Forecast Assumptions: Sales growth for FY14 is equal to the 10-year CAGR growth Cost of material consumed, Purchases

es of stock in trade, Manufacturing and operating cost, Changes in inventory and Employee benefits expense are taken as an average of the percentage of sales of the two previous years Finance Cost: It mainly includes wtd.average of long term and short term The depreciation rate is taken as 12.6%.... Other Expenses are estimated to grow at the sales CAGR growth rate of 6.7% Exceptional Items for the years 2013 and 2014 are assumed to be 0 Dividend

Inventory Turnover ratio is assumed to be same as 2012 for the years 2013 and 2014. Non-current assets Chore committee Equity raised for capex 300 cr. @ 350 295.3cr of CL has been rolled over 2013 295.3 cr. Of CL has been paid and rolled over 295.3 cr. Has been paid. Check?? Bill discounting 150 cr @4.5% (for 4 months). Done 3 times. Financing of WC. Working Notes: Inventory calculation Ratio Analysis

Sensitivity Analysis:
Cost of Materials Consumed Conversion costs Interest Expense Stock-in-trade Sales Estimated DSCR for 2014 10% Increase 10% decrease 1.56 2.31 1.63 2.24 1.9 1.97 1.83 2.03 1.64* 2.22*

*Contrary to expectations, an increase in sales has led to a decrease in DSCR. This is due to the large cash
conversion cycle of Raymond, hence, an increase in sales has a lagged effect on the cash flow from operations. Thus, even though an increase in sales leads to a decrease in DSCR this year, for the coming years, it would have a positive impact.

The most critical factor is the cost of materials consumed. Since, the company would have already entered into contracts with its suppliers for the raw materials, price changes are not expected. The only change can be in the quantity of materials consumed, which if changed, would lead to a corresponding change in the sales and all significant items, which are dependent on the sales, in the Profit & Loss statement. The next essential factor determining the DSCR is Sales. For FY13, the sales is estimated at 3000 crore, which is because of the relaxed credit policy that Raymond plans to offer in the next year. For FY14, the sales is assumed to grow at 6.7%, which is the 10-year CAGR growth. Hence, sales is not estimated to change significantly during the coming years. Amongst the five factors, Interest Expense is the only factor which is an externality for the company. And this factor is not very sensitive to changes in the DSCR. All the other factors are within the companys control.