4QFY2012 Result Update | Infrastructure

June 5, 2012

Sadbhav Engineering
Performance Highlights
Quarterly highlights - Standalone
Y/E March (` cr) Net sales Operating profit Net profit
Source: Company, Angel Research

BUY
CMP Target Price
Investment Period
% chg (yoy) (13.6) (10.3) (13.0) 3QFY12 725 82 42 % chg (qoq) 24.8 4.4 12.4

`119 `182
12 Months

4QFY12 905 86 47

4QFY11 1,047 96 54

Stock Info Sector Market Cap (` cr) Net Debt (` cr) Beta 52 Week High / Low Avg. Daily Volume Face Value (` ) BSE Sensex Nifty Reuters Code Bloomberg Code Infrastructure 1,794 393 0.5 161/94 37,249 1 16,020 4,863 SADE.BO SADE@IN

For 4QFY2012, Sadbhav Engineering (SEL) reported a mixed set of numbers, with revenue coming marginally higher than our estimates while earnings coming in lower than our expectations. SEL had an order inflow of `2,844cr (majority contribution by the two recent road BOT projects) during FY2012, taking its order book to `7,554cr (2.8x FY2012 revenue), which provides good revenue visibility. We maintain our Buy view on the stock. Mixed performance: On the top-line front, SEL reported a 13.6% yoy decline to `905cr, marginally higher than our estimate of `856cr. It should be noted that the decline was on account of high base in 4QFY2011. On a sequential basis, revenue grew by 24.8%. On the margin front, the company posted EBITDAM of 9.5%, tad lower than our estimate of 10.0% owing to development cost incurred in projects but revenue not booked. Interest cost stood at `15cr, registering a decline of 10.4% yoy/5.6% qoq. On the earnings front, SEL reported a 13.0% yoy decline to `47cr, lower than our expectation of `53cr. We were expecting higher earnings on the back of bonus income as per the companys guidance. Outlook and valuation: For FY2013, SEL has given a flat guidance on the revenue front primarily due to completion of Dhule Palesnar and Bijapur Hungund projects. Further, the two recently won road BOT projects Gomti ka Chauraha and Solapur Bijapur will start contributing to construction revenue post September 2013. On the EBITDAM front, the company expects its margin to stay at 10.5-11%. SELs management has reiterated that the company would continue to focus on the sustainability of its margins. We continue to maintain our Buy view on the stock with an SOTP target price of `182, owing to robust order backlog of `7,554cr (2.8x FY2012 revenue), strong balance sheet (0.5x net debt/equity FY2012) and as the companys equity requirement for underconstruction/development projects is expected to be met by internal accruals. Key financials (Standalone)
Y/E March (` cr) Net sales % chg Adj. net profit % chg EBITDA (%) FDEPS (`) P/E (x) P/BV (x) RoE (%) RoCE (%) EV/Sales (x) EV/EBITDA (x)
Source: Company, Angel Research

Shareholding Pattern (%) Promoters MF / Banks / Indian Fls FII / NRIs / OCBs Indian Public / Others 47.4 31.8 18.3 2.5

Abs. (%) Sensex Sadbhav

3m

1yr

3yr 6.1 81.9

(7.7) (12.8) (11.2) (19.7)

FY2011 2,209 75.8 120 122.1 10.2 8.0 15.0 2.9 23.5 21.3 1.0 9.3

FY2012 2,676 21.1 140 17.3 10.8 9.3 12.8 2.3 20.2 23.1 0.8 7.5

FY2013E 2,789 4.2 127 (9.6) 10.6 8.4 14.1 1.9 15.0 19.4 0.8 7.4

FY2014E 3,147 12.8 157 23.5 10.7 10.4 11.4 1.7 15.6 18.7 0.7 6.8

Nitin Arora
022-39357800 Ext: 6842 nitin.arora@angelbroking.com

Please refer to important disclosures at the end of this report

Sadbhav Engineering | 4QFY2012 Result Update

Exhibit 1: 4QFY2012 performance (Standalone)

Y/E March (` cr) Net sales Total expenditure Operating profit OPM (%) Interest Depreciation Non operating income Non-recurring items Profit Before Tax Tax Reported Profit After Tax PAT (%) EPS (`)
Source: Company, Angel Research

4QFY12 905 819 86 9.5 15 7 4 68 21 47 5.2 3.1

4QFY11 1,047 951 96 9.2 17 7 4 76 22 54 5.2 3.6

% chg (yoy) (13.6) (13.9) (10.3) 30bp (10.4) (3.6) 2.3 (10.2) (3.4) (13.0) (13.0)

3QFY12 725 643 82 11.4 16 7 3 62 21 42 5.8 2.8

% chg (qoq) 24.8 27.4 4.4 (190)bp (5.6) (3.1) 40.4 9.4 3.3 12.4 (60)bp 12.4

FY2012 2,676 2,385 290 10.8 65 27 11 208 68 140 5.2 9.3

FY2011 2,209 1,972 238 10.8 54 27 19 176 56 120 5.4 8.0

% chg 21.1 21.0 22.0 20.3 2.2 (43.2) 18.6 21.1 17.4 (20)bp 17.4

Exhibit 2: Actual vs. Estimates

Particulars (` cr) Revenues EBITDA Interest Tax PAT
Source: Company, Angel Research

Estimates 856 86 12 25 53

Actual 905 86 15 21 47

Variation (%) 5.7 0.4 31.0 (16.2) (11.3)

Revenue performance marginally above expectations

On the top-line front, SEL reported a 13.6% yoy decline to `905cr, marginally higher than our estimate of `856cr. It should be noted that the decline was on account of high base in 4QFY2011. On a sequential basis, revenue grew by 24.8%. For FY2012, SEL reported a yoy jump of 21.1% on the revenue front to `2,676cr. Majority contribution came from the road segment `2,242cr (`1,980cr BOT projects and `262cr cash contracts), while irrigation and mining contributed `211cr and `219cr, respectively. Upcoming opportunities in the irrigation and mining segments 1) Irrigation: SEL has submitted the bids of `1,025cr, and we expect the bids will open in a couple of weeks; 2) Mining sector bids are outstanding for a total value of `910cr.

Operational BOT projects Toll collection

On the toll collection front for FY2012, SEL reported 17.3% yoy growth for Ahmedabad Ring road project to `78.7cr and 13.9% yoy growth for Aurangabad Jalna project to `27.0cr. As per management, these projects have witnessed traffic growth of 7.7% and 13.2% for Ahmedabad Ring road and Aurangabad Jalna project, respectively, on a yoy basis.

June 5, 2012

Sadbhav Engineering | 4QFY2012 Result Update

Exhibit 3: Revenue lower on high base

1,200 1,000 800 600 400 200 425 476 261 42.1 40.8 51.2 1,047 613 725 430 65.0 44.1 52.2 905 (13.6) 129.0 140.0 120.0 100.0 80.0 60.0 40.0 20.0 (20.0) (40.0)

Exhibit 4: Road segment Lions share of overall revenue (%)

100 90 80 70 60 50 40 30 20 10 FY2008 FY2009 FY2010 FY2011 Irrigation FY2012 FY2013E FY2014E 86 78 77 84 82 78 3 11 14 14 16 6 13 10 8 8 10 8 12 10

72

1QFY11

2QFY11

3QFY11

4QFY11

1QFY12

2QFY12

3QFY12

4QFY12

Sales (` cr, LHS)

Growth (yoy %, RHS)

Road BOT

Mining

Source: Company, Angel Research

Source: Company, Angel Research

Project update
Dhule Palesnar project: Dhule Palasner project achieved the commercial operation date (COD) for 75% of the project length on January 17, 2012, as against the scheduled date of June 18, 2012. For the balance portion of the project, NHAI has already recommended final COD and SEL is expecting the same in June 2012. Average collection in Dhule-Palesner is ~`24.5lakhs/day. Nagpur Seoni project: This project will be limited to 28km as against the original length of 56km. Further, for the payment of annuity, proportionate invoice has already been raised to NHAI. Adjusted annuity for this project would be `17cr-18cr on a semiannual basis. Maharashtra border check post project: Possession for 14 check posts has been given by Government of Maharashtra to SEL; and out of these, COD for three check posts has been proposed and operations have started in all the three check posts. SEL expects another three would be operational in August 2012, and 12 check posts out of 14 will be operational by the end of March 2013. SEL is expecting revenue of `140cr-145cr from the 12 check posts in the first full year of operations (FY2014). Bijapur Hungund: Bijapur Hungund project has achieved the COD for the entire 100% of the project length on April 9, 2012, against the scheduled date of completion of March 3, 2013. Currently, the project has a daily toll collection of `28lakhs/day. Hyderabad Yadgiri: The scheduled date of completion for the project is May 2012, and as per SEL the proposal for 75% completion has already been moved to NHAI and is expected to get the approval by the end of June 2012, post which toll collection would start for 75% of the project highway. Further, SEL is expecting toll revenue of `62cr-65cr during the first full year of operations. Rohtak Panipat: The scheduled date of completion for the project is October 2013. SEL is expecting 75% completion by January 2013 and the balance by April 2013.

June 5, 2012

Sadbhav Engineering | 4QFY2012 Result Update

Under-development projects
SEL has won two road projects Gomti ka Chauraha (TPC `1,280cr; EPC `975cr) and Solapur Bijapur (TPC `1,220; EPC `999cr). However, as SEL is yet to achieve financial closure on these projects, contribution to construction revenue would start from September 2013. Further, SEL is expecting toll revenue of `126cr-129cr and `145cr-148cr for Gomti ka Chauraha and Solapur Bijapur projects, respectively, in the first full year of operations.

Lower EBITDAM and interest cost lead to lower-than-expected earnings growth

On the margin front, the company posted EBITDAM of 9.5%, tad lower than our estimate of 10.0% owing to development cost incurred in projects but revenue not booked for the same. Interest cost stood at `15cr, registering a decline of 10.4% yoy/5.6% qoq. On the earnings front, SEL reported a 13.0% yoy decline to `47cr, lower than our expectation of `53cr. We were expecting higher earnings on the back of bonus income as per the companys guidance.
Exhibit 5: EBITDAM in-line with our estimate
120 100 80 60 40 20 51 53 31 96 68 45 82 86 11.9 12.0 11.1 9.2 11.1 10.5 11.4 9.5 14.0 12.0 10.0 8.0 6.0 4.0 2.0 -

Exhibit 6: PAT trend

60 50 40 30 20 10 25 14 26 54 34 18 42 6.0 5.3 5.5 5.2 5.5 4.2 5.8 7.0 5.2 6.0 5.0 4.0 47 3.0 2.0 1.0 -

1QFY11

2QFY11

3QFY11

4QFY11

1QFY12

2QFY12

3QFY12

1QFY11

2QFY11

3QFY11

4QFY11

1QFY12

2QFY12

3QFY12

4QFY12

EBITDA (` cr, LHS)

EBITDAM (%, RHS)

PAT (` cr, RHS)

PATM (%, RHS)

Source: Company, Angel Research

Source: Company, Angel Research

Bonus of ~`70cr to come in FY2013 for SEL

As per management, SELs parent will receive ~`70cr bonus as its share for the early completion of the two projects (Bijapur Hungund `50cr and Dhule Palesnar `20cr) during FY2013. This bonus (75% of toll collection) is payable to EPC contractors (SEL and other sub contractors) for the early completion of the project and is applicable from 75% completion of project (toll collection starts post 75% completion) till the scheduled completion date. We have accounted this bonus amount (one time income) under other income for SELs parent in FY2013. It should be noted that this bonus amount is adjusted from total earnings, while assigning a PE multiple for valuing its parent business and calculating our SOTP target price.

June 5, 2012

4QFY12

Sadbhav Engineering | 4QFY2012 Result Update

Equity requirement for BOT projects

SELs subsidiary, Sadbhav Infrastructure Project Ltd. (SIPL) has a total equity requirement of ~`919cr (excluding Solapur Bijapur and Gomti ka Chauraha projects), of which the company has already invested `731cr. For the balance `188cr, SIPL can utilize cash balance of `162cr, expected generation of `80cr90cr margin from Maharashtra Border Check Post project (unexecuted portion of `210cr), expected savings (in terms of the debt service reserve account and contingencies) on BOT projects (`250cr from four projects Rohtak-Panipat, Bijapur-Hungood, Hyderabad-Yadgiri and Maharashtra Border Check Post) and sanctioned loan from ICICI Bank of `180cr. Hence, SIPL sits on a comfortable position for the balance equity funding requirement for its BOT projects.

Outlook and valuation

For FY2013, SEL has given a flat guidance on the revenue front primarily due to completion of Dhule Palesnar and Bijapur Hungund projects. Further, the two recently won road BOT projects Gomti ka Chauraha and Solapur Bijapur will start contributing to construction revenue post September 2013. On the EBITDAM front, the company expects its margin to stay at 10.5-11%. SELs management has reiterated that the company would continue to focus on the sustainability of its margins. We continue to maintain our Buy view on the stock with an SOTP target price of `182, owing to robust order backlog of `7,554cr (2.8x FY2012 revenue), strong balance sheet (0.5x net debt/equity FY2012) and as the companys equity requirement for under-construction/development projects is expected to be met by internal accruals.

Exhibit 7: SOTP break-up

Business Segment Construction (a) Ahmedabad Ring Road (SIPL's share 80%) Aurangabad - Jalna (SIPL's share 100%) Mumbai - Nasik (SIPL's share 20%) Nagpur - Seoni (SIPL's share 51%) Dhule - Palasner (SIPL's share 27%) Maharasthra Border (SIPL's share 90%) Rohtak - Panipat (SIPL's share 100%) Bijapur - Hungund (SIPL's share 77%) Hyderabad - Yadgiri (SIPL's share 60%) SIPL - Road BOT Projects SEL holds 80.0% stake in SIPL (b) Total (a+b)
Source: Company, Angel Research

Methodology P/E NPV NPV NPV NPV NPV NPV NPV NPV NPV

Remarks 8x FY2014E earnings CoE -14%, Traffic & Toll increase 5% each CoE -14%, Traffic 5% & Toll increase 18.5% (every 3 years) CoE -14%, Traffic & Toll increase 5% each CoE -14%, Annuity Project CoE -14%, Traffic & Toll increase 5% each CoE -14%, Traffic & Toll increase 5% each CoE -14%, Traffic & Toll increase 5% each CoE -14%, Traffic & Toll increase 5% each CoE -14%, Traffic & Toll increase 5% each

` cr 1,254 274 191 122 18 103 363 377 293 112 1,853 1,482

`/share 83.4 18.2 12.7 8.1 1.2 6.8 24.2 25.0 19.5 7.4 123.2 98.6 182.0

June 5, 2012

Sadbhav Engineering | 4QFY2012 Result Update

Exhibit 8: Key assumptions

FY2009 FY2010 FY2011 Order inflow Revenue Order backlog (Y/E) Order bookto-sales ratio (x)
Source: Company, Angel Research

FY2012 FY2013E FY2014E 2,844 2,676 7,554 2.8 2,673 2,789 7,438 2.7 2,883 3,147 7,175 2.3

2,649 1,074 4,339 4.0

2,912 1,257 5,994 4.8

2,363 2,209 6,965 3.2

Exhibit 9: BOT assumptions

Project Type Status KM Issuing Auth. State Concession (Yrs) Con. Start Con. End TPC (` cr) Equity (` cr) Debt (` cr) Grant (` cr) Traffic Growth (%) Toll inc (%) Interest Rate (%) ARRIL Toll Oper. 76 AUDA Gujarat 20 Jan-07 Jan-27 515.0 74.0 405.0 36.0 5.0 5.0 11.0 AJIT Toll Oper. 66 MSRDC Mah. 24 Jan-07 Jul-30 277.0 83.0 194.0 5.0 5.0 11.0 MNEL Toll 100 NHAI Mah. 20 Dec-09 Dec-29 753.0 52.0 650.0 51.0 5.0 5.0 11.0 NSEL Annuity 57 NHAI MP 20 May-07 Nov-27 269.8 31.5 238.3 8.9 DPTL Toll 97 NHAI Mah./MP 18 Dec-09 Dec-27 1,420.0 355.0 1,065.0 5.0 5.0 11.8 MBCPNL Entry Fees MSRDC Mah. 25 Apr-12 Aug-34 1,426.4 285.4 1,141.0 5.0 5.0 12.8 RPTL Toll 66 NHAI Haryana 25 Sep-10 Sep-35 1,213.6 242.8 970.8 5.0 5.0 12.3 BHTL Toll 100 NHAI Karnataka 20 Mar-13 Sep-30 1,257.1 137.0 846.5 273.6 5.0 5.0 10.5 HYTL Toll 35 NHAI AP 23 Aug-10 Aug-33 480.2 100.0 380.2 5.0 5.0 12.8

Oper. Under Dev. Under Dev. Under Dev. Under Dev. Under Dev. Under Dev.

Source: Company, Angel Research

Exhibit 10: Angel EPS forecast vs. consensus

Angel Forecast FY2013E FY2014E
Source: Company, Angel Research

Bloomberg consensus 10.9 12.5

Variation (%) (22.2) (16.6)

8.4 10.4

June 5, 2012

Sadbhav Engineering | 4QFY2012 Result Update

Investment arguments
Sound balance sheet: SEL has a sound balance sheet with parent net debt/equity of 0.5x as of FY2012. The companys working capital position is also much better than its peers. This has insulated the companys earnings to a great extent in such an exorbitant interest rate scenario, which has been the key concern for the decline in the sectors earnings, and has aided the company to outperform on the bourses. Funds tied up for projects in hand: SEL had successfully raised `400cr through stake dilution (22.2% in August 2010) in SIPL. This has made SEL fully tied up for the projects in hand. This money raising was a timely development for SEL, given its then huge equity commitment towards under-development projects. Also, this helped the company to focus on project execution, which is SELs forte, leading to early completion of projects a rare phenomenon in the industry.

Key concerns
Interest rate: Road BOT projects are vulnerable to interest rate fluctuations and any hike in interest rates would increase SELs interest costs. Commodity risks: Road players are facing pressures from the recent price inflation in commodities such as cement, steel, bitumen and diesel, which have a direct impact on margins. Awarding from NHAI: Slowdown in awarding activity by NHAI would hit order inflow for road-focused players such as SEL.

Company background
SEL was incorporated in 1988. The company is a leading EPC and infrastructure development company based in Ahmadabad. SEL is present in the roads and highways (71.5% of order book), irrigation (13.2%) and mining (15.3%) sectors. The company forayed into the road sector in 1995 and has since then executed several projects for NHAI and state governments. Currently, SEL is one of the largest BOT players in India with 11 projects in its portfolio through its 80.0% owned subsidiary, SIPL.

June 5, 2012

Sadbhav Engineering | 4QFY2012 Result Update

Exhibit 11: Recommendation summary

Company ABL CCCL HCC IRB Infra ITNL IVRCL JP Assoc. L&T Madhucon NCC Patel Engg Punj Lloyd Sadbhav Simplex In. CMP 209 14 17 114 171 39 64 37 31 85 44 119 214 TP Rating FY12E 273 Buy 1,514 2,128 3,988 3,131 5,606 4,971 - Neutral - Neutral 186 265 61 88 70 41 Buy Buy Buy Buy Buy Buy Buy Top line (` cr) FY13E 2,014 2,526 4,239 3,821 6,619 5,510 2,293 2,792 4,522 4,582 7,925 6,722 23.1 14.5 6.5 21.0 18.9 16.3 16.7 14.0 17.8 8.4 3.6 10.9 8.4 14.1 18.0 (0.4) (3.7) 14.9 25.6 0.9 4.8 64.7 4.9 1.4 14.9 2.8 9.3 16.8 EPS (`) 22.6 1.8 (1.8) 15.0 22.0 2.5 4.2 70.8 4.6 1.6 14.0 1.8 8.4 23.5 26.7 2.8 (0.8) 16.9 26.7 4.6 5.0 76.5 4.7 1.9 14.5 3.2 10.4 29.4 21.7 6.5 2.1 125.5 1.9 8.7 (2.6) 17.3 (1.1) 7.2 5.7 32.2 11.6 7.7 6.7 43.3 13.2 18.7 7.6 21.7 5.7 15.8 12.8 12.7 Adj. P/E 9.3 7.6 7.6 7.8 15.4 15.0 17.1 8.1 18.6 6.1 24.0 14.1 9.1 7.8 4.9 6.8 6.4 8.5 12.7 15.8 8.0 15.8 5.8 13.7 11.4 7.3 OB/ 3.9 2.8 3.8 4.3 5.6 2.7 4.3 3.8 2.7 2.6 2.8 2.5 FY14E CAGR (%) FY12E FY13E FY14E CAGR (%) FY12E FY13E FY14E Sales(x)

12,853 15,259 17,502 53,171 59,559 69,089 1,802 5,250 3,573 2,676 6,019 2,206 5,453 3,609 2,789 6,732 2,502 6,169 3,836 3,147 7,837

1,210 1,553

- Neutral - Neutral 182 265 Buy Buy

10,557 11,592 12,993

Source: Company, Angel Research

Exhibit 12: SOTP break-up

Company ` ABL CCCL HCC IRB Infra ITNL IVRCL JP Assoc. L&T Madhucon NCC Patel Engg Punj Lloyd Sadbhav Simplex In. 87 17 (5) 98 53 41 28 1,223 19 14 44 72 83 265 Core Const. % to TP 32 100 (20) 59 20 67 32 79 27 33 46 100 46 100 ` 12 25 2 2 17 Real Estate % to TP 50 29 3 5 18 ` 186 16 64 180 38 6 16 99 Road BOT % to TP 68 70 39 68 54 15 16 54 Invst. In Subsidiaries ` 4 20 330 % to TP 3 33 21 ` 33 35 12 19 19 Others % to TP 12 40 17 48 20 Total ` 273 17 23 166 265 61 88 1,553 70 41 95 72 182 265

Source: Company, Angel Research

June 5, 2012

Sadbhav Engineering | 4QFY2012 Result Update

Profit & loss statement (Standalone)

Y/E March (` cr) Net Sales Other operating income Total operating income % chg Total Expenditure Net Raw Materials Other Mfg costs Personnel Other EBITDA % chg (% of Net Sales) Depreciation& Amortisation EBIT % chg (% of Net Sales) Interest & other Charges Other Income (% of PBT) Share in profit of Associates Recurring PBT % chg Extraordinary Expense/(Inc.) PBT (reported) Tax (% of PBT) PAT (reported) Add: Share of earnings of asso Less: Minority interest (MI) Prior period items PAT after MI (reported) ADJ. PAT % chg (% of Net Sales) Reported EPS (`) Adj. EPS (`) % chg FY2009 FY2010 FY2011 FY2012 FY2013E FY2014E 1,074 1,074 19.5 954 276 625 51 1 120 19.7 11.2 16 104 20.8 9.7 21 12 12.4 95 27.0 95 19.2 20.3 75 75 75 48.0 7.0 6.0 5.0 48.0 1,257 1,257 17.0 1,119 211 843 66 (1) 138 14.7 11.0 23 114 9.7 9.1 33 17 17.0 98 3.5 98 44.1 45.0 54 54 54 (28.6) 4.3 4.3 3.6 (28.6) 2,209 2,209 75.8 1,983 160 1,707 116 0 226 64.0 10.2 27 199 73.9 9.0 43 20 11.1 176 79.4 176 56.2 32.0 120 120 120 122.1 5.4 8.0 8.0 122.1 2,676 2,676 21.1 2,386 166 2,108 111 290 28.5 10.8 27 263 32.0 9.8 65 11 5.2 208 18.5 208 68.0 32.6 140 140 140 17.3 5.2 9.3 9.3 17.3 2,789 2,789 4.2 2,494 177 2,198 119 295 1.7 10.6 39 257 (2.3) 9.2 68 81 30.0 270 29.5 270 87.6 32.4 182 182 127 (9.6) 4.6 12.1 8.4 (9.6) 3,147 3,147 12.8 2,810 196 2,480 135 337 14.2 10.7 49 288 12.2 9.1 73 17 7.3 232 (14.0) 232 75.3 32.4 157 157 157 23.5 5.0 10.4 10.4 23.5

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Sadbhav Engineering | 4QFY2012 Result Update

Balance sheet (Standalone)

Y/E March (` cr) SOURCES OF FUNDS Equity Share Capital Preference Capital Reserves& Surplus Shareholders Funds Minority Interest Total Loans Deferred Tax Liability Total Liabilities APPLICATION OF FUNDS Gross Block Less: Acc. Depreciation Net Block Capital Work-in-Progress Goodwill Investments Current Assets Inventories Debtors Cash Loans & Advances Other Current liabilities Net Current Assets Misc. Exp. not written off Total Assets 261 106 155 125 592 28 278 10 276 1 306 286 1 566 332 122 210 144 1,009 54 441 45 467 3 534 476 830 372 142 230 326 1,434 69 687 85 586 7 952 482 1,038 457 169 288 332 1,519 88 791 56 565 18 904 614 1,235 581 208 374 449 1,543 100 783 52 589 19 948 594 1,417 741 257 485 526 1,689 112 840 51 665 21 1,045 645 1,655 13 331 343 211 11 566 13 379 392 424 14 830 15 611 626 396 16 1,038 15 747 762 449 23 1,235 15 919 934 459 23 1,417 15 1,065 1,080 551 23 1,655 FY2009 FY2010 FY2011 FY2012E FY2013E FY2014E

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Sadbhav Engineering | 4QFY2012 Result Update

Cash flow statement (Standalone)

Y/E March (` cr) Profit Before Tax Depreciation Change in Working Capital Less: Other income Direct taxes paid Cash Flow from Operations (Inc.)/ Dec. in Fixed Assets (Inc.)/ Dec. in Investments Other income Cash Flow from Investing Issue of Equity Inc./(Dec.) in loans Dividend Paid (Incl. Tax) Others Cash Flow from Financing Inc./(Dec.) in Cash Opening Cash balances Closing Cash balances FY2009 FY2010 95 16 105 19 (14) (19) (4) (23) 61 6 (18) 37 (0) 10 10 98 23 155 17 44 (95) (72) (20) 17 (74) 213 6 (3) 204 35 10 45 FY2011 FY2012E FY2013E FY2014E 176 27 (34) 20 56 161 (39) (182) 20 (202) 123 (28) 10 (3) 81 40 45 85 208 27 161 11 68 (4) (86) (6) 11 (81) 0 53 11 14 57 (28) 85 56 270 39 (16) 81 88 156 (124) (116) 81 (160) 10 11 (0) (4) 56 52 232 49 51 17 75 138 (160) (77) 17 (220) 92 11 81 (1) 52 51

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Sadbhav Engineering | 4QFY2012 Result Update

Key Ratios
Y/E March Valuation Ratio (x) P/E (on FDEPS) P/CEPS P/BV Dividend yield (%) EV/Sales EV/EBITDA EV / Total Assets Per Share Data (`) EPS (Basic) EPS (fully diluted) Cash EPS DPS Book Value DuPont Analysis EBIT margin Tax retention ratio Asset turnover (x) ROIC (Post-tax) Cost of Debt (Post Tax) Leverage (x) Operating ROE Returns (%) ROCE (Pre-tax) Angel ROIC (Pre-tax) ROE Turnover ratios (x) Asset Turnover (Gross Block) Inventory / Sales (days) Receivables (days) Payables (days) W.cap cycle (ex-cash) (days) Solvency ratios (x) Net debt to equity Net debt to EBITDA Interest Coverage 0.6 1.7 4.9 1.0 2.8 3.5 0.5 1.4 4.7 0.5 1.4 4.0 0.4 1.4 3.8 0.5 1.5 4.0 4.3 19 73 89 76 4.2 12 104 128 103 6.3 10 93 125 68 6.5 11 101 118 65 5.4 12 103 107 72 4.8 12 94 104 66 20.6 21.0 23.9 16.4 17.1 14.7 21.3 22.9 23.5 23.1 24.6 20.2 19.4 20.2 15.0 18.7 19.4 15.6 9.7 0.8 2.2 16.8 9.4 0.5 20.7 9.1 0.5 1.9 9.4 5.7 0.8 12.2 9.0 0.7 2.5 15.6 7.1 0.7 21.8 9.8 0.7 2.5 16.6 10.4 0.5 19.7 9.2 0.7 2.2 13.6 10.1 0.5 15.3 9.1 0.7 2.1 13.1 9.7 0.4 14.6 6.0 5.0 6.1 0.4 22.8 4.3 3.6 5.1 0.4 26.0 8.0 8.0 9.7 0.5 41.6 9.3 9.3 11.2 0.5 50.7 12.1 8.4 11.0 0.5 62.1 10.4 10.4 13.7 0.5 71.8 23.7 19.7 5.2 0.3 1.9 16.6 3.5 33.2 23.2 4.6 0.3 1.7 15.8 2.6 15.0 12.2 2.9 0.4 1.0 9.3 2.0 12.8 10.7 2.3 0.4 0.8 7.5 1.8 14.1 10.8 1.9 0.4 0.8 7.4 1.6 11.4 8.7 1.7 0.4 0.7 6.8 1.4 FY2009 FY2010 FY2011 FY2012E FY2013E FY2014E

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Sadbhav Engineering | 4QFY2012 Result Update

Research Team Tel: 022 - 39357800

E-mail: research@angelbroking.com

Website: www.angelbroking.com

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This document is solely for the personal information of the recipient, and must not be singularly used as the basis of any investment decision. Nothing in this document should be construed as investment or financial advice. Each recipient of this document should make such investigations as they deem necessary to arrive at an independent evaluation of an investment in the securities of the companies referred to in this document (including the merits and risks involved), and should consult their own advisors to determine the merits and risks of such an investment. Angel Broking Limited, its affiliates, directors, its proprietary trading and investment businesses may, from time to time, make investment decisions that are inconsistent with or contradictory to the recommendations expressed herein. The views contained in this document are those of the analyst, and the company may or may not subscribe to all the views expressed within. Reports based on technical and derivative analysis center on studying charts of a stock's price movement, outstanding positions and trading volume, as opposed to focusing on a company's fundamentals and, as such, may not match with a report on a company's fundamentals. The information in this document has been printed on the basis of publicly available information, internal data and other reliable sources believed to be true, but we do not represent that it is accurate or complete and it should not be relied on as such, as this document is for general guidance only. Angel Broking Limited or any of its affiliates/ group companies 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. Angel Broking Limited has not independently verified all the information contained within this document. Accordingly, we cannot testify, nor make any representation or warranty, express or implied, to the accuracy, contents or data contained within this document. While Angel Broking Limited endeavours to update on a reasonable basis the information discussed in this material, there may be regulatory, compliance, or other reasons that prevent us from doing so. This document is being supplied to you solely for your information, and its contents, information or data may not be reproduced, redistributed or passed on, directly or indirectly. Angel Broking Limited and its affiliates may seek to provide or have engaged in providing corporate finance, investment banking or other advisory services in a merger or specific transaction to the companies referred to in this report, as on the date of this report or in the past. Neither Angel Broking Limited, nor its directors, employees or affiliates shall be liable for any loss or damage that may arise from or in connection with the use of this information. Note: Please refer to the important `Stock Holding Disclosure' report on the Angel website (Research Section). Also, please refer to the latest update on respective stocks for the disclosure status in respect of those stocks. Angel Broking Limited and its affiliates may have investment positions in the stocks recommended in this report.

Disclosure of Interest Statement 1. Analyst ownership of the stock 2. Angel and its Group companies ownership of the stock 3. Angel and its Group companies' Directors ownership of the stock 4. Broking relationship with company covered

Sadbhav Engg No No No No

Note: We have not considered any Exposure below ` 1 lakh for Angel, its Group companies and Directors.

Ratings (Returns):

Buy (> 15%) Reduce (-5% to 15%)

Accumulate (5% to 15%) Sell (< -15%)

Neutral (-5 to 5%)

June 5, 2012

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