Escolar Documentos
Profissional Documentos
Cultura Documentos
September 2010
Valuation Summary
Rating CMP Target Price P/E (x) P/BV (x) EV/EBITDA (x) EV/Sales (x) RoE (%)
(Rs) (Rs) FY11E FY12E FY11E FY12E FY11E FY12E FY11E FY12E FY11E FY12E
Exide Accumulate 158 171 20.4 17.8 4.9 4.0 11.2 9.5 2.5 2.0 26.4 24.5
ARBL Buy 213 261 11.9 9.2 2.7 2.1 6.8 5.6 1.0 0.8 24.8 25.5
HBL Power* Not Rated 28 - 7.8 6.4 1.2 1.0 5.8 4.8 0.9 0.7 16.0 17.0
Source: C-line, Bloomberg, Angel Research; Note: *Consensus, Market price as of September 20, 2010
Table of Contents
Industry 3
Companies 13
Annexure 47
Key risks 55
September 2010 2
Auto Ancillary
Industry
September 2010 3
Auto Ancillary
Exhibit 1: Indian battery market – Growth trend Exhibit 2: Battery industry’s revenue break-up
(%) Revenue growth (%) Net income growth (%) Automobile Industrial
Operating margin (RHS) 100%
80 76 25
70 65
57 20 80% 41 40
60 50
50 15
40 29 30 60%
29
30 21 24 22 10
18 16 18 19 20
14 16
20 40%
7 5
10 60
59
0 0
20%
FY08
FY09
FY10
FY11E
FY12E
FY13E
FY01-10*
FY05-10*
FY10-13E*
0%
FY09 FY10
Source: Industry, Company, Angel Research; Note : * CAGR Source: Industry, Company, Angel Research
Exhibit 3: New vehicle sales, increasing vehicle population and healthy industrial growth drives battery demand
CAGR CAGR
Particular FY08 FY09 FY10P FY11E FY12E FY13E
FY2008-10 FY2010-13E
New OEM vehicle volume ('000 units) 10,370 10,732 13,155 15,008 16,603 18,258 12.6 11.5
yoy growth (%) 3.5 22.6 14.1 10.6 10.0
Vehicle population* ('000 units) 99,626 106,888 115,759 125,704 136,860 149,549 7.8 8.9
yoy growth (%) 7.3 8.3 8.6 8.9 9.3
Batteries Volume
Automotive volume (mn units) 30.7 35.0 40.6 47.9 54.7 60.4 15.0 14.1
yoy growth (%) 14.0 16.1 18.0 14.0 10.5
OEM volume (mn units) 10.1 11.1 13.4 15.8 17.5 19.0 15.1 12.5
yoy growth (%) 9.9 20.4 18.4 10.5 8.8
Replacement volume (mn units) 20.6 23.9 27.3 32.1 37.2 41.4 15.0 14.9
yoy growth (%) 16.0 14.1 17.8 15.7 11.3
Industrial volume (mnAH) 2,220 3,071 3,625 4,119 4,782 5,517 27.8 15.0
yoy growth (%) 38.3 18.0 13.6 16.1 15.4
Source: Industry, SIAM, Company, Angel Research; Note: *Projected
September 2010 4
Auto Ancillary
We expect the auto original equipment (OE) battery volume to register 13-14%
CAGR over FY2010-13 aided by healthy ~12% CAGR in automobile volumes.
Auto replacement demand is expected to post 14-15% CAGR in volumes during
FY2010-13. We believe that sustained auto volume growth has resulted in a large
base for the replacement market. Thus, with a sharp increase in vehicle
population, we see a corresponding pick up in replacement demand. Further,
positive industry (IIP) cycle, increasing demand from railways and UPS segment
would support healthy growth of industrial battery segment.
We believe that the Indian battery sector offers an excellent opportunity for
investors to cash in on the strong economic growth and emerging consumerism
theme in India. We expect Exide and ARBL to register robust ~21% and ~23%
CAGR in net sales and ~17% and ~11% CAGR in net profit respectively, during
FY2010-13.
0
FY10-13E*
FY11E
FY12E
FY13E
FY00-05*
FY05-10*
FY05
FY06
FY07
FY08
FY09
FY10
September 2010 5
Auto Ancillary
Stable lead prices and smelter acquisition by industry leader, Exide, helped the
industry clock higher margins in the last couple of years. As a result, the impact of
the fluctuations in the lead prices on margins has reduced in recent quarters
particularly for majors like Exide. The lead smelter acquisition has reduced Exide’s
dependence on imports and purchase of pure lead from the market owing to
which we model it EBITDA margins in the range of 20-22% going ahead. ARBL is
expected to operate at margins of around 14-15% going forward.
Exhibit 7: Sensitivity to Exide’s FY12E EBITDA margin Exhibit 8: Sensitivity to ARBL’s FY12E EBITDA margin
LME Lead prices ($/kg) LME Lead prices ($/kg)
1.9 2.2 2.4 2.6 2.9 1.9 2.2 2.4 2.6 2.9
41.5 34.7 31.6 28.7 26.6 24.7 41.5 23.3 19.9 16.8 14.6 12.9
Rupee-Dollar rate
Rupee-Dollar rate
43.7 32.3 29.3 26.6 25.0 23.0 43.7 21.6 18.3 15.5 13.6 12.4
46.0 26.7 23.9 21.4 20.0 18.8 46.0 20.0 16.9 14.4 12.9 12.1
48.3 28.4 25.7 23.4 22.2 21.6 48.3 18.5 15.7 13.5 12.3 12.0
50.7 24.2 21.7 19.7 18.9 18.6 50.7 17.1 14.6 12.8 12.1 12.2
Source: Bloomberg, Company, Angel Research Source: Bloomberg, Company, Angel Research
Exide procures ~50% of its lead requirement from captive smelters and produces
recycled lead, which gives it 10-15% of cost advantage. Imports constitute ~30%
of its lead consumption. In comparison, ARBL imports around ~60% of its lead
requirements on account of which it operates at lower margins to Exide and is
more sensitive to the changes in the LME lead prices.
Exhibit 9: High inventory levels to stabilise lead prices Exhibit 10: EBITDA margin trend
(USD/tonne) Lead inventory (RHS) Lead prices (LHS) (tonne) (%) Exide ARBL
25 24
5,000 250,000 22 21 21
19
4,000 200,000 20
16 16 17 16
15 15 15 14
3,000 150,000 14 14
15 13
11
2,000 100,000
9
10
1,000 50,000
5
0 0
Aug-01
Aug-02
Aug-03
Aug-04
Aug-05
Aug-06
Aug-07
Aug-08
Aug-09
Aug-10
0
FY05 FY06 FY07 FY08 FY09 FY10 FY11E FY12E FY13E
Going ahead, we model margins to contract with the LME lead prices estimated to
increase by around 10% annually, which would gradually be passed on with lag
effect.
September 2010 6
Auto Ancillary
We expect Exide to outperform ARBL on the earnings front following the increase in
the contribution from the in-house lead smelter to total consumption of lead
(almost ~50%). While Exide emerges a clear winner in terms of earnings CAGR of
~17% due to cost savings at raw material front, ARBL is expected to report ~11%
earnings CAGR during FY2010-13.
500
400
300
174
200
97 101 89 108 81
100 54 61 47
28 14 (15) 23 (9) 15 29 14 15 9 17 11
(15)
0
(0)
(100)
FY10-13E*
FY11E
FY12E
FY13E
FY00-05*
FY05-10*
FY05
FY06
FY07
FY08
FY09
Exhibit 12: Exide – Capex and capacity utilisation trend Exhibit 13: ARBL – Capex and capacity utilisation trend
(Rs cr) Capex Capacity utilisation (RHS) (%) (Rs cr) Capex Capacity utilisation (RHS) (%)
400 100 200 100
353
164 161
FY06
FY07
FY08
FY09
FY10
FY11E
FY12E
FY13E
FY05
FY06
FY07
FY08
FY09
FY10
FY11E
FY12E
FY13E
September 2010 7
Auto Ancillary
Exhibit 14: Exide – Capex v/s FCF Exhibit 15: ARBL – Capex v/s FCF
(Rs cr) Capex FCF (Rs cr) Capex FCF
800 200 169 164 161
150 112 116
617
90 94
600 100 68
490 47
459 50 27 27 22
9
400 353 370 0
313
274 (5) (2)
252 (50)
194
167 (100)
200 130
88107 100 (93)
53 42 (150) (112)
27 33
(149)
0 (200)
FY05 FY06 FY07 FY08 FY09 FY10 FY11E FY12E FY13E FY05 FY06 FY07 FY08 FY09 FY10 FY11E FY12E FY13E
We believe that both the companies are well placed in terms of funding their
expansion plans owing to strong operating cash flow and low debt/equity ratio.
The capacity expansions would broadly be funded through internal accruals.
FY06
FY07
FY08
FY09
FY10
FY11E
FY12E
FY13E
0.0
FY05 FY06 FY07 FY08 FY09 FY10 FY11E FY12E FY13E
Over the last few years, the battery manufacturers have clocked significant
increase in return ratios on the back of sustained volume growth and high
margins. Going ahead, over the next couple of years, profitability of the battery
manufacturers would continue to be determined largely by growing demand.
Further, on the back of higher capacity utilisation levels and apparent pricing
flexibility the high levels of RoCE and RoE would be maintained going forward in
turn capping downside risks.
September 2010 8
Auto Ancillary
FY06
FY07
FY08
FY09
FY10
FY11E
FY12E
FY13E
FY05
FY06
FY07
FY08
FY09
FY10
FY11E
FY12E
FY13E
Source: Company, Angel Research Source: Company, Angel Research
Strong auto and industrial volumes and higher contribution from backward
integration coupled with a significant correction in input costs led to consistent
earnings upgrades driving the outperformance of the stocks. Going ahead too,
with the long-term consumption story of India intact, we expect the companies
(Exide and ARBL) to continue to outperform the benchmark indices.
On the bourses, over the past ten years, most battery stocks broadly outperformed
the benchmark indices reflecting sustained volume growth, significant margin
expansion and steady earnings growth. Exide in particular registered superior
performance during the period.
Exhibit 20: Exide, ARBL outperform benchmark Exhibit 21: ARBL outperforms on higher earnings growth
Sensex ARBL Exide Sensex ARBL Exide
6,000 2,000
5,000
1,500
4,000
3,000 1,000
2,000
500
1,000
0 0
Dec-06
Jun-09
Jan-09
Aug-08
Apr-05
Mar-08
Apr-10
Oct-07
Nov-09
Sep-05
Feb-06
Sep-10
Jul-06
May-07
Dec-01
Dec-03
Dec-05
Dec-07
Dec-09
Aug-02
Aug-04
Aug-06
Aug-08
Aug-10
Apr-01
Apr-03
Apr-05
Apr-07
Apr-09
In the recent past, most battery players witnessed a sharp rally and touched their
life-time highs. Leader Exide is perceived as a defensive play (low beta) due to
consistent growth performance, strong cash-flow and prudent execution track
record. Thus, during the economic downturn it not only exhibited significant
strength, but also outperformed the benchmark indices over the last five years.
ARBL followed suit with strong growth in the industrial battery segment (telecom).
Nonetheless, the ARBL stock fluctuated and reflected the growth contraction during
the period due to contraction in demand of telecom batteries.
Over FY2005-10, ARBL has shown relative outperformance to Exide largely owing
to higher contribution from the telecom battery segment. However, the recent
structural shift in the telecom industry has impacted the industrial telecom battery
September 2010 9
Auto Ancillary
business of these companies, wherein the demand for telecom batteries has seen a
sharp correction in the growth rate. This in turn resulted in loss of bargaining
power and lower realisation from the telecom battery segment. As a result,
companies generating higher revenues from the telecom battery segment (ARBL
and HBL) relatively underperformed the market leader, Exide, in the recent past.
On an average, these stocks delivered CAGR returns of ~50-60% over the last five
years. We attribute the steady earnings CAGR of ~50-60% as the key factor
behind this outperformance.
5 5
0 0
Dec-01
Dec-03
Dec-05
Dec-07
Dec-09
Aug-02
Aug-04
Aug-06
Aug-08
Aug-10
Apr-01
Apr-03
Apr-05
Apr-07
Apr-09
Dec-01
Dec-03
Dec-05
Dec-07
Dec-09
Aug-02
Aug-04
Aug-06
Aug-08
Aug-10
Apr-01
Apr-03
Apr-05
Apr-07
Apr-09
Source: Bloomberg, Company, Angel Research Source: Bloomberg, Company, Angel Research
September 2010 10
Auto Ancillary
Exhibit 25: Exide, ARBL – Relative P/E performance Exhibit 26: ARBL – Premium/Discount to Exide
(x) AMRL Exide Adj. for Insurance (%) prem./ disc. to Exide Three-yr average Prem/Disc
30 0 Five-yr average Prem/Disc
25 (10)
(20)
20 (30)
15 (40)
(50)
10
(60)
5 (70)
(80)
0
(90)
Dec-01
Aug-02
Dec-03
Aug-04
Dec-05
Aug-06
Dec-07
Aug-08
Dec-09
Aug-10
Apr-01
Apr-03
Apr-05
Apr-07
Apr-09
May-08
Jul-09
Mar-07
Feb-10
Apr-04
Oct-07
Nov-04
Aug-06
Dec-08
Sep-10
Jun-05
Jan-06
Source: Bloomberg, Company, Angel Research Source: Bloomberg, Company, Angel Research; Note: Exide P/E adjusted for
Insurance business
ARBL is currently trading at ~35% discount to industry leader, Exide (adjusted for
insurance business). The gap is due to Exide's leadership position, higher margins
(backward integration through acquisition of lead smelters) and its less
dependence on the telecom battery segment. However, ARBL products have
exhibited strong performance and continuously increased market share through
innovative marketing strategies over the last ten years. ARBL is also in the process
of channelising its efforts to increase market share in the auto battery segment
through capacity, technology, customer and market expansion. Improved
fundamentals are expected to perk up the company’s return ratios compared to its
historical levels. Thus, ARBL’s valuation has increased on sustained volume growth
and earnings visibility, and the valuation gap with Exide has reduced to reasonable
levels of ~35% (as against five year average discount of ~50%).
We believe that investing in these stocks at current valuations would fetch good
returns for investors as the consumption theme plays out in favour of the Indian
market.
Exhibit 27: Global valuation – Relative
(US $mn) P/E (x) P/B (x) EV/EBITDA (x) EV/Sales (x)
Market Cap Sales* PAT* FY11E FY12E FY11E FY12E FY11E FY12E FY11E FY12E
Exide Technologies, USA 371 2,685 (12) 9.0 6.7 - - 4.4 4.0 0.1 0.1
#
Johnson Controls 19,923 28,497 (338) 15.1 12.3 2.0 1.8 9.2 7.5 0.6 0.5
GS Yuasa Corp 2,911 2,666 70 28.8 22.6 2.3 2.2 10.5 8.7 0.9 0.8
Enersys 1,240 1,579 62 11.8 9.9 - - 6.7 5.7 0.7 0.6
Exide Industries 2,946 830 118 20.4 17.8 4.9 4.0 11.2 9.5 2.5 2.0
Amara Raja Batteries 398 321 37 11.9 9.2 2.7 2.1 6.8 5.6 1.0 0.8
HBL Power System 155 243 22 7.8 6.4 1.2 1.0 5.8 4.8 0.9 0.7
#
Source: Bloomberg, Company, Angel Research; Note: Year end September, * Latest financial year-end, Market price as on September 20, 2010
September 2010 11
Auto Ancillary
3 11
2.5
3 9
2.0 10
8
2 1.7 7
7
1.2 6
2 5
1.0 5
1 0.8
0.7
1
0 0
FY10 FY11E FY12E FY13E FY10 FY11E FY12E FY13E
Source: Bloomberg, Company, Angel Research Source: Bloomberg, Company, Angel Research
30 25
25 22
20 20 18
20 18 16
16 15 14
12
11 9 9
9 10
10 8 7
6
5
0 0
FY10 FY11E FY12E FY13E FY10 FY11E FY12E FY13E
Source: Bloomberg, Company, Angel Research Source: Bloomberg, Company, Angel Research
4 0.8
4 3 3 0.5
3 0.6
2
2 0.4 0.3 0.3
2
0.2 0.1
0 0.0
FY10 FY11E FY12E FY13E FY10 FY11E FY12E FY13E
Source: Bloomberg, Company, Angel Research Source: Bloomberg, Company, Angel Research
September 2010 12
Auto Ancillary
Companies
September 2010 13
Auto Ancillary
September 2010
Investment rationale
Auto and industrial batteries: Robust demand scenario
Exide derives ~69% and 31% of its revenue The automotive and industrial battery segments have been witnessing strong
from the automotive and industrial battery growth post the economic downturn, driven by robust demand-pull on account of
segments, respectively higher auto and industrial production and increased consumer spending. We
expect the auto and industrial battery segments to continue to grow, generating
robust revenue CAGRs of ~20% and ~19.4%, respectively, over FY2010–13E.
Hence, we forecast Exide to register strong revenue CAGRs of 20.9% and 21.7% in
the auto and industrial battery segments, respectively.
The automotive OEM segment has registered strong sales volume post the
economic downturn, and domestic demand continues to witness a strong traction
across all segments. The prospect for automotive batteries looks encouraging,
supported by the fact that major global automotive players have set up their base
in India due to low production cost and lower penetration levels. We expect
volume growth to be robust and forecast passenger vehicles, commercial vehicles
and two-wheelers to post CAGRs of ~13%, ~12% and ~11%, respectively, in
sales between FY2010–13E, leading to sustainable demand for batteries.
Consequently, Exide, which caters to 65–67% of OEM demand, is set to benefit
from the expected surge in vehicle production over FY2010–13E.
Exhibit 1: Volumes to maintain growth momentum Exhibit 2: Auto battery revenue to register 20.9% CAGR
(mn units) Auto battery volume yoy growth (RHS) (%) (Rs cr) Auto battery revenue yoy growth (RHS) (%)
25 23.3 25 6,000 5,495 60
21.2
20 5,000 4,683 50
18.8
20
3,975
15.8
14.5 15 4,000 40
15 13.2 3,108
11.9 2,905
10 3,000 2,561 30
10
5 2,000 1,668 20
5
0 1,000 10
0 (5) 0 0
FY07 FY08 FY09 FY10 FY11E FY12E FY13E FY07 FY08 FY09 FY10 FY11E FY12E FY13E
Exide derives 48–50% of its overall The average life of an automotive battery is 3–4 years, after which it needs to be
revenue from the automotive replacement replaced; there could be as much as three battery replacements in a vehicle’s life.
segment Going ahead, demand for replacement batteries is expected to continue to be
buoyant, led by a strong base of vehicles and burgeoning automotive OEM sales.
Exide derives 48–50% of its overall revenue from the automotive replacement
segment. The company has a 60-62% market share in the branded replacement
market. Exide is looking to expand its market share at the cost of unorganised
players, using its excellent sales and distribution network. We believe Exide is well
placed to capitalise on the opportunity going ahead, given a promising outlook for
the replacement market.
September 2010 15
Exide Industries | Auto Ancillary
UPS/inverter batteries to drive industrial Demand for industrial batteries surged in last ten years largely owing to favourable
battery demand economic scenario and growth in industrial activity. Further, during FY2007-09,
largely due to significant boom in the telecom sector the segment recorded
substantial jump in volumes. (Telecom sector uses batteries as a backup power
source for telecom towers.) However, due to the slowdown in the telecom space,
we expect demand for telecom batteries to remain subdued. Demand will mainly
be driven by replacement demand for telecom batteries, which have a useful life of
5–6 years.
Exhibit 3: Ind. battery volumes to post a 15.6% CAGR Exhibit 4: ...driving growth in industrial revenue
(mnAH) Ind battery volume (mnAH) yoy growth (RHS) (%) (Rs cr) Ind battery revenue yoy growth (RHS) (%)
2,500 25 3,000 45
2,238
1,992 2,516 40
2,000 20 2,500
1,717 2,117 35
1,450 2,000 1,753 30
1,500 1,324 15
1,170 1,397 25
1,500 1,269
959 20
1,000 10 1,019
1,000 715 15
500 5 10
500
5
0 0 0 0
FY07 FY08 FY09 FY10 FY11E FY12E FY13E FY07 FY08 FY09 FY10 FY11E FY12E FY13E
Industrial battery segment’s revenue to We expect industrial battery demand to be mainly driven by demand from the
post a 21.7% CAGR over FY2010–13E power back-up segment (UPS) and railways. Over the last five years, battery
demand in the UPS/inverter segment has witnessed a 15% CAGR, driven by
large-scale computerisation of banking networks and government departments
and power deficit over the last few years (10.1% in FY2010). We believe demand
for UPS/inverter batteries will continue to grow, as the power demand-supply gap
will continue over the medium term, with deficit to be ~7.0% in FY2013E.
September 2010 16
Exide Industries | Auto Ancillary
Exide is a dominant player in the automotive battery (OEM and replacement) and
industrial battery segments with market share of 60-65% and 40–45% respectively.
Exide has leveraged upon its brand equity, better quality proposition and wider
reach to consolidate its position in the market, which gives it a superior pricing
power compared to peers. Over the years, Exide has been able to improve its
realisation across the automobile and industrial battery businesses, which has
more than offset the movements in input prices. We expect Exide to continue to
leverage upon its market leadership position and pricing power, which would
enhance the company’s ability to pass on cost increases in the future as well.
Hence, we expect average realisation to grow at a ~6% CAGR over FY2010–13E.
Exhibit 5: Market share across segments Exhibit 6: Average realisation to remain strong
Railways 35 (Rs) Average realisation/unit yoy growth (RHS) (%)
Telecom 30 3,000 50
Cap Lamps 90
2,500 40
Traction 80
UPS/Inverters 40 2,000 30
Power Projects 35
Two Wheelers 55 1,500 20
Branded (Replacement) 62
1,000 10
Auto (Replacement) incl. unorganised 37
Auto (OE) - PV 75 500 0
Auto (OE) 65
0 (10)
(%) 0 25 50 75 100 FY07 FY08 FY09 FY10 FY11E FY12E FY13E
Along with strong brand equity, Exide has a well-entrenched distribution network
across India. The company has close to 38,500 retail outlets for aftermarket sales,
over 9,000 main dealers and 210 hub offices, which the company plans to
increase to 250 by the end of FY2011E and further to 510 by FY2013E. Exide
operates through authorised distributors and dealers who, in addition to selling to
consumers, sell to a tertiary distribution network, which constitutes garages and is
called the ‘Humsafar Partner’ network (~21,970 partners). The company also has
a separate distribution network called the ’C Dealer’ network (~500 dealers) for
heavy commercial vehicles and ‘Kisaan Dealer’ network (~3,197 dealers) for
tractors. On the back of its excellent service and distribution network, which is the
largest among battery manufacturers, Exide continues to penetrate the
replacement market.
September 2010 17
Exide Industries | Auto Ancillary
Total lead supplied by the captive smelter increased to ~50% in FY2010 from
~35% in FY2009. Exide has benefitted from its captive sourcing strategy, as lead
sourcing from captive smelters is 10–15% cheaper compared to market rates.
Margins during FY2010 were substantially higher compared to average margins of
18.1% in FY2007–10.
Exhibit 7: Lead prices v/s EBITDA margin Exhibit 8: Captive lead sourcing benefits Exide
(US $/tonne) Avg. Lead Price (LHS) EBITDA Margin (RHS) (%) (%) Captive consumption EBITDA Margin (RHS) (%)
3,500 30 80 25
3,000 25 70
2,500 20
20 60
2,000
15 50 15
1,500
40
10
1,000 10
30
500 5
20
0 0 5
10
FY11E
FY12E
FY13E
1QFY08
2QFY08
3QFY08
4QFY08
1QFY09
2QFY09
3QFY09
4QFY09
1QFY10
2QFY10
3QFY10
4QFY10
1QFY11
0 0
FY07 FY08 FY09 FY10 FY11E FY12E FY13E
Going forward, the company plans to further increase sourcing from its smelters to
~55% in FY2011E and ~70% by FY2012E. Hence, the company is expanding its
lead smelter capacity to 100,000tpa by March 2011. Going ahead, we model
margins to contract with the LME lead prices estimated to increase by around
~10% annually, which would gradually be passed on with lag effect. We expect
Exide to leverage upon its low-cost structure relative to its competitors.
September 2010 18
Exide Industries | Auto Ancillary
Our sensitivity analysis suggests that every 10% increase in sourcing from the
captive smelters, EBITDA margins expands by ~50bp (assuming stable lead
prices).
Exide has been operating at ~90% utilisation levels over the past five years. The
company plans to increase its battery capacity with an investment of Rs400cr in
FY2011E to cater to growing demand. Exide plans to increase its two-wheeler
battery capacity to 15.4mn units from 9.6mn units by setting up a new plant at
Ahmednagar, Maharashtra, at a cost of Rs80cr. The company also plans to
increase its four-wheeler capacity to 10.2mn units from 8mn units by FY2011.
Though the electric vehicle (EV) segment in India is still at a nascent stage, the
company wants to be prepared for the opportunity as and when it arises. Hence, it
plans to spend Rs40cr on EV battery capacity over the next 2–3 years.
Exhibit 10: Utilisation to remain at high levels Exhibit 11: Adding capacities to meet demand
(mn units) Installed Capacity Utilisation (RHS) (%) (mn units) FY10 FY11E
45 41.6 100 18
40 37.8 90 16
80 14 60%
35
29.1 70
30 12
24.2 28%
22.7 60
25 10
19.8 50
18.3 8
20
40
15 6
30
10 20 4
5 10 2
0 0 0
FY07 FY08 FY09 FY10 FY11E FY12E FY13E 2-wheeler 4-wheeler
As a result of increased capacity, we believe Exide is well placed to meet the rising
automotive battery demand. We estimate the overall utilisation level to remain at
78–80% in FY2013E. We expect Exide to post volume CAGRs of 13.9% and 15.6%
in the automotive and industrial battery segments, respectively.
September 2010 19
Exide Industries | Auto Ancillary
Financial performance
Net revenue to post a 20.8% CAGR over FY2010–13E
Exhibit 12: 14.1% CAGR in volume over FY2010–13E Exhibit 13: ...will lead to an 20.8% revenue CAGR
(mnAH ) Overall volumes yoy growth (RHS) (%) (Rs cr) Net sales yoy growth (RHS) (%)
7,000 25 8,000 60
5,861 6,691
7,000
6,000 5,296 50
20 5,682
4,675 6,000
5,000 4,788 40
3,949 5,000
4,000 3,475 15
3,794
3,124 4,000 3,393 30
2,721 2,845
3,000 10 3,000
1,870 20
2,000 2,000
5 10
1,000 1,000
0 0 0 0
FY07 FY08 FY09 FY10 FY11E FY12E FY13E FY07 FY08 FY09 FY10 FY11E FY12E FY13E
September 2010 20
Exide Industries | Auto Ancillary
Exhibit 15: Lead prices expected to remain stable Exhibit 16: EBITDA margins to stabilise around 21-22%
(USD/tonne) Lead inventory (RHS) Lead prices (LHS) (tonne) (US $/tonne) Avg. Lead Price (LHS) EBITDA Margin (RHS) (%)
5,000 250,000 3,500 25
3,000
4,000 200,000 20
2,500
3,000 150,000 15
2,000
Aug-02
Aug-03
Aug-04
Aug-05
Aug-06
Aug-07
Aug-08
Aug-09
Aug-10
FY07
FY08
FY09
FY10
FY11E
FY12E
FY13E
Source: Bloomberg, Company, Angel Research Source: Bloomberg, Company, Angel Research
Exhibit 17: Net profit to grow at a 16.9% CAGR Exhibit 18: Return ratios to remain strong
(Rs cr) Net profit yoy growth (RHS) (%) (%) RoE RoCE
45 40.8
1,000 100
40 36.6
900 90 33.1 34.3
31.7 32.3
800 80 35
700 70 30 26.0
600 60 25 29.5 31.0
500 50 25.4 25.0 26.4
20 24.5
22.8
400 40 15
300 30 10
200 20
5
100 10
0
0 0
FY07 FY08 FY09 FY10 FY11E FY12E FY13E
FY07 FY08 FY09 FY10 FY11E FY12E FY13E
September 2010 21
Exide Industries | Auto Ancillary
Exide has a 50% stake in ING Vysya Life Insurance Company Limited, a JV with
ING Group, Netherlands. ING Vysya Life Insurance has a ~2% market share
among private players in India. Exide plans to continue investing in this business
and has no plans of selling out in the medium term.
We value Exide’s stake in ING Vysya Life Insurance Company at Rs11/share based
on 15x FY2012E NBAP, with an NBAP margin of ~17% on an estimated annual
premium equivalent (APE) amount of Rs657cr in FY2012E.
Key concerns
Slowdown in demand for automobile and industrial batteries
Exide generates 15–17% of its revenue from OEM sales, which are highly
dependent on off-take in cars, commercial vehicles and two-wheelers. Any decline
in demand due to a slowdown in economic activity or rise in interest rates will have
an adverse impact on automobile demand, which poses a downside risk to our
volume and earnings estimates.
Lead and lead alloys are the key inputs and major cost elements in the battery
manufacturing process. Lead accounts for 75–80% of Exide’s raw-material cost.
Although Exide plans to secure the supply from its own smelters, a significant
increase in lead prices will have a negative impact on our earnings estimates.
September 2010 22
Exide Industries | Auto Ancillary
At Rs158, the stock is quoting at 20.4x FY2011E and 17.8x FY2012E earnings. We
maintain an Accumulate rating on the stock with an SOTP Target Price of Rs171.
Owing to its defensive appeal and healthy and consistent business fundamentals;
we are valuing the company at 17.3x (20% premium to its historical average of
14.4x) FY2012E earnings at Rs154. We have valued the company’s stake in ING
Vysya Life Insurance at Rs11/share on FY2012E NBAP and have assigned a value
of Rs6/share to lead smelters (8x FY2012E PAT).
Exhibit 20: One-year forward P/E band Exhibit 21: One-year forward P/E chart
(Rs) Share price (Rs) 6x 10x 14x 18x (x) One-yr forward P/E Three-yr average P/E
200 Long term average P/E
30
25
150
20
100 15
10
50
5
0 0
Dec-01
Dec-03
Dec-05
Dec-07
Dec-09
Apr-01
Apr-03
Apr-05
Apr-07
Apr-09
Aug-02
Aug-04
Aug-06
Aug-08
Aug-10
Dec-01
Aug-02
Dec-03
Aug-04
Dec-05
Aug-06
Dec-07
Aug-08
Dec-09
Aug-10
Apr-01
Apr-03
Apr-05
Apr-07
Apr-09
Source: Bloomberg, Company, Angel Research Source: Bloomberg, Company, Angel Research
Exhibit 22: One-year forward EV/EBITDA band Exhibit 23: One-year forward EV/EBITDA chart
(Rs cr) EV (Rs cr) 2x 5x 8x 11x (x) One-yr forward EV/EBITDA Three-yr average EV/EBITDA
Long term average EV/EBITDA
16,000 16
12,000 12
8,000 8
4,000 4
0
0
Dec-01
Dec-03
Dec-05
Dec-07
Dec-09
Aug-02
Aug-04
Aug-06
Aug-08
Aug-10
Apr-01
Apr-03
Apr-05
Apr-07
Apr-09
Dec-01
Dec-03
Dec-05
Dec-07
Dec-09
Apr-01
Apr-03
Apr-05
Apr-07
Apr-09
Aug-02
Aug-04
Aug-06
Aug-08
Aug-10
Source: Bloomberg, Company, Angel Research Source Bloomberg, Company, Angel Research
September 2010 23
Exide Industries | Auto Ancillary
DCF-based valuation
Given the free cash flow generation going ahead, our fair value for Exide’s core
business, based on the discounted cash flow (DCF) methodology, works out to
Rs166 on a conservative basis. Our model captures most of the concerns present
in the market. We have applied weighted average cost of capital (WACC) of
13.2% and terminal growth rate of 3%.
September 2010 24
Exide Industries | Auto Ancillary
Company background
Exide is the largest manufacturer of lead acid storage batteries with manufacturing
presence in India, Sri Lanka, UK, Singapore and Australia. The company
manufactures batteries, ranging from 2.5Ah to 20,400Ah, having applications in
the automotive and industrial segments. Exide has a technological tie-up with Shin
Kobe, Furukawa Battery, Changxing Noble and Thunder Sky Battery. The business
segment of the company comprises automotive batteries (~69% of revenue),
industrial batteries (~30% of revenue) and submarine batteries (1% of revenue).
Exhibit 26: Auto battery segment’s revenue break-up Exhibit 27: Ind. battery segment’s revenue break-up
Others Traction Others
1% 2% 5%
Exports
6%
OEM
26%
Infrastructure
20%
Power back-up
After-market 67%
73%
Exhibit 28: Sectors and customers for automotive and industrial batteries
Automobile
Maruti Suzuki, Tata Motors, Fiat, General Motors, Honda, Hyundai,
Cars
Mitsubishi, Toyota
Commercial Vehicles Tata Motors, Iveco, Ashok Leyland, Piaggio, Mazda
Motorcycle Bajaj Auto, Honda, Yamaha
Tractors Eicher Tractors, John Deere, Mahindra Tractors, New Holland Tractors
Special Purpose Vehicles Caterpillar India, JC Bamford
Industrial
Motive Power (Electric vehicles, mining locomotives, miners' cap India Railways, Macneill & Magor, Godrej, Voltas, Josts, BHEL, Escorts,
lamps) Indian Navy
Fujitsu, Alctel, Siemens, Tata Lucent, BSNL, MTNL, AT&T, Compton
Standby (Power, Telecom, UPS, Inverter)
Greaves, Tata Telecom, Reliance Telecom
Railways(Train lightning, AC, Electric Multiple Units, Diesel Loco
Railways
Starters, Signaling and Telecom
Source: Company, Angel Research
Exide has a strong sales and distribution network and offers quality customer
service with a pan India presence.
September 2010 25
Exide Industries | Auto Ancillary
Exhibit 30: Exide’s dealer and service network Exhibit 31: Distribution network’s strength
Factories
Authorised dealers 13,400
Branches
Outlets 38,500
Government
Main Dealer
After-Sales Staff Humsafar partners 21,970
Institutions
Subdealers/ Retailers
Depot cum service stations 202
September 2010 26
Exide Industries | Auto Ancillary
September 2010 27
Exide Industries | Auto Ancillary
Balance Sheet
Y/E March (Rs cr) FY07 FY08 FY09 FY10 FY11E FY12E FY13E
SOURCES OF FUNDS
Equity Share Capital 75 80 80 85 85 85 85
Reserves& Surplus 595 946 1,170 2,135 2,694 3,327 4,037
Shareholder’s Funds 670 1,026 1,250 2,220 2,779 3,412 4,122
Total Loans 325 350 317 90 90 90 90
Deferred Tax Liability 45 48 41 59 54 49 43
Total Liabilities 1,040 1,424 1,609 2,369 2,923 3,550 4,255
APPLICATION OF FUNDS
Gross Block 946 1,097 1,257 1,336 1,710 1,959 2,230
Less: Acc. Depreciation 480 542 589 660 757 865 992
Net Block 466 555 668 677 953 1,094 1,238
Capital Work-in-Progress 31 47 17 38 17 20 22
Investments 378 518 668 1,335 1,637 1,952 2,383
Current Assets 575 876 742 912 1,060 1,366 1,647
Cash 1 2 34 3 1 54 97
Loans & Advances 29 45 38 48 48 63 74
Other 545 830 669 861 1,011 1,249 1,477
Current liabilities 410 572 487 593 744 882 1,035
Net Current Assets 165 304 255 319 316 484 611
Total Assets 1,040 1,424 1,609 2,369 2,923 3,550 4,255
September 2010 28
Exide Industries | Auto Ancillary
Key Ratios
Y/E March FY07 FY08 FY09 FY10 FY11E FY12E FY13E
Valuation Ratio (x)
P/E (on FDEPS) 76.5 50.6 44.6 25.1 20.4 17.8 15.7
P/CEPS 56.7 40.3 36.0 21.8 17.8 15.6 13.6
P/BV 18.9 12.8 10.4 6.1 4.9 4.0 3.3
Dividend yield (%) 0.2 0.3 0.4 0.6 0.6 0.8 0.9
EV/Sales 7.2 4.7 3.9 3.2 2.5 2.0 1.7
EV/EBITDA 43.9 28.2 23.9 13.7 11.2 9.5 8.0
EV / Total Assets 12.9 9.3 8.1 5.2 4.1 3.3 2.6
Per Share Data (Rs)
EPS (Basic) 2.1 3.1 3.6 6.3 7.7 8.9 10.1
EPS (fully diluted) 2.1 3.1 3.6 6.3 7.7 8.9 10.1
Cash EPS 2.8 3.9 4.4 7.3 8.9 10.2 11.6
DPS 0.4 0.4 0.6 1.0 1.0 1.3 1.5
Book Value 8.4 12.4 15.2 25.8 32.3 39.8 48.1
DuPont Analysis
EBIT margin 13.4 14.3 14.1 21.4 20.2 19.5 18.8
Tax retention ratio 0.7 0.7 0.7 0.7 0.7 0.7 0.7
Asset turnover (x) 3.2 3.8 3.9 4.0 4.2 4.1 4.1
ROIC (Post-tax) 28.3 36.6 36.0 57.4 58.0 54.2 52.3
Cost of Debt (Post Tax) 6.6 8.1 10.1 4.4 5.4 5.4 5.4
Leverage (x) - - - - - - -
Operating ROE 28.3 36.6 36.0 57.4 58.0 54.2 52.3
Returns (%)
ROCE (Pre-tax) 26.0 33.1 31.7 40.8 36.6 34.3 32.3
Angel ROIC (Pre-tax) 40.7 47.0 54.9 81.1 77.1 73.4 72.3
ROE 25.4 29.5 25.0 31.0 26.4 24.5 22.8
Turnover ratios (x)
Asset Turnover (Gross Block) 2.0 2.8 2.9 2.9 3.1 3.1 3.2
Inventory / Sales (days) 62 62 54 50 49 49 50
Receivables (days) 29 26 26 23 26 26 26
Payables (days) 53 51 46 42 40 39 40
Working capital cycle (ex-cash) (days) 30 30 28 26 24 24 26
Solvency ratios (x)
Net debt to equity (0.1) (0.2) (0.3) (0.6) (0.6) (0.6) (0.6)
Net debt to EBITDA (0.2) (0.4) (0.7) (1.4) (1.5) (1.6) (1.7)
Interest Coverage (EBIT / Interest) 8.1 10.0 9.3 60.1 134.6 154.5 175.5
Note: Market price as on September 20, 2010
September 2010 29
Auto Ancillary
September 2010
Key Financials
Y/E March (Rs cr) FY2009 FY2010 FY2011E FY2012E
Net Sales 1,313 1,465 1,871 2,267
% chg 21.2 11.6 27.7 21.2
Net Profit 80.5 167.0 152.4 197.1
% chg (14.7) 107.5 (8.8) 29.3
EBITDA (%) 11.5 19.2 14.6 14.4
EPS (Rs) 9.4 19.6 17.8 23.1
P/E (x) 22.6 10.9 11.9 9.2 Vaishali Jajoo
P/BV (x) 4.5 3.3 2.7 2.1 022-4040 3800 Ext: 344
vaishali.jajoo@angeltrade.com
RoE (%) 21.8 35.2 24.8 25.5
RoCE (%) 16.8 34.9 28.5 28.6
Yaresh Kothari
EV/Sales (x) 1.5 1.2 1.0 0.8
022-4040 3800 Ext: 313
EV/EBITDA (x) 13.2 6.5 6.8 5.6 yareshb.kothari@angeltrade.com
Source: Company, Angel Research; Note: Market price as of September 20, 2010
Investment rationale
Auto batteries to ride on OEM and replacement battery demand
ARBL derives ~50% of its revenue from the automotive battery segment. ARBL and
Exide cater to almost the entire organised automotive battery market, with Exide
being the market leader having a market share of 60-65%, followed by ARBL with
a share of 24–27%. We expect the automotive battery market to post a 20% CAGR
in sales over FY2010–13E. Consequently, we expect ARBL to post a 17.9% volume
CAGR. ARBL’s low base of volume offers more leeway to increase its market share
in the OEM and replacement segments compared to Exide.
Exhibit 1: Volume to grow at a 17.9% CAGR Exhibit 2: Auto battery revenue to drive total revenue
('000 units) Auto battery volume yoy growth (RHS) (%) (Rs cr) Auto battery revenue yoy growth (RHS) (%)
9,000 8,326 30 2,000 1,893 50
8,000 7,482 1,800 45
25 1,531
7,000 6,417 1,600 40
1,400 1,237 35
6,000 5,094 20
1,200 30
5,000 4,230
15 1,000 790 846 25
4,000
800 20
3,000 10
600 15
2,000 400 10
5
1,000 200 5
0 0 0 0
FY09 FY10 FY11E FY12E FY13E FY09 FY10 FY11E FY12E FY13E
ARBL has 24–27% market share in the The automobile industry, which is a barometer for the country’s economic strength,
OEM segment posted a 9.1% volume CAGR over FY2006–10, led by buoyant economic activity.
The industry has also benefitted from the introduction of new models, easy
availability of finance and aggressive pricing by players. Favourable
demographics, low penetration level and higher per capita income would support
the long-term increase in auto volumes in India. We expect the four-wheeler and
two-wheeler segments to report volume CAGRs of ~13% and ~11%, respectively,
over FY2010–13E, resulting in the auto industry witnessing a ~12% volume CAGR.
The expected surge in auto volumes would create a sustainable demand for
automotive batteries going ahead, thus benefitting ARBL.
ARBL derives ~14% of its revenue from OEMs and enjoys a 24–27% market share
in the automotive OEM market. The company supplies automotive batteries to
major OEMs in the country, including Ashok Leyland, Hyundai, M&M, Maruti, Tata
Motors, General Motors, TAFE and FIAT. ARBL is also an exclusive supplier to
Daimler Chrysler, Ford and the Maruti-Swift platform.
September 2010 31
Amara Raja Batteries | Auto Ancillary
ARBL derives ~33% of its revenue from The short lifespan of automotive batteries, which is 3–4 years for four-wheelers
the replacement segment and two-wheelers, creates an attractive replacement market. The replacement
market largely tracks the number of vehicles on the road. We estimate vehicle
penetration in India to grow at a CAGR of ~9% over FY2010–13E. On the back of
healthy growth in OE sales in the last few years, we expect replacement battery
demand to witness a 13–15% CAGR over FY2010–13E. This will benefit ARBL, as
the company derives ~65% of its automotive battery segment’s revenue from the
replacement market.
Over the past three years, ARBL has been focusing on branding. The company has
steadily expanded its retail distribution network, as a strong distribution network is
essential to serve the replacement market effectively. ARBL has successfully
established itself in a market that is dominated by Exide. The company has a
network of over 18,000 retailers, 200 franchisees and 700 PowerZone outlets,
catering to the semi-urban and rural markets. ARBL’s market share in the
replacement market now stands at ~26%. The company plans to widen its retail
network to further increase its penetration in the replacement market.
5
Retailers 14,000 18,000 18,000+ 18,000+
0
PowerZone - 400 600 700 FY07 FY08 FY09 FY10
September 2010 32
Amara Raja Batteries | Auto Ancillary
Industrial batteries
Telecom battery segment contributes Demand for industrial batteries has been fairly strong over the past couple of
28–30% of overall revenue years, largely due to the significant boom in the telecom sector. As a result, ARBL’s
industrial battery business grew at a ~34% CAGR over FY2006–10. ARBL enjoys
strong ties with its customers and has emerged as a preferred supplier to leading
telecom operators. ARBL commanded a market share of 30–32% in the telecom
battery segment in FY2010. However, the telecom sector, which constitutes
28–30% of ARBL’s sales, is expected to post modest growth going forward due to
the slowdown in the telecom space. We estimate the company’s telecom battery
segment to register a single-digit CAGR (~5%) in volumes over FY2010–13E.
Exhibit 5: Ind. battery segment – Stable market share Exhibit 6: UPS/inverter batteries to contribute more
(%) (%) Telecom revenue UPS/Inverter revenue
30 70
28 60.0
27 27 27 60 53.7 55.7
27 51.1
48.9
50 46.3 44.3
40.0
24 40
30
21
20
18
10
15 0
FY07 FY08 FY09 FY10 FY10 FY11E FY12E FY13E
ARBL plans to enter the tubular battery Going forward, we expect demand for industrial batteries to be driven by the
segment in the next couple of years power back-up (UPS) and railways segments. Large-scale computerisation of
banking networks, government departments and power deficit (~10.1% in
FY2010) have led to increased demand for batteries in the UPS/inverter segment
over the last five years, reporting a ~15% CAGR. ARBL has emerged as one of the
key suppliers to OEMs of digital UPS devices and inverters, and the company
currently controls a large part of the replacement market. As of FY2010, ARBL’s
market share in the UPS segment stood at ~28%. We believe the power demand-
supply gap will continue over the medium term with deficit likely to be ~7.0% in
FY2013E, expected to drive demand for UPS/inverter batteries.
Further, the company plans to enter the tubular batteries segment in the next
couple of years. Tubular batteries are mainly used in material handling equipment.
September 2010 33
Amara Raja Batteries | Auto Ancillary
Two-wheeler and four-wheeler battery ARBL currently has capacity of 4.2mn four-wheeler, 1.8mn motorcycle and
capacity to increase by 100% and medium VRLA and 900mnAH large VRLA batteries. With its strong focus on
~21%, respectively two-wheeler batteries, ARBL plans to double the capacity of motorcycle batteries to
3.6mn units by December 2010. The company also plans to increase the capacity
of four-wheeler batteries by ~21% to 5.1mn units by January 2011. The recent
capacity expansion in the automotive batteries segment comes on the back of
~100% expansion in large VRLA batteries to 900mnAH in FY2009 and a ~50%
increase in medium VRLA batteries to 1.8mn units in FY2010.
The company is operating at over 75–80% utilisation level in the auto battery
segment and 70–75% in the industrial battery segment. With additional capacity
going on stream by end-FY2011 and higher utilisation levels, we estimate ARBL to
post a 23% revenue CAGR over FY2010–13E aided by a robust volume growth.
September 2010 34
Amara Raja Batteries | Auto Ancillary
ARBL is a joint venture between the Galla family and JCI, with each holding a 26%
stake in the venture. ARBL has a technological tie-up with JCI.
4%
14% PS 34%
62%
42% 17%
BE 30%
53%
44% 9%
AE 52%
39%
September 2010 35
Amara Raja Batteries | Auto Ancillary
Financial performance
ARBL’s net sales grew at a 35.1% CAGR over FY2007–10, led by strong growth in
the automobile and industrial battery businesses. Growth in sales can be attributed
to the rise in volumes, which reported a 28.1% CAGR over FY2007–10.
September 2010 36
Amara Raja Batteries | Auto Ancillary
Exhibit 14: High inventory levels to stabilise lead prices Exhibit 15: ...leading to steady EBITDA margins
(USD/tonne) Lead inventory (RHS) Lead prices (LHS) (tonne) (US $/tonne) Lead prices EBITDA margins (%)
3,000 30
5,000 250,000
2,500 25
4,000 200,000
2,000 20
3,000 150,000
1,500 15
2,000 100,000 1,000 10
0 0
0 0
FY11E
FY12E
FY13E
1QFY09
2QFY09
3QFY09
4QFY09
1QFY10
2QFY10
3QFY10
4QFY10
1QFY11
Aug-01
Aug-02
Aug-03
Aug-04
Aug-05
Aug-06
Aug-07
Aug-08
Aug-09
Aug-10
Source: Bloomberg, Company, Angel Research Source: Bloomberg, Company, Angel Research
Since ARBL imports ~60% of its lead requirement, the company’s margin is
expected to be lower compared to Exide, which procures ~50% of its lead
requirements from captive smelters, which gives Exide a significant cost advantage.
We expect ARBL’s net profit to increase in line with its EBITDA, at a 10.7% CAGR,
over FY2010–13E. We estimate EPS to increase to Rs26.5 in FY2013E from Rs19.6
in FY2010. On the back of improved fundamentals we estimate ARBL to register
RoE of 23–25% and RoCE of 28–29% over the next two years.
Exhibit 16: Net profit to register a CAGR of 10.7% Exhibit 17: Return rations to better historical levels
(Rs cr) Net profit yoy growth (RHS) (%) (%) RoE RoCE
250 227 120 40 35.2
32.7
197 100 35
200 34.9 28.5 28.6 28.5
167 80 30
152
60 25 21.8
150 20.3 26.0
24.8 25.5 23.4
40 20
94 21.1
100 80 20 15 16.8 Higher ratios on account
47 0 10 of exceptional margins
50 due to inventory gains
(20) 5
0 (40) 0
FY07 FY08 FY09 FY10 FY11E FY12E FY13E FY07 FY08 FY09 FY10 FY11E FY12E FY13E
September 2010 37
Amara Raja Batteries | Auto Ancillary
Key concerns
Sales to OEMs constitute ~14% of ARBL’s revenue and are highly dependent on
offtake in cars, commercial vehicles and two-wheelers. Any decline in demand due
to a slowdown in economic activity or rise in interest rates will have an adverse
impact on automobile demand, which poses downside risk to our estimates.
Further, the slowdown in economic activity will have a negative impact on the
demand for industrial batteries as well. Demand for industrial batteries is expected
to remain subdued in FY2011, mainly due to the slowdown in the telecom
segment. The telecom segment, which contributes 30-35% of industrial battery
sales, declined in FY2010. Going ahead, if the decline in demand of industrial
battery segment is severe, there exists a downside risk to our revenue and earnings
estimates.
During FY2010, ARBL reaped the benefits of low lead prices and strong growth in
the battery business, posting a 774bp margin improvement. Substantial volatility in
lead prices is likely to affect the company's profitability if it is unable to pass on the
price increase. The sensitivity analysis shows the impact of the rise in lead prices
and rupee–dollar movement on ARBL’s EBITDA margin.
September 2010 38
Amara Raja Batteries | Auto Ancillary
Although ARBL has always traded at a discount to Exide (due to Exide’s leadership
position, scale of operations, superior margins and return ratios), ARBL is well
placed to tap the rising demand from the automobile and industrial segments with
its innovative products, increased capacity and widening reach.
On the valuation front, ARBL is trading at 11.9x and 9.2x FY2011E and FY2012E
EPS, respectively. At present, ARBL is trading at ~35% discount to Exide (adjusted
for Insurance business). The gap is due to Exide’s leadership position, higher
margins and low dependence on the telecom battery segment. The discount
commanded by ARBL compared to Exide would reduce with a) increasing scale of
operations, b) sustainable revenue and earnings visibility and c) improving return
ratios.
We Initiate Coverage on ARBL with a BUY rating and a 12-month Target Price of
Rs261, representing a ~23% potential upside. At our target price, the stock will
trade at 11.3x (35% discount to Exide's multiple of 17.3x) FY2012E EPS of Rs23.1.
Exhibit 19: ARBL – P/E Premium/Discount to Exide Exhibit 20: ARBL–EV/EBITDA Premium/Discount to Exide
(%) prem./ disc. to Exide Three-yr average Prem/Disc (%) Prem./ Disc. to Exide Three-yr average Prem/Disc
0 Five-yr average Prem/Disc 0 Five-yr average Prem/Disc
(10) (10)
(20) (20)
(30) (30)
(40) (40)
(50)
(50)
(60)
(60)
(70)
(80) (70)
(90) (80)
May-08
Jul-09
Mar-07
Feb-10
Apr-04
Nov-04
Oct-07
Dec-08
Aug-06
Sep-10
Jun-05
Jan-06
May-08
Jul-09
Mar-07
Feb-10
Apr-04
Nov-04
Oct-07
Dec-08
Aug-06
Sep-10
Jun-05
Jan-06
Source: Bloomberg, Company, Angel Research Source: Bloomberg, Company, Angel Research
Exhibit 21: One-year forward P/E band Exhibit 22: One-year forward P/E chart
(Rs) Share price (Rs) 5x 8x 11x 14x (x) One-yr forward P/E Three-yr average P/E
300 Long term average P/E
30
225 25
20
150 15
10
75
5
0 0
Dec-01
Dec-03
Dec-05
Dec-07
Dec-09
Apr-01
Apr-03
Apr-05
Apr-07
Apr-09
Aug-02
Aug-04
Aug-06
Aug-08
Aug-10
Dec-01
Dec-03
Dec-05
Dec-07
Dec-09
Apr-01
Apr-03
Apr-05
Apr-07
Apr-09
Aug-02
Aug-04
Aug-06
Aug-08
Aug-10
Source: Bloomberg, Company, Angel Research Source: Bloomberg, Company, Angel Research
September 2010 39
Amara Raja Batteries | Auto Ancillary
Exhibit 23: One-year forward EV/EBITDA band Exhibit 24: One-year forward EV/EBITDA chart
(Rs cr) EV (Rs cr) 2x 5x 8x 11x (x) One-yr forward EV/EBITDA Three-yr average EV/EBITDA
3,500 Long term average EV/EBITDA
10
3,000
8
2,500
2,000 6
1,500
4
1,000
2
500
0 0
Dec-01
Dec-03
Dec-05
Dec-07
Dec-09
Dec-01
Dec-03
Dec-05
Dec-07
Dec-09
Apr-01
Aug-02
Apr-03
Aug-04
Apr-05
Aug-06
Apr-07
Aug-08
Apr-09
Aug-10
Apr-01
Apr-03
Apr-05
Apr-07
Apr-09
Aug-10
Aug-02
Aug-04
Aug-06
Aug-08
Source: Bloomberg, Company, Angel Research Source: Bloomberg, Company, Angel Research
September 2010 40
Amara Raja Batteries | Auto Ancillary
DCF-based valuation
Taking into account the prospects of ARBL’s future free cash flow generation
capability, we have used a DCF methodology to arrive at an intrinsic/fair value for
ARBL. Assuming a WACC of 14.4% and a terminal growth rate of 3%, our fair
value works out to Rs264, at which ARBL would trade at a P/E multiple of 11.4x
and an EV/EBITDA multiple of 6.9x FY2012E earnings. We believe the DCF model
is conservative and captures most of the concerns related to the uncertainty in lead
prices.
September 2010 41
Amara Raja Batteries | Auto Ancillary
Company background
ARBL is India’s second largest manufacturer of VRLA batteries for both industrial
and automotive applications. The company is a JV between the Galla family and
JCI, with each holding a 26% stake in the venture. Based in Andhra Pradesh, ARBL
has a fully integrated manufacturing unit for its batteries at Tirupati. Automotive
and industrial batteries contribute 50% each to the company’s total revenue.
Exhibit 27: Auto battery segment’s revenue break-up Exhibit 28: Ind. battery segment’s revenue break-up
Export Others
7% OEM 15%
28%
UPS/Inverter
25% Telecom
Replacement 60%
65%
ARBL’s battery product portfolio comprises batteries with capacities ranging from
4.5Ah to 5,000Ah. The company has developed a niche for itself in the telecom
battery space and is the preferred battery supplier to major cellular service
providers, with a market share of ~32%. In the automotive battery space, ARBL
has a market share of ~27% in the OEM and ~26% in the replacement segment.
ARBL has contracts with most of the four-wheeler makers in India, including Maruti,
Hyundai, Ashok Leyland, Tata Motors, M&M and TAFE. The company has a tie-up
with Maruti and has launched a co-branded replacement battery under the
Amaron MGB brand, which will be available across Maruti’s network of over 3,000
authorised outlets. ARBL also has a tie-up with Tata International for exporting
automobile batteries to select African countries.
September 2010 42
Amara Raja Batteries | Auto Ancillary
To build upon sales momentum, ARBL introduced VRLA technology for two-wheelers under the Amaron Pro Bike Rider
brand name with a 60-month warranty. The initiative has been taken off well in the market. ARBL has also entered into a
development agreement with Honda, Japan, for motor cycle VRLA batteries. The company has also launched a second
variant of motorcycle battery Amaron Pro Bike Rider Beta based on VRLA technology with a 48-month warranty.
ARBL has introduced low-price products at its outlets to boost volumes and improve its market share in the high-margin
replacement market. These low-price products have been accepted well by customers.
ARBL has also entered into an alliance with Maruti Suzuki to strengthen its aftermarket presence. ARBL’s Amaron brand will
be branded as Maruti Genuine Battery and will be marketed through Maruti’s authorised service networks across India.
On the distribution front, ARBL has strengthened its Amaron distribution network to 200 franchises and 18,000 retailers.
This has enabled the company to gain increased presence in rural and urban India.
ARBL conceptualised PowerZone retail outlets in rural and semi-urban areas to provide customised batteries for rural
applications. The outlets also offer complete power solutions for automobile and domestic applications, making it a one-
stop shop for all power needs.
In FY2010, ARBL developed PowerSleek (front terminal access) batteries to strengthen its position in the telecom and UPS
segments. The company is also designing solar power batteries for its UPS segment.
ARBL widened its reach through 75 strong Authorised Quanta Alliance (AQuA) partners with a pan India distribution
network to service replacement demand in industrial batteries.
In FY2010, ARBL enhanced its capacity to 1.8mn units per year from 1.2mn units per year.
ARBL developed small VRLA batteries for commercial and household applications.
Going forward, ARBL plans to enter the tubular battery segment. Tubular batteries are mainly used in material handling
equipment.
September 2010 43
Amara Raja Batteries | Auto Ancillary
September 2010 44
Amara Raja Batteries | Auto Ancillary
Balance Sheet
Y/E March (Rs cr) FY07 FY08 FY09 FY10 FY11E FY12E FY13E
SOURCES OF FUNDS
Equity Share Capital 11 11 17 17 17 17 17
Preference Capital - - - - - - -
Reserves& Surplus 232 322 389 527 666 848 1,057
Shareholder’s Funds 244 333 406 544 683 865 1,074
Minority Interest - - - - - - -
Total Loans 141 316 286 91 161 111 91
Deferred Tax Liability 14 17 18 22 22 16 13
Total Liabilities 398 666 710 656 866 992 1,179
APPLICATION OF FUNDS
Gross Block 258 311 427 491 645 756 909
Less: Acc. Depreciation 101 122 146 185 242 303 378
Net Block 157 189 281 306 404 453 531
Capital Work-in-Progress 6 66 40 23 32 38 45
Goodwill - - - - - - -
Investments 16 16 47 16 22 30 47
Current Assets 350 575 526 631 787 894 1,050
Cash 26 51 70 62 95 70 70
Loans & Advances 86 103 87 109 131 153 177
Other 238 421 369 460 561 671 803
Current liabilities 131 179 184 319 379 423 495
Net Current Assets 219 396 342 312 408 472 555
Mis. Exp. not written off - - - - - -
Total Assets 398 666 710 656 866 992 1,179
September 2010 45
Amara Raja Batteries | Auto Ancillary
Key Ratios
Y/E March FY07 FY08 FY09 FY10 FY11E FY12E FY13E
Valuation Ratio (x)
P/E (on FDEPS) 25.8 12.8 22.6 10.9 11.9 9.2 8.0
P/CEPS 18.9 10.2 15.8 8.7 8.7 7.0 6.0
P/BV 5.0 3.6 4.5 3.3 2.7 2.1 1.7
Dividend yield (%) 0.3 0.6 0.4 1.4 0.6 0.7 0.8
EV/Sales 3.2 1.9 1.5 1.2 1.0 0.8 0.7
EV/EBITDA 23.1 12.7 13.2 6.5 6.8 5.6 4.7
EV / Total Assets 4.8 3.1 2.8 2.8 2.2 1.8 1.5
Per Share Data (Rs)
EPS (Basic) 8.3 16.6 9.4 19.6 17.8 23.1 26.5
EPS (fully diluted) 8.3 16.6 9.4 19.6 17.8 23.1 26.5
Cash EPS 11.2 20.9 13.5 24.6 24.4 30.2 35.3
DPS 0.7 1.2 0.8 2.9 1.3 1.5 1.8
Book Value 42.8 58.5 47.5 63.7 80.0 101.3 125.8
DuPont Analysis
EBIT margin 11.1 12.7 8.8 16.3 11.6 11.7 11.4
Tax retention ratio 0.7 0.6 0.7 0.7 0.7 0.7 0.7
Asset turnover (x) 2.1 2.3 2.2 2.5 2.8 2.8 2.8
ROIC (Post-tax) 15.7 18.7 12.8 26.7 21.8 22.3 21.5
Cost of Debt (Post Tax) 3.4 4.1 4.4 2.8 7.5 4.5 4.9
Leverage (x) - - - - - - -
Operating ROE 15.7 18.7 12.8 26.7 21.8 22.3 21.5
Returns (%)
ROCE (Pre-tax) 20.3 26.0 16.8 34.9 28.5 28.6 28.5
Angel ROIC (Pre-tax) 18.6 23.1 19.6 41.3 28.9 29.8 29.2
ROE 21.1 32.7 21.8 35.2 24.8 25.5 23.4
Turnover ratios (x)
Asset Turnover (Gross Block) 2.7 3.8 3.6 3.2 3.3 3.2 3.3
Inventory / Sales (days) 46 48 49 47 48 49 50
Receivables (days) 71 63 60 56 56 54 53
Payables (days) 43 30 30 35 38 38 37
Working capital cycle (ex-cash) (days) 88 91 86 65 55 58 59
Solvency ratios (x)
Net debt to equity 0.4 0.7 0.4 0.0 0.1 0.0 (0.0)
Net debt to EBITDA 1.2 1.5 1.1 0.0 0.2 0.0 (0.1)
Interest Coverage (EBIT / Interest) 14.0 9.6 5.8 30.1 15.4 29.9 42.5
Note: Market price as of September 20, 2010
September 2010 46
Amara Raja Batteries | Auto Ancillary
Annexure
September 2010 47
Auto Ancillary | Auto Sector Report
Exhibit 1: Indian storage battery industry’s revenue Exhibit 2: Auto battery – Segment-wise offtake
Auto
90.9% Two Wheelers Commercial
Organised 21% Vehicles
indutrial 29%
36.4% Tractors
12%
Source: Company, Angel Research Source: Crisil Research, Company, Angel Research
A wide distribution network and after-sales and service reach are key parameters
to gain competitive strength and increase market share in the industry. OEMs
prioritise operational efficiency, quality and after-sales and service reach. Hence,
most battery manufacturers distribute their products through exclusive
dealerships/service centres, retail distributors and OEM service centres.
In the replacement market too brand perception, after-sales service and product
differentiation play an important role. Thus, a well-entrenched distribution network
is a vital link in retaining customers as the costs involved in switching brands are
negligible. Leader Exide has the widest distribution in India with around 38,500
retail outlets for after-market sales in comparison to competitor ARBL, which has
18,000 retail outlets.
September 2010 48
Auto Ancillary | Auto Sector Report
Exhibit 3: Vehicle sales and population in India Exhibit 4: OEM, Replacement battery volume trend
(mn units) Total Vehicle Population Total Vehicle Sales (mn units) OEM volume Replacement volume
160 150 70
137
140 126 60
116
120 107
100 50
100 90
81
80 73 40 41.4
67 37.2
55 59
60 49 30 32.1
41 45
27.3
40 23.9
18 20 20.6
14 15 17
20 7 8 9 11 11 11
4 5 5 5 6
10 17.5 19.0
0 13.4 15.8
10.1 11.1
FY06P
FY07P
FY08P
FY09P
FY10E
FY11E
FY12E
FY13E
FY99
FY00
FY01
FY02
FY03
FY04
FY05
0
FY08 FY09 FY10P FY11E FY12E FY13E
Automotive OEM segment revving up: The automobile sector registered a robust
10% volume CAGR during FY2005-10, which resulted in strong demand for
automotive batteries particularly from the OEM segment. Going ahead too, the
automobile volumes are expected to register an impressive ~12% CAGR over
FY2010-13E. Moreover, with the global automobile majors setting up
manufacturing plants in India, we expect the automotive battery sector to register
healthy growth over the medium term.
4,000 20 12,000
30
3,000 15 9,000
20
2,000 10 6,000
10
1,000 5 3,000
0 0 0 0
FY08 FY09 FY10 FY11E FY12E FY13E FY08 FY09 FY10 FY11E FY12E FY13E
Source: SIAM, Industry, Companies, Angel Research Source: SIAM, Industry, Companies, Angel Research
The OEM market is dominated largely by brands such as Exide, Amaron and
AMCO. Exide is the market leader in the OEM segment with a market share of
60-65%, while ARBL enjoys market share of 24-27%.
September 2010 49
Auto Ancillary | Auto Sector Report
Exhibit 7: Four-wheeler OEM market share Exhibit 8: Two-wheeler OEM market share
(%) FY08 FY09 (%) FY08 FY09
70 66.7 64.7 56.3
60 53.9
60
50
42.3 40.8
50
40
40
30
30 26.3 26.5
20
20
7.0 8.8 10 5.3
10 1.4
0 0
Source: Industry, Companies, Angel Research Source: Industry, Companies, Angel Research
Exhibit 9: Four-wheeler replacement market share Exhibit 10: Two-wheeler replacement market share
(%) FY08 FY09 (%) FY08 FY09
60 54.5 70
49.0 58.8
50 60 53.1
50
40
40
27.5
30 23.5 27.5
22.7 22.7 30 25.0
21.9
20
20 13.7
10 10
0 0
Exide ARBL Others Exide Amco Others
Source: Industry, Companies, Angel Research Source: Industry, Companies, Angel Research
The replacement segment is highly concentrated in the hands of few players in the
organised sector (Exide and ARBL), but a large portion continues to be dominated
by the unorganised players. The unorganised players cater to the lower end of the
market especially in the CV and tractor segments. Over the last few years however,
share of the unorganised players has been declining on the back of rising
disposable income levels, increasing quality consciousness, environmental
restrictions and better technology in the automotive industry.
September 2010 50
Auto Ancillary | Auto Sector Report
According to a market forecast, the BEV market will comprise approximately 13mn
vehicles in 2020. Given that total vehicle sales are estimated at around 100mn in
2020, the share of BEVs in the vehicle market is likely to be small, while ICE
vehicles continue to dominate the market for at least another decade.
By 2020, around 5% of the global auto production, or nearly two million cars, will
be electric. As per industry estimates, in India electric cars are expected to account
for less than 5% of the overall automobile market in the next 8-10 years. With
rising fuel cost and environmental concerns boosting demand for electric cars,
auto majors in India such as Mahindra & Mahindra, Tata Motors, Maruti Suzuki,
Hero Electric and Hyundai are assessing the electric car market. While the
domestic auto sales in India increased by 25% in value terms this year, the surge in
demand for auto components and accessories presents an opportunity for
partnerships that will help cut the manufacturing costs and boost energy savings.
September 2010 51
Auto Ancillary | Auto Sector Report
A review of the key trends suggests that catalysts may be aligning for BEVs.
Economic trends such as strong and potentially rising oil prices, as well as a
pervasive awareness of environmental impacts and an ongoing, contentious
debate surrounding climate change are likely to keep the BEVs in the spotlight.
Policy changes, evolving technology and changes in the market from consumer
tastes to personal economics like-wise suggest that while the ICE will continue to
play an important role, it may no longer have the stage to itself. However, the
BEV’s distinctive characteristics, such as simplicity of its vehicle structure and driving
capability, could bring about major changes to an industry that has progressed
without significant changes for a century.
Utility
Consumers
companies Compensation
for electricity trade
Vehicle
manufacturers
New Battery
suppliers New market for manufacturers
other industries
Nonetheless, battery technology is unable to keep up with the hybrid and electric
vehicle market (HEV). Improving infrastructure and growing power requirements
lead to greater instability in the batteries thereby limiting the miles covered. In case
of the BEVs, battery technology is not advanced enough to cover long distances on
September 2010 52
Auto Ancillary | Auto Sector Report
one charge. Increasing the number of cells to augment the energy capacity and
density of the batteries increases the weight of the vehicle rendering it incapable of
covering greater distances. The battery cost also increases, thereby discouraging
demand. However, since this is an upcoming segment, the level of enthusiasm and
investments or participants entering the market is at an all-time high. In 2004,
revenues generated by the World BEV/HEV battery market were approximately US
$349 million. Revenues are expected at US $1,867mn in 2011, logging a CAGR
of 27.1%.
Industrial batteries are classified into conventional (lead acid), valve-regulated lead
acid (VRLA) and nickel-cadmium batteries. The VRLA batteries have been gaining
increasing acceptance and currently comprise ~75% of the Indian industrial
storage battery market Overall, the industrial battery sales majorly driven by VRLA
batteries logged CAGR of ~18.8% over FY2008-10.
The industrial battery market is highly concentrated with three-four players. Exide is
the market leader with a share of 40-45%. ARBL and HBL Power are the other
major players with a market share of 25-27% and 30-33%, respectively.
300
50
40
200
34
20
100 23
15
8
0 0
FY06 FY07 FY08 FY09 FY10 FY11E FY12E FY13E
September 2010 53
Auto Ancillary | Auto Sector Report
Going ahead, the addition of new towers is expected to slow down owing to
tapering subscriber growth and sharing of tower infrastructure becoming
imminent. Hence, we believe that future demand for telecom batteries would be
driven primarily by the surge in the replacement market. Moreover, with the roll
out of 3G and WiMAX services and sharing of tower infrastructure, the load on the
telecom towers is expected to increase and shorten the replacement cycle for the
telecom batteries. Thus, we estimate the replacement demand to pick up
depending on usage. Typically, an average replacement cycle spans 5-6 years
wherein a tower requires around two batteries of 24 cells (150-200 Ah/cell) and
battery back-up constitutes 10-15% of the total tower cost depending on the type
of tower (ground-based or roof-top tower).
The telecom batteries segment is dominated by three players, viz. HBL Power
(market share of 45-48%), ARBL (30-32%) and Exide (23-25%).
Currently, India faces power deficit of 10.1%, driving the demand for batteries
used in UPS/Inverters. We expect the power deficit scenario to continue over the
medium term despite the ambitious capacity addition plans by the government in
the Eleventh Five-year Plan.
800 8
8.3
7.0
600 6
400 4
200 2
0 0
FY06 FY07 FY08 FY09 FY10 FY11E FY12E FY13E
Amidst the backdrop of power cuts and load shedding, we believe that demand for
UPS/Inverter batteries would continue to grow. Further, planned capacity addition
would also bolster demand for storage batteries required in the T&D networks.
September 2010 54
Auto Ancillary | Auto Sector Report
Key risks
Lead price volatility
Cheap imports from China are a concern for the industry. However, the price
differential has shrunk to 5–10% after China cancelled the export refund for all
lead-acid battery manufacturers in a bid to control high energy-consuming and
highly polluting products. Given the general industry concerns regarding the
quality of Chinese batteries, these imports are not likely to be a major threat over
the long term.
The industry is likely to witness increased competition over the medium term.
Buoyant demand outlook has prompted existing players such as Exide and ARBL to
increase their capacity. Among new players, Tata Autocomp plans to scale up to
2mn units by FY2011E. Among prominent global players, JCI and Exide
Technologies have already entered India through JVs with ARBL and Tudor,
respectively. Other global majors such as East Penn and EnerSys, might enter India
in the future owing to higher growth opportunity, which can intensify competition in
the industry.
September 2010 55
Auto Ancillary | Auto Sector Report
Research Team Tel: 022 - 4040 3800 E-mail: research@angeltrade.com Website: www.angeltrade.com
DISCLAIMER
This document is solely for the personal information of the recipient, and must not be singularly used as the basis of any investment
decision. Nothing in this document should be construed as investment or financial advice. Each recipient of this document should make
such investigations as they deem necessary to arrive at an independent evaluation of an investment in the securities of the companies
referred to in this document (including the merits and risks involved), and should consult their own advisors to determine the merits and
risks of such an investment.
Angel Broking Limited, its affiliates, directors, its proprietary trading and investment businesses may, from time to time, make
investment decisions that are inconsistent with or contradictory to the recommendations expressed herein. The views contained in this
document are those of the analyst, and the company may or may not subscribe to all the views expressed within.
Reports based on technical and derivative analysis center on studying charts of a stock's price movement, outstanding positions and
trading volume, as opposed to focusing on a company's fundamentals and, as such, may not match with a report on a company's
fundamentals.
The information in this document has been printed on the basis of publicly available information, internal data and other reliable
sources believed to be true, but we do not represent that it is accurate or complete and it should not be relied on as such, as this
document is for general guidance only. Angel Broking Limited or any of its affiliates/ group companies shall not be in any way
responsible for any loss or damage that may arise to any person from any inadvertent error in the information contained in this report.
Angel Broking Limited has not independently verified all the information contained within this document. Accordingly, we cannot testify,
nor make any representation or warranty, express or implied, to the accuracy, contents or data contained within this document. While
Angel Broking Limited endeavours to update on a reasonable basis the information discussed in this material, there may be regulatory,
compliance, or other reasons that prevent us from doing so.
This document is being supplied to you solely for your information, and its contents, information or data may not be reproduced,
redistributed or passed on, directly or indirectly.
Angel Broking Limited and its affiliates may seek to provide or have engaged in providing corporate finance, investment banking or
other advisory services in a merger or specific transaction to the companies referred to in this report, as on the date of this report or in
the past.
Neither Angel Broking Limited, nor its directors, employees or affiliates shall be liable for any loss or damage that may arise from or in
connection with the use of this information.
Note: Please refer to the important `Stock Holding Disclosure' report on the Angel website (Research Section). Also, please
refer to the latest update on respective stocks for the disclosure status in respect of those stocks. Angel Broking Limited and
its affiliates may have investment positions in the stocks recommended in this report.
Note: We have not considered any Exposure below Rs 1 lakh for Angel, its Group companies and Directors.
Ratings (Returns): Buy (> 15%) Accumulate (5% to 15%) Neutral (-5 to 5%)
Reduce (-5% to 15%) Sell (< -15%)
September 2010 56
Auto Ancillary | Auto Sector Report
Address: Acme Plaza, ‘A’ Wing, 3rd Floor, M.V. Road, Opp. Sangam Cinema, Andheri (E), Mumbai - 400 059.
Tel: (022) 3952 4568 / 4040 3800
Research Team
Fundamental:
Sarabjit Kour Nangra VP-Research, Pharmaceutical sarabjit@angeltrade.com
Vaibhav Agrawal VP-Research, Banking vaibhav.agrawal@angeltrade.com
Vaishali Jajoo Automobile vaishali.jajoo@angeltrade.com
Shailesh Kanani Infrastructure, Real Estate shailesh.kanani@angeltrade.com
Anand Shah FMCG, Media anand.shah@angeltrade.com
Deepak Pareek Oil & Gas deepak.pareek@angeltrade.com
Sushant Dalmia Pharmaceutical sushant.dalmia@angeltrade.com
Rupesh Sankhe Cement, Power rupeshd.sankhe@angeltrade.com
Param Desai Real Estate, Logistics, Shipping paramv.desai@angeltrade.com
Sageraj Bariya Fertiliser, Mid-cap sageraj.bariya@angeltrade.com
Viraj Nadkarni Retail, Hotels, Mid-cap virajm.nadkarni@angeltrade.com
Paresh Jain Metals & Mining pareshn.jain@angeltrade.com
Amit Rane Banking amitn.rane@angeltrade.com
John Perinchery Capital Goods john.perinchery@angeltrade.com
Srishti Anand IT, Telecom srishti.anand@angeltrade.com
Jai Sharda Mid-cap jai.sharda@angeltrade.com
Sharan Lillaney Mid-cap sharanb.lillaney@angeltrade.com
Amit Vora Research Associate (Oil & Gas) amit.vora@angeltrade.com
V Srinivasan Research Associate (Cement, Power) v.srinivasan@angeltrade.com
Mihir Salot Research Associate (Logistics, Shipping) mihirr.salot@angeltrade.com
Chitrangda Kapur Research Associate (FMCG, Media) chitrangdar.kapur@angeltrade.com
Pooja Jain Research Associate (Metals & Mining) pooja.j@angeltrade.com
Yaresh Kothari Research Associate (Automobile) yareshb.kothari@angeltrade.com
Shrinivas Bhutda Research Associate (Banking) shrinivas.bhutda@angeltrade.com
Sreekanth P.V.S Research Associate (FMCG, Media) sreekanth.s@angeltrade.com
Hemang Thaker Research Associate (Capital Goods) hemang.thaker@angeltrade.com
Nitin Arora Research Associate (Infra, Real Estate) nitin.arora@angeltrade.com
Technicals:
Shardul Kulkarni Sr. Technical Analyst shardul.kulkarni@angeltrade.com
Mileen Vasudeo Technical Analyst vasudeo.kamalakant@angeltrade.com
Derivatives:
Siddarth Bhamre Head - Derivatives siddarth.bhamre@angeltrade.com
Jaya Agarwal Derivative Analyst jaya.agarwal@angeltrade.com
Production Team:
Bharathi Shetty Research Editor bharathi.shetty@angeltrade.com
Simran Kaur Research Editor simran.kaur@angeltrade.com
Bharat Patil Production bharat.patil@angeltrade.com
Dilip Patel Production dilipm.patel@angeltrade.com
Angel Broking Ltd: BSE Sebi Regn No : INB 010996539 / CDSL Regn No: IN - DP - CDSL - 234 - 2004 / PMS Regn Code: PM/INP000001546 Angel Securities Ltd:BSE: INB010994639/INF010994639 NSE: INB230994635/INF230994635 Membership numbers: BSE 028/NSE:09946
Angel Capital & Debt Market Ltd: INB 231279838 / NSE FNO: INF 231279838 / NSE Member code -12798 Angel Commodities Broking (P) Ltd: MCX Member ID: 12685 / FMC Regn No: MCX / TCM / CORP / 0037 NCDEX : Member ID 00220 / FMC Regn No: NCDEX / TCM / CORP / 0302
September 2010 57