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Unichem Laboratories Limited (ULL)
Meeta Shetty, CFA( Research Analyst )
(022) 2282 2992 Ext. : 147
December 13, 2010 Milind Karmarkar ( Head Research )
(022) 6630 8667
Manas Singh( Equity Sales )
(022) 3290 3017

Accumulate Domestic formulations growth trajectory to improve - Despite a subdued CAGR of

CMP (Rs ) 255 11% in the past due to price cuts byDPCO and withdrawal of COX II inhibitors, Management
52-Week R ange R s 259.9 / R s 98.82
is looking at aggressive growth of 17% CAGR over the next 3 years. Growth will be driven
Target P rice 304.00
Upside 19.2% by focus on family physicians & Consulting physicians, therapeutic areas like Anti Diabetic,
Gynecologist and additions in field force.

KEY SHARE DATA Export contribution set to increase, supply agreements could boost exports

Market cap Rs. 2.28 BN / 48.6 MN

business significantly - Export segment (25% of Sales) will see traction over the coming
EV/ Sales 3.09 years as the international subsidiaries turnaround and the approved DMF's and ANDA's are
EV/ EBIDTA 13.52 commercialized. We expect international business to contribute over 30% to top line by
Volume (NSE + BSE) 48450
FY13 (including Export Formulations and API's)implying a CAGR of 30%. Management has
No. of Shares o/s (mn) 90.14
also indicated towards a supply agreement with a couple of MNC's (not included in our
Face Value (Rs) 2.0
Book Value (Rs) 62.5 estimates), if this materializes ULL's top line as well as bottom line will see good traction.
BSE / NSE Code 506690 / UNICHEMLAB
Sustainable margins - ULL is a vertically integrated company, most of its formulations are
Bloomberg code UL:IN
backed by captive API's. This gives ULL a better hold over its margins. Although margins are
Shareholding (%) likely to see some pressure in this year due to increase in employee cost, we don't see it as
Period Sep 10' Jun 10' a concern going ahead, as better product mix and increase in MR productivity will ease the
Promoters 48.4 48.4 pressure on margins.
MF/Banks /FI's 13.3 14.1
FII's 3.8 3.8 Sound Financials - Unichem is virtually a debt free company, management is also gearing
Corparate Bodies 7.3 6.7 for a negative working capital. Return ratios are improving and is poised to be in line with the
Pubic & Others 27.3 27.0
top pharma companies. Unichem will be among few pharma companies to have return ratios
close to 25 percent.

Valuation- ULL with the current change in guard is heading for stronger growth in sales
and profitability and yet maintaining the financial conservativeness. Valuations have improved
on back of growth strategies being adopted but as benefits of new growth strategies
become visible the potential upside for the stock would increase.

We expect ULL to do an EPS of Rs 15.2 for FY11E and Rs 18 for FY12E, its trading at 16.8x
its FY11E EPS and 14.2x its FY12E EPS.

We recommend a Accumulate on the stock with a price target of Rs 304, implying an

upside of 19% .

Year Net sales %Growth EBIDTA OPM (%) PAT %Growth EPS PE (x) RoE (%) RoCE (%)
FY10 7,473.9 1.7 1,708.5 22.9 1,228.1 13.5 13.6 18.7 21.8 23.3
FY11E 8,755.9 17.2 1,919.8 21.9 1,369.4 11.5 15.2 16.8 20.8 22.4
FY12E 10,479.0 19.7 2,370.5 22.6 1,623.7 18.6 18.0 14.2 21.9 25.9
FY13E 12,719.3 21.4 3,079.4 24.2 1,933.3 19.1 21.4 11.9 23.1 30.3
Dalal & Broacha Research is available on Bloomberg DBVS<GO>

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Domestic Formulations poised for a 17% CAGR over next three years...

ULL past performance in Domestic formulations market has been subdued at CAGR of 9% in
the past five years form FY06-FY10, compared to industry CAGR of 14%. Withdrawal of COX-II
inhibitors from the market and price reduction of Ampoxin by DPCO kept the growth rate under
pressure. Barring these factors Unichem has grown above market CAGR at 16% from FY06-
FY10.ULL has taken some corrective measures to restore momentum in its core business
including improving the penetration of the existing portfolio, strengthening of second tier brands
and expanding and reorganizing the sales force. We believe these measures would yield results
in the coming years, we expect 17% CAGR in domestic formulations segment from FY10-FY13.

Key Management changes - ULL has roped in several professionals from reputed MNC's as
well as Indian Pharma companies over the last couple of years. We believe this induction of
professionals will bring in more aggression in the growth strategies. The change can be seen
in the form of export targets, domestic business growth targets & new product launches.

Field Force Addition -MR additions over the past two quarters add vision to the future strategies
charted by the management. Unichem has ramped up its sales force from 1500 in FY10 to 1800
in 1HFY11 and plans to add another 600-700 MR's by FY12. This could impact productivity in the
short term,However in the long term we expect MR productivity to go back to around Rs 4mn/yr,
giving a fillip to revenues from Domestic formulations segment. ULL's MR productivity has been
more than industry average of Rs 3 mn per year/MR (Medical Representatives)

FY07 FY0 8 FY0 9 FY1 0 FY1 1 FY 12 FY 13

MR's 100 0 120 0 140 0 150 0 1800 2 100 23 00
Dom estic Rev 428 8 472 1 512 1 558 8 6563 7 712 90 66
MR Produ ctivity 4.3 3.9 3.7 3.7 3.6 3.7 3.9

Plans to tap the hospital segment - ULL has also identified Hospital segment as a growth
driver. It has started focusing on Hospitals as a market and plans to dedicate 100-150 MR for
this segment by FY13-14. ULL would be catering to both Super specialty and Nursing homes
with its vast portfolio of Chronic as well as Acute formulations.

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Strong presence in high margin chronic segment….

Unichem Laboratories holds a valuable portfolio of chronic therapies (57% of the segment's
revenue) and a strong brand name. Three of its brands feature among the top 100 and five among
the top 300.

ULL has strong presence in high margin chronic segment , the segment contribution has gradually
increase from 27% in FY2000 to 57% in FY10. Though the therapeutic focus is skewed towards
cardiovascular (accounting for 41% of formulation revenues) and anti-infective (21%), we believe
that new launches under various other therapeutic segments in the next two years would de-
concentrate its therapeutic areas.

Therapeutic wise break up - 2010

ULL has identified therapeutic areas like Nephrology, Gynecology, Ophthalmic and Anti Diabetic
as growth drivers going forward. We expect Anti Diabetic products to contribute 10% (approx) to
top line by FY13. Nephrology would also feature amongst it therapeutic area with close to 3%
contribution.ULL is also evaluating inorganic growth opportunities especially in the Ophthalmic
and Gynecology areas. New launches under new therapeutic segments and attractive in organic
growth opportunities would lessen the weightage of CVS and Anti Infective segment and de-
concentrate the revenues by FY13.

Industry comparision - Pharma industry in India has witnessed a gradual evolution from acute to
chronic segment, Though the overall domestic formulations is growing at 15-17%, chronic segment
continues to grow over 20-22% unlike acute segment (7%-10% growth). Unichem is well placed
amongst its peers to reap the benefits of chronic segment.

C h r o n ic A c u te

120
100
80 37 43 43 40
65 69
60
40
63 57 57 60
20 35 31
0
To r r e n t C a d ila In d o c o U n ic h e m L u p in IP C A L a b s

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Capability of building strong Brands

ULL's focus has always been on Brands which reflects in the market share of its best selling
brands. Losar group has a market share of 32.2% in Losartan market, Losar is the largest brand
of ULL accounting for over 18% to the top line with over Rs1400 mn sales per year. Ampoxin which
is an Anti Infective has a market share of 39% and is the second largest brand with revenues of Rs
800 mn. Five of Unichem brands also are among the top 300 brands in India. And most of its
heritage products are still seeing double digit growth.

Brand Therapeutic Area Amt in mn

Losar Group Hypertension 1420
Ampoxcin Anti Infective 790
Trika Anti-Psych 380
Unienzymes Gastro 460
Telsar Hypertension 290
TG Tor Atorvastatin 270
Vizylac Vit B 180
Metride Diabetic - Metformin 180
Corvadil Hypertension 120
Clodrel clopidogrel 120

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Cardio vascular will continue to remain a thrust of the company; but to mitigate the heavy dependency
..
on its top brands Unichem has started introducing second tier brands under this segment,
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TELSAR and OLSAR , are showing higher double digit growth. At the same time ULL is expanding
..
the marketing reach of Losar and expects to sustain the growth momentum.
..
ULL plans to follow the same strategy for all top therapeutic areas to reduce the dependence on
top brands. Currently top 7 Brands contribute 52% and next 18 brands contribute 20% to top line.
By FY13 we expect top 25 brands to contribute around 50% of revenues, this growth trajectory will
improve further in long term post FY13 in the domestic formulations segment as most of its new
brands mature.

Ampoxin, Rs 790 mn brand for ULL, has been facing competition for the past few quarters, for
IHFY11 Ampoxin has de-grown by 20%. Management has already taken corrective measure and
monthly sales have started picking up. We believe though Ampoxin is a concern at present, as the
corrective measures start yielding results and other brands with higher growth continue their
momentum, this effect will be nullified.

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US to drive Export Formulations sales…

Currently, overseas markets contribute only 25% of its consolidated revenues. The company has
plans to increase this share to 35% by FY13. We expect a 24% CAGR in export segment mainly
driven by US formulations and Niche Generics.Unichem has strategically divided its export
formulation business into emerging markets and developed markets. In emerging markets, Unichem
plans to enter 1-2 countries every year. The company is working on around 25 molecules and
expects to file 1-2 ANDAs every quarter. The company generates 6% of its revenues from contractual
tie-ups in Europe. Currently most of the revenues in the export segment come from UK (including
Niche Generics) and the rest from Asia/Africa.

Geographical Break up FY10

Niche Generic & Europe

accounts for nearly 75% of
total exports.

As of now ULL has negligible presence in US market. ULL's US subsidiary has filed for 15 ANDA's
of which 9 have been approved. ULL has already launched 5 products in the market. We expect
close to USD 4 mn of revenues in FY11 from US region. Unichem plans to file 10-12 ANDA's every
year, focus therapy areas would be CVS, CNS & Anti Infective. From a negligible contribution in
FY10, we expect LATAM and US to contribute close to 10% to top line in FY13.

Recent USFDA Approvals

ULL's US subsidiary has recently got some USFDA approvals for various drugs, the total USFDA
approvals now stands at 9, this opens avenue for ULL to enter US market more aggressively.

Drug Therapeutic area

Clonidine Hydrochloride Anti-H ypertension
Hydrochlorothiazide Anti-H ypertension
Bisoprolol & H ydrochlorothiazide Anti-H ypertension
Bisoprolol Fumarate Anti-H ypertension

Total Market size for these drugs is over USD 400 mn - USD 800 mn.

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Niche Generics expected to turn around leading to improvement in consolidated numbers

Unichem expects its 100% subsidiary Niche Generics UK to turnaround in FY12 on account of
various initiatives taken by the management. It has restructured its operations by shutting down
its manufacturing operations and reducing workforce from 100 to 70 and also transferring
developmental activity to Indian operations. These efforts resulted in Niche generics trimming
down its losses from Rs 203 mn in FY08 to Rs 20 mn in 1HFY11.

Niche Generics has been filing dossiers with European authorities. In the last two year, it has
filed seven dossiers with the UK MHRA and received approval for four products. Of these, two
products have been recently launched. It is planning to register 25 new products in the next three
years in EU and other territories.

Niche generics recently received marketing authorizations for Anastrozole tablets for a number
of markets within the European Union. This represents the first of a number of products emanating
from the European development pipeline. Anastrozole, an inhibitor for the treatment of cancer,
had sales of USD 1.9 bn in 2009.

*FY11 Revenues and Loss numbers are annualized

For the 1HFY11 Niche generics recording sales of GBP 4.60million and net loss of GBP0.28
million. As new approvals are commercialized and the restructuring initiatives taken by the
management start yielding results, ULL's consolidated numbers would improve on the bottom-
line. We expect Niche generics to turnaround in FY12.

Signing of Supply Agreements

ULL is negotiating supply agreement with a couple of MNC's, these order would be Cephalosporin
or Beta Lactam. This would help ULL use its unutilized capacities at Ghaziabad plant and new
units at Baddi. We estimate revenues from these deals to be around Rs 800-1000 mn.

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Consistent Improvement in EBIDTA margins…

ULL's tap on cost and better product mix has consistently improved ULL's profitability over last
couple of years. From 16.5% in FY07 EBIDTA margins have improved by more than 700 bps to
23.7%.Although margins are likely to see some pressure in the current year due to higher
employee cost, we do not see it as a concern, as we expect the margins to be better post FY11.
Margin expansion would come due to higher productivity of MR's and higher focus on Therapy
segments like Nephrology & Anti Diabetic.

Sale s EBIDTA %

1 4 ,0 0 0 .00 25 .1 % 3 0 .0 %
2 3 .7 % 2 2 .8% 2 3 .5 %
1 2 ,0 0 0 .00 2 0 .6 % 2 5 .0 %
1 0 ,0 0 0 .00 1 6 .5 % 2 0 .0 %
8 ,0 0 0 .00 1 3.9 %
1 5 .0 %
6 ,0 0 0 .00
4 ,0 0 0 .00 1 0 .0 %
2 ,0 0 0 .00 5 .0 %
0 .0 0 0 .0 %
FY0 7 FY0 8 FY0 9 FY1 0 FY1 1E FY1 2 E FY1 3 E

Working capital efficiency

The company has a healthy cash flow history and has recently implemented SAP as a step
towards their plan to make the company a negative working capital company in the next three
years. ULL would be amongst the few companies in the industry to have a negative working
capital taking it par with few large Indian and MNC's.

Sound Financials

ULL is virtually a debt free company Return ratios are improving and is poised to be in line with
the top pharma companies. Unichem will be among few pharma companies to have return
ratios in excess of 30 percent.

35.00
30.3
30.00 25.9
24.56
23.3 22.4
25.00 21.5
20.00 17.2 23.11
22.33 21.82 21.94
14.6 20.79 RONW(%)
15.00 19.0
17.46
ROCE (%)
10.00 12.36
5.00

0.00
FY06 FY07 FY08 FY09 FY10 FY11E FY12E FY13E

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Business Overview

ULL’s business flows through its seven divisions focusing on various therapeutic areas. Cardiac
and Anti Infective remain the key areas for ULL, with over 60% of the revenues coming from them.
Most of the division are growing at a double digit .

Revenue – FY10 MAT- FY10

Divisions (Rs.mn) % Growth Value
Cardiovascular Division 2290 21.4
Pharma Division - Acute Therapy 2020 20.7
Cardiovascular-Diabetology Divis 750 32.5
Unikare Division - Dermatology and Primary care 520 34.1
Neu-Foreva Division - Neuro Psychiatry 440 22.5
Integra Division - Nephrology Division 200 7.6

Company Background
Unichem Laboratories is a vertically integrated pharmaceutical company that caters to finished
dosages formulations, active pharmaceutical ingredients (APIs) as well as R&D for new drug
delivery systems and non infringing process for APIs. It manufactures and markets a large
..
basket of pharmaceutical formulations as branded generics as well as generics in India and
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several other markets across the world. In India, the company is a leader in niche therapy areas
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of cardiology, and anti-infectives. The company has strong skills in product development, process

..
chemistry and manufacturing of complex API as well as dosage forms.

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The company has six manufacturing facilities in India spread across Maharashtra, Goa, Madhya
Pradesh, Uttar Pradesh, Sikkim and Himachal Pradesh. Out of which formulations plant at Goa
and Ghaziabad are USFDA approved. API plant at Pitampur and Roha are also approved by
USFDA, taking the USFDA approved plants to four.

It has also four whollyowned subsidiaries in South Africa, Brazil, the US and the UK. UK subsidiary
Niche generics is the only one which has a manufacturing set-up, rest are all distribution set-
ups.

Concerns
High concentration of revenues -ULL's revenues are highly concentrated as top 7 brands
account for 52% of revenues with Losar group alone constituting around 18%to top line.
Management is already working towards increasing its overall contribution of chronic segment
to moderate the concentration of revenues from CVS segment.

DPCO -price cuts - ULL has already seen the impact of price cuts by DPCO (Drug Price Control),
as Ampoxin still remain a top brand in Unichem portfolio this risk is inevitable until there is
deleveraging amongst the top brands.

Niche Generics Turnaround - Niche generics though has trimmed its losses its crucial to
turnaround by FY12.Niche's inability to turnaround by FY12 would continue to impact the
consolidated earnings.

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Valuations and Outlook

For the IHFY11, Unichem's revenue from operations stood at Rs 3895.3 at standalone level,
reflecting overall growth of 13.2%. Under the domestic formulations segment, branded
formulations grew at 17.4%. However the generic formulations segment witnessed lower growth
due de-growth in Ampoxin. Overall growth in domestic formulations was close to 12.8%. Export
formulations grew at 15.3%.

Margins remained under pressure due to commissioning of new plants at Baddi and Sikkim.
Higher staff cost and other expenditure also pulled the margins lower. We believe that margins
will remain under pressure for the year and pick up only from FY12.

PAT for the quarter stood at Rs 680.6 mn, for the IHFY11 ULL has posted an EPS of Rs 7.6,

Conclusion:
Unichem with the current change in guard is heading for stronger growth in sales and profitability
and yet maintaining the financial conservativeness. Valuations have improved on back of growth
strategies being adopted but as benefits of new growth strategies become visible the potential
upside for the stock would improve further.

ULL’s top would grow at a CAGR of 19% from FY11E-FY13E, the growth will be fuelled by
Domestic formulations (17%CAGR) and Export Formulations(24% CAGR).Margins though are
expected to remain under pressure due to higher cost, we do not see it as a concern going
forward.

We expect ULL to do an EPS of Rs 15.2 for FY11E and Rs 18.0 for FY12E. At CMP of Rs 255, the
stock trades at 16.8x its FY11E EPS and 14.2x its FY12E EPS.

We recommend an ‘Accumalte’ on the stock with a price target of Rs 304, implying an upside of
19% from the current levels.

PE Band

Fwd PE Ratio Mean

15.0

12.0
9.0
6.0

3.0

0.0
1/A pr/04 1/Apr/05 1/A pr/06 1/A pr/07 1/A pr/08 1/A pr/09 1/A pr/10
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Weighted average target price Target Weight Weighted

Methodologies price assigned Avg Price Comments
Using DCF approach 385 40.0% 154 DCF for 10 years & 4% terminal growth rate
Using EV/EBITDA approach 265 30.0% 79 Based on 7x EV / EBIDTA FY12E
Using P/E approach 234 30.0% 70 Based on 10x P / E FY12E
Weighted average target price 304
Current price 255
% Upside/(Downside) from current levels 19.2%

P / E Method
Figures (Rs mn) EPS P/E
Company Price FY11E FY12E FY11E FY12E
Torrent 585 37.0 46.0 15.8 37.0
Cadila 772 32.5 39.9 23.8 32.5
Indoco 492 46.2 56.8 10.6 8.7
Lupin 501 19.4 23.4 25.8 21.5
IPCA Labs 335 19.6 24.6 17.1 13.6
Unichem Labs 255 16.6 21.0 15.4 12.1
Peer Group average .. 14.0
Valuation metrics .. FY12 E
P/E multiple .. 13
2012E Earnings
Target Price
.. 18
234
CMP ..255
% Upside/(Downside) (8)

EV / EBIDTA method
Figures (Rs mn) Sales EBIDTA EV EV/EBIDTA
Company CMP FY11E FY11E FY12E FY11E FY11E FY12E
Torrent 585 21,575 4,410 5,403 50,290 11.4 9.3
Cadila 772 43,717 9,713 11,601 161,082 16.6 13.9
Indoco 492 4,965 786 1,031 5,990 7.6 5.8
Lupin 501 57,691 11,848 14,270 231,580 19.5 16.2
IPCA Labs 335 18,592 3,879 4,747 46,331 11.9 9.8
Unichem Laboratories 250 8,835 1,999 2,466 22,640 11.3 9.2
Peer Group average 10.7
Valuation metrics-FY 2012E
EV/EBITDA m ultiple 9.5
2012E EBITDA 2466
2012E EV 23428
2012E Debt 0.0
2012E Cas h 447
2012E Market Capitalization 23875
No. of s hares 90.1
Target Price 265
CMP 255
% Upside/(Downside) 4
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DCF Calculation
DCF Valuation: FY10A FY11E FY12E FY13E FY14E FY15E FY16E FY17E FY18E FY19E FY20E
PBIT 1543 1717 2109 2762 3775 5277 6332 7282 8374 9630 11075
19% 11% 23% 31% 37% 40% 20% 15% 15% 15% 10%
PBIT*(1-Tax Rate) 1236 1374 1624 1933 2642 3694 4432 5097 5862 6741 7752
Change in working capital: (Incr)/Decr (278) (91) 430 212 200 577 548 520 494 470 446
Capex (577) (434) (1000) (1500) (1500) (1000) (1000) (1000) (1000) (1000) (1000)
-FCFF 380 848 1054 645 1342 3270 3980 4617 5356 6211 7198
-FCFF Growth Rate 122.8% 24.3% -38.8% 108.0% 143.6% 21.7% 16.0% 16.0% 16.0% 15.9%
-Cost of Capital (%) 11.3% 11.3% 11.3% 11.3% 11.3% 11.3% 15.0% 15.0% 15.0% 15.0% 15.0%
-Weight Assigned 0.0 0.0 1.0 2.0 3.0 4.0 5.0 6.0 7.0 8.0 9.0
-Present Value 0.0 848 947 521 974 2132 1979 1996 2014 2030 2046

Sum of PV of FCF 15486.2

WACC for term inal grow th
Calculation of Term inal Value
Expected Market Return (Rm) 15.0%
Terminal Year Free Cash Flow 7486.2
Risk Free Rate (Rf) 8.0%
Terminal Grow th Rate 4.0%
Country Premium (Rm-Rf ) 7.0%
Terminal Enterprise Value 68056.3
Beta 1.0
Terminal Value 19345.8
Cost of Equity 15.0%
Enterprise Value 34832.0
Cost of Debt 8.5%
Add: Cash & Investments 236.4
Tax rate 33.6%
Less: Debt (357.8)
Post Tax Cost of Debt 5.6%
Market Capitalisation 34710.6
Long term debt to capital ratio 0.0
No. of shares 90.1
WACC 15.0%
Value per share 385.1
CMP 255.0
% upside 51.0

WACC
385.08 13.0% 14.0% 15.0% 16.0% 17.0%
2.0% 431.6 386.3 348.6 316.9 289.9
3.0% 458.9 407.5 365.3 330.3 300.8
4.0% 492.3 432.9 385.1 345.9 313.3
5.0% 534.0 464.0 408.8 364.3 327.8
6.0% 587.7 502.9 437.8 386.5 345.1

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UNICHEM LABORATORIES FINANCIALS
P&L (Rs mn) FY10A FY11E FY12E FY13E Cash Flow St. (Rs. mn) FY10A FY11E FY12E FY13E
Net Sales 7,473.9 8,755.9 10,479.0 12,719.3 Net Profit 1,228.1 1,369.4 1,623.7 1,933.3
Add: Dep. & Amort. 232.1 282.3 357.3 432.3
Raw materials (2,681.5) (3,195.9) (3,772.5) (4,578.9) Cash profits 1,460.2 1,651.7 1,981.0 2,365.6
Employee costs (1,031.9) (1,238.3) (1,486.0) (1,708.9)
Other Expenses (2,051.9) (2,401.9) (2,850.1) (3,352.0) (Inc)/Dec in
Cost of sales (5,765.3) (6,836.1) (8,108.5) (9,639.9) -Sundry debtors (153.9) (9.5) (186.9) (224.7)
-Inventories (60.8) 103.1 (51.6) (118.5)
Operating Profit 1,708.5 1,919.8 2,370.5 3,079.4 -Loans/advances (86.5) - - -
Depreciation (232.1) (282.3) (357.3) (432.3) -Sundry creditors 157.3 142.6 288.6 405.2
PBIT 1,476.4 1,637.5 2,013.2 2,647.1 -Others 52.4 193.6 161.8 137.9
Other income 66.4 79.6 95.6 114.7 Change in working capital (91.4) 429.9 211.9 199.9
Interest (10.4) (5.4) - - CF from Oper. activities 1,368.8 2,081.7 2,193.0 2,565.5

Profit before tax 1,532.4 1,711.8 2,108.8 2,761.8 CF from Inv. activities (1,016.4) (1,000.0) (1,500.0) (1,500.0)
Provision for tax (304.3) (342.4) (485.0) (828.5)
Reported PAT 1,228.1 1,369.4 1,623.7 1,933.3 CF from Fin. activities (459.8) (404.0) (1,159.9) (950.1)
Extraordinary Items - - - -
Adjusted PAT 1,228.1 1,369.4 1,623.7 1,933.3 Cash generated/(utilised) (107.3) 677.7 (467.0) 115.4
Cash at start of the year 343.7 236.4 914.0 447.1
Cash at end of the year 236.4 914.0 447.1 562.5

Balance Sheet FY10A FY11E FY12E FY13E Ratios FY10A FY11E FY12E FY13E
Equity capital 180.3 180.3 180.3 180.3 OPM 22.9 21.9 22.6 24.2
Reserves 5,448.8 6,407.4 7,219.3 8,185.9 NPM 16.3 15.5 15.4 15.1
Net worth 5,629.1 6,587.7 7,399.5 8,366.2 Tax rate (19.9) (20.0) (23.0) (30.0)

Def. Tax Liab.+Minority Int. 346.8 353.7 363.4 380.0 Growth Ratios (%)
Secured loans 152.9 152.9 - - Net Sales 1.7 17.2 19.7 21.4
Unsecured loans 204.8 204.8 - - Operating Profit 20.2 12.4 23.5 29.9
Total debt 357.8 357.8 - - PAT 13.5 11.5 18.6 19.1
CAPITAL EMPLOYED 6,333.7 7,299.1 7,762.9 8,746.1
Per Share (Rs.)
Gross block 4,646.0 5,646.0 7,146.0 8,646.0 Net Earnings (EPS) 13.6 15.2 18.0 21.4
Accumulated depreciation (1,312.5) (1,594.8) (1,952.1) (2,384.4) Cash Earnings (CPS) 16.2 18.3 22.0 26.2
Net block 3,333.5 4,051.2 5,193.9 6,261.6 Dividend 3.2 4.1 4.6 9.0
Capital WIP 636.3 636.3 636.3 636.3 Book Value 62.5 73.1 82.1 92.8
Total fixed assets 3,969.8 4,687.5 5,830.2 6,897.9 Free Cash Flow 3.9 12.0 7.7 11.8
Goodwill - - - 1.0
Investments 592.1 592.1 592.1 592.1 Valuation Ratios
Inventories 1,094.7 991.5 1,043.1 1,161.6 P/E(x) 18.7 16.8 14.2 11.9
Sundry debtors 1,669.7 1,679.2 1,866.1 2,090.8 P/B(x) 4.1 3.5 3.1 2.7
Cash & bank 236.4 914.0 447.1 562.5 EV/EBIDTA(x) 13.5 11.7 9.5 7.3
Loans & advances 443.8 443.8 443.8 443.8 EV/SALES(x) 3.1 2.6 2.2 1.8
Other current assets - - 1.0 2.0 Div. Yield(%) 1.3 1.6 1.8 3.5
Sundry creditors (1,170.7) (1,313.4) (1,602.0) (2,007.2) FCF Yield(%) 1.5 4.7 3.0 4.6
Acceptances (145.6) (160.2) (176.2) (193.8)
Provisions (356.4) (535.4) (681.2) (801.5) Return Ratios (%)
Working capital 1,771.8 2,019.6 1,340.7 1,256.2 ROE 21.8 20.8 21.9 23.1
Deferred Tax Assets - - - 1.0 ROCE 23.3 22.4 25.9 30.3
Miscellaneous exp. - - - -
CAPITAL DEPLOYED 6,333.7 7,299.1 7,762.9 8,748.1
This document has been prepared and compiled from reliable sources. While utmost care has been taken to ensure that the facts stated are accurate and opinions given are
fair and reasonable, neither the Company nor any of its Directors, Officers or Employees shall in any way be responsible for the contents. The Company, its Directors, Officers
or Employees may have a position or may otherwise be interested in the investment referred in this document. This is not an offer or solicitation to buy, sell or dispose off
any securities mentioned in this document.
For Further details contact : Mr. Milind Karmarkar / Mr.Apurva Shah / Ms. Hiral Sanghvi / Mr. Kunal Bhatia / Ms. Purvi Shah / Ms. Meeta Shettyi / Mr. Lalitabh S
508, Maker Chambers V, 221 Nariman Point, Mumbai 400 021 Tel: 91-22- 2282 2992, 2287 6173, (D) 6630 8667 Fax: 91-22-2287 0092 E-mail: dbvs@vsnl.com