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Established in 1987, Cords Cable Industries Ltd (CCIL) is engaged in providing solutions to various electrical connectivity requirements. It is engaged in manufacturing of specialized cables. Its products include electrical wire and cables and continuous cast copper wire rod. The company caters to a majority of core industries such as power, cement, chemicals, petrochemicals, steel etc.
KEY HIGHLIGHTS
Strong global presence CCIL is a leading global player providing products and services offering comprehensive solutions to the electrical connectivity requirements of businesses as well as domestic users. It is focusing aggressively on export markets and its export turnover has gone up by 54% to Rs 415 mn in FY10 from Rs 269 mn in FY09. As on date, almost 50% of the order book of the company comprises of export orders. Countries to which CCIL majorly export are Oman, Kazakhastan, Egypt, UAE. During FY10, new export clients added are Modern Petrotech LLC, International Cable Management, Yokogaa Middle East BSC, Israel Electric Corp. Ltd, Faist Aniagenbav Gmbh and Metito (Overseas) Ltd. Diverse customer base CCIL customers are from diverse industries such as power generation (thermal, nuclear, gas, hydel), electricity transmission and distribution, oil refining and distribution, petrochemicals, iron and steel, chemicals, fertilizers, cement etc., thus testifying to diverse applications of its products. The companys clientele includes blue chip companies like BHEL, L&T, NTPC, Reliance Energy Ltd, IOCL, SAIL and others.
Mar-08 1,699.0 15.7 94.1 5.5 0.5 8.2 10.3 1.2 26.0 20.4 3.8
Mar-09 2,226.6 9.7 71.3 3.2 0.7 6.2 5.4 0.5 14.6 8.8 3.1
Mar-10 2,206.5 9.1 41.9 1.9 0.9 3.7 9.7 0.5 11.2 4.9 4.1
KEY RISKS
Volatility in raw material prices such as copper, aluminum, steel etc. Foreign exchange fluctuations as exports contributed ~18% of total revenues in FY10 Non availability of skilled manpower
Promoter 54%
(index) 140
('000) 700 600 500 400 300 200 100 0 Nov-10 Apr-10 Mar-10 May-10 Dec-10 NIFTY Aug-10
1-m 6 -4
3-m -15 -5
12-m -31 9
-15 8
Volumes (RHS)
CORDSCABLE
COMPETITIVE POSITION
Peer Comparison
Revenue (Rs mn) EBITDA ma rgins (%) PAT (Rs mn) PAT ma rgins (%) Gea ring (x) EPS (Rs /s ha re) PE (x) P/BV (x) RoCE (%) RoE (%) EV/EBITDA (x)
n.m: Not meaningful
Cords Cable Universal Cables Industries Ltd Ltd. Mar-10 Mar-10 2,206.5 4,993.5 9.1 10.8 41.9 271.4 1.9 5.4 0.9 0.7 3.7 11.7 9.7 6.7 0.5 1.0 11.2 15.3 4.9 15.1 4.1 5.7
Torrent Cables Ltd. Mar-10 1,723.8 5.5 105.0 6.1 0.1 7.5 11.3 0.5 6.9 8.0 8.0
KEI Industries Ltd. Mar-10 9,096.8 6.9 142.3 1.6 1.7 2.2 13.0 0.8 10.3 6.8 8.2
FINANCIAL PROFILE
Top-line declines in FY10; operating margins too remain under pressure
Key Financial Indicators Units Revenue Rs mi ll ion Rs mi ll ion Per cent Per cent Per cent Times Per cent Per cent EBITDA ma rgins Per cent PAT PAT ma rgins EBITDA growth PAT growth Gea ring RoCE RoE
Mar-08
1,699.0 15.7 94.1 5.5 85.1 93.2 34.3 0.5 26.0 20.4
Mar-09
2,226.6 9.7 71.3 3.2 31.1 -19.1 -24.3 0.7 14.6 8.8
Mar-10
2,206.5 9.1 41.9 1.9 -0.9 -6.6 -41.3 0.9 11.2 4.9
CCILs top-line in FY10 remained at similar levels as that of FY09 and stood at Rs 2.2 bn. This is mainly on account of drop in sales in electric wire and cables by ~4% on yo-y basis. The operating margins remained under pressure in FY10 and stood at 9.1% as compared to 9.7% in FY09 mainly on account of increase in raw material and employee costs. Net margins dropped from 3.2% in FY09 to 1.9% in FY10, largely on account of increase in interest and depreciation costs by ~35% and ~28% respectively on y-o-y basis.
INDUSTRY PROFILE
Power cables The growth of the power cables and conductors industry depends on the capacity additions in the generation segment and concomitant additions in the transmission and distribution segment. The estimated size of the power cables and conductors industry in 2009-10 was around Rs 135 billion. Foreign trade is not significant as exports stand at 5-7 per cent of the current market size, while imports are at 3-4 per cent of the total market size. Power cables and conductors is a low capital-intensive business. However, it requires continuous short-term funding to meet working capital requirements. Over 80 per cent of the operating costs are raw material costs. Aluminium, PVC resins and XLPE are the primary raw materials. The industry is fragmented with several players. The players need to have good project execution skills to maintain margins. There may be delays in collections because of liquidity issues faced by various SEBs.
Mar-08 1,695.5 1,699.0 266.2 15.7 8.8 56.0 9.6 167.5 94.1 5.5 11.4 8.2
Mar-09 2,223.8 2,226.6 215.3 9.7 28.6 83.6 8.1 111.1 71.3 3.2 11.4 6.2
Mar-10 2,204.1 2,206.5 201.2 9.1 36.7 112.9 10.7 62.3 41.9 1.9 11.4 3.7
Mar-08 114.3 665.0 779.3 16.8 232.7 94.1 326.8 380.6 23.0 1,526.5 508.2 539.7 59.5 927.3 376.5 198.9 284.9 1,526.5
Mar-09 114.3 722.9 837.2 26.1 205.5 270.8 476.3 381.9 19.3 1,740.8 681.5 729.4 36.5 974.9 432.8 223.7 196.5 1,740.8
Mar-10 114.3 751.4 865.7 28.2 186.4 389.6 576.0 655.6 20.4 2,145.9 699.3 770.4 0.0 1,375.5 568.0 394.3 163.0 2,145.9
Cash flow from investing activities Equity raised/(repaid) Debt raised/(repaid) Dividend (incl. tax) Others (incl extraordinaries)
Cash flow from financing activities Change in cash position Opening cash Closing cash
n.m : Not meaningful;
QUARTERLY RESULTS
Profit and loss account (Rs million) No of Months Revenue EBITDA Interes t Depreci a tion PBT PAT Sep-10 3 627.5 64.3 34.2 9.4 20.7 13.7 100.0 10.2 5.4 1.5 3.3 2.2 % of Rev Sep-09 3 474.0 50.2 28.6 10.2 11.3 7.2 100.0 10.6 6.0 2.2 2.4 1.5 % of Rev Sep-10 6 1,067.2 108.3 56.0 18.9 33.4 22.0 100.0 10.1 5.3 1.8 3.1 2.1 % of Rev Sep-09 6 833.7 87.8 47.0 19.2 21.6 14.0 100.0 10.5 5.6 2.3 2.6 1.7 % of Rev
Dec-07
Dec-08
Dec-09
Sep-08
Sep-09
Mar-08
Mar-09
Dec-08
Dec-09
Sep-08
Sep-09
Mar-08
Mar-09
Mar-10
Sep-10
Sales
Net Profit
EPS
Per cent 20 18 16 14 12 10 8 6 4 2 0 Dec-06 Mar-07 Dec-08 Dec-09 Sep-09 Mar-09 Mar-10 Sep-10
Dec-07
Dec-08
Mar-10
Dec-09 Sep-09
Sep-07
Sep-08
Sep-10
Mar-10 Sep-10
Rs mn 60 50 40 30 20 10 0
Per cent 1,400 1,200 1,000 800 600 400 200 0 -200
Mar-08
Sep-07
Mar-07
Mar-08
Sep-08
OPM
Mar-09
NPM
Shareholding Pattern (Per cent) Dec 2009 Mar 2010 Promoter 52.1 53.9 DII 5.5 4.8 Others 42.4 41.2
Board of Directors Sep 2010 Director Name 54.0 Na veen Sa whney (Mr.) 2.9 43.0 Devender Kuma r Pra s ha r (Mr.) Na ra s ingha pura m Kri s hna s wa my Ba l a s ubra ma ni a n (Mr.) Om Pra ka s h Bha nda ri (Mr.) Aji t Kuma r Sa ha y (Mr.)
Designation Ma na gi ng Di rector, Whol etime Director, Promoter-Director Jt.Ma na ging Director, Whol eti me Director, Promoter-Director Non-Executive Di rector
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