E
Segment EBIT Margin Trend (%)

Revenues
Compressors
YoY %
Auto Equip
YoY %
FY11
FY12E
FY13E
7964
8287
9529
36.6
7.5
15.0
1135
1300
1391
28.1
3.0
7.0
1191
790
1277
61.6
EBIT
Compressors
YoY %
34
(33.6)
Auto Equip
127
151
181
YoY %
29.6
19.2
19.6
EBIT %
Compressors
15.0
12.1
13.4
Auto Equip
11.2
12.7
13.0
15
INITIATING COVERAGE
June 18, 2012
Compressors and auto equipment

16.0
Compressors(%)
AutoEquip(%)
14.5
13.0
11.5
10.0
FY10
FY11
FY12E
FY13E
We opine that the working capital is likely to increase marginally from current
10.5% of sales to 11% in FY13E due to increase in inventory days from 42 days
currently to 44 days at the end of FY13.
Working capital
Rs (mn)
FY11
FY12E
FY13E
987
1146
1474
36
40
45
Current Assets
4181
4539
5160
Inventory
1148
1262
1440
Net Working capital (non cash)

Net Working capital (non cash) in days
inventory days
Sundry Debtors
42
44
44
11758
1233
1407
Debtors days
43
43
43
Other current assets
30
33
102
Loans and advances

Cash
Current liabilities
Acceptances
in days
Sundry creditors
in days
provisions
in days
1828
2011
2212
1399
1536
1702
3193
3393
3686
244
273
296
16
16
16
1258
1415
1537
81
83
83
1691
1705
1852
109
100
100
Source: Kotak PCG Research
We believe that going forward; with increasing share of exports company is

likely to increase sensitivity between operating margins and forex fluctuations.
16
INITIATING COVERAGE
June 18, 2012
Debtor/Sales
12000
Revenues(RsmnLHS)
Debtors/Sales(%RHS)
15.0
9000
14.0
6000
13.0
3000
12.0
11.0
0
FY10
FY11
FY12E
FY13E
RoE trend
EBIT(RsmnLHS))
ROCE(%RHS)
ROE(%RHS)
1600
36.0%
1200
27.0%
800
18.0%
400
9.0%
0.0%
FY10
FY11
FY12E
FY13E
Company enjoys a strong balance

sheet adequate to drive its
future growth
We expect that the company is likely to benefit from its strong balance sheet to
fuel its future growth. Stable margins and higher return on Equity at 25% are
expected to result in net operating cash flow at Rs 970 mn in FY13E vis--vis Rs
823 mn in FY12E.
17
INITIATING COVERAGE
June 18, 2012
VALUATION & RECOMMENDATION

Current valuations appear favorable vis--vis the potential growth in revenues driven
by pick up in the domestic infrastructure spending viz. hydrocarbons, mining,
construction and water segments 2) revival in international demand for compressors
and 3) increased contribution from companys key overseas subsidiaries.
We initiate coverage on EIL with
a BUY rating and one year DCF
based target price of Rs 98
At current price of Rs.79, stock is trading at 13.2x P/E and 7.5x EV/EBITDA
multiples on FY13E earnings.
We value the company using DCF valuation methodology that derives a price
target of Rs.98 per share, implying an upside of 25% over a 12- month horizon.
Our DCF model employs a WACC of 13.09%, beta of 0.85 and terminal growth
of 4%.
At our target price of Rs 98, stock would trade at 16.3x P/E on FY13E earnings.
We highlight the P/E band below that reflects the valuation trend from the historical perspective.
EEL P/E Band
120
EEL
7x
9x
11x
14x
Jun10
Nov10
90
60
30
0
Oct08
Mar09
Aug09
Jan10
Apr11
Sep11
Feb12
Source: Ace Equity, Kotak Securities-Private Client Research
We initiate coverage on the EEL stock with a BUY rating and a target
price of Rs.98, over a 12-month horizon.
18
INITIATING COVERAGE
June 18, 2012
DCF valuation
Free Cash Flow to Firm
FY13E
FY14E
FY15E
FY16E
FY17E
FY18E
FY19E
FY20E
PAT
922
1235
1551
1871
2132
2528
2838
2981
Add Depreciation
145
150
155
160
166
172
178
184
Add Int (Net of Tax)
(34)
(32)
(31)
(30)
(29)
(30)
(31)
(32)
Less change in WC
(328)
(42)
(303)
(364)
(393)
(464)
(365)
(170)
Less incremental Capex
(400)
(150)
(150)
(150)
(150)
(150)
(160)
(160)
FCFF
305
1160
1222
1488
1726
2056
2460
2804
Discounting Factor
1.0
0.9
0.8
0.7
0.6
0.6
0.5
0.4
313
1053
980
1055
1082
1140
1206
1215
Discounted Value (FCFF)
Source: Kotak Securities-Private Client Research
Sensitivity Analysis
Assumptions
Adjusted beta
0.9
Risk free rate
8.0
Risk premium
Cost of equity%
Cost of debt%
12.00%
13.00%
13.39%
14.00%
15.00%
6.0
2.50%
103.29
93.45
90.18
85.58
79.17
13.1
3.00%
105.77
95.26
91.79
86.93
80.18
7.0
3.50%
108.54
97.26
93.56
88.40
81.28
4.00%
111.66
99.47
95.51
90.01
82.49
WACC%
13.1
Equity(Rs mn)
3383
Debt (Rs mn)
50
4.50%
115.20
101.95
97.69
91.80
83.80
Total (Rs mn)
3433
5.00%
119.24
104.74
100.12
93.78
85.25
5.50%
123.90
107.90
102.86
96.00
86.85
Source: Kotak Securities - Private Client

Research
Source: Kotak Securities-Private Client Research
DCF Summary (Rs mn)

FCFF
Terminal Value
8244
6025
Total FCFF
14268
Less net debt
(1349)
Shareholder's value
15617
Value per share

Terminal value as % of FCFF
98
42.2
Source: Kotak Securities - Private Client

Research
19
INITIATING COVERAGE
June 18, 2012
Business review Q4FY12; revenue grew by 7% YoY driven by turnkey

projects division, PAT grew by 23% YoY
Company's consolidated revenues for Q4FY12 grew by 7% YoY at Rs 2.7 bn &
EBITDA declined by 10% YoY at Rs.262 mn. EBITDA margins stood at 9.7% in the
quarter against 12.2% last year. Margins declined on account of 1) 12% YoY
increase in input prices and 2) substantial increase of 27% in employee expense.
EBIT margins for Compressor segment contracted to 8% in the quarter. Automotive
segment has observed margins and at 11% vis--vis 6.8 % in Q4FY11.
Management has stated that the company has been observing some signs of revival
in the domestic demand. While Europe markets were sluggish in Q4FY12, US
market has been observing revival in demand for compressors.
Company is likely to break even in China in FY13; however meaningful contribution
is expected not before FY14. Management aims as establishing itself as a long term
value player in highly competitive Chinese markets and expects to continue
investing Capital for next two to three years.
Company enjoys strong balance sheet and have reported a PAT of Rs 211 mn in the
quarter.
EEL Consolidated Result for Q4FY12
(Rs mn)
Q4FY12
Q4FY11
YoY (%)
Income from Operations
2709
2435
11.2
Decrease/ (Increase) in stock
(28)
(12)
134.7
Material consumed
1648
1469
12.2
Employee expenses
319
250
27.4
Other expenses
509
436
16.7
Total Expenses
2447
2143
14.2
EBITDA
262
292
(10.3)
Other income
66
37
77.8
Depreciation
38
34
9.3
290
295
(1.5)
EBIT
Net Interest
PBT
Total tax
PAT
288
293
(1.6)
77
112
(31.3)
211
181
16.8
58.2
EPS (Rs)
1.3
0.8
EBITDA%
9.7
12.0
26.7
38.3
Q4FY12
Q4FY11
2284
2023
12.9
345
309
11.7
182
243
(25.2)
41
21
94.7
8.0
12.0
11.8
6.8
Tax Rate %
Source: Company
Segmental table
YoY (%)
Segment Revenue (Rs mn)

Compressors
Automotive Equipment
Segment EBIT
Compressors
Segment Margins %
Compressors
Source: Company
20
INITIATING COVERAGE
June 18, 2012
KEY CONCERNS
Sharp increase in raw material prices
Sharp increase in the raw material prices especially steel and aluminum would
negatively affect companys profitability. In our estimates, we build a moderate
increase in key raw material costs which is likely to get absorbed by the company
achieving economies of scale going ahead.
Increasing competition
Low HP (< 20 HP) compressor segment is highly fragmented and there exists stiff
competition between various players both from unorganized sector and organized
players. In large HP category, company faces competition mainly from multinational players. We believe that the company has grown commendably in the past
amidst higher competitive intensity in the industry and is likely to maintain
meaningful growth going ahead.
Slowdown in domestic industrial activity
Compressor segment growth is highly correlated with the overall economic activity
mainly mining, hydrocarbon, transport, power, oil, railways etc. Any slowdown in
the industrial capex program would imply lower off take of companys products.
21
INITIATING COVERAGE
June 18, 2012
FINANCIALS
Profit and Loss Statement (Rs mn)
Balance sheet (Rs mn)
(Year-end March)
FY11
FY12E
FY13E
(Year-end March)
Revenues
9,390
9,897
11,267
39.8
4.8
14.1
1,411
1,083
1,484
% change yoy
34.3
(23.3)
Depreciation
115
132
1,297
951
1,340
35.9
(26.6)
40.8
Current Assets
WIP
% change yoy
EBITDA
EBIT
% change yoy
Net Interest
Earnings Before Tax
% change yoy
Tax
FY11
FY12E
FY13E
Balance sheet (Rs m)
FY11
FY12(E)
FY13(E)
Cash and cash equivalents
1,399
1,536
1,702
Accounts receivable
1,175
1,233
1,407
37.1
Loans & advances
1,828
2,011
2,212
145
Inventories
1,148
1,262
1,440
4,181
4,539
5,160
987
1,146
1,474
Misc expenditure
(50)
1,410
1,106
1,417
LT investments
173
173
173
38.1
(21.6)
28.0
Net fixed assets
844
1,112
1,367
472
350
467
Total Assets
3,455
4,020
4,769
34.6
31.7
33.0
Provisions
1,691
1,705
1,852
49
Current Liabilities
3,193
3,393
3,686
Recurring PAT
890
756
949
% change yoy
34.8
(15.1)
25.5
LT debt
50
50
50
Other liabilities(deferred tax)
31
31
31
as % of EBT
XO Items
Shares outstanding (m)
Minority Interest
158.5
158.5
158.5
EPS (Rs)
5.6
4.8
6.0
Equity & reserves
3,383
3,948
4,697
DPS (Rs)
1.0
1.0
1.1
Total Liabilities
3,464
4,028
4,778
CEPS
6.3
5.6
6.9
BVPS (Rs)
21
25
30
Cash Flow Statement (Rs mn)
Ratio Analysis
(Year-end March)
FY11
FY12E
FY13E
Profit Before Tax
1,410
1,106
1,417
Depreciation
115
132
145
Net profit margin (%)
Current liabilities incl provisions
697
200
292
inc in inventory
361
115
178
inc in sundry Debtors
269
58
inc in advances
488
183
Tax Paid
472
FY11
FY12E
FY13E
EBITDA margin (%)
15.0
10.9
13.2
EBIT margin (%)
13.8
9.6
11.9
9.5
7.6
8.4
Adjusted EPS growth (%)
34.8
(15.1)
25.5
174
Receivables (days)
43.0
43.0
43.0
201
Inventory (days)
41.9
44.0
44.0
350
467
Sales / Net Fixed Assets (x)
4.9
4.4
4.3
69
N.M
N.M
N.M
625
729
765
0.0
0.0
0.0
(235)
(400)
(400)
ROE (%)
29.6
20.6
22.0
(248)
(401)
(400)
ROCE (%)
32.7
23.7
24.8
23
Add:
Other Adjustments
Net cash from operations
less:
Purchase of fixed Assets
Net investments
Net cash from investing
secured
unsecured
Dividend Paid
Cash at the end of year
(1)
EV/ Sales
1.2
1.1
1.0
(184)
(191)
(200)
EV/EBITDA
7.9
10.3
7.5
Price to earnings (P/E)
14.1
16.6
13.2
3.7
3.2
2.7
12.5
14.1
11.4
(191)
(200)
215
137
166
1,406
1,536
1,702
Interest coverage (x)

Debt/ equity ratio
Net Cash from financing activities (162)

Net Cash Flow
(Year-end March)
Price to book value (P/B)

Price to cash earnings
22
INITIATING COVERAGE
June 18, 2012
Fundamental Research Team

Dipen Shah
IT, Media
dipen.shah@kotak.com
+91 22 6621 6301
Saurabh Agrawal
Metals, Mining
agrawal.saurabh@kotak.com
+91 22 6621 6309
Ruchir Khare
Capital Goods, Engineering
ruchir.khare@kotak.com
+91 22 6621 6448
Amit Agarwal
Logistics, Transportation
agarwal.amit@kotak.com
+91 22 6621 6222
Sanjeev Zarbade
Capital Goods, Engineering
sanjeev.zarbade@kotak.com
+91 22 6621 6305
Saday Sinha
Banking, NBFC, Economy
saday.sinha@kotak.com
+91 22 6621 6312
Ritwik Rai
FMCG, Media
ritwik.rai@kotak.com
+91 22 6621 6310
Jayesh Kumar
Economy
kumar.jayesh@kotak.com
+91 22 6652 9172
Teena Virmani
Construction, Cement, Mid Cap
teena.virmani@kotak.com
+91 22 6621 6302
Arun Agarwal
Automobiles
arun.agarwal@kotak.com
+91 22 6621 6143
Sumit Pokharna
Oil and Gas
sumit.pokharna@kotak.com
+91 22 6621 6313
K. Kathirvelu
Production
k.kathirvelu@kotak.com
+91 22 6621 6311
Amol Athawale
amol.athawale@kotak.com
+91 20 6620 3350
Premshankar Ladha
premshankar.ladha@kotak.com
+91 22 6621 6261
Rahul Sharma
sharma.rahul@kotak.com
+91 22 6621 6198
Malay Gandhi
malay.gandhi@kotak.com
+91 22 6621 6350
Technical Research Team

Shrikant Chouhan
shrikant.chouhan@kotak.com
+91 22 6621 6360
Derivatives Research Team

Sahaj Agrawal
sahaj.agrawal@kotak.com
+91 22 6621 6343
Prashanth Lalu
prashanth.lalu@kotak.com
+91 22 6621 6110
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Analyst holding in stock: Nil
Registered Office: Kotak Securities Limited, Bakhtawar, 1st floor, 229 Nariman Point, Mumbai 400021 India. Tel : +9122 6634 1100
Correspondence address: Infinity IT Park, Bldg. No 21, Opp Film City Road, A K Vaidya Marg, Malad (East), Mumbai 400097.
Tel No : 66056825.
Securities and Exchange Board Of India: Registration No's: NSE INB/INF/INE 230808130, BSE INB 010808153/INF 011133230/
INE 011207251, OTC INB 200808136, MCXSX INE 260808130. AMFI No: 0164.
Investment in securities market is subject to market risk, please read the combined risk disclosure document prior to investing.
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ELGI Compressors

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ELGI Compressors

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PRIVATE CLIENT RESEARCH

Elgi Equipment Ltd (EEL)

Market cap (Rs mn)

Free float (%)

52-wk Hi/Lo (Rs)

Avg. Daily Volume BSE+NSE :

Shares o/s (mn)

One-year performance (Rel to Sensex)

Source: ACE Equity

One-year performance (Rel to Sensex)

Elgi Equipment Ltd (EEL) is Asia's leading manufacturer of air compressors

Key Investment Rationale

Source: ACE Equity

June 18, 2012

Company to maintain high growth in financials; higher operating

Kotak Securities - Private Client Research

Please see the disclaimer on the last page

For Private Circulation

June 18, 2012

Key Revenue Streams

Rotary Screw Air

Electric powered Screw

Single stage (SS)/ Two

Wind Screen Wipers

Body Shop Equipment

Source: Company, Kotak Securities - Private Client Research

Kotak Securities - Private Client Research

Please see the disclaimer on the last page

For Private Circulation

June 18, 2012

Kotak Securities - Private Client Research

Please see the disclaimer on the last page

For Private Circulation

June 18, 2012

Utility for Compressed Air

Spinning, Weaving, Processing etc.

Dyes & Intermediates

Filter pres, Spray driers,

Blister pack machines

Blow Moulding Machines,

Pneumatic operations, Blowing

Electrical locomotives, dieseal

Tap changers, contactors,

pneumatic operations, tyre/tubes

Source: Kotak PCG-Research

Kotak Securities - Private Client Research

Please see the disclaimer on the last page

For Private Circulation

June 18, 2012

Planning commissions five year plan projections (US$ bn)

Source: Planning Commision

End user emphasis on efficiency

Kotak Securities - Private Client Research

Please see the disclaimer on the last page

For Private Circulation

June 18, 2012

Overseas Markets: While US markets witnesses some signs

Kotak Securities - Private Client Research

Please see the disclaimer on the last page

For Private Circulation

June 18, 2012

MAN GHH Sterkrade

Fives Cail Babcock

MHI, Japan Ebara