HMCL 4Q FY 2013

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Hero MotoCorp | 4QFY2013 Result Update

April 29, 2013 2

Exhibit 1:Quarterly financial performance (Standalone)Y/E March (` cr) 4QFY13 4QFY12 % chg (yoy) 3QFY13 % chg (qoq) FY2013 FY2012 % chg (yoy)Net Sales 6,146 6,035 1.8 6,188 (0.7) 23,768 23,579 0.8Consumption of RM 4,440 4,418 0.5 4,585 (3.2) 17,398 17,282 0.7

(% of Sales) 72.2 73.2 74.1 73.2 73.3

Staff Costs 226 192 17.5 198 14.0 821 736 11.6

(% of Sales) 3.7 3.2 3.2 3.5 3.1

Other Expenses 631 499 26.3 625 0.8 2,265 1,943 16.6

(% of Sales) 10.3 8.3 10.1 9.5 8.2

Total Expenditure 5,296 5,110 3.6 5,409 (2.1) 20,484 19,960 2.6Operating Profit 850 925 (8.2) 779 9.1 3,284 3,619 (9.2)OPM (%) 13.8 15.3 12.6 13.8 15.3

Interest 3 3 4.8 3 3.7 12 21 (44.1)

Depreciation 266 280 (5.3) 283 (6.2) 1,142 1,097 4.0

Other Income 105 105 (0.4) 90 16.0 398 365 9.3

PBT (excl. Extr. Items) 686 747 (8.2) 583 17.7 2,529 2,865 (11.7)Extr. Income/(Expense) - - - - - -

PBT (incl. Extr. Items) 686 747 (8.2) 583 17.7 2,529 2,865 (11.7)(% of Sales) 11.2 12.4 9.4 10.6 12.1

Provision for Taxation 111 143 (22.2) 95 17.7 411 487 (15.5)

(% of PBT) 16.3 19.2 16.3 16.3 17.0

Reported PAT 574 604 (4.9) 488 17.7 2,118 2,378 (10.9)Adj PAT 574 604 (4.9) 488 17.7 2,118 2,378 (10.9)

Adj. PATM 9.3 10.0 7.9 8.9 10.1

Equity capital (cr) 39.9 39.9 39.9 39.9 39.9

Reported EPS (`) 28.8 30.2 (4.9) 24.4 17.7 106.1 119.1 (10.9)Source: Company, Angel Research

Exhibit 2:4QFY2013 Actual vs Angel estimatesY/E March (` cr) Actual Estimates Variation (%)Net Sales 6,146 6,095 0.8EBITDA 850 764 11.2

EBITDA margin (%) 13.8 12.5 129bp

Adj. PAT 574 492 16.7Source: Company, Angel Research

Exhibit 3:Quarterly volume performance(units) 4QFY13 4QFY12 % chg (yoy) 3QFY13 % chg (qoq) FY2013 FY2012 % chg (yoy)Total two-wheelers 1,527,351 1,572,027 (2.8) 1,573,135 (2.9) 6,073,581 6,235,205 (2.6)Domestic 1,488,167 1,528,832 (2.7) 1,530,122 (2.7) 5,912,538 6,042,902 (2.2)

Exports 39,184 43,195 (9.3) 43,013 (8.9) 161,043 192,303 (16.3)

Motorcycles 1,364,020 1,444,244 (5.6) 1,413,128 (3.5) 5,499,245 5,779,621 (4.9)Domestic 1,331,283 1,411,023 (5.7) 1,374,384 (3.1) 5,362,730 5,628,513 (4.7)

Exports 32,737 33,221 (1.5) 38,744 (15.5) 136,515 151,108 (9.7)

Scooters 163,331 127,783 27.8 160,007 2.1 574,336 455,584 26.1Domestic 156,884 117,809 33.2 155,738 0.7 549,808 414,389 32.7

Exports 6,447 9,974 (35.4) 4,269 51.0 24,528 41,195 (40.5)

Source: Company, Angel Research

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Top-line performance driven by growth in net average realization: For 4QFY2013,HMCLs top-line recorded an in-line growth of 1.8% yoy (flat qoq) to `6,146cr

driven by a strong growth of 4.8% yoy (1.7% qoq) in net average realization, led

by a superior product-mix. The volume performance however was subdued (down~3% yoy and qoq) owing to slowdown in demand and increasing competition

from Honda Motors and Scooters India. While scooter sales continue to grow at a

brisk rate (strong growth of 27.8% yoy) driven by the successful launch of Maestro

and easing of capacity constraints, motorcycle sales posted a decline of 5.6% yoy

(3.5% qoq) due to rising competition and weak demand environment.

Exhibit 4:Volumes impacted by ongoing slowdown


Exhibit 5:Strong net average realization, up 4.8% yoy


Exhibit 6:Net sales growth in-line with estimates


Exhibit 7:Domestic market share trend

Source: Company, SIAM, Angel Research

EBITDA margin surprises positively: HMCLs operating performance witnessed asharp improvement sequentially as margins expanded 124bp qoq, largely due to

the softening of raw-material prices, supported further by depreciation of the Yen,

which led to significant savings on the raw-material front. For HMCL, indirect

imports account for ~9.5% of net sales, half of which are denominated in Yen.

Direct imports form ~5.5% of net sales, however, they are denominated mostly in

US$. During 4QFY2013, raw-material expenses as a percentage of sales declined

190bp qoq (100bp yoy) to 72.2%. On a yoy basis, EBITDA margins declined

150bp largely due to increase in other expenditure which was on account of

higher marketing spends and increase in power, freight and transportations costs.

The employee expense as a percentage of sales too increased 50bp during the

quarter.

22.6

23.9 20.1

11.38.1 7.2

(13.7)

(1.0)

(2.8)

(20.0)

(15.0)

(10.0)

(5.0)

0.0

5.0

10.015.0

20.0

25.0

30.0

0

200,000

400,000

600,000

800,000

1,000,000

1,200,000

1,400,000

1,600,000

1,800,000

4QFY11

1QFY12

2QFY12

3QFY12

4QFY12

1QFY13

2QFY13

3QFY13

4QFY13

(%)(units) Total volume yoy growth (RHS)

36,7

91

36,8

58

37,4

56

37,6

50

37,9

29

37,8

46

38,6

49

39,1

02

39,7

58

6.7 6.7 6.8

5.0

3.12.7

3.23.9

4.8

0.0

1.0

2.0

3.0

4.0

5.0

6.0

7.0

8.0

35,000

35,500

36,000

36,500

37,000

37,500

38,00038,500

39,000

39,500

40,000

4QFY11

1QFY12

2QFY12

3QFY12

4QFY12

1QFY13

2QFY13

3QFY13

4QFY13

(%)(`) Net average realisation/unit yoy growth (RHS)

5,3

91

5,6

82

5,8

26

6,0

31

6,0

35

6,2

47

5,1

87

6,1

88

6,1

46

30.8 32.228.0

16.9

11.910.0

(11.0)

2.6 1.8

(15.0)

(10.0)

(5.0)

0.0

5.0

10.0

15.0

20.0

25.0

30.0

35.0

0

1,000

2,000

3,000

4,000

5,000

6,000

7,000

4QFY11

1QFY12

2QFY12

3QFY12

4QFY12

1QFY13

2QFY13

3QFY13

4QFY13

(%)(`cr) Net sales (LHS) yoy change (RHS)

18.6 18.314.7 15.8 16.4 15.9

17.520.6 21.1

55.9 56.4 54.8 56.1 56.1 56.5

50.0 51.954.0

46.0 46.7 44.0 45.2 44.4 45.3

39.842.5 43.5

0.0

10.0

20.0

30.0

40.0

50.0

60.0

4QFY11

1QFY12

2QFY12

3QFY12

4QFY12

1QFY13

2QFY13

3QFY13

4QFY13

(%) Scooter Motor-cycle Total 2-wheeler

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Exhibit 8:EBITDA margins recover sequentially...


Exhibit 9:... aiding the bottom-line growth


Net profit beats estimates: Led by strong operating performance and decline indepreciation expense, the bottom-line registered a robust growth of 17.7% qoq to

`574cr, which was ahead of our expectations of `492cr. On a yoy basis though,

the net profit declined 4.9% on account of a 150bp decline in operating margins

following higher marketing spends and increase in power and transportations

costs.

15.4 14.6 15.7 15.6 15.3 15.0 13.9 12.6 13.8

73.4 75.3 73.0 73.4 74.1 74.1 73.2 74.5 73.1

0.0

10.0

20.0

30.0

40.0

50.0

60.070.0

80.0

4QFY11

1QFY12

2QFY12

3QFY12

4QFY12

1QFY13

2QFY13

3QFY13

4QFY13

(%) EBITDA margin Raw material cost/sales

502 558 604 613 604 615 441 488 574

9.3

9.810.4 10.2 10.0 9.9

8.57.9

9.3

0.0

2.0

4.0

6.0

8.0

10.0

12.0

0

100

200

300

400

500

600

700

4QFY11

1QFY12

2QFY12

3QFY12

4QFY12

1QFY13

2QFY13

3QFY13

4QFY13

(%)(`cr) Net profit (LH S) Net profit margin (RH S)

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April 29, 2013 5

Conference call Key highlights

The Management expects the domestic two-wheeler industry to grow in highsingle digits in FY2014. It expects scooters to grow at a faster rate than

motorcycles.

The motorcycle market share for HMCL stood at ~ 53% in FY2013 (~54% in4QFY2014) and the scooter market share stood at ~18% in FY2013 (~20%

in 4QFY2013).

HMCL increased prices by`500-`1,500/unit in April 2013 to partially mitigatethe impact of increase in warranty, power, freight and distribution costs.

The current dealer inventory remains around 4.5 weeks. According to thecompany, the retail sales have remained strong in April 2013.

The tax rate should remain in the range of 22-24% in FY2014 given that only30% of profits from the Haridwar plant will be entitled for tax breaks from

FY2014.

Imports constitute ~15% of net sales, of which direct imports (USDdenominated) form 5.5%, while indirect imports (50% Yen denominated) form

9.5%. HMCL compensates its vendors with a lag of one quarter.

Around 40% of the royalty payments due to Honda for FY2014 have beenhedged at a USD-JPY rate of 98 (vs average rate of 84 in FY2013).

The company expanded its reach in FY2013 by adding 500 touch points toincrease its tally to 5,500 touch points at the end of FY2013. The companyexpects to add about 500 more touch points in FY2014.

The new plant at Rajasthan with an installed capacity of 0.75mn will beoperational by 4QFY2014. Post the expansion, the total installed capacity will

increase to 7.7mn units. The company plans to increase the total capacity to

9mn units by the end of FY2015.

The Management indicated that R&D expenses amounted to ~0.4% of netsales in FY2013. HMCL expects R&D cost to inch upwards going ahead and

expects it to reach 1-1.25% of net sales going ahead.

HMCL has floated a financing subsidiary to finance its vehicles. The sharecapital of the company stands at `200cr currently and will increase to

`1,000cr by FY2017. HMCL holds ~40% of the stake in the financing

subsidiary. The company expects the book size of the company to reach

`5,000cr by FY2017.

The company announced a dividend of `60/share in FY2013 and plans tomaintain a 40-50% dividend payout.

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April 29, 2013 6

Investment arguments

Expect the demand scenario to remain moderate; however profitability toimprove gradually: We believe that the demand environment will remainsubdued in 1HFY2014 given that consumer sentiments remain dampened led

by macro-economic concerns and rising fuel and product prices. Nonetheless,

expected easing of interest rates going ahead will revive demand in

2HFY2014. We expect the company to register an ~6% volume CAGR over

FY2013-15. Further, we expect the companys profitability to improve

gradually over the next few quarters driven by the recent pricing action (price

hikes of `500-`1,500 in April 2013) coupled with continuous depreciation of

the Yen (in addition to royalty, indirect imports account for ~9.5% of net sales,

half of which are JPY denominated). The profitability is set to further improve

sharply once the royalty costs are paid out completely in 1QFY2015.

Capacity expansion to meet future increase in demand: HMCL commencedexpansion plans at its Haridwar plant in Uttarakhand, with the first plant

commissioned in April 2008, with an initial capacity of 500,000 units.

The company has increased its total installed capacity to 6.15mn units in

FY2011 from 5.4mn units in FY2010, with capacity of 2.25mn units at

Haridwar and 1.95mn units each at Dharuhera and Gurgaon. HMCL has

further expanded its capacity to 7mn units through de-bottlenecking at existing

plants. The company is also setting up two new plants in Rajasthan (0.75mn

units) and Gujarat (1.5mn units) which will come on stream in FY2014 and

FY2015 respectively, thus taking the overall capacity to 9.25mn units. As a

result of capacity expansion, HMCL remains well-poised to meet increasingdemand going ahead.

Outlook and valuation

We broadly retain our revenue, volume, and earnings estimates for FY2014/15.

While volume growth is expected to remain modest (~6% volume CAGR over

FY2013-15) due to increasing competition, we expect profitability to improve

gradually over the next few quarters driven by the recent pricing action (price hikes

of `500-`1,500 in April 2013) coupled with continuous depreciation of Yen (in

addition to royalty, indirect imports account for ~9.5% of net sales, half of whichare denominated in JPY). The profitability is set to further improve sharply once the

royalty costs are paid out completely in 1QFY2015. We expect HMCL to register

an ~15% earnings CAGR over FY2013-15.

Exhibit 10:Change in estimatesY/E March Earlier Estimates Revised Estimates % chg

FY2014E FY2015E FY2014E FY2015E FY2014E FY2015ENet Sales (` cr) 25,351 28,047 25,274 27,658 (0.3) (1.4)OPM (%) 13.9 13.8 14.1 13.7 23bp (10)bp

EPS (`) 104.1 140.3 110.1 139.9 5.8 (0.3)Source: Company, Angel Research

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April 29, 2013 7

At `1,649, the stock is trading at 11.8x FY2015E earnings. We maintain ourAccumulate rating on the stock with a target price of `1,819, valuing the stock at13x FY2015E earnings (at a discount of ~15% to Bajaj Autos multiple of 15x).

Exhibit 11:Key assumptions - VolumesY/E March (` cr) FY2010 FY2011 FY2012 FY2013 FY2014E FY2015ETotal motorcycles 4,385,858 5,040,971 5,779,621 5,499,245 5,670,613 6,029,240

Domestic 4,293,991 4,926,390 5,628,513 5,362,730 5,523,612 5,867,235< 125cc 4,055,304 4,589,003 5,303,622 5,165,222 5,320,179 5,639,389

>125cc 238,687 337,387 324,891 197,508 203,433 227,845

Exports 91,867 114,581 151,108 136,515 147,001 162,006< 125cc 82,824 102,524 131,026 122,015 131,776 144,954

>125cc 9,043 12,057 20,082 14,500 15,225 17,052

Total scooters 214,272 361,473 455,584 574,336 676,245 783,895Domestic 208,440 342,991 414,389 549,808 648,773 752,577Exports 5,832 18,482 41,195 24,528 27,471 31,317

Total two-wheelers 4,600,130 5,402,444 6,235,205 6,073,581 6,346,858 6,813,135Source: Company, Angel Research

Exhibit 12:Angel vs consensus forecastAngel estimates Consensus Variation (%)FY14E FY15E FY14E FY15E FY14E FY15E

Total op. income (` cr) 25,274 27,658 26,143 29,185 (3.3) (5.2)EPS (`) 110.1 139.9 111.2 143.0 (0.9) (2.1)

Source: Bloomberg, Angel Research

Exhibit 13:One-year forward P/E band


Exhibit 14:One-year forward P/E chart


0

500

1,000

1,500

2,000

2,500

3,000

Apr-03

Feb-0

4

Jan-0

5

Dec-0

5

Nov-0

6

Oct-07

Sep-0

8

Aug-0

9

Jul-10

Jun-1

1

May-1

2

Apr-13

(`) CMP (`) 8x 12x 16x 20x

0

5

10

15

20

25

Apr-02

Mar-03

Jan-0

4

Dec-0

4

Dec-0

5

Nov-0

6

Oct-07

Sep-0

8

Aug-0

9

Jul-10

Jun-1

1

May-1

2

A

r-13

(x) Absolute P/E Five-yr average P/E

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April 29, 2013 8

Exhibit 15:HMCL Premium/Discount to Sensex P/E


Exhibit 16:Two-wheeler stock performance vs Sensex


Exhibit 17:Automobile - Recommendation summaryCompany Reco. CMP(`) Tgt. price(`) Upside(%)

P/E (x) EV/EBITDA (x) RoE (%) FY13-15E EPSFY14E FY15E FY14E FY15E FY14E FY15E CAGR (%)

Ashok Leyland Buy 23 27 18.1 11.4 8.5 5.2 4.4 12.1 15.2 43.9

Bajaj Auto Accumulate 1,897 2,014 6.2 16.1 14.1 10.8 9.1 40.2 36.6 13.8

Hero MotoCorp Accumulate 1,649 1,819 10.3 15.0 11.8 7.7 6.9 39.8 40.7 14.9Maruti Suzuki Accumulate 1,681 1,847 9.9 15.6 13.6 7.8 6.7 16.2 16.0 24.7

Mahindra &Mahindra

Accumulate 903 1,006 11.5 15.2 13.2 8.2 6.7 22.3 21.6 11.5

Tata Motors Accumulate 296 327 10.4 9.0 7.5 4.2 3.5 23.4 23.3 17.6

TVS Motor Neutral 39 - - 8.1 6.8 2.8 2.2 16.5 17.5 16.0


Company background

Hero MotoCorp (HMCL) is a leading 2W manufacturer in the world and the

market leader in the domestic motorcycle segment with a 54.6% market share

(48% market share including exports). HMCL has three manufacturing facilities in

India, located at Gurgaon with a total capacity of ~7mn units/year as of FY2013.

Over 2008-13, HMCL recorded a healthy volume CAGR of ~13%, backed by its

strong brands (Passion and Splendor) and a well-entrenched dealership network,

which has a good presence even across rural areas, which account for ~45% of

total volumes.

(80)

(60)

(40)

(20)

0

20

40

60

80

Apr-02

Mar-03

Jan-0

4

Dec-0

4

Dec-0

5

Nov-0

6

Oct-07

Sep-0

8

Aug-0

9

Jul-10

Jun-1

1

May-1

2

Apr-13

(%) Absolute premium Five-yr average premium

0

100

200

300

400

500

600

700

Mar-08

Aug-0

8

Feb-0

9

Aug-0

9

Jan-1

0

Jul-10

Dec-1

0

Jun-1

1

Nov-1

1

May-1

2

Oct-12

Apr-13

TVSL HMCL BJAUT Sensex

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April 29, 2013 9

Profit and loss statement (Standalone)

Y/E March (` cr) FY2010 FY2011 FY2012 FY2013E FY2014E FY2015ETotal operating income 15,861 19,398 23,579 23,768 25,274 27,658% chg 28.1 22.3 21.6 0.8 6.3 9.4Total expenditure 13,096 16,785 19,960 20,484 21,702 23,859Net raw material costs 10,736 14,111 17,282 17,398 18,339 20,164

Other mfg costs 225 265 300 355 351 398

Employee expenses 438 619 736 821 890 974

Other 1,697 1,790 1,643 1,910 2,122 2,323

EBITDA 2,764 2,613 3,619 3,284 3,571 3,798% chg 58.2 (5.5) 38.5 (9.2) 8.7 6.4

EBITDA margin 17.4 13.5 15.3 13.8 14.1 13.7

Adj. EBITDA margin* 17.4 12.1 11.9 10.4 10.9 13.0

Depreciation & amortization 191 402 1,097 1,142 1,174 591

EBIT 2,573 2,210 2,521 2,143 2,398 3,208% chg 64.2 (14.1) 14.1 (15.0) 11.9 33.8

(% of total op. income) 16.2 11.4 10.7 9.0 9.5 11.6

Interest and other charges 2 15 21 12 13 14

Other income 261 290 365 398 453 483

Recurring PBT 2,832 2,485 2,865 2,529 2,838 3,677% chg 59.0 (12.3) 15.3 (11.7) 12.2 29.5

Extraordinary income/(exp.) - (80) - - - -

PBT 2,832 2,405 2,865 2,529 2,838 3,677Tax 600 477 487 411 639 882

(% of PBT) 21.2 19.8 17.0 16.3 22.5 24.0

PAT (reported) 2,232 1,928 2,378 2,118 2,200 2,794ADJ. PAT 2,232 2,008 2,378 2,118 2,200 2,794% chg 74.1 (10.0) 18.4 (10.9) 3.8 27.0

(% of total op. income) 14.1 10.4 10.1 8.9 8.7 10.1

Basic EPS (`) 111.8 100.5 119.1 106.1 110.1 139.9Adj. EPS (`) 111.8 100.5 119.1 106.1 110.1 139.9% chg 74.1 (10.0) 18.4 (10.9) 3.8 27.0

Note: Adj. EBITDA margins are calculated after accounting for royalty costs as a part of operating

expense instead of depreciation expense

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Balance sheet statement (Standalone)

Y/E March (` cr) FY2010 FY2011 FY2012 FY2013E FY2014E FY2015ESOURCES OF FUNDSEquity share capital 40 40 40 40 40 40Reserves & surplus 3,425 2,916 4,250 4,966 6,006 7,640

Shareholders Funds 3,465 2,956 4,290 5,006 6,046 7,680Total loans 66 - - - - -

Deferred tax liability 153 247 208 132 132 132

Other long term liabilities - 1,471 1,011 302 302 302

Long term provisions - 36 38 30 30 30

Total Liabilities 3,684 4,710 5,547 5,471 6,510 8,144APPLICATION OF FUNDSGross block 2,751 5,538 6,308 6,773 7,936 9,135

Less: Acc. depreciation 1,092 1,458 2,523 3,665 4,838 5,429

Net Block 1,659 4,080 3,786 3,109 3,098 3,706Capital work-in-progress 48 50 39 24 61 63

Investments 3,926 5,129 3,964 3,624 4,312 5,395Long term loans and advances 342 534 780 780 780

Other noncurrent assets 16 26 36 36 36

Current assets 2,883 1,109 1,541 2,068 2,925 3,257Cash 1,907 72 77 181 1,217 1,395

Loans & advances 431 345 476 554 541 596

Other 545 692 988 1,334 1,167 1,266

Current liabilities 4,831 6,017 4,341 4,171 4,703 5,093

Net current assets (1,949) (4,908) (2,801) (2,102) (1,778) (1,836)Misc. exp. not written off - - - - - -

Total Assets 3,684 4,710 5,547 5,471 6,510 8,144Note: Cash includes cash with scheduled banks on dividend current accounts

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April 29, 2013 11

Cash flow statement (Standalone)

Y/E March (` cr) FY2010 FY2011 FY2012 FY2013E FY2014E FY2015EProfit before tax 2,832 2,405 2,865 2,529 2,838 3,677

Depreciation 191 402 1,097 1,142 1,174 591Change in working capital 484 185 (691) (594) 712 235

Direct taxes paid (575) (481) (583) (411) (639) (882)

Others (245) (257) (329) - - -

Cash Flow from Operations 2,687 2,254 2,360 2,666 4,085 3,620(Inc.)/Dec. in fixed assets (210) (361) (503) (450) (1,200) (1,200)

(Inc.)/Dec. in investments (363) (999) 1,443 (709) (688) (1,082)

Others 45 38 (847) - - -

Cash Flow from Investing (528) (1,322) 93 (1,160) (1,888) (2,282)Issue of equity - - - - - -

Inc./(Dec.) in loans (12) - - - - -

Dividend paid (Incl. Tax) (1,997) (599) (2,097) (1,402) (1,160) (1,160)

Others (100) (356) (361) - - -

Cash Flow from Financing (2,109) (955) (2,458) (1,402) (1,160) (1,160)Inc./(Dec.) in cash 49 (23) (6) 104 1,036 178

Opening Cash balances 13 63 39 77 181 1,217Closing Cash balances 63 39 34 181 1,217 1,395Note: Closing Cash balances excludes cash with scheduled banks on dividend current accounts

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April 29, 2013 12

Key ratios

Y/E March FY2009 FY2010 FY2011 FY2012 FY2013E FY2015EValuation Ratio (x)P/E (on FDEPS) 14.8 16.4 13.8 15.5 15.0 11.8P/CEPS 13.6 13.7 9.5 10.1 9.8 9.7

P/BV 9.5 11.1 7.7 6.6 5.4 4.3

Dividend yield (%) 6.7 6.4 2.7 3.6 3.0 3.0

EV/Sales 1.7 1.4 1.2 1.2 1.1 0.9

EV/EBITDA 9.8 10.6 7.9 8.9 7.7 6.9

EV / Total Assets 7.4 5.9 5.2 5.3 4.2 3.2

Per Share Data (`)EPS (Basic) 111.8 100.5 119.1 106.1 110.1 139.9

EPS (fully diluted) 111.8 100.5 119.1 106.1 110.1 139.9

Cash EPS 121.3 120.7 174.0 163.2 168.9 169.5

DPS 110.0 105.0 45.0 60.0 50.0 50.0

Book Value 173.5 148.0 214.8 250.7 302.7 384.6

Dupont AnalysisEBIT margin 16.2 11.4 10.7 9.0 9.5 11.6

Tax retention ratio 78.8 80.2 83.0 83.7 77.5 76.0

Asset turnover (x) 5.7 6.0 4.7 4.4 4.8 4.6

ROIC (Post-tax) 72.7 55.2 41.4 33.4 35.1 40.5

Cost of Debt (Post Tax) 2.3 36.8 - - - -

Leverage (x) (1.7) (1.8) (0.9) (0.8) (0.9) (0.9)

Operating ROE (44.5) 22.9 - - - -

Returns (%)ROCE (Pre-tax) 66.8 52.7 49.2 38.9 40.0 43.8

Angel ROIC (Pre-tax) 102.5 70.9 51.2 40.6 45.7 53.8

ROE 61.4 62.5 65.6 45.6 39.8 40.7

Turnover ratios (x)Asset Turnover (Gross Block) 6.0 4.7 4.0 3.6 3.4 3.2

Inventory / Sales (days) 9 9 9 10 10 10

Receivables (days) 3 2 3 7 8 6

Payables (days) 25 35 40 38 37 38

WC cycle (ex-cash) (days) (59) (83) (61) (40) (38) (41)

Solvency ratios (x)Net debt to equity (1.7) (1.8) (0.9) (0.8) (0.9) (0.9)

Net debt to EBITDA (2.1) (2.0) (1.1) (1.2) (1.5) (1.8)

Int. Coverage (EBIT / Int.) 1,225.2 145.7 118.4 179.9 189.3 231.4

7/30/2019 HMCL 4Q FY 2013

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A il 29 2013 13

Research Team Tel: 022 - 39357800 E-mail: [email protected] Website: www.angelbroking.com

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HMCL 4Q FY 2013