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Bhartiya
International Ltd
CRISIL
Fundamental Grade
Assessment
CRISIL
Valuation Grade
Assessment
5/5
Excellent fundamentals
5/5
4/5
Superior fundamentals
4/5
3/5
Good fundamentals
3/5
2/5
Moderate fundamentals
2/5
1/5
Poor fundamentals
1/5
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Last updated: May, 2013
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
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purpose.
Valuation Grade
Industry
Bhartiya International Ltds (Bhartiyas) Q3FY14 standalone revenues exceeded but earnings
were below CRISIL Researchs expectations due to lower margin. Highlights of the results
are mentioned below; this will be followed by a detailed quarterly update. Our outstanding
fundamental grade is 3/5 and fair value is 285 per share. We may revise our assessment
post our discussion with the management.
Excellent
Fundamentals
Standalone revenues increased by 16.8% y-o-y (down 18.9% q-o-q) to 856 mn.
Historically, Q3 has been a seasonally weak quarter.
Revenues from the leather products business (95% of revenues) increased by 31.5%
4
3
2
1
y-o-y to 836 mn; revenues from the textile apparel business were down to 19.8 mn
Poor
Fundamentals
EBITDA margin declined 78 bps y-o-y and 119 bps q-o-q to 6.9% mainly due to increase
lower margin. The company reported EPS of 2.1 in Q3FY14 vs. 1.9 in Q3FY13.
FY11
FY12
FY13
FY14E
FY15E
Operating income
1,952
2,507
3,039
3,918
4,616
186
270
273
369
443
68
118
104
147
183
Adj EPS ()
7.1
11.3
9.4
12.8
16.0
24.6
EBITDA
NIFTY/SENSEX
NSE/BSE ticker
Face value ( per share)
Shares outstanding (mn)
Market cap ( mn)/(US$ mn)
Enterprise value ( mn)/(US$ mn)
52-week range ()/(H/L)
Beta
Free float (%)
Avg daily volumes (30-days)
Avg daily value (30-days) ( mn)
33.7
58.5
(16.6)
36.1
1.9
2.0
0.6
0.7
0.8
RoCE (%)
9.4
12.3
10.6
12.6
13.9
RoE (%)
6.0
9.4
7.5
9.7
10.9
PE (x)
7.3
4.6
17.4
12.8
10.3
70%
P/BV (x)
0.4
0.4
1.3
1.2
1.1
60%
EV/EBITDA (x)
5.3
4.4
9.9
7.9
6.8
50%
Strong
Downside
PAT recorded a moderate growth of 11.9% y-o-y (down 48.7% q-o-q) to 24 mn due to
Valuation Grade
in employee costs.
Strong
Upside
285
164
CFV MATRIX
Fundamental Grade
The above grades are outstanding ones and are currently under review
RESEARCH
6063/20377
BIL
10
11.1
1,819/29
2,709/44
245/109
1.3
54.0%
10,480
1.8
SHAREHOLDING PATTERN
100%
90%
80%
40%
54.5%
54.5%
54.0%
53.7%
0.03%
0.04%
0.04%
0.2%
0.04%
45.5%
45.5%
46.0%
46.0%
Mar-13
Jun-13
30%
20%
10%
0%
Promoter
Sep-13
FII
DII
Dec-13
Others
Bhartiya
1-m
-7%
CNX 500
-2%
Returns
3-m
6-m
-11%
37%
-1%
12%
12-m
-5%
0%
ANALYTICAL CONTACT
Mohit Modi (Director)
mohit.modi@crisil.com
Ravi Dodhia
ravi.dodhia@crisil.com
Bhaskar Bukrediwala
bhaskar.bukrediwala@crisil.com
clientservicing@crisil.com
Q3FY14
Q2FY14
Q3FY13
q-o-q (%)
y-o-y (%)
9MFY14
9MFY13
y-o-y (%)
Net sales
856
1,056
733
(18.9)
16.8
2,590
1,883
37.6
519
704
478
(26.2)
8.7
1,588
1,171
35.5
60.7%
66.7%
65.2%
-600bps
-456bps
61.3%
62.2%
-92bps
49
40
33
21.6
49.5
125
86
45.7
Other expenses
229
226
166
1.1
38.0
682
455
49.7
59
86
56
(30.7)
5.1
196
170
15.0
6.9%
8.1%
7.7%
-119bps
-78bps
7.6%
9.0%
-149bps
EBITDA
EBITDA margin
Depreciation
(20.3)
(12.5)
18
15
14.4
EBIT
54
79
51
(31.6)
7.1
178
155
15.0
26
26
23
(0.3)
12.7
74
63
17.7
Operating PBT
28
53
27
(47.1)
2.4
104
92
13.2
Other Income
(22.0)
48.8
18
15
22.8
PBT
34
60
31
(44.1)
8.1
122
107
14.6
Tax
10
14
10
(28.6)
31
30
3.3
PAT
24
46
21
(48.7)
11.9
91
77
18.9
Adj PAT
Adj PAT margin
No of equity shares (mn)
Adj EPS ()
24
46
21
(48.7)
11.9
91
77
18.9
2.8%
4.4%
2.9%
-161bps
-12bps
3.5%
4.1%
-55bps
11.1
11.1
11.1
11.1
11.1
2.1
4.2
1.9
(48.7)
11.9
8.3
6.9
18.9
( mn)
8%
35
6%
25
5.6%
600
4%
200
2%
10
0%
429
722
733
590
679
1,056
856
Q3FY14
Q2FY14
Q1FY14
Q4FY13
Q3FY13
Q2FY13
Q1FY13
Q4FY12
Net Sales
1.4%
4%
2.8%
3%
2%
1.0%
1%
15
0%
17
6
39
21
21
46
24
-1%
-2%
Q4FY12
397
2.9%
20
400
30
3.1%
PAT
Q3FY14
6.9%
5%
3.9%
40
Q2FY14
7.5%
6.7%
10%
8.1%
6%
4.4%
Q1FY14
7.7%
45
Q4FY13
1,000
5.4%
50
Q3FY13
10.1%
Q2FY13
9.5%
12%
Q1FY13
1,200
800
('000)
300
600
250
500
200
400
150
300
200
100
200
100
50
100
600
500
Bhartiya
CNX 500
Feb-14
Jan-14
Dec-13
Sep-13
Nov-13
Jul-13
Aug-13
Jun-13
Apr-13
May-13
Mar-13
Feb-13
Jan-13
Dec-12
Oct-12
Feb-14
Aug-13
Mar-13
Oct-12
May-12
Dec-11
Jun-11
Jan-11
Aug-10
Mar-10
Sep-09
300
Nov-12
400
Bhartiya
-Indexed to 100
Source: NSE, CRISIL Research
Balance Sheet
FY11
1,952
186
9.5%
28
158
82
76
22
(4)
94
30
64
(4)
68
FY12
2,507
270
10.8%
30
240
103
137
23
(3)
157
41
115
(3)
118
FY13
3,039
273
9.0%
32
241
119
123
22
(3)
141
40
101
(3)
104
FY11
FY12
FY13
Grow th
Operating income (%)
EBITDA (%)
Adj PAT (%)
Adj EPS (%)
(5.7)
4.2
46.0
33.7
28.4
45.2
75.3
58.5
21.2
1.2
(11.8)
(16.6)
Profitability
EBITDA margin (%)
Adj PAT Margin (%)
RoE (%)
RoCE (%)
RoIC (%)
9.5
3.5
6.0
9.4
14.5
10.8
4.7
9.4
12.3
16.6
9.0
3.4
7.5
10.6
13.8
Valuations
Price-earnings (x)
Price-book (x)
EV/EBITDA (x)
EV/Sales (x)
Dividend payout ratio (%)
Dividend yield (%)
7.3
0.4
5.3
0.5
14.8
1.9
4.6
0.4
4.4
0.5
9.6
2.0
17.4
1.3
9.9
1.0
11.5
0.6
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
177
52
28
167
3.6
5.0
4.3
4.1
0.5
0.4
1.9
169
54
39
159
3.9
5.4
4.8
3.9
0.6
0.5
2.3
154
46
49
165
4.0
5.4
5.0
4.5
0.7
0.6
2.0
FY11
7.1
10.1
126.1
1.0
9.5
FY12
11.3
14.2
127.0
1.1
10.5
FY13
9.4
12.3
130.0
1.1
11.1
Ratios
Per share
Adj EPS ()
CEPS
Book value
Dividend ()
Actual o/s shares (mn)
( mn)
Liabilities
Equity share capital
Reserves
Minorities
Net w orth
Convertible debt
Other debt
Total debt
Deferred tax liability (net)
Total liabilities
Assets
Net f ixed assets
Capital WIP
Total fixed assets
Investme nts
Current assets
Inventory
Sundry debtors
Loans and advances
Cash & bank balance
Marketable securities
Total current assets
Total current liabilities
Net current assets
Intangibles/Misc. expenditure
Total assets
FY11
FY12
FY13
95
1,099
1,194
627
627
13
1,835
105
1,224
1,329
767
767
17
2,113
111
1,328
1,438
1,038
1,038
23
2,499
455
28
483
389
478
91
569
411
647
2
649
412
777
137
218
96
38
1,267
310
956
6
1,835
949
251
198
83
33
1,515
388
1,126
7
2,113
1,081
381
221
121
27
1,831
403
1,428
9
2,499
Cash flow
( mn)
Pre-tax profit
Total tax paid
Depreciation
Working capital changes
Net cas h from operations
Cash from investments
Capital expenditure
Investments and others
Net cas h from investments
Cash from financing
Equity raised/(repaid)
Debt raised/(repaid)
Dividend (incl. tax)
Others (incl extraordinaries)
Net cas h from financing
Change in cash position
Closing cash
FY11
98
(25)
28
(275)
(175)
FY12
160
(38)
30
(188)
(37)
FY13
144
(34)
32
(270)
(128)
(87)
22
(65)
(116)
(17)
(133)
(115)
5
(110)
34
162
(11)
29
215
(25)
96
50
140
(13)
(20)
156
(13)
83
36
271
(14)
(17)
276
38
121
Q1FY14
679
15%
51
54%
7%
21
21
247%
3%
1.9
Q2FY14
1,056
56%
86
69%
8%
46
46
118%
4%
4.2
Q3FY14
856
-19%
59
-31%
7%
24
24
-49%
3%
2.1
Q3FY13
733
2%
56
-23%
8%
21
21
-45%
3%
1.9
Q4FY13
590
-19%
33
-42%
6%
6
6
-71%
1%
0.6
RESEARCH
CRISIL Research
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