Devine Impex Limited. Key Data (as on 23 December 2015) 23 December 2015

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1 23 December 2015 CMP: Rs.7.4 Industry: Trading BSE Group/Index: Group XT Promoters Rohit Jain and family Year of incorporation 1995 Registered office SCF 103, Chamber No. 7, I Floor, Phase XI, Mohali (S A S Nagar) Punjab Company website Key Data (as on 23 December 2015) BSE ISIN INE455C01014 Face Value (Rs.) 10.0 Mkt Cap (Rs.mn) 70.5 Current P/E Current P/BV week highlow (Rs.) day avg daily trading vol 1,524 Equity capital (Rs.mn) 95.3 Net worth (Rs.mn) Company Business ( DIL ) is primarily engaged in the trading of shares and gold.the company has been in existence for 20 years. Peer group analysis The financial performance of DIL was weak throughout the year. Its profit margins are DIL s profitability and return ratios (EBITDA margin, PAT margin, RONW, and ROACE) are amongst the lowest as compared to peers. Financials Standalone Particulars (FY15, Rs.mn) DIL White Ausom O P Chains Diamond Enterprise Ltd Ind. Ltd. Ltd Total Income , ,802.0 EBIDTA ,747.5 EBIDTA margin 0.8% 11.9% 0.2% 99.4% PAT PAT margin 0.4% 6.7% 0.0% 2.1% EPS Cash accruals Debt/EBIDTA (x) Debt/Equity (x) ROANW (%) ROACE (%) ,089.0 P/E (TTM) P/BV (TTM) Source: CMIE, Company Page 1 of 6

2 Share Price Performance Change in Shareholding Pattern (%) 40.1% 0.0% 1 Yr 3 Yr 0.9% 83.7% Devine Impex Ltd. S&P BSE 500 Year Promoters DII FII Others 30Sep Jun Mar Mar Mar Mar Mar Top Public Shareholders with >1% shareholding Sl. No. Name of the Shareholder No. of Shares held Shares as % of Total No. of Shares 1 Sarla Mining Ltd Sun & Shine Worldwide Ltd Sun Techno Overseas Ltd Synergy Cosmetic (Exim) Ltd Rotam Commercial Ltd Simplex Trading & Agencies Ltd Total 4,400, Page 2 of 6

3 Key strengths and opportunities The company has been in the business since 1990 and has developed an expertise in this sector. Key concerns and risks Fraud, theft, employee negligence may adversely affect the company s results of operations and financial condition. Volatility in the market price of gold has a bearing on the inventory value and could affect the income and profitability. In October 2015, a diamond jewellery firm based in Hongkong and Bangkok has gone bankrupt and has defaulted upto Rs. 3.5 bn to diamond exporters in Surat and Mumbai. Losses and defaults have increased the uncertainity about the outlook of the sector Key financial indicators The company s revenues grew at a compounded annual growth rate of 25.6% during The growth was on account of increased product registrations and strengthening of marketing/distribution chains. Gems and Jewellery industry is a key contributor to the economy Domestic demand for gold jewellery Increased profitability and declining debt strengthened interest cover from 74x in to 233x in The Gems and Jewellery sector plays a significant role in the Indian economy, contributing around 67 per cent of the country s GDP. One of the fastest growing sectors, it is extremely export oriented and labour intensive. Based on its potential for growth and value addition, the Government of India has declared the Gems and Jewellery sector as a focus area for export promotion. The Government has recently undertaken various measures to promote investments and to upgrade technology and skills to promote Brand India in the international market. Traditionally gold jewellery has been an important part of Indian culture. The demand for gold jewellery is driven by festivals and wedding ceremonies. In marriages, gold jewellery is a preferred gift given by the family of the bride and the groom. About 60% of the Indian jewellery market is contributed by rural India. Gold jewellery is popular among farmers and an upsurge in gold demand is typically seen after a good harvest season. Apart from its cultural and social significance, gold is also valued as an important saving and investment vehicle in India, second only to bank deposit Gold monetization scheme Government policy The Reserve Bank of India has announced norms for gold monetisation scheme, which allows individuals, trusts and mutual funds to deposit gold with banks in return for interest, to help reduce gold imports and alleviate pressure on trade balance. The Reserve Bank of India (RBI) has liberalised gold import norms. With this, star and premier export houses can import the commodity, while banks and nominated agencies can offer gold for domestic use as loans to bullion traders and jewellers. Page 3 of 6

4 Government initiatives Gold import Gems and Jewellery has been included in the Make in India programme. The government has announced Special Economic Zones (SEZ) to make India a global hub for the industry. The names of some of the operational SEZs in the sector are SEEPZ Special Economic Zone, Mumbai; Manikanchan SEZ, West Bengal; Jaipur SEZ; and Hyderabad Gems SEZ Ltd. At present, the government allows 100% Foreign Direct Investment (FDI) in gems and jewellery through the automatic route. The government eased gold import refulations in and is not expected to restrict gold imports in on account of lower international gold prices and anundercontrol current account deficit (CAD) Key financial indicators Weak financial performance The company is a debt free company. The receivables days is high at 282 days. Over the last two years the profitability has shrunk to 0.4 % fro 10.8% in FY13. Quarterly results Particulars (Rs in mn) Jul'15 to Sep'15 Jul'14 to Sep'14 % Change 1 Apr'15 to Jun'15 % Change 2 Total income % % Total expenditure % % EBIDTA % % PBT % % PAT % % EPS Neg compared to corresponding quarter in the previous year 2 sequential comparison Book Value per share Key ratios Dividend per share EPS Page 4 of 6

5 Profitablity Leverage ratios RONW (%) ROCE (%) Dividend per share EPS Page 5 of 6

6 Financials Income Statement Balance Sheet Total Income Share Capital EBIDTA Share Application Money Pending allotment EBIDTA margin 12.5% 0.3% 0.8% Reserves & Surplus Depreciation Net worth EBIT Borrowings Interest Current Liabilities & Provisions PBT Total liabilities Tax Net fixed assets PAT Capital WIP PAT margin 10.8% 0.2% 0.4% Investments Dividend (Rs.mn) Inventories Dividend Payout 0.0% 0.0% 0.0% Sundry Debtors Cash & Bank Cash Flow Statement Other Current Assets PBT Loans and Advances CF from Operations (67.0) (20.7) 3.8 CF from Investing 7.1 CF from Financing Inc/(Dec) in Cash 21.4 (20.7) 3.8 Closing Balance Miscellaneous Expenses not w/off Deferred Tax Assets/(Liabilities) (0.0) (0.0) (0.0) 81.2 Total assets Disclaimer The information contained herein is from publicly available data or other sources believed to be reliable, but we do not represent that it is accurate or complete and it should not be relied on as such. Our company 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. This document is provided for assistance only and is not intended to be and must not alone be taken as the basis for any investment decision. The user assumes the entire risk of any use made of this information. Each recipient of this document should make such investigation as it deems necessary to arrive at an independent evaluation which may affect their investment in the securities of companies referred to in this document (including the merits and risks involved). The discussions or views expressed may not be suitable for all investors. This information is strictly confidential and is being furnished to you solely for your information. Page 6 of 6