Godawari+ +4qfy08+result+update
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Godawari Power & Ispat Ltd.
Research
Strong performance, strong outlook
17th Jun 2008
BUY Price Rs195
Target Price Rs418
Sensex – 15,396
Price Performance (%)
1M
3M
Absolute
(4)
3
(39)
41
8
6
(24)
30
Rel. to Sensex
6M
12M
Source: Bloomberg
Godawari Power and Ispat Ltd. (GPIL) reported 4QFY08 and FY08 results. The results are ahead of estimates. During the quarter net sales stood at Rs2,634mn (yoy up 139%, qoq up 21.1%) and EBITDA stood at Rs491mn. However, during the quarter, GPIL reported market to market forex loss of Rs74.6mn. Adjusting for this the adjusted EBITDA stood at Rs565mn (yoy up 191.7%, qoq up 39.6%) . In 4QFY08, GPIL witnessed huge volume growth of 60-70% on account of increased capacities across product categories and higher capacity utilization. GPIL has announced to acquire 75% stake in Ardent Steel Ltd, which is a newly formed company and is under the process of setting up 0.6mtpa pelletization plant in Orissa. GPIL expects the plant to be operational by 3QFY10. GPIL’s backward integration plan is progressing as per schedule. The 0.6mtpa pelletization plant is expected to be operational by 2QFY10. We believe that the stock is currently available at an attractive valuation. At the CMP of Rs195, the stock is trading at2.8x FY10E FDEPS of Rs69.6 and at 2.4x FY10E EV/EBITDA. The key overhang on the stock, in the recent past, has been the pending forest clearance of its iron ore mines. However, we believe that once the company receives forest clearance, it will be able to ramp up its mines quite fast as compared to the other greenfield mines. This is primarily because these mines were previously operated by Bhilai Steel Plant of SAIL, hence all the related infrastructure is in place. We maintain a BUY on the stock with a Target Price of Rs418. We have attended the 4QFY08 concall hosted by the company
The key takeaways from the concall are as under:n
GPIL reported strong 4QFY08 results , which are ahead of our estimates. The net sales stood at Rs2,634mn (yoy yp 139%, qoq up 21.1%) as against our estimates of Rs2,339mn (% surprise of 12.6%). The higher sale was supported by increased volumes by 60-70% on yoy basis, which was on account of increased capacities across product categories and higher capacity utilization.
n
For 4QFY08, EBITDA stood at Rs491mn. However, this EBITDA also includes marked to market forex loss of Rs74.6mn, which was included in other expenses. Adjusting for this the adjusted EBITDA stood at Rs565mn (yoy up 191.7%, qoq up 39.6%), as against our estimates of 427mn.
Stock Details Sector Metals & Mining Reuters GDPI.BO Bloomberg GODPI@IN Equity Capital (Rs mn) 281 Face Value (Rs ) 10 Number of shares o/s (mn) 28 52 Week H/L (Rs ) 377/132 Market Cap (Rsbn/USDmn) 5/116 Daily Avg Vol (No of shares) 104146 Daily Avg Turnover (US$ mn) 0.5
4QFY08 numbers - actual vs estimates Net sales Adj. EBITDA Adj. EBITDA margin
Shareholding Pattern (%) 31/3/08 Promoters FII/NRI Institutions Private Corp. Public
56.2 12.4 12.1 5.0 14.3
Adj. PAT
31/12//07 30/9/07 63.4 8.1 13.7 3.8 11.0
63.4 5.1 11.1 6.1 14.3
4QFY08A
4QFY08E
% surprise
2,634
2,339
12.6%
565
427
32.3%
21.5%
18.2%
325bps
352
305
15.4%
Source: Company, Emkay Research estimates
Production numbers (t) 4QFY08
4QFY07
Sponge Iron
73,014
Billets
58,209
Wires Ferro Manganese Vishal Chandak [email protected] +91 22 6612 1251
Result Update
Emkay
% yoy
3QFY08
% qoq
41,511
75.9%
69,886
4.5%
27,301
113.2%
53,040
9.7%
18,735
14,528
28.9%
16,583
12.9%
2,468
2,288
7.9%
2,483
-0.6%
Source: Company
Chirag Khasgiwala [email protected] +91 22 6612 1254
C-6, Ground Floor, Paragon Center Pandurang Budhkar Marg, Worli, Mumbai – 400 013. India
G O D A W A R I P O W E R A N D I S P A T L T D.
Result Update
n
GPIL commenced phase-II expansion plan in 2HFY08, which has increased its sponge iron capacity to 0.495mtpa, billets capacity to 0.4mtpa, HB wires capacity to 0.15mtpa and captive power generation capacity to 53MW. We expect the company to reap the full benefits of capacity expansion from FY09 onwards.
n
The company’s backward integration plans are progressing as per schedule. GPIL expects 0.6mtpa pelletization plant to be operational by 2QFY10.
n
The total estimated capex is of Rs2,350mn, which will be funded through a debt of Rs995mn and equity of Rs1,355mn. All the funding requirements are fully tied up and no further dilution is expected.
n
Out of the total capex of Rs2,350mn, GPIL has already incurred Rs350mn in FY08. GPIL expects to incur arpund Rs1,500-1,600mn in FY09 and balance Rs400-500mn in FY10.
Capex breakup
Plant details Target Completion date Capacity Total capex (Rs mn) Iron ore Pelletization Plant 2QFY10 0.6mtpa 1,360 Iron ore Beneficiation Plant FY11 0.1mtpa 240 Iron Ore Crushing Plant FY11 1.2mtpa 120 Railways siding FY11 150 Other infra related FY11 380 Mining Capex 100 Total Capex 2,350 Source: Company
Ardent Steel acquisition – to boost topline GPIL has announced to acquire 75% stake in Ardent Steel Ltd, which is a newly formed company and is under the process of setting up a 0.6mtpa pelletization plant. GPIL expects the plant to be operational by 3QFY10. The total estimated capex for the plant is Rs1,800mn which will be funded through a debt/equity ratio of 2:1. Out of the total equity contribution of Rs600mn, GPIL will be contributing Rs450mn, which will be funded through internal accruals. The funding requirements for the project are yet to be tied up. Given, the current strength in pellets market, which is expected to remain firm, we believe this will add to the bottomline of the company and will expand margins. This greenfield pelletization plant will be in addition to its current plan of setting up 0.6mtpa pelletization plant, which is expected to commence operations by 2QFY10.
Valuation At the CMP of Rs195, the stock is trading at 2.8x FY10E FDEPS of Rs69.6 and at 2.4x FY10E EV/EBITDA. We believe that the stock offers good growth potential considering the strong demand of long products, strong pricing environment and company’s thrust for backward integration. We maintain BUY on the stock with a Target Price of Rs418 (6x FY10E FDEPS of Rs69.6), signifying a potential upside of 114%. At our Target price, the stock will likely trade at a PE of 6x and EV/EBITDA of 4.6x on FY10 estimates.
Emkay Research
June 17, 2008
2
G O D A W A R I P O W E R A N D I S P A T L T D.
Result Update
Quarterly results summary 4QFY08
4QFY07
% yoy
3QFY08
% qoq
FY08
FY07
% yoy
2,634
1,102
139.0%
2,174
21.1%
8,098
4,775
69.6%
2,143
810
164.5%
1,528
40.3%
5,948
3,397
75.1%
-322
-2
20006.3%
94
-440.8%
-418
36
-1258.2%
1,821
808
125.2%
1622
12.3%
5,529
3,433
61.1%
813
294
176.7%
552
47.2%
2569
1341
91.5%
30.9%
26.7%
421bps
25.4%
547bps
31.7%
28.1%
363bps
30
18
61.4%
23
31.4%
106
56
87.1%
Other Expenditure
218
82
167.0%
125
74.9%
709
436
62.5%
Total operating exp
248
100
147.6%
148
68.2%
815
493
65.3%
Adj. EBITDA
565
194
191.7%
405
39.6%
1754
849
106.7%
21.5%
17.6%
388bps
18.6%
283bps
21.7%
17.8%
389bps
73
29
148.3%
57
27.4%
258
122
111.2%
492
164
199.5%
348
41.6%
1496
726
106.0%
18.7%
14.9%
378bps
16.0%
270bps
18.5%
15.2%
326bps
87
39
121.9%
82
6.7%
315
130
142.5%
3
11
-68.5%
3
6.3%
18
24
-23.9%
334
136
145.7%
269
24.0%
1125
620
81.4%
45
16
178.5%
31
45.5%
139
79
75.7%
13.6%
12.0%
160bps
11.6%
201bps
12.3%
12.7%
-40bps
45
16
191.0%
31
47.4%
137
78
75.5%
Deferred tax liability
0
0
1
0
Fringe benefit tax
0
1
-100.0%
0
-100.0%
1
1
7.7%
288
120
141.3%
238
21.2%
987
542
82.2%
10.9%
10.8%
10bps
10.9%
bps
12.2%
11.3%
84bps
63
0
63
0
352
120
194.3%
238
47.8%
1,050
542
93.90%
Net Sales Expenditure Raw Material cost Change in stock Net Raw Material Cost Gross profit Gross margin Staff Cost
Adj. Ebitda margin Depreciation & amortization EBIT EBIT margin Interest Other income Forex loss
75
PBT Provision for tax ETR (%) Current tax/MAT
PAT Net margin Add/Less: E/o item adj for tax Adj PAT Adj Net margin
75
0
0
16.4%
14.8%
166bps
15.6%
84bps
17.7%
15.9%
171bps
Equity capital
281
248
13.0%
248
13.0%
269
237
13.6%
F.D. Equity
290
248
16.8%
275
5.5%
275
237
15.9%
Basic
10.27
4.81
113.5%
9.58
7.2%
36.62
22.83
60.4%
Diluted
9.94
4.81
106.6%
8.65
14.8%
35.88
22.83
57.2%
Basic
12.53
4.81
160.5%
9.58
30.8%
38.97
22.83
70.7%
Diluted
12.12
4.81
152.0%
8.65
40.1%
38.19
22.83
67.3%
(%) yoy
Reported EPS
Adjusted EPS
All fig. in Rs mn except percentage and per share data
Common size ratios 4QFY08
4QFY07
(%) yoy
3QFY08
(%) qoq
FY08
FY07
100%
100%
-
100%
-
100%
100%
-
81%
73%
786 bps
70%
1,109 bps
73%
71%
229 bps
-12%
0%
-1,207 bps
4%
-1,655 bps
-5%
1%
-592 bps
69%
73%
-421 bps
75%
-547 bps
68%
72%
-363 bps
Staff Cost
1%
2%
-54 bps
1%
9 bps
1%
1%
12 bps
Other expenses
8%
7%
87 bps
6%
255 bps
9%
9%
-38 bps
21%
18%
388 bps
19%
283 bps
22%
18%
389 bps
Depreciation
3%
3%
10 bps
3%
14 bps
3%
3%
63 bps
Interest expense
3%
4%
-25 bps
4%
-45 bps
4%
3%
117 bps
Other income
0.1%
1.0%
-85 bps
0.1%
-2 bps
0.2%
0.5%
-27 bps
PAT
11%
11%
10 bps
11%
0 bps
12%
11%
84 bps
Net Sales Raw Material cost Change in stock Net Raw Material Cost
EBITDA
Emkay Research
June 17, 2008
3
G O D A W A R I P O W E R A N D I S P A T L T D.
Result Update
Financials Income Statement
Rs Mn FY07
FY08E
FY09E
FY10E
5,456
9,193
12,496
13,793
734
1,195
1,375
1,517
Net Sales
4,722
7,998
11,121
12,276
Raw Material Consumption
3,433
5,694
7,922
8,403
72.7
71.2
71.2
68.5
Power & Fuel
82
130
158
As a % to Net Sales
1.7
1.6
1.4
Gross External Sales Less: Excise
As a % to Net Sales
Staff Cost
Balance Sheet
Rs Mn FY07
Equity Capital
FY08E
FY09E
FY10E
237
279
279
279
Reserves & Surplus
1,837
3,985
5,372
7,141
Networth
2,074
4,264
5,651
7,421
Total Debts
2,894
2,594
2,594
2,594
Net def Liabilities
19
19
19
19
167
Capital Employed
4,991
6,881
8,267
10,037
1.4
Gross Block
3,117
3,817
4,117
6,517
56
80
111
123
Less Depreciation
-344
-574
-891
-1,317
As a % to Net Sales
1.19
1.00
1.00
1.00
CWIP
1,034
700
1,600
800
Other Expenses
354
544
767
859
Net Fixed Assets
3,852
3,988
4,871
6,046
As a % to Net Sales
7.5
6.8
6.9
7.0
Investments
49
49
49
49
3,926
6,448
8,958
9,552
Inventory
761
1,094
1,518
1,738
EBITDA (Core)
796
1,550
2,163
2,724
Debtors
281
504
753
945
EBITDA (%)
16.9
19.4
19.5
22.2
Cash and Bank
125
1,236
951
982
Other Income
71
82
149
149
Loans & Advances
407
603
894
1,076
Depreciation
122
230
317
425
Total Cur. Assets
1,575
3,437
4,116
4,740
EBIT
674
1,320
1,846
2,298
Current Liabilities
258
337
467
497
Interest
125
296
265
255
Provisions
228
257
301
301
PBT
621
1,107
1,731
2,193
Tax
79
141
220
279
Net Current Assets
ETR (%)
12.7
12.7
12.7
12.7
A PAT
533
967
1,511
1,914
Total Exp
Cash Flow Statement
Rs Mn
Total Cur. Lia. & Prov.
485
594
769
798
1,090
2,843
3,347
3,942
Misc. Assets
0
0
0
0
Total Assets
4,991
6,881
8,267
10,037
FY07
FY08E
FY09E
FY10E
EBITDA - Core (%)
16.9
19.4
19.5
22.2
Ratios
FY07
FY08E
FY09E
FY10E
PBT
612
1,107
1,731
2,193
Depreciation
122
230
317
425
EBIT (%)
14.3
16.5
16.6
18.7
Net Chg in WC
-405
-643
-789
-563
NPM (%)
11.3
12.1
13.6
15.6
Others
-51
-141
-220
-279
Adj ROCE (%)
16.9
21.3
23.4
23.7
CFO
277
553
1,038
1,776
Adj ROE (%)
34.8
30.5
30.5
29.3
-1,893
-366
-1,200
-1,600
ROIC (%)
19.5
26.6
27.2
27.5
-5
0
0
0
Adj EPS
22.9
35.2
55.0
69.6
1
1
1
1
Cash EPS
28.2
43.5
66.5
85.1
-1,897
-366
-1,199
-1,599
Book Value
89.2
155.1
205.6
269.9
736
1,574
350
450
3.1
3.1
3.9
4.5
1,168
-300
0
0
13.6
8.9
7.0
6.5
-54
-101
-124
-145
Net Debt to Equity (x)
1.3
0.3
0.3
0.2
-150
-250
-350
-450
PE (x)
8.5
5.6
3.6
2.8
P/BV (x)
2.2
1.3
1.0
0.7
EV/Sales (x)
1.5
0.9
0.7
0.6
Capex Net Investments made Others Investing Activities CFI Change in Share capital Change in Debts Div. & Div Tax Others CFF
DPS Payout (%)
1,700
923
-124
-145
Total Cash Generated
81
1,110
-286
32
Cash Opening Balance
44
125
1,236
951
EV/EBITDA (x)
8.4
4.5
3.3
2.4
Cash Closing Balance
125
1,236
951
982
Div Yield (%)
1.6
1.6
2.0
2.3
Emkay Research
June 17, 2008
4
G O D A W A R I P O W E R A N D I S P A T L T D.
Result Update
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Emkay Share and Stock Brokers Ltd., Paragon Center, Ground Floor, C-6 Pandurang Budhkar Marg, Worli, Mumbai – 400 013. , Tel no. 66121212. Fax: 66121299
Emkay Research
June 17, 2008
5
Research
Strong performance, strong outlook
17th Jun 2008
BUY Price Rs195
Target Price Rs418
Sensex – 15,396
Price Performance (%)
1M
3M
Absolute
(4)
3
(39)
41
8
6
(24)
30
Rel. to Sensex
6M
12M
Source: Bloomberg
Godawari Power and Ispat Ltd. (GPIL) reported 4QFY08 and FY08 results. The results are ahead of estimates. During the quarter net sales stood at Rs2,634mn (yoy up 139%, qoq up 21.1%) and EBITDA stood at Rs491mn. However, during the quarter, GPIL reported market to market forex loss of Rs74.6mn. Adjusting for this the adjusted EBITDA stood at Rs565mn (yoy up 191.7%, qoq up 39.6%) . In 4QFY08, GPIL witnessed huge volume growth of 60-70% on account of increased capacities across product categories and higher capacity utilization. GPIL has announced to acquire 75% stake in Ardent Steel Ltd, which is a newly formed company and is under the process of setting up 0.6mtpa pelletization plant in Orissa. GPIL expects the plant to be operational by 3QFY10. GPIL’s backward integration plan is progressing as per schedule. The 0.6mtpa pelletization plant is expected to be operational by 2QFY10. We believe that the stock is currently available at an attractive valuation. At the CMP of Rs195, the stock is trading at2.8x FY10E FDEPS of Rs69.6 and at 2.4x FY10E EV/EBITDA. The key overhang on the stock, in the recent past, has been the pending forest clearance of its iron ore mines. However, we believe that once the company receives forest clearance, it will be able to ramp up its mines quite fast as compared to the other greenfield mines. This is primarily because these mines were previously operated by Bhilai Steel Plant of SAIL, hence all the related infrastructure is in place. We maintain a BUY on the stock with a Target Price of Rs418. We have attended the 4QFY08 concall hosted by the company
The key takeaways from the concall are as under:n
GPIL reported strong 4QFY08 results , which are ahead of our estimates. The net sales stood at Rs2,634mn (yoy yp 139%, qoq up 21.1%) as against our estimates of Rs2,339mn (% surprise of 12.6%). The higher sale was supported by increased volumes by 60-70% on yoy basis, which was on account of increased capacities across product categories and higher capacity utilization.
n
For 4QFY08, EBITDA stood at Rs491mn. However, this EBITDA also includes marked to market forex loss of Rs74.6mn, which was included in other expenses. Adjusting for this the adjusted EBITDA stood at Rs565mn (yoy up 191.7%, qoq up 39.6%), as against our estimates of 427mn.
Stock Details Sector Metals & Mining Reuters GDPI.BO Bloomberg GODPI@IN Equity Capital (Rs mn) 281 Face Value (Rs ) 10 Number of shares o/s (mn) 28 52 Week H/L (Rs ) 377/132 Market Cap (Rsbn/USDmn) 5/116 Daily Avg Vol (No of shares) 104146 Daily Avg Turnover (US$ mn) 0.5
4QFY08 numbers - actual vs estimates Net sales Adj. EBITDA Adj. EBITDA margin
Shareholding Pattern (%) 31/3/08 Promoters FII/NRI Institutions Private Corp. Public
56.2 12.4 12.1 5.0 14.3
Adj. PAT
31/12//07 30/9/07 63.4 8.1 13.7 3.8 11.0
63.4 5.1 11.1 6.1 14.3
4QFY08A
4QFY08E
% surprise
2,634
2,339
12.6%
565
427
32.3%
21.5%
18.2%
325bps
352
305
15.4%
Source: Company, Emkay Research estimates
Production numbers (t) 4QFY08
4QFY07
Sponge Iron
73,014
Billets
58,209
Wires Ferro Manganese Vishal Chandak [email protected] +91 22 6612 1251
Result Update
Emkay
% yoy
3QFY08
% qoq
41,511
75.9%
69,886
4.5%
27,301
113.2%
53,040
9.7%
18,735
14,528
28.9%
16,583
12.9%
2,468
2,288
7.9%
2,483
-0.6%
Source: Company
Chirag Khasgiwala [email protected] +91 22 6612 1254
C-6, Ground Floor, Paragon Center Pandurang Budhkar Marg, Worli, Mumbai – 400 013. India
G O D A W A R I P O W E R A N D I S P A T L T D.
Result Update
n
GPIL commenced phase-II expansion plan in 2HFY08, which has increased its sponge iron capacity to 0.495mtpa, billets capacity to 0.4mtpa, HB wires capacity to 0.15mtpa and captive power generation capacity to 53MW. We expect the company to reap the full benefits of capacity expansion from FY09 onwards.
n
The company’s backward integration plans are progressing as per schedule. GPIL expects 0.6mtpa pelletization plant to be operational by 2QFY10.
n
The total estimated capex is of Rs2,350mn, which will be funded through a debt of Rs995mn and equity of Rs1,355mn. All the funding requirements are fully tied up and no further dilution is expected.
n
Out of the total capex of Rs2,350mn, GPIL has already incurred Rs350mn in FY08. GPIL expects to incur arpund Rs1,500-1,600mn in FY09 and balance Rs400-500mn in FY10.
Capex breakup
Plant details Target Completion date Capacity Total capex (Rs mn) Iron ore Pelletization Plant 2QFY10 0.6mtpa 1,360 Iron ore Beneficiation Plant FY11 0.1mtpa 240 Iron Ore Crushing Plant FY11 1.2mtpa 120 Railways siding FY11 150 Other infra related FY11 380 Mining Capex 100 Total Capex 2,350 Source: Company
Ardent Steel acquisition – to boost topline GPIL has announced to acquire 75% stake in Ardent Steel Ltd, which is a newly formed company and is under the process of setting up a 0.6mtpa pelletization plant. GPIL expects the plant to be operational by 3QFY10. The total estimated capex for the plant is Rs1,800mn which will be funded through a debt/equity ratio of 2:1. Out of the total equity contribution of Rs600mn, GPIL will be contributing Rs450mn, which will be funded through internal accruals. The funding requirements for the project are yet to be tied up. Given, the current strength in pellets market, which is expected to remain firm, we believe this will add to the bottomline of the company and will expand margins. This greenfield pelletization plant will be in addition to its current plan of setting up 0.6mtpa pelletization plant, which is expected to commence operations by 2QFY10.
Valuation At the CMP of Rs195, the stock is trading at 2.8x FY10E FDEPS of Rs69.6 and at 2.4x FY10E EV/EBITDA. We believe that the stock offers good growth potential considering the strong demand of long products, strong pricing environment and company’s thrust for backward integration. We maintain BUY on the stock with a Target Price of Rs418 (6x FY10E FDEPS of Rs69.6), signifying a potential upside of 114%. At our Target price, the stock will likely trade at a PE of 6x and EV/EBITDA of 4.6x on FY10 estimates.
Emkay Research
June 17, 2008
2
G O D A W A R I P O W E R A N D I S P A T L T D.
Result Update
Quarterly results summary 4QFY08
4QFY07
% yoy
3QFY08
% qoq
FY08
FY07
% yoy
2,634
1,102
139.0%
2,174
21.1%
8,098
4,775
69.6%
2,143
810
164.5%
1,528
40.3%
5,948
3,397
75.1%
-322
-2
20006.3%
94
-440.8%
-418
36
-1258.2%
1,821
808
125.2%
1622
12.3%
5,529
3,433
61.1%
813
294
176.7%
552
47.2%
2569
1341
91.5%
30.9%
26.7%
421bps
25.4%
547bps
31.7%
28.1%
363bps
30
18
61.4%
23
31.4%
106
56
87.1%
Other Expenditure
218
82
167.0%
125
74.9%
709
436
62.5%
Total operating exp
248
100
147.6%
148
68.2%
815
493
65.3%
Adj. EBITDA
565
194
191.7%
405
39.6%
1754
849
106.7%
21.5%
17.6%
388bps
18.6%
283bps
21.7%
17.8%
389bps
73
29
148.3%
57
27.4%
258
122
111.2%
492
164
199.5%
348
41.6%
1496
726
106.0%
18.7%
14.9%
378bps
16.0%
270bps
18.5%
15.2%
326bps
87
39
121.9%
82
6.7%
315
130
142.5%
3
11
-68.5%
3
6.3%
18
24
-23.9%
334
136
145.7%
269
24.0%
1125
620
81.4%
45
16
178.5%
31
45.5%
139
79
75.7%
13.6%
12.0%
160bps
11.6%
201bps
12.3%
12.7%
-40bps
45
16
191.0%
31
47.4%
137
78
75.5%
Deferred tax liability
0
0
1
0
Fringe benefit tax
0
1
-100.0%
0
-100.0%
1
1
7.7%
288
120
141.3%
238
21.2%
987
542
82.2%
10.9%
10.8%
10bps
10.9%
bps
12.2%
11.3%
84bps
63
0
63
0
352
120
194.3%
238
47.8%
1,050
542
93.90%
Net Sales Expenditure Raw Material cost Change in stock Net Raw Material Cost Gross profit Gross margin Staff Cost
Adj. Ebitda margin Depreciation & amortization EBIT EBIT margin Interest Other income Forex loss
75
PBT Provision for tax ETR (%) Current tax/MAT
PAT Net margin Add/Less: E/o item adj for tax Adj PAT Adj Net margin
75
0
0
16.4%
14.8%
166bps
15.6%
84bps
17.7%
15.9%
171bps
Equity capital
281
248
13.0%
248
13.0%
269
237
13.6%
F.D. Equity
290
248
16.8%
275
5.5%
275
237
15.9%
Basic
10.27
4.81
113.5%
9.58
7.2%
36.62
22.83
60.4%
Diluted
9.94
4.81
106.6%
8.65
14.8%
35.88
22.83
57.2%
Basic
12.53
4.81
160.5%
9.58
30.8%
38.97
22.83
70.7%
Diluted
12.12
4.81
152.0%
8.65
40.1%
38.19
22.83
67.3%
(%) yoy
Reported EPS
Adjusted EPS
All fig. in Rs mn except percentage and per share data
Common size ratios 4QFY08
4QFY07
(%) yoy
3QFY08
(%) qoq
FY08
FY07
100%
100%
-
100%
-
100%
100%
-
81%
73%
786 bps
70%
1,109 bps
73%
71%
229 bps
-12%
0%
-1,207 bps
4%
-1,655 bps
-5%
1%
-592 bps
69%
73%
-421 bps
75%
-547 bps
68%
72%
-363 bps
Staff Cost
1%
2%
-54 bps
1%
9 bps
1%
1%
12 bps
Other expenses
8%
7%
87 bps
6%
255 bps
9%
9%
-38 bps
21%
18%
388 bps
19%
283 bps
22%
18%
389 bps
Depreciation
3%
3%
10 bps
3%
14 bps
3%
3%
63 bps
Interest expense
3%
4%
-25 bps
4%
-45 bps
4%
3%
117 bps
Other income
0.1%
1.0%
-85 bps
0.1%
-2 bps
0.2%
0.5%
-27 bps
PAT
11%
11%
10 bps
11%
0 bps
12%
11%
84 bps
Net Sales Raw Material cost Change in stock Net Raw Material Cost
EBITDA
Emkay Research
June 17, 2008
3
G O D A W A R I P O W E R A N D I S P A T L T D.
Result Update
Financials Income Statement
Rs Mn FY07
FY08E
FY09E
FY10E
5,456
9,193
12,496
13,793
734
1,195
1,375
1,517
Net Sales
4,722
7,998
11,121
12,276
Raw Material Consumption
3,433
5,694
7,922
8,403
72.7
71.2
71.2
68.5
Power & Fuel
82
130
158
As a % to Net Sales
1.7
1.6
1.4
Gross External Sales Less: Excise
As a % to Net Sales
Staff Cost
Balance Sheet
Rs Mn FY07
Equity Capital
FY08E
FY09E
FY10E
237
279
279
279
Reserves & Surplus
1,837
3,985
5,372
7,141
Networth
2,074
4,264
5,651
7,421
Total Debts
2,894
2,594
2,594
2,594
Net def Liabilities
19
19
19
19
167
Capital Employed
4,991
6,881
8,267
10,037
1.4
Gross Block
3,117
3,817
4,117
6,517
56
80
111
123
Less Depreciation
-344
-574
-891
-1,317
As a % to Net Sales
1.19
1.00
1.00
1.00
CWIP
1,034
700
1,600
800
Other Expenses
354
544
767
859
Net Fixed Assets
3,852
3,988
4,871
6,046
As a % to Net Sales
7.5
6.8
6.9
7.0
Investments
49
49
49
49
3,926
6,448
8,958
9,552
Inventory
761
1,094
1,518
1,738
EBITDA (Core)
796
1,550
2,163
2,724
Debtors
281
504
753
945
EBITDA (%)
16.9
19.4
19.5
22.2
Cash and Bank
125
1,236
951
982
Other Income
71
82
149
149
Loans & Advances
407
603
894
1,076
Depreciation
122
230
317
425
Total Cur. Assets
1,575
3,437
4,116
4,740
EBIT
674
1,320
1,846
2,298
Current Liabilities
258
337
467
497
Interest
125
296
265
255
Provisions
228
257
301
301
PBT
621
1,107
1,731
2,193
Tax
79
141
220
279
Net Current Assets
ETR (%)
12.7
12.7
12.7
12.7
A PAT
533
967
1,511
1,914
Total Exp
Cash Flow Statement
Rs Mn
Total Cur. Lia. & Prov.
485
594
769
798
1,090
2,843
3,347
3,942
Misc. Assets
0
0
0
0
Total Assets
4,991
6,881
8,267
10,037
FY07
FY08E
FY09E
FY10E
EBITDA - Core (%)
16.9
19.4
19.5
22.2
Ratios
FY07
FY08E
FY09E
FY10E
PBT
612
1,107
1,731
2,193
Depreciation
122
230
317
425
EBIT (%)
14.3
16.5
16.6
18.7
Net Chg in WC
-405
-643
-789
-563
NPM (%)
11.3
12.1
13.6
15.6
Others
-51
-141
-220
-279
Adj ROCE (%)
16.9
21.3
23.4
23.7
CFO
277
553
1,038
1,776
Adj ROE (%)
34.8
30.5
30.5
29.3
-1,893
-366
-1,200
-1,600
ROIC (%)
19.5
26.6
27.2
27.5
-5
0
0
0
Adj EPS
22.9
35.2
55.0
69.6
1
1
1
1
Cash EPS
28.2
43.5
66.5
85.1
-1,897
-366
-1,199
-1,599
Book Value
89.2
155.1
205.6
269.9
736
1,574
350
450
3.1
3.1
3.9
4.5
1,168
-300
0
0
13.6
8.9
7.0
6.5
-54
-101
-124
-145
Net Debt to Equity (x)
1.3
0.3
0.3
0.2
-150
-250
-350
-450
PE (x)
8.5
5.6
3.6
2.8
P/BV (x)
2.2
1.3
1.0
0.7
EV/Sales (x)
1.5
0.9
0.7
0.6
Capex Net Investments made Others Investing Activities CFI Change in Share capital Change in Debts Div. & Div Tax Others CFF
DPS Payout (%)
1,700
923
-124
-145
Total Cash Generated
81
1,110
-286
32
Cash Opening Balance
44
125
1,236
951
EV/EBITDA (x)
8.4
4.5
3.3
2.4
Cash Closing Balance
125
1,236
951
982
Div Yield (%)
1.6
1.6
2.0
2.3
Emkay Research
June 17, 2008
4
G O D A W A R I P O W E R A N D I S P A T L T D.
Result Update
DISCLAIMER: This document is not for public distribution and has been furnished to you
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Emkay Research
June 17, 2008
5
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