(all non-ratios in ₹ mi

Mar-09 Mar-10 Mar-11

Transport Logistics vs. ALL
Profitability (RoA)

Total income / Total assets 0.56 0.51 0.97

EBIT -8,589.07 -8,956.18 27,497.64
Industry Total Income 230,348.03 263,546.94 248,141.06
EBIT / Total income -0.04 -0.03 0.11
EBIT / TA (RoA) -0.02 -0.02 0.11

Total assets 1,118.24 2,776.44 6,133.50

ALL EBIT 212.09 309.35 314.82
EBIT / TA (RoA) 0.19 0.11 0.05

Operating cost efficiency

Direct operating cost 159,231.27 190,940.58 204,463.87

Other operating expenses 17,908.00 18,606.82 8,081.79
Industry Total operating costs 177,139.27 209,547.40 212,545.66
Total operating cost / Total
income 0.77 0.80 0.86

Revenue 2,134.01 3,220.12 3,808.79

Direct operating cost 1,754.90 2,724.24 3,267.88
ALL Other operating expenses 155.62 171.62 177.26
Total operating cost / Total
income 0.90 0.90 0.90

Asset utilization

Industry Sales / NFA 2.65 2.21 2.53

Net fixed assets 141.68 493.26 516.71

ALL
Sales / NFA 15.06 6.53 7.37

Working capital management

DSO 37.48 46.74 51.08

Industry
PDP 84.90 109.72 63.92

Trade receivables 597.26 1,032.39 1,556.35

Trade payables 65.77 105.85 135.41
ALL
DSO 102.16 117.02 149.15
PDP 12.56 13.34 14.35
 Leverage (solvency) ratios

Industry Debt-to-equity ratio 0.80 0.78 0.56

Short-term borrowings 0.62 0.11 619.71

Long-term borrowings 397.28 296.99 51.95
ALL Total borrowings 397.90 297.10 671.66
Total equity 574.48 2,270.09 5,196.08
Debt-to-equity ratio 0.69 0.13 0.13
 (all non-ratios in ₹ millions)
Mar-12 Mar-13

bility (RoA)

0.92 0.88
32,426.74 27,004.06
246,853.98 224,671.74
0.13 0.12
0.12 0.11

6,345.79 6,042.18
109.08 131.48
0.02 0.02

cost efficiency

197,554.61 181,590.06
7,959.93 7,593.80
205,514.54 189,183.86

0.83 0.84

3,103.50 2,595.92
2,824.33 2,334.89
121.41 80.34

0.95 0.93

utilization

2.31 2.31

583.81 544.61
5.32 4.77

apital management

50.38 54.82
58.07 55.29

1,467.95 1,425.87
143.63 88.75
172.64 200.49
17.80 13.41
solvency) ratios

0.58 0.48

813.27 793.82
30.90 4.57
844.17 798.38
5,215.57 4,941.49
0.16 0.16
 Actual Redrawn Projected Projected Projected Projected
(in ₹ millions) Mar-13 Mar-13 Mar-14 Mar-15 Mar-16 Mar-17
Assets
Cash & equivalents 12.34 12.34 506.39 557.03 612.74 674.01
Short-term
investments 432.64 432.64 432.64 432.64 432.64 432.64
Trade receivables 1,425.87 1,425.87 704.10 774.51 851.96 937.15

Total current assets 1,870.85 1,870.85 1,643.13 1,764.18 1,897.33 2,043.80

Loans and advances 664.45 664.45 664.45 664.45 664.45 664.45

Investments 197.00 2,962.28 2,962.28 2,962.28 2,962.28 2,962.28

Gross fixed assets 3,458.72 693.44 801.86 921.14 1,052.34 1,196.66

Less: Cumulative
depreciation 148.83 148.83 202.80 262.17 327.47 399.30
Net fixed assets 3,309.89 544.60 599.06 658.97 724.87 797.35

Total assets 6,042.18 6,042.18 5,868.92 6,049.87 6,248.92 6,467.88

Liabilities & equity

Trade payables 88.75 88.75 207.71 228.48 251.33 276.46
Short-term
borrowings 793.82 793.82 793.82 793.82 793.82 793.82
Other current
liabilities 96.17 96.17 96.17 96.17 96.17 96.17
Total current
liabilities 978.73 978.73 1,097.69 1,118.46 1,141.31 1,166.44

Provisions 43.21 43.21 43.21 43.21 43.21 43.21

Deferred tax liabilities
(net) 74.19 74.19 74.19 74.19 74.19 74.19

Long-term borrowings 4.57 4.57 4.57 4.57 4.57 4.57

Share capital 299.99 299.99

Reserve & surplus 4,641.50 4,641.50
Total equity 4,941.49 4,941.49 4,649.27 4,809.45 4,985.65 5,179.48

Total liabilities &

equity 6,042.18 6,042.18 5,868.92 6,049.87 6,248.92 6,467.88

Check - - - -

Working capital estimates

DSO 200.49 200.49 90.00 90.00 90.00 90.00
PDP 13.41 13.41 30.00 30.00 30.00 30.00

Change in WC (in ₹
millions) -840.73 49.64 54.60 60.06
Capital expenditure
(in ₹ millions) 108.43 119.27 131.20 144.32

Net fixed asset requirement (assuming asset utilization is constant for next 5 years)
41,334.00 41,699.00 42,064.00 42,430.00 42,795.00
Revenue / NFA 4.77 4.77 4.77 4.77 4.77

NFA required 599.06 658.97 724.87 797.35

0.16156713
Projected
Mar-18

741.41

432.64
1,030.87

2,204.92

664.45
2,962.28

1,355.41

478.32
877.09

6,708.73

304.11

793.82

96.17

1,194.09

43.21

74.19

4.57

5,392.68

6,708.73

-
 90.00
30.00

66.07

158.75

ext 5 years)
43,160.00
4.77

877.09
 Assumptions
Revenue growth rate 10%
Direct operating cost / Rev. 86%
Other op. expenses / Rev. 2.50%
Depreciation / Revenue 1.89%
Cost of debt 14%
Tax rate 33.50%
Terminal growth rate 5%

Income statement Actual Projected Projected Projected Projected Projected

(in ₹ millions) Mar-13 Mar-14 Mar-15 Mar-16 Mar-17 Mar-18
Revenue 2,595.92 2,855.51 3,141.06 3,455.17 3,800.68 4,180.75
Direct operating cost 2,334.89 2,455.74 2,701.31 2,971.44 3,268.59 3,595.45
Other operating expenses 80.34 71.39 78.53 86.38 95.02 104.52
Depreciation 49.20 53.97 59.37 65.30 71.83 79.02
EBIT 131.48 274.41 301.86 332.04 365.25 401.77
Other income -279.98 - - - - -
Interest expense 126.59 111.77 111.77 111.77 111.77 111.77
PBT -275.09 162.64 190.08 220.27 253.47 290.00
Tax 8.98 54.48 63.68 73.79 84.91 97.15
PAT -284.07 108.16 126.40 146.48 168.56 192.85
 Free Cash Flow for Firm (FCFF) Estimation
(all figures in ₹ millions)
Year 0 1 2 3 4 5 6
Mar-13 Mar-14 Mar-15 Mar-16 Mar-17 Mar-18 Mar-19
EBIT 131.48 274.41 301.86 332.04 365.25 401.77
Depreciation 49.20 53.97 59.37 65.30 71.83 79.02
Change in WC -840.73 49.64 54.60 60.06 66.07
Capital expenditure 108.43 119.27 131.20 144.32 158.75

FCFF 968.76 91.19 100.31 110.34 121.37 127.44

WACC estimation

Mar-09 Mar-10 Mar-11 Mar-12 Mar-13

Interest expense 47.47 51.66 72.50 117.83 126.59
Short-term borrowings 0.62 0.11 619.71 813.27 793.82
Long-term borrowings 397.28 296.99 51.95 30.90 4.57
Total borrowings 397.90 297.10 671.66 844.17 798.38
Cost of debt 11.93% 17.39% 10.79% 13.96% 15.86%

Levered beta estimation

Market beta D / D + E
as on Dec. (market Unlevered
2013 value) beta
Allcargo Logistics Ltd. 0.45 0.24 0.37
Blue Dart Express Ltd. 0.58 0.00 0.58
Gati Ltd. 1.46 0.45 0.95
Patel Integrated Logistics
Ltd. 1.32 0.65 0.58
Transport Corporation of
India Ltd. 1.14 0.45 0.74
Average 0.64

Target D /
D+E 0.25
Levered
beta 0.79

WACC estimation
Beta 0.79
Risk-free rate RFR 8.19%
Market risk premium Rm - RFR 10.55%
Cost of equity Ke 16.48%
Tax rate t 33.50%
Cost of debt Kd 14.00%
Target debt ratio 25.00%
WACC 14.69%
 (all valuations in ₹ millions)
Value of operations
1 2 3 4 5
968.76 91.19 100.31 110.34 121.37
PV 844.68 69.33 66.49 63.77 61.16
Terminal value 1,315.16
PV 662.75
844.68 69.33 66.49 63.77 723.91
Value (operating assets) 1,768.18

Value of non-operating assets

41,334.00
Cash & equivalents 12.34
Short-term investments 432.64
Loans and advances 664.45
Investments 2,962.28

Value (non-operating assets 4,071.70

Value of debt and other liabilities

41,334.00
Short-term borrowings 793.82
Long-term borrowings 4.57

Value (total debt) 798.38

Other current liabilities 96.17

Provisions 43.21
Deferred tax liabilities (net) 74.19

Value (other liabilities) 213.56

Value (equity) 4,827.94

No. of shares outstanding
(mn) 299.99
Stock price (INR) 16.09
luations in ₹ millions)

6
127.44