TechnoSpeak

InitiatingCoverage

AutolineIndustries Ltd.
August31,2010 BUY PRICE` 189 TARGET` 242

AutoAncillary
SHAREHOLDING(%)
Promoters FII FI/MF BodyCorporates Public&Others

26.74 14.19 0.01 15.62 43.44

STOCKDATA

ReutersCode BloombergCode
BSECode NSESymbol Market Capitalization* Shares Outstanding* 52Weeks(H/L) Avg.Daily Volume(6m)

AUIN.BO AUTOLIN 532797 AUTOIND ` 2,306.7mn US$49.2mn 12.20mn ` 218/78 105,133Shares

PricePerformance(%) 1M 24 3M 71 6M 72

200DaysEMA:` 134 *Onfullydilutedequityshares

AutolineIndustriesLtd.(AIL)isengagedinmanufacturingofmorethan800productsinthe Sheet Metal Components and Tubular structure space. AIL has evolved from being a stamping player to a midsized engineering company manufacturing components, assemblies and subassemblies for OEMs in Auto space. AIL is also involved into Value added services that include conceptualizing, styling, design engineering and creating prototypesofAutoComponents. RevivalinAutoSectortoboostdemandforAILsproducts AILderives80.0%ofthedomesticrevenuesand70.0%oftotalrevenuesfromTataMotors. DuringQ1FY11,TataMotorsdomesticsalesofPassengerVehicle(PV)havewitnessedyoy growth of 57.6% mainly on back of successful launch of Indigo Manza. Within the Commercial Vehicle space, the company has witnessed yoy growth of 34.9% during Q1FY11.CurrentlyAILsuppliestoallthevehiclesofTataMotorsexceptforTataNano.AIL alsoprovidesBodyFrames,Silencers,ExhaustsystemsforTataMotorsvehicles. DeriskingitselfbydiversifyingitsClientbase AILisdiversifyingitsclientbasebyincludingmorecustomersinitsclientbaseandnotbeing dependent on Tata Motors. AIL is in talks with Volkswagen, Mercedes, General Motors, M&M and by supplying them it would be able to diversify and add a huge client base. CompanieslikeVolkswagenandMercedeshavesetuphugemanufacturingfacilitiesinIndia. If the Company is able to meet the standards and quality, it would be able to achieve significantgrowthgoingforward. LargelyunaffectedbymovementsinRawMaterialprices AILsmajorrawmaterialisSteelandTataMotorbeingthemajorcustomer,fixessteelprices withsteelsuppliersonbehalfofitsvendors.Thepricesarethenreviewedeveryquarterand areadjustedaccordingtomarketprices.ThepricesoffinishedproductswhichTataMotors wouldprocurefromAIListhenfixedaccordingly.Incaseifsteelpriceshaveincreasedduring the period, the prices for finished products from AIL would then be adjusted accordingly. ThisprotectsAILfromfluctuationinsteelpricesandthusprotectsitsmarginperformance. Thus the margin performance is largelybased on how efficiently it is able to manufacture andmanageitsfixedcosts. Valueadditionthroughengineeringcapabilitiestoimproveprofitability Alongwithsupplyofcomponents,AILhasalsostartedprovidingDesigningandEngineering services. These solutions focus on reducing costs and improving the performance of the vehicles. Based on its satisfactory performance, Tata Motors has now allotted 14 more EngineeringprojectstoAIL.

OUTLOOK&VALUATION
AIL is midsized Engineering company manufacturing components, assemblies and sub assembliesforOEMsinAutospace.Itmanufacturesmorethan800productsinSheetMetal ComponentsandTubularstructurespace.Itiscurrentlyrunningatfullcapacityexceptatits Uttaranchalplantwhichiscurrentlyunderutilized.AILcancatertotheincreasingdemandtill FY2012withcurrentcapacityandincreasingutilizationlevelsatUttaranchalplant.InFY10, itsrevenuesincreased28.7%YoYandAPATgrewby339.8%YoYwithEPSof` 16.9.Going forward,withincreaseinsalespricebyTataMotorsandoverallimprovementindemandfor Autos,weexpectitsRevenuesandAPATtogrowby34.8%&41.1%,respectivelyinFY11E; andby23.4%&45.3%,respectivelyinFY12E.AttheCMPof` 189,thestockisavailableat anattractivevaluationof5.5xitsFY12Eearningsof` 34.6.Weinitiatecoverageonthestock withaBUYratingforatargetpriceof` 242 (7.0xFY12EEarnings).

KEYFINANCIALS (Consolidated)
EQUITYANALYST AlokDeora|+912240934014 alok.deora@sushilfinance.com RESEARCHASSOCIATE ShilpiJain|+912240934004 shilpi.jain@sushilfinance.com

Y/EMar. FY09 FY10 FY11E FY12E

Revenue (`mn) 3,504.6 4,511.2 6,080.0 7,505.0

APAT (`mn) 46.8 206.0 290.6 422.3

AEPS (`) 3.1 16.9 23.8 34.6

AEPS (%Ch.) (87.0) 437.1 41.1 45.3

P/E (x) 60.1 11.2 7.9 5.5

ROCE (%) 4.2 8.2 10.8 13.3

ROE (%) 3.1 9.6 12.1 15.3

P/Sales (x) 0.8 0.5 0.4 0.3

Pleaserefertoimportantdisclosuresattheendofthereport

ForprivateCirculationOnly. Member:BSEL,SEBIRegn.No.INB/F010982338|NSEIL,SEBIRegn.No.INB/F230607435. Phone:+912240936000Fax:+912222665758Email:info@sushilfinance.com

SushilFinancialServicesPrivateLimited
Office:12,HomjiStreet,Fort,Mumbai400001.

AutolineIndustriesLimited

COMPANYOVERVIEW

AutolineIndustriesLimitedisamajorsupplierofsheetmetalcomponents,subassemblies and assemblies. It has an ultramodern manufacturing facility and has the experience of producinglargevolumesinspecifiedtime andtothe required quality specifications. The products are customized to the requirements of the client, as per their drawings or samplesprovided.Thereisaqualitycheckateverylevelandbeforefinaldispatch. The manufacturing plants are set across different locations with enough of capacity to catertothegrowingdemandofautocomponents. ChakanI ChakanII BhosariUnit(Pune) KudalwadiUnit(Pune) WesternPressingLtd.(PimpriUnit) NirmitiAutocomponentsPvt.Ltd. Sidkul,Pantnagar(Uttarakhand) UnionAutolineSpareParts,LLC ButlerIndiana To further enhance the design capabilities, AIL has taken a major stake in design engineering firm. With this acquisition, company has the unique capability of Offshore Designing&Manufacturingmodel(ODM).Companyiscontinuouslyrenewingtechnology andupgradingqualitystandards,keepinginmindinternationalbenchmarks. Due to excellent qualityinwork, costcompetitiveness,timely deliveriesand stateofthe art tool room with latest CAD/CAM facilities, in short span of time it has become prime vendortoreputedautomanufacturers. Atpresent,companyismanufacturing"A"classsheetmetaldiesandsupplyingabout 130 components to Tata Motor's Indica, Indigo & Marina. It is also supplying 400 components to its Auto Division for LCVs, MCVs and HCVs, besides components for SUVslikeSafari,Sumoandtheirvariants. Variousothercomponentsnumberingmorethan150arebeingsuppliedtoBajajAuto Limited&KineticEngineeringLimitedfor2wheelers&3wheelers. Critical and prestigious components are regularly supplied to Walker Exhaust (India) PrivateLtd,awhollyownedsubsidiaryofaFortune500company. CompanysuppliestractorcomponentstoMahindra&MahindraLimitedandFiatfor theirPalioProject. ExportsofBrakeshoesmeantassparesforMercedesTrailerstoGermany,Singapore, UAEandSaudiArabia. AjointventurebythenameofUnionAutolineSparePartsLLC,UAEhasbeensetupto promoteexportsofAutoComponentsfortheGulfandAfricanMarkets. AILsuppliesmostlyassinglesourcesuppliertoTATAMotors,whichcontributesmore than80%ofcompanysstandalonerevenues. Companyhasaggressivelygrownthroughorganicandinorganicrouteswithanaimto becomeadesigntomanufacturecompany.

August31,2010

AutolineIndustriesLimited

PRODUCTRANGE
Company has wide range of products to offer as per the specifications of the clients. It specializes in providing different sheet metal components and subassemblies which are usedinvariousmannersinproductionofvehicles.Fewofthemajorproductsinclude: AssemblyPanelforFrontandRearDoor PanelTunnel FrontBumpMountingRear ReinforcementWaistInnerandOuterFrontDoor ReinforcementHandBrake TailLampCover SuspensionTower ExhaustSystem SwitchGears AssemblyFootControlModules

MAJORSUBSIDIARYCOMPANIES
NameofSubsidiary
WesternPressing Limited AutolineDimensions SoftwareLimited

Products TubularProducts EngineeringSoftware Services.

Holding Status 100.0% MergedwithAIL 100.0% Providesendto end solutionstoitscustomers onOutsourcedDesignto ManufacturingModel. 49.0% Wouldtake23yearsto breakeven 51.0% ReducingStaketo40.0%
effectiveApril01,2011

Zagato DEPAutolineINC.USA AutolineIndustries USAINC. NirmitiAuto Components

VehicleStylingand Customization DesigningSoftware JacksandPedals PedalSystemsand Hinges

51.0%

Recentlyachieved breakevenpoint 100.0% NoImmediateplansto mergeitwithAIL

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AutolineIndustriesLimited

INDUSTRYOVERVIEW
TheIndianAutoComponentindustryhaveevolvedfrombeingalowkeysupplierproviding componentstothedomesticmarkettobeingasupplierofkeyautocomponentscentersin Asiaandtodayseenasasignificantplayerintheglobalautomotivesupplychain.Indiais now a supplier of a range of highvalue and critical automobile components to leading globalautomakerssuchasGeneralMotors,Toyota,Ford,andVolkswagenamongstothers basedinvariousgeographies. Automobile Industry was delicensed in July 1991 with the announcement of the New IndustrialPolicy.ThePassengerVehicle(PV)industrywashowever,delicensedin1993.No industrial license is required for setting up of any unit for manufacture of automobiles except in some special cases. At present 100% Foreign Direct Investment (FDI) is permissibleunderautomaticrouteinthissectorincludingPVsegment.Withthegradual liberalizationoftheautomobilesectorsince1991,thenumberofmanufacturingfacilities inIndiahasgrownprogressively.Thesurgeinmanufacturingofautomobileshasledtoa sharp rise in Indian Auto Component demand over the years. In the last 6 years, Auto ComponentIndustryhasgrownatCAGRof19.5%toUS$19.5bninFY2010.
From200410 CAGRgrowth of19.5%.

Source:MOHIAutomotiveMissionPlan(AMP)

InvestmentsinAutoAncillarySectorexpectedtoSpike
The rocketing demand for automobiles in India has made Auto Majors put pressure on autocomponentmanufacturerstoincreasecapacity.AccordingtoACMA,demandhasfar outstripped supply primarily because of several new models launched in the domestic market and slow but steady recovery in demand from overseas. Moreover, since penetration levels continue to be low in India, capacity is likely to go up by 20.0% to 25.0%inFY2011.AutoComponentplayersarebeingforcedtoincurhugecapexin2010 11 for setting up new capacities and upgrading the existing ones. According to reports, Auto industry output is getting affected by 5.0% to 7.0% due to supply shortage in components. There is huge scarcity supply even from Chinese players as they are expectinghigherpricestakingintoaccounttheeverincreasingdemand.

August31,2010

AutolineIndustriesLimited

GlobalautofirmsaresettingupfacilityinIndiawhichhasmadeIndiathesmallcarhub for domestic and overseas markets. Hyundais i10 model is manufactured in India and supplied to the world. Recently Global Auto Majors like Volkswagen, Nissan Motor Co. and GM have set up facilities in India and are increasing their commitment to Indian component suppliers. According to industry reports, Hero Motors Ltd and German ZF Groupwilltogetherinvestaround` 800mninthenexttwoyearstoassembleaxleand chassissystems.

Expectedto touchUS$20.9 bnby201516

Source:ACMA

Investments according to ACMA are expected to touch US$20.9 bn by 201516 from currentlevelsofUS$7.4bn.PredictionarebasedonStrongbalancesheetsandfinancial positions which have made it possible for Indian firms to invest in component sector. IndustryEBITDAdeclinedduringtherecessionin200809butwiththerevivalineconomy which has led to strong up move in Auto Sector, the financial position for Auto Componentshaveimprovedsignificantlyandareinstrongpositiontoinvestinincreasing capacities.

DistributionofAutoAncillaryIndustry
AutoAncillaryindustryissubdividedintovarioussegmentswhichplayerspresentineach segment of the industry. Body and Chasis currently make up for 12.0% of the total productswhereAILismajorlyinvolved.

Source:MOHIAutomotiveMissionPlan(AMP)

August31,2010

AutolineIndustriesLimited

Marutihasthreatenedtoreducecomponentsuppliersonpartsshortage
Asperrecentreports,MarutiSuzukiIndiaLtdhasthreatenedtocutcomponentmakers unabletoincreasecapacitiesasanindustrywidecomponentsshortagehassignificantly affected auto production in vehicle market. Maruti has asked suppliers to strengthen their balance sheets and increase capacity or they would drop them from their list of vendors. AutoMajorsarebeingforcedtomakecustomerwaitfordeliveryofvehiclesduetolack ofcriticalcomponentsparts.Duetoextremelyhighdebtlevels,componentsplayershave struggled to expand. All auto players get significantly affected even with delay or shortageinfewcriticalcomponents.

CompetitiveedgeisforcingGlobalAutoMajorstosourcecomponentsfrom India
Indian Auto Components makers are constantly working on improving component quality,producingcomponentsatlowercostascomparedtoglobalcomponentindustry. India has now become a globally trusted brand in the global auto component industry. Alsotheautocomponentmanufacturershaveevolvedandmovedupinthevaluechain. They now provide value added engineering services along with supply of components. Thisimprovestheirmarginandbargainingpower.Asweexpectthecompetitiveedgeto continueinfuture,weexpectextremelystrongoutlookfortheautocomponentindustry inIndia. According to reports, components made in India and China is 10.015.0% cheaper than those manufactured in Europe and the US. According tothe Investment Commission of India, Global automobile manufacturers see India as a manufacturing hub for auto componentsprimarilydueto: LowlabourforceandrawmaterialwhichmakesIndiacostcompetitive. Indiahasanestablishedmanufacturingbase. Major international autocomponent including Delphi, Visteon, Bosch and Meritor havesetupoperationsinIndia. Automobile manufacturers and auto components manufacturers have set up InternationalPurchasingOffices(IPOs)inIndia. FinequalitycomponentsarenowbeingmanufacturedinIndia.

August31,2010

AutolineIndustriesLimited

INVESTMENTARGUMENT
RevivalinAutoSectortoboostdemandforAILsproducts
GrowthofAILatthecurrentmomentisdependentongrowthofAutosector.Thesector hasseenasharprevivalposttheslumpwitnessedduring20082009.Ithasbeenableto getbackontrackduetoGovernmentIncentives(ExciseCuts),EasyavailabilityofFinance andimprovementinoverallliquidityinthesystem. AIL derives 80.0% of the Domestic Revenues and 70.0% of total revenues from Tata Motors. Tata Motors has seen a turnaround across segments in Q1 FY11 with yoy growthof34.9%and57.6%inCVandPVsegmentsrespectively.Ithasexperiencedtotal yoygrowthof47.5%inQ1FY11onstandalonebasis.TherearetwosegmentswhichAIL caterstowhenitsuppliestoTataMotors. PassengerVehicle CommercialVehicle PassengerVehicleSegment:

Source:SIAM

AILs50.0%oftherevenuesgeneratedfromTataMotorsarefromsupplyingcomponents tothePVdivision.CurrentlyAILsuppliestoallthePVvehiclesofTataMotorsexceptfor Tata Nano. AIL also provides Body Frames, Silencers, Exhaust systems for Tata Motors vehicles.AILisinastrongpositiontosupplycomponentstoJLRwhichiscurrentlyrunning athighcapacityutilization. AccordingtotheJLRmanagement,withthecurrentmanpower,JLRisoperatingatclose to full capacity. If AIL meets the required quality standards then it would be able to achieve big orders from JLR which could play significant contrition in driving its future growth.

August31,2010

AutolineIndustriesLimited

During last six years Indias PV has grown at CAGR of 15.5%. According to Auto Component Manufacturing Association of India (ACMA), PV sales including exports are expectedtotouch4.1mnunitsby2016fromcurrentlevelsof2.3mn.TataMotorenjoys marketshareofapproximately10.5%inthePVmarket.

From200410 CAGRof 15.5%

Source:ACMA

CommercialVehicleSegment: CommercialVehiclesegmentgottheworstaffectedduringthedownturnexperiencedin 20082009.CVsegmentisnowshowingsignsofrevival.ItgrewataCAGRof12.8%during lastsixyears.AccordingtoACMA,CVsalesincludingexportsareexpectedtotouch0.78 mn units by 2016 from current levels of 0.57 mn. Commercial Vehicles account of approximately50.0%ofthetotalrevenuesAILgeneratesfromTataMotors.

From200410 CAGRof 12.8%

Source:ACMA

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AutolineIndustriesLimited

DeriskingitselfbydiversifyingitsClientbase
After the global economic downturn, India has become an attractive destination as a global outsourcing hub and manufacturing base for OEMs. AIL generates 70.0% of its consolidatedturnoverfromTataMotors.ThismakesAILsignificantlydependentonTata Motors. With a view to diversify its customer base, AIL is in constant talks with Auto Majors like Volkswagen, Mercedes, General Motors, M&M. Companies like Volkswagen andMercedeshavesetuphugemanufacturingfacilitiesinIndia.IftheCompanyisableto meet the standards and quality specifications, it would be able to achieve significant growthgoingforward. AIL is targeting to reduce the contribution from Tata Motors to 50.0% in 23 years. It wouldbeabletocomfortablydosoifitisabletopenetratethemarketbybaggingorders fromGlobalAutomajorswhohavesetupfacilityinIndia.

LargelyUnaffectedbymovementsinRawMaterialprices
AIL major raw material is Steel and Tata Motor being the major customer, fixes steel priceswithsteel suppliersonbehalfofitsVendors.Theprices arethen reviewed every quarter and are adjusted according to market prices. The prices of finished products whichTataMotorswouldprocurefromAIListhenfixedaccordingly. Thepricesforfinishedproductsarefixedforthevendorsonlyaftertakingintoaccount the price at which Raw Material Prices have been fixed at. This protects AIL from fluctuationinsteelpricesandthusprotectsitsgrossmarginperformance. From February 2010 onwards, Tata Motors raised the selling price for most of the products it procures from its Auto Ancillary vendors by 3.0%. This increase would let players like Autoline cover on the overhead costs like increase in fuel prices, transportationandlabourcostsandthusbeprotectedagainstmargincrunch.

Valueadditionthroughengineeringcapabilitiestoimproveprofitability
AIL has evolved from a pure supplier of Components to providing Designing and Engineering services to the Company. These solutions focus on reducing costs and improving the performance of the vehicles. Based on its satisfactory performance, Tata Motorshasnowallotted14moreEngineeringprojectstoAIL. AutolinehasmadesignificantpresenceovertheyearsinAutomotiveEngineeringServices whichinvolvesthecompleteprocessfromDesigningtoManufacturing.Ithasalsogrown inthissegmentthroughacquisitionsandisnowwellestablishedwithinthisspace.With therisingcostsoffuel,ithasbecomeprimefocusatindustryleveltoreducecosts.The needforengineeringserviceswouldincreaseovertimeandplayerslikeAILwouldhavean edgeoveritspeersinancillaryspace. AILispresentacrosstheValueChainandhasCoreCompetence rightfromStylingtotheManufacturingprocess MARKETING, SALESAND PRODUCT PRODUCT TOOLDESIGN PROTOTYPING MANUFACTURING STYLING DISTRIBUTION DESIGNING ENGINEERING DEVELOPMENT SERVICE AILCoveredSegments

OEM&Dealer Network

August31,2010

AutolineIndustriesLimited

OtherBusinessDrivers
Subsidiaries breaking even: AILs all the subsidiaries except for Zatago of Italy have achievedthebreakevenpoint.AILnowexpectstoincreaseitspresenceinUSAandEurope throughitssubsidiariesandwouldfocusmoreonEngineeringServices.AILsUSsubsidiary which recently achieved the breakeven point incurred a loss in FY 2009 due to the economic slowdown. It has now moved back to profits and we expect to contribute on marginfrontasproductsofferedinUSmarketsenjoyhighermargins.AILisalsoopento furtheracquisitionswhereitfindsvalue.

LandAssets AIL is having a 51.0% stake in a 100 acre land in heart of Chakan, Pune. Originally AIL acquiredtheLandforaJointVenturearoundtwoyearsback.Howeverduringthisperiod, hugefacilitiesweresetupbyAutomajorslikeVolkswagen,GM,MercedesBenz,Daimler, andM&MHyundaiinthatarea.DuetothisthevalueoftheLandappreciatedsignificantly andthecompanyconverteditintoresidentialland.Currentlythetotalindustrialvalueof theLandiscloseto` 1,000mnhowevertheresidentialvalueisestimatedcloseto` 2,500 mnofwhich51.0%belongstoAIL.AILhasnowdecidedtodeveloptheresidentiallandand itisintalkswithdevelopersforthedevelopment.Itexpectstogenerateannualreturnsof ` 750to` 1,000mnforthenext45yearsfromthisprimeland.

COMPARATIVEANALYSIS
CompanyName(FY10) AIL AutomotiveStampings&AssembliesLtd AutomotiveCorporationofGoa Ltd JBMAutoLtd
Source:CapitalLine

Revenues (`.Inmn) 4,511.2 4,525.3 2,463.2 2,472.5

EBIDTA (%) 12.0 6.2 0.3 10.4

EPS PE (`.) (x) 16.9 11.2 5.1 27.1 (3.4) NA 12.6 5.6

ROE ROCE (%) (%) 9.6 8.2 10.7 13.3 (1.7) (2.6) 8.5 11.6

RISKSANDCONCERNS
Highly dependent on single OEM: AIL is dependent on Tata Motors and it generates 80.0% of total revenues and 70.0% of consolidated revenues from Tata Motors. Such a highdependencecanprovetomeriskyifthereisashutdownorslowdownforacertain period which could significantly affect players like AIL. However AIL is not intentionally diversifyingitscustomerbasebytalkingtootherAutomajorsforsupplyingcomponents. IncreaseinInterestratesUpmoveininterestratesaffectthedemandforAutoswhich in turn affect the demand for Auto Ancillary products. Expected hardening of interest ratesandincreaseininflationcouldnegativelyimpacttheautoindustry.Thiscouldlead to delay in orders by customers which could badly affect Auto Ancillary companies like AIL. FluctuationinExchangerateAILrecentlystartedexportingconsignmentstoUSAandis expecting further orders from them. Fluctuation in exchange rates could negatively impact the performance of your Company. Company has not entered into derivative contractsyetandmightenteronceitsexportspickup. High levels of inflation The industry is investing to increase capacities to cater to the demand.Howeverconsideringthethinmargintheindustrycommands,theyneedtobe awareoftheirreturnoninvestmentinviewofinflationincommodityprices,power,fuel andmanpowercost.

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AutolineIndustriesLimited

PROFIT&LOSSSTATEMENT(Consolidated)
Y/EMarch NetSales RawMat.Consumed StaffCost AdminandSellingExp Misc.Expenditure TotalExpenditure PBIDT Interest Depreciation PBTinclOI Tax PAT MinorityInterest APAT FY09
3,504.6 2,807.8 260.2 173.7 0.3

`.mn

BALANCESHEETSTATEMENT(Consolidated)
Ason31 March ShareCapital Reserves&Surplus NetWorth MinorityInterest SecuredLoans UnsecuredLoans TotalLoanfunds DeferredTaxLiability CapitalEmployed NetBlock Goodwill Investments Inventories SundryDebtors Cash&BankBal OtherCurrAssets CurrentAssets CurrLiab&Prov NetCurrentAssets MiscellaneousExp TotalAssets
st

`.mn
FY12E
122.0 2,791.6 2,913.6 387.3 1,530.5 281.6 1,812.2 76.1 5,187.3 2,782.6 361.4 243.9 550.1 1,089.8 790.0 936.4 3,366.3 1,594.2 1,772.2 27.3 5,187.3

FY10
4,511.2 3,342.1 443.5 203.3

FY11E
6,080.0 4,518.6 611.0 275.0 5,404.6 705.8 135.9 187.4 382.4 76.5 305.9 15.3 290.6

FY12E
7,505.0 5,577.7 754.3 320.6 6,652.5 890.0 135.9 198.4 555.7 111.7 444.5 22.2 422.3

FY09
149.0 1,984.3 2,133.4 380.4 1,039.5 432.5 1,472.0 59.4 4,045.2 2,483.8 361.4 225.2 308.2 487.7 28.7 960.2 1,784.9 858.6 926.3 48.5 4,045.2

FY10
122.0 2,146.2 2,268.2 387.3 1,530.5 281.6 1,812.2 76.1 4,543.8 2,768.5 361.4 243.9 336.2 802.2 74.0 936.4 2,148.8 1,006.1 1,142.8 27.3 4,543.8

FY11E
122.0 2,408.5 2,530.6 387.3 1,530.5 281.6 1,812.2 76.1 4,806.1 2,781.0 361.4 243.9 445.7 882.8 431.6 936.4 2,696.6 1,304.0 1,392.5 27.3 4,806.1

3,242.0 3,988.9 290.6 80.3 121.4 88.9 22.7 66.2 19.4 46.8 543.1 108.2 168.3 266.6 49.6 217.0 11.0 206.0

FINANCIALRATIOSTATEMENT(Consolidated)
Y/EMarch Growth(%) NetSales APAT EBITDA Profitability(%) EBITDAMargin Adj.PATMargin ROCE ROE PerShareData(Rs.) Adj.EPS Adj.CEPS BVPS Valuations(X) PER P/BV EV/EBITDA EV/Netsales Mcap/Netsales TurnoverDays Debtorsdays Creditorsdays GearingRatio TotalDebttoEquity FY09
2.7 (84.5) (40.8) 8.2 1.3 4.2 3.1 3.1 11.3 143.1 60.1 1.3 16.1 1.3 0.8 46 94 0.7

CASHFLOWSTATEMENT(Consolidated)`.mn
Y/EMarch PBIT Depreciation ProvisionforTax ChginWorkingcap Chginothers Cashflowfrom operations ChginGrossPPE ChginInvestments Chginothers Cashflowfrom investing Chgindebt ChginShareCapital ChginMinInt DividendPaid Chginothers Cashflowfrom financing Chgincash Cashatstart Cashatend FY09 88.9 114.5 (22.7) (503.0) (4.3) (326.6) (368.8) (85.0) (23.1) (476.9) 210.9 23.9 159.1 (14.3) 387.6 767.1 (36.5) 65.2 28.7 FY10
266.6 121.1 (49.6) (171.2) 48.9 215.8 (405.8) (18.6) 0.0 (424.5)

FY10
28.7 339.8 86.9 12.0 4.5 8.2 9.6 16.9 30.7 185.8 11.2 1.0 8.3 1.0 0.5 52 102 0.8

FY11E
34.8 41.1 29.9 11.6 4.8 10.8 12.1 23.8 39.2 207.3 7.9 0.9 6.4 0.7 0.4 53 100 0.7

FY12E
23.4 45.3 26.1 11.8 5.6 13.3 15.3 34.6 50.9 238.6 5.5 0.8 5.1 0.6 0.3 53 100 0.6

FY11E
382.4 187.4 (76.5) 107.8 15.3 616.5 (200.0) 0.0 0.0 (200.0) 0.0 0.0 (15.3) (43.6) 0.0 (58.9) 357.6 74.0 431.6

FY12E
555.7 198.4 (111.1) (21.2) 22.2 644.0 (200.0) 0.0 0.0 (200.0) 0.0 0.0 (22.2) (63.3) 0.0 (85.6) 358.4 431.6 790.0

340.1 (27.0) (4.1) (28.6) (26.6)

253.9 45.3 28.7 74.0

Source:Company,SushilFinanceResearchEstimates

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AutolineIndustriesLimited

OUTLOOK&VALUATION
AIL is midsized Engineering company manufacturing components, assemblies and sub assemblies for OEMs in Auto space. It manufactures more than 800 products in Sheet Metal Components and Tubular structure space. It is currently running at full capacity except at its Uttaranchal plant which is current underutilized. AIL can cater to the increasing demand till FY 2012 with current capacity and increasing utilization levels at Uttaranchalplant.InFY10,itsRevenuesincreased28.7%YoYandAPATgrewby339.8% YoY with EPSof` 16.9. Going forward,with increaseinsalesprice byTata Motorsand overallimprovementindemandforAutos,weexpectitsRevenuesandAPATtogrowby 34.8%&41.1%respectivelyinFY11E;andby23.4%&45.3%,respectivelyinFY12E.Atthe CMPof` 189, thestockisavailableatanattractivevaluationof5.5xitsFY12Eearningsof ` 34.6. We initiate coverage on the stock with a BUY rating for a target price of ` 242 (7.0xFY12EEarnings).

PleaseNotethatourtechnicalcallsaretotallyindependentofourfundamentalcalls. Additional information with respect to any securities referred to herein will be available upon request.
Sushil Financial Services Private Limited and its connected companies, and their respective directors, Officers and employees(tobecollectivelyknownasSFSPL),may,fromtimetotime,havealongorshortpositioninthesecurities mentioned and may sell or buy such securities. SFSPL may act upon or make use of information contained herein priortothepublicationthereof. This sheet is for private circulation only and the said document does not constitute an offer to buy or sell any securitiesmentionedherein.Whileutmostcarehasbeentakeninpreparingtheabove,Weclaimnoresponsibilityfor itsaccuracy.Weshallnotbeliableforanydirectorindirectlossesarisingfromtheusethereofandtheinvestorsare requestedtousetheinformationcontainedhereinattheirownrisk.

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