Initiating Coverage | Logistics
January 5, 2016
Navkar Corporation
BUY
CMP
`208
Spreading its Wings
Target Price
`265
Navkar Corporation (NCL) is one of the largest container freight station (CFS) at JNPT
Investment Period
12 Months
and also one of the three CFS with rail connectivity that provides it an edge over its
peers. The current capacity stands at 310,000 TEUs and it has amongst the highest
market share at JNPT mainly owing to this rail advantage. Post the IPO, the company
Stock Info
is in a massive expansion mode and will be increasing its capacity at Somathane CFS
Sector
Logistics
by 252,889 TEUs to 472,889 TEUs and is also coming up with an inland container
Market Cap (Rs cr)
2,962
depot (ICD) at Vapi with capacity of ~474,000 TEUs and an adjacent Logistics Park.
Net Debt
549
Upcoming ICD to provide an edge: The Vapi region has a huge market potential as it
Beta
0.6
is a well developed industrial area. As per the Management and industry sources, the
52 Week High / Low
221 / 151
Vapi region accounts for close to 27% of container volumes at JNPT. We believe that
Avg. Daily Volume
254,152
ICD (with rail connectivity) will enable the NCL to garner a good portion of the
business from the region. At present, imports headed for the region have to get
Face Value (Rs)
10
custom cleared at CFS/ICD at JNPT and are then transported via road. With rail
BSE Sensex
25,623
transport being a more economical option compared to road, the imports should head
Nifty
7,791
directly to Vapi ICD. As for exports from Vapi region, a large portion (~60%) is stuffed at
Reuters Code
NA
factory and transported to JNPT. However, the balance 40% or ~170,000 TEUs (less-than-
Bloomberg Code
[email protected]
container load [LCL]) which is being transported via road and consolidated at JNPT, can be
consolidated at the ICD. Once the scale advantages kick in and given its rail advantage,
the company can also cater to some portion of bulkier factory stuffed cargo.
Shareholding Pattern (%)
Capacity enhancement at Somathane to aid revenue growth: The company has
Promoters
72.9
managed to outgrow its peers in the region by attracting volumes on the back of its
rail advantage. NCL has been facing capacity constraints at JNPT and is forced to
MF / Banks / Indian Fls
15.3
reject certain bulk commodities like PTA, Fiber, Scrap, Marble, etc. Although the
FII / NRIs / OCBs
6.2
current South Gujarat volume of NCL (~70,000 TEUs) is expected to shift to the Vapi
Indian Public / Others
5.7
ICD, the company will now be able to handle these bulk commodities and effectively
utilize its extended capacity. NCL will now also be handling domestic traffic, which it
had been rejecting earlier, thus aiding growth.
Logistics park at Vapi to be an additional revenue driver: The logistics park will be a
Abs. (%)
3m 1yr 3yr
one-stop solution for importers and exporters, providing a host of warehousing and
Sensex
(0.2)
(4.9)
33.6
other value added services. Its close proximity to one of the largest industrial clusters in
NCL
33.3
NA NA
India augurs well for NCL.
Outlook and Valuation: We estimate NCL to post a revenue CAGR of ~26% and PAT
CAGR of ~31% over FY2015-18E. We have factored in lower utilisation levels of
Historical share price chart
33.2% and 42.2% for FY2017E and FY2018E respectively. At current levels, the stock
225
is trading at 18.0x its FY2018E earnings. Historically, NCL has consistently grown at
JNPT and increased its utilisation from 68% in FY2012 to 87% in FY2015 by
200
leveraging on its rail advantage during periods where JNPT posted flattish volume
growth. Going forward, we expect NCL’s utilizations to increase; we expect NCL to be
175
able to garner a good chunk of business over the next three to four years due to its rail
advantage at both JNPT and Vapi. Moreover, the capacity addition at JNPT port serves
150
as an additional long-term trigger for the stock. We initiate coverage on the stock with
125
a Buy recommendation and target price of `265 (23.0x FY2018E EPS), indicating an
upside of ~27% in the stock price from the present levels.
Key Financials
Y/E March (` cr)
FY2014 FY2015
FY2016E
FY2017E FY2018E
Source: Company, Angel Research
Net sales
349
329
365
436
664
% chg
4.8
(5.9)
11.2
19.3
52.2
Adj. Net profit
90
73
80
84
164
% chg
58.7
(18.7)
9.9
4.3
95.8
EBITDA margin (%)
35.5
40.7
38.3
37.5
37.5
Amarjeet S Maurya
EPS (`)
6.3
5.1
5.6
5.9
11.5
022-40003600 Ext: 6831
P/E (x)
32.9
40.5
36.8
35.3
18.0
[email protected]
P/BV (x)
6.9
3.9
2.3
2.2
1.9
RoE (%)
21.0
9.7
6.3
6.1
10.7
RoCE (%)
12.8
9.1
6.7
7.5
11.4
Milan Desai
EV/Sales (x)
9.7
10.7
8.9
7.6
5.0
022-40003600 Ext: 6846
EV/EBITDA (x)
27.2
26.2
23.3
20.4
13.2
[email protected]
Source: Company, Angel Research, Note: CMP as of January 4, 2016
Please refer to important disclosures at the end of this report
1
Navkar Corporation | Initiating Coverage
Investment Arguments
Vapi ICD and logistics park, an upper hand on competition
NCL is in the process of setting up an ICD and a fully-integrated logistics park at
Umergaon, Valsad district (near Vapi). The ICD will come up at an outlay of
The ICD will come up at an outlay of
`380cr (funded via debt and internal accruals) and will have a total capacity of
`380cr and will have a total capacity of
~474,000 TEUs. The ICD is expected to be fully operational with a rail link by
~474,000 TEUs.
June 30, 2016. The company will cater to the South Gujarat EXIM traffic of JNPT
through the ICD.
Exhibit 1: JNPT volume break-up (TEUs)
JNPT
4,480,000
Teus/year
Filled (80%)
Empty(20%)
3,584,000
896,000
Teus/year
Teus/year
Imports(56%)
Exports (44%)
2,007,040
1,576,960
Teus/year
Teus/year
CFS (40%)
Factory (60%)
630,784
946,176
Teus/year
Teus/year
Source: Company, Angel Research
Early moreover advantage in South Gujarat to help capture export market: Of the
total export volume (Full Containers) of JNPT, ~27% or ~426,000 TEUs arises
from South Gujarat and ~170,000 TEUs goes through CFS. At the moment, NCL
Of the total export volume (full
does ~30,000 containers from the area around its proposed ICD which suggests
containers) of JNPT,
~27% or
that it can capture a lion’s share of the balance ~140,000 TEUs on account of
~426,000 TEUs arises from South
being the only ICD present in the region with a rail link. Besides Rail transport
Gujarat and
~170,000 TEUs goes
would enable the company to transport factory stuffed cargo in a more economical
through CFS
and time bound manner, thus making rail a preferred mode of transport (six
hours’ distance between Vapi ICD to JNPT via rail vs ~12 hours by road). The ICD
which caters to South Gujarat, will enable consolidation of LCL cargo thus
enabling the company to capture a good portion of Export volume arising from the
region.
January 5, 2016
2
Navkar Corporation | Initiating Coverage
Exhibit 2: South Gujarat volume break-up (TEUs)
Full Containers
(South Gujarat)
967,680
Teus/year
Export (44%)
Import (56%)
425,779
541,901
Teus/year
Teus/year
Factory Stuffed
CFS (40%)
(60%)
170,312
255,468
Teus/year
Teus/year
Source: Company, Angel Research
Potential to Capture capture import market of South Gujarat: As for Imports, of the
total containers volume at JNPT (Full Containers), ~5,42,000 TEUs of import
Of the total container volume at JNPT
traffic is South Gujarat bound, which should more or less translate to CFS/ICD
(full containers), ~5,42,000 TEUs of
volumes. We believe that NCL should avail to an early mover advantage in the
import traffic is South Gujarat bound,
region and successfully utilize the new facility. Additionally, the JNPT port is
which should more or less translate to
working at peak capacities and is in the process of doubling its capacity over the
CFS/ICD volumes
next few years which should boost container volumes of South Gujarat. However,
we have not factored in any benefits from this capacity expansion and proposed
satellite Wadhwan port in Dahanu which will be four times JNPT’s current capacity.
Logistics park would provide additional trigger for NCL
As for the logistics park, the company will be incurring a capex of ~`315cr which
will be funded through IPO proceeds. The facility will be a one-stop solution for
importers and exporters, providing a host of warehousing and other value added
services including cold storage facility for perishable goods, a container
maintenance, repair, servicing and cleaning yard, an empty container yard, and
garage facility with a workshop for maintenance of vehicles.
The company will operate this logistics park through three models - (1) value basis,
(2) space basis and (3) quantity basis. Considering that both the ICD and the
logistics park are in close proximity to one of the largest industrial clusters in India,
we expect both the ICD and the logistics park to witness a gradual improvement in
utilisation levels over the longer run.
January 5, 2016
3
Navkar Corporation | Initiating Coverage
Bounce in utilisation rate to trigger strong growth over the long run
NCL is currently in an investment phase with capacity expansion taking place at
Somathane CFS and new ICD coming up in Vapi. As a result, the blended
utilisation levels are expected to remain at low level initially. However, this places
the company in an advantageous position from a longer term perspective owing to
macro level factors working in the company’s favour. As utilisation levels pick up,
NCL will generate strong cash flows, which will enable it to further expand its
presence.
Exhibit 3: Capacity and utilisation details of NCL
FY2012
FY2013
FY2014
FY2015
FY2016E
FY2017E
FY2018E
CFS I (Ajivali)
25,000
25,000
25,000
25,000
25,000
25,000
CFS II
65,000
65,000
65,000
65,000
65,000
65,000
CFS (Somathane)
220,000
220,000
220,000
220,000
220,000
220,000
CFS (Somathane-New)
252,889
252,889
Valsad district (near vapi) - ICD- NTL
474,000
474,000
474,000
Total Capacity (TEUs)
310,000
310,000
310,000
310,000
7,84,000
10,36,889
10,36,889
Total Capacity Utilized (TEUs)
210,800
220,182
244,128
268,836
291,400
344,610
437,802
yoy growth (%)
4.5%
10.9%
10.1%
8.4%
18.3%
27.0%
Capacity Utilization
68.0%
71.0%
78.8%
86.7%
94.0%*
33.2%
42.2%
Logistics park at Valsad (near Vapi)
4,400,000
4,400,000
(11,00,000 Sq. ft)
Capacity Utilization
20%
Source: Company, Angel Research; Note: *Utilisation excluding Vapi ICD
Capacity expansion at JNPT to compliment capacity expansion at
Somathane and Vapi ICD
As mentioned above, JNPT has been operating at peak capacities, thereby
favourably impacting CFS volumes in the region. However, the port has initiated
the process of expanding its capacity from
4,500,000 TEUs at present to
JNPT has initiated the process of
10,000,000 TEUs over the next few years. Largely, 100% of import volumes get
expanding its capacity from 45,00,000
converted to CFS volumes while 30%-40% of export volumes go through CFS/ICD.
TEUs at present to 1,00,00,000 TEUs
We believe that NCL is uniquely placed to benefit from the capacity addition at
over the next few years….compliments
JNPT as it operates at a utilization level of ~87% (as of FY2015), and will be
Somathane expansion and upcoming
enhancing its capacity at Somathane to cater to the expected increase in container
ICD at Vapi
volumes at JNPT. Currently, the Somathane CFS has a capacity of handling
220,000 TEUs, and the company is planning to install a Rubber Tyred Gantry
Crane (RTGC), which will increase the capacity to 472,889 TEUs. The company
will be incurring an incremental capex of `115cr which will be funded via IPO
proceeds. The installation is expected to be in operation by 2HFY2017.
NCL has increased its utilization from 68.0% in FY2012 to current levels and we
believe that it can continue with the trend of outperforming its peers in the region
and efficiently utilize its extended capacity. Additionally, the capacity expansion at
January 5, 2016
4
Navkar Corporation | Initiating Coverage
JNPT augurs well for volumes at the upcoming ICD at Vapi by way of higher
import and export volume for South Gujarat.
Exhibit 4: Incremental capacity addition at JNPT
12,000
10,000
10,000
8,000
6,000
4,500
4,000
2,000
-
Current Capacity
Future Capacity
Source: Company, Angel Research
Strong position at JNPT
NCL, till date has its operations solely at the JNPT port, which happens to be the
largest container port in India (containers account for the highest portion in the
total cargo handled at JNPT). NCL has exhibited a strong growth over the past
three years, thereby steadily growing its market share at JNPT. As per our
reckoning, NCL has increased its market share from 10.8% in FY2012 to 13.4% in
FY2015. This came at a time where volumes at JNPT have been flat as the port
operates at peak capacity levels in terms of container TEUs.
Exhibit 5: Historical Break-up of JNPT traffic
Exhibit 6: Vol. at major ports incl. Mundra & Pipavav
70
3
5,000
45.0
3
2
3
3
3
4,500
38.9
40.0
60
2
2
5
5
4
4
5
4
4,000
2
5
35.0
50
1
3,500
30.0
2
3
40
3,000
2
3
23.7
25.0
30
2
2,500
20.0
2,000
16.9
20
15.0
1,500
13.5
6.9
10
1,000
10.0
29
34
41
52
51
53
56
58
58
55
57
0
500
5.0
-
-
JNPT
Mundra
Chennai
Pipavav
Others
Container (Tonnes)
Petroleum, Oil Lubricants
Others
Container TEUs - FY2015 (LHS)
Share in Volumes (RHS)
Source: Ministry of Shipping, Angel Research
Source: Ministry of Shipping, Angel Research
Over FY2012-15, the company managed to post a volume CAGR of 8.4% while
JNPT container volumes posted a flattish CAGR of 1.1%. The volume growth and
market share gains can be attributed to NCL being one of the only three PFT
operators at the port, the others being Container Corp (CONCOR) and Hind
Terminals.
January 5, 2016
5
Navkar Corporation | Initiating Coverage
Exhibit 7: NCL gaining market share at JNPT
Exhibit 8: JNPT operating at peak capacity
2,500
16
4,600
104
13.4
13.0
14
102.9
4,500
102
2,000
11.5
101.7
101.4
12
4,400
10.8
99.1
100
4,300
99.2
10
1,500
98
4,200
8
96.7
4,100
96
1,000
6
4,000
94.1
94
3,900
4
92
500
3,800
2
3,700
90
211
220
244
269
-
-
3,600
88
FY2012
FY2013
FY2014
FY2015
FY09
FY10
FY11
FY12
FY13
FY14
FY15
Est. JNPT CFS Vol. (LHS)
NCL Vol. (LHS)
NCL Market Share
JNPT Container Volume (LHS)
Capacity Utilization (RHS)
Source: Company, Angel Research
Source: IPA, Angel Research
The PFT advantage allows NCL to
The PFT advantage allows NCL to reduce delays in transportation of containers
reduce delays in transportation of
between Somathane CFS and JNPT during times of congestion and increase its
containers between Somathane CFS
container throughput. This is evident in the growing volumes and utilization post
and JNPT and increase its container
the PFT being operational in 2012. For FY2015, of the total container traffic
throughput.
handled by the company, ~16% was transported over the rail network and this
has increased to ~20% in 1HFY2016. This contribution is further expected to
improve on account of a) capacity enhancement at Somathane CFS, b) third track
now being operational (NCL had two tracks operational in the past year) and c)
capacity expansion at JNPT over the next few years. We believe that the company
can capitalize on its strong position at JNPT and further outperform its peers which
have lagged NCL in the past few years.
Exhibit 9: JNPT CFS Market Share
Exhibit 10: Capacity utilization at JNPT
100.0
86.7
90.0
NCL, 13.4%
80.0
70.0
62.0
Others, 70.8%
60.0
Allcargo
Logistics, 4.7%
50.0
40.0
32.8
30.0
20.0
Gateway
Distriparks,
10.0
11.1%
-
NCL
Allcargo Logistics
Gateway Distriparks
Source: Company, Angel Research
Source: Company, Angel Research
January 5, 2016
6
Navkar Corporation | Initiating Coverage
Outlook and Valuation
We estimate NCL to post a revenue CAGR of ~26% and PAT CAGR of ~31% over
FY2015-18E. We have factored in lower utilisation levels of 33.2% and 42.2% for
FY2017E and FY2018E respectively. At current levels, the stock is trading at 18.0x its
FY2018E earnings. Historically, NCL has consistently grown at JNPT and increased its
utilisation from 68% in FY2012 to 87% in FY2015 by leveraging on its rail advantage
during periods where JNPT posted flattish volume growth. Going forward, we expect
NCL’s utilizations to increase; we expect NCL to be able to garner a good chunk of
business over the next three to four years due to its rail advantage at both JNPT and
Vapi. Moreover, the capacity addition at JNPT port serves as an additional trigger for
the stock. We initiate coverage on the stock with a Buy recommendation and target
price of `265 (23.0x FY2018E EPS), indicating an upside of ~27% in the stock price
from the present levels.
Exhibit 11: Peer Valuations
Sales
OPM
PAT
EPS
ROE
P/E
P/BV
EV/Sales
EV/EBITDA
` Cr
(%)
` Cr
`
(%)
(x)
(x)
(x)
(x)
NCL
FY2018E
664
37.5
164
11.5
10.7
18.0
1.9
5.0
13.2
Gateway Distriparks
FY2018E
1,596
28.3
251
23.1
20.4
13.6
2.6
2.3
8.2
Allcargo Logistics
FY2018E
7,737
9.6
441
19.1
15.8
10.4
1.7
0.7
7.0
CONCOR
FY2018E
8,869
22.1
1,347
69.1
13.7
19.5
2.7
2.7
12.1
Source: Company, Bloomberg, Angel Research
January 5, 2016
7
Navkar Corporation | Initiating Coverage
The downside risks to our estimates include
The company is exposed to currency risk with foreign currency debt of `194cr
on its balance sheet (as of 31-03-2015). The company uses dollar call options
to hedge against dollar appreciation and as per the term, the foreign currency
debt will get converted to INR debt upon dollar rate hitting the strike price. In
this event, the interest rate on the INR debt will be at ~12%.
Currently the company is paying lower taxes, with it getting tax benefits for its
CFS operations. Once the exemption period is over, the company will have to
pay higher taxes, which could impact its earnings growth.
Delay in capacity expansion and lower than expected utilization of existing
CFS as well as existing players increasing their capacity at JNPT could impact
the profitability of the company. Delay in capacity enhancement at JNPT can
also impact the top-line.
The company operates a PFT at JNPT which has helped the company in
increasing its volumes. Lapse in agreement with the Indian Railways will lead
to company being unable to operate its PFT.
Company Background
NCL is a CFS operator with three CFSs, Ajivali CFS I and Ajivali CFS II at Ajivali
and Somathane. All of its CFS units are strategically located in close proximity to
the JNPT which is the largest container port in India. As of May 31, 2015, NCL’s
CFSs had an aggregate installed handling capacity of 310,000 TEUs per annum.
It has PFT which facilitates loading and unloading of cargo from container trains
operating between Somathane CFS and JNPT and to transport domestic cargo to
and from inland destinations on the Indian rail network. As of May 31, 2015, it
also owns and operates 516 trailers for the transportation of cargo between its
CFSs and the JN Port by road. The company offers services like cargo storage
facilities at CFSs, packing, labeling/bar-coding, palletizing, fumigation and other
related activities. It also provides warehousing facilities, for which, it occupies an
aggregate area of 500,000 sq ft.
Exhibit 12: CFS details
Particulars
Ajivali CFS I
Ajivali CFS II
Somathane CFS
Somathane/Ashte
Location
Ajivali village, Panvel Ajivali village, Panvel
village, Panvel
Area Custom Notified
135,156 sq. ft.
428,400 sq. ft.
1,073,224.35 sq. ft.
Operational since
May 12, 2008
May 18, 2006
May 11, 2009
Installed Capacity per
25,000 TEUs
65,000 TEUs
220,000 TEUs
annum
Bonded warehouse
-
27,641 sq. feet
33,141 sq. feet
Reefer Points
16
24
52
Temperature controlled
-
500 m
-
chambers
Authorized to handle,
Authorized to handle,
store and deliver
store and deliver
Hazardous cargo
-
hazardous cargo up to
hazardous cargo, up
the total installed
to the total installed
capacity per annum capacity per annum
Connectivity
Road
Road
Rail and road
Source: Company, Angel Research
January 5, 2016
8
Navkar Corporation | Initiating Coverage
Financial outlook
Top-line likely to clock a CAGR of ~26% over FY2015-18E
NCL has reported a net revenue CAGR of ~7% over FY2012-15 and ~19% over
Going forward, we expect NCL to
FY2010-15 on the back of improving capacity utilization which has improved from
register healthy top-line CAGR of ~26%
68.0% in FY2012 to 86.7% in FY2015. Going forward, we expect the capacity
over FY2015-18E
enhancement at Somathane CFS and ICD to add meaningfully to the top-line from
FY2017E onwards. Additionally, the logistics park which is being setup near the
ICD in Vapi is expected to contribute to the overall top-line. On the back of above
mentioned reasons, we expect NCL to post revenue CAGR of 26.4% over
FY2015-2018 to `664cr.
Exhibit 13: Projected Net Revenue growth trend
700
60.0
52.2
600
50.0
500
40.0
29.8
400
30.0
24.4
300
20.0
19.3
200
10.0
11.2
4.8
100
-
(5.9)
-
(10.0)
FY2012
FY2013
FY2014
FY2015
FY2016E FY2017E FY2018E
Revenue (LHS)
yoy growth (RHS)
Source: Company, Angel Research
EBITDA to witness a CAGR of 23% over FY2015-18E
We expect the EBITDA to post a
23.0%
We expect the EBITDA to post a 23.0% CAGR over FY2015-18E, mainly on
CAGR over FY2015-18E mainly on
account of increase in capacity at its existing CFS and with the new ICD getting
account of increase in capacity at its
operational in FY2017. We are slightly conservative on the margin front; we have
existing CFS and with the new ICD
built-in an EBITDA margin estimate of
37.5% for FY2018E on account of
getting operational in FY2017.
competition at JNPT.
Exhibit 14: Projected EBIDTA and margin trend
300
43.0
41.0
250
40.7
39.0
37.5
200
38.3
37.0
37.5
35.0
150
35.5
33.0
33.6
30.5
100
31.0
29.0
50
27.0
-
25.0
FY2012
FY2013
FY2014
FY2015
FY2016E FY2017E FY2018E
EBITDA (LHS)
Margin (RHS
Source: Company, Angel Research
January 5, 2016
9
Navkar Corporation | Initiating Coverage
Company to report healthy growth
We expect ~31% CAGR in Net Profit
With majority of the capex funded via IPO proceeds and internal accruals, we do
over FY2015-18E
not foresee any further increase in debt and therefore interest costs. Further, the
company is expected to save on the capex planned at the Somathane facility as the
company was able to agree on better terms for the purchase of equipment. We
expect the company to utilize its operating cash flows as well as capex savings to
reduce its debt and lower the interest cost. With lower interest out go and
improvement in volumes, we expect the company to post 30.9% CAGR in net profit
over FY2015-18E to `164cr.
Exhibit 15: Projected Net Profit growth trend
180
30.0
160
25.8
22.0
25.0
140
22.2
19.2
24.7
17.0
120
17.5
20.0
100
15.0
80
60
10.0
40
5.0
20
-
-
FY2012
FY2013
FY2014
FY2015
FY2016E FY2017E FY2018E
PAT (LHS)
PAT Margin (RHS)
Source: Company, Angel Research
Return ratios expected to bounce back
As the company has planned a capex of ~`810cr which will be fully operational
post 1HFY2017E, the return ratios are bound to dip initially and recover post
FY2016E as the utilization level picks up. We estimate that NCL’s ROCE will
decline to 6.7% in FY2016E and improve to 11.4% in FY2018E. With improving
profitability, we expect the ROE to improve to 10.7% in FY2018E after regressing
to 6.3% in FY2016E.
Exhibit 16: Improving ROE & ROCE
23.0
21.0
19.0
17.0
15.0
13.0
11.0
9.0
7.0
5.0
FY2013
FY2014
FY2015
FY2016E FY2017E FY2018E
ROE
ROCE
Source: Company, Angel Research
January 5, 2016
10
Navkar Corporation | Initiating Coverage
Consolidated Profit & Loss Statement
Y/E March (` cr)
FY13
FY14
FY15
FY16E
FY17E
FY18E
Total operating income
333
349
329
365
436
664
% chg
24.4
4.8
(5.9)
11.2
19.3
52.2
Total Expenditure
232
225
195
225
273
415
Operating Expenses
92
117
138
157
188
289
Purchases of Traded Goods
105
60
-
-
-
-
Personnel Expenses
17
19
22
26
34
53
Others Expenses
18
29
34
42
50
73
EBITDA
102
124
134
140
164
249
% chg
12.9
21.9
7.9
4.5
16.8
52.2
(% of Net Sales)
30.5
35.5
40.7
38.3
37.5
37.5
Depreciation& Amortisation
10
13
15
22
28
30
EBIT
92
111
119
118
135
219
% chg
11.5
21.3
6.9
(0.3)
14.4
61.7
(% of Net Sales)
27.5
31.8
36.1
32.4
31.0
33.0
Interest & other Charges
32
33
26
41
47
42
Other Income
5
4
2
10
3
3
(% of PBT)
7.3
4.7
2.3
11.4
3.3
1.7
Share in profit of Associates
-
-
-
-
-
-
Recurring PBT
64
82
94
87
92
180
% chg
21.3
28.4
15.4
(7.5)
4.8
96.9
Prior Period & Extraord. Exp./(Inc.)
-
-
-
-
-
-
PBT (reported)
64
82
94
87
92
180
Tax
7
9
7
7
8
16
(% of PBT)
11.1
10.8
7.4
8.0
8.5
9.0
PAT (reported)
57
73
87
80
84
164
Extraordinary Items
0
17
(14)
-
-
-
ADJ. PAT
57
90
73
80
84
164
% chg
58.7
(18.7)
9.9
4.3
95.8
(% of Net Sales)
17.0
25.8
22.2
22.0
19.2
24.7
Basic EPS (`)
4.0
6.3
5.1
5.6
5.9
11.5
Fully Diluted EPS (`)
4.0
6.3
5.1
5.6
5.9
11.5
% chg
20.8
58.7
(18.7)
9.9
4.3
95.8
January 5, 2016
11
Navkar Corporation | Initiating Coverage
Consolidated Balance Sheet
Y/E March (` cr)
FY13
FY14
FY15
FY16E
FY17E
FY18E
SOURCES OF FUNDS
Equity Share Capital
17
21
112
145
145
145
Reserves& Surplus
299
407
638
1,139
1,222
1,387
Shareholders’ Funds
316
428
750
1,283
1,367
1,531
Minority Interest
-
-
-
-
-
-
Total Loans
444
437
555
495
440
390
Deferred Tax Liability
21
28
33
33
33
33
Total Liabilities
781
893
1,338
1,812
1,840
1,954
APPLICATION OF FUNDS
Gross Block
651
699
1,133
1,409
1,556
1,606
Less: Acc. Depreciation
30
43
59
81
109
139
Net Block
620
656
1,073
1,328
1,447
1,467
Capital Work-in-Progress
0
44
27
27
27
27
Investments
20
20
5
5
5
5
Current Assets
156
198
253
473
385
497
Inventories
-
-
2
2
2
4
Sundry Debtors
63
76
77
87
104
158
Cash
4
1
1
191
61
56
Loans & Advances
42
45
48
55
65
100
Other Assets
47
76
126
139
153
179
Current liabilities
16
25
22
23
26
43
Net Current Assets
140
172
231
450
360
454
Deferred Tax Asset
0
1
1
1
1
1
Mis. Exp. not written off
-
-
-
-
-
-
Total Assets
781
893
1,338
1,812
1,840
1,954
January 5, 2016
12
Navkar Corporation | Initiating Coverage
Consolidated Cashflow Statement
Y/E March (` cr)
FY13
FY14
FY15
FY16E
FY17E
FY18E
Profit before tax
64
99
80
87
92
180
Depreciation
10
13
15
22
28
30
Change in Working Capital
(19)
(29)
7
(29)
(39)
(99)
Interest / Dividend (Net)
32
33
26
41
47
42
Direct taxes paid
(15)
(16)
(22)
(7)
(8)
(16)
Others
0
(17)
18
-
-
-
Cash Flow from Operations
73
82
123
114
120
136
(Inc.)/ Dec. in Fixed Assets
(89)
(93)
(209)
(276)
(147)
(50)
(Inc.)/ Dec. in Investments
(20)
-
15
-
-
-
Cash Flow from Investing
(109)
(93)
(194)
(276)
(147)
(50)
Issue of Equity
43
35
-
453
-
-
Inc./(Dec.) in loans
27
10
97
(60)
(55)
(50)
Dividend Paid (Incl. Tax)
-
-
-
-
-
-
Interest / Dividend (Net)
11
1
(27)
412
(47)
(42)
Cash Flow from Financing
38
10
71
352
(102)
(92)
Inc./(Dec.) in Cash
1
(1)
0
189
(129)
(5)
Opening Cash balances
0
2
1
1
191
61
Closing Cash balances
2
1
1
191
61
56
January 5, 2016
13
Navkar Corporation | Initiating Coverage
Key Ratios
Y/E March
FY13
FY14
FY15
FY16E
FY17E
FY18E
Valuation Ratio (x)
P/E (on FDEPS)
52.2
32.9
40.5
36.8
35.3
18.0
P/CEPS
44.3
34.4
28.9
29.0
26.4
15.3
P/BV
9.4
6.9
3.9
2.3
2.2
1.9
Dividend yield (%)
0.0
0.0
0.0
0.0
0.0
0.0
EV/Sales
10.1
9.7
10.7
8.9
7.6
5.0
EV/EBITDA
33.2
27.2
26.2
23.3
20.4
13.2
EV / Total Assets
4.2
3.7
2.6
1.8
1.8
1.6
Per Share Data (`)
EPS (Basic)
4.0
6.3
5.1
5.6
5.9
11.5
EPS (fully diluted)
4.0
6.3
5.1
5.6
5.9
11.5
Cash EPS
4.7
6.0
7.2
7.2
7.9
13.6
DPS
0.0
0.0
0.0
0.0
0.0
0.0
Book Value
22.2
30.0
52.6
90.0
95.9
107.4
Returns (%)
ROCE
12.0
12.8
9.1
6.7
7.5
11.4
Angel ROIC (Pre-tax)
12.5
13.2
9.1
7.5
7.8
11.8
ROE
17.9
21.0
9.7
6.3
6.1
10.7
Turnover ratios (x)
Asset Turnover (Gross Block)
0.5
0.5
0.3
0.3
0.3
0.4
Inventory / Sales (days)
-
-
2
2
2
2
Receivables (days)
69
80
86
87
87
87
Payables (days)
5
7
7
5
4
4
Wc cycle (ex-cash) (days)
64
72
81
84
85
85
January 5, 2016
14
Navkar Corporation | Initiating Coverage
Research Team Tel: 022 - 39357800
E-mail: [email protected]
Website: www.angelbroking.com
DISCLAIMER
Angel Broking Private Limited (hereinafter referred to as “Angel”) is a registered Member of National Stock Exchange of India Limited,
Bombay Stock Exchange Limited and Metropolitan Stock Exchange of India Limited. It is also registered as a Depository Participant with
CDSL and Portfolio Manager with SEBI. It also has registration with AMFI as a Mutual Fund Distributor. Angel Broking Private Limited is
a registered entity with SEBI for Research Analyst in terms of SEBI (Research Analyst) Regulations, 2014 vide registration number
INH000000164. Angel or its associates has not been debarred/ suspended by SEBI or any other regulatory authority for accessing
/dealing in securities Market. Angel or its associates including its relatives/analyst do not hold any financial interest/beneficial
ownership of more than 1% in the company covered by Analyst. Angel or its associates/analyst has not received any compensation /
managed or co-managed public offering of securities of the company covered by Analyst during the past twelve months. Angel/analyst
has not served as an officer, director or employee of company covered by Analyst and has not been engaged in market making activity
of the company covered by Analyst.
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.
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 Pvt. 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 Pvt. 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 Pvt. Limited endeavors to update on a reasonable basis the information discussed in this material, there may be
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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 Pvt. Limited and its affiliates may
have investment positions in the stocks recommended in this report.
Disclosure of Interest Statement
Navkar Corporation
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 (Based on expected returns
Buy (> 15%)
Accumulate (5% to 15%)
Neutral (-5 to 5%)
over 12 months investment period):
Reduce (-5% to -15%)
Sell (< -15)
January 5, 2016
15