FROM THE CEO's DESK. 12 November Best Regards, Rahul Arora Chief Executive Officer

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2 FROM THE CEO's DESK 12 November 2012 Diwali 2012 is upon us and I take this opportunity to wish each and every one of you and your families a very Happy and Prosperous Diwali filled with good health, peace of mind and success in personal and professional endeavours. Diwali 2012 takes place in the backdrop of the recently concluded US elections with Mr. Barack Obama winning himself a second term and Diwali 2013 will be about looking ahead to our own national elections in the first-half of calendar While it is correct that adequate printing of monies universally have helped stock markets globally to come within a stone s throw distance of their all-time highs (the Nifty too is about 10% away), the big question in my mind is how much really has changed on the ground to reflect this movement in the stock markets? It is well documented; the dominance of FII flows this year in Indian stock markets with the help of constant monetary easing by global central banks, but is this the long- term solution global financial markets are looking for? Have we addressed the issue of the corporate sector investing aggressively to boost capex? Have the impediments relating to project clearances, land acquisition, availability of raw material and access to skilled labour been addressed? Are jobs being created in the economy? Is the much talked about red tape whilst doing business in India been done away with? Are low interest rates really the answer (if this was the single biggest impediment to capex, why aren t the US and European corporates investing with ridiculously low interest rates for so many years)? Do we really have concrete evidence that the economy and earnings are going to rebound from here as opposed to just languishing at the current numbers, even if they do not fall much from here? Are we seeing the same exuberant consumer spending that we witnessed in the boom time from , or even half of it? And on top we have the obsession of fiscal deficit contraction and so even the government should not be spending. Export numbers have been poor - so where is the growth going to come from? My own assessment is none of these questions are answered and cannot be in a hurry either. India as a country cannot address these issues overnight job creation being the biggest of them all, in my opinion. Qualified, intelligent people are celebrating a very quiet Diwali in many parts as a result of lay-offs. I personally think the markets are way ahead of where they should be, given the inherent fundamentals of the global and Indian economy (with every major rating agency and global bank downgrading economies and growth rates faster than we can change a channel on our TV sets). And I am fine if I am in a minority camp here. Sure, all of us reading this have a vested interest in markets rising, and even as I write this I would certainly hope despite all the concerns surrounding us, the stock markets continue to keep rising and help all make money, but as we all know markets have a mind of their own. We have advised our clients to be cautious on every rise, as every QE, every LTRO, every bit of easing in China and Japan has taught us one thing as fast as markets go up, they come down too. Here s hoping to be in the camp of this time its different, but somehow the conviction in me is not there, not just yet at least. We continue to advise caution (our Head of Research has a 5200 target on the Nifty in his last released strategy note earlier this year). Plenty, as always, will happen between this Diwali and next. Three or four earnings seasons (depending on Diwali 2013 dates), a budget, state elections, hopes of rate cuts (may be concrete moves on these will be made), at least three sessions of parliament (hopefully uninterrupted), and of course more clarity on how the US goes about dealing with the new buzzword, fiscal cliff and whether Germany does indeed go off track on growth as does China the big two global fears at this point. If the sum total of all these issues can be addressed, partially or totally, and the markets are at a new high by next Diwali or even sooner, it would indeed land up being a very Happy Diwali for all. As I sign off, and yes of course it s a busy cricket calendar for India too, I would like to leave you with three stocks we would recommend buying this Diwali Cipla, Cairn India and IRB Infrastructure. From the bottom of my heart and on behalf of the entire family at Nirmal Bang Institutional Equities, once again, wish you a very, very, Happy Diwali God Bless. Best Regards, Rahul Arora Chief Executive Officer 2

3 Table of Contents TOP BUYS Cipla 05 Cairn India IRB Infrastructure Developers

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5 Cipla 12 November 2012 Top Buys Reuters: CIPL.BO; Bloomberg: CIPLA IN Strong Focus On Profit Growth We like Cipla s realigned focus on profit growth (moving away from low-margin businesses and non-profitable geographies) and believe the change in strategic thinking (induction of professionals in its core team, setting up own front-ends in regulated markets) will induce a re-rating of the stock over the long run. The current valuation discount of 15%-20% compared with peers is too steep and under-estimates the company s higher-than-industry growth (revenue/pat CAGRs of 15%/30%, respectively, seen over FY12-FY14E), which we believe will narrow down subsequently. We have retained our Buy rating on the stock with a target price of Rs456. Improving profitability quotient: Cipla has realigned its focus on profit growth over the past months, moving away from unprofitable geographies and low-margin businesses like anti-retrovirals, or ARVs. We believe this has started reflecting in its numbers; gross margin has improved by 540bps over the past two quarters owing to a better product mix (lower ARV sales, higher domestic sales) and we believe a large portion of it is sustainable. Consequently, we expect FY14E EBITDA margin to sustain above 25%. Ramp-up at Indore SEZ is key near-term trigger: With the successful completion of the USFDA s (US Food and Drug Administration) inspection of its Indore Special Economic Zone (SEZ), we expect capacity utilisation (~70% capacity utilisation in oral dosages currently) to significantly improve for Cipla going forward. Consequently, we expect Indore SEZ s contribution to revenue to go up from Rs6.0bn in FY13E to Rs8.3bn in FY14E. Lexapro, Dymista type opportunities can lead to upside: At its annual general meeting held recently, Cipla Chairman Y.K. Hamied had stated that at least two more Lexapro/Dymista type opportunities can emerge in the next two years. We have noted that Lexapro contributed significantly (our estimate is ~US$40mn) to FY13E revenue so far, while we expect Dymista to add US$15mn in FY14E. More than revenue contribution, we believe such opportunities are important profit drivers (we believe Lexapro/Dymista gross margins are close to 90% each). Valuation and outlook: Historically, Cipla has traded at a discount to peers owing to its large capex and muted growth, leading to a sharp decline in its return ratios. However, with a change in strategic thinking and realigned focus on profitability, we expect Cipla to report revenue/pat CAGRs of 15%/30%, respectively, over FY12- FY14E, above the industry s growth. Consequently, we believe the current discounted valuation (17XFY14E EPS versus 20x for peers) will fade and expect the stock to trade in line with peers. We have arrived at a target price of Rs456, valuing the stock at 20xFY14E EPS of Rs22.8 and retained our Buy rating on it. Revenue 56,249 63,218 69,945 81,410 92,409 YoY (%) EBITDA 13,330 13,291 15,988 23,169 24,406 EBITDA (%) Adj. PAT 10,826 9,896 11,254 17,509 18,317 YoY (%) 39.6 (8.6) Fully DEPS RoE (%) RoCE (%) P/E (x) EV/EBITDA (x) BUY Sector: Pharmaceuticals CMP: Rs394 Target Price: Rs456 Upside: 16% Praful Bohra praful.bohra@nirmalbang.com Key Data Current Shares O/S (mn) Mkt Cap (Rsbn/US$bn) 315.9/ Wk H / L (Rs) 401/284 Daily Vol. (3M NSE Avg.) 2,268,674 Share holding (%) 4QFY12 1QFY13 2QFY13 Promoter FII DII Corporate General Public One Year Indexed Stock Performance Nov-11 Jan-12 Mar-12 May-12 Jul-12 Sep-12 Nov-12 CIPLA LTD Price Performance (%) 1 M 6 M 1 Yr Cipla Nifty Index (0.3) Source: Bloomberg NSE S&P CNX NIFTY INDEX 5 Please refer to the disclaimer towards the end of the document.

6 Financials Exhibit 1: Income statement Net sales 56,249 63,218 69,945 81,410 92,409 % growth Raw material costs (24,530) (27,471) (28,677) (30,432) (34,317) Staff costs (3,191) (4,895) (7,282) (8,899) (10,837) Others (15,198) (17,562) (17,998) (18,910) (22,848) Total expenditure (42,919) (49,927) (53,957) (58,241) (68,002) EBITDA 13,330 13,291 15,988 23,169 24,406 % growth 8.7 (0.3) EBITDA margin (%) Other income 881 1,049 1,183 2,299 2,394 Interest costs (230) (173) (121) (138) (147) Profit before depn. and tax 13,982 14,166 17,049 25,329 26,653 % growth Depreciation (1,671) (2,542) (2,821) (3,145) (3,445) Profit before tax 12,311 11,625 14,229 22,184 23,208 % growth 36.6 (5.6) Tax (2,435) (1,952) (2,975) (5,102) (5,338) Effective tax rate (%) (19.8) (16.8) (20.9) (23.0) (23.0) Net profit 9,876 9,673 11,254 17,082 17,870 % growth 27.1 (2.1) Extra-ordinary item Reported net profit 10,826 9,896 11,254 17,509 18,317 % growth 39.6 (8.6) EPS (Rs) % growth 35.1 (8.6) DPS (Rs) Payout (%) Exhibit 3: Balance sheet Equity 1,606 1,606 1,606 1,606 1,606 Reserves 57,500 65,056 74,438 90, ,523 Net worth 59,106 66,661 76,044 91, ,129 Short-term loans 47 4,346 5,092 5,539 5,986 Long-term loans 4 1,373 1,373 1,373 1,373 Total loans 51 5,719 6,465 6,912 7,359 Deferred tax liabilities/ (assets) 1,792 2,132 2,131 2,131 2,131 Liabilities 60,948 74,512 84, , ,619 Gross block 28,973 42,411 47,411 52,411 57,411 Depreciation 8,861 11,465 14,286 17,432 20,875 Net block 20,112 30,946 33,125 34,979 36,536 Capital work-in-progress 6,842 2,853 2,853 2,853 2,853 Long-term investments 10 3,668 3,668 3,668 3,668 Inventories 15,126 19,062 21,363 24,932 28,839 Debtors 15,666 14,908 17,972 20,974 23,839 Cash 621 1,010 2,343 5,119 10,134 Liquid investments 2,454 2,236 2,936 6,536 10,136 Other current assets 12,260 11,619 12,983 15,151 17,221 Total current assets 46,127 48,835 57,597 72,713 90,169 Creditors 8,271 8,150 8,870 9,574 11,178 Other current liabilities 3,872 3,641 3,733 3,915 4,430 Total current liabilities 12,143 11,791 12,603 13,489 15,608 Net current assets 33,984 37,044 44,994 59,224 74,561 Total assets 60,948 74,512 84, , ,619 Exhibit 2: Cash flow EBIT 11,659 10,750 13,167 20,024 20,962 Inc./(dec.) in working capital (2,244) (2,883) (5,921) (7,854) (6,722) Cash flow from operations 9,415 7,867 7,246 12,170 14,239 Other income 881 1,049 1,183 2,299 2,394 Depreciation 1,671 2,542 2,821 3,145 3,445 Interest paid (-) (230) (173) (121) (138) (147) Tax paid (-) (2,435) (1,952) (2,975) (5,102) (5,338) Dividends paid (-) (1,873) (2,615) (1,871) (1,871) (1,871) Net cash from operations 7,430 6,716 6,283 10,502 12,722 Capital expenditure (-) (5,219) (9,449) (5,000) (5,000) (5,000) Net cash after capex 2,211 (2,733) 1,283 5,502 7,722 Inc./(dec.) in short-term borrowing (8,593) 4, Inc./(dec.) in long-term borrowing (759) 1, Inc./(dec.) in borrowings (9,352) 5, Inc./(dec.) in investments (1,664) (3,440) (700) (3,600) (3,600) Equity issue/(buyback) 6, Cash from financial activities (4,324) 2, (3,153) (3,153) Others 2, Opening cash ,010 2,343 5,119 Closing cash 621 1,010 2,343 5,119 10,134 Change in cash ,333 2,776 5,015 Exhibit 4: Key ratios Y/E March FY10 FY11 FY12 FY13E FY14E Per share (Rs) Reported EPS Adjusted EPS DPS BV/share Dividend payout (%) Performance ratios (%) RoE RoCE Valuation ratios (x) P/E P/BV EV/net sales EV/EBITDA Efficiency ratios Asset turnover (x) Working capital/sales (x) Receivable days Inventory days Payable days Cipla

7 Top Buys Cairn India Reuters: CAIL; Bloomberg: CAIR IN Progress On All Fronts Cairn India (CIL), which has a resource base of 7.3bboe and peak production target of 300kbpd, has reiterated its guidance of achieving 240kbpd production in 2013E. The company recently announced its maiden dividend after securing regulatory approvals for restructuring. We have retained our Buy rating on the stock with a revised target price of Rs398 from Rs387 earlier. We have revised upwards our target price to reflect: (1) Uncertainty easing on production growth, (2) Production upside beyond consensus estimate of 240kbpd in respect of peak output, (3) Likely higher other income on rupee deposits. Downside risks to our assumptions are: (1) Any correction in crude oil prices, and (2) Government making any fresh changes to its royalty and cess policy. Restructuring gets green signal: As we had highlighted previously in our initiating coverage report dated 15 October 2012, we continue to remain sanguine on the pace of approvals required for CIL to ramp up its production to its guidance level. Our stance was reaffirmed when the management announced in a post-result conference call that it has secured regulatory approvals for restructuring to enable the transfer of Indian business owned by foreign subsidiaries (Cairn India Pty Ltd & BV) into Cairn India. This will result in a simplified and consolidated multi-layered structure of CIL and all the assets and liabilities of Indian businesses of Cairn India Pty Ltd & BV. Our estimates are above consensus estimates as: (1) The street seems to be overly pessimistic on getting regulatory nod for incremental output, (2) The management stating that approvals are in place to achieve 200kbpd output, (3) Pipeline de-bottlenecking using drag reducing agent is set to start by February-March 2013, and (4) Weakness in the rupee. Uncertainty clears on production target: CIL is confident of achieving its earlier exit rate production guidance of 240kpd from Rajasthan fields for FY14E. The critical parameters for achieving this target are: (1) The company s management being quite confident of achieving 40kbpd production from Bhagyam field by drilling 20% of the well left for drilling, as per the field development plan (FDP), (2) Aishwarya field expected to start production by the end of FY13, (3) Mangala EOR polymer FDP submitted to the joint venture entity and full field implementation to commence in FY14E-FY15E, (4) Technical/pilot trial completed for drag reducing agent to de-bottleneck the pipeline. We assume Mangala, Bhagyam and Aishwarya fields production at 171.5kbpd/205kbpd/240kbpd for FY13E/FY14E/FY15E, respectively Outlook and valuation: We have retained our Buy rating on CIL and also our NAVbased target price of Rs398. We believe the risk-reward ratio is skewed towards the investors due to: 1) Around 40% production growth from current levels likely from Rajasthan fields over FY13E-15E, 2) Professional CEO with no Vedanta linkage to be announced in two-three months, 3) Stock price discounting Brent crude oil price at US$/77bbl in perpetuity compared to our assumption of US$90/bbl, and 4)Output CAGR of 23% likely over FY13E-FY15E and earnings CAGR of 20% seen for the same period. Net sales 16, , , , ,611 YoY (% ) EBITDA 6,303 70,614 77, , ,854 EBITDA margin (%) Net profit 10,580 63,344 79, , ,854 EPS RoAE (%) RoACE (%) P/E (x) November 2012 BUY Sector: Oil & Gas CMP: Rs328 Target Price: Rs398 Upside: 21% Ashutosh B ashutosh.b@nirmalbang.com Vivek Sarin vivek.sarin@nirmalbang.com Key Data Current Shares O/S (mn) 1,909.7 Mkt Cap (Rsbn/US$bn) 631.1/ Wk H / L (Rs) 401/284 Daily Vol. (3M NSE Avg.) 6,298,108 Share holding (%) 4QFY12 1QFY13 2QFY13 Promoter FII DII Corporate General public One Year Indexed Stock Performance Nov-11 Jan-12 Mar-12 May-12 Jul-12 Sep-12 Nov-12 CAIRN INDIA Price Performance (%) 1 M 6 M 1 Yr Cairn India (0.2) Nifty Index (0.3) Source: Bloomberg NSE S&P CNX NIFTY INDEX 7 Please refer to the disclaimer towards the end of the document.

8 Financials Exhibit 1: Income statement Net sales 16, , , , ,611 % growth Staff costs 1,102 1, ,700 2,209 Operating expenses 2,382 5,017 6,300 8,749 11,599 Other expenses 4,958 14,114 18,872 38,081 48,949 Total expenditure 8,442 20,236 27,090 29,822 40,946 EBITDA 6,303 70,614 77, , ,854 % growth , (1.9) EBITDA margin (%) Other income 4,077 1,288 9,380 9,794 11,795 Interest costs 148 3,003 2, Depreciation 1,485 11,930 14,403 18,708 21,811 Profit before tax 10,232 68,899 84, , ,838 % growth (2.5) Tax (348) 5,556 4,857 7,917 11,984 Effective tax rate (%) (3.4) Net Profit 10,580 63,344 79, , ,854 % growth (6.2) EPS (Rs) DPS (Rs) Payout (%) Exhibit 2: Cash flow PBT 10,232 68,899 84, , ,838 (Inc.)/dec. in working capital (6,605) (7,614) (15,818) 745 (2,046) Cash flow from operations 3,627 61,286 68, , ,792 Other income (4,077) (1,288) (9,380) (9,794) (11,795) Depreciation 1,485 11,930 14,403 18,708 21,811 Interest paid (-) 148 3,003 2, Unsuccessful exploration costs 2,085 1,667 1,960 3,716 3,726 Tax paid (-) (2,675) (11,489) (20,233) (24,590) (23,968) Dividends paid (-) (23,006) (21,571) Net cash from operations ,108 57,425 89,210 85,995 Capital expenditure (-) (33,758) (34,168) (30,101) (45,780) (54,390) Net cash after capex (33,163) 30,941 27,324 43,430 31,605 Other income 4,077 1,288 9,380 9,794 11,795 Inc./(dec.) in borrowings (9,557) (7,225) (14,264) (12,518) 0 (Inc.)/dec. in investments (15,411) 6,180 (7,411) 0 0 Equity issue/(buyback) (390) 0 0 Cash from financial activities (53,976) 31,323 14,639 40,706 43,400 Others (2,000) 4,229 14,477 (4,197) (3,726) Opening cash 65,271 9,294 44,847 73, ,472 Closing cash 9,294 44,847 73, , ,146 Change in cash (55,977) 35,553 29,116 36,510 39,674 Exhibit 3: Balance sheet Equity 18,970 19,019 19,074 19,074 19,074 Reserves 319, , , , ,157 Net worth 338, , , , ,231 Total loans 34,007 26,782 12, Deferred tax liabilities 4,619 5,750 6,841 6,841 6,841 Liabilities 377, , , , ,072 Gross block 2,228 66,539 73,639 80,928 99,526 Depreciation 958 7,304 14,346 24,074 35,198 Net block 1,270 59,236 59,294 56,854 64,328 CWIP 96,629 60,668 76, , ,675 Long-term Investments 17,124 10,944 18, , ,193 Goodwill 253, , ,193 18,356 18,356 Deferred tax assets Inventories 2,909 3,277 4,441 6,938 7,388 Debtors 3,067 14,829 14,968 22,300 23,747 Cash 9,294 44,847 73, , ,146 Other current assets 1,897 1, Loans & advances 6,566 16,269 33,765 50,437 62,421 Total current assets 23,734 80, , , ,095 Creditors 9,869 12,638 12,309 19,822 21,108 Provisions 4,937 16,628 19,946 23,006 21,571 Total current liabilities 14,806 29,266 32,255 42,828 42,679 Net current assets 8,928 51,285 95, , ,416 Total assets 377, , , , ,072 Exhibit 4: Key ratios Y/E March FY10 FY11 FY12 FY13E FY14E Per share EPS Book value per share Dividend per share Cash EPS per share Free cash flow per share (18.5) Valuation (x) P/E P/BV EV/EBITDA Margins (%) EBITDA margin Net profit margin Asset-based ratios (%) RoAE RoACE Du Pont analysis RoE PAT/PBT (%) PBT/EBIT (%) EBIT/sales (%) Sales/assets (x) Assets/equity (x) Cairn India

9 IRB Infrastructure Developers 12 November 2012 Top Buys Reuters: IRBI.BO; Bloomberg: IRB IN Galloping Ahead IRB Infrastructure, a premier toll road developer and operator with in-house integrated project execution capabilities, offers a good blend of growth and sustainable cash flow (EPC business will drive consolidated revenue at a CAGR of 19% over FY12-FY14E and toll revenue will provide sustainable operating cash flow of around Rs22bn over FY13-FY14E to meet equity commitment of new projects without equity dilution). We assign a Buy rating to the stock with a target price of Rs193 based on SOTP valuation. Biggest beneficiary of opportunity in road segment: National Highways Authority of India (NHAI) is expected to tender road projects of around 18,000km in the next three years, which augurs well for IRB Infrastructure, India s largest integrated player in the road space. In FY12, NHAI tendered road projects of 6,400km of which the company secured the Ahmedabad-Vadodra mega expressway project for Rs49bn and is targeting road projects of ~300km each year. The company has already achieved 60% of its FY13E target by bagging 186km Goa-Kundapur road project. Strong operating cash flow to drive future growth: IRB Infrastructure, which has a portfolio of 17 projects with a daily gross toll collection of Rs330mn, is expected to post toll revenue CAGR of 24% over FY12-FY14E. The company has witnessed significant growth in operating cash flow, from Rs2bn in FY08 to Rs11bn in FY12, which is expected to increase to Rs13.8bn until FY14.On the other hand, for the underdeveloped BOT projects, the equity commitment could be in the range of Rs18bn over FY13-15E, which could be funded through internal accruals. Thus, existing cash flows are sufficient to meet equity funding requirements of its projects without any dilution. EPC order book of Rs75bn to drive robust growth: The company has an order book work worth Rs75bn (excluding O&M order book, 3.5x FY12 construction revenue), which is likely to be executed over the next two-three years. Robust order book coupled with four projects under active phase, would drive revenue CAGR of 19% over FY12-FY14E. However, we expect net profit to show a CAGR of 8.5% due to higher interest costs and depreciation on completion of BOT projects. SOTP-based target price of Rs193: We assign a Buy rating on the stock with a target price of Rs193. We have valued the stock via the SOTP route using the FCFE method for BOT assets and relative valuation (PE ratio) for EPC business. Consequently, we have arrived at a valuation of Rs193, comprising Rs150 for BOT assets and Rs43 for EPC business. We have not done any valuation for the company s investments in real estate and airport development, as these projects are still at the planning stage. Net sales 17,049 24,381 31,307 40,103 45,217 EBITDA 7,990 10,939 13,735 16,247 18,874 Net profit 3,855 4,524 4,960 5,406 5,836 EPS (Rs) EBITDA margin (%) PER (x) P/BV (x) Price/sales (x) EV/EBITDA (x) RoCE (%) RoE (%) Source: Company, Nirmal Bang Institutional Reearch BUY Sector: Infrastructure CMP: Rs122 Target Price: Rs193 Upside: 58% Amit Srivastava amit.srivastava@nirmalbang.com Nitin Arora nitin.arora@nirmalbang.com Key Data Current Shares O/S (mn) Mkt Cap (Rsbn/US$mn) 40.3/ Wk H / L (Rs) 211/100 Daily Vol. (3M NSE Avg.) 4,356,082 Share holding (%) 4QFY12 1QFY13 2QFY13 Promoter FII DII Corporate General Public One Year Indexed Stock Performance Nov-11 Jan-12 Mar-12 May-12 Jul-12 Sep-12 Nov-12 IRB INFRASTRUCTU NSE S&P CNX NIFTY INDEX Price Performance (%) 1 M 6 M 1 Yr IRB Infra (20.8) (0.4) (27.3) Nifty Index (0.3) Source: Bloomberg 9 Please refer to the disclaimer towards the end of the document.

10 Financials Exhibit 1: Income statement Net sales 17,049 24,381 31,307 40,103 45,217 % growth Raw material costs 7,851 11,812 15,226 20,746 22,918 Staff costs ,376 1,767 1,949 Other expenses ,343 1,475 Total expenditure 9,058 13,442 17,572 23,856 26,342 EBITDA 7,990 10,939 13,735 16,247 18,874 Growth (%) EBITDA margin (%) Other income ,252 1,377 1,515 Interest 2,494 3,572 5,505 5,488 7,162 Gross profit 5,986 8,012 9,482 12,137 13,228 Growth (%) Depreciation 1,819 2,254 2,970 5,006 5,466 Profit before tax 4,167 5,759 6,512 7,131 7,761 Tax 133 1,118 1,552 1,666 1,799 Effective tax rate (%) Net profit 4,034 4,641 4,960 5,464 5,962 Growth (%) Net profit after MI 3,855 4,524 4,960 5,406 5,836 Growth (%) Exhibit 3: Balance sheet Equity 3,324 3,324 3,324 3,324 3,324 Reserves 17,075 21,002 25,243 30,649 36,485 Net worth 20,399 24,326 28,566 33,972 39,808 Minority Interest ,123 1,181 1,308 Short-term loans 117 5,116 17,913 26,869 40,303 Long-term loans 29,035 41,139 50,455 41,605 35,311 Total loans 29,152 46,255 68,367 68,473 75,614 Deff. tax liability (net) Total liabilities 50,597 71,709 98, , ,456 Gross block 40,185 41,317 66,189 83, ,458 Depreciation 5,511 7,695 10,647 15,653 21,120 Net block 34,674 33,622 55,542 68,217 90,339 Capital work-in-progress 8,802 25,085 24,452 24,452 24,452 Long-term investments Inventories 1,698 1,638 1,624 3,296 3,716 Debtors Cash 5,102 12,000 18,208 9, Other current assets 4,380 6,349 8,427 10,987 11,769 Total current assets 11,477 20,383 28,399 24,187 16,817 Creditors 1,587 4,842 5,825 7,691 8,920 Other current liabilities 3,229 3,099 4,440 5,494 5,946 Total current liabilities 4,816 7,941 10,265 13,185 14,866 Net current assets 6,661 12,443 18,134 11,002 1,952 Misc. expenses Total assets 50,597 71,709 98, , ,456 Exhibit 2: Cash flow EBIT 6,661 9,331 10,765 11,241 13,408 Inc./(dec) in working capital 1,849 1, (1,831) 395 Cash flow from operations 8,510 10,645 11,281 9,410 13,803 Other income 2,009 2,918 1,252 1,377 1,515 Depreciation 1,819 2,254 2,970 5,006 5,466 Interest paid (-) (2,494) (3,572) (5,505) (5,488) (7,162) Tax paid (-) (812) (1,463) (1,552) (1,666) (1,799) Dividends paid (-) (429) (753) (719) - - Net cash from operations 8,604 10,027 7,727 8,639 11,824 Capital expenditure (-) (10,604) (17,510) (24,240) (17,681) (27,588) Net cash after capex (2,000) (7,483) (16,512) (9,042) (15,764) Inc./(dec.) in long-term borrowing 2,574 20,685 22, ,141 Inc./(dec.) in investments 381 (6,382) 364 (28) (32) Equity issue/(buyback) 0 (4) Cash from financial activities 2,955 14,380 22, ,109 Change in cash 955 6,898 6,208 (8,964) (8,655) Opening cash 4,147 5,102 12,000 18,208 9,244 Closing cash 5,102 12,000 18,208 9, Exhibit 4: Key ratios Y/E March FY10 FY11 FY12 FY13E FY14E EPS (x) Valuations PE ratio (x) Price /CEPS (x) Price / BV (x) EV /sales (x) EV /EBITDA (x) Margins (%) EBIDTA margin EBIT margin PBT margin Net margin Returns (%) RoCE RoNW Working capital T/O days Inventory T/O Debtors T/O Loans and adv. T/O Creditors T/O DuPont method NPM (PAT/sales) Total asset T/O Equity multiplier Gearing ratio Net debt/equity (x) Total debt/equity (x) IRB Infrastructure Developers

11 Disclaimer Stock Ratings Absolute Returns BUY > 15% HOLD 0-15% SELL < 0% This report is published by Nirmal Bang s Institutional Equities Research desk. Nirmal Bang has other business units with independent research teams separated by Chinese walls, and therefore may, at times, have different or contrary views on stocks and markets. This report is for the personal information of the authorised recipient and is not for public distribution. This should not be reproduced or redistributed to any other person or in any form. This report is for the general information for the clients of Nirmal Bang Equities Pvt. Ltd., a division of Nirmal Bang, and should not be construed as an offer or solicitation of an offer to buy/sell any securities. We have exercised due diligence in checking the correctness and authenticity of the information contained herein, so far as it relates to current and historical information, but do not guarantee its accuracy or completeness. The opinions expressed are our current opinions as of the date appearing in the material and may be subject to change from time to time without notice. Nirmal Bang or any persons connected with it do not accept any liability arising from the use of this document or the information contained therein. The recipients of this material should rely on their own judgment and take their own professional advice before acting on this information. Nirmal Bang or any of its connected persons including its directors or subsidiaries or associates or employees or agents shall not be in any way responsible for any loss or damage that may arise to any person/s from any inadvertent error in the information contained, views and opinions expressed in this publication. Access our reports on Bloomberg Type NBIE <GO> Team Details: Name Id Direct Line Rahul Arora CEO rahul.arora@nirmalbang.com / 99 Hemindra Hazari Head of Research hemindra.hazari@nirmalbang.com / 18 Sales and Dealing: Neha Grover AVP Sales neha.grover@nirmalbang.com Ravi Jagtiani Dealing Desk ravi.jagtiani@nirmalbang.com , Sudhindar Rao Dealing Desk sudhindar.rao@nirmalbang.com , Pradeep Kasat Dealing Desk pradeep.kasat@nirmalbang.com /8101, Michael Pillai Dealing Desk michael.pillai@nirmalbang.com /8103, Nirmal Bang Equities Pvt. Ltd. Correspondence Address B-2, 301/302, Marathon Innova, Nr. Peninsula Corporate Park Lower Parel (W), Mumbai Board No. : /1 Fax. :