Visaka Industries | Cement Products
November 18, 2014
Visaka Industries
BUY
CMP
`123
Initiating Coverage
Target Price
`174
Visaka Industries (VIL) is engaged in two businesses - building products (cement
Investment Period
12 Months
asbestos products and fibre cement flat products like V-boards and V-panels) and
synthetic yarn. It has an installed capacity of 7,52,000MT of cement asbestos
Stock Info
products with a strong network of 6000 plus stockists / dealers across India. In the
synthetic yarn segment it has an installed capacity of
31 MTS M/CS. With
Sector
Cement Products
consumer and business confidence improving in building products segment and
Market Cap (` cr)
196
sustainable performance of its synthetic yarn segment, we expect the company to
Net Debt
205
post a strong performance going ahead.
Beta
1.0
Utilization levels and EBIDTA margins to improve: VIL’s performance in FY2014
52 Week High / Low
143 / 67
was impacted on account of slowdown in economy and high competition, which
Avg. Daily Volume
10,593
were sector related issues. The company’s raw material cost as a percentage of
sales too increased sharply from 58% in FY2013 to 62.8% in FY2014 due to
Face Value (`)
10
increase in asbestos fibre (100% imported) which accounts for ~60% of the raw
BSE Sensex
28,178
material of the building products segment. However, with demand from housing
Nifty
8,431
and infrastructure sector picking up, we expect the utilization levels for its asbestos
Reuters Code
VSKI.BO
cement product business to improve coupled with strong growth momentum in its
Bloomberg Code
VSKI.IN
V-boards segment. Hence, we expect the company to post a 14.9% CAGR in its
top-line over FY2014-16E to `1,177cr. The EBIDTA margins are also expected to
Shareholding Pattern (%)
improve, as currency has stabilized at lower levels compared to FY2014 which
will keep the asbestos fibre cost under check.
Promoters
37.5
MF / Banks / Indian Fls
1.3
Lower depreciation cost in FY2016E to boost profitability: The company’s
FII / NRIs / OCBs
26.7
depreciation cost is expected to increase sharply in FY2015 due to changes made
in the Company’s Act 2013 which lays down the new rates for depreciation of
Indian Public / Others
34.5
fixed assets. However, in FY2016E, the depreciation cost is expected to decline by
~30% yoy which will significantly boost profits. We expect the net profit to grow at
Abs.(%)
3m 1yr
3yr
a CAGR of 81% over FY2014-16E to `39cr. At the current price of `123, the stock
Sensex
6.8
35.1
71.2
is trading at a valuation of 5x FY2016E EPS, which we believe is attractive. We
Visaka
2.8
60.7
70.4
initiate coverage on VIL with a Buy rating and a target price of `174, valuing the
stock at 7x on FY2016E earnings.
Key financials
Y/E March (` cr)
FY2012
FY2013
FY2014 FY2015E
FY2016E
Net sales
750
916
892
968
1177
% chg
15.4
22.0
(2.6)
8.5
21.6
Adj. net profit
34
51
12
17
39
% chg
(23.7)
47.6
(76.3)
38.1
137.1
EBITDA Margin (%)
10.4
11.7
6.4
8.4
8.6
EPS (`)
21.6
31.9
7.5
10.5
24.8
P/E (x)
5.7
3.9
16.3
11.8
5.0
P/BV (x)
0.7
0.6
0.6
0.6
0.5
RoE (%)
12.0
15.6
3.6
4.8
10.5
RoCE (%)
12.6
13.5
5.5
6.1
10.9
Bhavin Patadia
EV/Sales (x)
0.4
0.5
0.4
0.4
0.3
+91-22-3935 7800 Ext: 6868
EV/EBITDA (x)
3.6
3.9
7.0
4.8
3.8
Source: Company, Angel Research; Note: CMP as of November 17, 2014
Please refer to important disclosures at the end of this report
1
Visaka Industries | Initiating Coverage
Investment arguments
Improvement in utilization levels on revival in demand
VIL’s presence in the building products segment is dominated by cement asbestos
Revival in rural demand to drive future
products (71% of FY2014 revenue). The company has expanded its capacity from
top-line growth
6,52,000MT in FY2011 to 7,52,000MT in FY2012 to cater to the rising rural
demand. However, in FY2014 due to slow down in rural demand led by high food
inflation and lower disposable incomes, the utilization levels dropped sharply for
the cement asbestos products. Despite this, the company was able to retain its
position as the second largest cement asbestos products manufacturer in India with
a 17% market share supported by its outdoor advertising campaign and strong
dealer network. This shows the acceptance of the company’s products and its
ability to stay competitive during slowdowns. The overall de-growth in the segment
was limited by strong performance of its V-boards division (capacity of
1,20,000MT) which grew by a healthy 25.6% yoy. We expect the division to post a
robust performance going ahead as well on account of growing acceptance in
India due to cost advantages against substitute products and increasing
contribution of exports.
The company’s synthetic yarn segment has an installed capacity of 55,000 ring
spindles (31 MT M/CS). The utilization levels for this segment dipped marginally,
but due to strong growth in exports coupled with improvement in realizations due
to rupee depreciation, the company was able to post a revenue growth of 8% in
FY2014. As per the Federation of Indian Chamber of Commerce and Industry
(FICCI), India’s textile exports are expected to rise from US$21bn in 2012 to
US$145.6bn by 2023. This augurs well for the company as it is expected to
increase its focus on the export business which has higher margins.
With consumer and business confidence improving, the utilization levels are
expected to improve gradually which will enable the company to post a revenue
CAGR of 14.9% over FY2014-16E to `1,177cr.
Exhibit 1: Sales growth to rebound
Exhibit 2: Capacity Utilization to improve
1,200
21.6
25
9,00,000
90.0
120
22.0
98.9
8,00,000
87.0
82.0
92.3
90.4
79.7
100
1,000
20
7,00,000
15.4
80
6,00,000
800
15
7.6
5,00,000
60
600
10
4,00,000
8.5
40
3,00,000
400
5
20
4.5
2,00,000
200
0
1,00,000
0
(2.6)
0
-5
FY2010
FY2011
FY2012
FY2013
FY2014 FY2015E FY2016E
Net Sales
Sales growth
Installed Capacity (MT)
Utilization levels (%)
Source: Company, Angel Research
Source: Company, Angel Research
November 18, 2014
2
Visaka Industries | Initiating Coverage
EBIDTA margin to witness an uptrend
The company’s net raw-material cost as a percentage of sales is expected to
Stability in key raw material prices and
decline to ~61% in FY2016E from 62.8% in FY2014 on account of stable prices of
higher exports to aid margin expansion
its key raw materials and stable currency rates. Asbestos fibre, the key raw material
for asbestos cement products is 100% imported and accounts for 60% of raw
material cost of building products segment. Sharp fall in rupee in FY2014 led to
increase in landed cost which impacted the segment margins. However, with rupee
stabilizing, the prices are expected to remain flat going ahead. Besides asbestos
fibre, cement and fly ash prices are also expected to remain flat. Freight costs too
are expected to remain stable as diesel prices have cooled down. The increase in
power costs due to power crisis in Andhra Pradesh and Tamilnadu would be offset
by the company’s newly commissioned 2.5MW solar power plant. The company is
expected to increase exports in its synthetic yarn business, which has higher
margins. As a result, the EBIDTA margin will witness a northward shift from 6.4%
in FY2014 to 8.6% in FY2016E.
Exhibit 3: Raw material cost to decline steadily
Exhibit 4: ...leading to higher EBIDTA margins
62.8
61.0
1200
59.1
61.2
65
120
20
56.3
58.0
18.0
18
51.4
55
1000
100
16
13.0
45
11.7
14
800
80
35
10.4
12
8.4
8.6
600
60
10
25
6.4
8
400
40
15
6
4
200
20
5
2
0
-5
0
0
FY2010
FY2011
FY2012
FY2013
FY2014
FY2015E FY2016E
FY2010
FY2011
FY2012
FY2013
FY2014
FY2015E FY2016E
Net Sales
Raw material as % of net sales
EBIDTA
EBIDTA margins
Source: Company, Angel Research
Source: Company, Angel Research
November 18, 2014
3
Visaka Industries | Initiating Coverage
Asset turnover and return ratios to improve
With capacity in place to cater to the expected rise in overall demand, the
utilization levels are expected to improve. This will lead to higher sales, resulting in
higher asset turnover (Gross block) from 1.7x in FY2014 to 2.1x in FY2016E. The
ROCE is expected to improve from 5.5% in FY2014 to 10.9% in FY2016E. Also,
with improvement in profitability the ROE is expected to improve from 3.6% in
FY2014 to 10.5% in FY2016E.
Exhibit 5: Asset turnover to improve
Exhibit 6: Return ratios to see recovery
2.3
25
24.8
2.2
2.2
2.1
20
22.1
17.2
2.1
15.6
2.0
1.9
1.9
15
12.0
1.9
10.5
1.8
14.8
1.8
13.5
10
12.6
1.8
10.9
1.7
4.8
3.6
1.7
5
1.6
5.5
6.1
1.5
0
FY2010
FY2011
FY2012
FY2013
FY2014
FY2015E FY2016E
FY2010
FY2011
FY2012
FY2013
FY2014
FY2015E FY2016E
Asset Turnover (Gross Block)
ROE
ROCE (Pre-tax)
Source: Company, Angel Research
Source: Company, Angel Research
November 18, 2014
4
Visaka Industries | Initiating Coverage
Exhibit 7: Segment wise revenue breakup
Exhibit 8: Building products’ revenue breakup
1%
2%
9%
18%
81%
89%
Building products
Synthetic Yarn
Others
Asbestos Cement Products
V- Boards
V - Pannel
Source: Company, Angel Research
Source: Company, Angel Research
Segment and Industry Outlook
Building Products
The company’s building products segment includes cement asbestos products,
V - boards (fibre cement sheets) and V - panels.
Cement asbestos products: Currently there are about 20 entities in the industry
with about 68 manufacturing plants throughout the country. Top five players
including VIL have a market share of 70-75%. Rural infrastructure is a key social
priority of the government. The huge housing deficit in rural India, with a majority
of houses being kaccha houses, offers tremendous opportunity of sustained growth
of new age construction practices as well as building products. Looking ahead,
with the ambitious 12th Five-year plan in place along with a stable government in
the country, the income of the under-privileged section is expected to go up. This
should translate into an increased demand for roofing products such as fibre
cement roofing sheets.
The industry is currently operating at lower utilization levels. Going ahead, if the
demand improves from here on, existing capacities are enough to cater through
higher utilization. Industry performance is directly linked to performance of
rural/semi-urban economies. Consumer inflation, food inflation and rural growth
are other driving factors for this segment. Cement asbestos sheets are popular as
they are inexpensive; they need no maintenance and last long when compared to
competing products such as thatched roofs, tiled roofs and galvanized iron sheets.
VIL has a total of 8 plants located in India with an installed capacity of
7,52,000MT. The company is the second largest cement asbestos products
manufacturer in India with a 17% market share. The company has a strong
distribution network comprising over 6,000 retailers (rural and the semi-urban
markets). The company derives 85% of its sales from these markets while the rest is
derived from institutional sales, governmental agencies, industries and poultry
farms.
November 18, 2014
5
Visaka Industries | Initiating Coverage
Exhibit 9: Product Profile
Source: Company
Exhibit 10: Products
Products
Manufacturing facility
Cumulative installed capacity
Patancheru (Andhra Pradesh)
Vijayawada (Andhra Pradesh)
Paramathi (Tamil Nadu)
Tumkur (Karnataka)
Cement Asbestos Facility
7,52,000 MT
Midnapur (West Bengal)
Rae Bareli (Uttar Pradesh)
Pune (Maharashtra)
Sambalpur (Odisha)
Fibre cement flat board
Miryalguda (Andhra Pradesh)
1,29,750 MT
products
Daund (Maharashtra)
Synthetic Yarn
31 MTS M/CS
Nagpur (Maharashtra)
Source: Company
Fibre Cement Sheets (Non-Asbestos) - V-BOARDS AND V-PANELS: The capacity of
the industry producing same or similar products is 396000MTPA with 8 players in
total. In the last few years, the use of flat products (V-boards and V-panels)
increased on account of a superior price-value proposition over alternatives. They
bring in the triple advantage of being fireproof, water-resistant and termite-resistant.
Also, they are easy to fix and take comparatively lesser time for installation.
The company possesses an installed capacity of 1,20,000MT of V-boards (fibre
cement flat sheets) and 9,750MT of V-panels. The company recently commissioned
a 72,000 TPA plant at Daund (Pune) to address growing product demand. The
company is continuously exploring new markets in various countries and has taken
initiatives to export V - boards, and has witnessed a fair amount of success.
Synthetic Yarn: VIL diversified into the manufacture of synthetic yarn in 1992. Its
textile division manufactures yarns using state-of-the-art twin air jet spinning
machines (Murata, Japan) with 31 MTS machines (equivalent to 55,000 ring
spindles) where yarn quality is superior to conventional ring frame yarn. The
company manufactures value-added yarn, enjoying some of the highest margins
in the segment. The company plans to increase its capacity by 10% in FY2016E.
The company gets better margins in the segment from export earnings. Hence, it
plans to increase exports from 25% to 40% by FY2016E.
November 18, 2014
6
Visaka Industries | Initiating Coverage
Financials
Exhibit 11: Key assumptions
Particulars (%)
FY2015E
FY2016E
Total revenue growth (yoy)
8.5
21.6
Asbestos Cement Products
Capacity Utilization (%)
82
90
Realization growth (%)
1
5
Revenue growth (yoy)
7
20.5
V-Boards
Capacity Utilization (%)
48
55
Realization growth (%)
1.5
2
Synthetic Yarn
Volume growth (yoy)
5.1
11.1
Realization growth (%)
3.0
2.0
Revenue growth (yoy)
8.2
13.3
Source: Angel Research
Top line to grow at a 14.9% CAGR over FY2014-16E
We expect the company’s net sales to grow at a CAGR of 14.9% over FY2014-
16E, from `892cr to `1,177cr due to higher capacity utilization on the back of
expected revival in rural demand and strong performance of its V-boards division.
The sales (gross) from the building products segment is expected to increase from
`792cr in FY2014 to `1,064cr by FY2016E, while the sales (gross) from V-board
are expected to increase from `68cr to `128cr, during the same period. Sales
(gross) from synthetic yarn segment are expected to increase from `178cr in
FY2014 to `218cr in FY2016E, led by improvement in realization due to higher
exports.
EBIDTA and EBITDA margins to improve
In FY2014, the EBIDTA and EBIDTA margins declined sharply due to increase in
raw material cost and higher advertisement & sales promotion expenses. EBIDTA
fell to `57cr in FY2014 from `107cr in FY2013 while the EBIDTA margins decline
to 6.4% in FY2014 from 11.7% in FY2013. With stable raw material cost in
building products segment due to stable rupee coupled with higher exports
contribution in synthetic yarn segment, the EBIDTA is expected to grow at a CAGR
of 33.3% to `102cr by FY2016E. As a result, EBIDTA margins are expected to
improve from 6.4% in FY2014 to 8.6% in FY2016E.
PAT to grow at a CAGR of 81% over FY2014-16E
With improvement in EBIDTA margins coupled with lower depreciation cost,
specifically in FY2016E, the PAT is expected to grow at a CAGR of 81% over
FY2014-16E to `39cr. As a result, the PAT margins are expected to improve from
1.3% in FY2014 to 3.3% in FY2016E.
November 18, 2014
7
Visaka Industries | Initiating Coverage
Exhibit 12: PAT and PAT margins to improve
60
12
50
10
9.7
40
8
6.9
30
6
5.5
4.6
20
4
3.3
10
2
1.7
1.3
0
0
FY2010
FY2011
FY2012
FY2013
FY2014
FY2015E FY2016E
ADJ. PAT
PAT margins
Source: Company, Angel Research
Outlook and valuation
We expect net sales and EBIDTA to register a CAGR of 14.9% and 33.3% to
`1177cr and `102cr respectively, over FY2014-16E. As a result, the net profit is
expected to grow at a CAGR of 81% over FY2014-16E to `39cr. At the current
market price the stock is trading at a P/E of 5x on FY2016E earnings.
On account of expected revival in rural demand aided by government’s focus on
low cost housing, we initiate coverage on the stock with a Buy rating and with a
target price of `174, valuing the stock at 7x on FY2016E earnings.
Exhibit 13: One-year forward PE band
200
180
160
140
120
100
80
60
40
20
0
Price
2 x
4 x
6 x
8 x
Source: Company, Angel Research
November 18, 2014
8
Visaka Industries | Initiating Coverage
Relative valuation
The leading players in the industry are Hyderabad Industries, Visaka Industries,
Everest Industries and Ramco Industries. These companies account for 70-75% of
industry capacity. VIL is trading at cheap valuations of 5x P/E and 0.5x P/BV on
FY2016E as compared to its peers which are trading at relatively high valuations.
Exhibit 14: Comparative analysis
EV/
EV/
Company
Year end
Mcap
Sales
OPM PAT
EPS
RoE
P/E
P/BV
Sales
EBIDTA
Visaka Industries
FY2015E
196
968
8.4
17
10.5
4.8
11.8
0.6
0.4
4.8
FY2016E
196
1,177
8.6
39
24.8
10.5
5.0
0.5
0.3
3.8
Everest Industries*
FY2015E
457
1,228
6.4
35
22.3
12.0
13.3
1.4
0.5
8.2
FY2016E
457
1,375
7.5
51
33.7
15.3
8.8
1.3
0.5
6.3
Hyderabad Industries* FY2015E
521
1,143
10.0
62
83.3
15.4
8.3
1.2
0.5
5.1
FY2016E
521
1,364
11.7
89
119.5
19.8
5.8
1.1
0.4
3.6
Source: Company, Angel Research, *Bloomberg
Key concerns
Increase in input costs due to rupee depreciation: The continuous increase in cost
of inputs is a matter of concern. Asbestos fibre, cement and fly ash and polyester
fibre are the key materials. Asbestos fibre is a key raw material and accounts for
60% of overall cost and is 100% imported. Since exports are limited and imports
are significant, the company is exposed to forex risk.
Dependence on rural growth: Rural demand for housing is the key growth driver
which depends upon increase in spending power and government schemes. High
inflation and lower spend could have adverse impact for roofing in rural India.
Activities of Ban Asbestos Lobby: Asbestos fibre has been included with other forms
of asbestos, in being considered to be a human carcinogen by the International
Agency for Research on Cancer (IARC) and by the U.S. Department of Health and
Human Services. Any government initiative to completely ban or restrict use of
asbestos fibre will be key negative.
Lack of entry barriers: Lack of entry barriers is attracting new entrants into this line
of business. Closure of Canadian and Zimbabwean asbestos mines are a matter
of concern.
November 18, 2014
9
Visaka Industries | Initiating Coverage
Company Background
Visaka Industries (established 1985) is engaged in two businesses - building
products (cement asbestos products and fibre cement flat products like V-Boards
and V-Panels) and textiles. Its manufacturing facilities are spread across
11
locations supported by nine marketing offices. The company is the second largest
cement asbestos products manufacturer in India with a 17% market share. The
spinning plant, with 31 MURATA Twinjet spinning machines and 112 Two-For-One
twisting machines, is the world's largest installation of its kind, producing about
9,000 tons of yarns per annum.
November 18, 2014
10
Visaka Industries | Initiating Coverage
Profit and Loss
Y/E March (` cr)
FY2012
FY2013
FY2014
FY2015E
FY2016E
Net Sales
750
916
892
968
1,177
Other operating income
-
-
-
-
-
Total operating income
750
916
892
968
1,177
% chg
15.4
22.0
(2.6)
8.5
21.6
Net Raw Materials
444
531
560
593
718
% chg
21.1
19.7
5.5
5.8
21.1
Power and Fuel costs
39
51
48
51
62
% chg
15.2
31.4
(6.4)
7.4
21.6
Personnel
42
47
52
56
69
% chg
25.1
12.2
10.6
8.5
21.6
Selling & Admin Expenses
71
80
86
92
112
% chg
2.7
11.9
8.7
6.4
21.6
Other
77
101
88
94
115
% chg
91.8
30.9
(12.1)
6.6
21.6
Total Expenditure
672
809
835
887
1,075
EBITDA
78
107
57
81
102
% chg
(7.0)
36.1
(46.3)
41.5
25.5
EBITDA Margin
10.4
11.7
6.4
8.4
8.6
Depreciation & Amortisation
18
20
22
43
30
EBIT
61
87
35
39
72
% chg
(10.5)
43.4
(60.0)
10.6
86.7
(% of Net Sales)
8.1
9.5
3.9
4.0
6.1
Interest & other Charges
14
15
21
19
18
Other Income
5
3
5
5
5
(% of Net Sales)
0.6
0.3
0.6
0.6
0.5
Recurring PBT
47
72
13
19
53
% chg
(19.2)
54.8
(81.4)
44.6
174.9
PBT (reported)
51
75
19
25
59
Tax
17
24
7
8
19
(% of PBT)
33.0
32.1
36.3
33.0
33.0
PAT (reported)
34
51
12
17
39
Extraordinary Expense/(Inc.)
(0.1)
(0.1)
(0.1)
-
-
ADJ. PAT
34
51
12
17
39
% chg
(23.7)
47.6
(76.3)
38.1
137.1
(% of Net Sales)
4.6
5.5
1.3
1.7
3.3
Basic EPS (`)
21.6
31.9
7.5
10.5
24.8
Fully Diluted EPS (`)
21.6
31.9
7.5
10.5
24.8
% chg
(23.8)
47.6
(76.4)
38.8
137.1
November 18, 2014
11
Visaka Industries | Initiating Coverage
Balance Sheet
Y/E March (` cr)
FY2012
FY2013
FY2014
FY2015E
FY2016E
SOURCES OF FUNDS
Equity Share Capital
16
16
16
16
16
Preference Capital
-
-
-
-
-
Reserves& Surplus
271
310
317
329
360
Shareholders’ Funds
286
326
333
345
375
Minority Interest
-
-
-
-
-
Total Loans
152
270
246
231
231
Other long term liabilities
18
21
24
24
24
Net Deferred tax liability
25
26
30
30
30
Total Liabilities
482
644
633
630
660
APPLICATION OF FUNDS
Gross Block
396
421
527
537
548
Less: Acc. Depreciation
152
171
192
235
265
Net Block
244
250
334
302
283
Capital Work-in-Progress
4
16
21
16
12
Lease adjustment
-
-
-
-
-
Goodwill
-
-
-
-
-
Investments
15
15
15
15
15
Other non-current assets
0
0
0
0
0
Current Assets
300
419
341
378
453
Cash
54
34
26
24
22
Loans & Advances
16
26
30
39
47
Other current assets
-
-
-
-
-
Current liabilities
92
96
96
102
123
Net Current Assets
207
323
245
276
329
Mis. Exp. not written off
-
-
-
-
-
Total Assets
482
644
633
630
660
November 18, 2014
12
Visaka Industries | Initiating Coverage
Cash flow statement
Y/E March (` cr)
FY2012
FY2013 FY2014 FY2015E FY2016E
Profit Before Tax
51
75
19
25
59
Depreciation
18
20
22
43
30
Other Income
(5)
(3)
(5)
(5)
(5)
Change in Working Capital
(1)
(136)
71
(34)
(55)
Direct taxes paid
(17)
(24)
(7)
(8)
(19)
Cash Flow from Operations
46
(68)
100
20
9
(Incr)/ Decr in Fixed Assets
(55)
(37)
(111)
(5)
(7)
(Incr)/Decr In Investments
14
(29)
22
(3)
0
Other Income
5
3
5
5
5
Cash Flow from Investing
(35)
(63)
(83)
(3)
(1)
Issue of Equity/Preference
-
-
-
-
-
Incr/(Decr) in Debt
(0)
123
(18)
(15)
0
Dividend Paid (Incl. Tax)
(9)
(11)
(5)
(5)
(9)
Others
(1)
(1)
(1)
-
-
Cash Flow from Financing
(11)
111
(24)
(20)
(9)
Incr/(Decr) In Cash
0
(20)
(7)
(3)
(2)
Opening cash balance
54
54
34
26
24
Closing cash balance
54
34
26
24
22
Source: Company, Angel Research
November 18, 2014
13
Visaka Industries | Initiating Coverage
Key Ratios
Y/E March
FY2012
FY2013
FY2014
FY2015E
FY2016E
Valuation Ratio (x)
P/E (on FDEPS)
5.7
3.9
16.3
11.8
5.0
P/CEPS
3.8
2.8
5.7
3.3
2.8
P/BV
0.7
0.6
0.6
0.6
0.5
Dividend yield (%)
4.7
5.7
2.4
2.4
4.8
EV/Net sales
0.4
0.5
0.4
0.4
0.3
EV/EBITDA
3.6
3.9
7.0
4.8
3.8
EV / Total Assets
0.6
0.6
0.6
0.6
0.6
Per Share Data (`)
EPS (Basic)
21.6
31.9
7.5
10.5
24.8
EPS (fully diluted)
21.6
31.9
7.5
10.5
24.8
Cash EPS
32.8
44.3
21.7
37.3
43.6
DPS
5.0
6.0
2.5
2.5
5.0
Book Value
180.4
205.3
209.9
217.5
236.4
DuPont Analysis
EBIT margin
8.1
9.5
3.9
4.0
6.1
Tax retention ratio
0.7
0.7
0.6
0.7
0.7
Asset turnover (x)
1.8
1.6
1.6
1.7
1.9
ROIC (Post-tax)
10.0
10.2
3.9
4.5
7.9
Cost of Debt (Post Tax)
6.3
3.8
5.5
5.5
5.4
Leverage (x)
0.3
0.7
0.6
0.6
0.5
Operating ROE
11.0
14.6
2.9
3.9
9.2
Returns (%)
ROCE (Pre-tax)
12.6
13.5
5.5
6.1
10.9
Angel ROIC (Pre-tax)
14.9
15.0
6.1
6.7
11.8
ROE
12.0
15.6
3.6
4.8
10.5
Turnover ratios (x)
Asset TO (Gross Block)
1.9
2.2
1.7
1.8
2.1
Inventory / Net sales (days)
74
85
94
76
73
Receivables (days)
35
32
38
38
35
Payables (days)
45
38
39
38
38
WC cycle (ex-cash) (days)
74
88
104
89
87
Solvency ratios (x)
Net debt to equity
0.3
0.7
0.6
0.6
0.5
Net debt to EBITDA
1.1
2.1
3.6
2.4
1.9
Int. Coverage (EBIT/ Int.)
4.3
5.8
1.6
2.0
3.9
November 18, 2014
14
Visaka Industries | Initiating Coverage
Research Team Tel: 022 - 39357800
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
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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
Visaka Industries
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%)
Accumulate (5% to 15%)
Neutral (-5 to 5%)
Reduce (-5% to 15%)
Sell (< -15%)
November 18, 2014
15
Visaka Industries | Initiating Coverage
6th Floor, Ackruti Star, Central Road, MIDC, Andheri (E), Mumbai- 400 093. Tel: (022) 39357800
Research Team
Fundamental:
Sarabjit Kour Nangra
VP-Research, Pharmaceutical
Vaibhav Agrawal
VP-Research, Banking
Amarjeet Maurya
Analyst
Bharat Gianani
Analyst
Shrenik Gujrathi
Analyst
Umesh Matkar
Analyst
Twinkle Gosar
Analyst
Tejas Vahalia
Research Editor
Technicals and Derivatives:
Siddarth Bhamre
Head - Technical & Derivatives
Sameet Chavan
Technical Analyst
Sneha Seth
Associate (Derivatives)
Institutional Sales Team:
Mayuresh Joshi
VP - Institutional Sales
Meenakshi Chavan
Dealer
Gaurang Tisani
Assistant Manager
Production Team:
Dilip Patel
Production Incharge
CSO & Registered Office: G-1, Ackruti Trade Centre, Road No. 7, MIDC, Andheri (E), Mumbai - 93. Tel: (022) 3083 7700. Angel Broking Pvt. Ltd: BSE Cash: INB010996539 / BSE F&O: INF010996539, CDSL Regn. No.: IN - DP - CDSL - 234 - 2004, PMS Regn. Code: PM/INP000001546, NSE Cash: INB231279838 /
NSE F&O: INF231279838 / NSE Currency: INE231279838, MCX Stock Exchange Ltd: INE261279838 / Member ID: 10500. Angel Commodities Broking (P) Ltd.: MCX Member ID: 12685 / FMC Regn. No.: MCX / TCM / CORP / 0037 NCDEX: Member ID 00220 / FMC Regn. No.: NCDEX / TCM / CORP / 0302.
November 18, 2014
16
