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TABLE OF CONTENTS:

Topic InvestmentHighlights CompanyOverview BusinessOverview IndustryOverview InvestmentThesis BrandBuilding,DistributionandRelationshipModels ProductPortfolioandContractManufacturingagreements DahejPlanttostrengthenInternationalPresence AcquisitionofMetahelix PeerGroup KeyManagementProfile Valuation RisktotheRating Financials Disclaimer

PageNo 0303 0404 0505 0506 0713 0708 0912 1212 1213 1414 1414 1515 1515 1616 1719

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Rallis India Ltd- Rely on the Agro gold

BUY
Market Data Current Market Price (INR) Target Price (INR) Upside (%) 52 Week High/Low (INR) Market Capitalization (In INR Mn) 162.60 190.00 17% 174.3/116.67 31,620.66

Sector- Agrochemicals
We re-initiate coverage on Rallis India Ltd (Rallis). Our rating underpins the companys brand building activities, wide distribution network, and competitive research team with technical innovation capabilities. Rallis has wide range of product portfolio, launching 3-6 new products every year. In addition to that, the company has strengthened relationship with farming community and other end users through different service providing models such as EAGLE, Rallis Kisan Kutumba, MoPu, Saathi, Bhagidari Sabhas, Apollo, and Disha. Furthermore, commissioning of port based Dehaj facility to strengthen international presence and acquisition of Seed Research Company Metahelix Life Sciences make Rallis more attractive. Investment Highlights Brand building, distribution networks and maintaining relationship with the end customers through various relationship models help the company to increase market presence and therefore top line growth. Technical innovation capabilities, deep understanding of organic chemistry and systematic development of new products reduces product life cycle which are likely to help Rallis launch 3-6 new products every year that helps the company to have a wide range of crop and region specific product portfolios. Port based Dehaj plant is likely to strengthen international presence through capacity addition for contract manufacturing.
500355 RALLIS RALI IB RALL. BO 1.00 194.47 21.9x 0.67 74,186 1.2%

STOCK SCAN BSE Code NSE Code Bloomberg Ticker Reuters Ticker Face Value (INR) Equity Share Capital (In INR Mn) Average P/E Beta vs Sensex Average Daily Volume Dividend Yield

Acquiring 59.02% stake in Bangalore based seed research company Metahelix Life Sciences, Rallis can access exclusive hybrid pipelines, regulatory clearance with over 100 hybrids in pipeline, branded Dhaanya seeds, competent research team which help the company to serve farmer in better way that is likely to make Rallis competitive against the peers.

Rallis Financial Performance at a glance

Particulars(In`Mn) Revenue Growth(%) EBITDA EBITDAMargins(%) NetProfit NetProfitMargins(%) NetProfitGrowth(%) EPS BVPS P/E P/BV EV/EBITDA ROE

FY2009 8,366.89 24.03% 1,108.80 13.25% 720.19 8.61% 42.52% 6.01 27.43 4.35 0.95 3.49 20.59%

FY2010 8,786.77 5.02% 1,448.74 16.49% 1,014.88 11.55% 40.92% 7.83 29.86 10.69 2.80 7.46 23.91%

FY2011 10,657.04 21.29% 1,713.45 16.08% 1,260.37 11.83% 24.19% 6.48 23.90 20.37 5.53 15.60 24.96%

FY2012E 13,464.83 26.35% 2,258.28 16.77% 1,566.24 11.63% 24.27% 8.05 29.99 20.19 5.42 14.10 23.68%

FY2013E 16,435.45 22.06% 2,787.31 16.96% 1,952.44 11.88% 24.66% 10.04 39.03 16.20 4.17 10.99 22.79%

Source: Company Data, Microsec Research

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Company Overview Rallis India Ltd (Rallis), subsidiary of Tata Chemicals Ltd is a leading crop protection player. The company sells its products across 80% of Indias districts through the wide range of distribution channels with supportive retailers and dealers. In addition to that, Rallis supplies technical grades and intermediates to the different chemicals and agrochemical companies such as Bayer, Syngenta, Excel, UPL, Gharda, Cheminova, Dhanuka and Nagarjuna. The company has manufacturing units for pesticides and fine chemicals that are located in Ankleshwar, Akola, Turbhe, Lote, Patancheru and Dahej. The flexible manufacturing process enables the company to produce new product in short period of time with cost competitive advantages. It has got ISO 9002 certification for pesticides and fine chemicals plants. By acquisition of 59.02% stake in Metahelix, Rallis has strengthened its position in the seed business. History & Background Rallis was incorporated in the year of 1948 in Calcutta. It is headquartered in Mumbai. Rallis: Event

Source: Company Data, Microsec Research

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Business Overview Rallis has categorized its business into the Domestic Agri Business, Institutional Business, International Business and Contract Services. Under the Domestic Agri Business, Rallis operates in the area of pesticides, herbicides, fungicides, plant growth nutrients, seeds and also providing agri services to the farming community. Rallis has about 13% market share in the `6000-7000 cores insecticide business; a vertical which is estimated to have grown by about 12%-15% in India. This segment is contributing 60% to the companys total revenues. Product Category Segment wise revenue contribution (%)

Source: Microsec Research, Company Data

Source: Microsec Research, Company Data

Due to the performance of key brands, the domestic business showed 20% growth during FY11. In the rising cost and labor shortage scenario, the company is providing knowledge to the farming community about high yield seeds, crop management techniques and crop protection method to improve the productivity of different crops. The domestic institutional business consists of crop protections, seed treatment chemicals and household pesticides. Rallis has strengthen international business through new registrations, alliances, contract manufacturing and also by setting up fully owned subsidiary in Australia in the name of Rallis Australasia Pty Ltd to increase direct market presence outside India. The International Business division registered 34% top line growth during the year due to the rising price and demand of crop commodities.

Industry Overview Global agrochemical industry is growing at a CAGR of more than 7.5% on account of rising food prices during FY2009-FY2011. Worlds total number of people is rising by about 75 million per year. UN estimates that world population might reach 9 billion by 2050. Furthermore, the World Bank estimates that food requirement will rise by 50% by 2030 driven not only by population growth but also by an expanding middle class in developing countries with a growing preference for Western diets. Besides rising population, decreasing rate of fertile land, changing weather pattern, growing water scarcity are the other important factors for increasing food inflation. To reduce food inflation, Government has to focus on increasing farm productivity by using sufficient region specific and crop specific agri-inputs and investing in R&D-farm technology innovation.

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Source: Microsec Research, Company Data

Source: Microsec Research, Company Data

Indian agrochemical industry is one of the fastest growing sectors in the economy. With an estimated worth of $28 billion, it accounts for 12.5% of the countrys total industrial production and 16.2% of the total exports from the Indian manufacturing sector. The future of pesticide industrys export is looking good as the share of generic products are going to increase driven by $4billion agrochemical molecules are likely to go off patent and generic players will find opportunity to grab the market share. In addition to that, the companies with strong R&D team and continuously introducing new products are likely to be benefitted from the situation of getting banned of old products or lose market share because pests are starting to become resistant. Based on the application, agrochemical industry is segregated into insecticides, fungicides, herbicides, bio-pesticides and plant growth nutrients. Out of the top 20 agrochemicals sold in India, 16 are from insecticide categories. However, global market is dominated by herbicides which have 48% share followed by 29% insecticides and 17% fungicides. In India, Andhra Pradesh, Tamil Nadu, Karnataka and Punjab account for 50% of the total pesticide market. Agrochemical Market Size (In ` Cr) Product Category in Agrochemical Industry

Source: Microsec Research, Company Data

Source: Microsec Research, Company Data

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Investment Thesis Rallis is a leading crop protection player in India. In Q1 FY12, the company reported yoy growth of 19% and 12% in top line and bottom line respectively on standalone basis and after incorporate the results of Metahelix, the consolidated top line and bottom line was escalated by 46% and 90% respectively though it may not be comparable on yoy basis. The consolidated revenue of Rallis shows 12% growth (CAGR) over the period of 2007-2011 whereas bottom line jumped at an annual rate of 17% over the same period. The increasing trend of minimum support price of food commodity due to the growing population and rising income level boost the demand of agri inputs. We expect Rallis is likely to show good performance due to the acquisition of Metahelix and commissioning of Dahej facility in the current fiscal year. The details analysis is as follows:

Brand Building, Wide Distribution Network and Relationship Model to increase market presence Rallis has its presence worldwide over 50 countries through new registrations, alliances and contract manufacturing. To increase direct market presence outside India, the company has also fully owned subsidiary in Australia in the name of Rallis Australasia Pty Ltd. Around 23% of revenue contribution coming from international markets like USA, South East Asia, Australia, and Africa. According to the management, it is likely to contribute approximately 40% in the coming 2-3 years. In domestic country, Rallis distribution network covers 80% of total districts with more than 4000 dealers and 30,000 retailers. The company has 7 regional offices, 28 area sales offices, 39 depots and field staff headquarters with 400 field staff and more than 1000 field assistants across the country. Worldwide Distribution Network of Rallis

Source: Microsec Research, Company Data

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Rallis is following differentiated strategies to penetrate market and promote its products. The company has invested heavily in the brand building process. Through its wide distribution channels, first it makes contact with the farmers; then different innovative strategies like posters, wall paintings, video campaign, slides show in movie theaters, slogan designs, demonstrations, quizzes and mass campaign Rallis creates awareness and enhances visibility of its products in the mind of the farming community. Furthermore together with University of Agriculture and Department of Agriculture, Rallis has conducted over 8000 demonstrations involving 20-25 farmers each for making the farmers to familiar with good agriculture practices and right products. In addition to that, by providing value added services like sms alert on crop prices, weather, and possible disease outbreak, identifies current and future farmers needs, the company ensures customer satisfaction. Rallis currently covers over 5 lakhs farmers and intends to scale up to 1 Mn farmers by FY12. Moreover Prema visits are being organized wherein farmers from one area taken to other locations to observe and learn good crop management practices from other farmers and newsletters in the name of Unnat Kisan in local languages are circulated for better knowledge to the farming community. All of these brand building and customer centric activities make the products of Rallis to be renowned and easy to recall which in turn help Rallis for doubling the sales of Ergon, Takum, Applaud, Asataf, Manik, Tata Metri and Taqat and help farmers to protect their crops effectively, improving yields and ultimately improving farmers living of standard. Relationship Models

Source: Microsec Research, Company Data

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Product portfolios, new launches along with contract manufacturing agreements to boost growth Agrochemical R&D is very similar to those Pharmaceuticals. Developing a molecule with registration is time consuming, takes around 2-4 years and after that the product can be multibillion dollar opportunity or a complete disaster. Indian agrochemical product registration process is one of the stringent in Asia and takes around 2-3 years for approvals of each new formulation from the time of registration as it has to undergo extensive field trials with respect to chemistry, toxicology, metabolism, soil residue and packaging- labeling. The strong R&D team of Rallis continuously focuses on developing innovative new products with various combination and better efficacy. The technological superiority in the research department and systematic development of new products reduces product life cycle which helps Rallis to launch around 3-6 products every year that leads to have large number of innovative quality products in the pipeline and make Rallis competitive in the Industry. R&D Expenditure from FY2007-FY2011 Product Registration & Launched from FY2002-FY2011

Year 200203 200304 200405 200506 200607 200708 200809 200910 201011
Source: Microsec Research, Company Data

Product Product KeyNewProducts Registration Launched 4 3 TataReeva,ContafPlus 7 6 Manik,Fateh,Samarth,Termex,Tatamida,Sentry 7 6 Anant,Daksh,Preet,Sartaj,Samarth,Prabal 4 3 Prabhaav,Spiro,Koranda 6 3 Applaud,Taqat,Nova 5 4 Takumi,Sedna,Royal,Ishaan 7 3 Mantis,CartoxS.P 5 3 Ergon,Balwan 4 3 Toran,Ralligold,Taarak

Source: Microsec Research, Company Data

Rallis Research Center is located at Patancheru, Andhra Pradesh. It is recognized by Department of Scientific And Industrial Research under the Ministry of Science And Technology. During FY11, the company has incurred R&D expenditure of `9.24 cores against `6.02 cores in FY10 towards the product development and registration. Awareness of Brands Rallis products in Safer & High Toxic Category (%)

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New Products Launch in Proportion of Total sales

Pesticides Revenue % Growth

Source: Microsec Research, Company Data

Source: Microsec Research, Company Data

Rallis has wide range of product portfolios depending on the nature of Indian climates and crop pattern. Besides pesticides, herbicides, insecticides, the company has its presence in hybrid varieties of maize, paddy, and cotton. Rallis new product sales contribute around 24-31% to its total sales. Some of the popular products are Contaf, Contaf Plus, Master, Fujione, Fatch, Tata Metri, Tata Panida, Daksh, Reeva, Asataf, Manik, Rogor, Ralligold, and Ergon. Our of these Contaf, Rogor, Asataf, Tatamida, Contaf Plus, Applaud, Tatamono are the top seven brands out of twelve top crop protection brands in India. In addition to that, the company has different household products such as Termax, Sentry, and RalliGel to control cockroaches, houseflies, and mosquitoes. Insecticides
Product Asataf(Acephate) Anant(Thiamethoxam) Applaud CartoxG(CartapHydrochloride) CartoxSP(CartapHydrochloride) Daksh(Indoxacarb) Electra(CarbamateInsecticide) Endotaf(Endosulfan) Impeder Koranda505(Chloropyrifos) Manik(Acetamiprid) Nagata(Cypermethrin) Prabal(Profenofos) Ralo(Cypermethrin) Reeva(Lambdacyhalothrin) Rogor(Dimethoate) Spiro(Thiodicarb) TataCyper(Cypermethrin) TatamidaSL(Imidachloprid) TataMono(Monocrotophos) Tatafen(Fenvalerate) Tatafuran Tefethion(Ethion) Tritox Volphor(Phorate) Toran Crop Tobacco,Sugarcane,Chillies,Fruits,Cereals Paddy,Cotton Paddy Rice Vegetables,Rice Cotton Rice,chillies Cotton,Pulses,Groundnut,rice,mango Cotton Cotton Cotton Cotton,Fruit,Vegetables,Pulses Cotton Cotton,Fruit,Vegetables,Pulses Cereals,Potatoes,Vegetables,Cotton Crops Cotton,Cabbage Cotton,Fruit,Vegetables,Pulses Cotton,Rice,Chilli,Mango,Sugarcane WiderangeofCrops WiderangeofCrops Cereals,Pulses,Oilseeds,Vegetables,Fruits Chillies,Cotton,Fruits,Vegetables Rice,Soyabean,Brinjal Rice,Sugarcane Cotton Pest Sucking&ChewingInsects PlantHopper,GreenLeafHopper,Aphids,Jassids,Thrips NymphStageofWhitefly,Planthoppers StemBorer,LeafFolder,WhorlMaggot StemBorer&LeafFolder Bollworm,DiamondBackMoth Caterpiller,Suckingpests ChewingPests,Hoppers Bollworm,Whiteflies Aphids,Jassids,Thrips,Whitefly,Bollworm Aphids,jassids,WhiteFlies Whiteflies,Bollworms,Caterpillars Bollworm,Jassids,Aphids,Thrips,Whiteflies Sucking,Chewing&boringpests ChewingPests,Hoppers Suckingpests,Chewinginsects,Mites Bollworm Suckingpests,Chewinginsects,Boringpests Aphids,Whiteflies,Hoppers,Thrips,Jassids,Termites Chewing&Boringinsects Chewing,Sucking,Boringinsects Caterpiller,Suckingpests,Rootgrub Mites WhiteFlies,LeafFolder,GirdleBeetle,Shoot&FruitBorer StemBorers,BPH Suckingpests

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Herbicides

Product Atrataf(Atrazine) Dhar(Isoproturon) Fateh(Sulfosulfuron) Preet(Pretilachlor) Sartaj(PiroxofopPropinyl) TataPanida(Pendimethalin) TataMetri(Metribuzin) Teer Teg(MetsulfuronMethyl) Taarak
Fungicides

Crop Maize,Sorghum,Coffee,OilPalm,Banana,pineapple,Guava Wheat Wheat Rice Wheat Soybean,Groundnut,Cotton,Mustard Wheat,Soybean,Potato,Tomato,Sugarcane Paddy Wheat,Paddy Paddy

TargetHerb AnnualGrasses,BroadLeavedWeeds Weeds Phalarisminor,Chenopodiumalbum,Melilotusalba Echinochloasp,Cyperusiria,Cyperusdifformis,Pannicumrepens Polarisminor 51typesofannualgrasses,broadleavedweeds Annualgrasses,BroadleafWeeds BroadLeafedWeeds Weeds Weeds

Product Blitox(CopperOxychloride) Captaf(Captan) Contaf(Hexaconazole) ContafPlus(Hexaconazole) Fujione(Isoprothiolane) Master(Mancozeb+Metalaxyl) Samarth(Hexaconazole) Sultaf(Sulphur80%) TataM45(Mencozeb75%)

TargetFungiandCrops Blightsofpotato,tomato,fruitsdiseases,mildewoftobacco,vegetables,diseasesofcoffee,tea Widevarietyoffungusinseedingstage&matureplant Blight&leafspotsofpaddy,powderymildewofgrapes,Chillies Powderymildews,rusts,leafspotsincereals,oilseeds,RiceSheathBlight BlastdiseaseinPaddy DownymildewofGrapes,LateBlightofPotato&Tomato,BlotchofOnion,DampingoffinTobacco&Cardamom PowderyMildew&FruitRotinChillies,EarlyBlight&LateblightinPotato PowderyMildewofApple,Grapes,Cowpea,Moong,Urid,Pea,Chillies,Okra,Mango,Citrus Brown&BlackrustofWheat,BlastofPaddy,DampingoffofChillies

Source: Microsec Research, Company Data

Over the year, Rallis has build strong relationship with different companies such as Bayer, Syngenta India, Yara International, Borax International in the segment of agrochemicals, fine chemicals, specialty chemicals, polymers and pharma intermediates for contract manufacturing of Technical formulations and intermediates.

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Contract manufacturing Agreements

Source: Microsec Research, Company Data

Port based Dahej plant to strengthen International Presence Rallis has set up agrochemicals manufacturing plant at Dahej in Bharuch district of Gujarat with an investment of `180 cores. A portion of fund comes from internal accruals. As per Financial Times Group, SEZ at Dahej is the top 25 best global economic zones. From this location, Rallis is likely to get export benefit as well as tax benefit. The commercial production of this unit has been commenced on June 2011. This plant is likely to add more production lines for its existing products with the estimated production capacity of 45,790 MTPA besides 10,000 MTPA of formulations in the solid and liquid form and make new room for introduction of new products for direct selling to the farmers as well as contract manufacturing to serve its overseas clients in better manner.

Acquiring Metahelix a right strategic move for long term A genetically modified seed company which develop pests resistance seeds to increase yield can be the main competitor for an agrochemical company. From our view, the acquiring 59.02% stake of seed research company, Metahelix through internal accruals is the right strategic move of Rallis for the long tenure. As we know, seed industry has high entry barriers in the form of product Intellectual Property, regulatory clearance, and substantial investment by the way of R&D, manpower. In addition to that developing a typical product takes years of time to complete. By this acquisition, Rallis is likely to be benefitted by getting diversified hybrid and genetically modified product portfolio, regulatory clearance with over 100 hybrids in pipeline, competitive research team

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and well known Dhaanya brand. Furthermore, Metahelix is entering in Vietnam, Thailand, Indonesia and Philippines for rice and maize hybrid. Seed Industry Benefit of Rallis after acquiring Metahelix

Source: Microsec Research, Company Data

Source: Microsec Research, Company Data

The `6500 crores Indian seed market is the 6th largest in the world and growing at a rate of 12-13% pa. Metahelix is an agricultural biotechnology company focusing on developing high technologies crop protection and improved productivity hybrid seeds in rice, maize, cotton, millet, tomato, and sunflower. Its research firms are situated at Bangalore, Hyderabad and Aurangabad. Product of Metahelix
ProductVarieties Paddy(DRH775) Paddy)DRH748) Maize(DMH8255) Maize(MM7314) Maize(DMH888) Maize(DMH849) Cotton(BADRI) Cotton(BadriplusBt) Cotton(MC5112Bt) Cotton(MC5103Bt) Cotton(MC3Bt) Cotton(RanaPratapBt) PearlMillet(MP7792) PearlMillet(MP7882) PearlMillet(MP7872) Sunflower(3389) Tomato(MANOHAR) Tomato(NISHA) Tomato(AMRUTHA) Tomato(RANJITHA) Tomato(CHARMI) Tomato(PKM1) Tomato(S22) OKRA(SENORA) HOTPEPPER(DCX3160) HOTPEPPER(DAMINI) HOTPEPPER(PRIYA) HOTPEPPER(UJJWAL) HOTPEPPER(REDHOT) HOTPEPPER(DHAANYAMEGAHOT) HOTPEPPER(ARUN) Source: Microsec Research, Company Data Duration(Days) 120125 135140 115120 100105 100110 90100 145150 145150 160170 145170 145170 145170 7275 7880 7880 90105 6570 65 6570 7075 7075 120125 120130 45 6570 6570 5055 5358 6065 6570 7075 AreaofAdaptation Haryana,Uttaranchal,TamilNadu,M.P,Jharkhand AP,Karnataka,Maharashtra,Uttaranchal,EasternUP,Orissa,Tripura Irrigatedassuresrainfallareas AlloverIndia Assuredrainfallareas AlloverIndia Central&SouthIndia A.P,TamilNadu,Gujarat,M.P,Karnataka A.P,TamilNadu,Gujarat,M.P,Karnataka Gujarat,partsofM.P Punjab,Haryana,Gujarat,partsofM.P Central&SouthIndia Gujarat,Rajasthan,Haryana,UP,Maharashtra,Karnataka) Gujarat,Rajasthan,Haryana,UP Gujarat,Rajasthan,Haryana,UP,Maharashtra,Karnataka) AlloverIndia AlloverIndia AlloverIndia AlloverIndia AlloverIndia AlloverIndia AlloverIndia AlloverIndia SouthernStates AlloverIndia A.P,Maharashtra Gujarat,A.P,M.P,Maharashtra Central,Western&NorthernPartofIndia AlloverIndia South,North,East A.P,U.P,M.P

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Peer Group
Particulars (In `Mn) Revenues Growth (%) EBITDA EBITDA Margins (%) Net Profit Net Profit Margins (%) Growth (%) EPS BVPS P/E P/BV RoE EV/EBITDA

Rallis India 10,657.04 21.29% 1,713.45 16.08% 1,260.37 11.83% 24.19% 6.48 25.96 20.37 5.09 27.12% 15.70

Dhanuka United Agritech Phosphorus 56496.9 5412.25 6.80% 21.47% 10596.4 778.63 18.76% 14.39% 5576.2 511.12 9.87% 9.44% 5.98% 40.66% 12.45 10.22 80.68 34.08 12.08 7.63 1.86 2.29 16.60% 38.20% 12.35 5.72

Monsanto India 3582.6 12.65% 652 18.20% 428.3 11.96% 20.42% 49.63 433.74 38.84 4.44 11.80% 29.03

Source:MicrosecResearch,CompanyData,Bloomberg,AceEquity;FY11

Key Management Profile

KeyMembersintheBoard B.Sc(Physics)fromCalcuttauniversity, ViceChairmaninHindustanLeverLtd, ChairmanofUnileverArabia,MDofBrooke EngineeringfromIITKharagpur,Advanced BondLipton&DirectorofBoardofseveral ManagementProgrammefromHarvard BusinessSchool Tatacompanies ChiefOperatingOfficerinPhosphates CharteredAccountant,CostAccountant, CompanySecretary&LawGraduate BusinessofTataChemicals VicePresidentNewBusiness,M&A, PGDMfromIIM(A),ICWA FinanceatTataChemicalsLtd&Tata IndustriesLtd,HeadofCapitalMarkets PracticeatAvendusAdvisorsPrivateLtd, CFOofInternationalBusiness,Placement& MerchantBankingatHSBC InvestDirect(India)Ltd SeniorManager(Strategy&Business Devlopment)ofTataChemicalsLtd BachlorofEngineering(Mech)

R.Gopalakrishnan

Chairman

V.Shankar

MD&CEO

GirishNadkarni

CFO

K.Venkatadri

ExecutiveVice PresidentSales& Marketing

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Valuation We adopted a comparable valuation method to value Rallis based on Price-to-Earning (P/E) multiples. Currently, Rallis is trading at 16.2x on its FY13 EPS (E) of `10.04. In the longer run, we expect the company continue to trade at a premium over the peer group average P/E based on its right strategic move and outperformance. As a result, we assign the multiple of 19x and arrive at a target price of `190 for the stock. Our target price translates a 17% upside over Rallis current stock price. Rallis: P/E Bands:

Source: Company, Microsec Research, Bloomberg

Rallis: EV/EBITDA Bands:

Source: Company, Microsec Research, Bloomberg

Risks to the Rating Rallis is highly dependent on weather. The fluctuation of rainfall and its distribution may affect the top line growth of the company. Fluctuation of exchange rate and oil price has effect on margins as well as earnings. Any legislation related issue on key products may affect its revenue.

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Financials (All numbers in ` Mn unless specified)

IncomeStatement(In`Mn) Revenue GrossProfit EBITDA Dep EBIT Interest OtherIncome PBT Tax NetProfit AdjEPS FY2009 8,366.89 3,295.03 1,108.80 229.49 879.31 34.31 227.39 1,072.39 352.20 720.19 6.01 FY2010 8,786.77 3,731.60 1,448.74 183.10 1,265.64 27.29 288.75 1,527.11 512.22 1,014.88 7.83 FY2011 10,657.04 4,320.93 1,713.45 174.85 1,538.60 39.85 345.96 1,844.71 580.41 1,260.37 6.48 FY2012E 13,464.83 5,557.16 2,258.28 295.51 1,962.77 51.69 511.66 2,422.74 799.51 1,566.24 8.05 FY2013E 16,435.45 6,797.56 2,787.31 444.45 2,342.86 57.84 706.72 2,991.74 978.30 1,952.44 10.04

BalanceSheet(In`Mn) ShareCapital Reserves&Surplus Shareholders'Funds Secured Unsecured LoanFunds SOURCESOFFUNDS GrossBlock AccumulatedDep/Amor NetBlock CapitalWorkinProgress FixedAssets Investments Inventories SundryDebtors Cash&BankBalances OtherCurrentAssets Loans&Advances CurrentAssets,Loans&Advances CurrentLiabilities&Provisions NetCurrentAssets APPLICATIONOFFUNDS
CashFlowStatement(In`Mn) NetProfitBeforeTax Dep Intertest(Net) OperatingProfitbeforeWCChanges OperatingCashFlow InvestingCashFlow FinancingCashFlow NetChangeInCash OpeningBalance ClosingBalance

FY2009 999.85 2,497.54 3,497.39 248.11 576.64 824.75 4,322.14 3,376.57 1,790.68 1,585.88 290.71 1,876.59 1,361.53 1,492.51 1,159.91 81.86 11.26 773.57 3,519.11 2,607.92 911.18 4,322.14
FY2009 1,072.39 229.49 30.73 1,297.34 1,391.47 (1,423.49) 30.29 (1.73) 70.25 68.53

FY2010 129.65 4,114.91 4,244.56 16.12 65.01 81.13 4,325.69 3,090.97 1,563.50 1,527.47 1,120.29 2,647.76 1,402.30 1,488.70 755.06 118.97 14.59 886.17 3,263.47 3,041.32 222.15 4,325.69
FY2010 1,527.11 183.10 22.73 1,723.38 2,150.25 (912.47) (1,202.83) 34.95 68.53 103.48

FY2011 194.47 4,854.75 5,049.22 1,087.31 84.82 1,172.14 6,275.11 4,056.88 1,742.53 2,314.34 1,694.51 4,008.85 255.97 2,289.20 1,063.50 145.75 12.84 1,154.22 4,665.51 3,891.49 774.01 6,275.11
FY2011 1,844.71 174.85 25.01 1,920.37 987.26 (1,441.07) 452.63 (1.18) 103.48 116.90

FY2012E 194.50 6,420.98 6,615.48 1,092.92 84.82 1,177.75 7,903.99 5,056.88 2,038.04 3,018.84 1,694.51 4,713.35 269.30 2,379.47 1,106.70 1,047.59 15.86 1,280.34 5,829.96 4,144.89 1,685.07 7,903.99
FY2012 2,422.74 295.51 51.69 2,769.94 1,961.22 (1,013.33) (46.05) 901.84 116.90 1,018.74

FY2013E 194.50 8,373.43 8,567.93 1,098.53 84.82 1,183.36 9,923.04 5,856.88 2,482.49 3,374.39 1,694.51 5,068.90 328.71 2,897.89 1,350.86 2,311.69 21.61 1,568.08 8,150.14 4,860.98 3,289.16 9,923.04
FY2013 2,991.74 444.45 57.84 3,494.03 2,175.75 (859.41) (52.23) 1,264.10 1,018.74 2,282.85

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Microsec Research: Phone No.: 91 33 30512100 Email: microsec_research@microsec.in Ajay Jaiswal: President, Investment Strategies, Head of Research: ajaiswal@microsec.in Fundamental Research Name Sectors Nitin Prakash Daga Naveen Vyas Nitesh Goenka Abhisek Sasmal Sutapa Roy Gargi Deb IT, Telecom & Entertainment Midcaps,Market Strategies Metal & Mining BFSI Economy Agriculture & Pharma

Designation AVP-Research AVP-Research Sr. Research Analyst Research Analyst Research Analyst Research Analyst VP Sr. Manager

Email ID npdaga@microsec.in nvyas@microsec.in ngoenka@microsec.in asasmal@microsec.in s-roy@microsec.in gdeb@microsec.in vpagaria@microsec.in rksaha@microsec.in rlilaramani@microsec.in dmittal@microsec.in ssedani@microsec.in srudra@microsec.in

Technical & Derivative Research Vinit Pagaria Derivatives & Technical Ranajit Saha` Institutional Desk Rajiv Lilaramani Dhruva Mittal PMS Division Siddharth Sedani Sarmistha Rudra PMS Research PMS Technical Institutional Equities Institutional Equities Technical Research

Sr. Manager Manager AVP Research Analyst

Research: Financial Planning Division Shrivardhan Kedia FPD Products Research-Support Subhabrata Boral Research Support

Manager Research Executive

skedia@microsec.in sboral@microsec.in

**Rating Scale
Recommendation Strong Buy Buy Hold Underperform Sell Expected absolute returns (%) over 12 months >20% between 10% and 20% between 0% and 10% between 0% and -10% < -10%

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19 Aug 2011 Microsec Research