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CRISIL Research Ier Report Sterlite Technologies 2012
CRISIL Research Ier Report Sterlite Technologies 2012
CRISIL Research Ier Report Sterlite Technologies 2012
MAKING MA RK
S ET
CTION BE TT FUN ER
CRISIL IERIndependentEquityResearch
Detailed Report
CRISIL IERIndependentEquityResearch
Assessment
Excellent fundamentals Superior fundamentals Good fundamentals Moderate fundamentals Poor fundamentals
Assessment
Strong upside (>25% from CMP) Upside (10-25% from CMP) Align (+-10% from CMP) Downside (negative 10-25% from CMP) Strong downside (<-25% from CMP)
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Analyst Disclosure
Each member of the team involved in the preparation of the grading report, hereby affirms that there exists no conflict of interest that can bias the grading recommendation of the company.
Disclaimer:
This Company-commissioned CRISIL IER report is based on data publicly available or from sources considered reliable. CRISIL Ltd. (CRISIL) does not represent that it is accurate or complete and hence, it should not be relied upon as such. The data / report is subject to change without any prior notice. Opinions expressed herein are our current opinions as on the date of this report. Nothing in this report constitutes investment, legal, accounting or tax advice or any solicitation, whatsoever. The subscriber / user assume the entire risk of any use made of this data / report. CRISIL especially states that, it has no financial liability whatsoever, to the subscribers / users of this report. This report is for the personal information only of the authorised recipient in India only. This report should not be reproduced or redistributed or communicated directly or indirectly in any form to any other person especially outside India or published or copied in whole or in part, for any purpose.
YEARS
MAKING MA RK
S ET
CTION BE TT FUN ER
Rs 40 Rs 33
Fundamental Grade
Sterlite Technologies Ltd (Sterlite Tech) has stepped into FY13 with better business prospects in both its segments telecom and conductors. The optical fibre plants stabilisation issues have been resolved and the conductor segment has a healthy flow of Power Grid Corporation of India Ltd (PGCIL) orders. However, competition in both segments has increased. We believe that the company will bounce back from FY12 lows and, hence, retain the fundamental grade of 3/5, indicating that its fundamentals are good relative to other listed securities in India. Expanding fibre capacity to capture market growth; profitability to improve According to the company, the stabilisation issues in the newly commissioned capacity in its fibre plant at Aurangabad (Maharashtra) have been resolved in Q4FY12. Further, the capacity expansion from 12 mn fibre-Km to 20 mn fibre-Km and established presence in the global markets will ensure that Sterlite Tech is able to cater to the increase in demand for optical fibre. Driven by these factors, the segments EBITDA is expected to grow at 31% CAGR over FY12-14 to Rs 2,279 mn. Healthy PGCIL order book to drive conductor segments profitability After the gap of one year, PGCIL released the order backlog in H2FY12, resulting in healthy order book of Rs 21 bn (62% from PGCIL) for Sterlite Tech, as of FY12, executable over FY13-14. As PGCIL orders are relatively high margin orders, EBITDA per tonne is expected to improve to Rs 9,200 in FY14 from Rs 6,187 in FY12. However, we do not expect profitability to return to historical levels of Rs 12,000-13,000 per tonne as competition has intensified. Further, the company is expanding its conductor capacity from 1.6 lakh MT to 2 lakh MT by FY13, which will enable it to meet the demand CAGR of 15% over FY13-15 in the domestic conductor industry. Also, the company is executing three transmission grid projects entailing equity investment of Rs 10 bn by FY15. Though returns are low, the projects will provide a steady cash flow to Sterlite Tech. Key monitorables/Risks a) Capacity expansion by Chinese players which could reduce Chinas dependency on imports, (b) PGCILs order flow and increase in competition in the domestic conductor industry, and c) successful execution of the ultra mega power transmission projects. Standalone earnings to grow at a CAGR of 71% over FY12-FY14 Sterlite Techs standalone revenue is expected to grow at a CAGR of 15% to Rs 36 bn in FY14 driven by capacity expansion in both telecom and power transmission segments. Further, following an improvement in both segments profitability, standalone PAT is projected to grow from Rs 438 mn in FY12 to Rs 1,279 mn in FY14. Valuations: Current market has upside We have used the sum-of-the-parts method to value Sterlite Tech and maintain the fair value of Rs 40. Based on the current market price of Rs 33, the valuation grade is 4/5.
5 4 3 2 1
Poor Fundamentals
Valuation Grade
Strong Downside Strong Upside
SHAREHOLDING PATTERN
100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% 54.7% 54.7% 54.7% 54.7% 11.6% 2.2% 11.5% 1.8% 11.5% 1.4% 9.9% 2.4% 31.5% 32.0% 32.4% 33.0%
Jun-11 Promoter
Sep-11 FII
Dec-11 DII
ANALYTICAL CONTACT
Mohit Modi (Director) Pravesh Rawat Vishal Rampuria Client servicing desk +91 22 3342 3561 clientservicing@crisil.com mohit.modi@crisil.com pravesh.rawat@crisil.com vishal.rampuria@crisil.com
Source: Company, CRISIL Research estimates # Based on abridged financials, NM: Not meaningful; CMP: Current market price
For detailed initiating coverage report please visit: www.ier.co.in CRISIL Independent Equity Research reports are also available on Bloomberg (CRI <go>) and Thomson Reuters.
CRISIL IERIndependentEquityResearch
Table 1: Sterlite Technologies: Business environment (Standalone)
Product / Segment Revenue contribution (FY12) Revenue contribution (FY14) Product / service offering Telecom 30% 29% Power transmission conductors 70% 71% Grid projects NA NA Setting up of high capacity transmission lines on a build, own, operate and maintain basis (BOOM) India
Won three out of nine projects
Manufactures optical fibre, fibre Power transmission conductors, optical optic cables, structured data fibre composite overhead ground wire cables, and offers telecom (OPGW ) cables integration and managed services India, China, Middle-East, Africa and Europe
5% market share in global fibre 25% market share in India 8% market share in Africa
China and 5% share in Russia for fibre optic cables Sales growth (FY09-FY12 3-yr CAGR) Sales forecast (FY12-FY14 2-yr CAGR) Demand drivers -3%* 17% Domestic Laying out of fibre network in rural areas under the national broadband policy # Increased penetration of FTTx Growth in bandwidth requirement in India due to increase in demand for video content International Increase in FTTx penetration Increase in wireless and broadband network penetration in developing countries Domestic: Aksh Optifibre, Finolex Cables, Birla Ericsson Opticals International: Sumitomo Electric, Prysmian Inc, Nexans Inc, Draka, General Cables, Furukawa, Fujikura, Corning
Competition from global players Increase in fibre capacity in
8% 16% Domestic Increase in power generation PGCILs power transmission corridor project for evacuation of power from surplus regions and supplying it to deficit regions International Improvement in power infrastructure in developing nations Thrust on renewable sources of energy in developed nations Upgradation of national grids of developed nations Domestic: Apar Industries, Diamond Power Infrastructure International: Alcan, ZTT China, Southwire, Midal, Prysmian Inc, General Cables
Competition from domestic players High dependence on PGCIL
NA NA
Increase in power generation PGCILs power transmission corridor
project for evacuation of power from surplus regions and supplying it to deficit regions
Key competitors
Key risks
electricity boards)
*Due to the decline in the optical fibre realisation and lower system integration business Note: Revenue contribution of the telecom and power transmission conductor segments is for the respective standalone business #Fibre to the x (FTTx) is a generic term for any broadband network architecture that uses optical fibre to replace all or part of the usual metal (copper) local loop used for last mile telecommunications. The various configurations are FTTN (fibre to the node), FTTC (fibre to the curb), FTTB (fibre to the building and FTTP (fibre to the premise) Source: Company, CRISIL Research
Grading Rationale
Last year was tough but future looks promising
Sterlite Tech has stepped into FY13 with better demand prospects and expects profitability to improve over FY12 in both its businesses optical fibre/cable and conductors. FY12 was a subdued year for Sterlite Tech as its newly commissioned optical fibre capacity faced stabilisation issues and the demand for conductors was low due to delay in PGCIL orders. The company has resolved the stabilisation issues in the optical fibre plant and currently holds a healthy order book of Rs 21 bn (62% PGCIL orders) in the conductor segment. Further, demand for both its products optical fibre/cables and conductors - is expected to be healthy over the next two years. The companys prospects have improved from the previous year and we expect standalone earnings to grow at a two-year CAGR of 71% over FY12-14. The growth number appears to be large on account of a low base; the standalone earnings degrew significantly by 59% CAGR during FY10-FY12.
Sterlite Tech, with an installed capacity of 12 mn fibre-Km, is currently the fifth largest global and the only domestic manufacturer of optical fibre
5.5
5.5
6.0
0.0 FY07 FY08 FY09 FY10 FY11 FY12 FY13E FY14E Optical fibre* Optical fibre cable
*includes 4 mn fibre-Km installed in China for FY14 Source: Company, CRISIL Research
CRISIL IERIndependentEquityResearch
With an established presence in global markets
Over the years, Sterlite Tech has established itself in various geographies. Exports comprise ~85% of total revenues of optical fibre business in FY12. The company exports optical fibre and cables to China, Africa, Middle East, South Africa, Europe and the US. According to the management, the company has ~10% market share in Europe, ~6% in China, ~7% in Latin America and ~2% in North America. It has supplied optical fibre and cables to six of the top 10 global telecom service providers.
Sterlite Tech is an established players in global markets such as China, Africa, Middle East, South Africa, Europe and the US
US 6%
China 34%
India 12%
Source: Company
0
1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012E
15.6% 15.9%
10.0%
0.0%
Q1FY11
Q2FY11
Q3FY11
Q4FY11
Q1FY12
Q2FY12
Q3FY12
Note: Telecom segment includes optical fibre, fibre optic cables, data cables and system integration business Source: Company, CRISIL Research Source: Company, CRISIL Research
Q4FY12
CRISIL IERIndependentEquityResearch
Increase in Chinese capacity a threat to profitability
According to Research in China (a China-based research agency), China will become selfsufficient in preform (glass used for making optical fibre) by 2013 driven by capacity expansion by the six small fibre manufacturers in China. Preform imports have already declined from 70% in 2010 to 48.9% in 2011. Since China accounts for ~40% of the global demand for optical fibre, decline in Chinese imports will have an adverse impact on the global players volume growth and their capacity utilisation levels. Also, over the past year, realisations of optical fibre have been stable at US$7.5-8 per fibre-Km since the demand-supply situation has been stable. When the Chinese capacities come on stream, supply will exceed demand and will put pressure on fibre realisation, which will adversely impact profitability of players like Sterlite Tech. According to the management, Chinese manufacturers have not been able to stabilise the preform capacities in the past and, hence, China has always remained an importer of optical fibre. Also, the gestation period for optical fibre capacities is high. Accordingly, the company believes that China will take some time to become self-sufficient.
(Rs mn)
2,500
1,500
100,000 80,000 60,000 40,000 20,000 0 FY10 FY11 FY12 FY13E FY14E
1,000
Sterlite Tech is not only an approved but also one of the largest vendors of PGCIL (which accounts for ~50% of total domestic demand for conductors). As per the company, 25% of Indias national grid uses conductors manufactured by Sterlite Tech. Its other clients include SEBs and a few private players in India. The contracts are awarded based on competitive bidding.
CRISIL IERIndependentEquityResearch
EBITDA per tonne improved in H2FY12; the company reported EBITDA per tonne of Rs 8,844 (adjusted for bad debt write-off of Rs 50 mn) in Q4FY12. PGCIL constitutes 62% of Sterlite Techs total conductor order book of Rs 21 bn as on March 31, 2012.
12.7 11.4 11.5 3.6 1.0 1.4 9.3 6.7 2.1 3.2 4.4 2.4 0.0
Q1FY11
Q2FY11
Q3FY11
Q4FY11
Q1FY12
Q2FY12
Q3FY12
Note: There is a lag of close to one year in order winning and the execution of the order. Source: PGCIL, Company Source: PGCIL, Company
Figure 9: ... which will keep EBITDA per tonne below historical levels
(Rs) 18,000 16,000 14,000 12,000 10,000 8,000 6,000 4,000 11,603 9,120 6,187 8,750 9,200 14,318 16,540
Note: There is a lag of close to one year in order winning and the execution of the order. Source: PGCIL, Company Source: Company, CRISIL Research
Q4FY12
Execution is a monitorable
Sterlite Tech is a new player in the asset-heavy business and does not have any track record of setting up transmission lines. Though the company has outsourced the ground work to EPC players and has recruited an experienced team, successful execution of these projects is a key monitorable. Also, given the low IRRs (10-11%), funding mix (including foreign currency funding) is key for value accretion to equity holders. Accordingly, we prefer to wait for further development in the BOOM projects before factoring them into our valuations.
CRISIL IERIndependentEquityResearch
Key Risks
Delay by PGCIL in awarding contracts
Sterlite Techs profitability in the power segment is driven by the contribution of PGCIL orders to the total orders executed. The companys margins in FY11 and FY12 were depressed as PGCIL delayed orders. PGCILs orders for FY12 are strong and we expect the profitability to bounce back, albeit not at historical levels as the competition in this segment has increased. However, any delay in PGCIL orders in the future will impact the conductor segments profitability.
10
Financial Outlook
Standalone revenue to grow at 15% CAGR over FY12-14
Sterlite Techs standalone revenue is expected to grow at a two-year CAGR of 10% to Rs 36 bn in FY14 driven by capacity expansion in telecom and power transmission segments. The demand for both products - optical fibre/cable and conductors is expected to remain healthy, hence we expect the company to operate both capacities at optimum utilisation levels.
FY10
FY11
FY12
FY13E
FY14E
40,000 35,000 30,000 25,000 20,000 15,000 25,777 10,000 15,370 5,000 FY10 FY11 FY12 FY13E FY14E Power Transmission segment Telecom segment 16,073 19,210 20,577 9,264 6,588 9,469 7,947 10,711
10
10 0
12
12 0
16
16 0
20
16 4
11
CRISIL IERIndependentEquityResearch
Standalone PAT to grow by 71% over FY12 - FY14
Following the growth in sales and improvement in operating performance, standalone PAT is expected to grow to Rs 1,279 mn in FY14 from Rs 438 mn in FY12. PAT margin is expected to expand by 215 bps to 3.8% in FY13. However, we expect a slight contraction in PAT margin in FY14 on account of increase in depreciation and interest expenses. The deprecation is expected to increase y-o-y in FY13 and FY14 as the company capitalises both the optical fibre (FY13) and conductor (FY14) capacities. Further, interest cost is expected to go up in FY13 and FY14 on account of increase in long-term loans, which the company will borrow to fund the equity portion (30% of total capex) in grid projects. Sterlite Tech is expected to report EPS of Rs 2.8 and Rs 3.3 in FY13 and FY14, respectively. The standalone RoE and RoCE are expected to improve from FY12 level but will remain subdued, as the investment in three grid projects will start giving returns from FY15.
12
FY14
Expect rupee to appreciate to Rs 48 per US$ against previous
management discussion, we have revisited our assumptions related to cash outflow for grid projects. Source: CRISIL Research
13
CRISIL IERIndependentEquityResearch
Management Overview
CRISIL's fundamental grading methodology includes a broad assessment of management quality, apart from other key factors such as industry and business prospects, and financial performance.
14
Corporate Governance
CRISILs fundamental grading methodology includes a broad assessment of corporate governance and management quality, apart from other key factors such as industry and business prospects, and financial performance. In this context, CRISIL Research analyses the shareholding structure, board composition, typical board processes, disclosure standards and related-party transactions. Any qualifications by regulators or auditors also serve as useful inputs while assessing a companys corporate governance. Overall, corporate governance at Sterlite Tech meets the desired levels supported by reasonably good board practices and an independent board.
Board composition
Sterlite Techs board comprises six members; Mr Anil Agarwal is the non-executive chairman. The company has three independent directors, which exceeds the requirement under Clause 49 of SEBIs listing guidelines. The independent directors have strong industry experience and are highly qualified. Given the background of directors, we believe the board is well experienced.
Boards processes
The companys quality of disclosures can be considered adequate judged by the level of information and details furnished in the annual report, websites and other publicly available data. The company has all the necessary committees audit, remuneration and investor grievance - in place to support corporate governance practices. The audit committee is chaired by an independent director, Mr Arun Todarwal.
15
CRISIL IERIndependentEquityResearch
Valuation Grade: 4/5
We continue to value Sterlite Tech at Rs 40 per share
We continue to value Sterlite Tech based on the sum-of-the-parts method. We have assigned a fair value of Rs 39 to the companys standalone business based on P/E of 12x FY14E EPS of Rs 3.3. The investment in the China subsidiary is valued at book value of Rs 350 mn to arrive at a fair value of ~Rs 1 per share. Accordingly, we maintain our fair of Rs 40. At the current market price of Rs 33, the valuation grade is 4/5.
Sterlite Tech
1x
5x
12x
24x
36x
EV
3x
5x
8x
10x
P/E movement
(Times)
70 60 50 40 30 20 10 0 -1 std dev +1 std dev
Oct-06
Oct-08
Dec-07
Dec-09
Oct-10
May-07
May-09
May-11
Dec-11
Jul-06
Jul-08
Jul-10
Apr-06
Feb-07
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Apr-06 Jul-06 Oct-06 Feb-07 May-07 Sep-07 Dec-07 Apr-08 Jul-08 Oct-08 Feb-09 May-09 Sep-09 Dec-09 Mar-10 Jul-10 Oct-10 Feb-11 May-11 Sep-11 Dec-11 Mar-12 Jul-12
Premium/Discount to NIFTY
Median PE
Global peers
Adj EPS (US$) Companies Corning Inc General Cable Corp Nexans Sa Prysmian Spa Sumitomo Electric* Fujikura Ltd* Furukawa Electric* Country USA USA Europe Europe Japan Japan Japan CY11 1.8 1.8 0.7 0.7 na na na CY12E 1.4 2.7 3.8 1.5 0.9 -0.2 -0.2 CY13E 1.5 3.5 5.1 1.9 1.3 0.2 0.2 CY11 13.9 5.8 -8.8 -15.1 na na na RoE (%) CY12E 9.7 9.6 5.1 20.0 6.1 -3.5 -7.2 CY13E 10.0 12.2 6.6 22.0 7.8 3.0 5.7 CY11 7.1 14.1 na na na na na P/E CY12E 9.0 9.6 10.0 9.7 15.3 0.0 0.0 CY13E 8.0 7.4 7.5 7.7 8.8 15.1 12.1 CY11 5.8 5.5 4.7 5.8 na na na EV/EBITDA CY12E 5.2 5.4 3.2 6.4 7.7 5.9 9.1 CY13E 4.8 4.6 2.7 5.5 4.9 5.1 7.1 CY11 0.9 0.9 0.6 2.0 na na na P/Book CY12E 0.8 0.8 0.5 2.1 0.9 0.6 1.1 CY13E 0.8 0.8 0.4 1.7 0.7 0.4 0.7
* March ending; Exchange rates considered for the conversion are 1.2 US$/Euro and 78.2 Yen/US$ Source: CRISIL Research, Industry sources
16
Mar-12
Jul-12
17
CRISIL IERIndependentEquityResearch
Company Overview
Sterlite Tech has three main lines of business: telecom products, power transmission conductors and transmission grid projects. Sterlite Industries entered the telecom cable business in 1988 with copper cables. It started producing fibre optic cables in 1992 and backward integrated into optical fibre production in 1995. In 2000, the telecom cables business was demerged into Sterlite Optical Technologies Ltd. In 2006, the company acquired the power conductor business from Sterlite Industries and the company was renamed Sterlite Technologies Ltd.
Milestones
1988 1992 1995 2000 2006 2006 2010 Started the copper cables business Started the fibre optic cables business Backward integrated into optical fibre manufacturing Telecom business demerged into Sterlite Optical Technologies Ltd Acquired the power conductors business from Sterlite Industries and was renamed Sterlite Technologies Ltd Started manufacturing broadband and access networks Won its first UMTP project
Business segments
Telecom products
Under the telecom products business, the company manufactures copper cables, optical fibre, fibre optic cables, structured data cables and provides telecom integration and managed services. This segment contributed ~30% of total revenues in FY12. The company procures silica, the main raw material used in optical fibre, from China. While optical fibre is a standardised product, fibre optic cables is customised.
18
# Based on abridged financials Note: FY12 financials are not strictly comparable with that of the previous years due to the new format of disclosure under Schedule VI of the Companies Act Source: CRISIL Research
19
CRISIL IERIndependentEquityResearch
Annexure: Financials (Consolidated)
Incom e statem e nt (Rs m n) Ope rating incom e EBITDA EBITDA m argin Depreciation EBIT Interest Ope rating PBT Other income Exceptional inc/(exp) PBT Tax provision Minority interest PAT (Reporte d) Less: Exceptionals Adjusted PAT Ratios FY10 Grow th Operating income (%) EBITDA (%) Adj PAT (%) Adj EPS (%) Profitability EBITDA margin (%) Adj PAT Margin (%) RoE (%) RoCE (%) RoIC (%) Valuations Price-earnings (x) Price-book (x) EV/EBITDA (x) EV/Sales (x) Dividend payout ratio (%) Dividend yield (%) B/S ratios Inventory days Creditors days* Debtor days Working capital days Gross asset turnover (x) Net asset turnover (x) Sales/operating assets (x) Current ratio (x) Debt-equity (x) Net debt/equity (x) Interest coverage Per share FY10 Adj EPS (Rs) CEPS Book value Dividend (Rs) Actual o/s shares (mn) 7.2 8.6 25.8 0.5 355.5 FY11 4.0 5.5 29.1 0.5 356.4 FY12# 1.0 2.8 29.3 0.3 393.3 FY13E 2.5 4.6 32.7 0.3 393.3 FY14E 3.1 6.4 35.4 0.3 393.3 33 102 93 49 2.4 4.2 1.3 2.0 0.4 0.0 8.7 38 139 140 63 2.0 3.4 1.0 2.0 0.7 0.5 4.8 42 146 112 57 1.9 3.0 0.9 1.6 0.9 0.7 1.3 44 180 110 35 1.7 2.6 0.7 1.5 1.7 1.3 2.1 43 141 107 38 1.6 2.3 0.6 1.7 2.5 2.3 1.6 Quarte rly financials - s tandalone (Rs m n) Ne t Sales Change (q-o-q) EBITDA Change (q-o-q) EBITDA m argin PAT Adj PAT Change (q-o-q) Adj PAT m argin Adj EPS Q4FY11 6,822 18% 490 14% 7.2% 103 103 -40% 1.5% 0.3 Q1FY12 5,473 -20% 302 -38% 5.5% 52 52 -49% 1.0% 0.1 Q2FY12 7,073 29% 504 67% 7.1% 127 127 142% 1.8% 0.3 Q3FY12 6,635 -6% 522 4% 7.9% 95 95 -25% 1.4% 0.2 Q4FY12 8,093 22% 667 28% 8.2% 165 165 74% 2.0% 0.4 4.6 1.3 3.5 1.3 7.2 0.6 8.3 1.1 6.1 0.7 12.6 1.5 32.7 1.1 8.8 0.8 29.8 0.9 13.0 1.0 5.3 1.1 11.8 0.9 10.8 0.9 9.3 1.3 9.8 0.9 15.7 10.5 33.2 27.8 30.0 12.0 6.2 14.4 14.0 14.5 7.2 1.5 3.6 5.9 8.8 11.2 3.6 8.2 8.1 9.1 14.0 3.4 9.0 8.6 9.9 Cash flow (Rs m n) Pre-tax profit Total tax paid Depreciation Working capital changes Ne t cas h from operations Cash from inves tm ents Capital expenditure Investments and others Ne t cas h from inve stm ents Cash from financing Equity raised/(repaid) Debt raised/(repaid) Dividend (incl. tax) Others (incl extraordinaries) Ne t cas h from financing Change in cash position Clos ing cash 441 (1,379) (208) 154 (992) 1,324 2,103 30 4,091 (208) (47) 3,866 (294) 1,810 1,113 2,686 (139) (199) 3,461 353 2,162 10,990 (118) 436 11,307 2,035 4,197 13,821 (118) (28) 13,675 (1,647) 2,550 (1,032) (143) (1,176) (4,443) (50) (4,493) (6,578) 990 (5,588) (12,871) 130 (12,741) (14,281) (14,281) FY10 3,168 (562) 483 403 3,491 FY11 1,793 (321) 560 (1,698) 334 FY12# 518 (54) 715 1,301 2,480 FY13E 1,330 (332) 830 1,640 3,468 FY14E 1,619 (415) 1,317 (3,563) (1,042) 6.1 60.9 192.3 165.3 (6.9) (28.7) (44.9) (45.0) 15.8 (30.6) (71.9) (74.6) 5.9 64.3 151.8 151.8 25.8 58.3 20.6 20.6 FY11 FY12# FY13E FY14E FY10 24,311 3,811 15.7% 483 3,328 381 2,947 221 (104) 3,064 605 2,459 (104) 2,563 FY11 22,645 2,717 12.0% 560 2,157 452 1,705 88 0 1,793 380 1.1 1,412 0 1,412 FY12# 26,218 1,886 7.2% 715 1,171 924 247 271 518 129 (7.70) 396 396 FY13E 27,765 3,099 11.2% 830 2,269 1,105 1,164 166 1,330 332 998 998 FY14E 34,921 4,906 14.0% 1,317 3,589 2,284 1,305 313 1,619 415 1,204 1,204 Balance She et (Rs m n) Liabilitie s Equity share capital Reserves Minorities Ne t w orth Convertible debt Other debt Total debt Def erred tax liability (net) Total liabilities Asse ts Net f ixed assets Capital WIP Total fixed ass ets Inve stm ents Current ass ets Inventory Sundry debtors Loans and advances Cash & bank balance Marketable securities Total curre nt ass ets Total curre nt liabilities Ne t curre nt ass ets Intangible s/Misc. e xpe nditure Total as se ts 1,709 6,290 1,280 2,103 1,070 12,452 6,216 6,236 121 13,377 1,928 8,665 2,132 1,810 1,120 15,655 7,964 7,691 114 18,714 2,806 7,859 3,091 2,162 130 16,049 10,296 5,753 34 22,639 2,999 8,512 2,959 4,197 18,667 12,649 6,017 34 34,944 3,544 10,435 3,593 2,550 20,122 12,189 7,933 34 49,824 6,168 852 7,019 6,983 3,926 10,909 10,676 6,176 16,852 10,341 18,552 28,893 19,635 22,223 41,857 3,587 3,587 602 13,377 711 8,474 3 9,188 713 9,664 10,376 7,678 7,678 660 18,714 10,364 10,364 735 22,639 787 10,662 91 11,540 21,353 21,353 735 34,944 787 11,978 91 12,856 35,175 35,175 735 49,824 787 13,036 91 13,914 FY10 FY11 FY12# FY13E FY14E
# Based on abridged financials Note: FY12 financials are not strictly comparable with that of the previous years due to the new format of disclosure under Schedule VI of the Companies Act Source: CRISIL Research
20
Focus Charts
Expanding capacities of both segments...
Capacity Conductor (Tonne) Optical Fibre (mn fibre-Km)
India China
FY10
FY11
FY12
FY13E
FY14E
40,000 35,000 30,000 25,000 20,000 15,000 25,777 10,000 15,370 5,000 FY10 FY11 FY12 FY13E FY14E Power Transmission Business Telecom segment 16,073 19,210 20,577 9,264 6,588 9,469 7,947 10,711
10
10 0
12
12 0
16
16 0
20
16 4
21
CRISIL IERIndependentEquityResearch
YEARS
MAKING MA RK
S ET
CTION BE TT FUN ER
CRISIL IERIndependentEquityResearch
CRISIL Research Team
President
Mukesh Agarwal CRISIL Research +91 22 3342 3035 mukesh.agarwal@crisil.com
Analytical Contacts
Tarun Bhatia Prasad Koparkar Binaifer Jehani Manoj Mohta Sudhir Nair Mohit Modi Jiju Vidyadharan Ajay D'Souza Ajay Srinivasan Rahul Prithiani Senior Director, Capital Markets Senior Director, Industry & Customised Research Director, Customised Research Director, Customised Research Director, Customised Research Director, Equity Research Director, Funds & Fixed Income Research Director, Industry Research Director, Industry Research Director, Industry Research +91 22 3342 3226 +91 22 3342 3137 +91 22 3342 4091 +91 22 3342 3554 +91 22 3342 3526 +91 22 4254 2860 +91 22 3342 8091 +91 22 3342 3567 +91 22 3342 3530 +91 22 3342 3574 tarun.bhatia@crisil.com prasad.koparkar@crisil.com binaifer.jehani@crisil.com manoj.mohta@crisil.com sudhir.nair@crisil.com mohit.modi@crisil.com jiju.vidyadharan@crisil.com ajay.dsouza@crisil.com ajay.srinivasan@crisil.com rahul.prithiani@crisil.com
Business Development
Siddharth Arora Vinaya Dongre Sagar Sawarkar Deepak Mittal Prosenjit Ghosh Director, Customised Research Director, Industry & Customised Research Associate Director, Equity Research Associate Director, Funds & Fixed Income Research Associate Director, Industry & Customised Research +91 22 3342 4133 +91 22 3342 8025 +91 22 3342 8012 +91 22 3342 8031 +91 22 3342 8008 siddharth.arora@crisil.com vinaya.dongre@crisil.com sagar.sawarkar@crisil.com deepak.mittal@crisil.com prosenjit.ghosh@crisil.com
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