Motherson Sumi Systems

1QFY2012 Result Update | Auto Ancillary
July 29, 2011
Motherson Sumi Systems

Performance Highlights
Consolidated (` cr) Net sales EBITDA OPM (%) Reported PAT
Source: Company, Angel Research
ACCUMULATE
CMP Target Price `230 `250
12 Months
Angel est. 2,240 249 106 % diff 2.7 (20.4) (38.7)
1QFY12 2,300 199 8.6 65
1QFY11 1,905 186 9.8 60
% chg (yoy) 20.8 6.7 (114)bp 9.6
Investment Period
Stock Info Sector Market Cap (` cr) Beta 52 Week High / Low Avg. Daily Volume Face Value (`) BSE Sensex Nifty Reuters Code Bloomberg Code
11.1 (250)bp
Auto Ancillary 8,911 0.4 256/163 71,069 1 18,197 5,482 MOSS.BO MSS@IN
Motherson Sumi Systems (MSSL) 1QFY2012 consolidated results were below our expectations on the margin and bottom-line front, despite strong performance at the standalone level. The companys weak performance can be attributed to a sharp contraction in margins at Samvardhana Motherson Reflectec (SMR) on account of start-up costs related to new plants in Hungary and Brazil, high interest costs and increased effective tax rate. We are revising our FY2012 earnings estimates downwards on account of margin pressures at SMR. However, we believe operating leverage benefits due to pick-up in order execution will help MSSL to restore its margin in 2HFY2012. We recommend Accumulate. Operating performance impacted by start-up costs for new plants at SMR: MSSL registered an in-line 20.8% yoy increase (down 2.4% qoq) in net sales to `2,300cr on a consolidated basis, driven by a 33.6% (down 15.7% qoq) and 16.4% yoy (up 8.4% qoq) jump in domestic and overseas sales, respectively. Overseas sales performance was led by strong 19.6% yoy (flat qoq) growth at SMR. On the operating front, MSSLs margin reported a 114bp yoy (318bp qoq) contraction to 8.6%, largely due to input cost pressures and subdued operating performance at SMR (margin at 5.1% against 7.2% in 1QFY2011) on account of start-up costs related to two new plants. Thus, net profit posted modest growth of 9.6% yoy (down 53% qoq) to `65cr, significantly lower than our estimates of `106cr. Outlook and valuation: We believe execution of orders at SMR from OEs such as BMW, Volkswagon and Daimler will help MSSL deliver volume and revenue growth going ahead. We expect MSSL to deliver a 16.5% and 17.3% CAGR in its top line and bottom line, respectively, over FY201113E. At `230, MSSL is trading at 22.2x FY2012E and 16.6x FY2013E earnings. We recommend Accumulate on the stock with a target price of `250.
Shareholding Pattern (%) Promoters MF / Banks / Indian Fls FII / NRIs / OCBs Indian Public / Others 65.2 16.3 11.6 6.9
Abs. (%) Sensex MSSL
3m (4.9) 0.2
1yr 1.1
3yr 31.9
36.5 204.6
Key financials (Consolidated)

Y/E March (` cr) Net sales % chg Net profit % chg EBITDA margin (%) Adj. EPS (`) P/E (x) P/BV (x) RoE (%) RoCE (%) EV/Sales (x) EV/EBITDA (x)
FY2010 6,924 162.3 241 37.8 7.9 6.2 35.7 7.4 24.8 14.1 1.4 17.4
FY2011E 8,371 20.9 391 62.0 11.0 10.1 22.8 6.4 30.4 28.7 1.1 10.3
FY2012E 9,866 17.9 401 2.7 10.2 10.4 22.2 5.8 27.3 27.6 1.0 9.5
FY2013E 11,358 15.1 538 34.0 10.9 13.9 16.6 4.6 30.9 31.5 0.8 7.7
Yaresh Kothari
022-3935 7800 Ext: 6844 yareshb.kothari@angelbroking.com
Please refer to important disclosures at the end of this report
Motherson Sumi Systems | 1QFY2012 Result Update
Exhibit 1: Quarterly performance (Consolidated)

Y/E March (` cr) Net Sales (incl. otr. op. inc.) Consumption of RM (% of Sales) Staff Costs (% of Sales) Exchange Fluctuation (% of Sales) Other Expenses (% of Sales) Total Expenditure EBITDA EBITDA margin (%) Interest Depreciation Other Income PBT (excl. Extr. Items) (% of Sales) Provision for Taxation (% of PBT) PAT Before Minority Interest Minority Interest PAT After Minority Interest PATM (%) Extr. Income/(Expense) Reported PAT Equity capital (cr) EPS (`)
1QFY12 2,300 1,455 63.3 355 15.4 (11) (0.5) 302 13.1 2,102 199 8.6 21 62 3 119 5.2 51 43.3 67 2 65 2.9 65 38.8 1.7
1QFY11 1,905 1,162 61.0 295 15.5 4 0.2 258 13.5 1,719 186 9.8 11 58 3 120 6.3 48 39.8 72 13 59 3.8 60 38.8 1.5
% chg 20.8 25.3 20.4 (393.5) 17.1 22.3 6.7 84.7 6.8 7.7 (0.8) 8.0 (6.5) 9.7 9.6 9.6
FY2011 8,371 5,145 61.5 1,259 15.0 (34) (0.4) 1,078 12.9 7,449 922 11.0 58 246 13 631 7.5 188 29.8 443 52 391 5.3 391 38.8 10.1
FY2010 6,924 4,166 60.2 1,132 16.3 (65) (0.9) 996 14.4 6,229 695 10.0 63 260 14 386 5.6 109 28.4 276 (9) 286 4.0 (43) 243 37.5 6.5
% chg 20.9 23.5 11.2 (48.1) 8.2 19.6 32.7 (9.2) (5.2) (9.5) 63.6 72.2 60.2 36.8
61.0 55.6
Strong net sales growth of 20.8% yoy: MSSL reported strong growth of 20.8% yoy (down 2.4%) in its net sales to `2,300cr, which was in-line with our expectation of `2,240cr. Top-line performance was driven by growth in domestic and overseas revenue, which grew by 33.6% (down 15.7% qoq) and 16.4% yoy (8.4% qoq), to `841cr and `1,430cr, respectively. Overseas revenue benefitted by strong growth of 19.6% yoy (flat qoq) in SMR revenue.
July 29, 2011
Exhibit 2: Healthy 33.6% yoy growth in domestic rev.

(` cr) 1,200 1,000 800 600 400 200 0 16.2 25.5 58.2 Within India 67.1 53.0 yoy change (RHS) 59.7 61.9 (%) 80 70 60.5 60 50 40 33.6 30 20 10 0
Exhibit 3: Overseas revenue increases by 16.4% yoy

(` cr) 1,600 1,400 1,200 1,000 800 600 400 200 0 301.0 360.5 Outside India 496.8 yoy change (RHS) (%) 600 500 400 300 187.4 23.8 4.0 (2.3) 1.0 200 100 16.4 0 (100)
1QFY10
2QFY10
3QFY10
4QFY10
1QFY11
2QFY11
3QFY11
4QFY11
1QFY12
1QFY10
2QFY10
3QFY10
4QFY10
1QFY11
2QFY11
3QFY11
4QFY11
EBITDA margin declines by 114p yoy to 8.6%: On the operating front, the company reported a 114bp yoy decline in its EBITDA margin to 8.6%, sharply lower than our expectations of 11.1%. Margin contraction can be attributed to raw-material cost pressures and start-up costs at SMR for new facilities in Hungary and Brazil. Raw-material costs during the quarter increased by 155bp yoy and accounted for 64.1% of net sales. However, the decline in staff costs, other expenditure and gains on the foreign exchange front arrested further contraction in operating margin. Going ahead, management has guided that margins will return back to normal levels of 1011%, as start-up cost pressures subside from 3QFY2012.
Exhibit 4: EBITDA margin below expectations

(%) 70 60 50 40 30 20 10 0 6.1 6.5 19.9 16.2 16.5 15.7 14.8 15.9 9.8 15.7 10.6 15.3 11.6 14.8 11.8 15.6 8.6 62.6 EBITDA margin 61.8 62.4 Raw material cost/sales 61.9 62.5 62.3 63.5 Staff cost 63.2 64.1
Exhibit 5: Fluctuations in foreign exchange

(` cr) 30 20 10 0 (10) (20) (30) (40) (50) (60) Foreign exchange gain/loss 1.2 % of sales (%) 2 1 1 0 (1) (1) (2) (2) (3) (3)
(0.1)
0.2 (0.9) (1.7) (2.7)
(0.1) (0.8)
11.0
1QFY10
2QFY10
3QFY10
4QFY10
1QFY11
2QFY11
3QFY11
4QFY11
1QFY12
1QFY10
2QFY10
3QFY10
4QFY10
1QFY11
2QFY11
3QFY11
4QFY11
Net profit up 9.6% yoy: Led by contraction in operating margin, high interest cost and high effective tax rate, net profit for the quarter grew by modest 9.6% yoy (down 53% qoq) to `65cr, lower than our expectations of `106cr.
July 29, 2011
1QFY12
1QFY12
(0.5)
Exhibit 6: Profitability trend

(` cr) 160 140 120 100 80 60 40 20 0 0.8 0.9 4.2 3.2 2.9 4.5 5.1 6.0 Net profit 7.4 Net profit margin (%) 8 7 6 5 4 3 2 1 0
1QFY10
2QFY10
3QFY10
4QFY10
1QFY11
2QFY11
3QFY11
4QFY11
Exhibit 7: Quarterly performance (Standalone)

Y/E March (` cr) Net Sales (include Other Op. Inc.) Consumption of RM (% of Sales) Staff Costs (% of Sales) Exchange Fluctuation (% of Sales) Other Expenses (% of Sales) Total Expenditure Operating Profit OPM (%) Interest Depreciation Other Income PBT (excl. Extr. Items) Extr. Income/(Expense) PBT (incl. Extr. Items) (% of Sales) Provision for Taxation (% of PBT) Reported PAT PATM (%) Equity capital (cr) EPS (`)
1QFY12 1QFY11 752 477 63.5 76 10.1 (6) (0.7) 103 13.7 650 101 13.5 12 23 24 90 0 90 11.9 24 27.0 66 8.7 39 1.7 560 335 59.9 57 10.1 0.4 88 15.7 482 78 13.9 4 19 57 0 57 10.2 28 48.6 29 5.2 39 0.8
% chg FY2011 FY2010 % chg 34.2 42.4 33.9 17.3 34.9 29.8 206.0 22.3 57.7 57.7 (12.4) 123.9 123.9 2,855 1,727 60.5 257 9.0 (21) (0.7) 409 14.3 2,372 483 16.9 32 83 27 395 0 395 13.8 107 27.1 287 10.1 39 7.4 1,758 1,022 58.1 165 9.4 (56) (62.1) (3.2) 265 15.1 1,396 362 20.6 27 65 16 287 20 267 15.2 89 33.2 178 10.2 38 4.8 55.9 61.1 20.8 20.8 28.5 66.2 37.5 47.7 69.9 33.4 54.5 56.4 62.4 68.9
3 (319.5)
2 1,356.2
July 29, 2011
1QFY12
Strong standalone performance: MSSLs standalone revenue reported robust top-line growth of 34.2% yoy (down 12.2 qoq) to `752cr on the back of 36.1% and 41.2% yoy growth in domestic and overseas revenue, respectively. On the operating front, the companys margin declined marginally by 46bp yoy (down 590bp qoq) to 13.5% due to a 259bp yoy increase in raw-material costs. However, a sharp 229bp yoy decline in other expenses restricted further fall in margin. As a result, net profit jumped significantly by 123.9% yoy (down 42.9% qoq) to `66cr. Noticeably, the significant jump in other income (`24cr vs. `1.6cr in 1QFY2011) negated the impact of high interest and depreciation costs.
Exhibit 8: Domestic revenue increases by 36.1% yoy

(` cr) 800 700 600 500 400 300 200 100 0 10.5 23.9 Within India 77.8 63.3 63.5 58.5 yoy change (RHS) 76.0 76.8 (%) 90 80 70 60 50 40 36.1 30 20 10 0
Exhibit 9: Overseas revenue up by 41.2% yoy

(` cr) 90 80 70 60 50 40 30 20 10 0 Outside India yoy change (RHS) 37.9 15.2 16.4 17.7 36.9 41.2 (%) 50 40 30 20 10 0 (10) (20) (30) (40)
(7.6) (34.3) (22.1)
1QFY10
2QFY10
3QFY10
4QFY10
1QFY11
2QFY11
3QFY11
4QFY11
16.9
1QFY10
2QFY10
3QFY10
4QFY10
1QFY11
2QFY11
3QFY11
4QFY11
1QFY12
Exhibit 10: Copper prices and inventory trend

(USD/tonne) 12,000 10,000 8,000 6,000 4,000 2,000 0 Inventory (RHS) Price (tonne) 1,200,000 1,000,000 800,000 600,000 400,000 200,000 0
Exhibit 11: EBITDA margin trend

(%) 70 60 50 40 30 20 10 0 17.4 22.8 12.5 10.2 9.8 8.4 26.7 13.9 10.4 16.3 19.4 13.5 10.2 EBITDA margins 61.4 60.7 58.6 59.4 Raw material cost/sales 62.5 62.1 61.8 Staff cost 64.4 62.2
10.7
9.7
9.0
8.3
1QFY10
2QFY10
3QFY10
4QFY10
1QFY11
2QFY11
3QFY11
4QFY11
1QFY12
(%) 16 14 12 10 8 6 4 2 0 8.8
Feb-06
May-04
Dec-04
Sep-06
Jun-08
Jan-02
Aug-02
Jan-09
Mar-03
Aug-09
Apr-07
Nov-07
Mar-10
Oct-03
Nov-10
Jun-11
Source: Company, Bloomberg, Angel Research
Exhibit 12: Fluctuations in foreign exchange

(` cr) 30 20 10 0 (10) (20) (30) (40) (50) (3.3) (5.4) (7.5) 0.5 (1.7) (0.3) (1.2) (0.7) Foreign exchange gain/loss 5.1 % of sales (%) 6 4 2 0 (2) (4) (6) (8) (10)
Exhibit 13: Net profit jumps yoy on high other income

(` cr) 140 120 100 80 60 40 20 0 8.9 7.6 5.4 Net profit 13.7 10.9 10.1 10.3 Net profit margin 13.8
1QFY10
2QFY10
3QFY10
4QFY10
1QFY11
2QFY11
3QFY11
4QFY11
1QFY10
2QFY10
3QFY10
4QFY10
1QFY11
2QFY11
3QFY11
4QFY11
1QFY12
July 29, 2011
1QFY12
1QFY12
Jul-05
Exhibit 14: Segmental performance Standalone

Y/E Mar (` cr) Total net sales Auto Non-Auto Other segments Total EBIT Auto Non Auto EBIT margin (%) Auto Non-auto
1QFY12 788 695 69 24 78 73 5 9.9 10.5 6.7
1QFY12 567 512 54 2 59 54 5 10.4 10.5 8.9
% chg 38.9 35.7 28.9 32.1 35.3 (3.1)
FY2011 2,948 2,648 271 29 394 365 29 13.4 13.8 10.7
FY2010 1,846 1,593 179 73 239 210 29 12.9 13.2 16.3
% chg 59.7 66.2 51.6 64.9 73.9 (0.0)
SMR performance impacted by start-up costs related to new facilities: SMR reported a 7.6% yoy increase in net sales to 201mn in 1QFY2012; however, due to favourable currency movement, revenue grew by 19.6% yoy in rupee terms. The companys operating margin declined sharply by 210bp yoy to 5.1%, led by start-up costs related to two new facilities at Hungary and Brazil. The new plants in Hungary and Brazil have started production on a trial basis and ramp-up is expected to start from 3QFY2012. Once the ramp-up in volumes is achieved, the margin is expected to return to normal levels. Net profit at SMR fell to `2.7cr in 1QFY2012 from `12.7cr in 1QFY2011, largely led by operating margin contraction.
Exhibit 15: SMR performance

(` cr) Net sales EBITDA EBITDA margin (%) Depreciation PBT Minority share PAT
1QFY12 1,293 66.1 5.1 30.3 29.2 3.4 2.7
1QFY11 1,081 77.9 7.2 30.3 41.2 13.6 12.7
% yoy chg 19.6 (15.2)
4QFY11 1,303 99.6 7.6 37.5
% qoq chg (0.8) (33.6)
(29.1) (78.8)
59.7 16.2 13.4
(51.1) (79.8)
Conference call Key highlights

MSSL has invested US$85mn in three new plants in Hungary, Brazil and South Africa. Trial runs at these plants have already begun and ramp-up is expected to start from 3QFY2012. Management has guided that the margin at SMR would return to normal levels in the next two quarters. Current order book at SMR stands at 800mn and execution is expected to begin from 2QFY2012. Capital expenditure of ~`650cr has been planned for FY2012.
July 29, 2011
Investment arguments
Maintaining its leadership position: MSSL is a leader in wire harnessing, controlling over 65% of the domestic passenger vehicle (PV) market and around 48% market share in the domestic rear view mirror market. The company is now focusing on the supply of high-level assemblies and modules (MSSL is a key supplier for the recently launched Ford Figo), where margins are comparatively high. MSSL is also increasing its content per car in a bid to diversify its product portfolio. The company is laying emphasis on its global product plan (GPP), where it is looking at setting up joint ventures with leading tier-I suppliers to upgrade its technology base and bolster its clientele. SMR turns positive at PAT level in FY2010: During FY2009, MSSL acquired a global company in the business of rear view mirrors from Visiocorp PLC, now known as Samvardhana Motherson Reflectec (SMR). Post the recent acquisition, the company now controls around 25% of the global rear view mirror market. SMR has shown a substantial margin expansion in the last 23 quarters and has bagged potential orders of about 800mn to be supplied over the life of the new models, which would be launched in CY2011. MSSL is gradually progressing towards achieving its target of around 8% EBITDA margin at the SMR front. The company stands by its resolve to improve EBITDA and generate good RoCE.
July 29, 2011
Exhibit 16: Five-year milestone set in FY2000

To cross `10bn in revenue by FY2005 To attain RoCE of 40% Not more than 25% from one customer To achieve 30% of sales from outside India To achieve dividend payout of 40% A chieved `10.2bn A chieved RoCE of 39% L a rgest customer constituted 27% of total turnover A chieved 29% from exports A chieved payout ratio 43%
Exhibit 17: Five-year milestone set in FY2005

To cross US $1bn in revenue by FY2010 To achieve 60% of sales from outside India Not more than 20% from one customer To strive to maintain business RoCE of 40% To achieve dividend payout of 40% on consolidated profit To achieve US $1.5bn A chieved over 65% of sales from outside India L argest customer constituted 15% of total turnover RoC E 37% standalone & 22% consolidated basis A chieved payout ratio of 23% for FY2010
Exhibit 18: MSSLs targets for FY2015

Ma nagement Ou r view
To cross US $5bn in revenue on a consolidated basis To attain RoCE of 40% on a consolidated basis To achieve 70% of sales from outside India To achieve dividend payout of 40% of consolidated profit To increase reach from 21 countries to 26 countries
C a n be achieved as it has a strong execution track record C o uld be a potential upside risk to o ur EBITDA margins Requires turnaround in the o verseas market Will offer potential returns to in vestors Th rough JVs and acquisitions a cross geographies
Outlook and valuation

We believe execution of orders at SMR from OEs such as BMW, Volkswagon, and Daimler will help MSSL deliver volume and revenue growth going ahead. We are revising our FY2012 earnings estimates downwards on account of margin pressures at SMR, but we believe operating leverage benefits due to pick-up in order execution will help MSSL to restore its margin in 2HFY2012.
Exhibit 19: Change in estimates

Y/E March (` cr) Net sales OPM (%) EPS Earlier Estimates FY2012E 9,866 10.8 11.6 FY2013E 11,358 10.9 13.7 Revised Estimates FY2012E 9,866 10.2 10.4 FY2013E 11,358 10.9 13.9 % chg FY2012E (59)bp (10.7) FY2013E 5bp 1.3
We are not factoring in the acquisition of Peguform GmbH in our estimates currently, as we wait for the complete consolidation to take place. We expect MSSL to deliver a 16.5% and 17.3% CAGR in top line and bottom line, respectively, over FY201113E. At `230, MSSL is trading at 22.2x FY2012E and 16.6x FY2013E earnings. We recommend Accumulate on the stock with a target price of `250, valuing the company at 18x FY2013E earnings.
July 29, 2011
Exhibit 20: Key assumptions

Y/E March (` cr) Mirror Wiring Harness Group Polymer Group Rubber, Metals and other parts Total net sales % yoy growth Mirror Wiring Harness Group Polymer Group Rubber, Metals and other parts Total sales % of Total sales Mirror Wiring Harness Group Polymer Group Rubber, Metals and other parts Total sales
FY2008 1,335 437 256 2,028 36.2 11.3 65.5 32.8 65.8 21.5 12.6 100.0
FY2009 364 1,568 449 215 2,596 17.4 2.7 (15.9) 28.0 14.0 60.4 17.3 8.3 100.0
FY2010 4,153 1,810 561 178 6,702 1,040 15.5 25.0 (17.2) 158.2 62.0 27.0 8.4 2.7 100.0
FY2011E 4,983 2,299 718 175 8,176 20.0 27.0 28.0 (1.7) 22.0 61.0 28.1 8.8 2.1 100.0
FY2012E 5,856 2,759 862 175 9,651 17.5 20.0 20.0 18.0 60.7 28.6 8.9 1.8 100.0
FY2013E 6,734 3,200 1,017 175 11,126 15.0 16.0 18.0 15.3 60.5 28.8 9.1 1.6 100.0
Exhibit 21: Angel v/s consensus forecast

Angel estimates FY12E Total operating income (` cr) EPS (`)
Source: Bloomberg, Angel Research
Consensus FY12E 9,803 12.4 FY13E 11,624 15.5
Variation (%) FY12E 0.6 (16.6) FY13E (2.3) (10.5)
FY13E 11,358 13.9
9,866 10.4
July 29, 2011
Exhibit 22: One-year forward P/E band

(`) 300 250 200 150 100 50 0 Price (`) 7x 12x 17x 22x
Exhibit 23: One-year forward P/E chart

(x) 30 25 20 15 10 5 0 One-yr forward P/E Five-yr average P/E
Jun-06
Jan-06
Aug-05
Apr-07
Jan-09
Jun-09
Nov-06
Nov-09
Feb-08
Apr-10
Sep-07
Sep-10
Feb-11 Feb-11
Jul-08
Feb-05
Feb-10
Sep-03
Sep-09
Jul-05
May-07
Dec-06
Jan-06
Jun-06
Aug-04
Mar-04
Nov-07
Mar-09
Aug-10
Apr-03
Apr-08
Oct-08
Jan-11
Jul-11
Exhibit 24: One-year forward EV/EBITDA band

(` cr) 16,000 14,000 12,000 10,000 8,000 6,000 4,000 2,000 0 EV (` cr) 4x 7x 10x 13x
Exhibit 25: One-year forward EV/EBITDA chart

(x) 18 16 14 12 10 8 6 4 2 0 One-yr forward EV/EBITDA Five-yr average EV/EBITDA
Feb-08
Sep-07
Jul-08
Sep-10
Feb-07
Jul-06
May-04
May-10
Jul-11
Dec-08
Jun-06
Dec-05
Aug-05
Dec-10
Jan-06
Apr-07
Jun-09
Aug-07
Nov-06
Mar-08
Nov-04
Nov-09
Exhibit 26: Auto Ancillary Recommendation summary

Company Amara Raja Automotive Axle Bharat Forge* Bosch India
# ^
Reco. Accumulate Under Review Accumulate Neutral Neutral Neutral Accumulate Accumulate
#
CMP (`) 239 438 329 7,090 155 1,348 230 33
Tgt. price (`) 257 351 250 35
Upside (%) 7.7 6.7 8.6 6.4
P/E (x) FY12E 11.6 11.5 17.5 23.0 19.1 13.8 22.2 8.6 FY13E 10.2 9.8 14.1 20.8 16.6 12.6 16.6 7.5
EV/EBITDA (x) FY12E 6.6 6.4 9.2 13.4 11.7 7.9 9.5 4.1 FY13E 5.6 5.4 7.4 11.6 9.8 6.9 7.7 3.6
RoE (%) FY12E 23.3 26.2 20.4 18.9 23.0 25.0 27.3 9.5 FY13E 21.5 25.0 21.3 17.7 22.4 22.1 30.9 10.3
Nov-09
Apr-03
Oct-03
Oct-08
Apr-09
Apr-10
Jun-05
FY11-13E EPS CAGR (%) 17.3 24.1 35.3 11.6 12.0 21.0 17.3 (3.5)
Exide Industries FAG Bearings Subros Motherson Sumi*
Source: Company, Angel Research; Note: * Consolidated results; # December year end; ^ September year end
July 29, 2011
10
Jul-11
Jul-11
Profit and loss statement (Consolidated)

Y/E March (` cr) Gross sales Less: Excise duty Net Sales Other Operating Income Total operating income % chg Total Expenditure Net Raw Materials Other Mfg costs Personnel Other EBITDA % chg (% of Net Sales) Depreciation & Amortisation EBIT % chg (% of Net Sales) Interest & other Charges Other Income (% of PBT) Recurring PBT % chg Extraordinary Items PBT Tax (% of PBT) PAT (reported) Less: Minority interest (MI) PAT after MI (reported) Adj. PAT % chg (% of Net Sales) Basic EPS (`) Fully Diluted EPS (`) % chg FY08 2,272 244 2,028 24 2,052 33.1 1,755 1,124 142 247 242 297 26.4 14.5 85 212 24.7 10.5 29 43 20.5 226 39.4 19 207 51 24.7 175 (3) 178 159 22.9 7.8 4.5 4.1 22.9 FY09 2,783 188 2,596 44 2,640 28.7 2,356 1,549 141 344 322 283 (4.6) 10.7 109 174 (17.9) 6.7 38 120 47.0 256 13.1 1 255 35 13.6 221 45 176 175 10.3 6.7 4.9 4.5 10.3 FY10 6,854 151 6,702 222 6,924 162.3 6,375 4,166 319 1,200 690 549 93.6 7.9 260 289 65.5 4.3 63 111 32.6 336 31.5 (5) 341 109 32.0 227 (9) 236 241 37.8 3.6 6.4 6.2 37.8 FY11E 8,364 188 8,176 195 8,371 20.9 7,449 5,146 328 1,259 716 922 68.1 11.0 246 676 134.2 8.3 58 13 2.1 631 87.7 631 188 29.8 443 52 391 391 62.0 4.8 10.1 10.1 62.0 FY12E 247 215 17.9 6,080 405 1,496 878 1,006 9.1 10.2 283 723 7.0 7.5 82 17 2.5 657 4.1 657 204 31.0 454 52 401 401 2.7 4.2 10.4 10.4 2.7 FY13E 285 232 15.1 6,987 467 1,725 940 1,239 23.1 10.9 321 918 26.9 8.2 82 20 2.3 855 30.1 855 265 31.0 590 52 538 538 34.0 4.8 13.9 13.9 34.0 9,899 11,411 9,651 11,126 9,866 11,358 8,860 10,119
July 29, 2011
11
Balance sheet (Consolidated)

Y/E March (` cr) SOURCES OF FUNDS Equity Share Capital Reserves & Surplus Shareholders Funds Minority Interest Total Loans Deferred Tax Liability Total Liabilities APPLICATION OF FUNDS Gross Block Less: Acc. Depreciation Net Block Capital Work-in-Progress Goodwill Investments Current Assets Cash Loans & Advances Other Current liabilities Net Current Assets Mis. Exp. not written off Total Assets 949 346 603 28 5 904 95 190 618 531 373 42 1,052 2,947 1,599 1,349 176 55 1,884 277 383 1,224 1,597 286 27 1,893 3,182 1,727 1,455 181 47 2,097 343 310 1,444 1,592 505 2 2,190 3,893 1,974 1,919 117 63 2,332 241 409 1,682 1,904 428 2,528 4,531 2,257 2,274 136 81 2,450 36 483 1,931 2,231 219 2,710 4,945 2,578 2,366 148 93 3,044 263 556 2,224 2,539 505 3,113 36 500 536 23 489 4 1,052 36 748 783 200 895 15 1,893 37 1,127 1,165 203 818 4 2,190 39 1,366 1,405 203 918 3 2,528 39 1,498 1,537 203 968 3 2,710 39 1,900 1,940 203 968 3 3,113 FY08 FY09 FY10 FY11E FY12E FY13E
July 29, 2011
12
Cash flow statement (Consolidated)

Y/E March (`` cr) Profit before tax Depreciation Change in Working Capital Less: Other income Direct taxes paid Cash Flow from Operations (Inc.)/Dec. in Fixed Assets (Inc.)/Dec. in Investments (Inc.)/Dec. in loans and advances Other income Cash Flow from Investing Issue of Equity Inc./(Dec.) in loans Dividend Paid (Incl. Tax) Others Cash Flow from Financing Inc./(Dec.) in Cash Opening Cash balances Closing Cash balances FY08 207 85 37 115 51 163 (0) (55) 43 12 29 42 (128) (45) (93) 99 95 FY09 255 109 (430) (221) 35 120 (50) (192) 120 406 56 1,454 1,916 (232) 95 277 FY10 341 260 231 452 109 271 (239) 8 74 111 (46) 2 (77) 76 (159) (158) 66 277 343 FY11E 631 246 (45) (50) 188 695 (647) (16) (101) 13 (751) 1 100 77 (224) (46) (102) 343 241 FY12E 657 283 (72) 40 204 624 (657) (18) (9) 17 (667) 50 113 (325) (162) (205) 241 36 FY13E 855 321 10 (16) 265 937 (426) (12) (54) 20 (473) 136 (374) (238) 227 36 263
(197) (2,146)
(210) (2,268)
July 29, 2011
13
Key ratios
Y/E March Valuation Ratio (x) P/E (on FDEPS) P/CEPS P/BV Dividend yield (%) EV/Sales EV/EBITDA EV / Total Assets Per Share Data (`) EPS (Basic) EPS (fully diluted) Cash EPS DPS Book Value DuPont Analysis EBIT margin Tax retention ratio Asset turnover (x) RoIC (Post-tax) Cost of Debt (Post Tax) Leverage (x) Operating RoE Returns (%) RoCE (Pre-tax) Angel RoIC (Pre-tax) RoE Turnover ratios (x) Asset Turnover (Gross Block) Inventory / Sales (days) Receivables (days) Payables (days) WC cycle (ex-cash) (days) Solvency ratios (x) Net debt to equity Net debt to EBITDA Interest Coverage 0.7 1.3 7.4 0.7 2.0 4.5 0.4 0.8 4.5 0.4 0.7 11.7 0.6 0.8 8.8 0.3 0.5 11.2 2.4 44 51 56 42 1.4 63 66 113 20 2.3 35 38 69 5 2.4 34 37 64 8 2.3 35 35 64 7 2.4 36 35 65 7 22.2 22.3 34.7 11.8 10.8 26.6 14.1 15.6 24.8 28.7 29.6 30.4 27.6 27.1 27.3 31.5 32.2 30.9 10.5 0.8 2.4 18.9 4.6 0.8 30.5 6.7 0.9 2.1 11.9 4.8 0.7 17.1 4.3 0.7 4.0 11.7 5.0 0.5 15.1 8.3 0.7 4.1 23.5 4.7 0.4 31.2 7.5 0.7 4.0 20.6 6.0 0.5 27.8 8.2 0.7 4.1 23.4 5.9 0.4 30.8 4.5 4.1 7.3 1.3 15.0 4.9 4.5 9.3 1.9 22.0 6.4 6.2 13.4 1.8 31.0 10.1 10.1 16.4 2.5 36.2 10.4 10.4 17.7 3.0 39.6 13.9 13.9 22.2 3.0 50.0 51.5 31.5 15.3 0.6 4.2 32.1 8.8 46.7 24.8 10.5 0.6 3.4 33.6 5.0 35.7 17.2 7.4 0.8 1.4 17.4 4.3 22.8 14.0 6.4 1.1 1.1 10.3 3.8 22.2 13.0 5.8 1.3 1.0 9.5 3.6 16.6 10.4 4.6 1.3 0.8 7.7 3.1 FY08 FY09 FY10 FY11E FY12E FY13E
July 29, 2011
14
Research Team Tel: 022 - 3935 7800
E-mail: research@angelbroking.com
Website: www.angelbroking.com
DISCLAIMER
This document is solely for the personal information of the recipient, and must not be singularly used as the basis of any investment decision. Nothing in this document should be construed as investment or financial advice. Each recipient of this document should make such investigations as they deem necessary to arrive at an independent evaluation of an investment in the securities of the 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. Angel Broking Limited, its affiliates, directors, its proprietary trading and investment businesses may, from time to time, make investment decisions that are inconsistent with or contradictory to the recommendations expressed herein. The views contained in this document are those of the analyst, and the company may or may not subscribe to all the views expressed within. Reports based on technical and derivative analysis center on studying charts of a stock's price movement, outstanding positions 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. 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, but we do not represent that it is accurate or complete and it should not be relied on as such, as this document is for general guidance only. Angel Broking Limited or any of its affiliates/ group companies shall not be in any way responsible for any loss or damage that may arise to any person from any inadvertent error in the information contained in this report. Angel Broking Limited has not independently verified all the information contained within this document. Accordingly, we cannot testify, nor make any representation or warranty, express or implied, to the accuracy, contents or data contained within this document. While Angel Broking Limited endeavours 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. This document is being supplied to you solely for your information, and its contents, information or data may not be reproduced, redistributed or passed on, directly or indirectly. Angel Broking Limited and its 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. Neither Angel Broking Limited, nor its directors, employees or affiliates shall be liable for any loss or damage that may arise from or in connection with the use of this information. Note: Please refer to the important `Stock Holding Disclosure' report on the Angel website (Research Section). Also, please refer to the latest update on respective stocks for the disclosure status in respect of those stocks. Angel Broking Limited and its affiliates may have investment positions in the stocks recommended in this report.
Disclosure of Interest Statement Motherson Sumi Systems 1. Analyst ownership of the stock No 2. Angel and its Group companies ownership of the stock No 3. Angel and its Group companies' Directors ownership of the stock No 4. Broking relationship with company covered No Note: We have not considered any Exposure below `1 lakh for Angel, its Group companies and Directors.
Ratings (Returns) :
Buy (> 15%) Reduce (-5% to 15%)
Accumulate (5% to 15%) Sell (< -15%)
Neutral (-5 to 5%)
July 29, 2011
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1QFY2012 Result Update | Auto Ancillary

July 29, 2011