"Subscribe with Caution" to Heranba Industries Ltd.
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“Subscribe with Caution” to Heranba Industries Ltd.
19th Feb. 2021
Salient features of the IPO: Recommendation Subscribe with Caution
• The Gujarat-based crop protection chemical manufacturer Heranba
Price band Rs. 626 - 627 per share
Industries Ltd. (Heranba), is planning to raise up to Rs. 6,250mn
through an IPO, which opens on 23rd Feb. and closes on 25th Feb. Face value Rs. 10
2021. The price band is Rs. 626 - 627 per share. Shares for fresh issue 0.9569 - 0.9585mn shares
• The issue is a combination of fresh and OFS issue. The company will Shares for OFS 9.0150mn shares
not receive any fund from the OFS portion. Of the net proceeds from Fresh issue size Rs. 600mn
the fresh issue, Rs. 500mn will be utilized to fund the working capital OFS issue size Rs. 5,643.4 - 5,652.4mn
requirement of the company. Residual amount will be used for
9.9719 - 9.9735mn shares
general corporate purposes. Total issue size
(Rs. 6,243.4 - 6,252.4mn)
Key competitive strengths: Bidding date 23rd Feb. - 25th Feb. 2021
• Presence in a wide range of products across the entire value chain of MCAP at higher
synthetic pyrethroids Rs. 25,088mn
price band
• Product registrations in the domestic and international markets
Enterprise value at
enabling global outreach Rs. 25,202mn
higher price band
• Strong product portfolio and wide distribution network
• Diversified and stable customer base Book running lead
Emkay Global Financial
• Experienced promoters and management team Services Ltd. and Batlivala &
manager
Karani Securities India Pvt. Ltd.
Risk and concerns:
Registrar Bigshare Services Pvt. Ltd.
• Delay in new product approvals
• Dependence on China for raw material and sales of end products Sector/Industry Agrochemicals
• Business seasonality Mr. Sadashiv K. Shetty and Mr.
Promoters
• Unfavorable raw material prices Raghuram K. Shetty
• Unfavorable forex movements Issue breakup
• Intense competition Percent of
Category Number of shares (mn)
issue (%)
Peer comparison and valuation: At higher price band of Rs. 627,
Heranba is demanding a TTM P/E multiple of 25.7x (to its restated TTM QIB portion 50% 4.9860 - 4.9867mn shares
EPS of Rs. 24.4), as compared to the peer average of 27.4x. Non institutional
15% 1.4958 - 1.4960mn shares
portion
Below are few key observations of the issue: (continued in next page)
Retail portion 35% 3.4902 - 3.4907mn shares
• Growing at 6.5% CAGR over 2014-2019, the Indian agrochemicals Indicative IPO process time line
market reached a value of USD 2.8nb in 2019. Going forward, it is
Finalization of basis of
expected to grow at 7.9% CAGR during 2020-2025, reaching a value 2nd Mar. 2021
allotment
of USD 3.8bn by 2025. Insecticides represented the most popular
product type of agrochemicals of India, accounting for 54.1% of the Unblocking of
3rd Mar. 2021
total market in India. This was followed by herbicides (23.3%), ASBA account
fungicides (18.7%) and others (3.9%) in 2019. Credit to demat accounts 4th Mar. 2021
• Heranba is a crop protection chemical manufacturer, exporter and Commencement of trading 5th Mar. 2021
marketing company based in Vapi, Gujarat. It manufactures Pre and post - issue shareholding pattern
intermediates, technicals and formulations. Majority of its current Pre-issue Post-issue
intermediates production is utilized for captive consumption for the
Promoter & promoter
manufacturing of technicals products. Formulations are produced and 98.85% 74.15%
group
packaged in powder and liquid forms and sold to distributors for
further sales to farmers. The company’s pesticides range includes Public 1.15% 25.85%
insecticides, herbicides, fungicides and public health products for pest Total 100.00% 100.00%
control. Retail application money at higher cut-off price per lot
• It holds registrations for 18 technicals for manufacture and sale in Number of shares per lot 23
India, 103 technicals & formulations for manufacture and sale in the Application money Rs. 14,421 per Lot
export markets and 169 formulations registered for manufacturing
Analyst
and sale in India. Applications for registration of 14 technicals &
Rajnath Yadav
formulations for manufacture & sale in India and seven technicals and
formulations to manufacture for the export markets have been filed Research Analyst (022 - 6707 9999; Ext: 912)
with the CIB&RC and are in the process of evaluation. Email: rajnath.yadav@choiceindia.com
1
Peer comparison and valuation (Contd…):
• The company exported its products to more than 60 countries in Latin America, CIS, Middle East, Africa, Asia and South
East Asia in FY20. As of 15th Nov. 2020, its international distribution partners (IDP) have successfully obtained 371
registrations of technicals & formulations in 41 countries across Middle East, CIS, Asia, South East Asia and Africa. Further
another 172 registration applications for technicals & formulations products are filed before the regulatory authorities in
41 countries. It is in the process of developing two products of fungicides, two products of herbicides and one product of
insecticides, for which R&D tests have been initiated, for exclusive sale to the European markets after registration with
the regulatory authority in EU. The product pipeline of the company is further expected to expand upon receiving the
regulatory approvals for the filed applications.
• India has emerged as the largest pyrethroid manufacturer over the years. In terms of production value, the Pyrethroids
market in India reached a value of USD 313mn in 2019, exhibiting a growth of 7.7% CAGR during 2014-2019. In the
future, it is expected to rise by 12.5% CAGR to be at USD 462mn in 2025. Agriculture represented the largest end-use
segment for Pyrethroids, accounting for 79.5% of the total market. This was followed by public health (17.1%) and animal
health (3.4%). Based on production value, with 19.5% share - Heranba dominated the domestic pyrethroids market in
2019.
• More than half of the global demand for pyrethroids comes from China, after importing intermediates from India, which
is used to produce pyrethroid. With China's adoption of the' Blue Sky' program to realize green GDP, led to the shutdown
of several chemical plants, which in turn has resulted in higher volumes of pyrethroids being exported out of India.
• Heranba has an extensive distribution network in India supported by a skilled sales force. It has more than 9,400 dealers
having access to 21 depots across 16 states and one union territory in India supporting the distribution of its products.
The company also educates farmers regarding the benefits of using its products by conducting farmer training camps,
participating in village level programmes and exhibitions to establish a direct relationship with farmer communities all
over India.
• Various domestic and multinational agrochemical companies operating in and outside India are customers for the
technicals manufactured by Heranba. These include companies like Sumitomo Chemical India Ltd., Sulphur Mills Ltd.,
Biostadt India Ltd., Crystal Crop Protection Ltd., NACL Ltd., Sharda Cropchem Ltd., Meghmani Organics Ltd., PI Industries
Ltd., Krishi Rasayan Group, Agro Life Science Corporation and Shanghai Agricare Chemical Co. Ltd. amongst others. This
diverse and stable base of customers provide the necessary revenue stability to the company.
• Though the company has reported a short financial history, there was a healthy business growth with improvement in
the profitability over FY18-20. On the back of higher demand in the domestic and overseas markets, Heranba reported a
13% CAGR rise in top-line to Rs. 9,513.7mn in FY20. Total operating expenditure increased by 11.8% CAGR (low than top-
line growth), leading to a 21.4% CAGR rise in EBITDA to Rs. 1,293.5mn in FY20. EBITDA margin expanded by 181bps over
the period to stood at 13.6% in FY20. Further, mainly with around 11ppts lower effective tax rate, reported PAT
increased by 44.4% CAGR over FY18-20 to be at Rs. 977.5mn in FY20. PAT margin expanded by 398bps over the period to
10.3% in FY20.
• Heranba had a positive operating cash flow over FY18-20, which increased by 2.2% CAGR to Rs. 542.1mn in FY20. Average
operating cash flow during the period was at around Rs. 646.2mn. Average RoIC and RoE stood at 35.6% and 31.1%,
respectively, over FY18-20. The company has paid dividend in the last three years with an average dividend payout of
around 6.7% over FY18-20.
• For H1 FY21, the company has reported a 23.3% Y-o-Y higher top-line to Rs. 6,183.4mn. EBITDA and PAT margin stood at
16.1% and 10.7%, respectively. We feel that the improvement in the profitability is not sustainable and is mainly linked to
Covid-19 pandemic induced low cost structure. We forecast an 18.7% CAGR rise in top-line over FY20-23 to Rs. 15,915mn
in FY23E. EBITDA and PAT margin are expected to contract by 60bps and 55bps, respectively, to 13% and 9.7% in FY23E
as compared to a level of 13.6% and 10.3% in FY20.
At higher price band of Rs. 627, Heranba is demanding a TTM P/E multiple of 25.7x (to its restated TTM EPS of Rs. 24.4), as
compared to the peer average of 27.4x. We feel the demand valuation is too stretched and thus assign a “Subscribe with
Caution” rating for the issue.
© CHOICE INSTITUTIONAL RESEARCH
About the issue:
• Heranba is coming up with an initial public offering (IPO) with 9.9719 - 9.9735mn shares (fresh issue: 0.9569 - 0.9585mn
shares; OFS shares: 9.0150mn shares) in offering. The offer represents around 24.92% of its post issue paid-up equity
shares of the company. Total IPO size is Rs. 6,243.4 - 6,252.4mn.
• The issue will open on 23rd Feb. 2021 and close on 25th Feb. 2021.
• The issue is through book building process with a price band of Rs. 626 - 627 per share.
• The issue is a combination of fresh and OFS issue. The company will not receive any fund from the OFS portion. Of the net
proceeds from the fresh issue, Rs. 500mn will be utilized to fund the working capital requirement of the company.
Residual amount will be used for general corporate purposes.
• 50% of the net issue shall be allocated on a proportionate basis to qualified institutional buyers, while rest 15% and 35%
is reserved for non-institutional bidders and retail investors, respectively.
• Promoter holds 98.85% stake in the company and post-IPO this will come down to 74.15%. Public holding will increase
from current 1.15 to 25.85%.
Pre and post issue shareholding pattern (%)
Pre Issue Post Issue (at higher price band)
Promoter & Promoter Group (%) 98.85% 74.15%
Public (%) 1.15% 25.85%
Source: Choice Equity Broking
Indicative IPO process time line:
Unblocking of
Offer closes on
ASBA account
25-Feb-2021
3-Mar-2021
Offer opens on Finalization of Commencement
23-Feb-2021 basis of allotment Credit to demat of trading
2-Mar-2021 accounts 5-Mar-2021
4-Mar-2021Company introduction: Heranba is a crop protection chemical manufacturer, exporter and marketing company based out of Vapi, Gujarat. It manufactures intermediates, technicals and formulations. The company is one of the leading domestic producers of synthetic pyrethroids like cypermethrin, alphacypermethrin, deltamethrin, permitherin, lambda cyhalothrin etc. Heranba’s pesticides range includes insecticides, herbicides, fungicides and public health products for pest control. Its business verticals includes manufacturing & sales of technicals and formulations in domestic & export markets; and public health - manufacturing & selling of general insect control chemicals by participating in public health tenders issued by governmental authorities and selling to pest management companies. Heranba started its manufacturing activity in the year 1996 with production of an intermediate product CMAC. By FY02, the company forward integrated the operations by the manufacturing of various technicals (like metametron, cypermethrin, alpha, permethrin and deltamethrin). By the end of FY05, it further expanded the product range to formulations, which are final products sold to farmers as pesticides, herbicides, fungicides for crop protection and into public health products in FY11. Heranba is present in the entire product value chain of the agrochemicals industry i.e. intermediates, technicals & formulations and holds registrations for 18 technicals for manufacture and sale in India, 103 technicals & formulations for manufacture and sale in the export markets and 169 formulations registered for manufacturing and sale in India. Applications for registration of 14 technicals & formulations for manufacture & sale in India and seven technicals and formulations to manufacture for the export markets have been filed with the CIB&RC and are in the process of evaluation. The company has diversified its business from manufacturing and selling of intermediates to manufacturing, marketing and selling of technicals and formulations. Majority of its current intermediates production is utilized for captive consumption for the manufacturing of technicals products. Formulations are produced and packaged in powder and liquid forms and sold to distributors for further sales to farmers. Heranba’s manufacturing process mainly includes chemical reactions of ammonolysis, esterification, hydrolysis, condensation, favorski reaction, isomerization, cyanation, friedel crafts, methoxylation, cyclisation and halogenation. The company has in-house R&D team for product development and improvisation, which is well supported by its product registration team. R&D facilities at Unit I and II are recognized by the Department of Scientific and Industrial Research. A new R&D facility at Unit III has become operational from Oct. 2020. The company exported its products to more than 60 countries in Latin America, CIS, Middle East, Africa, Asia and South East Asia in FY20. As of 15th Nov. 2020, its international distribution partners (IDP) have successfully obtained 371 registrations of technicals & formulations in 41 countries across Middle East, CIS, Asia, South East Asia and Africa. Heranba’s IDPs have presently filed 172 registration applications for technicals & formulations products, which are pending before the regulatory authorities in 41 countries. It is in the process of developing two products of fungicides, two products of herbicides and one product of insecticides, for which R&D tests have been initiated, for exclusive sale to the European markets after registration with the regulatory authority in EU. India has emerged as the largest pyrethroid manufacturer over the years. More than half of the global demand for pyrethroids comes from China, after importing intermediates from India, which is used to produce pyrethroid. With China's adoption of the' Blue Sky' program to realize green GDP, led to the shutdown of several chemical plants, which in turn has resulted in higher volumes of pyrethroids being exported out of India. Heranba has an extensive distribution network in India supported by a skilled sales force. It has more than 9,400 dealers having access to 21 depots across 16 states and one union territory in India supporting the distribution of its products. The company also educates farmers regarding the benefits of using its products by conducting farmer training camps, participating in village level programmes and exhibitions to establish a direct relationship with farmer communities all over India. Some of its branded formulations sold to farmers in the domestic markets are Jayam, Progress Plus, Param, Cypraplus, Dyken, Mantra, Astron, Signor, Prompt, Cypra, Heraban, Sarag, Alpha Shakti, Henox, Glory, Chakde, Heraquat, Zinta, Glory 71, Shera, Pendant, Atria, Macamba, Sulphy, Mask, Silicon Plus, Propizole, Vintage, Exort, Tulip, Mandy, Silicon, Shado, Heraphon, Temper and Rat Kill among others.
Company introduction (Contd…): Heranba has three manufacturing and packaging facilities in and around the industrial belt of Vapi, Gujarat having 174 reactors with an aggregate manufacturing capacity of 0.014mn tonnes per annum. These facilities manufacture intermediates (like cypermethric acid chloride, cypermethric acid and MPBD), technicals (like cypermethrin, alphacypermethrin, deltamethrin, permitherin and lambda cyhalothrin amongst others) and a range of insecticides, herbicides and fungicides formulations. From four facilities earlier, it has now integrated a facility with Unit I for operational purposes, which will exclusively manufacture intermediates and technicals and Unit II will continue to manufacture intermediates and technicals. Facilities, which has been mainly producing formulations in liquid and powder forms has being dismantled and shifted to Unit III at Sarigam. As a part of its expansion plans, the company in the year 2018 acquired a land on lease from GIDC at Sarigam, near Vapi, Gujarat, part of the land is being used for formulations facility, while a new R&D facility has become operational from Oct. 2020. The remaining land shall be utilized at a later stage for the manufacturing of intermediates, technicals and for establishing other administrative facilities. The Sarigam Unit III also has a rooftop solar plant generating 0.27mn unit of power per annum for captive consumption. Competition: The lndian agrochemicals market is highly fragmented in nature with many formulators. The competition is fierce with large number of organized sector players and spurious pesticide manufacturers. In 2019, Heranba dominated the India pyrethroids market, accounting for a share of 19.5% of the total production values. This is followed by Tagros Chemicals India Ltd. (14.8%), Hemani Industries Ltd. (9.9%), Dhanuka Agritech Ltd. (8.7%), Insecticides (India) Ltd. (7.9%), Syngenta India Ltd. (6.2%), Excel Crop Care Ltd. (5.8%), UPL Ltd. (4.2%), Bayer CropScience Ltd. (3.9%), Rallis India Ltd. (3.6%), Sumitomo Chemical India Ltd. (3.4%) and others (12.1%).
Financial performance:
Though the company has reported a short financial history, there was a healthy business growth with improvement in the
profitability over FY18-20. On the back of higher demand in the domestic and overseas markets, Heranba reported a 13%
CAGR rise in top-line to Rs. 9,513.7mn in FY20. With 23.3% Y-o-Y higher revenues in H1 FY21, TTM top-line stood at Rs.
10,680.7mn.
Net cost of raw materials (which on an average stood at 68% of the top-line) increased by 12.5% CAGR over FY18-20.
Consequently, total operating expenditure increased by 11.8% CAGR (low than top-line growth), leading to a 21.4% CAGR
rise in EBITDA to Rs. 1,293.5mn in FY20. EBITDA margin expanded by 181bps over the period to stood at 13.6% in FY20. In
H1 FY21 and on TTM basis, EBITDA margin was at 16.1% and 14.3%, respectively.
With rise in business, depreciation charge increased by 27.9% CAGR, while with decline in debt, finance cost declined by
13.5% CAGR. Further with around 11ppts lower effective tax rate, reported PAT increased by 44.4% CAGR over FY18-20 to
be at Rs. 977.5mn in FY20. PAT margin expanded by 398bps over the period to 10.3% in FY20. For H1 FY21 and on TTM
basis, PAT margin stood at 10.7% and 10.4%, respectively.
Heranba had a positive operating cash flow over FY18-20, which increased by 2.2% CAGR to Rs. 542.1mn in FY20. Average
operating cash flow during the period was at around Rs. 646.2mn. Average RoIC and RoE stood at 35.6% and 31.1%,
respectively, over FY18-20. The company has paid dividend in the last three years with an average dividend payout of
around 6.7% over FY18-20.
Y-o-Y Y-o-Y
Financial snapshot (Rs. mn) FY18 FY19 FY20 H1 FY20 H1 FY21 TTM CAGR (%)
(%, Annual) (%, Half yearly)
Technicals - Domestic 1,963.6 3,314.6 3,010.0 1,557.4 2,040.2 3,492.9 23.8% -9.2% 31.0%
Technicals - Export 3,007.8 3,965.7 3,470.9 1,738.3 1,989.4 3,722.0 7.4% -12.5% 14.4%
Formulations - Domestic 1,670.7 1,458.5 1,205.8 820.3 1,410.0 1,795.5 -15.0% -17.3% 71.9%
Formulations - Export 667.4 952.0 1,220.6 659.9 573.5 1,134.2 35.2% 28.2% -13.1%
Public health 141.5 353.7 606.4 240.7 170.4 536.1 107.0% 71.5% -29.2%
Revenue from operations 7,451.0 10,044.4 9,513.7 5,016.5 6,183.4 10,680.7 13.0% -5.3% 23.3%
EBITDA 878.1 1,314.1 1,293.5 757.1 992.8 1,529.2 21.4% -1.6% 31.1%
Reported PAT 468.8 754.0 977.5 532.4 663.1 1,108.2 44.4% 29.6% 24.5%
Restated reported EPS 11.7 18.8 24.4 13.3 16.6 27.7 44.4% 29.6% 24.5%
Cash flow from operating activities 519.5 877.0 542.1 146.3 523.1 918.9 2.2% -38.2% 257.5%
NOPLAT 524.2 784.6 895.4 530.4 686.0 1,050.7 30.7% 14.1% 29.3%
FCF 198.5 115.0 (7.4) -42.1%
RoIC (%) 37.9% 39.9% 29.0% 19.9% 19.0% 29.1% (899) bps (1,093) bps (87) bps
Revenue growth rate (%) 34.8% -5.3% 23.3%
EBITDA growth rate (%) 49.7% -1.6% 31.1%
EBITDA margin (%) 11.8% 13.1% 13.6% 15.1% 16.1% 14.3% 181 bps 51 bps 96 bps
EBIT growth rate (%) 51.5% -3.4% 28.5%
EBIT margin (%) 11.1% 12.5% 12.7% 14.4% 15.0% 13.3% 162 bps 24 bps 62 bps
Restated PAT growth rate (%) 60.9% 29.6% 24.5%
Restated PAT margin (%) 6.3% 7.5% 10.3% 10.6% 10.7% 10.4% 398 bps 277 bps 11 bps
Inventories turnover ratio (x) 7.9 9.7 7.3 3.8 3.6 6.2 -3.8% -24.1% -5.5%
Trade receivable turnover ratio (x) 3.7 4.4 3.7 1.9 1.7 2.9 0.7% -15.5% -11.4%
Accounts payable turnover ratio (x) 4.2 4.9 4.3 2.2 2.1 3.6 0.9% -12.5% -7.3%
Fixed asset turnover ratio (x) 15.7 15.0 7.1 4.6 4.6 8.0 -32.6% -52.3% -0.2%
Total asset turnover ratio (x) 1.7 1.8 1.5 0.8 0.8 1.4 -4.1% -15.0% -3.1%
Debt to equity (x) 1.2 1.1 0.7 0.9 0.9 0.9 -22.7% -34.7% -3.3%
Net debt to EBITDA (x) 2.0 1.8 1.8 3.0 3.1 2.0 -6.8% 0.4% 2.6%
RoE (%) 29.8% 33.0% 30.5% 19.3% 17.4% 29.1% 67 bps (258) bps (189) bps
RoA (%) 10.4% 13.5% 15.6% 8.6% 8.4% 14.1% 524 bps 219 bps (18) bps
RoCE (%) 49.7% 52.6% 36.8% 25.3% 23.7% 36.2% (1,289) bps (1,584) bps (162) bps
Source: Choice Equity BrokingCompetitive strengths:
• Presence in a wide range of products across the entire value chain of
synthetic pyrethroids
• Product registrations in the domestic and international markets enabling
global outreach
• Strong product portfolio and wide distribution network
• Diversified and stable customer base
• Experienced promoters and management team
Business strategy:
• Enhancing and streamlining production capacities and operations
• Development of new products at R&D facility at Unit III (Sarigam unit)
• Entering the highly regulated markets of the USA and Europe
• Enhancing formulations & technicals business in the international markets
• Branded formulations and public health products segment
Risk and concerns:
• Delay in new product approvals
• Dependence on China for raw material and sales of end products
• Business seasonality
• Unfavorable raw material prices
• Unfavorable forex movements
• Intense competition
© CHOICE INSTITUTIONAL RESEARCHFinancial statements:
Profit and loss statement (Rs. mn)
CAGR over Annual growth Half yearly
FY18 FY19 FY20 H1 FY20 H1 FY21 TTM
FY18 - 20 (%) over FY19 (%) growth (%)
Revenue from operations 7,451.0 10,044.4 9,513.7 5,016.5 6,183.4 10,680.7 13.0% -5.3% 23.3%
Cost of materials consumed (4,970.1) (7,083.6) (6,397.8) (3,373.8) (4,517.9) (7,541.9) 13.5% -9.7% 33.9%
Purchase of stock-in-trade 0.0 (64.7) (153.1) (34.4) (138.2) (256.9) 136.6% 301.9%
Changes in inventories of
finished goods and work-in- (67.4) 170.7 176.5 140.2 461.6 498.0 3.4% 229.3%
progress
Excise duty on finished goods (38.5) 0.0 0.0 0.0 0.0 0.0
Employee benefits expense (332.1) (380.1) (464.7) (224.5) (228.6) (468.7) 18.3% 22.3% 1.8%
Other expenses (1,164.8) (1,372.7) (1,381.3) (766.8) (767.7) (1,382.1) 8.9% 0.6% 0.1%
EBITDA 878.1 1,314.1 1,293.5 757.1 992.8 1,529.2 21.4% -1.6% 31.1%
Depreciation and amortization
(50.1) (59.5) (82.0) (36.2) (66.0) (111.9) 27.9% 37.8% 82.6%
expenses
EBIT 828.0 1,254.6 1,211.5 721.0 926.7 1,417.2 21.0% -3.4% 28.5%
Finance costs (118.1) (107.3) (88.4) (38.1) (34.6) (84.9) -13.5% -17.7% -9.2%
Other income 53.2 73.9 165.3 5.8 8.7 168.2 76.4% 123.6% 48.5%
PBT 763.1 1,221.2 1,288.4 688.7 900.8 1,500.5 29.9% 5.5% 30.8%
Tax expenses (294.3) (467.2) (310.9) (156.3) (237.7) (392.4) 2.8% -33.4% 52.1%
Reported PAT 468.8 754.0 977.5 532.4 663.1 1,108.2 44.4% 29.6% 24.5%
Balance sheet statement (Rs. mn)
Annual
CAGR over Half yearly
FY18 FY19 FY20 H1 FY20 H1 FY21 TTM growth over
FY18 - 20 (%) growth (%)
FY19 (%)
Equity share capital 78.1 390.6 390.6 390.6 390.6 390.6 123.6% 0.0% 0.0%
Other equity 1,495.1 1,891.2 2,817.9 2,370.4 3,422.0 3,422.0 37.3% 49.0% 44.4%
Long term borrowings 4.1 0.1 0.0
Long term financial liabilities 52.2 57.3 61.5 60.4 65.5 65.5 8.5% 7.3% 8.5%
Long term provisions 1.8 4.2 6.5 9.4 12.7 12.7 89.4% 53.8% 34.9%
Non current net deferred tax
36.0 41.3 16.1 15.6 19.8 19.8 -33.1% -61.0% 27.3%
balances
Other long term liabilities 2.3 2.8 1.6 1.6 -43.0%
Short term borrowings 757.4 498.7 430.8 639.3 380.2 380.2 -24.6% -13.6% -40.5%
Other short term financial liabilities 68.5 121.8 139.3 203.2 299.3 299.3 42.6% 14.3% 47.3%
Trade payables 1,784.2 2,352.1 2,124.7 2,239.6 2,976.4 2,976.4 9.1% -9.7% 32.9%
Current net tax balances 129.5 101.7 37.5 67.0 115.5 115.5 -46.2% -63.2% 72.4%
Short term provisions 48.3 49.1 57.4 55.1 63.6 63.6 9.0% 17.0% 15.4%
Other short term liabilities 49.4 96.5 163.2 143.2 134.1 134.1 81.8% 69.2% -6.4%
Total liabilities 4,504.7 5,604.4 6,247.6 6,196.4 7,881.2 7,881.2 17.8% 11.5% 27.2%
Property, plant and equipment 462.4 511.4 954.4 978.2 1,306.6 1,306.6 43.7% 86.6% 33.6%
Capital work-in-progress 11.6 159.7 377.7 106.9 33.1 33.1 470.1% 136.5% -69.0%
Long term investments 0.2 0.2 37.3 36.1 124.5 124.5 1173.6% 15445.8% 245.1%
Other long term financial assets 62.4 71.0 84.3 81.9 98.5 98.5 16.2% 18.7% 20.3%
Non current net tax assets 1.5 0.0
Other long term assets 223.5 344.6 80.7 62.9 80.5 80.5 -39.9% -76.6% 28.0%
Inventories 940.0 1,138.9 1,455.2 1,331.0 1,735.2 1,735.2 24.4% 27.8% 30.4%
Trade receivables 2,030.8 2,532.7 2,584.7 2,678.1 3,727.8 3,727.8 12.8% 2.1% 39.2%
Short term loans 9.0 0.0
Cash and cash balances 117.8 209.7 31.9 207.0 252.8 252.8 -47.9% -84.8% 22.1%
Other short term financial assets 14.9 15.4 17.2 16.6 19.8 19.8 7.3% 11.5% 19.6%
Other short term assets 641.0 619.3 615.3 697.8 502.4 502.4 -2.0% -0.6% -28.0%
Total assets 4,504.7 5,604.4 6,247.6 6,196.4 7,881.2 7,881.2 17.8% 11.5% 27.2%
Source: Choice Equity Broking
© CHOICE INSTITUTIONAL RESEARCHFinancial statements:
Cash flow statement (Rs. mn)
Annual
CAGR over Half yearly
Particulars (Rs. mn) FY18 FY19 FY20 H1 FY20 H1 FY21 TTM growth over
FY18 - 20 (%) growth (%)
FY19 (%)
Cash flow before working capital changes 1,024.6 1,385.7 1,453.7 775.2 997.9 1,676.4 19.1% 4.9% 28.7%
Change in working capital (332.0) (17.5) (512.7) (413.7) (318.9) (417.9) 24.3% 2824.8% -22.9%
Cash flow from operating activities 519.5 877.0 542.1 146.3 523.1 918.9 2.2% -38.2% 257.5%
Purchase of property , plant & equipment (141.9) (256.6) (398.2) (168.5) (73.6) (303.4) 67.5% 55.2% -56.3%
Cash flow from investing activities (246.9) (373.8) (520.4) (206.2) (159.3) (473.5) 45.2% 39.2% -22.8%
Cash flow from financing activities (258.0) (411.4) (199.4) 57.3 (142.9) (399.6) -12.1% -51.5% -349.6%
Net cash flow 14.6 91.9 (177.7) (2.6) 220.9 45.8 -293.4% -8561.7%
Opening balance of cash and bank
103.2 117.8 209.7 209.6 32.0 207.0 42.5% 78.1% -84.8%
balances
Closing balance of cash and bank
117.8 209.6 32.0 207.0 252.8 252.8 -47.9% -84.8% 22.1%
balances
Financial ratios
Particulars (Rs. mn) FY18 FY19 FY20 H1 FY20 H1 FY21 TTM
Revenue growth rate (%) 34.8% -5.3% 23.3%
EBITDA growth rate (%) 49.7% -1.6% 31.1%
EBITDA margin (%) 11.8% 13.1% 13.6% 15.1% 16.1% 14.3%
EBIT growth rate (%) 51.5% -3.4% 28.5%
EBIT margin (%) 11.1% 12.5% 12.7% 14.4% 15.0% 13.3%
PAT growth rate (%) 60.9% 29.6% 24.5%
PAT margin (%) 6.3% 7.5% 10.3% 10.6% 10.7% 10.4%
Turnover ratios
Inventory days 68.1 54.4 74.3 73.3 74.5 86.8
Debtor days 99.5 82.9 98.2 96.1 108.5 127.4
Payable days (129.3) (108.2) (128.2) (123.4) (127.7) (148.8)
Cash conversion cycle 38.3 29.1 44.3 46.1 55.3 65.3
Fixed asset turnover ratio (x) 15.7 15.0 7.1 4.6 4.6 8.0
Total asset turnover ratio (x) 1.7 1.8 1.5 0.8 0.8 1.4
Return ratios
RoE (%) 29.8% 33.0% 30.5% 19.3% 17.4% 29.1%
RoA (%) 10.4% 13.5% 15.6% 8.6% 8.4% 14.1%
RoCE (%) 49.7% 52.6% 36.8% 25.3% 23.7% 36.2%
Per share data
Restated reported EPS (Rs.) 11.7 18.8 24.4 13.3 16.6 27.7
Restated DPS (Rs.) 1.3 1.0 1.0 1.0 1.5 1.5
Restated BVPS (Rs.) 39.3 57.0 80.2 69.0 95.3 95.3
Restated operating cash flow per share (Rs.) 13.0 21.9 13.5 3.7 13.1 23.0
Restated free cash flow per share (Rs.) 5.0 2.9 (0.2)
Dividend payout ratio 10.8% 5.2% 4.0% 7.3% 8.8% 5.3%
Note: Ratios calculated on pre-issue data; Source: Choice Equity Broking
© CHOICE INSTITUTIONAL RESEARCHDisclaimer
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