MANPASAND BEVERAGES LTD Result Update (PARENT BASIS): Q2 FY18 Index Details Stock Data Sector Non-alcoholic Beverages BSE Code 539207 Face Value 10.00 52wk. High / Low (Rs.) 511.83/253.38 Volume (2wk. Avg.) 5894 Market Cap (Rs. in mn.) 46396.62 Annual Estimated Results(A*: Actual / E*: Estimated) Years( Rs. In mn) FY17A FY18E FY19E Net Sales 7171.12 8963.90 10756.68 EBITDA 1576.85 1976.21 2441.98 Net Profit 726.37 937.84 1211.20 EPS 12.70 8.20 10.58 P/E 31.94 49.47 38.31 Shareholding Pattern (%) As on Sep 2017 As on Jun 2017 PROMOTER 44.14 44.14 PUBLIC 55.86 55.86 OTHERS -- -- 1 Year Comparative Graph MANPASAND BEVERAGES LTD S&P BSE SENSEX CMP: 405.45 NOV 20 th, 2017 Overweight SYNOPSIS ISIN: INE122R01018 Manpasand Beverages Limited is engaged in the business of manufacturing of fruit juices in the beverages segment. The company achieved a turnover of Rs. 1258.17 mn for Q2 FY 2017-18 as against Rs. 1063.73 mn in the corresponding quarter of the previous year, up by 18.28%. Total Income for Q2 of FY 17 18 at Rs. 1322.70 mn was higher by 22.41% over previous fiscal s same quarter total income of Rs. 1080.50 mn. During the quarter, EBIDTA stood at Rs. 279.82 mn as against Rs. 239.18 mn in the corresponding period of the previous year, up by 16.99%. Profit before tax (PBT) increased by 67.49% to Rs. 101.68 mn in Q2 FY18 from Rs. 60.71 mn in the corresponding quarter of the previous year. During the quarter, net profit increased by 65.34% to Rs. 89.50 mn from Rs. 54.13 mn in the corresponding quarter ending of previous year. EPS of the company stood at Rs. 0.78 in Q2 FY18 against Rs. 1.08 in the corresponding quarter of the previous year. The Revenues of the company has increased to Rs.4272.79 mn in H1 FY18 from to Rs.3432.85 mn in H1 FY17. In H1 FY18, The PAT of the company has increased to Rs.448.56 mn from Rs. 340.61 mn in H1FY17, up by 31.69%. Net Sales and PAT of the company are expected to grow at a CAGR of 26% and 34% over 2016 to 2019E, respectively. PEER GROUPS CMP MARKET CAP EPS(TTM) P/E(X)(TTM) P/BV(X) DIVIDEND Company Name (Rs.) Rs. in mn. (Rs.) Ratio Ratio (%) Manpasand Beverages Ltd 405.45 46396.62 13.80 29.38 2.01 10.00 Orient Beverages Ltd 111.55 241.10 1.39 80.25 1.28 8.00 Transglobe Foods Ltd 8.30 24.10 - - - 0.00
QUARTERLY HIGHLIGHTS (PARENT BASIS) Results updates- Q2 FY18, (Rs. In million) Sep-17 Sep-16 % Change Revenue 1258.17 1063.73 18.28% Net Profit 89.50 54.13 65.34% EPS 0.78 1.08 (27.62) EBITDA 279.82 239.18 16.99% Manpasand Beverages Ltd has achieved a turnover of Rs. 1258.17 million for the 2 nd quarter of the FY 2017-18 as against Rs. 1063.73 million in the corresponding quarter of the previous year, up by 18.28%. During the 2 nd quarter, net profit increased by 65.34% to Rs. 89.50 million from Rs. 54.13 million in the corresponding quarter ending of previous year. Reported earnings per share of the company stood at Rs. 0.78 in Q2 FY18 as against Rs. 1.08 in the corresponding quarter of the previous year. Profit before interest, depreciation and tax stood at Rs. 279.82 million as against Rs. 239.18 million in the corresponding period of the previous year, up by 16.99%. Break up of Expenditure Break up of Expenditure Cost of Materials Consumed Q2 FY18 Value in Rs. Million Q2 FY17 % Change 773.15 603.97 28% Excise Duty 0.00 38.78 -- Employee Benefits Expense Depreciation & Amortization Expense 62.00 51.56 20% 169.22 170.96-1% Other Expenditure 207.82 120.02 73%
Latest Updates: Manpasand Beverages and Parle Products Pvt to form an exclusive promotional venture. The beverage major has introduced a new packaging for Mango Sip, Mango Sip Gold, for this partnership. COMPANY PROFILE Manpasand Beverages Ltd is a Fruit Drink Manufacturing company with a primary focus on mango fruit, which is the leading flavour for juice drinks in India. The Mango based fruit drink; Mango Sip is its flagship brand, which is strategically focused towards customers primarily based in semi urban and rural markets. With a view to expand its portfolio, the company launched two new brands, Fruits Up, and Manpasand ORS. Under the Fruits Up brand, the company offered fruit drinks and carbonated fruit drinks in different flavours, and under the Manpasand ORS brand, the company offer fruit drinks with energy replenishing qualities with a primary focus on north East India. The company currently offers fruit drinks in mango and other flavours and carbonated fruit drinks, in different packaging types and sizes.
FINANCIAL HIGHLIGHT (PARENT BASIS) (A*- Actual, E* -Estimations & Rs. In Millions) Balance Sheet as of March 31, 2016-2019E FY16A FY17A FY18E FY19E SOURCES OF FUNDS Shareholder's Funds Share Capital 500.54 572.16 1144.32 1144.32 Reserves and Surplus 5515.29 10963.02 11900.87 13112.06 1. Sub Total - Net worth 6015.83 11535.19 13045.19 14256.39 Non Current Liabilities Long term borrowing 0.00 2.53 5.95 5.36 2. Sub Total - Non Current Liabilities 0.00 2.53 5.95 5.36 Current Liabilities Short term borrowings 0.00 0.00 203.10 182.79 Trade Payables 447.54 672.30 336.15 302.54 Other Financial Liabilities 15.32 5.11 9.41 7.06 Provisions 10.82 4.52 2.53 2.15 Current Tax Liabilities 2.54 0.00 21.60 24.84 Other Current Liabilities 117.27 116.16 99.90 91.90 3. Sub Total - Current Liabilities 593.49 798.09 672.69 611.28 Total Liabilities (1+2+3) 6609.32 12335.81 13723.83 14873.02 APPLICATION OF FUNDS Non-Current Assets Fixed Assets Property, Plant & Equipment 2659.58 4363.39 4276.12 4425.78 Capital Work in progress 1339.36 183.37 627.14 689.85 Intangible assets 0.90 2.34 2.15 2.30 Other Financial Assets 133.60 1234.55 1037.02 1119.99 a) Sub-Total Fixed Assets 4133.44 5783.65 5942.43 6237.92 b) Income Tax Assets (net) 0.00 11.07 0.00 0.00 c) Deferred Tax Assets 151.90 223.46 281.56 323.79 d) Other non-current assets 64.66 1833.10 3574.54 4039.23 1. Sub Total - Non Current Assets 4350.00 7851.28 9798.53 10600.94 Current Assets Current Investment 6.50 2054.19 1068.18 1196.59 Inventories 704.19 615.96 714.51 757.38 Trade receivables 677.50 751.93 691.78 719.45 Cash and Cash Equivalents 43.47 41.54 18.69 22.06 Bank Balances other than Cash 355.04 316.03 41.08 43.14 Loans 1.01 0.32 0.29 0.31 Other Financial Assets 440.77 655.96 1349.45 1484.40 Other current assets 30.84 48.60 41.31 48.75 2. Sub Total - Current Assets 2259.33 4484.53 3925.30 4272.08 Total Assets (1+2) 6609.32 12335.81 13723.83 14873.02
Annual Profit & Loss Statement for the period of 2016 to 2019E Value(Rs.in.mn) FY16A FY17A FY18E FY19E Description 12m 12m 12m 12m Net Sales 5320.04 7171.12 8963.90 10756.68 Other Income 91.40 179.09 313.41 391.76 Total Income 5411.44 7350.21 9277.30 11148.44 Expenditure -4216.93-5773.36-7301.10-8706.46 Operating Profit 1194.52 1576.85 1976.21 2441.98 Interest -57.16-11.85-10.66-9.60 Gross profit 1137.36 1565.00 1965.55 2432.38 Depreciation -570.51-737.57-885.08-1035.55 Profit Before Tax 566.85 827.43 1080.46 1396.84 Tax -61.86-101.06-142.62-185.64 Net Profit 504.99 726.37 937.84 1211.20 Equity capital 500.54 572.16 1144.32 1144.32 Reserves 5515.29 10963.02 11900.87 13112.06 Face value 10.00 10.00 10.00 10.00 EPS 10.09 12.70 8.20 10.58 Quarterly Profit & Loss Statement for the period of 31 st Mar, 17 to 31 st Dec, 2017E Value(Rs.in.mn) 31-Mar-17 30-Jun-17 30-Sep-17 31-Dec-17E Description 3m 3m 3m 3m Net sales 2734.05 3014.62 1258.17 1358.82 Other income 85.19 98.40 64.49 72.23 Total Income 2819.24 3113.02 1322.66 1431.05 Expenditure -2216.51-2451.23-1042.84-1106.49 Operating profit 602.74 661.79 279.82 324.57 Interest -1.05-4.28-8.92-8.20 Gross profit 601.69 657.50 270.90 316.36 Depreciation -240.58-236.63-169.22-189.53 Profit Before Tax 361.11 420.87 101.68 126.84 Tax -47.73-61.81-12.18-16.74 Net Profit 313.38 359.06 89.50 110.09 Equity capital 572.16 572.16 1144.32 1144.32 Face value 10.00 10.00 10.00 10.00 EPS 5.48 6.28 0.78 0.96
Ratio Analysis Particulars FY16A FY17A FY18E FY19E EPS (Rs.) 10.09 12.70 8.20 10.58 EBITDA Margin (%) 22.45% 21.99% 22.05% 22.70% PBT Margin (%) 10.65% 11.54% 12.05% 12.99% PAT Margin (%) 9.49% 10.13% 10.46% 11.26% P/E Ratio (x) 40.19 31.94 49.47 38.31 ROE (%) 8.39% 6.30% 7.19% 8.50% ROCE (%) 10.37% 7.27% 8.23% 9.74% Debt Equity Ratio 0.00 0.00 0.02 0.01 EV/EBITDA (x) 16.65 13.18 23.01 18.56 Book Value (Rs.) 120.19 201.61 114.00 124.58 P/BV 3.37 2.01 3.56 3.25 Charts
OUTLOOK AND CONCLUSION At the current market price of Rs. 405.45, the stock P/E ratio is at 49.47 x FY18E and 38.31 x FY19E respectively. Earning per share (EPS) of the company for the earnings for FY1 8E and FY19E is seen at Rs. 8.20 and Rs. 10.58 respectively. Net Sales and PAT of the company are expected to grow at a CAGR of 26% and 34% over 2016 to 2019E respectively. On the basis of EV/EBITDA, the stock trades at 23.01 x for FY18E and 18.56 x for FY19E. Price to Book Value of the stock is expected to be at 3.56 x and 3.25 x for FY18E and FY19E respectively. Hence, we say that, we are Overweight in this particular scrip for Medium to Long term investment. INDUSTRY OVERVIEW The Indian Package juice industry size is about Rs. 10000 crores and it has been growing at more than 30% per annum in last few years and will maintain that pace in future as well. India s per capita consumption of packaged beverages is hardly 5% that of the USA per capita consumption. Rural consumption level in India is still standing at 2/3 of Urban consumption. Carbonated drinks account for more than half of the soft drink market in India. Mango based drinks still remain the most popular drinks among Indian Consumers. Opportunities: The company is a proud partner of the Make in India initiative. It caters to Indian taste buds by providing India s Manpasand flavours while keeping consumer s health at forefront. Manpasand aim is to focus on products that resonate with masses as well as classes. It has successfully tapped the otherwise neglected rural market by providing quality products at attractive rates through its strong and ever expanding retail and distribution network, healthier drinks. Jeera Sip is the company s take on the age old traditional recipe with an innovative approach. While keeping the traditional drink s taste and authenticity intact, the company added real fruit and fizz in it to give it a modern twist. Jeera sip will be made available through modern retail stores, standalone stores and traditional provision stores. Innovation, new consumption occasions and focus on execution will be the biggest grown drivers of the soft drink segment. Consumers are looking for products that are available round-the-clock, beating seasonality constraints. This brings an opportunity for beverage makers. Even though traditional and homemade drinks will always remain popular, packaged beverages are gaining traction with Indian consumers who are now convenient-to-consume counterparts. It has created more opportunities in employment sector. The company has started construction work on four new facilities and has expanded its foothold in South India. Manpasand has introduced new flavours as well as different product
categories in order to reach out and tap more consumers. The company is on an aggressive expansion mode and is partnering with key entities for promotional and marketing deals. Future Outlook: The company is the first listed beverage company in the Indian Capitals Market. It has a strong presence in rural/semi urban areas and is now aggressively expanding its base in urban markets too. Since last two years, the company has embarked on a growth mode by increasing its production capacity and product portfolio. With intense R&D, it is working on bringing out innovative and unique range of health drinks. Affordable pricing and a variety of SKUs are going to be plus points on company s expansion plans. Rising consciousness around health and traditional flavours gives an edge to the company s products which are associated with health and well-being.
Disclosure Section The information and opinions in Firstcall Research was prepared by our analysts and it does not constitute an offer or solicitation for the purchase or sale of any financial instrument including any companies scrips or this is not an official confirmation of any transaction. The information contained herein is from publicly available secondary sources and data or other secondary 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. Firstcall Research or any of its affiliates 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. Firstcall Research and/ or its affiliates and/or employees will not be liable for the recipients investment decision based on this document. Analyst Certification The following analysts hereby state that their views about the companies and sectors are on best effort basis to the best of their knowledge. Unless otherwise stated, the individuals listed on the cover page of this report are research analysts. The analyst qualifications, sectors covered and their exposure if any are tabulated hereunder: Name of the Analyst Qualifications Sectors Covered Dr.C.V.S.L. Kameswari M.Sc, PGDCA, Pharma & M.B.A, Diversified Ph.D (Finance) U. Janaki Rao M.B.A Capital Goods B. Anil Kumar M.B.A Auto, IT & FMCG Exposure/Interest to company/sector Under Coverage in the Current Report No Interest/ Exposure No Interest/ Exposure No Interest/ Exposure M. Vijay M.B.A Diversified No Interest/ Exposure V. Harini Priya M.B.A Diversified No Interest/ Exposure MD. Naveed M.B.A Diversified No Interest/ Exposure A. Bhikshapathi M.B.A Diversified No Interest/ Exposure Important Disclosures on Subject Companies In the next 3 months, neither Firstcall Research nor the Entity expects to receive or intends to seek compensation for any services from the company under the current analytical research coverage. Within the last 12 months, Firstcall Research has not received any compensation for its products and services from the company under the current coverage. Within the last 12 months, First call Research has not provided or is providing any services to, or has any client relationship with, the company under current research coverage. Within the last 12 months, First call Research has neither provided or is providing any services to and/or in the past has not entered into an agreement to provide services or does not have a client relationship with the company under the research coverage. Certain disclosures listed above are also for compliance with applicable regulations in various jurisdictions. Firstcall Research does not assign ratings of Buy, Hold or Sell to the stocks we cover. Overweight, Equal-weight, No-Weight and Underweight are not the equivalent of buy, hold and sell. Investors should carefully read the definitions of all weights used in Firstcall Research. In addition, since First call Research contains more complete information concerning the analyst's views, investors should carefully read First call Research, in its entirety, and not infer the contents from the
weightages assigned alone. In any case, weight ages (or research) should not be used or relied upon as investment advice. An investor's decision to buy or sell should depend on individual circumstances (such as the investor's own discretion, his ability of understanding the dynamics, existing holdings) and other considerations. Analyst Stock Weights Overweight (O): The stock's total return is expected to exceed the average total return of the analyst's industry (or industry team's) coverage universe, on a risk-adjusted basis, over the next 12-18 months. Equal-weight (E): The stock's total return is expected to be in line with the average total return of the analyst's industry (or industry team's) coverage universe, on a risk-adjusted basis, over the next 12-18 months. No-weight (NR): Currently the analyst does not have adequate conviction about the stock's total return relative to the average total return of the analyst's industry (or industry team's) coverage universe, on a risk-adjusted basis, over the next 12-18 months. Underweight (U): The stock's total return is expected to be below the average total return of the analyst's industry (or industry team's) coverage universe, on a risk-adjusted basis, over the next 12-18 months. Unless otherwise specified, the weights included in Firstcall Research does not indicate any price targets. The statistical summaries of Firstcall Research will only indicate the direction of the industry perception of the analyst and the interpretations of analysts should be seen as statistical summaries of financial data of the companies with perceived industry direction in terms of weights. Firstcall Research may not be distributed to the public media or quoted or used by the public media without the express written consent of Firstcall Research. The reports of Firstcall Research are for Information purposes only and is not to be construed as a recommendation or a solicitation to trade in any securities/instruments. Firstcall Research is not a brokerage and does not execute transactions for clients in the securities/instruments. Firstcall Research - Overall Statement S. No Particulars Remarks 1 Comments on general trends in the securities market 2 Discussion is broad based and also broad based indices 3 Commentaries on economic, political or market conditions 4 Periodic reports or other communications not for public appearance 5 The reports are statistical summaries of financial data of the companies as and where applicable 6 Analysis relating to the sector concerned 7 No material is for public appearance 8 We are no intermediaries for anyone and neither our entity nor our analysts have any interests in the reports 9 Our reports are password protected and contain all the required applicable disclosures 10 Analysts as per the policy of the company are not entitled to take positions either for trading or long term in the analytical view that they form as a part of their work 11 No conflict of interest and analysts are expected to maintain strict adherence to the company rules and regulations. 12 As a matter of policy no analyst will be allowed to do personal trading or deal and even if they do so they have to disclose the same to the company and take prior approval of the company
13 Our entity or any analyst shall not provide any promise or assurance of any favorable outcome based on their reports on industry, company or sector or group 14 Researchers maintain arms length/ Chinese wall distance from other employees of the entity 15 No analyst will be allowed to cover or do any research where he has financial interest 16 Our entity does not do any reports upon receiving any compensation from any company Firstcall Research Provides Industry Research on all the Sectors and Equity Research on Major Companies forming part of Listed and Unlisted Segments For Further Details Contact: Mobile No: 09959010555 E-mail: info@firstobjectindia.com info@firstcallresearch.com www.firstcallresearch.com