Grindwell Norton Ltd Bloomberg Code: GWN IN

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1 Aug 2, 21 Materials - Abrasives Aug 2, 21 Bloomberg Code: GWN IN India Research - Stock Broking GWN is set to rise with resilient economy Up-tick in industrial and investment activity could steer revenues by 11% during FY1-17E: We expect GWN to grow at a CAGR of 11% during FY1-17E driven by recovery in the industrial and investment activity. Abrasives being industrial consumable to grow in-sync with the recovery in the industrial production at a CAGR of 9.4% whereas ceramics demand driven by capex to grow at a CAGR of 8.2% during FY1-17E. Prudent investments to improve operating leverage aided by robust balance sheet: GWN s prudent investments in capacities during sulk period allows for operating leverage to unfold during FY1-17E. The blended utilisation levels ranged between -6% in the past and we expect the utilisation levels to improve and asset turnover to reach to x by FY17E complemented by its strong cash position with near zero debt balance sheet. Enviable parental back-up to sustain GWN s market leadership: GWN is backed by Saint Gobain (SG), a global leader in materials business; GWN could access proven product and process technologies to up itself in the value chain and remain competitive in terms of costs for export of products through SG s global network. GWN and SG together control ~3% of domestic abrasives market and abrasives contribute ~69% of GWN s revenue. Ceramics offerings are visibly inching up in the value chain. Valuation and Outlook At CMP of Rs. 76, GWN is trading at 41x trailing twelve month EPS. GWN being a market leader with superior margin profile is set to outperform its peers during the times of economic revival. We ascribe a multiple of 31x FY17E EPS, which is 2 standard deviation of one year forward mean PE during FY-1. We initiate a coverage with a BUY rating for a target price of Rs. 89 representing an upside potential of 17% for a 9-12 months period. Key Risks yslower than expected economic recovery could impact demand. yvolatility in raw material prices. yincrease in competition may create pricing pressure. Recommendation (Rs.) BUY CMP (as on Aug 19, 21) 76 Target Price 89 Upside (%) 17 Stock Information Mkt Cap (Rs. Mn/US$ Mn) 4271 / 64 2-wk High/Low (Rs.) 8 / 422 3M Avg. daily volume (Mn).2 Beta (x).8 Sensex/Nifty / 849 O/S Shares(mn).4 Face Value (Rs.). Shareholding Pattern (%) Promoters 9. FIIs 3.3 DIIs 11. Others 26.2 Stock Performance (%) 1M 3M 6M 12M Absolute Relative to Sensex Source: Bloomberg Relative Performance* Aug-14 Nov-14 Feb-1 May-1 Aug-1 GWN Source: Bloomberg; *Index 1 Sensex Exhibit 1: Valuation Summary (Rs. Mn) YE Mar (Rs. Mn) FY13 FY14 FY1 FY16E FY17E Net Sales EBITDA EBITDA Margin (%) Adj. Net Profit EPS (Rs.) RoE (%) PE (x) , *Represents multiples for FY13, FY14 & FY1 are based on historic market price For private circulation only. For important information about Karvy s rating system and other disclosures refer to the end of this material. Karvy Stock Broking Research is also available on Bloomberg, KRVY<GO>, Thomson Publishers & Reuters Analysts Arvind Vinjamoori arvind.vinjamoori@karvy.com De Arul Kaarthick arul.kaarthick@karvy.com 1

2 Aug 2, 21 Company Financial Snapshot (Y/E Mar) Profit & Loss (Rs. Mn) FY1 FY16E FY17E Net sales Optg. Exp (Adj for OI) EBITDA Depreciation Interest Other Income PBT Tax Adj. PAT Profit & Loss Ratios EBITDA margin (%) Net profit margin (%) P/E (x) EV/EBITDA (x) Dividend Yield (%) Balance sheet (Rs. Mn) FY1 FY16E FY17E Total Assets Net Fixed assets Current assets Other assets Total Liabilities Networth Debt Current Liabilities Deferred Tax Balance Sheet Ratios RoE (%) RoCE (%) Net Debt/Equity (.2) (.2) (.3) Equity/Total Assets P/BV (x) Exhibit 2: Shareholding Pattern (%) Company Background. was incorporated as a private limited company by the name Grindwell Abrasives Pvt. Ltd in In 1967, Grindwell Abrasives Ltd. entered into a technical collaboration with US-based Norton Company. The company s name was changed to in 1971, following an equity stake investment by the Norton Company. In 199, Saint-Gobain acquired Norton Company globally. Following the worldwide acquisition in 1996, (GWN) became a majority-owned subsidiary of Saint-Gobain in India. The company operates in two business segments namely abrasives, ceramics & plastics. The abrasives division produces bonded, non-woven, thin wheels, super and coated abrasives whereas the ceramics and plastics division produces silicon carbide and high performance refractories. The company markets these products to the automobiles, steel, bearings, and construction & fabrication industries. Additionally, the company converts and markets performance plastic products. Manufacturing facilities are at Mora, Bengaluru, Nagpur, bated, Tirupati, Halol & Bhutan. Cash Flow (Rs. Mn) Exhibit 3: Revenue Segmentation (%) FY1 FY16E FY17E PBT Depreciation Interest (net) Tax (496) (26) (619) Changes in WC (36) (414) (44) Others (4) (3) (27) CF from Operations Capex (378) (4) (4) Others CF from Investing (32) (42) (423) Change in Debt (1) (1) (1) Dividends (421) (421) (421) Interest (29) (2) (2) CF from Financing (49) (461) (46) Net change in cash Others 26.2% Ceramics & Plastics 28% Others 3% FIIs 3.3% DIIs 11.% Promoters 9.% Abrasives 69% Source: BSE, Karvy Research 2

3 Industry overview Aug 2, 21 The world s Abrasives market is currently valued at $36 Bn and is estimated to reach $1 Bn by 219 according to Transparency Market Research (TMR). North America and Europe together account for -% of the Abrasives consumption followed by China with 17-2%. The Indian Abrasives market size is estimated to be in the range of Rs. - Bn (~2.%), out of which ~7% is organized. The Indian Abrasives industry continues to be catered to by a few large players, numerous smaller players specializing in select & customized products and imports from China catering to the low end of the market. There are two major players in Indian abrasives market viz. Grindwell Norton and Carborundum Universal (CUMI) who have ~3% market share each in the organized segment making it a duopolistic market along with some small sized and local players. The unorganized sector consists of imports from China particularly at the lower end and some players from Europe and Japan having their agents and distributors in India. Exhibit 4: Abrasives- Geographical Segmentation (%) Exhibit : Abrasives- Future Outlook ($ Bn) 6 Rest of the World 3% North America & Europe % China 2% 1 FY1 FY19 Source: TMR, Karvy Research Abrasives to grow in tandem with GDP & IIP and revenue cushioned by replacement demand during harsh times Exhibit 6: IIP Vs Domestic Abrasives - Growth (%) FY6 FY7 FY8 FY9 FY1 FY12 FY13 FY14 FY1 FY16E FY17E IIP Abrasives Growth Source: CSO, RBI, Company, Karvy Research Nearly ~69% of GWN s overall revenue is from abrasives. The product being a consumable grows in tandem with industrial activity. Traditionally, domestic abrasives growth exhibits a near perfect correlation with IIP growth. The industrial activity is set to rebound from multi-year lows to 6.4% and 7.2% during FY16E and FY17E. We expect domestic abrasives revenue to grow in tandem with the industrial recovery at a CAGR of 9.4% during FY1-FY17E. Abrasives, by nature a consumable and has a replacement cycle of up to three month. Therefore, demand for abrasives is mainly replacement driven thus neutral to demand volatility. Joint market leader in domestic abrasives market with superior margins Exhibit 7: Trend in Abrasives Revenue FY12 FY13 FY14 FY1 Sales (Rs. Mn) EBITDA (Rs. Mn) EBITDA Margin % (RHS) Indian organized abrasives market is a virtual duopoly with two players (GWN& CUMI) owning ~7% market. Revenue growth has been sluggish from FY1-FY14 due to weak macro conditions. However, during FY1 abrasives recorded a growth of ~17%. On the back of domestic industrial recovery along with a pick-up in automotive volumes & surge in infrastructure projects, future for abrasives looks optimistic and GWN, being the market leader with superior margins (vis-à-vis to CUMI) is expected to capitalize on the positive opportunity. 3

4 Exhibit 8: Monthly IIP & Core Sector Growth (%) Aug 2, 21 May-14 Jun-14 Jul-14 Aug-14 Sep-14 Oct-14 Nov-14 Dec-14 Jan-1 Feb-1 Mar-1 Apr-1 May-1 Jun Source: CSO, Karvy Research IIP Core Sector Exhibit 9: Abrasives - Segment Abrasives FY12 FY13 FY14 FY1 CAGR (%) Net Sales EBITDA EBITDA Margin % EBIT EBIT Margin % Capex Capital Employed RoCE % Industrial Capex to drive demand for Ceramics along with new product introduction Ceramics segment constitutes of industrial ceramics and plastics; and has formed ~28% of top line in FY1. The main business in this segment is Silicon Carbide (SiC), High Performance Refractories (HPR) and Performance Plastics (PPL). Ceramics has its application in automotive, construction, energy and general industrial. Ceramics business is dependent on the capex cycle and GWN has wide offerings in this space to participate in the capex cycle recovery. The outstanding capital expenditure in the key industry segments like cement, power generation, power transmission, mining, chemicals manufacturing provides optimistic outlook on domestic ceramics business. We expect the segment to grow at a CAGR of 8.2% during FY16E- FY17E. GWN is now more focused on export markets through its plant at Halol near Vadodara, which has capabilities to address growing export opportunities. The PPL business produces standard & customized products through engineered components (ENC), fluid systems (FLS) and composites. The major product lines in PPL are bearings, seals, tubings & hoses, films, fabrics and foams. Ceramics business has grown mainly due to introduction of new products in the PPL division and the new facility in the HPR division. Going forward, the company aims to grow in the segment through increased HPR exports from the Halol facility and introduction of new products in the PPL division. Exhibit 1: GFCF Vs Ceramics- Growth (%) FY6 FY7 FY8 FY9 FY1 FY12 FY13 FY14 FY1 FY16E FY17E Source: CSO, RBI, Karvy Research GFCF Ceramics & Plastics growth Exhibit 11: Trend in Ceramics & Plastics Revenue FY12 FY13 FY14 FY1 Sales (Rs. Mn) EBITDA (Rs. Mn) EBITDA Margin % (RHS)

5 Exhibit 12: Ceramics & Plastics Segment Aug 2, 21 Ceramics & Plastics FY12 FY13 FY14 FY1 CAGR (%) Net Sales EBITDA EBITDA Margin % EBIT EBIT Margin % Capex Capital Employed RoCE % Strong parental back-up to assist growth across the globe GWN is one of the subsidiaries of Compagnie de Saint-Gobain ( Saint-Gobain ), a transnational group with its headquarters in Paris and with sales of 41.1 Bn in 214. Saint-Gobain is active in 64 countries and has also ranked among the top 1 most innovative global organizations; it has 12 research centers worldwide and allocates nearly ~4% of sales to R&D with two dedicated research centers in US and France supported by centers in India & China. Saint Gobain s businesses fall into five broad sectors of activity: Construction Products, Flat Glass, High Performance Materials (HPM), Building Distribution and Packaging. GWN s businesses are a part of the HPM sector and HPM sector contributes nearly ~1% of Saint Gobain s revenue with 27 employees and operations over 42 countries. Parental back up has provided strong global network to GWN, which ranges from Asia Pacific to Africa, mainly through Saint Gobain s group companies. Exports constitute around ~13% of the GWN s total operating revenue and witnessed a strong growth at a CAGR of ~19% during -1. Saint Gobain group provides marketing & customer services support to GWN across the globe and has plans to triple its Indian operations by 219. Apart from abrasives exports, GWN has commenced a new HPR facility at Halol to address growing demand from international market. Exhibit 13: Saint Gobain - Revenue Segmentation (%) Building Distribution 4% Source: Saint Gobian, Karvy Research Construction Products 27% Flat Glass 12% High Performance Materials 1% Packaging 6% Exhibit 14: Saint Gobain - Trend in HPM Sector Source: Saint Gobian, Karvy Research CY1 CY11 CY12 CY13 CY14 Sales (Eu. Bn) EBITDA (Eu. Bn) EBITDA Margin % (RHS) Prudent investing in R&D to aid new product introduction Exhibit 1: R & D Expenditure FY12 FY13 FY14 FY1 R & D Expenses (Rs. Mn) Saint Gobain Research India (SGRIL) incorporated in FY13, is a transversal Research and Development (R&D) centre for the Saint Gobain Group in Chennai, the benefits of which accrue to GWN also. The parent holds 1% stake in SGRIL whereas 19% is held by GWN and two other group companies hold the remaining 3% stake in the R&D centre. GWN benefits from the parent in terms of access to all developments in products and process technology, sourcing of products and development of exports. Apart from that, at the company level, GWN spent ~ Rs mn as R&D expenditure in FY1 and so far GWN has been successful in developing patented backing of coated abrasives, premium cutting and grinding wheels along with improvements in product safety and quality, better cutting rate, longer life and versatility of grinding wheels.

6 Surge in Capacity Utilization coupled with ramp up of production at new plants may steer revenue. Aug 2, 21 Exhibit 16: Capex Trend (Rs. Mn) 1% 8% 6% 4% 2% % FY12 FY13 FY14 FY1 Abrasives Ceramics & Plastics Others GWN has spent nearly Rs. 3 mn during -FY1 as capital expenditure and is currently operating at capacity utilization of -% in bonded abrasives, 6-62% in coated abrasives and ~4% in refractories. Thus, we are not expecting any capex apart from maintenance capex for next couple of years. However, considering the head room available together with revival in industry cycle we expect push up in capacity utilizations. Also, the new non-woven abrasives plant commissioned at Bengaluru and bonded abrasives expansion project at Nagpur last year, have stabilized and ramp up of production is in progress, we believe GWN is well positioned to benefit in terms of better profitability. Growing exports aided by parental presence across globe Exhibit 17: Domestic Vs Export Revenue (%) % % % 2% % FY12 FY13 FY14 FY1 FY16E FY17E Domestic Exports Exports currently contribute nearly ~13% of revenue and GWN exports to countries ranging from Asia Pacific to Africa mainly through its parent s group companies. Exports have grown at a CAGR of 19% during - FY1 and the growing exports have always cushioned weak domestic sales during harsh times. Alongside strong parental support we believe Saint Gobain also facilitates marketing and customer service processes for GWN in global markets. With support from Saint Gobain, we believe GWN is well poised to capitalize on the export opportunity and we expect exports contribution to continue to grow and contribute nearly ~1% by FY17E. Robust balance sheet & strong financials to support growth amid price wars Exhibit 18: Liquidity Cushion FY12 FY13 FY14 FY1 FY16E FY17E (18.4) (6.) (16.) (2.4) (11.8) (12.2) (26.4) Net Debt to Equity % Net Working Capital as % of Sales GWN has delivered a consistent growth during various economic cycles. Its debt-free balance sheet together with consistent positive free cash flows throughout the years and robust cash balance provides enough headroom during the times of price wars. GWN has cash & cash equivalents of Rs.113 Mn in FY1 representing cash per share of Rs. 2. and the same is expected to grow at a CAGR of 4% to reach Rs. 4. 6

7 Aug 2, 21 Exhibit 19: Business Assumptions Y/E Mar (Rs. Mn) FY14 FY1 FY16E FY17E Comments Consolidated Revenue Revenue Growth (%) EBITDA EBITDA Margins (%) PAT (Normalized) EPS EPS Growth (%) (13.1) Capex Net CFO Net Debt (683) (986) (1431) (214) Free Cash Flow We expect the product volumes to grow as the industrial activity picks up together with realization, revenue is estimated to grow at a CAGR of 1.6% during FY1- FY17E. We expect EBITDA to improve owing to stable raw material prices along with other expenses stabilizing at current levels. EPS has been consistently growing at ~23.% and we expect the trend to continue in near future. GWN is debt free and cash rich company to fund its capex through internal accruals. Exhibit 2: Karvy vs Consensus Revenues (Rs. Mn) Karvy Consensus Divergence (%) Comments FY16E (9.1) FY17E (19.6) EBITDA (Rs. Mn) We expect the product volumes to grow as the industrial activity picks up together with realization, revenue is estimated to grow at a CAGR of 1.6% during FY1- FY17E. FY16E (8.6) We expect EBITDA to improve owing to stable raw material prices along with other expeses FY17E (18.6) stabilizing at current levels. EPS (Rs.) FY16E (.1) EPS has been consistently growing at ~23.% and we expect the trend to continue in near FY17E (9.4) future. Source: Bloomberg, Karvy Research 7

8 Aug 2, 21 Exhibit 21: Sales & Sales Growth FY12 FY13 Sales (Rs. Mn) FY FY FY16E FY17E Growth % (RHS) Sales have grown at a CAGR of 9.2% for -FY1 to reach Rs.1134 Mn, we believe GWN to grow at a CAGR of 1.6% for FY1- FY17E owing to pick up in industrial activity combined with turnaround in investment cycle. Keeping GWN s product mix, market share and pricing power in consideration, we expect an increase in product volumes as the macro conditions perk up. Exhibit 22: EBITDA & EBITDA Margin FY FY FY FY FY16E EBITDA (Rs. Mn) EBITDA Margin % (RHS) FY17E EBITDA margin has fallen to 14.9% in FY14 due to weak economic conditions. We believe GWN to improve the EBITDA to 17.% levels by FY17E. Owing to stable raw material prices coupled with other expenses stabilizing at current levels, EBITDA numbers are expected to grow to Rs.2426 Mn for FY17E from the current levels of Rs. 188 Mn. Exhibit 23: PAT & PAT Margin FY12 FY13 PAT (Rs. Mn) FY14 FY1 FY16E FY17E 1 1 PAT Margin % (RHS) PAT reached to Rs. 128 Mn during FY12 and dropped to Rs. 844 Mn in FY14 and likewise, PAT margin also fell to 8.7% levels in FY14 from 11.3% in FY12 mainly owing to weak revenue growth. Considering the revival in economy combined with strong revenue growth and increase in EBITDA numbers, we believe PAT will reach to the highs of Rs. 191 Mn maintaining the PAT margin at 11.%. Exhibit 24: RoE Vs RoCE Both the return ratios, RoE & RoCE are expected to expand by 32 & 33 basis points during FY1-FY17E to 21% and 2.6% levels respectively FY12 FY13 FY14 FY1 FY16E FY17E RoE % RoCE % 8

9 Aug 2, 21 Exhibit 2: CFO Vs FCF (Rs. Mn) FY12 FY13 FY14 FY1 FY16E FY17E CFO FCF Significantly low debt levels coupled with expansion in profitability has led to continuous maintenance of operating and free cash flows during - FY1. Going forward, considering the revenue growth and current capacity utilization rates, we believe both CFO& FCF to remain positive, and FCF to reach Rs. 86 mn & Rs mn by FY16E & FY17E respectively. Exhibit 26: Dividend Payout Ratio FY FY FY FY1 421 FY16E 421 FY17E Dividend (Rs. Mn) Dividend Payout Ratio % (RHS) GWN has been maintaining a constant dividend of Rs. 6. per share since FY12 and we expect the same trend to continue in near future. Considering the constant dividend payment, we expect the dividend payout ratio to reach 26.% by FY17E from the current levels of 4.4%. Exhibit 27: Asset Turnover Ratio & RoA FY FY FY14 FY1 11. FY16E 12.3 FY17E Proper product mix together with company s wider reach and product applicability across segments has helped GWN to improve its RoA to 11.% in FY1 compared to 1.1% in FY14. Going forward, we believe RoA will reach 13.4% and asset turnover multiple to remain at x by FY17E. RoA % Asset Turnover (x) (RHS) Exhibit 28: EPS Vs DPS Vs BVPS (Rs.) FY12 FY13 FY14 FY1 FY16E FY17E 2 1 EPS, BVPS & DPS have grown at a CAGR of.9%, 11.4% & 2.% for -FY1. We believe both EPS & BVPS will grow at a CAGR of 23.6% & % for FY1-FY17E. GWN has been consistently paying a dividend of Rs. 6. per year since FY12 and we expect the trend to continue. BVPS(LHS) EPS DPS 9

10 Aug 2, 21 Valuation & Outlook We believe cyclical trend to be appropriate method to value GWN based on its historical performance during various business and industry cycles. We have considered an eleven year cycle from FY to FY1 to reflect current economic and market sentiments while arriving at valuation for GWN. We value the company based on P/E basis. Exhibit 29: 1 Year Forward PE Band Mar- Mar-6 Mar-7 Mar-8 Mar-9 Mar-1 Mar-11 Mar-12 Mar-13 Mar-14 Mar-1 1 yr fwd PE Mean 1 std dev 2 std dev Source: Prowess, Karvy Research At CMP of Rs. 76, GWN is trading at 41x trailing twelve month EPS. GWN being a market leader with superior margin profile is set to outperform its peers during the times of economic revival. We ascribe a multiple of 31x FY17E EPS, which is 2 standard deviation of one year forward mean PE during FY-1. We initiate a coverage with a BUY rating for a target price of Rs. 89 representing an upside potential of 17% for a 9-12 months period. Exhibit 3 (a): Comparative Valuation Summary CMP Mcap EV/EBITDA (x) P/E (x) EPS (Rs.) (Rs.) (Rs. Mn) FY14 FY1 FY16E FY17E FY14 FY1 FY16E FY17E FY14 FY1 FY16E FY17E Grindwell Norton Carborundum Universal Source: Bloomberg, Company, Karvy Research Exhibit 3 (b): Comparative Operational Metrics Summary CAGR % (FY14-17E) RoE (%) Price Perf (%) Net Sales (Rs. Mn) Sales EBITDA EPS FY14 FY1 FY16E FY17E 3m 6m 12m FY14 FY1 FY16E FY17E Grindwell Norton Carborundum Universal (.1) (7.) (9.6) Source: Bloomberg, Company, Karvy Research Exhibit 31: Company Snapshot (Ratings) Low High Quality of Earnings 33 Domestic Sales 33 Exports 33 Net Debt/Equity 33 Working Capital Requirement 33 Quality of Management 33 Depth of Management 33 Promoter 33 Corporate Governance 33 Source: Karvy Research 1

11 Aug 2, 21 Peer Comparison GWN has better position over CUMI As mentioned earlier, GWN and CUMI are the two major players in Indian abrasive market with the total market share of over ~7%. However, despite similar line of business, GWN reported better growth at higher margins over CUMI. In addition, few of CUMI s foreign assets are non-performing and company has planned to close couple of units; while GWN is getting strong parental back-up and raising its export by capitalizing Saint Gobain s global network. Hence, we believe GWN has better prospects over CUMI going forward. Exhibit 32: Revenue Growth (%) FY13 FY14 FY1 FY16E FY17E - GWN CUMI Source: Bloomberg, Company, Karvy Research Exhibit 33: EBITDA Margin (%) Source: Bloomberg, Company, Karvy Research FY13 FY14 FY1 FY16E FY17E GWN CUMI Exhibit 34: PAT Margin (%) Exhibit 3: RoE (%) FY13 FY14 FY1 FY16E FY17E GWN CUMI Source: Bloomberg, Company, Karvy Research 6 FY13 FY14 FY1 FY16E FY17E GWN CUMI Source: Bloomberg, Company, Karvy Research Key Risks yslower than expected economic recovery could impact demand. yvolatility in raw material prices. yincrease in competition may create pricing pressure. 11

12 Aug 2, 21 Financials Exhibit 36: Income Statement YE Mar (Rs. Mn) FY13 FY14 FY1 FY16E FY17E Revenue Growth (%) Operating Expenses EBITDA Growth (%) (.3) (.3) Depreciation & Amortization Other Income EBIT Interest Expenses PBT Tax Adjusted PAT Growth (%) (.) (13.1) Exhibit 37: Balance Sheet YE Mar (Rs. Mn) FY13 FY14 FY1 FY16E FY17E Cash & Equivalents Sundry Debtors Inventory Loans & Advances Investments Gross Block Net Block CWIP Miscellaneous Total Assets Current Liabilities & Provisions Debt Other Liabilities Total Liabilities Shareholders Equity Reserves & Surplus Total Networth Minority Interest Total Networth & Liabilities

13 Aug 2, 21 Exhibit 38: Cash Flow Statement YE Mar (Rs. Mn) FY13 FY14 FY1 FY16E FY17E PBT Depreciation Interest Tax Paid (373) (334) (23) (26) (619) Inc/dec in Net WC (186) (144) (36) (414) (44) Other Income Other non cash items () (46) (7) (6) (4) Cash flow from operating activities Inc/dec in capital expenditure (832) (263) (378) (4) (4) Inc/dec in investments (23) (43) Others Cash flow from investing activities (86) (264) (32) (42) (423) Inc/dec in borrowings 3 (6) (1) (1) (1) Issuance of equity Dividend paid (418) (421) (421) (421) (421) Interest paid (3) (31) (29) (2) (2) Others () (1) 6 Cash flow from financing activities (414) (12) (49) (461) (46) Net change in cash (177) Exhibit 39: Key Ratios YE Mar FY13 FY14 FY1 FY16E FY17E EBITDA Margin (%) EBIT Margin (%) Net Profit Margin (%) Dividend Payout ratio (%) Net Debt/Equity (x) (.1) (.1) (.2) (.2) (.3) RoE (%) RoCE (%) Exhibit 4: Valuation Parameters YE Mar FY13 FY14 FY1 FY16E FY17E EPS (Rs.) DPS (Rs.) BVPS (Rs.) PE (x) P/BV (x) EV/EBITDA (x) EV/Sales (x) ; *Represents multiples for FY13, FY14 & FY1 are based on historic market price 13

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