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EDITORIAL

OUTTHINK, OUTSMART, OUTPACE

new economic order is taking shape in front of our eyes, as the old Western powers and the emerging world’s major new players converge. But the forces driving this convergence are not those that generations of economists envisaged, but the new best strategies are the ones that have never been thought of by anybody else, this is to say that for all the old, new and the next generation companies to stay ahead, you need to think ahead.

Think ‘ahead’ of your perceived and hidden competitors and think ‘for’ your customers, a strategy which sounds simple, but has many layers and hidden insights concerning all things important for companies to win. It is very important to accept and acknowledge that a company does not gain at the expense of its competitors or by limiting or cloning its competitor’s strategy, but rather, by crafting or deploying a distinctive strategy that changes the rules of the game in its favour. What wins in the business is not trying to out muscle your competitors with brawn, but rather to outthink those competitors with some serious brain power. This will enable you to produce a distinctive strategy. Then again there is a need for strategic thinking, which sets out a vision of where your company is going. Use this as your basis for making appropriate choices and plans. Clarify what your company is, and is not, to avoid becoming scattered and overextended. Every leader of a company must carefully choose what game to play, and how to craft a strategy to make and shape the rules. How to use strategic thinking is today’s most important management tool, to put your company on a growth-oriented path to the future. It is very important to find out how to overcome the key obstacles to strategic thinking; craft a future profile for your organisation; articulate a meaningful business concept; utilise strategic leverage; make competition practically irrelevant; benefit from product innovation & market fragmentation and avoid mistakes when making alliances and acquisitions, all this will help you outthink, outsmart & outpace your competitors. In the automated world, it’s still the human angle that dominates the thought process and strategies for success. In the race to win customer confidence, companies must ensure that they make the customer come back for more. Focus on delivering high-quality services that meet the needs of key customers is critical. Producing innovative solutions comes from a number of actions — closer relationships with supply chain partners, making corporate acquisitions relevant to better meeting the needs of customers and investing in & developing relationships with existing and new generation of consumers for your product or service, all underpin a commitment to innovation. Another critical human angle is the workforce that has the potential to make or mar the fortunes of a company. Building the right leadership and creating the best team is fundamental to success. All this and more will help you position yourself among the best in class, if you are already doing these things, chances are that you are a part of this envious listing of Top 500 Manufacturing Companies, if not, the analysis of what makes these winning companies tick will get you there. So read on and go ahead… Outthink, Outsmart, Outpace your competitor!

Archana Tiwari-Nayudu archana.nayudu@infomedia18.in

J A N U A R Y 2 0 1 2 | SEARCH - THE INDUSTRIAL SOURCEBOOK

FOREWORD

DR Dogra MD & CEO, CARE Ltd.

Scalability & Sustainability: Key To Manufacturing Growth

he World Economic Outlook suggests moderation in global growth to about 4% through CY2012 from over 5% in CY2010. The real GDP in developed economies is anticipated to expand at about 1.9% in CY2012, while emerging/developing ones are anticipated to expand at 6.1%. The macroeconomic situation in India is currently subdued as reflected by the decline in various indicators like GDP, IIP, export trends, etc. The Indian manufacturing sector grew at 3.7% in April-October, 2011, as compared to 9.4% in the last year. Hence, for the current fiscal, CARE estimates the GDP growth would be in the range of 7.1% to 7.4%, lower than 8.6% clocked in the previous fiscal.

IIP capital goods have registered a sharp drop of 25.5% in October, 2011, on the back of a slowdown in investments because of rising interest rates and slowdown in demand. These factors have inevitably dragged down production in the manufacturing sector and are expected to have an impact in the coming months as well. Further, FY12 continues to be marked by concerns such as those emanating from the European debt crisis, global currency wars, etc. However, resilient domestic consumption followed by diversiﬁcation of businesses to new geographical areas would help India arrest the decline to some extent. India, with its vast domestic consumption, remains a more resilient economy and one of the fastest growing economies in the world. CARE Research, as the Ratings Partner for SEARCH magazine, has developed a comprehensive methodology to bring out the leaders and rank the ‘Top-500 Indian Manufacturing Companies’ for the third consecutive year. The various parameters on which the companies were assessed on included: size of the company, proﬁtability, capital structure and return to the investor community. The research methodology is explained in detail in this issue and reinforces the fact that the companies, which strategically tackled the tidal waves of economic uncertainty, also paced faster than others to gain from the economic growth and achieved a higher rank than the rest in the rankings. Going forward, apart from scalability, sustainability would be the mantra for success for the Indian manufacturing industry.

RATINGS PARTNER CARE RESEARCH & Information Services is an independent division of CARE. CARE Research services a variety of business research needs with credible, high quality research and analysis on various facets of the Indian Economy and Industries. The research division has a two pronged objective of providing an in-house research to the ratings division as also high quality sectoral research to financial intermediaries, corporate, analysts, policy makers, etc., as an aid to their decision making process. CARE Research draws its strengths from CARE’s decade long experience and in-depth understanding of the Indian economy/industries, use of rigorous analytical methods and its knowledge team. It has an in-house team of qualified, experienced analysts and is committed to provide accurate, reliable research to its clients with consistent updates in time frame. CARE RESEARCH has established a network of primary and secondary sources, which enable the team of analysts to form unbiased opinions on industry segments. It has also developed different methodologies for forecasting the future demand-supply situation in a particular industry. CARE RESEARCH produces Industry Research Reports, Industry Risk Evaluation Reports and undertakes customised assignments on request basis. Industry Research: CARE Research is a leading provider of value research. Investors, corporates, bankers, analysts, etc use the sector reports for in-depth understanding of present situation, issues, outlook, etc., to arrive at opinion. The reports contain latest available data on capacity utilisation, consumption, prices, domestic and global trends, raw material scenario, and outlook. Further CARE Research also provides updates on monthly/quarterly /half-yearly basis as well as impact notes on policy changes. Subscription is made available though CARE online research distribution systems and all the reports can be accessed online from anywhere. The Industry Research Report services are today subscribed by vast number of clients. At present, we cover 30 industries. Industry Risk Evaluation: Industry Risk Evaluation Reports offer industry specific risk scores which capture the influence of industry variables on various critical parameters which can impact cash flow and debt servicing capabilities of the industry for the next 2-3 years. The risks on various parameters are quantified by assigning a score to each parameter. Some of the key parameters used for scoring are demand, supply, competition, factors of production, government policies and regulations and the financial structure of the industry. The risk scores are useful tools for quantifying industry risk and are used in credit assessment of companies. At present, evaluation reports are available on 84 sectors. Customised Research: The rising level of volatility in complex markets with lots of opportunities to tap necessitates a thorough understanding and guidance provided by a well known research firm. To address such needs, CARE Research offers need-based solutions by completely checking the facts, market scenario, past trends, etc., to help clients realise their futuristic goals and transform their businesses. Some of the areas in which we offer customised research are market sizing, demand estimation, demand-gap analysis, cost-benefit analysis, cost indexation, product segmentation, business analysis, competitive intelligence, etc. We also prepare industry overviews for clients in connection with their capital markets offerings.

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Editorial

Foreword

CONTENTS

GLOBAL ECONOMIC OUTLOOK Prospects Constrained, Yet Sturdy

24 China: Slower Growth, Longer-term Risks 27 Japan: On The Bright Side…

28 India: Trudging Along, For Now

RANKING METHODOLOGY Deciphering The Top 500 Manufacturing Companies

Top 500 Manufacturing Companies - Listing

ANALYSING THE TOP 14

RELIANCE INDUSTRIES LTD (RIL) The Pole Star

BHARAT PETROLEUM CORPORATION LTD (BPCL) Securing India’s Future Energy Needs

OIL & NATURAL GAS CORPORATION (ONGC) Moving Towards Hydrocarbon Assets

HINDUSTAN PETROLEUM CORPORATION LTD (HPCL) Promising A Future Full Of Energy

INDIAN OIL CORPORATION (IOC) On A Strong Tech & Marketing Footing

STEEL AUTHORITY OF INDIA LTD (SAIL) Growing From Strength-to-strength

ITC Building on Green GDP & Inclusive Growth

HINDALCO INDUSTRIES LTD Building On A Four-pronged Strategy

TATA MOTORS Capitalising On Product Innovation

STERLITE INDUSTRIES (INDIA) LTD Focussing On Organic Growth Projects

TATA STEEL Value Creation Through Sustainability

HINDUSTAN UNILEVER LTD (HUL) Winning With Brands & Innovations

BHARAT HEAVY ELECTRICALS LTD (BHEL) Of Envious Order Books & Potential Proﬁts

102

Glossary

103

100

Product Index

JINDAL STEEL & POWER LTD Treading Along The Success Path

104

Advertisers’ List

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Prospects

Constrained,

t e Y

Sturdy Global economic activity weakened in the ďŹ rst half of 2011. In advanced economies, the recovery was dragged down by the continued fragility in private sector balance sheets, as ďŹ nancial markets were buffeted by a series of shocks, including greater Euro area sovereign risks and the credit downgrade of the US. Tracking the impact of these on the emerging economies, hereâ&#x20AC;&#x2122;s analysing the prospects that the global economy holds...

UROZONE

Last quarter, the biggest issues facing the global economy were the crisis in the Eurozone and uncertainty about the path of US monetary and fiscal policy. Well, nothing seems to have changed. These remain the big issues. And yet, much has indeed changed. In Europe, the members of the Eurozone agreed on a new package for assisting Greece, only to find that financial market stress kept getting worse as market participants doubted the package would be sufficient. The fortune of the Eurozone depends crucially on whether and how fast - a convincing solution to the debt crisis can be found and implemented. Fears of a Greek default and its contagion effect, including the possibility of an ensuing banking crisis, hang over the economy like the sword of Damocles. Leaders are currently trying to solve three key issues: Dealing decisively with Greece while firewalling other, less-affected fringe nations Establishing a mechanism for a functioning European bond market by giving the European Financial Stability Facility (EFSF) more money and more power Putting the announced plans on fiscal and macroeconomic surveillance and enforcement into action. Eurozone growth is slowing. Sentiment has deteriorated over the summer amid signs of weakening global demand and disappointed hopes of solving the sovereign debt crisis. This is a crucial time for Europe. If Eurozone leaders act decisively to stabilise financial markets and turn their plans for closer cooperation into action, it could halt the downward spiral of deteriorating confidence and weakening activity. Real economic

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GLOBAL ECONOMIC OUTLOOK

indicators are not yet indicating a recession, but markets remain unsettled by deteriorating sentiment and speculation about the future of the monetary union.

THE UNITED STATES In the United States, it is likely that job growth failed to materialise, in part, because the private sector faced increased costs associated with regulatory oversight in health care, financial services, and energy. Add to this, the increase in government spending that was used to fund short-term consumption, shifting wealth from the future into the present. And finally, the Federal Reserve’s high-risk but ultimately unsuccessful second round of quantitative easing increased oil and food prices but did little to stimulate real growth. The first piece of hard data that argues in favor of a recession can be found in the most recent readings on US Gross Domestic Product (GDP). While the 2007–2009 recession was more severe than previously advertised, the new data also showed that real GDP growth in the second quarter was up just 1.5% from a year ago. Since 1947, there have been 14 occasions when real GDP growth slowed below 2%. In 11 of those cases, the economy fell into a recession, which puts the historical probability at 78%. The second development that raises the risk of a recession in the United States is the European debt crisis and a corresponding recession that would follow it. A recession in Europe would wash back into the US economy in several ways, including trade, industrial production, corporate profitability, and banking. The European Union is a major trading partner for the United States, accounting for $259 billion in exports, which is roughly 12% of the $1.9 trillion in total US exports. During the 2008–2009 recession, exports to the EU fell sharply from a peak of $272 billion to $220 billion, a peak-to-trough decline of 19.1% over a fifteen month period. Even with a recovery, the US exports to the EU are still 4.9% below their mid-2008 peak. Another recession in Europe would have a comparable drag on US exports. A comparable decline to what happened in 2008–2009 would bring US exports down to $210 billion. Since Europe would not be the only place from which US exports would decline, the trade sector would become a drag on growth. US businesses are going into this recession with much stronger balance sheets and much leaner operations than in 2008. Cash levels and productivity are substantially higher. With leaner operations, layoffs and inventory reduction will not create the kind of downdraft for the broader macro economy that they did in 2008. On the downside, the policy options available to address the recession are much more limited today than they were in 2008. Back-to-back stimulus programs in 2009 and 2010 in excess of $800 billion are unthinkable today. A third round of quantitative

easing is possible, but it will be controversial and given the effectiveness of the previous round, may be of limited value. Weaker exports, a decline in business investment, and contracting manufacturing will likely combine to push an economy that is operating at stall speed into a recession.

UNITED KINGDOM Consistent with the other large industrialised countries, UK growth slowed sharply in the second quarter (although, in the case of the UK, activity was somewhat depressed by timing effects and by the impact of Japan’s tsunami and earthquake). UK domestic fundamentals have weakened, but the big change has been in the global environment. The Eurozone debt crisis created fears of a vicious spiral of sovereign and bank defaults. One consequence has been the virtual closure of corporate bond and bank term funding markets to new issuance. Confidence about global growth has waned. Consensus forecasts for GDP growth have declined across the industrialised world. The UK consumer sector remains weak with spending under pressure from a severe squeeze on real incomes. Over the last year, real personal disposable incomes have fallen by almost 3%, the fastest rate of decline in this indicator of consumer spending power since 1976. With consumer borrowing growing at single-digit rates, credit has been unable to fill the gap. Over the last year, retail spending has hardly increased, and house prices have fallen. Mortgage approvals, a key leading indicator for housing activity, remain at historically low levels. Much will hinge on the speed and effectiveness of the response from European policymakers to the crisis in the Euro area. A combination of monetary ease in the UK and abroad should help bolster growth next year. So, too, will sharply lower inflation; UK inflation is widely expected to almost halve over the next 12 months, and this will support consumer spending power. But the UK’s fortunes are heavily dependent on events in the Euro area. Financial stress, as Lehman’s failure demonstrated, can spread contagiously. Disruption to demand in the Euro area would hit the UK’s largest export market. Introducing another round of quantitative easing in the UK is politically and technically straightforward, but finding a solution to the problems of the Euro area is precisely the opposite.

RUSSIA At long last, the political situation in Russia has clarity. It was announced that Prime Minister Putin will return as president in March 2012, exchanging jobs with President Medvedev. This means that, in theory, Putin could be president for the next 12 years since the constitution would allow this. Yet, clarity about who occupies which chair does not imply clarity about the policy outlook, which remains uncertain. And it could be that uncertainty pertaining to

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GLOBAL ECONOMIC OUTLOOK

policy has contributed to a declining value of the ruble. In the past few years, Russia has experienced almost $250 billion in capital flight, given the weak global economy and a perception of poor investment opportunities at home. Such flight puts downward pressure on the currency. Unfortunately, a slowing global economy and dampening oil prices will not be helpful. Instead, the economy will mostly have to rely on domestic demand. While consumer spending is doing well, fixed asset investment is not growing at a speed that would offset a slowdown in exports. On the positive side, consumer spending continues to rise, given rising real wages and greater access to consumer credit. Also, it is widely expected that fiscal policy will be more expansive in the months leading up to the election in March. This expectation is based on the fact that similar policy shifts have taken place in the past. Fiscal expansion will likely have a positive impact on economic activity. Also on the positive side is the fact that inflation is not accelerating. The central bank tightened monetary policy during the first half of 2011, but it left policy unchanged since May. This tightening, combined with declining global food and energy prices, has caused inflation to peak below 10%. In addition, it is expected that inflation will gradually decline in the coming year. However, a steep drop in the value of the ruble could have an inflationary impact. As for monetary policy, the deceleration of inflation provides the central bank room for engaging in more aggressive policy, should the economic slowdown become onerous. On the other hand, while the central bank does not explicitly target the exchange rate, a declining ruble could restrain the bank from cutting interest rates.

BRAZIL Brazil’s central bank has chosen a new path. After a two year period of raising interest rates in order to fight rising inflation, the bank suddenly and unexpectedly cut the critical Selic rate in August. The changing fortunes of the global economy have caused the central bank to rethink its policy in light of a new outlook. Going forward, it seems likely that interest rates will be cut further. After all, the inflation-adjusted interest rate remains fairly high by global standards. A lower rate will help maintain a satisfactory level of business investment. In addition, the rate of inflation is expected to decline as the economy slows and, especially, as commodity prices stabilize. Thus, a looser monetary policy is likely to be beneficial. The Brazilian economy will probably grow more slowly in the coming year than it did recently. The lagged effect of tight monetary policy and a high valued currency will take its toll on growth. Yet the new policy of lower rates, combined with a declining currency, will help boost investment and exports. Foreign direct investment is likely to be strong given expectations about Brazil’s long-term future.

SEARCH - THE INDUSTRIAL SOURCEBOOK | J A N U A R Y 2 0 1 2

The big uncertainty concerns the impact of the global economy on Brazil. A severe recession in Europe emanating from a partial collapse of the Eurozone would certainly have a negative impact on Brazil. Moreover, a global slowdown could have a significantly negative impact on commodity prices, which in turn, would hurt Brazil’s export revenue.

MEXICO At the turn of this century, Mexico was Latin America’s largest economy. Its prospects were akin to those of the BRIC nations. However, as the BRICs’ marched ahead, Mexico, it seems, lost its way. Despite being an uppermiddleincome nation, Mexico continues to grapple with widespread income inequality and poverty. Between 2000 and 2010, Brazil’s economy grew at an average rate of 3.7% compared to Mexico’s 2%. Today, Brazil’s economy is larger than Mexico and growing at a faster pace. While the outlook for China, India, and Russia is much more favorable, Mexico finds itself caught in the crossfire of violent drug cartels and the prospect of an economic slowdown for its major trading partner, the United States. Yet, Mexico has tremendous potential and if policymakers tackle the country’s challenges effectively, the economy could blossom once again. The economy will be constrained by declining oil output (due to underinvestment), poor business investment, and the likelihood of an unstable environment due to widespread violence. If remittances continue to increase, it could potentially boost domestic demand and positively impact the local economy. Higher consumer spending will likely benefit the retail industry as more people transition into the middle class. If demand from the United States strengthens, the export sector will be boosted. With elections due this year, tackling security concerns and making Mexico’s economic environment conducive for large-scale foreign and domestic investment will be high on the agenda.

ASIA The increased uncertainty over the global outlook and greater risk aversion in financial markets spilled over to Asia in August and September 2011, with leveraged investors liquidating profitable positions in the region to cover their losses elsewhere. As a result, many Asian financial and currency markets experienced declines of magnitudes similar to those experienced in mid 2010. After a strong start in the first quarter of 2011, economic activity in Asia has also moderated (Figure 1.1). Sluggish demand in advanced economies and supply chain disruptions after the tragic March 2011 earthquake and tsunami in Japan led to a broad-based decline in industrial production and export growth across Asia. High frequency indicators, including manufacturing purchasing managers’ indices (PMI) and export orders, suggest that the moderation of activity continued in the third quarter of 2011.

GLOBAL ECONOMIC OUTLOOK

By contrast, Asian domestic demand has proven generally resilient in 2011. Employment gains and real wage growth supported private consumption, and high capacity utilisation boosted private investment. Financial conditions have remained accommodative in most of Asia, as increases in interest rates were offset partly by higher inflation in some economies (such as Korea, Malaysia, and Thailand), and real effective exchange rates have generally not strengthened during 2011, except in a few commodity exporters, including Indonesia, Australia and New Zealand, as well as in Korea & Singapore. By contrast, monetary policy normalisation and slowing credit growth have contributed to tighter financial conditions in China and India. Notwithstanding the moderation in growth, inflationary pressures across the Asia-Pacific region remain elevated. Headline inflation continued to increase in most economies and averaged 5.5% (year over year) in July 2011, as compared

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China

Indonesia

Australia

India

Korea

Malaysia

Hong Kong SAR

New Zealand

Taiwan Province of China

Philippines

Thailand

Japan

Singapore

varied across Asia: In much of industrial Asia, economic activity has been significantly influenced by natural disasters. In Japan, the earthquake and tsunami led to a sharp contraction in domestic demand. In Australia, cyclones and flooding disrupted mineral output, although strong global demand for coal and iron pushed the terms of trade to 60-year highs and supported private investment. New Zealand’s economy, however, continued to expand despite the impact of the January 2011 earthquake. In East Asia, growth has been held up by strong domestic demand. In China, gains in wages employment supported private consumption, whereas strong private investment, including real estate investment, offset a slowdown in public investment. Growing financial and economic integration with the mainland helped cushion Hong Kong SAR and Taiwan Province of China against weaker external demand from advanced economies. In Korea, continuing easy financial conditions and 30 wage growth supported private domestic demand. 2011:01 25 In several ASEAN economies, strong domestic 2011:02 demand, particularly investment, helped mitigate 20 the slowdown in export growth. In addition, 15 commodity exporters, such as Indonesia and 10 Malaysia, benefitted from the rise in commodity 5 prices through mid-2011. Inflation concerns have 0 persisted in Vietnam. In South Asia, private consumption remained -5 robust in India on account of rising disposable -10 income, but investment was subdued partly on concerns over governance and the global outlook. In Bangladesh, buoyant credit growth amid a stillaccommodative monetary stance continued to fuel Sources: CEIC Data Company Ltd.; Haver Analytics; and IMF staff calculations. domestic demand, while in Sri Lanka activity Figure 1: Selected Asia: Real GDP at Market Prices benefitted from greater political stability. In Nepal, (Quarter-over-quarter% change; SAAR) domestic demand was subdued on investor concerns with 4.6% in January. In particular, inflation has continued over banking system fragilities and a decline in remittances to rise in China, Hong Kong SAR, Korea & Vietnam, and from the Middle East. In other low-income countries and Pacific Island remains above central banks’ explicit or implicit targets in economies, commodity exporters such as Mongolia and many cases. Inflation has been driven by commodity prices, Papua New Guinea benefitted from high mineral prices but also in many economies by sustained demand pressures. in the first half of 2011, and new garment quotas in Indeed, core inflation has increased in Hong Kong SAR, European markets contributed to buoyant exports in India, Indonesia, Korea, Malaysia and Thailand, as secondCambodia. In Mongolia, growth has also been fuelled by round effects of previous commodity price rises have fed expansionary macroeconomic policies, which boosted through to generalised inflationary pressures. underlying inflation above the authorities’ target. However, Inflation expectations have also risen since the first quarter in a number of Pacific Island economies, high commodity of 2011 in a number of economies. In contrast to the rest prices continued to weigh on growth, although the strong of the region, Japan’s deflationary pressures persisted, with Australian dollar boosted tourism flows. core inflation that excludes food and energy prices still in Net capital flows into emerging Asia have moderated negative territory as of July 2011. so far in 2011 relative to 2010, following the sharp rise DYNAMICS AND COMPOSITION OF GROWTH in global risk aversion. Within the region, however, there are large disparities — in the first half of 2011, capital The dynamics and composition of growth in 2011 have

GLOBAL ECONOMIC OUTLOOK

inflows remained strong in China, thus reflecting increased borrowing by mainland firms from Hong Kong SAR, and in India & Indonesia, where strong growth prospects and interest rate differentials attracted large equity and bond inflows, respectively. In East Asia (excluding China) and Singapore, however, concerns about slowing growth led to net capital outflows. Although direct investment and banking inflows to Asia have been relatively resilient, equity and bond inflows have been volatile, with equity recording sharp outflows since August 2011.

GROWTH FORECAST Looking ahead, for the region, growth is forecast to average 6¼% in 2011 and 6¾% in 2012. The somewhat weaker growth forecast for Asia mainly reflects the deteriorating outlook for exports to advanced economies. The impact would be smaller for domestic demand-based economies, such as China, India & Indonesia and larger for highly open economies that specialise in income-sensitive, high-tech consumer and investment goods, such as Korea, Singapore and Taiwan Province of China. Adverse regional supply chain disruptions are not expected to play a major role in the future, as Japanese production in key sectors returned to normal levels. The fundamentals for domestic demand in the region remain strong and are expected to cushion the impact of weaker external demand on overall growth in 2012: In Industrial Asia, reconstruction investment will be the main driver of domestic demand growth in Japan, while investment in mining will propel growth in Australia. In East Asia, more spending on social housing is expected to support investment in China. Moreover, accommodative

financial conditions and high capacity utilisation should boost private investment in Korea, while strong employment is expected to sustain private consumption in Hong Kong SAR. In more advanced ASEAN economies, in addition to favourable labour market conditions and high capacity utilisation, greater public investment projects will provide an additional boost to domestic demand in Indonesia, Malaysia, the Philippines and Singapore. In Thailand, the new government is seeking to stimulate domestic demand through measures to increase disposable income and private investment. In India, robust disposable income growth (including from high agricultural prices) and accommodative financial conditions are expected to support private consumption and investment. Headline inflation is expected to decelerate gradually in 2012. But inflation is expected to remain above the midpoint of the target range in most Asian economies, as commodity prices fall only slightly, domestic demand pressures persist and inflation spillovers from key regional economies remain elevated. The September 2011 World Economic Outlook, (WEO) projects fuel and nonfuel commodity price inflation in 2012 to recede by 3.5% and 4.5%, respectively – a mild deceleration relative to the sharp run up in 2010-11. Moreover, output gaps in many Asian economies will remain positive in 2012. Finally, inflation in China is expected to settle at levels that, while lower than the peak in 2011, are higher than in the recent past – with spillovers to inflation in the rest of Asia. Let’s take a look at the fortunes of major Asian economies in the near-term:

China:

Slower growth, longer-term risks China’s economic growth is decelerating because of the weakening global economy and tightened monetary policy. Overall debt has nearly tripled in the last five years and significant investments in fixed assets may loom heavily over China’s longer term. hina’s economy is decelerating. In September, the purchasing managers’ indices for output and exports were below 50 for a third month in a row, which has not happened since 2009. Still, the indices

barely slipped below 50, indicating that the decline in manufacturing is moderate. Moreover, China’s central bank has stopped tightening policy given the latest global slowdown. Therefore, although China’s economy

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will slow down, deceleration will likely be less-than-dramatic. On the other hand, it is notable that a senior Chinese official recently predicted that growth in 2012 would be below 9%. If this prediction materialises, it would be the

GLOBAL ECONOMIC OUTLOOK

first year since 2001 that growth falls below 9%. These comments reflect a belief that a combination of monetary policy tightening and reduced global growth will cause the Chinese economy to grow more slowly. Interestingly, there is an evidence that the economic slowdown is being experienced principally by small- to medium-sized private businesses and not by the large, state-run enterprises that retain favourable access to credit. After all, imports of oil and iron ore rose significantly in August. The biggest source of recent growth has been fixed asset investment, especially construction. The importation of iron ore, used to make steel, indicates ongoing strength in construction. Meanwhile, a deceleration in exports is the prime cause of the economic slowdown. While the strength of construction is good in the short term, it means that China continues to overbuild.

EXCESSIVE DEBT China’s officials have complained about the rapid expansion of US Government debt. This reflects fear that the massive stock of foreign currency reserves held by China’s Government could lose value. Less attention, however, has been paid to the big increase in overall debt in China itself. Yet, that is likely to change soon, given the fact that overall debt has nearly tripled in the past five years.

HOW DID IT COME TO THIS? When the global economic crisis began in 2008 and China’s exports suddenly dropped, the government implemented a vast stimulus programme to boost domestic demand and offset the drop in exports. Part of this involved extending credit to provincial and local governments to engage in infrastructure development. In the short run, this policy was successful in boosting growth and preventing a general recession. The problem, however, is that many such investments have failed

to generate adequate returns. The Chinese Government estimates that little more than one quarter of local government investment has produced a return adequate to service the debts. Furthermore, local government borrowing is not the entire problem. During the global crisis, the government injected capital into staterun banks so that they could lend to state-run companies. The result was an investment boom. Yet this also involved many investments that are not producing an adequate return. The result was that investment in fixed assets surged, reaching almost 50% of last year’s GDP.

WHAT EXACTLY IS THE RISK? Is China at risk of having a financial crisis? On one hand, there is a danger that a new round of defaults will damage the solvency of China’s staterun banking system. Yet, it is likely that the government would bail out such banks and thereby prevent a larger financial crisis. Moreover, due to capital controls, China’s financial system is not integrated into the global economy. Therefore, a problem in China’s banks would not lead to problems outside China. On the other hand, China does face a risk. Specifically, if the government were compelled to bail out troubled financial institutions, it would probably not support continued lending for the purpose of poorly conceived investments. Consequently, investment would likely fall considerably. Given that investment is now close to 50% of GDP, such a fall could have serious consequences for GDP without an offsetting increase in something else. What could that something else be? Exports are not likely to take up slack. With a rising currency, slower growth overseas, and rising wages at China’s factories, it seems likely that export growth will be slow in the next few years. In this scenario, China will likely look towards a boost in consumer spending to offset a decline

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in investment, but it would have to grow rapidly to make a difference and avoid a significant slowdown, given that consumer spending is now only 35% of GDP.

WHAT COULD GO RIGHT? There are some positive signs concerning the prospect for boosting consumer spending. First, wages have been rising, adding to real, disposable incomes. This reflects a shortage of labour as demographic trends limit the labour force’s growth and as internal migration slows. In addition, provincial and local governments have been increasing their minimum wages. Second, the government intends to have state-run companies pay higher dividends to shareholders. In doing so, this will reduce retained earnings and therefore, the impetus to invest. Third, higher inflation will help reduce some of the real value of the debts in question. On the other hand, high inflation means that real interest rates are largely negative, thereby fuelling continued borrowing. Also, high inflation means that the real value of the currency is rising quickly, thereby hurting export competitiveness. So, a slowdown in exports could become more pronounced.

WHAT HAPPENS NEXT? It is safe to say that China is slowing down. In addition, the excessive debtfinanced investment of recent years will likely lead to challenges somewhere down the road. In that situation, economic growth will decelerate. How much it slows will depend on a variety of factors, including how the government responds to such an event. In any event, an economic slowdown in China will have global ramifications. A Chinese slowdown will remove pressure on global commodity prices and reduce export growth for China’s major trading partners. Domestically, slower growth could remove some of the upward pressure on wages and prices.

GLOBAL ECONOMIC OUTLOOK

Japan:

On the

Bright side… The Japanese economy is one of the few economic bright spots in a world that is experiencing slower growth. Japan is recovering from a natural disaster and additional spending will likely accelerate the Japanese economy next year. However, slower overseas growth, a high-valued yen and slower than expected reconstruction spending, are introducing obstacles to the country’s economic prospects. n a world of slowing economic growth, Japan is the exception. In fact, the country can reasonably expect that growth will soon accelerate — at least for a while. The silver lining of a natural disaster is the extra spending that boosts economic growth, but the positive impact of reconstruction spending has not met expectations. Challenges remain for the Japanese economy. In the second quarter of 2011, the economy contracted at a rate of 2%. This third consecutive quarter of declining GDP was, in part, due to the negative impact of the earthquake and tsunami. While many analysts anticipated a strong boost to economic growth in the second half of 2011, the latest numbers suggest slower growth than expected. The Tankan index of sentiment at large manufacturing companies rose from -9 in the second quarter to +2 in the third quarter. A positive reading means that there are more optimists than pessimists among the surveyed executives. The current reading is still lower than in March, just before the earthquake. Japan is recovering, but the pace is underwhelming. This is likely due to slower overseas growth, a highvalued yen and slower than expected reconstruction spending. The rising value of the yen is taking its toll on the industrial sector. While the automotive sector is recovering from damage to its supply chain, the major players are planning to

shift production capacity offshore in order to avoid the impact of an overvalued currency. The strong yen reflects several factors, including the repatriation of overseas funds for the purpose of reconstruction. It is also due to the perception of Japan as a safe haven for financial assets in a time of global turmoil. Although the return on Japanese assets is very low, global investors do not perceive them to be at risk of outright failure. Still, despite troubles in Japan’s export sector, the country will probably grow faster in 2012 than either Europe or the US. This case would be different sans the earthquake or tsunami; reconstruction spending will make a significant difference. In September, the Japanese Government proposed its third reconstruction budget of 12 trillion yen — roughly $160 billion, which is about twice of what has already been budgeted. This brings the total to about $240 billion. The big debate has been over how to finance this expenditure. The current government has indicated a preference for tax increases so as to not substantially increase the already large debt. As such, it is likely that there will be an increase in the consumption tax. This will have some negative impact on consumer spending. In addition to increasing the consumption tax, the government plans to sell assets such as shares in Japan Tobacco to fund reconstruction. Interestingly, the government’s

deficit was already projected to be 8% of the GDP even before the earthquake. Reconstruction costs, by adding an estimated 4% of GDP, will not have a big impact on overall debt, even if it is financed by borrowing. Meanwhile, despite the government’s plans for fiscal rectitude, Moody’s has again downgraded Japan’s sovereign debt. This action had little impact on the market for Japanese Government bonds, which continue to offer among the lowest rates of return in the world. While Moody’s was evidently concerned about the fact that government debt has reached 200% of GDP, there are other mitigating factors. For example, 95% of that debt is held domestically. In addition, Japan continues to have a very high rate of savings, so financing government deficits is not a problem. Interestingly, Japanese monetary policy has been relatively aggressive this year; the Bank of Japan is engaged in quantitative easing on a surprisingly large scale, but perhaps it has not been large enough. The currency continues to rise, and inflation continues to be very low. One of the purposes of a round of quantitative easing is to boost expectations of inflation. Higher inflation can have the effect of boosting spending, reducing real interest rates and reducing the real value of debts. However, retail sales are declining, business investment fell in the second quarter and inflation remains close to zero. Thus, the real level of debt has

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GLOBAL ECONOMIC OUTLOOK

not improved. Going forward, Japan continues to face several downside risks despite the anticipated boost from reconstruction spending. The global economic

slowdown is the first among these risks as it will have a negative impact on export growth. Domestically, major challenges include a slower than expected revival of electricity generating

capacity, uncertainty about the future of Japan’s nuclear programme, political uncertainty, a continued high rate of savings, and long-term problems related to demographics.

India:

Trudging along, for Now Indian policymakers are trying to curb the rapidly rising inﬂation and simultaneously sustain growth despite a weakening global economy. GDP growth may continue to hover around 7.5% for the current ﬁscal year.

ver the past two years, India has experienced one of the highest inflation rates in major emerging markets. High food inflation and fears of a lack of meaningful fiscal intervention have compelled the central bank to increase interest rates in order to pursue lower prices at the expense of growth. The central bank’s latest tightening in September – the 12th since March 2010 – comes in the wake of fears of a global recession and the possibility of debt defaults in some Eurozone countries. While some critics of the central bank say that the bank has been too slow in reacting to inflation and has not been bold enough with its rate increases, several others lament the rising cost of capital and falling domestic demand. While the debate regarding India’s monetary policy rages on, it is becoming increasingly likely that the Indian Government will not meet its fiscal deficit target for the year. While policymakers tinker with policy tools, the Indian economy is on course to achieve over 7% growth this fiscal year.

INFLATION STAYS HIGH Inflation continues to be the key issue

for Indian policymakers. In a bold move to curb inflation, the central bank raised interest rates by 50 bps in July and by another 25 bps in September. Despite recent rate increases, inflation came in at over 9% in July and hit a 13-month high of 9.8% in August. Food inflation, despite hitting a 20month low of 7.3% in July, settled at 9.1% in September. That food inflation continues to be an issue, despite a good harvest in the 2010-11 season and normal rainfall this year, is a clear indication that structural issues and supply-side bottlenecks that plague the Indian agricultural sector will remain for some time to come. Fuel inflation is beginning to exert upward pressure on headline inflation as well. While the inflationary impact of the rise in fuel prices is worrisome, what is interesting is the fact that the latest price increase was the result of the depreciating rupee against the dollar on imports of crude oil.

THE EXTERNAL SECTOR With policymakers wrestling to control inflation and sustain growth in the context of a weak global

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economy, the rupee hit new lows as global funds chase better prospects for growth. The falling rupee is a serious cause of consternation for importers, oil companies included. At the same time, while one would normally expect a weaker rupee to benefit exporters, a shaky global recovery means exporters may not be able to take advantage of the opportunity for cost arbitrage in the coming months.

CONSUMPTION IS BAD, BUT INDUSTRY IS WORSE Interest rate hikes have finally begun to put the brakes on GDP growth in India. GDP growth for the first three months of 2011 came in at 7.8%, as compared to a growth of 9.4% in the corresponding quarter of 2010. Figures for the quarter that ended July further corroborate the slowdown in growth. GDP grew at 7.7% as compared to 8.8% the previous year. What is surprising about

GLOBAL ECONOMIC OUTLOOK

data from the recent quarter is that investment increased almost 8%. High interest rates, combined with a potential liquidity challenge in the second half of the year, could ensure that investment drops off once again as the year progresses. The Central Government recently announced that it will need to borrow 13% more than what it budgeted for the current fiscal year primarily due to a reduction in funds available through national savings accounts; there has been an exodus of funds from national saving accounts toward accounts in banks as they offer higher interest rates. This mopping up of funds from the market, although unlikely to add to the fiscal deficit, could crowd out investment from the private sector and increase the cost of borrowing for both government as well as private sector borrowers. However, the central bank is likely to be called upon to buy government bonds from the market in order to infuse

liquidity and this could, in turn, add to inflation. Consumer demand has taken a hit, and growth in rate sensitive sectors has been weak in the last two quarters. Still, relatively speaking, domestic consumption is robust and is likely to act as a buffer for the economy in the event of further global economic turbulence. However, it is important to note that policymakers are currently grappling with high inflation. Both the finance minister and the head of the central bank believe that current levels of food inflation are a matter of grave concern, and another hike in interest rates is a possibility. That being said, we could also be very close to the end of the rate increases. Until there is a clear indication that interest rates will stabilise, business confidence is likely to continue to drop. Private investment is expected to slow down in the coming months as well.

A LOOK AHEAD The challenges that face Indian policymakers are, to a large extent, the same as they were a year ago. Inflation shows no signs of abating, and another interest rate hike is a possibility, but the end of the cycle of rate increases is probably very close. Consumer demand is likely to continue to slow down as monetary policy kicks in with some lag. Consequently, GDP growth may slow down further and may hover around 7.5% for the current fiscal year. The fiscal deficit is unlikely to meet the target level of 4.6% of GDP. Since a significant portion of the deficit is funded through funds from the central bank, money supply in the economy will continue to increase and exert upward pressure on inflation. The article is an excerpt from â&#x20AC;&#x2DC;Navigating An Uncertain Global Environmentâ&#x20AC;&#x2122; by IMF & Deloitte Global Economic Outlook, 4th Quarter 2011.

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RANKING METHODOLOGY

TOP 500 TOP 500 Deciphering the

Manufacturing Companies

Uncertain global economic conditions coupled with rising inﬂationary trends are posing a threat to India Inc.’s stupendous growth journey. Withstanding such external as well as internal shocks is our pack of Top 500 Manufacturing Companies who have demonstrated to the world their mettle & might in true sense & spirit. Notably so, ranking these companies while taking all the fundamental aspects into consideration can never be an easy feat. Carefully crafting the most transparent methodology, we trace the inspirational journey of India Inc.’s most sought after manufacturing companies… he listing and analysis of the Top 500 Manufacturing Companies is an ode to those, who, by virtue of their grit & determination, have set enviable benchmarks when it comes to not only the financial performance, but also imbibing societal values and ethics. These are the companies who believe in leading by examples and setting milestones for emerging companies. In order to ensure a just & fair ranking, utmost care was taken while developing a step-by-step approach by taking each and every parameter into consideration. The process is as follows:

SELECTION CRITERIA The classification of manufacturing companies from non-manufacturing companies is based on “The Central Excise Tariff Act 1985”. Also, companies wherein their core business activities do not contribute to excise payments have been excluded. However, the manufacturing companies with operation set up in excise exemption zones like SEZs and EPZs have been considered. Only the entities listed on BSE or NSE have been considered.

CLASSIFICATION & ASSUMPTIONS The ranking is based on the consolidated results of the company. In cases, where the company does not have any subsidiary or latest data for consolidated results are not available,

the standalone results are assumed as consolidated results. The listed subsidiaries of the company qualifying the ranking criteria as detailed above have been excluded. Those companies having negative shareholder’s funds have also been excluded. The ratios as well as other company financials in absolute terms have been sourced through the database – CMIE Prowess. For the purpose of ranking, the annual financials of the companies has been sourced as available in the said database uptill December 4, 2011.

A STEP-WISE APPROACH Step 1: A two-tier weighting methodology was used to rank the companies. Step 2: Based on parameters selected and weightage specified for the same, ranking for each group was arrived at. Step 3: Each group was assigned a specific weightage to arrive at a weighted value for consolidating said values from all four groups. Step 4: The summation of weighted values for all four groups was then sorted in descending order to arrive at the final ranking. The relevance of selection of the parameters with the weightage so appropriated has been detailed below. Size Net sales: Net sales is equivalent to the sales of goods – excise duty paid. Any manufacturing concern is

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primarily recognised by its size and the same can well be reflected through the company’s sales activity. Herein, ‘net sales’ has been preferred over ‘gross sales’ as the latter includes collection of excise duty from customers as applicable to the company’s products. Thus, a higher levy of excise duty for the company’s products would inflate the company’s gross sales. The net sales figure ignores the levy of excise and reflects the value of goods sold with a mark-up on cost. Analytical observation: Higher the sales, higher the ranking. Profit after tax (PAT): PAT is equivalent to PBDITA – Depreciation – Interest – Tax paid. PAT value determines earnings of the company post operating expenses, interest, depreciation, other nonoperating expenses & tax. It reflects the company’s ability to recover its overall expenses (operating as well as non-operating) through a mark-up on the cost of goods manufactured. A company registering high sales, but still recording negative PAT figures is probably not prospering as the expenses are still left unrecovered. Analytical observation: Higher the PAT, higher the ranking. Net Fixed Assets: Net fixed assets is equivalent to gross fixed assets – depreciation. This reflects the book value of assets owned by the company in the form of plants & equipment, land & buildings

RANKING METHODOLOGY

(required for factory & office space), furniture & fixtures and intangible assets such as goodwill, etc. In case of manufacturing companies, the presence of fixed assets is essential to ensure the smooth flow of the production process. This is also a parameter of a company’s size as it broadly captures the capacity available for the production of the company’s products. Analytical observation: Higher the net fixed assets, higher the ranking. Profitability PBDITA margin %: PBDITA margin is equivalent to PBDITA / total income. The PBDITA ratio captures the actual operating efficiency of a business as it ignores the financing cost and the capital charges (depreciation). The same can either be reflected through higher sales realisations (with a greater markup on cost), lower cost of operations or a combined mix of both. As PBDITA is calculated after excluding expenses such as raw material costs, other manufacturing expenses and labour/ employee costs, the strategy of the company with regards to sourcing of raw materials also gets captured. Analytical observation: Higher the PBDITA margin, higher the ranking. Return on capital employed (ROCE) %: ROCE is equivalent to PBIT / average capital employed. This indicator measures the company’s ability to generate returns in relation to the capital employed. ROCE can also be considered as a measure of efficiency as it gauges profitability in relation to the amount of capital employed. ROCE is particularly useful to analyse the performance in capital-intensive sectors as it reflects on whether the capital is employed in productive assets. In cases where the capital is not employed in righteous areas, the company’s revenue will be impacted leading to a decline in ROCE. Another aspect of decline in ROCE could be viewed from the increasing expenses of the company (including both operating and non-

operating expenses barring interest & tax outflow) thereby resulting in lower profits despite better sales performance. Optimally, from the industry’s parlance, the ROCE should be greater than the total cost of borrowings (cost of equity + cost of debt) for the company. Analytical observation: Higher the ROCE, higher the ranking. Equity valuation Return on net worth (RONW) %: RONW is equivalent to PAT / average net worth. This indicator measures the company’s ability to generate returns Basis of size: 0.3 Parameters Net sales PAT Net Fixed Assets

Weightage 0.3 0.5 0.2

Basis of Profitability: 0.3 Parameters PBDITA Margin % ROCE %

Weightage 0.5 0.5

capitalisation of a stock on a particular day. This is in view of the fact that stock markets have been and are always volatile in nature and quoting the indicator as on a particular day may well distort the company’s standing in the market in relation to other equities comprising our list. This indicator stands as a ‘status symbol’ for the listed companies with the company leading the market capitalisation being assumed as a company of good repute with good track record of both the promoters as well as the company in terms of financial performance. A Basis of Equity valuation: 0.3 Parameters RONW % 365 day Average Market Capitalisation

Weightage 0.5 0.5

Basis of Capital structure: 0.1 Parameters Debt/Equity

Weightage 1.0

Table 1: Ranking parameters

in relation to the company’s net worth. Since net worth comprises of equity share capital, the preferred share capital and the various reserves accumulated by the company over the years, it can be referred to the shareholders’ money. This parameter is therefore of utmost significance for the investor community who can gauge the performance of the company based on RONW. Similar to ROCE, this indicator measures the efficiency of the company in generating returns (operating & nonoperating) over and above the total expenses (operating & non-operating). However, such returns are measured as against the shareholders’ capital as opposed to the total capital employed as in case of ROCE. Analytical observation: Higher the RONW, higher the ranking. 365-day average market capitalisation: Market capitalisation is equivalent to share price x number of shares outstanding. The average relates to the 365-day period ending December 16, 2010. In the ranking methodology, the 365-day average market capitalisation has been used as against the market

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higher market capitalisation therefore indicates higher confidence of the investors in the company. Analytical observation: Higher the 365-day average market capitalisation, higher the ranking. Capital structure Debt / equity (times): Debt / equity ratio is equivalent to total debt (long-term & short-term) / equity capital. This indicator holds paramount importance for the manufacturing concerns from the capital structure point of view. This ratio captures the financial leverage of a company and depicts its financial flexibility. Generally, for capital intensive manufacturing companies, this ratio tends to be higher as operations are asset intensive. However, a higher debt equity ratio, translates into a higher interest burden and any adversities in a company’s operations may render it difficult to service such fixed obligations. Hence, for companies which have a volatile revenue model, it may be prudent to have a low financial leverage. Analytical observation: Lower the debt / equity, higher the ranking.

P O T

14 Best In Class Companies

201103 116,072.9 22,825.0 93,047.6 3 45.0 31.1 26 0.1 424 21.2 241,556.7 2

201103 265,715.8 19,330.7 158,099.4 1 15.3 12.4 315 0.6 306 13.8 299,167.5 1

201103 138,280.2 1,702.0 19,615.9 7 3.6 8.5 466 2.4 62 13.3 12,387.0 48

201103 153,601.7 1,741.9 19,612.4 4 3.8 9.7 458 1.6 127 11.3 22,742.3 27

201103 42,674.0 5,017.3 16,609.0 9 22.5 14.5 197 0.6 306 14.1 58,295.3 7

201103 72,075.4 2,879.4 32,405.3 8 10.3 9.2 410 1.0 228 11.4 35,256.4 18

201103 30,242.9 7,322.0 21,248.7 11 34.6 19.0 83 0.3 369 18.7 51,936.0 12

Disclaimer: This ranking is prepared by CARE Research, a division of Credit Analysis & REsearch (CARE). CARE Research has taken utmost care to ensure accuracy and objectivity while developing this ranking based on information available in public domain. The data pertaining to the companies so ranked has been sourced through Prowess database. However, neither the accuracy nor completeness of information contained in this ranking is guaranteed. CARE Research operates independently of ratings division and this ranking does not contain any confidential information obtained by ratings division, which they may have obtained in the regular course of operations. The opinion expressed in this ranking cannot be compared to the rating assigned to the company within this industry by the ratings division. The opinion expressed is also not a

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201103 22,218.6 5,070.0 9,143.8 17 36.9 48.4 18 0.0 439 33.0 145,035.7 3 201103 312,718.6 8,084.5 62,642.7 2 5.9 12.4 419 1.0 214 14.7 78,209.7 5

Key Parameters Basis Of Capital Structure

Year Basis Of Size Net Sales (Rs In Cr) PAT (Rs In Cr) Net Fixed Assets (Rs In Cr) Group Rank Basis Of ProďŹ t PBDITA Margin (%) ROCE (%)

201103 118,659.3 8,851.5 51,865.8 5 16.6 17.6 235 1.6 115 29.6 53,097.1 11

Debt-equity (In Times)

Group Rank Basis Of Equity Valuation RONW (%) Avg 365 Days Market Capitalisation (Rs In Cr)

Group Rank

201103 126,838.3 9,220.8 35,342.2 6 13.8 26.9 164 1.7 104 67.7 56,499.1 9

201103 20,014.0 2,306.6 2,223.5 21 15.6 107.5 8 0.0 449 85.8 67,707.9 6

201103 42,314.3 6,053.4 3,609.7 12 23.0 50.5 31 0.0 439 33.6 94,838.0 4

201103 13,081.4 3,804.0 14,945.3 18 49.8 22.7 34 1.0 219 31.1 57,581.3 8

recommendation to buy, sell or hold an instrument. CARE Research and Infomedia18 are not responsible for any errors or omissions in analysis/inferences/views or for results obtained from the use of information contained in this ranking and especially states that CARE (including all divisions) has no financial liability whatsoever to the user of this product.

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15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 51 52 53 54 55 56 57 58 59 60 61 62 63 64 65 66 67 68 69 70 71 72 73 74 75

BASIS OF SIZE COMPANY NAME

YEAR NET SALES ( ` CR.)

Mahindra & Mahindra Ltd. Hindustan Zinc Ltd. Maruti Suzuki India Ltd. Bajaj Auto Ltd. Sun Pharmaceutical Inds. Ltd. Hero Motocorp Ltd. Essar Oil Ltd. J S W Steel Ltd. Grasim Industries Ltd. Nestle India Ltd. Oil India Ltd. Siemens Ltd. Sesa Goa Ltd. Asian Paints Ltd. Dr. Reddy’S Laboratories Ltd. Cipla Ltd. Ranbaxy Laboratories Ltd. Ambuja Cements Ltd. National Aluminium Co. Ltd. A C C Ltd. Bosch Ltd. Hindustan Copper Ltd. Aditya Birla Nuvo Ltd. Lupin Ltd. Piramal Healthcare Ltd. Crompton Greaves Ltd. Titan Industries Ltd. Dabur India Ltd. United Spirits Ltd. Cadila Healthcare Ltd. A B B Ltd. Glaxosmithkline Pharmaceuticals Ltd. Tata Chemicals Ltd. Bhushan Steel Ltd. Bharat Electronics Ltd. Godrej Consumer Products Ltd. Exide Industries Ltd. Ashok Leyland Ltd. Cummins India Ltd. Videocon Industries Ltd. Rajesh Exports Ltd. Ruchi Soya Inds. Ltd. Colgate-Palmolive (India) Ltd. Castrol India Ltd. United Breweries Ltd. Motherson Sumi Systems Ltd. Shree Renuka Sugars Ltd. Bharat Forge Ltd. United Phosphorus Ltd. Glenmark Pharmaceuticals Ltd. Glaxosmithkline Consumer Healthcare Ltd. Tata Global Beverages Ltd. Marico Ltd. Thermax Ltd. E I D-Parry (India) Ltd. Divi’S Laboratories Ltd. Welspun Corp Ltd. Apollo Tyres Ltd. Jain Irrigation Systems Ltd. Pidilite Industries Ltd. Biocon Ltd.

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201103 201103 201103 201103 201103 201103 201103 201103 201103 201012 201103 201009 201103 201103 201103 201103 201012 201012 201103 201012 201012 201103 201103 201103 201103 201103 201103 201103 201103 201103 201012 201012 201103 201103 201103 201103 201103 201103 201103 201012 201103 201103 201103 201012 201103 201103 201009 201103 201103 201103 201012 201103 201103 201103 201103 201103 201103 201103 201103 201103 201103

34,729.8 9,910.3 37,173.3 16,483.0 5,740.6 19,688.7 48,112.0 23,797.1 21,395.6 6,260.2 10,973.9 9,619.9 10,125.5 7,997.0 7,824.8 6,323.5 8,671.1 7,397.0 6,060.3 8,189.2 6,708.0 1,151.2 17,591.2 5,788.7 2,514.7 10,206.2 6,666.1 4,096.2 7,394.7 4,621.5 6,315.7 2,206.8 10,891.1 6,946.9 5,651.4 3,645.2 5,288.6 11,407.2 4,007.9 11,776.9 20,047.1 18,149.8 2,284.5 2,804.8 3,009.4 8,252.5 7,669.4 5,090.4 5,555.1 2,941.6 2,359.5 5,981.1 3,134.9 5,251.7 9,004.3 1,313.8 8,018.1 8,861.9 4,146.7 2,650.7 2,772.0

PAT ( ` CR.) 3,197.8 4,900.5 2,307.1 3,431.7 1,907.4 1,927.9 653.9 1,659.4 2,895.2 818.7 2,883.7 756.6 4,222.5 881.4 998.9 967.1 1,515.2 1,263.0 1,069.3 1,075.0 858.9 224.1 908.0 879.4 12,883.7 881.0 433.1 569.3 568.3 736.1 63.4 560.6 846.0 1,005.1 874.3 514.7 659.5 631.3 591.0 -275.1 247.7 234.4 402.6 491.0 147.5 460.5 703.8 294.6 582.2 457.8 300.1 292.0 291.5 377.0 560.8 429.3 623.3 440.8 288.1 308.4 375.1

NET FIXED ASSETS ( ` CR.) 14,981.9 7,253.7 5,671.8 1,855.2 3,383.6 4,080.3 11,744.1 26,903.9 16,850.7 1,012.7 4,248.3 962.2 2,415.6 1,309.9 3,385.5 3,094.6 4,544.3 5,632.0 5,493.5 5,306.6 436.0 213.2 10,843.6 2,056.8 1,463.6 1,831.4 288.4 1,498.7 6,371.9 1,832.6 766.1 109.0 9,413.8 12,566.6 503.0 3,077.7 967.6 4,633.8 356.4 8,568.7 71.4 2,235.0 255.1 117.3 1,134.6 1,765.7 7,283.4 2,462.7 2,320.9 2,066.6 202.0 3,758.9 822.6 785.3 2,368.8 589.9 4,266.2 3,519.3 2,017.1 563.9 1,411.1

GROUP RANKING

FINAL RANK

TOP 500 MANUFACTURING COMPANIES - LISTING

13 24 14 23 46 20 10 15 16 60 28 43 27 48 42 51 33 36 45 35 58 287 19 55 22 37 64 94 38 73 78 156 29 31 68 84 74 32 108 30 25 26 165 140 131 50 34 71 62 114 177 52 127 90 44 213 41 40 97 142 124

19.0 64.9 11.3 27.7 40.0 14.3 5.1 20.7 26.0 20.3 43.8 14.4 56.2 17.5 20.5 22.7 31.3 29.4 33.9 24.8 21.9 31.1 14.7 20.7 667.4 13.9 9.7 19.4 19.9 22.6 2.7 39.5 17.7 26.4 22.7 20.5 19.9 10.9 21.3 13.3 2.1 4.0 24.4 27.3 14.3 11.6 17.5 16.6 18.9 25.0 21.0 12.0 14.9 12.0 13.4 40.1 17.3 11.4 18.6 18.6 22.7

20.4 29.3 22.6 96.2 23.2 60.7 9.6 11.5 22.4 158.5 28.4 40.2 47.3 59.1 20.7 17.9 24.1 25.5 15.1 24.2 30.1 28.6 11.3 25.2 213.7 36.5 63.7 42.6 13.8 30.6 4.9 45.6 14.1 8.1 24.5 29.5 42.9 20.1 48.1 4 11.6 10.7 146.4 141.4 14.96 29.3 18.7 15.6 14.4 15.4 48.8 11.9 28.5 45.3 19.9 28.1 18.0 17.2 15.9 31.5 20.2

180 13 240 7 55 29 448 254 112 3 35 78 10 25 159 166 75 76 108 109 92 62 338 128 1 99 32 59 244 85 483 19 264 228 119 103 57 275 41 429 457 451 4 5 297 163 208 257 249 168 39 364 141 71 250 43 219 306 227 102 149

DEBT/ EQUITY (TIMES) 1.2 0.0 0.0 0.1 0.0 0.5 2.2 1.0 0.5 0.0 0.1 0.0 0.1 0.1 0.6 0.1 0.8 0.0 0.0 0.1 0.1 0.0 1.4 0.4 0.1 0.1 0.1 0.8 1.5 0.5 0.0 0.0 1.1 2.9 0.0 1.2 0.0 1.0 0.0 1.63 1.6 2.1 0.0 0.0 0.98 0.8 2.8 1.0 0.7 1.0 0.0 0.3 0.9 0.1 1.5 0.0 1.1 1.0 2.0 0.3 0.2

BASIS OF EQUITY VALUATION

182 449 427 417 427 323 71 208 331 439 417 449 410 403 300 408 269 439 449 410 417 449 154 357 422 399 417 260 134 321 449 449 203 48 449 187 427 223 439 118 123 80 449 449 222 267 49 219 285 208 449 373 253 403 141 439 198 208 88 365 391

AVG. 365-DAY MARKET CAPITALISATION ( ` CR.) 26.2 24.1 17.4 91.2 21.8 60.1 11.7 13.2 21.4 114.0 19.7 25.0 40.7 45.2 25.6 15.4 30.5 18.3 9.9 17.7 23.0 19.0 15.0 30.1 190.3 30.6 49.0 51.2 14.5 38.7 2.6 30.0 16.6 20.5 18.2 38.4 31.3 25.4 35.1 -3.39 18.1 11.3 113.4 93.7 15.62 33.4 36.4 17.5 17.3 20.9 32.2 7.7 37.1 31.5 27.7 25.9 19.5 20.2 21.2 31.5 19.8

RONW (%) 44,450.7 54,687.6 34,750.3 41,928.5 48,499.9 36,545.1 15,334.4 18,970.7 21,123.6 38,385.8 31,411.3 28,623.5 23,463.4 27,721.6 26,827.6 25,315.0 21,358.1 21,084.8 21,549.1 19,557.4 21,037.8 24,697.1 9,643.3 19,894.8 7,437.2 14,674.5 17,676.9 17,859.9 13,582.1 16,728.1 16,487.6 18,619.5 8,942.7 8,601.4 13,291.1 12,894.3 12,331.0 7,144.3 12,957.0 5,754.4 3,409.3 3,426.9 12,448.9 11,727.2 11,533.2 7,738.1 4,606.1 7,441.5 6,927.6 8,449.9 9,626.6 6,020.7 8,623.4 7,167.0 4,021.3 9,355.8 3,280.5 3,247.6 6,699.0 7,847.1 7,060.8

J A N U A R Y 2 0 1 2 | SEARCH - THE INDUSTRIAL SOURCEBOOK

GROUP RANKING

ROCE (% )

BASIS OF CAPITAL STRUCTURE

GROUP RANKING

PBDITA MARGIN (%)

GROUP RANKING

BASIS OF PROFITABILITY

14 10 19 15 13 17 41 35 30 16 20 21 26 22 23 24 29 31 28 34 32 25 52 33 61 42 38 37 43 39 40 36 55 57 44 46 49 64 45 76 110 109 47 50 51 60 89 62 66 58 53 75 56 63 100 54 114 116 67 59 65

76 77 78 79 80 81 82 83 84 85 86 87 88 89 90 91 92 93 94 95 96 97 98 99 100 101 102 103 104 105 106 107 108 109 110 111 112 113 114 115 116 117 118 119 120 121 122 123 124 125 126 127 128 129 130 131 132 133 134 135 136

BASIS OF SIZE COMPANY NAME

YEAR NET SALES ( ` CR.)

Godrej Industries Ltd. Alok Industries Ltd. Aurobindo Pharma Ltd. Shree Cement Ltd. Areva T & D India Ltd. Havells India Ltd. Jindal Saw Ltd. Voltas Ltd. Gitanjali Gems Ltd. Rashtriya Chemicals & Fertilizers Ltd. Sintex Industries Ltd. National Fertilizers Ltd. J S L Stainless Ltd. Chambal Fertilisers & Chemicals Ltd. M R F Ltd. Britannia Industries Ltd. Nirma Ltd. Amtek Auto Ltd. Emami Ltd. Wockhardt Ltd. T V S Motor Co. Ltd. Century Textiles & Inds. Ltd. Gujarat State Fertilizers & Chemicals Ltd. Ballarpur Industries Ltd. Jubilant Life Sciences Ltd. Gillette India Ltd. Procter & Gamble Hygiene & Health Care Ltd. Zuari Industries Ltd. Torrent Pharmaceuticals Ltd. Eicher Motors Ltd. Opto Circuits (India) Ltd. Jaybharat Textiles & Real Estate Ltd. Bombay Rayon Fashions Ltd. Gujarat Mineral Devp. Corpn. Ltd. India Cements Ltd. J B F Industries Ltd. Pipavav Defence & OďŹ&#x20AC;shore Engg. Co. Ltd. Kansai Nerolac Paints Ltd. Atlas Copco (India) Ltd. Bajaj Hindusthan Ltd. Gujarat Fluorochemicals Ltd. United Breweries (Holdings) Ltd. Sundaram-Clayton Ltd. Vardhman Textiles Ltd. S Kumars Nationwide Ltd. Aventis Pharma Ltd. Madras Cements Ltd. D B Corp Ltd. Arvind Ltd. Ipca Laboratories Ltd. Prism Cement Ltd. Kesoram Industries Ltd. 3M India Ltd. Jubilant Foodworks Ltd. K E C International Ltd. S R F Ltd. Max India Ltd. Rei Agro Ltd. Uttam Galva Steels Ltd. Tube Investments Of India Ltd. H T Media Ltd.

SEARCH - THE INDUSTRIAL SOURCEBOOK | J A N U A R Y 2 0 1 2

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4,341.0 6,744.4 4,384.8 3,496.9 4,032.1 5,904.1 4,554.5 5,179.0 9,464.8 5,504.7 4,475.0 5,825.8 7,505.7 5,690.7 7,455.9 4,661.7 4,781.1 3,480.1 1,260.2 3,751.4 6,433.3 4,813.5 4,747.4 4,651.3 3,439.9 1,057.7 1,005.5 7,600.4 2,203.1 4,411.4 1,585.6 629.7 2,690.9 1,416.6 3,539.0 6,460.4 862.9 2,259.0 1,679.7 3,189.1 1,439.2 6,775.5 7,287.9 4,417.7 5,182.7 1,143.9 2,620.0 1,260.0 4,060.7 1,975.3 3,419.0 5,422.2 1,189.9 765.4 4,473.3 3,405.0 932.6 3,723.9 5,018.2 3,270.9 1,776.7

PAT ( ` CR.) 249.6 322.3 563.1 209.7 186.7 303.9 442.0 351.6 356.6 245.4 458.4 138.5 318.8 216.5 357.5 134.2 94.7 270.8 126.6 95.7 130.5 237.5 749.4 265.6 227.2 86.2 150.9 265.2 270.2 306.9 368.6 -6.4 203.4 375.1 55.3 546.1 43.8 206.0 165.7 41.2 270.5 -1,057.8 123.0 543.6 392.5 230.8 211.0 258.7 165.4 262.3 104.8 -210.2 98.8 71.7 205.8 484.2 110.9 282.5 73.8 223.9 185.8

NET FIXED ASSETS ( ` CR.) 1,126.3 7,706.0 1,738.6 1,167.1 854.2 1,330.9 2,498.4 333.8 274.9 1,286.2 2,631.0 599.0 4,525.7 3,040.4 1,330.6 504.8 2,427.0 5,421.0 485.2 2,580.2 1,293.8 2,398.7 1,258.2 5,018.7 3,991.1 124.3 190.4 534.0 635.6 384.4 1,070.2 473.6 3,238.7 1,517.3 4,373.0 2,199.8 1,368.7 278.2 179.6 5,757.0 1,911.7 4,027.6 1,633.3 2,537.0 1,473.4 171.1 3,946.0 667.8 2,527.5 699.2 2,077.1 3,691.7 165.3 180.1 1,082.9 2,035.8 933.3 406.6 1,828.5 719.7 805.0

GROUP RANKING

FINAL RANK

TOP 500 MANUFACTURING COMPANIES - LISTING

104 39 87 119 116 69 77 96 49 82 76 89 47 61 53 109 83 65 267 99 67 81 79 57 88 348 330 59 168 111 183 425 110 172 85 54 261 188 243 72 159 63 56 75 80 292 100 236 95 185 115 66 321 409 103 102 277 122 92 128 199

11.9 29.4 22.8 29.1 10.9 9.6 17.8 10.9 6.9 9.8 19.2 5.2 16.9 13.8 11.6 6.4 11.4 26.1 23.7 13.0 6.3 14.4 26.8 16.9 15.7 14.5 19.8 7.0 19.5 11.0 29.8 10.2 20.5 49.1 13.3 13.0 26.1 15.0 17.2 23.8 34.7 2.8 7.1 25.4 20.4 30.1 25.1 32.8 13.9 20.8 11.4 6.6 14.0 15.9 10.4 27.2 45.6 20.8 8.2 33.2 20.3

13.3 10.7 18.7 8.7 0.0 30.2 11.6 41.5 11.5 14.9 14.6 10.0 8.3 11.1 28.0 24.3 4.4 7.7 20.3 7.8 15.4 9.9 37.2 7.3 6.1 22.9 31.1 15.8 25.7 33.9 24.0 3.3 7.5 35.3 3.7 26.0 5.1 30.8 43.2 5.4 16.0 -0.8 14.7 18.2 16.4 33.9 10.2 37.8 11.1 25.0 10.9 1.8 30.1 56.1 21.4 32.2 7.9 13.0 9.2 15.3 18.4

347 171 156 189 470 174 296 90 418 356 241 445 346 355 177 278 437 243 138 395 386 359 52 362 382 195 96 373 133 135 81 460 312 20 430 182 272 129 60 298 97 488 383 140 198 53 218 37 353 130 378 481 136 36 265 63 84 242 428 111 183

DEBT/ EQUITY (TIMES) 0.9 4.3 1.0 1.0 0.9 1.7 0.6 0.1 1.2 0.3 1.2 0.4 4.0 1.6 0.6 2.0 0.4 0.8 0.3 23.2 1.5 1.6 0.1 1.4 1.8 0.0 0.0 1.0 0.6 0.1 0.7 2.4 1.2 0.1 0.8 1.3 1.2 0.1 0.0 2.2 0.4 1.6 2.7 1.3 1.3 0.0 1.6 0.3 1.6 0.5 1.1 2.9 0.0 0.1 1.5 0.6 0.8 1.7 2.4 8.5 0.2

BASIS OF EQUITY VALUATION

239 25 214 228 245 107 309 406 179 375 190 353 27 115 309 86 344 256 364 3 135 132 399 151 95 449 449 212 305 410 287 57 187 410 267 174 187 408 431 74 342 129 52 165 170 449 115 380 122 323 201 47 435 424 139 289 260 109 61 8 383

AVG. 365-DAY MARKET CAPITALISATION ( ` CR.) 13.6 11.7 26.4 11.0 0.0 57.7 11.4 28.7 15.2 12.8 21.1 8.5 15.6 14.4 23.5 44.1 3.3 6.9 19.3 95.2 20.4 12.9 30.1 10.9 10.4 14.7 26.6 18.0 29.2 26.7 30.7 -2.7 8.8 24.6 1.6 47.5 2.6 24.4 30.8 1.7 15.1 2.8 22.9 28.1 16.3 24.0 13.0 35.6 12.8 27.4 8.6 -14.8 20.2 46.5 23.7 35.8 7.1 17.8 8.0 24.4 16.4

RONW (%) 6,045.4 1,807.6 5,260.8 6,375.1 6,149.7 4,647.3 4,623.4 5,187.5 2,383.9 4,434.8 4,277.5 4,548.9 1,770.7 3,540.4 2,875.2 5,032.7 3,851.6 3,120.2 6,453.9 4,110.8 2,777.3 3,138.0 3,025.9 2,061.4 3,203.1 6,185.3 6,070.1 1,850.2 4,965.1 3,553.6 4,901.7 6,041.5 3,462.7 4,735.3 2,607.2 1,116.7 5,219.1 4,607.0 4,936.4 1,808.0 4,151.2 1,158.1 588.7 1,524.2 1,608.1 4,682.3 2,291.1 4,333.1 1,930.6 3,808.2 2,418.7 808.8 4,410.1 4,674.6 1,948.3 1,894.7 4,137.3 2,475.9 1,251.3 2,586.5 3,475.0

J A N U A R Y 2 0 1 2 | SEARCH - THE INDUSTRIAL SOURCEBOOK

GROUP RANKING

ROCE (% )

BASIS OF CAPITAL STRUCTURE

GROUP RANKING

PBDITA MARGIN (%)

GROUP RANKING

BASIS OF PROFITABILITY

73 176 77 69 71 87 88 79 148 92 95 91 181 106 126 80 101 121 68 99 128 120 124 163 117 70 72 174 81 105 83 74 108 84 134 238 78 90 82 177 97 233 311 198 192 85 150 94 169 103 146 271 93 86 167 172 98 143 223 136 107

137 138 139 140 141 142 143 144 145 146 147 148 149 150 151 152 153 154 155 156 157 158 159 160 161 162 163 164 165 166 167 168 169 170 171 172 173 174 175 176 177 178 179 180 181 182 183 184 185 186 187 188 189 190 191 192 193 194 195 196 197

BASIS OF SIZE COMPANY NAME

YEAR NET SALES ( ` CR.)

Kalpataru Power Transmission Ltd. Whirlpool Of India Ltd. Shree Ganesh Jewellery House Ltd. Rain Commodities Ltd. Bayer Cropscience Ltd. Berger Paints India Ltd. Blue Star Ltd. Jagran Prakashan Ltd. Uﬂex Ltd. J K Tyre & Inds. Ltd. S K F India Ltd. Usha Martin Ltd. B A S F India Ltd. Pﬁzer Ltd. Sterling Biotech Ltd. B E M L Ltd. Gujarat N R E Coke Ltd. Birla Corporation Ltd. Raymond Ltd. Bombay Burmah Trdg. Corpn. Ltd. Jindal Poly Films Ltd. Mcleod Russel India Ltd. A I A Engineering Ltd. Gokul Refoils & Solvent Ltd. Maharashtra Seamless Ltd. Strides Arcolab Ltd. Bata India Ltd. Fertilisers & Chemicals, Travancore Ltd. Supreme Industries Ltd. Akzo Nobel India Ltd. Polyplex Corporation Ltd. Bajaj Electricals Ltd. H M T Ltd. Gujarat Narmada Valley Fertilizers Co. Ltd. D C M Shriram Consolidated Ltd. Escorts Ltd. Nagarjuna Fertilizers & Chemicals Ltd. Carborundum Universal Ltd. Lakshmi Machine Works Ltd. Kirloskar Oil Engines Ltd. Godfrey Phillips India Ltd. A B G Shipyard Ltd. Sterlite Technologies Ltd. Kwality Dairy (India) Ltd. Balrampur Chini Mills Ltd. Alfa Laval (India) Ltd. Su-Raj Diamonds & Jewellery Ltd. Orchid Chemicals & Pharmaceuticals Ltd. Binani Cement Ltd. Responsive Industries Ltd. Astrazeneca Pharma India Ltd. B O C India Ltd. C Mahendra Exports Ltd. Greaves Cotton Ltd. Triveni Engineering & Inds. Ltd. Chettinad Cement Corpn. Ltd. Hindusthan National Glass & Inds. Ltd. Lloyds Steel Inds. Ltd. Balkrishna Industries Ltd. J K Cement Ltd. T T K Prestige Ltd.

SEARCH - THE INDUSTRIAL SOURCEBOOK | J A N U A R Y 2 0 1 2

201103 201103 201103 201012 201103 201103 201103 201103 201103 201103 201012 201103 201103 201103 201012 201103 201103 201103 201103 201103 201103 201103 201103 201103 201103 201012 201012 201103 201106 201103 201103 201103 201103 201103 201103 201009 201103 201103 201103 201103 201103 201103 201103 201103 201103 201012 201103 201103 201103 201103 201103 201012 201103 201103 201009 201103 201103 201106 201103 201103 201103

4,234.4 2,723.2 5,839.9 3,746.7 2,139.6 2,094.4 2,976.1 1,221.4 3,511.4 5,932.7 2,081.1 3,037.9 3,060.1 932.6 1,616.6 2,619.0 1,811.9 2,132.3 3,061.8 5,144.8 2,868.3 1,270.9 1,161.0 4,836.7 1,779.5 1,722.9 1,275.9 2,495.8 2,454.8 1,212.6 2,433.8 2,739.9 433.3 2,847.1 4,129.9 3,364.3 3,088.6 1,609.6 1,930.1 2,393.0 1,601.7 2,133.8 2,258.6 1,608.0 1,951.3 837.6 5,178.5 1,663.3 1,891.3 1,178.7 474.4 986.9 3,366.1 1,708.9 2,246.8 1,544.9 1,558.8 3,915.5 2,193.0 2,361.4 764.0

PAT ( ` CR.) 211.4 166.2 294.7 242.7 131.5 148.3 158.3 208.0 695.2 62.6 177.0 140.2 117.8 169.8 146.2 147.7 134.7 320.2 42.6 193.8 595.7 249.2 183.6 70.2 341.7 150.8 88.4 -49.4 169.7 176.6 1,336.5 143.8 -492.6 266.5 -14.3 132.3 118.1 183.9 153.3 173.7 165.9 196.9 141.4 45.9 110.1 108.1 111.6 159.5 18.1 98.6 51.3 93.6 157.4 168.4 69.8 75.2 86.9 -139.7 194.6 62.6 83.8

NET FIXED ASSETS ( ` CR.) 749.5 317.2 100.1 3,238.4 350.9 204.2 194.0 472.5 1,752.5 1,855.5 283.4 3,050.7 349.1 84.3 2,844.9 400.9 2,722.8 981.5 1,329.5 1,560.5 1,246.2 1,746.5 282.3 335.2 998.9 2,328.3 157.3 348.5 741.7 141.9 1,374.2 153.2 145.8 1,212.9 2,018.0 1,608.2 1,833.6 633.3 431.5 590.7 323.7 1,023.3 709.7 41.9 1,709.9 96.5 53.4 1,606.5 1,864.7 381.7 27.5 842.6 123.2 277.4 1,233.1 1,373.8 1,148.0 1,148.3 724.9 2,296.8 41.9

GROUP RANKING

FINAL RANK

TOP 500 MANUFACTURING COMPANIES - LISTING

113 157 91 93 202 209 148 257 98 70 204 107 145 353 137 164 135 150 130 86 117 186 291 112 174 143 306 196 153 298 101 167 500 129 105 118 121 217 210 169 241 161 179 282 151 392 106 176 160 300 481 283 139 233 158 203 211 123 175 132 428

11.5 10.5 7.1 17.1 11.2 12.1 9.5 31.0 32.6 5.7 14.4 19.4 6.7 28.7 39.9 11.0 33.3 26.0 9.2 8.9 34.3 30.7 23.6 3.5 28.8 22.9 13.3 5.4 14.7 20.5 63.3 9.7 -57.1 18.3 4.7 8.6 15.2 20.8 17.3 13.9 18.4 24.6 12.0 6.2 18.6 21.3 3.3 25.1 14.3 16.3 18.5 18.6 7.0 16.7 12.0 33.7 16.7 2.7 17.7 13.3 16.4

18.2 63.7 30.5 11.9 28.3 30.8 0.0 0.0 34.8 11.7 34.0 12.7 16.3 23.96 7.9 8.6 9.9 18.1 4.2 16.4 48.5 28.5 25.1 18.2 27.9 11.9 37.1 7.7 32.1 21.8 75.7 37.0 -0.1 13.3 1.2 12.7 7.7 26.2 26.5 23.8 27.6 11.8 14.0 24.6 7.58 41.2 8.6 10.3 6.5 18.7 48.35 9.1 13.8 53.6 9.7 9.2 10.0 -10.0 23.5 8.9 76.6

290 30 192 301 179 148 476 274 45 427 114 261 371 86 115 408 145 137 459 345 22 64 110 384 72 221 98 463 125 153 6 126 500 268 486 392 372 124 139 190 127 205 337 277 336 58 468 217 397 220 47 316 394 38 385 147 326 492 158 380 14

DEBT/ EQUITY (TIMES) 0.5 0.2 0.5 2.3 0.2 0.1 0.9 0.3 0.8 2.8 0.0 1.0 0.1 0 1.5 0.4 1.9 0.5 1.3 1.6 0.3 0.3 0.0 0.9 0.0 1.6 0.2 6.8 0.9 0.0 0.5 0.2 6.0 0.5 1.3 0.3 4.4 0.6 0.0 0.3 0.3 2.0 0.7 4.7 1.56 0.0 1.1 1.6 3.4 0.8 0.05 0.4 1.7 0.0 1.0 1.0 0.6 0.0 0.7 1.2 0.0

BASIS OF EQUITY VALUATION

321 396 316 63 394 403 248 373 273 51 449 214 401 449 136 352 91 338 162 120 365 362 435 253 427 125 391 10 232 449 338 387 14 329 170 380 24 312 449 369 369 81 276 21 129 449 191 118 40 269 424 344 113 431 228 223 293 449 278 185 439

AVG. 365-DAY MARKET CAPITALISATION ( ` CR.) 15.9 60.1 34.5 18.6 21.3 22.0 0.0 0.0 47.7 11.1 22.6 8.2 12.9 15.73 6.5 7.1 9.3 16.7 3.6 22.8 44.6 28.4 18.8 16.7 20.2 14.7 26.9 -29.5 35.4 17.0 117.9 26.5 -36.9 12.2 -1.1 8.9 11.8 27.6 17.7 22.1 22.4 17.0 14.5 66.4 8.54 27.0 12.6 15.0 2.9 26.1 31.65 8.6 30.1 36.7 7.3 8.4 8.7 0.0 25.2 5.7 53.8

RONW (%) 1,945.6 3,033.7 1,124.8 1,149.5 3,353.5 3,374.5 2,802.4 3,667.8 1,264.5 393.1 3,195.6 1,546.9 2,536.2 3,841.8 2,336.3 2,710.8 2,254.8 2,566.3 2,124.4 598.8 1,588.1 2,663.7 3,343.7 1,223.1 2,512.0 2,149.6 3,270.3 2,599.0 2,185.4 3,115.6 708.5 2,211.8 4,234.2 1,566.9 752.2 1,215.7 1,303.6 2,552.2 2,468.8 2,073.9 2,625.2 1,924.1 1,972.6 2,648.5 1,621.2 2,924.9 326.8 1,755.8 1,653.7 2,568.2 3,158.4 2,482.7 1,262.0 2,170.6 1,507.9 1,791.6 1,847.6 622.5 1,456.7 847.2 2,655.1

J A N U A R Y 2 0 1 2 | SEARCH - THE INDUSTRIAL SOURCEBOOK

GROUP RANKING

ROCE (% )

BASIS OF CAPITAL STRUCTURE

GROUP RANKING

PBDITA MARGIN (%)

GROUP RANKING

BASIS OF PROFITABILITY

168 123 237 234 112 111 127 104 219 386 118 197 140 102 149 129 151 138 160 308 193 130 113 229 141 158 115 135 155 122 285 152 96 195 280 231 213 139 144 162 133 170 166 132 191 125 407 182 190 137 119 142 220 156 200 179 175 303 205 266 131

198 199 200 201 202 203 204 205 206 207 208 209 210 211 212 213 214 215 216 217 218 219 220 221 222 223 224 225 226 227 228 229 230 231 232 233 234 235 236 237 238 239 240 241 242 243 244 245 246 247 248 249 250 251 252 253 254 255 256 257 258

BASIS OF SIZE COMPANY NAME

YEAR NET SALES ( ` CR.)

Jai Balaji Inds. Ltd. Hindustan Oil Exploration Co. Ltd. Kirloskar Brothers Ltd. Ceat Ltd. Bombay Dyeing & Mfg. Co. Ltd. Indo Rama Synthetics (India) Ltd. Bilcare Ltd. Honeywell Automation India Ltd. Amara Raja Batteries Ltd. Adhunik Metaliks Ltd. Deepak Fertilisers & Petrochemicals Corpn. Ltd. Sundram Fasteners Ltd. Novartis India Ltd. Jai Corp Ltd. Graphite India Ltd. Orient Paper & Inds. Ltd. Garden Silk Mills Ltd. Abbott India Ltd. Wabco India Ltd. Mukand Ltd. I T I Ltd. Deccan Chronicle Holdings Ltd. Tecpro Systems Ltd. P S L Ltd. Kiri Industries Ltd. Century Plyboards (India) Ltd. Asahi India Glass Ltd. Prakash Industries Ltd. Clariant Chemicals (India) Ltd. Apar Industries Ltd. V I P Industries Ltd. Radico Khaitan Ltd. Tamil Nadu Newsprint & Papers Ltd. Finolex Industries Ltd. Plethico Pharmaceuticals Ltd. Page Industries Ltd. F A G Bearings India Ltd. Gujarat Alkalies & Chemicals Ltd. Electrosteel Castings Ltd. Trident Ltd. Sanwaria Agro Oils Ltd. Sujana Towers Ltd. F D C Ltd. Himadri Chemicals & Inds. Ltd. Wyeth Ltd. Jayaswal Neco Inds. Ltd. Time Technoplast Ltd. Moser Baer India Ltd. Electrotherm (India) Ltd. Jyoti Structures Ltd. Welspun India Ltd. Unichem Laboratories Ltd. Asian Star Co. Ltd. Fresenius Kabi Oncology Ltd. I S M T Ltd. Jyothy Laboratories Ltd. Sujana Metal Products Ltd. Indian Metals & Ferro Alloys Ltd. Surya Roshni Ltd. Isgec Heavy Engg. Ltd. G H C L Ltd.

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2,202.2 373.6 2,643.7 3,617.4 1,991.7 2,776.5 2,287.0 1,352.7 1,762.7 1,800.3 1,629.2 2,280.4 753.1 544.7 1,446.6 2,029.4 3,396.4 974.5 895.5 2,530.5 2,121.0 976.2 1,968.7 2,915.2 3,832.2 1,578.3 1,523.6 1,663.9 995.6 2,977.0 759.7 992.3 1,240.2 1,977.7 1,532.8 508.5 1,042.2 1,426.7 1,904.3 2,540.2 901.7 1,349.1 711.0 697.4 476.7 2,238.5 1,274.5 2,631.3 2,382.3 2,399.7 2,176.0 824.1 1,667.3 526.4 1,725.5 665.4 3,039.6 1,041.3 2,309.8 2,082.9 1,506.2

PAT ( ` CR.) 77.5 81.5 97.8 27.4 21.4 139.4 149.5 105.1 148.1 185.7 187.5 114.1 146.7 127.6 189.1 143.1 87.9 56.3 127.4 24.8 -363.3 162.6 132.5 62.3 -277.7 190.6 15.2 267.1 112.6 96.1 88.7 69.5 149.0 76.2 244.4 58.6 121.5 114.3 162.3 67.1 30.1 61.9 150.9 113.3 124.0 98.1 119.0 -848.6 8.9 99.8 3.0 95.0 37.8 16.0 78.1 65.7 15.9 165.4 67.5 69.5 18.4

NET FIXED ASSETS ( ` CR.) 1,698.9 1,489.9 490.6 1,413.7 897.3 1,322.3 1,408.3 75.3 315.1 2,069.9 1,059.1 749.7 8.0 221.1 503.1 1,195.5 993.4 49.7 180.4 2,431.0 2,547.7 863.9 159.5 1,440.1 723.5 426.2 1,120.0 1,046.2 143.3 178.2 80.2 418.9 2,193.9 792.5 411.0 93.1 141.0 1,468.8 553.2 1,593.3 126.9 332.6 275.3 564.2 25.6 1,098.2 743.8 2,548.1 1,792.4 195.9 1,560.0 377.3 156.2 517.2 1,192.4 239.0 443.8 403.9 926.3 426.0 2,124.0

GROUP RANKING

FINAL RANK

TOP 500 MANUFACTURING COMPANIES - LISTING

147 315 163 120 198 134 146 303 228 144 195 178 411 436 240 171 125 387 362 126 155 265 222 133 136 232 223 187 350 152 420 329 181 197 229 467 339 200 206 138 405 286 380 354 465 162 249 182 141 192 154 359 263 438 194 426 149 302 173 208 180

16.0 68.0 9.2 4.4 12.6 15.0 16.5 11.5 15.0 32.6 24.0 11.5 29.6 35.0 22.8 16.4 8.6 9.9 23.0 13.1 -12.5 35.2 15.7 14.2 -1.3 16.4 17.9 20.9 18.5 7.0 16.2 15.7 29.1 11.3 21.4 20.1 19.5 20.4 19.1 16.0 7.4 13.3 27.1 28.6 38.6 16.1 18.9 -1.9 12.6 11.5 15.1 19.2 4.5 19.1 15.4 14.5 6.5 33.0 8.4 7.9 20.7

9.7 7.5 15.9 9.7 10.5 21.6 15.7 29.4 32.3 14.5 18.0 15.7 33.5 6.1 16.2 18.4 12.8 29.72 57.6 11.7 0.0 18.3 0.0 8.2 -7.0 19.6 9.0 15.2 46.5 40.3 39.9 11.9 10.4 10.7 19.1 47.0 35.4 8.2 9.8 9.2 12.0 12.21 30.4 11.6 53.12 14.0 17.7 -12.2 7.3 26.3 9.0 20.4 6.9 7.5 10.0 15.1 8.23 26.9 11.7 18.9 7.3

339 28 352 455 370 201 256 162 117 120 154 321 56 160 181 222 388 175 24 354 497 82 440 375 493 212 323 209 51 118 73 319 178 381 167 46 77 307 302 348 409 342 69 169 15 285 199 498 405 188 361 176 469 329 344 292 450 61 401 324 311

DEBT/ EQUITY (TIMES) 1.9 0.5 0.5 1.2 3.5 1.1 1.2 0.0 0.2 3.5 0.7 1.4 0.0 0.0 0.2 0.6 2.3 0 0.0 4.0 0.0 0.2 1.1 2.4 1.3 0.9 7.0 0.5 0.0 0.4 0.5 0.8 1.6 1.2 0.5 0.9 0.0 0.3 0.9 3.6 2.5 0.93 0.0 1.0 0.01 1.3 0.9 57.5 3.5 0.8 2.6 0.1 1.7 2.6 2.1 0.1 1.57 0.7 2.2 0.5 2.0

BASIS OF EQUITY VALUATION

90 323 333 184 37 198 185 449 396 38 276 154 439 435 387 293 63 449 449 28 449 383 194 58 162 242 9 338 449 349 316 272 120 182 315 235 449 375 232 36 56 235 439 214 439 165 242 1 38 256 54 410 104 55 76 402 127 280 73 333 83

AVG. 365-DAY MARKET CAPITALISATION ( ` CR.) 8.0 7.1 12.0 4.3 7.6 28.2 15.8 21.6 24.9 23.4 19.1 22.1 22.6 4.6 13.5 17.2 16.6 19.5 38.8 5.5 0.0 12.8 0.0 6.7 -28.2 34.3 7.2 19.3 31.5 30.3 51.0 11.3 17.3 12.6 25.0 52.6 23.6 8.0 9.6 13.0 19.3 8.99 26.4 14.3 37.44 12.7 20.0 -165.3 1.3 18.7 0.5 16.1 10.3 6.3 13.6 12.9 2.24 24.6 19.2 15.5 2.0

RONW (%) 1,098.2 2,209.7 1,225.2 341.7 1,517.9 753.0 998.6 2,125.0 1,729.5 961.9 1,453.9 1,227.6 2,398.5 2,458.8 1,711.2 1,074.4 351.2 2,200.7 2,104.7 318.7 897.1 1,699.8 1,419.5 390.6 468.3 1,392.3 1,304.0 976.9 1,880.3 677.6 2,037.6 1,783.7 829.6 991.1 1,234.5 2,155.3 1,747.7 992.6 1,015.8 309.1 1,908.9 1,492.9 1,796.7 1,725.6 2,050.0 577.3 1,262.9 647.8 213.8 701.1 371.9 1,551.4 1,184.0 1,734.5 657.0 1,676.0 209.2 1,248.0 373.1 682.9 395.5

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GROUP RANKING

ROCE (% )

BASIS OF CAPITAL STRUCTURE

GROUP RANKING

PBDITA MARGIN (%)

GROUP RANKING

BASIS OF PROFITABILITY

239 153 228 401 199 278 249 159 185 253 206 226 147 145 187 241 397 154 161 416 260 188 210 387 359 211 214 252 173 293 165 180 267 251 225 157 183 250 247 423 171 201 178 186 164 315 221 300 452 287 392 196 232 184 299 189 456 224 391 292 384

259 260 261 262 263 264 265 266 267 268 269 270 271 272 273 274 275 276 277 278 279 280 281 282 283 284 285 286 287 288 289 290 291 292 293 294 295 296 297 298 299 300 301 302 303 304 305 306 307 308 309 310 311 312 313 314 315 316 317 318 319

BASIS OF SIZE COMPANY NAME

YEAR NET SALES ( ` CR.)

Texmaco Rail & Engg. Ltd. Finolex Cables Ltd. Chemplast Sanmar Ltd. R S W M Ltd. Piramal Glass Ltd. Mangalore Chemicals & Fertilizers Ltd. Panacea Biotec Ltd. Mcnally Bharat Engg. Co. Ltd. H S I L Ltd. V A Tech Wabag Ltd. Force Motors Ltd. Shrenuj & Co. Ltd. Surana Industries Ltd. Karuturi Global Ltd. H E G Ltd. Federal-Mogul Goetze (India) Ltd. Elgi Equipments Ltd. J K Lakshmi Cement Ltd. Essel Propack Ltd. O C L India Ltd. Grindwell Norton Ltd. Supreme Petrochem Ltd. V S T Industries Ltd. P I Industries Ltd. Sujana Universal Inds. Ltd. Navneet Publications (India) Ltd. Kemrock Industries & Exports Ltd. K R B L Ltd. Savita Oil Technologies Ltd. Praj Industries Ltd. Andhra Pradesh Paper Mills Ltd. Bajaj Corp Ltd. Alembic Pharmaceuticals Ltd. Kennametal India Ltd. Phillips Carbon Black Ltd. West Coast Paper Mills Ltd. Dhunseri Petrochem & Tea Ltd. Ingersoll-Rand (India) Ltd. Dishman Pharmaceuticals & Chemicals Ltd. Claris Lifesciences Ltd. K S L & Industries Ltd. Ruchi Infrastructure Ltd. Gujarat Ambuja Exports Ltd. J B Chemicals & Pharmaceuticals Ltd. Ess Dee Aluminium Ltd. Monsanto India Ltd. India Glycols Ltd. J K Paper Ltd. Gulf Oil Corpn. Ltd. Atul Ltd. Visa Steel Ltd. Elecon Engineering Co. Ltd. National Steel & Agro Inds. Ltd. Pradip Overseas Ltd. S E L Manufacturing Co. Ltd. Solar Industries India Ltd. Manaksia Ltd. Rupa & Co. Ltd. Elder Pharmaceuticals Ltd. Surya Pharmaceutical Ltd. Godawari Power & Ispat Ltd.

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939.2 2,033.0 1,874.3 2,244.7 1,243.1 2,520.5 1,157.8 2,256.2 1,037.0 1,233.0 1,527.3 2,480.1 1,213.9 638.7 1,117.9 952.1 938.6 1,319.6 1,408.3 1,455.3 790.6 1,939.6 558.6 791.6 2,904.0 560.8 1,082.2 1,552.2 1,547.4 664.9 786.9 359.2 1,430.8 505.3 1,721.2 1,063.6 1,591.7 488.5 990.8 751.6 1,759.1 2,061.1 1,954.5 886.1 683.0 361.5 1,606.8 1,383.4 1,106.4 1,556.0 1,298.0 1,285.8 2,540.3 2,146.3 1,722.0 679.3 1,438.5 638.5 959.5 1,657.7 1,128.2

PAT ( ` CR.) 121.5 86.8 -42.2 137.7 103.4 77.5 132.6 67.3 87.4 51.8 58.6 54.3 52.9 155.0 128.9 49.1 89.0 59.1 47.7 114.5 82.7 87.7 95.0 65.1 28.4 66.4 76.2 120.3 109.3 57.0 44.9 84.1 102.5 88.6 111.5 90.1 118.7 68.6 80.0 141.4 -4.6 21.6 93.2 139.3 118.0 42.8 25.6 106.0 57.0 89.7 51.4 88.7 32.2 66.4 113.2 83.0 112.7 32.0 63.6 91.5 99.5

NET FIXED ASSETS ( ` CR.) 104.8 403.4 1,399.5 889.2 859.4 378.5 684.7 340.2 779.9 48.4 392.6 272.9 862.2 1,323.9 658.6 370.6 86.2 1,381.0 971.2 998.5 226.7 238.0 152.4 254.1 206.3 118.9 743.0 385.1 197.2 142.3 858.3 21.7 272.0 106.7 603.8 1,528.3 590.5 25.3 1,012.0 530.6 1,376.0 242.5 298.7 258.4 280.2 87.6 1,039.6 895.6 462.9 390.7 771.2 475.1 189.0 82.3 970.0 198.7 612.8 105.3 647.5 432.8 970.9

GROUP RANKING

FINAL RANK

TOP 500 MANUFACTURING COMPANIES - LISTING

365 212 190 170 248 184 262 201 285 336 256 189 258 270 271 349 381 215 237 218 394 225 450 399 166 458 284 245 259 446 323 485 268 463 220 227 231 476 266 338 193 224 221 344 401 487 214 234 314 250 253 276 191 218 205 422 244 457 317 239 251

20.2 8.0 8.8 18.0 24.7 6.3 22.5 8.0 20.9 7.9 9.8 6.7 15.4 36.7 23.4 14.2 15.8 16.9 18.8 23.2 18.6 8.5 28.6 15.7 3.1 22.0 22.4 15.7 12.4 11.6 20.5 29.8 13.8 29.9 13.8 22.9 15.2 21.8 21.7 33.2 14.0 3.4 8.0 22.5 28.4 16.5 11.8 19.6 9.9 12.7 17.1 16.6 5.6 8.5 18.1 21.3 15.9 10.3 18.3 15.1 21.8

68.6 13.1 5.5 21.9 16.6 25.4 13.8 21.3 17.5 16.6 20.7 9.1 0.0 11.0 12.0 18.0 47.8 7.0 9.9 12.8 31.7 34.0 54.3 29.3 6.47 29.2 11.5 15.5 39.4 12.1 9.4 52.4 0 43.3 20.6 8.0 20.3 12.8 8.9 19.4 4.8 7.5 18.8 22.8 21.4 13.2 7.1 18.5 15.6 21.7 10.6 0.0 23.1 18.2 11.6 32.6 12.5 20.1 11.6 16.4 14.5

17 393 454 173 157 266 207 299 186 358 282 438 443 116 216 258 54 363 308 214 101 151 21 134 475 95 238 271 94 366 286 23 456 33 230 276 215 225 281 87 414 472 325 131 104 289 413 187 343 231 314 433 305 328 291 80 309 283 288 270 206

DEBT/ EQUITY (TIMES) 0.2 0.4 6.1 4.2 3.2 0.5 1.3 1.7 0.6 0.1 0.8 3.7 3.3 0.4 1.0 0.2 0.0 1.0 1.0 1.0 0.1 0.6 0.0 1.2 0.55 0.2 1.8 1.4 0.2 0.0 0.8 0.0 1.11 0.0 1.0 2.1 0.6 0.0 1.0 0.4 2.7 1.8 0.5 0.2 0.3 0.0 3.6 0.9 0.6 0.7 4.0 1.6 1.9 2.1 1.8 0.5 0.5 1.1 1.5 2.2 1.5

BASIS OF EQUITY VALUATION

386 355 11 26 43 331 164 104 288 417 273 32 41 342 214 394 435 223 206 227 422 306 449 179 312 390 97 157 391 449 273 449 197 449 223 77 300 449 219 349 52 97 333 383 360 449 35 239 293 280 29 129 89 79 100 319 333 194 145 71 145

AVG. 365-DAY MARKET CAPITALISATION ( ` CR.) 56.6 12.8 -22.1 55.7 40.4 21.0 19.6 23.2 17.6 10.7 19.0 15.6 0.0 14.5 14.8 13.2 31.6 5.9 6.2 13.6 22.1 33.2 37.7 38.8 4.59 21.5 12.2 20.4 30.6 10.5 8.3 41.9 0 29.8 26.6 15.8 18.6 8.6 9.7 19.9 -0.8 13.1 20.1 22.3 19.9 11.8 6.3 20.1 18.2 21.4 15.3 0.0 18.7 20.2 14.9 29.0 11.7 21.1 11.7 22.3 18.0

RONW (%) 1,428.5 694.5 520.0 309.5 954.0 388.6 1,000.8 543.5 1,066.2 1,278.3 941.7 407.5 923.8 938.8 937.2 1,225.4 1,278.8 566.5 686.2 574.0 1,299.0 597.3 1,446.9 1,288.9 80.5 1,469.2 883.6 699.3 782.9 1,385.7 1,034.3 1,566.6 814.0 1,425.2 473.7 506.1 531.3 1,468.1 747.5 1,016.2 219.9 441.4 408.8 1,017.3 1,135.1 1,481.4 360.9 453.5 826.6 548.6 572.3 661.9 76.9 318.1 168.0 1,128.1 467.2 1,221.0 770.6 405.3 489.9

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GROUP RANKING

ROCE (% )

BASIS OF CAPITAL STRUCTURE

GROUP RANKING

PBDITA MARGIN (%)

GROUP RANKING

BASIS OF PROFITABILITY

208 290 338 420 254 388 248 324 242 218 255 378 258 256 257 227 217 318 291 316 215 309 207 216 492 203 262 288 274 212 244 194 269 209 352 346 331 204 282 246 449 364 375 245 235 202 395 361 268 321 317 297 494 413 467 236 356 230 277 379 350

320 321 322 323 324 325 326 327 328 329 330 331 332 333 334 335 336 337 338 339 340 341 342 343 344 345 346 347 348 349 350 351 352 353 354 355 356 357 358 359 360 361 362 363 364 365 366 367 368 369 370 371 372 373 374 375 376 377 378 379 380

BASIS OF SIZE COMPANY NAME

YEAR NET SALES ( ` CR.)

Dhampur Sugar Mills Ltd. Sakthi Sugars Ltd. J V L Agro Inds. Ltd. Diamond Power Infrastructure Ltd. Everest Kanto Cylinder Ltd. Timken India Ltd. Heidelberg Cement India Ltd. K P R Mill Ltd. Sarda Energy & Minerals Ltd. Hatsun Agro Products Ltd. Nectar Lifesciences Ltd. Mirc Electronics Ltd. Goodyear India Ltd. Forbes & Co. Ltd. Sutlej Textiles & Inds. Ltd. Sunﬂag Iron & Steel Co. Ltd. Nahar Spinning Mills Ltd. H B L Power Systems Ltd. Bannari Amman Sugars Ltd. Greenply Industries Ltd. Century Enka Ltd. Aarti Industries Ltd. Kajaria Ceramics Ltd. Ineos A B S (India) Ltd. Merck Ltd. Himatsingka Seide Ltd. Mandhana Industries Ltd. Wheels India Ltd. Pennar Industries Ltd. Bharati Shipyard Ltd. Spentex Industries Ltd. Hanung Toys & Textiles Ltd. Shri Lakshmi Cotsyn Ltd. Nilkamal Ltd. Southern Petrochemical Inds. Corpn. Ltd. Agro Tech Foods Ltd. Titagarh Wagons Ltd. Oricon Enterprises Ltd. Eveready Industries (India) Ltd. K S B Pumps Ltd. Elantas Beck India Ltd. Sona Koyo Steering Systems Ltd. Riddhi Siddhi Gluco Biols Ltd. Nahar Industrial Enterprises Ltd. Lakshmi Energy & Foods Ltd. Ind-Swift Laboratories Ltd. Tinplate Co. Of India Ltd. Ratnamani Metals & Tubes Ltd. Conﬁdence Petroleum India Ltd. Rico Auto Inds. Ltd. Meghmani Organics Ltd. Value Industries Ltd. Advanta India Ltd. Kalyani Steels Ltd. T R F Ltd. Natco Pharma Ltd. Nakoda Ltd. Esab India Ltd. Venky’S (India) Ltd. Banco Products (India) Ltd. Innoventive Industries Ltd.

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1,547.1 1,712.1 2,180.8 1,408.6 781.3 462.5 868.4 1,102.8 875.8 1,355.8 1,074.6 1,939.7 1,302.5 1,461.8 1,613.5 1,544.1 1,392.0 1,227.5 817.5 1,318.4 1,344.4 1,474.2 954.5 745.6 524.8 1,249.7 747.2 1,692.2 1,250.0 809.6 1,637.6 1,133.8 1,539.4 1,317.2 2,093.2 718.7 723.6 836.7 1,073.6 609.1 253.4 1,206.5 999.9 1,243.5 1,163.4 1,039.3 802.7 812.2 1,153.2 1,308.0 1,045.2 1,371.3 734.2 1,238.5 1,108.7 458.6 1,344.5 506.0 852.0 849.7 677.2

PAT ( ` CR.) 9.0 -79.9 31.5 110.4 71.6 51.1 63.3 72.2 49.7 18.8 103.1 29.0 74.9 29.7 114.3 70.5 119.7 20.3 53.1 23.5 79.4 66.8 60.7 70.0 63.2 -15.8 66.8 24.6 75.6 91.3 1.8 119.6 91.7 54.1 -667.7 31.8 72.5 58.9 -14.0 49.4 32.4 49.1 164.5 34.1 140.4 89.5 35.8 83.2 67.3 13.3 29.8 11.6 -29.7 54.7 1.9 51.9 33.3 59.0 73.0 65.6 68.4

NET FIXED ASSETS ( ` CR.) 1,009.5 1,397.9 158.4 263.6 560.5 58.2 330.5 814.4 686.2 348.7 736.3 212.3 138.5 389.0 605.4 345.2 751.3 779.4 714.1 612.3 622.1 412.1 491.5 136.2 49.3 910.4 462.0 412.6 203.3 1,051.2 760.3 444.8 445.5 277.1 990.4 49.6 236.1 444.4 870.8 151.3 32.1 469.6 364.9 643.8 398.6 544.9 464.1 348.6 233.5 585.2 653.9 801.0 694.5 214.1 158.3 270.2 483.0 93.1 151.5 140.8 354.9

GROUP RANKING

FINAL RANK

TOP 500 MANUFACTURING COMPANIES - LISTING

226 207 216 273 352 479 366 274 326 297 278 238 309 272 230 254 242 269 332 275 255 260 331 421 470 264 374 246 312 289 235 295 247 301 293 451 412 360 294 453 498 299 310 279 288 304 372 369 325 281 305 252 379 319 364 462 280 468 395 402 407

10.2 5.0 2.9 13.3 19.0 18.1 14.7 21.8 18.0 6.6 22.3 3.8 10.0 7.6 18.5 10.9 21.1 8.6 18.8 8.6 14.0 13.5 15.4 15.6 19.5 8.3 20.1 7.6 12.1 56.1 9.7 18.9 13.0 10.5 -24.8 7.2 17.4 14.3 5.6 15.4 20.7 12.1 25.9 15.8 19.5 15.5 12.3 20.4 10.4 10.8 15.1 12.3 6.7 9.6 3.1 20.4 6.1 19.5 14.3 13.2 25.6

6.51 1.34 12.2 20.7 7.5 20.4 13.3 9.9 8.5 13.9 14.1 12.5 47.9 10.9 22.1 15.4 13.2 5.8 7.7 9.2 14.0 15.3 0.0 33.9 23.5 3.6 17.3 14.7 35.0 10.6 7.8 15.4 12.7 17.1 -20.9 28.8 19.0 17.1 2.9 19.0 31.7 20.7 43.6 7.6 14.1 10.8 9.1 18.2 33.0 10.0 7.7 6.64 2.5 17.3 6.2 15.6 11.6 49.3 32.8 21.1 32.0

432 485 446 237 333 185 313 267 331 399 202 434 66 415 165 335 233 453 330 423 310 304 444 106 146 467 196 379 121 48 426 232 340 318 499 211 204 269 482 229 89 251 40 368 245 334 389 184 143 396 374 412 479 322 478 213 425 42 122 234 68

DEBT/ EQUITY (TIMES) 1.79 9.02 0.6 0.9 0.5 0.0 0.0 1.3 0.9 3.2 1.1 0.6 0.0 1.3 3.2 0.9 2.0 1.5 0.7 1.8 0.6 1.0 1.3 0.0 0.0 1.4 1.6 1.5 0.8 3.7 16.7 2.0 2.4 0.9 0.0 0.0 0.3 0.3 0.6 0.0 0.0 1.7 0.9 1.8 1.1 1.7 1.4 0.6 0.5 1.5 1.5 1.81 1.2 0.7 2.3 0.6 2.2 0.0 0.4 0.4 1.9

BASIS OF EQUITY VALUATION

97 7 293 247 327 449 449 174 239 44 198 298 449 165 42 235 84 149 278 101 289 206 169 449 449 152 123 139 260 33 4 85 59 253 449 449 375 380 309 431 449 110 242 93 191 110 161 300 327 142 149 95 177 283 66 292 69 449 344 355 91

AVG. 365-DAY MARKET CAPITALISATION ( ` CR.) 1.77 -53.04 15.1 26.4 10.4 14.4 8.6 12.9 7.9 25.4 15.4 11.4 31.3 10.6 57.3 15.9 19.6 3.8 7.5 8.2 13.2 13.9 0.0 23.1 15.5 -3.0 24.5 11.8 38.0 9.7 3.3 26.6 23.8 17.6 0.0 19.4 15.3 13.1 -2.4 13.2 21.5 25.7 62.0 5.6 21.1 21.1 11.4 20.8 33.7 4.3 6.2 2.55 -5.9 18.3 1.3 15.8 18.6 32.9 30.4 19.9 51.8

RONW (%) 305.3 134.6 219.1 558.4 852.4 1,260.2 883.8 535.1 739.4 612.6 539.8 305.8 664.9 513.4 242.5 437.5 313.2 497.4 720.4 461.9 382.1 393.3 663.3 889.1 1,061.5 362.3 752.9 249.4 518.3 420.3 117.5 421.5 206.4 432.0 409.6 899.1 774.5 578.5 320.5 810.1 1,083.9 318.8 348.7 222.3 255.0 317.5 545.9 530.9 386.4 209.9 321.8 78.8 540.4 326.3 471.1 750.3 153.3 776.3 525.9 536.6 541.1

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GROUP RANKING

ROCE (% )

BASIS OF CAPITAL STRUCTURE

GROUP RANKING

PBDITA MARGIN (%)

GROUP RANKING

BASIS OF PROFITABILITY

426 482 448 319 265 222 263 330 283 305 326 424 294 342 438 365 419 347 284 360 390 385 296 261 243 393 279 437 337 374 485 371 457 367 376 259 276 313 412 270 240 410 396 445 434 415 322 332 389 454 409 493 328 406 353 281 473 275 335 329 323

381 382 383 384 385 386 387 388 389 390 391 392 393 394 395 396 397 398 399 400 401 402 403 404 405 406 407 408 409 410 411 412 413 414 415 416 417 418 419 420 421 422 423 424 425 426 427 428 429 430 431 432 433 434 435 436 437 438 439 440 441

BASIS OF SIZE COMPANY NAME

YEAR NET SALES ( ` CR.)

S M L Isuzu Ltd. Jamna Auto Inds. Ltd. Kirloskar Ferrous Inds. Ltd. Tide Water Oil Co. (India) Ltd. Symphony Ltd. Munjal Showa Ltd. Parekh Aluminex Ltd. Sangam (India) Ltd. D C W Ltd. Automotive Axles Ltd. Tata Sponge Iron Ltd. Tilaknagar Industries Ltd. Rohit Ferro-Tech Ltd. Hikal Ltd. Cosmo Films Ltd. Jagatjit Industries Ltd. Vesuvius India Ltd. Falcon Tyres Ltd. Emco Ltd. Andrew Yule & Co. Ltd. Andhra Sugars Ltd. Gabriel India Ltd. Trend Electronics Ltd. Indosolar Ltd. Kirloskar Electric Co. Ltd. Gokaldas Exports Ltd. L T Foods Ltd. K C P Ltd. Bharat Bijlee Ltd. Minda Industries Ltd. Steel Strips Wheels Ltd. Sudarshan Chemical Inds. Ltd. Suashish Diamonds Ltd. Ankur Drugs & Pharma Ltd. Walchandnagar Industries Ltd. Kewal Kiran Clothing Ltd. Simbhaoli Sugars Ltd. Dynamatic Technologies Ltd. I F B Industries Ltd. T V S Srichakra Ltd. Nitin Fire Protection Inds. Ltd. Subros Ltd. Lloyds Metals & Energy Ltd. Siyaram Silk Mills Ltd. Mafatlal Industries Ltd. Paper Products Ltd. Mawana Sugars Ltd. Kei Industries Ltd. Kirloskar Pneumatic Co. Ltd. Balasore Alloys Ltd. Hitachi Home & Life Solutions (India) Ltd. Voltamp Transformers Ltd. Lumax Industries Ltd. Jayant Agro-Organics Ltd. Ramco Industries Ltd. Heritage Foods (India) Ltd. Relaxo Footwears Ltd. Tamilnadu Petroproducts Ltd. Indoco Remedies Ltd. Action Construction Equipment Ltd. A P L Apollo Tubes Ltd.

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201103 201103 201103 201103 201106 201103 201103 201103 201103 201009 201103 201103 201103 201103 201103 201103 201012 201109 201103 201103 201103 201103 201012 201103 201103 201103 201103 201103 201103 201103 201103 201103 201103 201103 201009 201103 201009 201103 201103 201103 201103 201103 201103 201103 201106 201012 201103 201103 201103 201103 201103 201103 201103 201103 201103 201103 201103 201103 201103 201103 201103

890.3 903.5 1,088.1 751.8 291.3 1,289.3 902.4 1,167.5 1,057.4 669.7 675.1 474.3 1,164.4 502.3 1,135.4 979.9 442.5 980.5 1,061.8 253.8 822.8 969.9 1,517.4 581.2 1,088.0 1,140.0 1,267.1 659.1 703.4 947.4 656.2 704.7 1,063.7 824.6 673.8 234.9 1,267.4 359.1 777.5 1,090.9 438.2 1,091.5 690.0 855.5 631.0 725.7 1,140.4 1,159.8 491.2 639.8 759.5 526.1 865.3 1,259.3 664.1 1,080.8 689.4 1,082.7 486.0 694.9 904.4

PAT ( ` CR.) 36.6 37.2 49.5 64.2 51.2 34.0 67.3 56.6 28.9 44.1 101.3 39.6 44.0 27.4 31.0 25.2 48.9 17.9 -54.8 41.6 55.9 45.3 15.2 -57.4 7.3 -90.1 25.2 95.9 73.5 35.5 29.8 55.8 69.4 -68.8 22.3 46.2 -74.8 14.8 50.3 39.1 58.0 28.7 18.6 57.7 354.9 48.1 -41.8 10.6 43.9 26.9 29.3 51.8 18.0 24.9 60.7 1.0 26.8 19.5 51.1 39.9 43.1

NET FIXED ASSETS ( ` CR.) 127.5 157.8 288.8 72.0 70.4 254.5 461.5 538.6 606.9 132.8 188.7 396.6 323.2 635.3 421.7 344.8 92.0 428.5 292.3 173.7 553.1 206.9 172.6 594.9 332.8 252.0 269.8 466.1 71.2 250.4 496.4 133.0 66.5 1,219.9 281.5 40.6 569.4 261.2 124.2 154.6 121.6 267.9 334.4 230.7 45.6 175.3 644.8 301.7 84.8 1,058.4 131.0 55.9 265.0 105.8 239.5 221.7 268.4 346.8 212.6 159.5 181.7

GROUP RANKING

FINAL RANK

TOP 500 MANUFACTURING COMPANIES - LISTING

406 397 335 435 494 311 340 296 313 447 419 452 322 418 320 357 480 343 375 492 347 368 290 442 341 376 318 384 443 371 404 441 363 307 437 497 308 482 423 355 477 342 424 386 356 430 316 333 474 328 439 471 396 334 429 361 433 337 464 444 388

7.8 11.1 9.6 14.7 27.9 6.4 17.9 17.3 10.4 13.5 25.0 24.6 11.4 22.0 8.6 8.7 19.8 7.9 -0.3 25.0 17.8 10.2 4.7 9.6 5.9 -1.9 9.0 24.4 15.7 10.4 13.0 14.6 11.0 14.2 6.3 32.2 -0.1 17.9 10.2 9.4 18.3 8.4 6.5 13.9 76.7 12.5 7.5 7.0 16.1 16.1 7.6 16.0 6.5 5.1 20.0 3.6 10.3 7.5 14.9 9.2 9.7

21.1 38.5 22.2 43.9 69.7 19.2 14.5 15.0 8.9 28.1 32.4 15.4 12.8 8.6 9.3 15.9 32.1 11.91 -2.4 18.4 13.4 24.4 11 0.5 8.8 -8.1 7.2 19.0 36.4 20.1 10.2 27.8 6.7 4.2 8.6 35.5 -5.6 11.7 38.2 0.0 21.9 12.3 15.9 23.7 143.58 19.5 3.32 11.1 34.2 18.4 17.6 21.8 13.4 16.4 16.4 6.9 17.3 8.1 14.3 25.5 19.7

303 105 263 65 12 341 252 255 411 155 70 172 360 280 422 357 93 406 489 142 273 224 439 474 449 495 435 144 91 279 369 152 424 417 447 44 490 293 113 477 170 398 377 193 2 262 471 421 100 226 349 191 404 387 203 473 317 441 300 223 295

DEBT/ EQUITY (TIMES) 0.4 0.6 0.0 0.0 0.0 0.4 1.5 3.0 0.9 0.4 0.0 1.3 2.0 1.8 1.3 0.9 0.0 5.02 0.8 0.9 0.7 0.8 5.67 1.3 1.3 0.9 4.4 0.9 0.1 1.4 1.6 1.0 1.4 5.0 0.5 0.0 16.7 1.8 0.0 2.3 0.6 1.0 0.3 1.2 0.39 0.1 5.25 1.5 0.1 0.8 0.5 0.0 0.7 2.3 0.6 2.2 1.4 0.3 0.3 0.4 1.1

BASIS OF EQUITY VALUATION

348 293 449 449 449 344 145 46 249 357 449 165 87 93 176 245 449 18 260 249 280 260 16 170 170 249 23 235 410 159 125 212 158 19 333 431 5 101 449 68 289 228 375 179 349 410 17 136 406 260 319 449 285 67 300 75 160 367 369 353 203

AVG. 365-DAY MARKET CAPITALISATION ( ` CR.) 18.2 45.3 14.4 27.8 47.2 17.8 20.0 26.4 7.7 23.3 21.9 17.2 13.0 9.7 10.1 13.4 21.0 17.32 -9.8 27.6 11.8 27.0 16.06 -20.7 3.7 -21.7 10.2 24.7 29.1 28.7 16.3 32.6 10.6 -24.7 9.8 24.8 -94.2 10.0 27.8 0.0 28.3 13.1 17.0 29.6 191.22 17.5 -26.53 4.6 25.4 10.6 18.4 14.7 12.8 23.5 16.0 1.2 21.9 5.1 15.5 22.9 20.3

RONW (%) 541.4 512.7 341.6 605.7 877.4 229.1 333.6 153.1 220.8 620.7 513.3 604.3 211.6 495.1 197.1 319.4 710.4 282.6 362.8 784.4 277.0 333.5 47.2 515.2 232.9 336.4 131.6 341.2 493.5 315.1 396.4 482.6 279.2 96.4 467.1 794.1 101.1 659.2 421.8 239.0 616.6 198.7 422.1 314.1 190.7 419.8 78.9 145.5 594.8 136.2 432.2 577.4 323.6 136.0 401.9 220.6 407.2 147.8 525.1 421.9 283.4

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GROUP RANKING

ROCE (% )

BASIS OF CAPITAL STRUCTURE

GROUP RANKING

PBDITA MARGIN (%)

GROUP RANKING

BASIS OF PROFITABILITY

325 339 400 306 264 443 403 472 446 302 340 307 453 349 460 411 286 429 394 273 431 402 500 343 442 404 480 399 348 417 382 351 430 489 357 272 491 298 369 440 304 459 372 418 455 373 496 476 310 478 366 314 408 477 380 447 377 475 336 370 428

442 443 444 445 446 447 448 449 450 451 452 453 454 455 456 457 458 459 460 461 462 463 464 465 466 467 468 469 470 471 472 473 474 475 476 477 478 479 480 481 482 483 484 485 486 487 488 489 490 491 492 493 494 495 496 497 498 499 500

BASIS OF SIZE COMPANY NAME

YEAR NET SALES ( ` CR.)

Lloyd Electric & Engineering Ltd. Hawkins Cookers Ltd. Cmi F P E Ltd. Jay Bharat Maruti Ltd. Compuage Infocom Ltd. Omax Autos Ltd. Rainbow Papers Ltd. Bhansali Engineering Polymers Ltd. Loyal Textile Mills Ltd. Shasun Pharmaceuticals Ltd. Ester Industries Ltd. Banswara Syntex Ltd. N R B Bearings Ltd. Hyderabad Industries Ltd. Dhanuka Agritech Ltd. Shilpa Medicare Ltd. Nitco Ltd. Parenteral Drugs (India) Ltd. Pricol Ltd. O C L Iron & Steel Ltd. Seshasayee Paper & Boards Ltd. Provogue (India) Ltd. Jay Shree Tea & Inds. Ltd. M S P Steel & Power Ltd. Swaraj Engines Ltd. Usher Agro Ltd. Dalmia Bharat Sugar & Inds. Ltd. Vardhman Polytex Ltd. Gillanders Arbuthnot & Co. Ltd. Murli Industries Ltd. Amrit Banaspati Co. Ltd. Maharaja Shree Umaid Mills Ltd. Denso India Ltd. Oudh Sugar Mills Ltd. Henkel India Ltd. Rasoya Proteins Ltd. Everest Industries Ltd. Hinduja Foundries Ltd. J C T Ltd. L G Balakrishnan & Bros. Ltd. Ind-Swift Ltd. Vimal Oil & Foods Ltd. Aanjaneya Lifecare Ltd. Genus Power Infrastructures Ltd. V S T Tillers Tractors Ltd. Kohinoor Foods Ltd. Mangalam Cement Ltd. Assam Company India Ltd. Kaveri Seed Co. Ltd. D C M Shriram Inds. Ltd. Indian Hume Pipe Co. Ltd. Parabolic Drugs Ltd. Sumeet Industries Ltd. Zodiac Clothing Co. Ltd. Ajanta Pharma Ltd. Kanoria Chemicals & Inds. Ltd. Dharani Sugars & Chemicals Ltd. Samtel Color Ltd. Lanco Industries Ltd.

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201103 201103 201103 201103 201103 201103 201103 201103 201103 201103 201103 201103 201103 201103 201103 201103 201103 201103 201103 201103 201103 201103 201103 201103 201103 201106 201103 201103 201103 201103 201103 201103 201103 201106 201012 201103 201103 201103 201103 201103 201103 201103 201103 201103 201103 201103 201103 201012 201103 201103 201103 201103 201103 201103 201103 201103 201103 201103 201103

1,014.9 332.2 419.0 1,060.3 1,413.2 1,157.2 380.4 463.8 982.7 834.3 670.0 808.4 479.9 730.0 491.0 290.3 714.4 483.9 953.5 223.3 568.1 563.9 517.5 475.8 360.6 560.8 665.9 804.6 747.1 736.3 1,007.4 433.7 929.0 900.0 533.9 416.9 722.4 551.3 726.2 716.1 876.6 1,139.8 320.3 708.3 427.5 1,022.7 491.5 225.4 233.7 904.0 650.2 634.1 820.3 350.2 504.5 491.2 847.8 906.0 726.0

PAT ( ` CR.) 37.6 31.8 47.2 38.3 8.6 21.3 37.1 33.4 31.4 -14.1 129.5 47.3 54.7 50.6 51.1 49.4 24.8 5.0 21.5 11.8 65.0 33.4 49.1 50.2 43.9 35.2 3.8 14.0 54.2 -206.7 22.1 155.1 2.0 -50.2 -51.8 7.1 40.7 7.5 56.1 46.3 43.5 10.4 36.0 61.1 46.2 -9.0 38.2 9.9 42.5 -5.3 28.0 52.0 34.2 33.2 50.7 17.4 3.6 -83.9 41.4

NET FIXED ASSETS ( ` CR.) 300.3 17.4 25.9 244.2 9.0 300.8 292.8 165.5 382.7 248.4 363.2 452.2 184.6 267.1 38.3 146.2 563.4 405.6 243.2 106.6 474.7 66.1 341.2 500.3 23.9 160.4 596.1 481.3 234.2 983.8 53.7 132.2 142.7 636.8 258.8 77.8 214.9 537.9 477.8 191.3 206.7 33.4 70.4 75.7 53.4 91.3 351.1 386.3 104.4 293.5 72.1 162.9 188.8 108.7 214.0 587.3 349.3 604.5 301.7

GROUP RANKING

FINAL RANK

TOP 500 MANUFACTURING COMPANIES - LISTING

351 495 484 346 324 327 472 473 345 417 385 367 466 416 478 490 383 456 377 499 415 469 449 440 491 461 398 378 414 403 393 455 408 358 475 488 427 431 382 432 390 370 493 445 483 400 454 486 496 389 459 448 410 489 460 434 391 373 413

8.8 15.5 18.4 9.3 1.8 7.8 22.8 12.3 13.2 5.0 32.9 16.7 23.2 13.4 16.0 27.2 10.9 10.4 9.7 12.0 20.5 13.5 18.0 22.9 19.1 13.2 12.9 14.8 14.9 -1.4 4.0 48.8 3.1 8.8 -3.3 6.1 10.8 12.9 20.4 12.2 14.3 3.1 22.1 16.0 17.3 7.1 13.6 24.6 25.4 4.6 10.4 18.7 7.3 14.2 19.7 16.6 9.5 1.4 13.1

9.3 84.5 57.4 33.2 16.6 13.5 9.3 32.9 13.4 2.0 55.9 15.6 29.4 22.7 38.4 28.7 5.3 6.4 12.7 3.5 13.4 6.8 11.9 10.5 46.8 0.0 1.7 10.4 21.7 -5.1 43.1 68.9 2.5 3.8 -8.3 7.3 19.4 6.7 20.7 21.2 12.2 16.8 35.6 17.3 49.2 5.9 10.1 4.9 23.8 4.2 14.7 15.5 14.0 17.9 17.9 7.0 10.4 -10.2 14.2

420 11 27 150 416 390 260 132 327 484 16 253 88 210 79 74 436 431 376 442 239 400 287 246 50 462 452 350 200 491 123 9 487 465 496 461 284 407 161 247 332 403 67 248 49 464 365 294 107 480 351 236 391 259 194 367 402 494 320

DEBT/ EQUITY (TIMES) 0.9 0.4 0.0 0.9 4.5 1.5 1.5 0.5 5.7 3.9 0.8 3.6 0.6 0.3 0.4 0.3 1.1 1.1 1.4 0.7 1.4 0.3 1.2 2.3 0.0 1.6 1.5 4.9 1.1 9.8 0.8 0.5 0.3 26.2 1.8 0.6 0.5 3.0 6.0 0.6 2.0 2.8 1.0 0.8 0.0 6.1 0.0 2.1 0.2 1.5 1.1 1.7 2.4 0.2 0.8 1.7 3.9 2.2 1.7

BASIS OF EQUITY VALUATION

232 341 449 249 22 144 145 323 15 30 259 34 312 368 357 375 202 191 152 283 156 360 177 63 449 132 136 20 194 6 269 329 362 2 103 300 316 45 13 298 81 49 208 260 449 12 449 78 396 142 203 114 60 387 256 110 31 69 108

AVG. 365-DAY MARKET CAPITALISATION ( ` CR.) 9.5 74.8 37.6 35.2 31.8 12.5 14.6 34.9 32.3 -14.0 58.3 34.3 28.6 18.4 38.3 30.3 4.7 1.7 12.4 3.7 25.6 4.7 16.0 19.5 31.9 0.0 0.4 12.1 28.9 -83.5 49.5 92.3 1.0 -81.4 0.8 4.3 21.3 4.5 114.1 26.2 15.4 24.3 39.1 18.3 31.9 -5.3 9.9 3.2 25.0 -2.5 14.1 25.4 38.9 16.7 24.5 7.4 3.3 -47.0 21.3

RONW (%) 177.1 689.8 622.2 162.3 74.3 90.6 529.4 525.5 127.7 321.4 212.0 174.7 468.0 275.5 504.5 579.3 184.5 402.9 167.1 666.5 253.6 450.0 347.8 304.8 556.3 397.5 187.7 122.9 213.1 194.0 154.0 320.0 186.9 63.4 430.8 511.4 234.6 243.4 92.5 226.5 127.1 71.1 510.6 254.7 442.0 133.5 298.5 470.4 538.7 112.4 312.5 257.4 152.0 465.5 311.0 205.0 100.5 58.4 151.5

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GROUP RANKING

ROCE (% )

BASIS OF CAPITAL STRUCTURE

GROUP RANKING

PBDITA MARGIN (%)

GROUP RANKING

BASIS OF PROFITABILITY

466 289 301 469 495 490 333 334 481 414 450 465 354 432 345 312 464 381 468 295 436 362 398 425 320 383 461 484 451 463 470 405 462 498 368 344 441 439 487 444 483 497 341 435 363 479 427 355 327 486 421 433 471 358 422 458 488 499 474

Reliance Industries

THE POLE STAR tarting with textiles in the late seventies, Reliance Group pursued a strategy of backward vertical integration – in polyester, fibre intermediates, plastics, petrochemicals, petroleum refining and oil & gas exploration and production – to be fully integrated along the materials and energy value chain. Carrying the legacy forward, in 201011, Reliance Industries Limited (RIL) attained the largest profit growth in its history with record operating and financial results from each of the three core segments of petrochemicals, refining & marketing and oil & gas. The turnover achieved for the year was Rs2,58,651 crore — a growth of 29% over the previous year. The increase in revenue was due to 11% rise in volumes and 18% rise in prices. During the year, exports, including deemed exports, were higher by 33% at Rs1,46,667 crore. According to company officials, this landmark growth was the result of strong global economic recovery, India’s consumer demand for products & services linked to a better quality of life and best in class manufacturing achievements at all its plants. Reliance entered into three partnerships in shale gas in North America, thereby establishing itself as one of the leading foreign investors in this emerging unconventional hydrocarbon opportunity. The company also announced strategic partnership with BP, which will enable the company to exploit the full potential of India’s domestic oil & gas portfolio. Growth through these partnerships is going to be a key part of the company’s strategy. Stepping into the digital space, RIL acquired ownership of pan-India broadband wireless access licence in 2010.

These JVs, over a period, will enhance Reliance’s position in the development of unconventional natural gas & oil resources and develop new competencies in operating new businesses. It processed 66.6 million metric tonne (MMT) of crude — the highest ever at its Jamnagar refinery complex. The company made five oil discoveries in the on-land exploratory block CB–ONN– 2003/1 (CB-10 A&B) in the Cambay basin, awarded under the NELP-V round of exploration bidding.

PERFORMANCE HIGHLIGHTS In line with its aspirations of ongoing

Q2 PERFORMANCE Participating and investing in India’s growth has been the fundamental principle of Reliance Industries Limited (RIL) and this is what has yet again taken RIL to the pole position in Top 500 Manufacturing. With the thrust on new businesses, new technologies & new partnerships, Reliance is traversing contours of new waves of growth. Going forward, value creation through operating excellence and new initiatives will be the key to growth for RIL. growth, Reliance is investing its resources in core businesses across the integrated energy chain. It is also taking an initiative of investing in new technologies and businesses that help meet the changing aspirations of millions of Indian consumers. RIL attained various milestones in the last fiscal year. Some of them are: Production from KG-D6 for FY11 was 7.95 million barrels (MMBL) of crude oil, and 720 billion cubic feet (BCF) of natural gas — a growth of 97.6% and 41.7%, respectively. In FY11, Reliance entered into four joint ventures (JV) in the USA.

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RIL reported a 37% increase in its topline to Rs78,569 crore, while its net profit grew 16% to Rs5,703 crore during the quarter ended Sept 2011. RIL’s gross refining margin (GRM) for the quarter was at US$10.1 per barrel as against US$7.9 per barrel in the corresponding period of the previous year. Operating margins fell 380 bps to 12.5% as the cost of raw materials as a percentage to net sales rose 390 bps to 80.6% and purchases during the quarter rose 10 bps to 0.6%, while staff costs fell 20 bps to 0.9% and other expenses fell 120 bps to 5.5%. The operating profit rose 5% to Rs9,844 crore. For the quarter ended September 2011, the sales of petrochemicals division increased 40% to Rs21,066 crore representing 23% of total revenues of the company. PBIT improved 10% at Rs2,422 crore, which was 34% of total PBIT. The capital employed decreased 15% to Rs31,091 crore representing 13% of total capital employed. Refining contributed 73% of the company’s total revenues in Q2FY12, rose 37% to Rs68,096 crore in the quarter ended September 2011. The PBIT increased 40% to Rs3,075

RIL - ANALYSING THE TOP 14

2001 2002 2003 2004 2005 2006 2007 2008 2009 -02 -03 -04 -05 -06 -07 -08 -09 -10

crore accounting for 44% of the total. The capital employed in this segment decreased 5% to Rs72,223 crore. For the quarter ended September 2011, the sales of the oil and gas division decreased 17% to Rs3,563 crore representing 4% of total revenues of the company. The decline was due to lower production from KG-D6 and Panna Mukta Tapti (PMT) blocks partly offset by higher crude oil price realisation. The PBIT too decreased 10% to Rs1,531 crore, which was 22% of the total. The capital employed decreased 49% to Rs27,339 crore representing 11% of total capital employed. Commenting on the results, Mukesh D Ambani, CMD, Reliance Industries, said, “Our first half financial performance has been consistent. The increase in profits was largely driven by improved performance in the refining and petrochemicals business. All our manufacturing facilities operated at record levels with refineries achieving operating rates of 110%. RIL has a strong balance sheet and sustained earning base to pursue growth opportunities.”

THE UPHILL TASK In the oil & gas business, deepwater exploration and development operations present technological challenges and operating risks. The challenge for RIL is to ensure optimum level of production, safe and reliable operations while maintaining the highest level of health, safety and environment standards. As far as its refining and marketing business is concerned, RIL competes globally with a number of large energy companies some of which also produce

crude oil and are integrated in their refining operations. Global sourcing involves inventory, logistics and pricing risks, which necessitates the need for significant risk mitigation strategies. The merchant 2010 nature of its refining business -11 means that RIL faces extensive competition in international markets for the sale of key transportation fuels. RIL benefits from the quality of its assets, an unprecedented level of operational integration as well as an experienced team that has demonstrated its ability to deliver globally competitive refining margins, cost competitiveness and consistently high operating rates. Going by the market sentiments, IDBI Capital research analysts, in one of the reports, have revised PAT estimates downwards by 14% driven primarily by lower GRM assumption and decline in production volume from KG-D6. The company is facing significant delay in approvals for its capex plan in E&P assets. Further, arbitration process against the government’s decision on curbing cost recovery made in the KGD6 block may aggravate the situation. However, the company has aggressive plans in telecom, natural gas marketing and financial business, which are not factored owing to the gestation period involved. 258,651

200,400

146,328

139,269

118,354

89,124

73,164

56,247

50,096

45,404

Turnover (` crore)

CAUTIOUS OUTLOOK As per Nomura Financial Advisory And Securities India estimates, RIL has to tread the path cautiously owing to arbitration proceedings. The beginning of arbitration further exacerbates the impasse on KGD6 block and also the overall E&P investment climate in India. However, such arbitration proceedings and also the planned move (if true) to amend the

existing Production Sharing Contract, primarily to penalise contractors, would be a negative for further and much needed investments in Indian E&P. In recent years, investor concerns on E&P have significantly increased over regulatory and policy uncertainties. These have included the government’s move to decline tax holiday on gas, government’s interference in pricing and marketing of gas, long delays in approval process of discoveries, work programmes and budgets, etc. The government’s tough stance on the royalty and cess issue while approving Cairn India ownership change has also not gone down well

Turnover `2,58,651 crore ($ 58.0 billion)

Net Proﬁt `20,286 crore ($ 4.5 billion)

Total Assets `2,84,719 crore ($ 63.8 billion)

with investors in our view. Such policy/ regulatory uncertainties, are reflected in significantly reduced interest in new NELP rounds, and also significantly curtailed exploration & development efforts in recent years. Overall, the company is strategically positioned to capitalise on the everincreasing demand for petroleum products in the East African countries. It entered into high-growth aviation fuel segment this year and has a presence at 14 airports in India. The company plans to sharpen its focus on global markets for a significant part of petroleum products produced at the Jamnagar refinery. Information sourced by Prerna Sharma

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Oil & Natural Gas Corporation

MOVING TOWARDS HYDROCARBON ASSETS ndia is fast emerging as an activated economic centre in the world. The fourth largest economy in the world on Purchase Power Parity (PPP) is also emerging as a notable consumption centre, particularly for all forms of energy. Creating suitable energy infrastructure has become the first priority. This offers an immense opportunity to Oil & Natural Gas Corporation (ONGC) to meaningfully integrate in the entire energy value chain. Tracking last year’s performance, the company recorded the highest-ever production (including the production share from its domestic joint ventures and the production of OVL) of 62.05 million tonne of oil & oil equivalent gas (MMTOE). The ultimate reserve accretion of 83.56 MMTOE in domestic operated fields has been the highest in last two decades. The company has also made a significant breakthrough in shale gas exploration. It registered the highest ever Net Profit of `1,89,240 million despite sharing `2,48,924 million as underrecoveries of the Oil Marketing Companies as per the government directives towards subsidising petroleum products i.e., HSD, LPG and SKO.

MILESTONES The company made significant discoveries in the pre-NELP blocks of the East Coast like G-1 & GS-15, G-4 & GS-29, Vashishtha and S-1. Some discoveries in NELP blocks like KG-DWN-98/2 in the KG Basin and MN-DWN-98/3 and MN-OSN2000/2 blocks in the Mahanadi basin are also significant. Most of these are gas discoveries and efforts are on to monetise them. The company has taken up 10 major projects for the development of new & marginal fields and one project for the additional development of D-1 field

Acclaimed as the world leader in exploration & production (E&P), Oil & Natural Gas Corporation (ONGC) has been setting inspirational benchmarks for others. Going forward, the company’s strategic pursuits will be focussing on locating and creating new hydrocarbon assets, prudent reservoir management, sourcing equity oil & gas, exploration of new sources of energy and meaningful integration in the hydrocarbon value chain. with estimated investment of `248.90 billion. The field under development are C-Series, B-22 cluster, B-193 cluster, B-46 cluster, North Tapti gas field, cluster-7, BHE & BH-35, WO-16 cluster, G-1 & GS-15 and SB-14. These fields are expected to be on stream by 2013-14. The company achieved a breakthrough in shale gas exploration in its maiden R&D Pilot venture in Damodar Basin, Durgapur, West Bengal. It is also planning to take up exploration in other potential shale basins like Cambay, Krishna Godavari, Cauvery and Assam-Arakan. During FY11, the company made 24 discoveries in domestic

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fields (operated by ONGC); 15 new prospects and 9 new pool discoveries. Of the 15 new prospect discoveries, 5 are in NELP blocks. Some of the significant discoveries are Vadtal 1 & 3, Karnanagar-1 and Matar-12 in Western Onland, GK-28-2 & GK-28-3 in Kutch Offshore, Aliabet-2 in Gulf of Cambay, C-1-6 & C-23-9 in Western Offshore, Laxminarasinmapuram, Vygreswaram SW and Malleswaram in KG onland, GS-KV-1 & GS-29-6 in KG Offshore, Kuthanallur & North Kovilkallapal in Cauvery onland and Agartala Dome-30 in A&AA basin. Out of these discoveries Matar-12, Aliabet-2 assumes significance because these have been made in the blocks where the other operators failed to make breakthroughs earlier. Of the 15 onland discoveries, 9 discoveries have already been put on production.

Q2 PERFORMANCE For 2QFY2012, ONGC’s topline grew by 24.3% YOY on account of higher realisation. PAT for the quarter grew by 60.4% YOY due to a decline in depreciation, depletion and amortisation (DD&A) expenses. Angel Broking research analysts made the following remarks on the Q2 performance of the company: Higher realisation lifts ONGC’s topline: ONGC’s topline for the quarter grew by 24.3% YOY to `22,616 crore. ONGC’s topline growth was driven by higher net realisation, which grew by 33.4% YOY to US$83.7/bbl. Crude oil sales volume decreased by 1.6% YOY to 5.8mn tonne. The company shared a subsidy burden of `5,713 crore in 2QFY2012 versus `3,019 crore of subsidy shared in 2QFY2011 and `12,046 crore in 1QFY2012. Decline in DD&A expenses spurts PAT growth: Despite a 33.4% increase in crude oil realisation, EBITDA margin expanded only by 174bp YOY to 64% on account of a 36% YOY increase in

ANALYSING THE TOP 14 - ONGC

Oil & Gas Production

Coal Bed Methane (CBM): The company is pursuing CBM exploration in five blocks i.e., Jharia, Bokaro, North Karanpura, Raniganj and South Karanpura. The company has submitted its Final Development Plan (FDP) for approval to the Government of India for Parbatpur area in Jharia Block. The company has also completed exploration activities in the Bokaro and North Karanpura blocks. Based on the exploration leads, the Bokaro block has proved to be having good potential where a Pilot project has been planned. Exploration activities in South Karanpura in Jharkhand are in the final stage of completion. Underground Coal Gasification (UCG): The company has identified Vastan mine block in Gujarat for the UCG Pilot project. Environmental clearance has been obtained from the Ministry of Environment & Forests for pursuing the pilot project. Detailed design for the pilot project has been completed. A request has also been submitted to the Ministry of Coal for awarding of the Mining Lease (ML) for the Vastan mine block. Shale Gas Exploration: The company achieved a breakthrough in shale gas exploration, in its maiden R&D Pilot venture at Durgapur, West Bengal in Damodar Basin. The R&D project involved drilling of four R&D wells in Damodar basin — two wells in Raniganj, West Bengal and two wells in North Karanpura, Jharkhand. After the completion of drilling of all the

FY’08

FY’10 Gas (BCM)

24.42

23.11 24.67

25.37 FY’09

47.51

23.09

47.78

22.48

47.85

22.33 25.95

FY’07

GROWTH AVENUES

48.28

22.44

MTOE 48.49

26.05

royalty expenses to `2,880 crore. EBITDA registered a 27.8% YOY increase to `14,469 crore. DD&A expenses decreased by 25.5% YOY to `3,337 crore due to lower dry well write-offs. Consequently, net profit increased by 60.4% YOY to `8,642 crore, significantly above the estimate of `6,161 crore.

FY’11 Oil (MMT)

four wells, detailed geological and geophysical analysis is being carried out in order to bring out the gasin-place estimates for the Damodar Basin. The company is planning to take up shale gas exploration in other potential shale sequences in basins like Cambay, Krishna Godavari, Cauvery and Assam-Arakan.

ALTERNATE SOURCES OF ENERGY After successful commissioning of a 50 MW wind farm in Gujarat, the company is setting up a 102-MW wind farm in Rajasthan. Further, feasibility of setting up a 10-MW grid-connected Solar Photovoltaic (PV) project is being studied. Additionally, the ONGC Energy Centre (OEC) successfully installed the three state-of-the-art solar thermal engines at the Solar Energy Centre (SEC), Ministry of New and Renewable Energy (MNRE) campus at Gurgaon and their performance is under evaluation. Besides that, OEC is pursuing the following projects: Thermo-Chemical Reactor for Hydrogen generation Bio Conversion of Coal to Methane Exploration and exploitation of Uranium Reserves globally.

installations and approved a `23.5 billion investment in Assam. It registered five oil & gas discoveries on the East Coast and Northeast in May 2007. ONGC aims to produce 25 million metric standard cubic metres per day of gas from the KG Basin by 2012-13 from the estimated available 6 trillion cubic feet of gas reserves. It signed a feedstock supply agreement with Brahmaptura Cracker and Polymer (BCPL) for the Assam gas cracker plant being set up in Lepetkata, Dibrugarh, and a memorandum of understanding with British Pertoleum to jointly undertake oil and gas exploration and production projects in India and abroad. An agreement with Hindustan Petroleum Corporation (HPCL) enables its Tatipaka refinery and MRPL (subsidiary) to supply petroleum products to HPCL. Going forward, the Angel Broking research team expects incremental production from marginal fields to more than offset any decline in

Production 62.05 MMTOE

Ultimate Reserve Accretion 83.56 MMTOE

Net Proﬁt

INVESTING INTO FUTURE

`1,89,240 million production from the ageing fields. ONGC’s subsidiary, OVL is also expected to report a jump in volumes by FY2013 to ~12mn tonne, with incremental productions. Although there is an FPO overhang on the stock in the near term, analysts believe increased volumes and net realisations should offset these concerns.

ONGC has planned a `77.5 billion revamp of onshore pipelines and

Information sourced by Prerna Sharma

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IndianOil Corporation

ON A STRONG TECH & MARKETING FOOTING he year 2010-11 proved to be quite significant for IndianOil as it witnessed the successful commissioning of some of its most ambitious projects such as the expansion of its Panipat refinery, fuel quality upgradation facilities, besides the sustained expansion of its marketing and pipeline network. The company was also able to leverage the formidable supply chain to meet the challenge of making BS-III and IV compliant fuels available at the pump nozzle. The company has a participating interest in 23 blocks, which includes 13 domestic and 10 overseas blocks in Libya, Yemen, Nigeria, Iran, Gabon, Timor-Leste and Venezuela. The year marked a major step in efforts to build E&P operator capabilities as operator activities were initiated in Cambay blocks. In the Mahanadi offshore block, the commerciality of gas discovery made earlier was accepted by Director General of Hydrocarbons. The year saw the commencement of gas supplies to Panipat refinery through the corporation’s first gas pipeline between Dadri and Panipat, which was commissioned in July, 2010. In a bid to scale up its gas infrastructure, a 5 MMTPA LNG Import & Regasification Terminal Project has been planned at Ennore, Tamil Nadu. The turnover of IOC (inclusive of excise duty) for the year 2010-11 was Rs3,28,744 crore as compared to Rs2,71,095 crore in the previous year, registering an increase of 21.3%. The total sales of products (including gas and petrochemicals) for 2010-11 was 72.92 MMT as against 69.92 MMT during 2009-10, thereby registering an increase of 4.3%. It has earned a Profit Before Tax of Rs9,096 crore in 201011 as compared to Rs14,106 crore in 2009-10, thereby registering a decrease of 35.5%. The corporation has earned

Gaining one of the top slots among Top 500 Manufacturing Companies, IndianOil Corporation (IOC) has put its strong thrust on technology to drive growth. Coupled with the stupendous operational performance and supply chain stronghold, IOC has been able to keep pace with the changing market trends and deliver to customers’ expectations. a Profit After Tax of Rs7,445 crore during the current financial year as compared to Rs10,221 crore in 200910, thus registering a decrease of 27.2%. Let’s take a look at the operational performance achieved by the company in 2010-11… Refineries IndianOil’s refineries achieved the highest ever crude throughput of 52.96 million tonne during the year, surpassing the previous best of 51.37 million tonne achieved in 2008-09. With an overall capacity utilisation of 102% for the year, the corporation has been consistently maintaining a capacity utilisation of over 100%.

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This has come in the wake of planned revamp shutdowns for implementation of quality upgradation project in all the refineries. The optimal operation of secondary units at all refineries, as well as minimising downtime, has enabled refineries in achieving the highest combined distillate yield of 75.4 wt%. Pipelines IndianOil’s pipelines – the largest of its kind in Asia – registered an excellent performance during the year, recording a quantum leap in its operations with the highest ever throughput of 68.52 million tonne of crude oil and petroleum products as against 65.00 million tonne in the previous year. With the commissioning of new pipelines, the total network of product, crude and gas pipelines increased to 10,899 km during the year. Marketing During the year, IndianOil sold over 64.1 million tonne of petroleum products, which is an increase of 2.2 million tonne over the previous year, registering a 4% growth. IndianOil completed the switchover to BS-III & IV compliant transportation fuels across the country. It commissioned 900 new retail outlets, including 575 Kisan Seva Kendra (KSK) outlets during the year, taking the total tally to 19,463 retail outlets. It achieved 4.2% growth (17 TMT) of finished lubes during 2010-11 with a growth of 6.9% in retail lube and 2.8% in institutional lube business over the previous year. Assam Oil Division/IBP The Digboi Refinery of Assam Oil Division (AOD) plays a vital role in ensuring the supply of petroleum products in east Assam. The refinery processed 0.65 million tonne of crude oil during the year and sold about 1.2 million tonne of products through its extensive network retaining its position as a market leader in the region. The IBP Division, which comprises of explosives and cryogenic businesses,

ANALYSING THE TOP 14 - IOC

earned a revenue of Rs182.72 crore during the year, thereby registering a growth of 13% over the previous year. Research & Development IndianOil developed 132 new product formulations during the year of which more than 85% were commercialised. During the year, 46 original equipment manufacturers (OEMs) approvals and defence certifications were obtained. Dual mode de-asphalting technology was developed to enhance a Refinery Distillate Yield using LPG as a solvent. A multi-feed fluidised bed gasification pilot plant was commissioned to support research in the area of gas to liquid conversion. During the year, 12 patents were filed in India of which two have been granted. In addition, two Patents in the US, one in France and one in Russia were granted. IndianOil’s Bioremediation Technology – Oilivorous S – was utilised for treating oil spills at marine locations caused by collision of ships off Mumbai coast. Projects The company has been able to complete projects including: Capacity augmentation of Panipat Refinery to 15 MMTPA Residue upgradation & MS/HSD quality improvement project at Gujarat Refinery MSQ Improvement Projects at Guwahati, Barauni and Digboi Refineries Flare gas recovery facilities at Panipat and Gujarat refineries Mathura-Bharatpur spur pipeline Branch pipeline to Hazira from Koyali-Dahej Pipeline Automation of various product storage terminals Automation of 300 retail outlets. Upcoming Projects Distillate yield Improvement project at Haldia Refinery INDMAX project at Bongaigaon Refinery Mundra-Viramgam Crude Oil Pipeline Augmentation of Paradip-

Haldia-Barauni Pipeline LPG Pipeline from Kandla to Panipat Augmentation of Salaya-Mathura Pipeline.

Turnover `3,28,744 crore

Total Sales Of Products

Q2 PERFORMANCE Emkay Global Financial Services research informs that revenue for the quarter was at Rs891 bn, growth of 15.3% YOY, mainly on account of higher volumes plus better realisation. EBIDTA loss during the quarter was at Rs53.2bn, as against an EBIDTA profit of Rs68.9bn, YOY. Interest cost increased significantly by 192% to Rs14.8.bn. During the quarter, the company reported a net loss of Rs74.8bn, against net profit of Rs52.9bn YOY, mainly attributable to higher under recovery lead by higher crude oil prices, forex loss of Rs23.1bn and increase in interest outgo. Direct market sales grew by 4.6% to 17.7 mmt, while crude throughput increased by 7.5% to 13mmt YOY. Capacity utilisation for the quarter improved from 83.2% to 95.6% YOY. The company received upstream discount of Rs39.2bn, in respect of crude oil/LPG/SKO purchased from them has been accounted during the quarter. However, company has not received budgetary support from the Government of India for the under recovery on cooking fuel and auto fuel during the quarter.

Turnover Inclusive of Excise Duty (`in crore)

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328,744

271,095

285,398

1 0-1 201

9-10

200

8-0

9 (Year ending March)

72.92 MMT

Proﬁt Before Tax `9,096 crore

Proﬁt After Tax `7,445 crore

EXPLORING ENERGY ALTERNATIVES With the success of its first wind power project of 21 MW in Gujarat, IOC is considering further investments in wind power projects. During the year, the corporation won a bid for setting up a 5 MW solar photovoltaic power plant in Rajasthan under the Jawaharlal Nehru National Solar Mission. Talking about the future plans, RS Butola, Chairman, IOCL, during the annual general meeting, informed, “Currently, we propose to invest over Rs10,000 crore annually for the next few years on projects. Right now, the focus is to develop expertise in new areas. Nuclear power is one such area and we would also like to expand our presence in the gas sector too. Our LNG plans at Ennore are underway, while in petrochemicals we are trying to get into high value specialty and niche chemicals to add to our profitability.” Going forward, the improved gas supply in the country and the limited gas infrastructure presents a considerable investment opportunity in gas transportation infrastructure. The construction of pipeline networks, both cross country and for city gas distribution, will provide an opportunity to the corporation to serve value-added propositions. Information sourced by Prerna Sharma

ITC

BUILDING ON GREEN GDP & INCLUSIVE GROWTH TC completed 100 years in August 2010. In this exciting journey, the company has become the leading FMCG marketer in India, the second largest hotel chain, the clear market leader in the Indian paperboard and packaging industry and the country’s foremost agribusiness player. ITC’s diversified status originates from its corporate strategy aimed at creating multiple drivers of growth anchored on its time-tested core competencies i.e., its distribution reach, brand-building capabilities, effective supply chain management and service skills in hoteliering. ITC’s agribusiness is one of the country’s biggest FOREX earners with exports of over US$2 billion. The company’s e-Choupal initiative has also proved to be a successful exercise evolved around empowering the farmer. This transformational strategy, which has already become the subject matter of a case study at Harvard Business School, is expected to progressively create huge rural distribution infrastructure for ITC. The gross turnover for the year grew by 16.5% to `30,604.39 crore. The net turnover at `21,167.58 crore grew by 16.6% primarily driven by a 23.1% growth in the non-cigarette FMCG businesses, 22.9% growth in agribusiness and 17.6% growth in the hotels segment. Pre-tax profits increased by 20.8% to `7,268.16 crore, while post-tax profits at `4,987.61 crore registered a growth of 22.8%.

Q2FY12 PERFORMANCE

HIGHLIGHTS For the ninth year in a row, ITC has sustained its ‘water positive’ status, creating freshwater potential that is twice its consumption For the sixth year in succession, ITC is ‘carbon positive’ sequestering twice its emissions

Building on the notion that development in its truest sense can only take place when economic growth fosters social equity, ITC has been setting inspirational benchmarks for many. Sustaining its position in the Top 500 Manufacturing – Listing & Analysis, the company further plans to build on its two pillars — Green GDP and Inclusive Growth. It has also been ‘solid waste recycling positive’ for 4 years now All the luxury hotels of ITC have been accorded the LEED Platinum rating under the aegis of the US Green Building Council. This achievement makes ITC Hotels the ‘greenest luxury hotel chain’ in the world and places the company at the forefront of global environmental stewardship ITC’s e-Choupal initiative has pioneered rural transformation and benefitted over four million farmers in over 40,000 villages Over 35% of energy consumed in ITC is now from renewable sources and carbon neutral fuels.

During the quarter, ITC declared a topline growth of 17.5% YOY to `5,974 crore (`5,0834 crore), in line with the estimates. The cigarette division registered a 21.5% YOY growth in gross revenue (16.4% YOY growth in net revenue) on the back of higher volume growth as well as price hikes taken in cigarettes. Among other segments, at the net level, agribusiness, paperboards and packaging and hotels posted a growth of 14.8% YOY, 9.4% YOY and 1.1% YOY, respectively, while the non-cigarette FMCG business grew by robust ~27% YOY. Earnings for the quarter grew by a robust 21.5% YOY to `1,514 crore (`1,247 crore), marginally above our estimates. The company has been successful in reducing its losses in the non-cigarette FMCG business — loss during 2QFY2012 stood at ~`56 crore (`67 crore). Angel Broking post 2QFY2012 valuations maintain the revenue and earnings estimates. It expects ITC to report a topline of `24,706 crore in FY2012E and `29,294 crore in FY2013E, registering a CAGR of ~17% over FY2011-13E. The growth would be driven by the company’s diversified business model and ability to invest in growing businesses. In terms of earnings, it expects the company to report a 17.4% CAGR over the same period, backed by good performance by all businesses. Cigarette ITC’s cigarette division registered a 21.5% YOY growth in gross revenue (16.4% YOY growth in net revenue) on the back of higher volume growth as well as price hikes taken in cigarettes (took a price hike of ~10% in 2QFY2012 in its Navy Cut and Classic brands). On the margin front, the cigarette division’s EBIT margin registered a 74bp contraction on a gross level (107bp expansion on

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ANALYSING THE TOP 14 - ITC

Gross Turnover `30,604.39 crore

PAT `4,987.61 crore

driving modest 9% YOY growth in EBIT. The hotels business is well on track to post a 21% CAGR in revenue during FY201113E, aided by low base and uptick in the economic activity. Moreover, the margin of the business is likely to register significant improvement as ARR recovers. Paperboard and packaging The paperboard and packaging business registered a strong revenue growth of 9.4% YOY (10% on a net level) to `1,055 crore (`960 crore). However, the EBIT margin of the

segment registered an Net turnover at `21,167.58 crore grew by impressive expansion 16.6% primarily driven by a 23.1% growth in the of 185bp YOY to non-cigarette FMCG businesses, 22.9% growth 27.5%, driven by a in agribusiness and 17.6% growth in the hotels combination of better segment. product mix and higher realisation. business over the longer term. The Agribusiness analysts at Sharekhan expect ITC’s ITC’s agribusiness registered a 14.8% bottom line to grow at a CAGR of YOY growth in revenue to `1,435 about 21.2% over FY2011-13. crore (`1,205 crore). The business Angel Broking analysts expect segment reported a flat EBIT margin ITC to report a topline of `24,706 of 16.6%, aiding 18% YOY growth in crore in FY2012E and `29,294 crore EBIT. in FY2013E, registering a CAGR of THE CO-CREATION OF SOCIETAL VALUE ~17% over FY2011-13E. The growth As per Sharekhan estimates, ITC’s would be driven by the company’s cigarette business, which contributes diversified business model and ability around 60%, continues to be a cash to invest in growing businesses. In cow for the company. The company terms of earnings, the company is endeavours to make a mark in the expected to report a 17.4% CAGR Indian FMCG market and with over the same period, backed by good successful brands such as Bingo, performance by all businesses. Sunfeast and Aashirwaad, A strong rural connect, which has ITC is already in the earned the trust of millions of farmers, reckoning among the best a spirit of innovation and a focus on in the industry. With its game changing R&D, sharpen ITC’s new portfolio of personal care competitive strengths as it moves products gaining market share, into the future. In addition, unique its FMCG business promises to strengths in trade marketing and compete with the likes of Hindustan distribution, world-class manufacturing, Unilever and Procter & Gamble. superior service delivery, together with After a sharp increase of 16% a rich experience in branding and deep in Union Budget FY2010-11, the consumer insights add enduring vitality government has spared cigarettes from to the company. an excise duty hike in the FY2012 YC Deveshwar, Chairman, ITC, budget. Also, key states including has put it perfectly, “It is my belief Kerala, Karnataka, Andhra Pradesh that innovative energies of business and Maharashtra have kept VAT on can also be much better harnessed to cigarettes unchanged in their respective deliver meaningful solutions in costate budgets. ITC’s cigarette sales creating societal value. Incentivising volumes are expected to grow at mid outcomes, therefore, is the key to drive single digits in FY2012. ITC’s other business innovation and managerial businesses, such as hotel, agri, noncapacity for societal value creation. It cigarette FMCG business and paper, is my strong belief that, going forward, paperboard & packaging, are showing the company’s relentless endeavour to a strong up-move and will provide create new benchmarks in sustainable a cushion to the overall profit in business practices will lend it a unique FY2012. source of competitive advantage An increase in taxation and the in an increasingly challenging government’s intention to curb the socio-economic environment.” consumption of tobacco products Information sourced by Prerna Sharma remain the key risks to ITC’s cigarette

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FACFACT T

net level), aided by price hikes. The cigarette business is poised for doubledigit growth in terms of revenue and EBIT in FY2012E. Non-cigarette FMCG ITC’s non-cigarette FMCG business registered a steady revenue growth of 27.2% YOY at net level to `1,341 crore (`1,056 crore), driven by an impressive performance from all product categories. Also, losses of the business reduced to `56 crore (`67 crore). Going ahead, it expects revenue traction in the segment to continue and losses to reduce, though breakeven is likely to be achieved only in FY2013. Hotels business ITC’s hotels business at net level registered a flat growth of 1.1% YOY to `211 crore (`209 crore) during the quarter due to a weak global economic scenario and slowdown in the Indian economy. The business segment reported an EBIT margin of 20.6% (expansion of 149bp YOY),

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Tata Motors

CAPITALISING ON PRODUCT INNOVATION

4,096

(In Percentage)

2,771

48,224

2,938

37,447

29,223

26,556

4,355

4,349

(` in Crore)

strong product portfolio, improved reach and penetration in the market and focus on customer-oriented initiatives including finance enablement, ensured a 22.7% growth in CV sales. Some of the key highlights were: The company crossed the 4 million cumulative vehicle sales mark for its CVs. The company continued to focus on customer-centric initiatives, improved the sales of the Prima, and launched product variants to strengthen its product offerings. The company introduced its CNG Hybrid City Bus range and showcased it at the Commonwealth Games in Delhi. The company’s sales of passenger vehicles in the Indian market (inclusive Keeping up with the innovation of Tata, Fiat and JLR brands) were at culture, Tata Motors Limited its highest ever at 3,19,712 vehicles, launched many new variants in the representing a market share of 13% in market not only in India, but also 2010-11. Some of the key highlights overseas. Catering to a whole host were: of customers from entry-level to The company crossed the 2 million commercial vehicles, the company cumulative vehicle sales mark for its has been able to deliver to its PVs. customers’ expectations. Standing In June 2010, the Sanand plant for tall on the ﬁfth position in the Top the production of the Nano was 500 Manufacturing Companies, inaugurated. The company the company is all set to expand its completed delivery on the bookings portfolio with product innovation & of the Nano and opened sales in customer satisfaction. various states in a phased manner. Nano sales increased in the Indian domestic Turnover, EBIDTA And PAT to 70,431 vehicles — market representing a As A Percent Of Turnover a growth of 129% 24.3% market share in Net Income from 30,763 vehicles the Indian industry. Excise Duty EBIDTA Margin in the previous year. It exported 58,089 PAT As A Percent of Turnover The company focussed vehicles from India on increasing the — a growth of 70.3% reach and penetration over the previous 15.1 for the Nano and also year. 12.8 11.7 financing enablement It increased CV 10.3 10.1 for potential customer sales in the Indian 6.9 6.9 segments. The Nano market to an all-time 6.0 bagged the gold prize high of 4,58,828 3.8 3.8 in the Best New vehicles in 2010-11, Product segment representing a market under the share of 61.8%. A 27,715

upported by its strong distinct product offerings in both commercial vehicle (CV) as well as passenger vehicle (PV) ranges, Tata Motors Limited recorded a turnover of `52,136 crore — a growth of 35.9% over the previous year. The lower EBITDA of 9.9% as compared to 11.7%, the previous year has been registered owing to an increase in raw material cost and fixed marketing expenses. The Profit Before Tax and Profit After Tax for 2010-11 was `2,197 crore and `1,812 crore, respectively, as compared to `2,830 crore and `2,240 crore in the previous year. Jaguar Land Rover (JLR) has shown tremendous results in 2010-11, both in terms of volumes and revenue, better product mix, favourable exchange rates and higher margins. The company strives to be at the forefront of innovation and works to launch products aimed at the emerging needs of its customers. It continues to develop and build on its in-house capabilities and works with the right partners to ensure that it has competitive product offerings. As the global markets recovered coupled with a strong focus on product and market initiatives, particularly at JLR, the Tata Motors Group turnover in 2010-11 grew by 33.1% to `1,23,133 crore. Tata Motors Group recorded its highest-ever Consolidated Profit Before Tax of `10,437 crore (`3,523 crore in 2009-10) and the Consolidated Profit for the Year of `9,274 crore (`2,571 crore in 2009-10). The overall Tata Motors Group sales at 10,80,994 vehicles crossed the one-million-mark in 2010-11, higher by 24.2% as compared to the previous year. The global sales of all CVs were at 5,12,731 units, while the global sales of all PVs were at 5,68,263 units. The company recorded a sale of 7,78,540 vehicles in 2010-11 — a growth of 22.8% over the previous year

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ANALYSING THE TOP 14 - TATA MOTORS 22.7%

459

320

Volume Growth 70.3%

FY10

FY11

668 837

transportation category at the 2010 Edison Award, symbolising persistence and excellence personified as also the world’s oldest and coveted international award for ‘Good Design’ in 2010 conferred by the Chicago Athenaeum: Museum of Architecture and Design together with the European Centre for Architecture Art Design and Urban Studies in the category of transportation. The company continues to keenly focus on international markets and expects to launch its new product range in many of these markets. An assembly plant in South Africa is being set up and is expected to start production next year.

Q2 PERFORMANCE Tata Motors Limited reported quarterly numbers, which were a mixed bag as the domestic business dragged, while JLR clocked strong volumes and a good margin performance. The consolidated topline registered ~35,939 crore (up 25.8% YOY) as JLR’s topline grew to ~£2929 million (up 30.3% YOY) and standalone business grew to ~12,954 crore (up 15.2% YOY). The consolidated EBITDA margin stood at 13.4%. As per ICICI Direct research analysts, the domestic CV segment has weathered the rough H1 with beyond expectations volume growth in the MHCV and LCV segments of ~8% & 29% YTD, respectively. The negative remained on the domestic compact car segment and entry level Sedan segment, which has seen strongest buyer sentiment dent with Tata Motors Limited witnessing

~18% YTD decline. On JLR, volumes have gone up 23.3% YOY at 68,000 units with ASPs rising ~5.7% YOY, with favourable geography mix led by China.

23%

260

25.2%

Total

Export

PV Domestic

CV Domestic

(Number in thousands)

374

EXPANDING BOUNDARIES PREVAILING RISKS

The company has to wither the impact of hardening interest rates and other inflationary trends as hardening of consumer interest rates could have an adverse impact on the automotive industry, mainly in terms of interest cost on automotive loans. Inflation could also have a negative impact on growth and consequently, on automobile sales in the domestic market. Notwithstanding is the fuel price hike. The Kirit Parikh Committee recommendations that the retail prices of petrol and diesel to be market determined and that an additional excise duty of `80,000 per car to be levied on diesel cars if implemented, could adversely impact demand. Increase in raw material cost has been putting pressures on the input costs of the company. To counter the threat of growing global competition, the company continues to intensify its drive to improve quality and product offering, while maintaining its low-cost product development/sourcing advantage. New project execution holds the key for the company’s growth going forward. Timely introduction of new products, their acceptance in the marketplace and managing the complexity of operations across various manufacturing locations, would be the key to sustain competitiveness. It also needs to strengthen its supply chain and distribution network. Taking a cue from the recent strike by Maruti Suzuki workforce, labour unrest has been one of the biggest

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issues for the corporate world. Tata Motors Limited needs to maintain a healthy balance between the two i.e., to get the best productivity & quick time to market with the workforce satisfied and empowered.

Going forward, the company would continue to focus on retaining its advantage of market reach and penetration. In order to ensure that, it has plans to introduce new products, variants and fuel-efficient products. These will offer superior value to customers and improve the company’s market position. Aggressively pursuing opportunities in the international markets as a part of its internationalisation drive,

Turnover `1,23,133 crore

Proﬁt Before Tax `10,437 crore

including evaluation of possible overseas manufacturing, will offer a bigger growth avenue for the company. JLR is expected to turn aggressive and launch newer models to enrich its product mix further (Range Rover Evoque, 12 MY JLR models). The management is also increasingly focussed on the growing Chinese market where volumes have touched ~20,405 units in H1 and expects to clock ~40,000 units in FY12E. Seconding these thoughts, ICICI Direct research analysts remain positive on the longterm structural nature of Tata Motors Limited’s business and find great value in the brands and the franchises. Information sourced by Prerna Sharma

Tata Steel

VALUE CREATION THROUGH SUSTAINABILITY resently, among the top 10 global steel companies, Tata Steel is one of the world’s most geographically diversified steel producers with operations spread across 26 countries and commercial presence in over 50 countries. Tata Steel is committed to achieving its vision towards being a benchmark in the world’s steel industry through excellence in innovation and research & development. In the road ahead, the company is focussing on integration of new and innovative technologies in its operations and breaking new grounds in product development. As part of its strategy to de-risk the capital structure and provide more flexibility to the business, the company refinanced the entire long-term debt in Tata Steel Europe (TSE), deferring repayments by four years and allowing deployment of earnings for growth and improvement initiatives. As a result of all the financing initiatives and effective liquidity management, the company had cash and cash equivalents in excess of `10,890 crore (US$2.4 billion) at the end of financial year 2010-11.

product mix and higher realisations. The company’s European operations recorded robust improvement, posting an EBITDA of `4,204 crore (US$943 million), an increase of `5,555 crore (US$ 1,246 million) over FY10. Higher sales and realisations along with cost-cutting measures, initiated in the aftermath of the financial crisis, lay behind this performance. Further, to tackle significant challenges, the company took steps to restructure initiatives during the year. The sale of Teesside Cast Products (a slab manufacturing facility mothballed in February 2010) was completed in March 2011 in a deal valuing the business at `2,091 crore (US$469 million). The 2.9 mtpa brownfield expansion in Jamshedpur is progressing on schedule. The company has also begun site work on its greenfield project in Odisha.Total crude steel production of 6.86 million tonne at Tata Steel India exceeded the installed capacity of 6.8 mtpa. New annual production records were achieved for hot metal from the ’G’ Blast Furnace and hot rolled coil from the Hot Strip Mill at Jamshedpur, for clean coal at West Bokaro and for iron ore from the OMQ Division. Tata Steel India exceeded 1 mn

PERFORMANCE HIGHLIGHTS Tata Steel’s Indian operations continue to be among the most competitive operations in the global steel industry. The European branch of the company is initiating several initiatives towards further strengthening its position in the market, amid a very challenging market environment. During the year, the company also initiated steps towards rebranding Corus as Tata Steel Europe (TSE) to leverage the global presence of the wider parent company Tata Group. The company has attained various milestones in the last fiscal year. Some of them include: Tata Steel Group recorded a profit after tax of `8,983 crore (US$2,015 million) in FY11.

In line with Tata Steel Group’s vision to be the global steel benchmark for both value creation and corporate citizenship, Tata Steel believes that respect for the environment is critical to the success of its business…And this notion is what sets Tata Steel apart from the rest. With the intent to adopt an approach of value creation through sustainability, the company is committed to minimising the environmental impact of its operations and its products through the adoption of sustainable practices and continuous improvement in environmental performance.

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Tata Steel Group recorded EBITDA of `17,103 crore (US$3,836 million) for the full year, 83% higher than the EBITDA of `9,340 crore (US$2,095 million) in FY10. The Indian operations’ profit after tax of `6,866 crore (US$1,540 million) and EBITDA of `12,225 crore (US$2,742 million) were the highest ever on the back of higher volumes, improved

Geographical Distribution of Revenue India

26% Rest of the World

The EU excluding UK

29%

Asia excluding India

13%

27%

ANALYSING THE TOP 14 - TATA STEEL

tonne in sales to the automotive sector in FY11, with the best ever skin panel and galvanised annealed product sales. The sales of branded products also exceeded 1 mn tonne in FY11. In December 2010 and January 2011, Tata Steel drew a sum of `3,000 crore via issuance of 20-year non-convertible debentures, where the company will have no cash outgo on account of interest for the first three years.

Odisha. Efforts to reinvigorate the South East Asian operations are continuing through new product launches, branding initiatives, increased market access and improvements in operating parameters.”

POSITIVE FOR INVESTORS

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1,18,753 FY11

FY10

FY09

1,02,393

1,47,329

1,31,534 FY08

Turnover = Sales and other operating income (-) Excise Duty

According to Nomura Equity Research, Tata Steel has among the best steel operations globally in terms of both resources base and efficient operations, which provides an attractive investment opportunity. A key concern for the Q2 PERFORMANCE company used to be the high debt on Tata Steel has posted a net profit of its balance sheet. “We believe leverage `14,952.20 million for the quarter is no longer a problem for the company, ended September 30, 2011 as compared however, with: 1) a reduction in net to `20,651.30 million for the quarter debt following the sale of investments ended September 30, 2010. The total – stakes in Rivers-dale and sale of income has increased from `78,394.20 Teesside plant; 2) forecast higher million for the quarter ended September earnings from the Indian operations 30, 2010 to `82,355.00 million for the with its 2.9mtpa expansion (coming quarter ended September 30, 2011. on stream by the end of FY12 and Commenting on the results, HM expected to contribute in FY13F); and Nerurkar, MD, Tata Steel, said, “Tata 3) expected excess cash flow generation Steel’s Indian operations performed by FY13F,” the research agency says. strongly despite the overall soft market According to Angel Broking, Tata situation. The continued interest rate Steel is in the process of developing hikes impacted steel demand growth, a coking coal mine in Mozambique but the company and an iron ore mine Turnover sequentially increased in Canada to enhance (` in crore) sales volumes due to integration levels of enhanced market reach TSE. The projects and customer focus. are expected to be Higher raw material commissioned in phases prices and adverse beginning FY2012. currency movements Total capex remaining impacted profits in Q2 for the Mozambique of the financial year project is US$100mn2012, but the focus 150mn, while the on company-wide Canadian project will cost saving initiatives involve a capex of yielded desired results.” CAD350mn. “We He further added, “We expect these backward remain committed to integration projects commission the 2.9 at Mozambique and mtpa expansion in Canada to boost TSE’s Jamshedpur in the last earnings substantially quarter of this fiscal post FY2012, says year and we are making research. good progress on the Tata Steel is setting greenfield project in up a 6 mn tonne

integrated steel plant (including cold rolling mill) in two phases of 3 mn tonne each for a capex of `34,500 crore. Phase 1 of the 3 mn tonne plant is expected to be completed by 2014. This plant could potentially result in significant earnings accretion post completion, as they will be backed by captive iron ore. The Tata Steel Group remains focussed on executing its stated strategy of allocating capital to grow in India through brownfield and greenfield projects and also increasing the capital allocation to the European and other businesses to enhance their profitability. In India, the brownfield expansion at Jamshedpur is expected to be commissioned in the financial year 2011-12 taking the company’s flat products capacity to 6.4 million tonne — total crude steel capacity to 9.7 million tonne per annum. This will be accompanied by augmenting the capacity of mines to ensure that the expanded operations are fully integrated with respect to iron ore. The Odisha greenfield project is being developed in two phases of 3 million tonne each. The project work has already commenced and the company plans to commission the first phase of 3 million tonne by the financial year 2013-14. The next phase will follow soon after. It will continue to focus on downstream and valueadded products, including automotive steel through cold annealed processing, packaging steel and others. One of the Tata Steel Group’s value creation strategies is focussed on growth. With the aim of strengthening its position in emerging markets, the Group is increasing its crude steelmaking capacity through expansion projects at Jamshedpur and Kalinganagar. Such huge investments by the company will play a crucial role in not only extending, but in further strengthening the growth of the company. Information sourced by Arindam Ghosh

Bharat Heavy Electricals Ltd

OF ENVIOUS ORDER BOOKS & POTENTIAL PROFITS HEL has grown in stature over the years with continued inflow of orders, manufacturing prowess and a continued thrust on technology leading to a strong presence in domestic and international markets as a major supplier of power plant equipment besides establishing substantial inroads in select segment of products in the industrial sector and Railways. During 2010-11, the company witnessed growth in turnover by 26.89% to `43,337 crore from `34,154 crore in the previous year. The turnover (net of excise duty) increased by 26.49% from `32,861 crore in 2009-10 to `41,566 crore in 2010-11. Profit before Tax for 2010-11 is placed at `9,006 crore as against `6,591 crore during 2009-10 — a growth of 36.64% as compared to the previous year. The Profit After Tax is placed at `6,011 crore as against `4,311 crore during 2009-10 — a growth of 39.43% over previous year. Increase in turnover coupled with savings in material cost over the previous year has contributed to the better financial performance during the year. BHEL had many accomplishments in various business areas. Some of them are: In spite of difficult market conditions, BHEL booked orders of 7 Boilers and 9 TurbineGenerators with supercritical parameters from public as well as private sector utilities The order of the first 700 MW Nuclear TG (2 sets) for KAPP 3, 4 from NPCIL in consortium with Alstom, new rating introduced Export orders from 24 countries across five continents.

Q2 PERFORMANCE BHEL’s revenue for 2QFY12 grew 24% YOY to `103b, driven by strong execution. Adjusted EBITDA margin

Established more than 40 years ago, BHEL is the largest engineering and manufacturing enterprise of India in the energy & infrastructure-related sectors. It is among the world’s rarest few who have the capability to manufacture an entire range of power plant equipment. Standing tall on such strong pillars, BHEL has been demonstrating robust performance in terms of growth, performance and proﬁtability. With overﬂowing order books for the current year, the company is slated to post yet another record performance in the near term. was 17%, down 260 bps YOY. The EBITDA margin declined mainly due to higher provisions on account of contractual obligations and liquidated damages. Reported PAT of `14.1b was positively impacted by `1,660m (pretax) change in accounting policy related to provision of leave encashment. As per Motilal Oswal research estimates, growth in the power segment revenue was muted during 2QFY12 — up 11% YOY to `78b. The industry segment posted strong growth – up

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78% YOY to `30b – as a number of projects are reaching advanced stages of revenue recognition. Power division contributed 72% to total revenue and the industry division contributed 28%. BHEL booked new orders worth `143b in 2QFY12, up 6% YOY, driven by strong order inflow in the Industry segment (up 134% YOY to `51b). The power segment orders declined 18% YOY to `135b due to industry-wide slowdown. Adjusted EBITDA margin declined 260 bps YOY, led by the power segment. The EBITDA margin was impacted by a sharp rise in other expenditure (up 78% YOY at 10.6% of sales), which, in turn, was driven by much higher provisions. Change in accounting policy, which resulted in lower staff cost during the quarter, however, boosted EBITDA by `1.66b, a part of which is recurring in nature. In the light of growing concerns on the power segment, analysts at Motilal Oswal have lowered order intake estimates by 11% for FY12 and by 15% for FY13. They expect the order intake to decline by 3% in FY12 and to register a marginal growth of 3% in FY13. The company is well on track to expand capacity to 20GW per annum by the end of FY12. Analysts believe that with expanded capacity, BHEL will be able to grow production at an accelerated pace in FY13-14. The company maintained that execution on all power projects is on track, which will help boost the power

Orders secured (` in crore) 59678

59037

200809

200810

60507

50270 35643

200607

200708

201011

segment growth in the following quarters. The EBIT margin for the power division continues to be subdued at 16.9% due to unfavourable sales mix. For the industry division, EBIT margin expanded 670 bps YOY to 27%, as projects are reaching the margin recognition threshold. In the industry segment, BHEL has made new forays into Railways (propulsion systems for locomotives of 700HP range with Alstom), defence (naval guns), etc. These will keep the long-term drivers for the industry segment intact. The management foresees consistent revenue growth of 20-25% for this segment in the next 45 years. Order intake shows moderate growth, impacted by slowdown in the

FAC T FACT

ANALYSING THE TOP 14 - BHEL

Orders worth `60,507 crore were received during the year as against `59,037 crore in 2009-10.

FY12, i.e. 3.30x FY12E revenue. Based on sector division, the order book for BHEL stood at `1,28,000 crore (80%) from the power sector, `22,700 (14%) from the industry and the remaining `380 crore (6%) from exports. Meanwhile, the order inflow during the year has been muted with the same for H1FY12 limited to `16,800 against an annual guidance of `66,700 crore. Though this is seen as a negative for the company, the strong book would help meet the annual revenue guidance with ease.

NEW PHASE OF DYNAMIC GROWTH

Turnover `43,337 crore

Proﬁt After Tax `6,011 crore

Orders Inﬂow `60,507 crore

power segment; strong inflow of industry orders. BHEL booked new orders worth `143b, up 6% YOY, driven by strong order inflow in the industry segment (up 134% YOY to `51b). The order book currently stands at `1,610b, 3.6x TTM sales. The company has formed several joint ventures with SEBs for the development of projects. Its joint venture (JV) with Karnataka SEB is already developing 16GW, while its JV with Tamil Nadu SEB is expected to award the contract by the end of FY12. BHEL’s JVs with MP SEB and Maharashtra SEB will most likely be pushed to the next year. BHEL has a healthy order book of `1,61,000 crore at the end of Q2

The company continues to pursue its ‘Six-Point Strategy’ to sustain its leadership in its current business areas and capture opportunities in emerging growth areas. BHEL is actively pursuing several opportunities for sustaining future growth. These include: Strategic alliance with Toshiba, Japan, to establish a JVC to address the transmission & distribution (T&D) business in India and other mutually agreed countries. The JVC will cover equipment and projects in EHVAC & UHVAC range including 765 kV transformers and reactors & GIS, in addition to other products and systems Transportation business where BHEL is participating in tenders for setting up factory for Electric Loco components and Diesel Loco factory Proactive participation in the nuclear business segment by entering into a tripartite JV with NPCIL & Alstom for conventional island of nuclear projects for 700 MWe. Joint Working Arrangement with Abengoa, Spain, for a Concentrated Solar Thermal Power Plant (CSP)

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and the strategic alliance with BEL for the formation of a JV for setting up manufacturing facility (240 MW) for silicon wafers, solar cells & modules. Increased focus in the water business area, where the company has entered into a manufacturing associate agreement with GE India Industrial Pvt Ltd (GEIIPL), for water treatment equipment. From the present level of 15,000 mw capacity, BHEL is poised to mark the capacity at 20000 mw by FY12 as a part of its continuous capacity addition programme. The higher capacity will help execute the strong order book which is currently stands at `1,61,000 crore i.e. 3.30x FY12E revenue. The future prospect of BHEL is highly dependent upon the capex plans of refining, oil & gas and petrochemicals sector, i.e., any shortfall in the capex will have an effect on the company’s business. Unlike other businesses, the petrochemical sector is highly bound to the changes in government policy and regulations. Since the company is predominantly in the sector, the government’s stance is much significant to the company’s performance going forward. During the annual general meeting, B Prasada Rao, Chairman & MD, commented, “BHEL is committed to drive a new phase of growth, at a time of increasing focus of Government of India on developing the infrastructure sector. In this environment, the company has, over a period of time, established a number of differentiating competitive strengths, including a powerful manufacturing base, worldclass equipment performance, the technology edge, diversified business portfolio, country-wide efficient aftersales-service network, a robust balance sheet capable of supporting its growth ambitions and a strong human capital base.” Information sourced by Prerna Sharma

Bharat Petroleum Corporation Ltd

SECURING INDIA’S FUTURE ENERGY NEEDS to 9.5 MMTPA.

Q2FY12

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(Million Metric Tonne) LPG

Aviation Direct Retail

13.01 6.70 2.73 0.88

0.13

14.75 6.92 2.93 0.96

0.23

16.16 6.84 3.03 0.92

0.20

17.22 0.23 6.28 3.24 0.92

0.28

18.68

23.45

25.79

27.16

27.89

29.27

Lubes

5.62

(MMTPA) per annum grassroots refinery in Bina, Madhya Pradesh, which was set up by Bharat Oman Refineries Limited (BORL). BORL is a company promoted by BPCL and in which Oman Oil Company and the Madhya Pradesh Government are partners. Once all the units stabilise, the refinery would go a long way in meeting the product requirements of BPCL in central and northern parts of the country. The Kochi refinery also commissioned the capacity expansion and modernisation project, which saw the refinery’s processing capacity increase from 7.5 MMTPA

Market Sales Volume

1.13

BPCL remains committed towards strengthening its core business of reﬁning and marketing of petroleum products. Towards this end, major plans have been drawn up for enhancing the port and distribution infrastructure and setting up of new retails outlets, particularly in the rural markets. With the intent to facilitate timely completion of projects at the right cost, BPCL is well on its way to secure India’s future energy needs.

As per ICICI Direct research, BPCL declared its Q2FY12 results with revenues of `42,301.9 crore, EBITDA loss of `2,694.8 crore and net loss of `3,229.3 crore. The results are below the estimates mainly on account of higher net under-recoveries, forex losses of ~`800 crore and low refining margins. The downstream companies shared a net subsidy burden of 66.67% in Q2FY12. The GRM decreased to $1.6/barrel in Q2FY12 compared to $2.8/barrel in Q2FY11 mainly on account of custom duty reduction in June end. Brent crude oil prices estimates of US$100/barrel, have been maintained going forward. The gross under-recoveries are expected at ~`1,10,950 crore and ~`83,500 crore in FY12E and FY13E, respectively. Analysts assume net under-recoveries for downstream companies at 8.8% in FY12E and FY13E. The crude oil throughput remained

3.56

Fortune 500 company, Bharat Petroleum Corporation Limited (BPCL) has interests in oil refining and marketing of petroleum products. It is the third largest refining company in India with a capacity of 12 mmtpa at its Mumbai facility and 7.5 mmtpa at Kochi. BPCL has majority stake (63%) in Numaligarh Refineries, a 3 mmtpa refinery in the northeast. BPCL has investments in IGL (22.5%) and Petronet LNG (12.5%). BPCL is a public sector firm in which the Government of India holds 54.93%. The aggregate refinery throughput at BPCL’s refineries at Mumbai and Kochi and that of its subsidiary company, Numaligarh Refinery Limited (NRL) in 2010-11 was 24.03 Million Metric Tonne (MMT) as compared to 23.03 MMT in 2009-10. The market sales volume of the BPCL Group for 2010-11 stood at 29.58 MMT, as compared to 28.25 MMT in the previous year. The Group also exported 2.61 MMT of petroleum products during the year as against 2.51 MMT in 2009-10. During 2010-11, the BPCL Group achieved a sales turnover of `1,66,038.80 crore as compared to `1,33,749.10 crore recorded in 200910. The profit after tax for the year stood at `1,742.06 crore as against `1,719.98 crore in 2009-10. Among the key developments during the year was the announcement of five oil & gas discoveries in Mozambique, Brazil and Indonesia from exploration blocks where BPCL’s wholly owned subsidiary company, Bharat PetroResources Limited, has participating interest. This augurs well for the future in terms of oil & gas equity for the company once production starts in these blocks. The year also saw the commissioning of the 6 Million Metric Tonne

2010-11 2009-10 2008-09 2007-08 2006-07

BPCL - ANALYSING THE TOP 14

Production (Million Metric Tonnes)

19.57 18.63

3.34

6.13 11.40

10.47

10.12 3.59

2008-09

2009-10

2010-11

KEY INVESTMENT ARGUMENTS According to Motilal Oswal

20.55

5.40

4.92

5.21

10.71

2006-07 2007-08

19.20

3.02

18.47

3.65

The large GRM under-performance versus the regional benchmark Reuters Singapore GRM in recent quarters was due to the difference in the product slate — BPCL is a diesel-heavy refiner and cracks of diesel were down sequentially in 2QFY12. Product inventory adventitious loss in the quarter was `240m versus gain of `12b in 1QFY12. A large 1QFY12 product inventory gain was led by the government raising prices towards the end of June. Refinery throughput was 5.4 mmt, flat YOY and up 7.3% QOQ. Marketing volumes were down 10% sequentially led by seasonal factors and stood at 7 mmt.

The overall business environment remains extremely challenging. BPCL is, therefore, likely to encounter several risks during the course of its operations. The possible upward movement in international oil prices remains a major area of concern, given the level of dependency on imports for meeting the crude oil requirements of the refineries. The issue of under-recoveries on the sale of sensitive petroleum products is another major concern, as in the absence of adequate compensation for the same, the financial position of the

4.72

OTHER KEY HIGHLIGHTS

Light Distillates

Middle Distillates

company will be adversely affected. While the possible deregulation in the pricing of HSD will address the issue of under-recoveries suffered by BPCL on its sale, it will also lead to private players entering the market in a big way, leading to enhanced levels of competition. Also, any sustained rise in selling prices of fuels

Sales Turnover `1,66,038.80 crore

Proﬁt After Tax `1,742.06 crore

KEY INVESTMENT RISKS

9.76

flat YOY at 5.6 MMT in Q2FY12. The gross refining margins (GRMs) decreased from US$2.8/barrel in Q2FY11 to US$1.6/barrel in Q2FY12 on account of custom duty reduction in June end. The total market sales increased 6.06% YOY from 6.6 MMT in Q1FY11 to 7.0 MMT in Q2FY12. Net subsidy burden for downstream companies in this quarter is 66.67% in Q2FY12, which led to net underrecoveries of `3,227 crore in Q2FY12.

estimates, BPCL’s profitability continues to be determined by the quantum of under-recoveries and sharing mechanism, rather than fundamentals The Bina refinery’s commercial production ramp-up is expected over the coming quarters. BPCL has 49%stake in the ~`114b Bina refinery, which will have a capacity of 6 mmtpa BPCL’s E&P portfolio is likely to add substantial valueas it completes its appraisal programme and gives out the resource/reserve numbers.

3.99

In addition to enhancing the reﬁning capacity to meet the growing demand for petroleum products, BPCL is exploring the possibility of achieving value addition by venturing into the petrochemicals space. BPCL is looking at using the raw material produced at the Kochi reﬁnery to manufacture value added products having excellent demand, but limited availability within the country at present.

Heavy Ends

like MS and HSD could limit the growth in demand for these products. These developments can have an adverse impact on BPCL’s growth in the auto fuels segment and its market share.

TOWARDS AN AMBITIOUS GROWTH PHASE The government initiated the process of decontrol of retail fuel prices, starting with petrol prices. The FPO of IOCL and ONGC could be key triggers to start the decontrol process for LPG, kerosene and diesel. The BPCL Group ultimately aspires to reach a refining capacity of 1 million barrels per day over the next five years. BPCL also has ambitions of venturing into the petrochemicals sector. While this will call for a large quantum of investments, BPCL is focussed on meeting the challenging targets, which, in turn, will help in satisfying the growing energy needs of the country. Information sourced by Prerna Sharma

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Hindustan Petroleum Corporation Ltd

PROMISING A FUTURE FULL OF ENERGY Fortune 500 company, HPCL is a refining and marketing company in India and also has interests in upstream. It owns 13.5 mmt of refining capacity, split across Mumbai (6.5 mmt) and Visakhapatnam (7.5 mmt). It has a crude and product pipeline network of ~2,100 km and sells ~26 mmt of petroleum products. HPCL also holds a 16.9% stake in MRPL, a standalone refiner, which it jointly promoted. MRPL is now a subsidiary of ONGC. HPCL is a state-owned company, with 51.11% Government of India (GoI) stake. The turnover of HPCL increased by 22% to `1,32,670 crore during the year. Profit after tax increased to `1,539 crore during 2010-11 from `1,301 crore in 2009-10 after absorbing an under recovery of `1,509 crore on the sales of sensitive petroleum products. Although borrowings have increased, the interest cost has been brought down through prudent treasury management. The company’s refineries achieved a combined throughput of 14.75 MMT achieving nearly 100% capacity utilisation despite shutdown of key units for revamp and turnaround activities. This year has seen the completion of significant projects and revamp of its refineries at Mumbai and Visakh for handling additional throughput and improved flexibility in handling different varieties of crude oil. Refining margins in both the refineries were in the $5-6 per barrel range compared to $2.5 -3 per barrel last year. The sales for HPCL in 2010-11 reached 27 MMT, including exports. In the domestic market, the company has grown by 5.5% recording a growth of about 3% above industry and achieved 25.5 MMT of sales. It has increased sales of MS, HSD, LPG, FO and LDO. Naphtha sales were impacted

HPCL is one of the major integrated oil reﬁning and marketing companies in India. It is a Mega Public Sector Undertaking (PSU) with Navratna status. HPCL has a great history for meeting the fuel and energy needs of the country. The PSU has over the years, moved from strength to strength on all fronts. Going forward, with a focus on making HPCL ﬁnancially safe and secure by planning for the future, the company is all geared to spread its investments into conventional and non-conventional segments. by the availability of natural gas. The company is focussed on strengthening its network in the rural markets. The performance parameters are: The company has continued to build on pipeline capabilities. It has achieved a throughput of about 13

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ACT

million tonne as against a target throughput of 10 million tonne through its pipelines It has commissioned a new Fluidized Catalytic Cracking Unit (FCCUII) of capacity 1.45 MMTPA at Mumbai Refinery and revamped the second FCCU at Visakh Refinery from 0.6 to 1.0 MMTPA. These projects will help maximise production of MS and LPG. The Single Point Mooring (SPM) facilities at Visakh have been completed, which will result in freight savings The Lube Oil Base Stock (LOBS) project at Mumbai Refinery has been commissioned enhancing LOBS production capacity to 400 TMTPA. The company has also commissioned a new Grease & Specialty Product Plant at Silvassa with a capacity of 4.7 TMTPA The mechanical completion of 250 km-long Bathinda-RamanmandiBahadurgarh pipeline has been achieved during the year. It has commissioned the world’s largest Flex Speed Carousal at the Cherlapally LPG plant and the largest exclusive fully automated black oil terminal in the country at Visakhapatnam The sugar mills at Sugauli & Lauriya have been completed and commissioned in March 2011. The construction of the Cogen and Ethanol plants is in the advanced stage and commissioning is expected during 2011-12. The HMEL Refinery project is nearing completion and commissioning is

THE COMPANY IS SETTING UP A STATE-OF-THE-ART GREEN R&D CENTRE AT BENGALURU AT AN INVESTMENT OF `210 CRORE FOR THE ABSORPTION OF NEW TECHNOLOGIES, PRODUCT & PROCESS DEVELOPMENT TO STRENGTHEN MARKETING AND REFINERY FUNCTIONS.

ANALYSING THE TOP 14 - HPCL

Crude Throughput

9.24

7.42

9.41

7.36

9.16

6.65

8.80

6.96

8.20

6.55

(` in crores)

2010-11 2009-10 2008-09 2007-08 2006-07 Mumbai Reﬁnery

Visakh Reﬁnery

expected in the current financial year. This is the company’s first refining project in the northern part of the country and will ease product availability issues in the region.

Q2 PERFORMANCE HPCL declared its Q2FY12 results with revenues of `37,104.2 crore, EBITDA loss of `2,869.7 crore and a net loss of `3,364.5 crore. The results were below as per ICICI Direct estimates mainly on account of a sharp drop in refining margins and higher net under-recoveries. The downstream companies shared a net subsidy burden of 66.67% (`14,248.5 crore) in Q2FY12. Changes in the customs duty structure in June-end led to a sharp decline in the refining margin to US$1.9/barrel in Q2FY12. The interest cost stood at `302.8 crore in Q2FY12 increasing significantly by 37.6% YOY. The crude oil throughput increased 40% YOY from 3.0 MMT in Q2FY11 to 4.2 MMT in Q2FY12 due to higher capacity utilisation from both Mumbai and Visakhapatnam refinery. Gross refining margins (GRMs) dropped significantly from US$2.7/barrel in Q2FY11 to US$1.9/barrel in Q2FY12

due to changes in the customs duty structure in June end. Total market sales increased 15% YOY from 6.0 MMT in Q2FY11 to 6.9 MMT in Q2FY12. The net subsidy burden for downstream companies in this quarter is 66.67% in Q2FY12, which led to net underrecoveries of `3,125 crore in Q2FY12. According to Motilal Oswal research estimates, HPCL’s profitability continues to be determined by the quantum of under-recoveries and sharing mechanism, rather than fundamentals. Medium- to long-term growth would come from its 9 mmtpa grassroots refinery being set up in JV (~50% stake) with Mittal Energy Investments, with an estimated capex of `172b. Post deregulation and subsidy rationalisation, HPCL’s valuations should benefit due to improvements in: (1) earnings quality, (2) RoCE and RoE, (3) cash cycle and (4) debt levels. Key investment risks for the company include delays in diesel deregulation and ad hoc subsidy sharing and non-commensurate increase in retail fuel prices. Oil price rise leads to under-recoveries for the company and ad hoc nature of subsidy sharing impacts profits.

RECENT DEVELOPMENTS The government initiated the process of decontrol of retail fuel prices, starting with petrol prices. The FPO of IOCL and ONGC could be key triggers to start the decontrol process

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for LPG, kerosene and diesel. Going forward, to build value to the shareholders, the company has identified five strategic areas as its priority over the next few years, viz.: Improve profitability & build the upstream business Increase the refining capacity to meet the marketing demand Achieve sustained sales growth above the industry Provide differentiated customer experience through strong operational excellence Aggressively pursue growth opportunities in natural gas & alternate energy. As Subir Roy Choudhury, Chairman & MD, HPCL says, “The company is focussed on making HPCL financially safe and secure by planning for the future and balancing the business portfolio to insulate the company from the impact of increasing crude oil prices. Going forward, talking about the company’s plans, a HPCL senior official said, “We have decided to spread

Turnover `1,32,670 crore

Proﬁt After Tax `1,539 crore

Reﬁneries’ Combined Throughput 14.75 MMT

our investments into conventional and non-conventional segments. We are also looking at partnering with successful operators in oil & gas; coal bed methane and shale gas overseas.” Information sourced by Prerna Sharma

Steel Authority of India Ltd

GROWING FROM STRENGTH-TO-STRENGTH AIL, a Maharatna company, is India’s largest steel producer, holding 20% market share of domestic crude steel production. In 2010-11, the company achieved a turnover of more than `47,000 crore. SAIL produces both basic and value-added steels for various user segments. The company increased production of value-added steel and achieved the saleable steel production of 12.9 MT representing 116% of capacity utilisation. The profit of the company for 2010-11 was affected adversely, mainly due to adverse impact of input prices consisting of imported coal, indigenous coal, limestone, nickel, ferro alloys, aluminium, boiler coal, purchase power, increase in royalty on minerals, salaries & wages, higher interest & depreciation. However, the adverse impact on profitability was partially offset by higher volume of saleable steel production, increase in net sales realisation of saleable steel, better product mix and higher value-added steel production.

450E with improved toughness and corrosion resistance for steel superstructure of rail-cum-road bridge for the construction of steel super-structure of the two rail-cum-road bridges being built over the river Ganges at Patna and Munger, 45E1 Grade R260 Rails in Euronorm Specification (EN 13674-4) for export to Sri Lanka, Killed quality structurals with low temperature impact toughness for construction of the superstructure of the rail-cum-road bridges of Ganges, High Strength 100 mm thick pressure vessel quality SA537Cl-1 plates with ultrasonic soundness for hydel power projects, for the first time, EMU wheels for Indian Railways.

PRODUCTION REVIEW In 2010-11, the plants of the company continued with their journey of relentless improvement in production, product mix and efficiency parameters. Production of hot metal at 14.9 million tonne and crude steel at 13.8 million tonne, registered a growth of 3% and 2% respectively over CPLY. In line with market demand, SAIL produced 10.5 million tonne of finished steel, which also registered a growth of 4% over CPLY. The production growth was achieved with better utilisation of existing facilities since the company has not added any capacity in 201011. Higher production of special quality and value-added products at 4.8 million tonne, a growth of 3% over CPLY,

With the aim to contribute towards shaping the future of India, Steel Authority of India Ltd (SAIL) is adding strength to people, processes & products. The company is currently implementing a mega Modernisation & Expansion (M&E) plan to enhance its hot metal production capacity in a phased manner. The M&E plan will not only help strengthen the company’s market position, but also contribute to economic growth of the country. resulted in further improvement of the product mix. Several new products were developed, which have significant demand, ready market and good contribution margin. Improvement in quality of products has remained an important imperative. Some of the major new products developed to meet customers’ requirement and enhance market share were — High Tensile thicker plates in Normalised condition with sub-zero impact toughness and Ultrasonic soundness for construction of sluice gate for Hydel Power Project in Uttaranchal, HT plates in grade

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MAJOR HIGHLIGHTS Produced 12.89 MT of saleable steel, growth of 2% over previous year, with capacity utilisation at 116%. Maintaining its thrust on production of value-added & special steels, achieved best-ever annual production of 4.8 MT, growth of 3% over last year. Capex touched a record `11,280 crore, 6% higher than the previous year. All major facilities under expansion plan of Salem Steel Plant completed on schedule in September 2010 and are under stabilisation for regular production. Blast Furnace#2 at Bokaro Steel Plant upgraded & commissioned in July 2010. Upgradation of Plate Mill at Bhilai Steel Plant, installation of 700 tonne per day Oxygen Plant & simultaneous blowing of converters in SMS-II at Rourkela Steel Plant, and rebuilding of Coke Oven Battery#10 at IISCO Steel Plant, Burnpur completed.

Q2 PERFORMANCE SAIL’s Q2 FY12 sales volumes rose

ANALYSING THE TOP 14 - SAIL

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crore

PAT) ` in

(PBT &

er) ` Turnov (Sales

0.2% QOQ and 2.2% YOY to 2.82mn KEY DEVELOPMENTS GROWTH PLANS According to Dolat Capital analysis, Considering the acceleration in demand tonnes. Sales realisations declined SAIL currently has `7.834bn in net for steel in the country, the company is 2.3% QOQ to `38,496 a tonne against debt and will borrow further to fund its currently implementing a growth plan the expectations of flat realisations. to enhance its Hot Metal capacity from `700-bn expansion and modernisation EBITDA per tonne declined 3.5% the level of 13.8 million tonne in a plans. SAIL has reduced its capex QOQ (down 8.8% YoY) to `4,207 per phased manner. Under the ongoing guidance for `126bn (earlier `1,435bn) tonne, hit by higher cost and lower phase-I of modernisation and expansion in FY12 and `145bn for FY13. It has realisations. EBITDA declined 15.3% plan, hot metal production capacity only spent `47.45bn in H1 FY12. It YOY (1% QOQ) to `11.84bn, hit will get expanded to 23.46 million has a cumulatively spend of `340bn by higher raw material and employee tonnes by 2012-13. The growth plan, on capex till date on expansion plans cost. PAT decreased 41% QOQ and besides targeting higher production, and has borrowed `100.73bn for 47.2% YOY to `4.94bn (due to also addresses the need for eliminating expansion. lower EBITDA and forex loss). technological obsolescence, achieving SAIL has placed orders of `540bn SAIL’s adjusted profit declined 14.1% energy savings, enriching product-mix, for the total capex of `600bn. SAIL YOY to `8.46bn, while it was flat reducing pollution, developing mines expects the IISCO-integrated steel sequentially. and collieries, introducing customer plant to be fully operational by June Analysts at Dolat Capital believe centric processes and developing 2012 and not December 2012 as SAIL will continue to deliver poor matching infrastructure facilities. guided earlier. IISCO includes a new “Keeping this in view, and to performance compared to its peers 2.7-mn tonne blast furnace along with maintain its market dominance both due to higher employee cost, outdated bar, wire rod and section mills. We in the short and long term, SAIL will plants and relatively lower volume believe this will restrict volume growth continue to place maximum thrust on growth. Its premium valuations will in FY12-13E to 5% as against 10% capacity addition, for which capital erode further due to its poor execution earlier. expenditure will be made ‘with positive track record, leading to muted volume “We also expect significant delay and upbeat sentiments’, disclosed CS growth. in the integrated commissioning Verma, Chairman, SAIL, during the Sales volumes increase 0.2% QOQ, of the Bhilai and Rourkela AGM. 2.2% YOY to 2.82mn tonne, whereas blast furnaces, leading to muted “SAIL is growing and is poised production remained flat at 3.06 mn volume growth over FY11-FY14. for a big leap,” Verma tonnes. Blended sales told the shareholders, realisations declined 2.3% 48738 47041 while sharing details QOQ to `38,496 a tonne. 45555 43935 39189 SAIL’s net steel realisations, of the multi-pronged however, remained growth initiatives being 11469 flat QOQ at taken by the company. 10132 9423 9399 `36,230 per tonne in ‘Technology leadership’, 7194 Q1 FY12. Net he said, has been 7537 sales for SAIL rose identified as a key focus 6202 6754 6170 2.2% YOY and 0.2% QOQ area. He dwelt upon the 4905 to `108.3bn strategic initiatives taken 2006-07 2007-08 2008-09 2009-10 2010-11 Raw material cost to augment technological per tonne of crude steel interventions, among Sales Turnover PBT PAT increased 11% QOQ to which is the newly `17,348 primarily due to an increase launched R&D ‘master plan’ of SAIL Although value addition will rise due aimed at facilitating ‘acquisition in the cost of imported and domestic to expansion, it will incrementally and development of appropriate coking coal. SAIL procures coal from add to revenues only in FY13-FY14. technologies for sustainable growth’. BCCL, SEL and WCL, which are SAIL has been able to secure captive The other initiatives, he revealed, subsidiaries of Coal India. iron ore mine for its Vizag Steel related to SAIL’s MoUs with global PAT decreased 44% QOQ and Plant and has got allotted 140 hectare players such as Kobe Steel of Japan 28% YOY to `8.38bn due to lower of iron ore-bearing area in NEB, and POSCO of Korea. EBITDA and due to forex losses. Bellary, Karnataka, for exploration Adjusted profit declined 14.1% YOY to and mining,” informed Dolat Capital Information sourced by Prerna Sharma `8.46bn, while it was flat sequentially. analysts.

Hindalco Industries Ltd

BUILDING ON A FOUR-PRONGED STRATEGY indalco Industries Ltd., The company completed over US$7 the metals flagship billion of financing transactions; each company of the of them has been a landmark in itself: Financial closure of Utkal and Mahan: Aditya Birla Group, Achieved financial closure of two is an industry leader projects in challenging liquidity in aluminium and copper. A metals environment powerhouse with a consolidated Novelis refinancing: This was a turnover of `72,078 crore (US$15.85 landmark innovation in financing billion), Hindalco is the world’s largest — not only did Hindalco get back aluminium rolling company and one 50% of the invested equity within 4 of the biggest producers of primary years, but it also opened up a novel aluminium in Asia. Its copper smelter funding avenue between Novelis is the world’s largest custom smelter at and Hindalco. a single location. Hindalco’s consolidated revenue at OPERATIONAL HIGHLIGHTS `72,078 crore has been the highest The endeavour to produce more ever, a growth of 19% YOY. Strong metal through asset sweating and volumes, improved mix and higher through de-bottlenecking at Renukoot commodity prices have been the growth helped the company produce 538 KT, drivers. Profit before depreciation, The four-pronged strategy of marginally lower than the previous interest and taxes stood at `8,433 Hindalco, Aditya Birla Group year’s production of 555 KT of hot crore as against `10,069 crore in company – low cost business model, metal despite a loss of over 20 KT FY10, which included `2,736 crore operational excellence, superior productions at Hirakud. Aluminium (US$578 million) of unrealised gains product mix and a balanced & desales at `7,965 crore were up 14%, on derivatives, as against unrealised risked portfolio – has yet again mainly on the back of better realisation. loss of `291 crore (US$64 million) in taken the company to the Top Overall, metal volumes were lower FY11. The underlying performance 500 Manufacturing Companies due to Hirakud disruption. However of the current year sets a new record, – Listing & Analysis. With ambitious following, proactive initiatives were reflecting the inherent strength of brownﬁeld and greenﬁeld projects taken to bridge the gap: the company’s low-cost business in the pipeline, Hindalco is well on Higher alumina sales by 28%, as model, operational excellence, superior its way to emerge as the ‘global surplus alumina was diverted to product mix and a balanced and demetal business’ in the world. third-party sales risked portfolio. The highlights of this Sold more metal in India, to benefit year’s performance were: Consolidated revenue of from higher realisation. Hindalco Standalone US$15.9 billion on the back of Share of Net Sales Value Q2 PERFORMANCE a strong showing by all SAP, DAP and Hydrate and Alumina Complexes, Precious Net sales and operating revenue at businesses Metals and Others 3% 11% Highest-ever underlying `6,272 crore in Q2FY12 were up Aluminium Ingots and EBITDA of $1.9 billion, 7% over Q2FY11, driven by higher Billets 10% which reflected the inherent volume and improved realisation, Rolled Aluminium strength of the company’s lowdespite lower sale of value-added Products 33% 11% cost business model, products. PBITDA increased Copper Extrusions Copper 67% operational excellence, superior by 8% with higher volume and Cathodes 2% Conductor 32% product mix and a balanced realisation in aluminium business and Redraw Rods portfolio and better TcRc and byproduct 5% Strong cash flows to support realisation in the copper business. Aluminium Foils and the growth ambitions Net profit increased by 16% to Others Innovative financing to fuel `503 crore in Q2FY12 from `434 2% Concast Copper Rods 24% the company’s growth plans. crore in Q2FY11. For the half year

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ANALYSING THE TOP 14 - HINDALCO INDUSTRIES

ended September 30, 2011, revenues Mahan, Aditya and Jharkhand. All cost overrun and lower volume. rose by 11%, PBITDA increased by the three projects consist of similar Hirakud smelter capacity was raised 12% with increase in net profit by capacities i.e. 359 ktpa smelter with from 1,55,000 tpa to 1,61,400 capacity 18%. 900 MW captive power. The Mahan in Q4FY11. By 2012 end, another In Q2FY12, aluminium revenues project is coming up in Bargwan, MP, 51,600 tpa capacity is scheduled to were higher at `2,213 crore be added to the Hirakud up from `1,911 crore in The company has embarked on an ambitious growth path with plant, which will take the an announced investment plan of over US$6.5 billion in India total capacity at Hirakud Q2FY11 — a rise of 16% as and overseas in the next three years. a result of higher volumes to 2,13,000 tpa, along with and better aluminium prices a 100 MW captive power while the Aditya project would come up on the LME. In the copper business, plant. The next phase of expansion in Orissa. From the existing combined revenues were at `4,062 crore versus at Hirakud is planned to increase `3,951 crore in Q2FY11, on the back capacity of 1.5 mtpa, alumina refining its capacity to 360 ktpa along with of higher LME and byproduct credits. capacity is being raised to 4.5 mtpa a corresponding increase in captive Copper volumes were lower on account with additional 1.5 mtpa each in Utkal power from 467.5 MW to 967.5 MW. of the shutdown of one of the smelters and Aditya projects. The cumulative The environmental clearance for this is up till mid July. total capex for these projects is pegged already in place. Alumina production was lower by at ~`500 bn. This project involves the transfer of 4% due to constrained supplies and poor In case of brownfield projects, all key equipment for FRP production quality of bauxite. Metal volume was smelting capacity expansion in from Novelis plant at Rogerstone, UK higher by 16 per cent driven by higher Hirakud has been progressing well to Hirakud. Also, orders placed for production at Hirakud — in Q2FY11, and the company has already increased related and balancing equipment will Hirakud production was affected its capacity to 161 ktpa enable the company to produce superior due to smelter outage. Metal in Q4FY11. Further engineering products, including can expansion to 213 ktpa body stock, for various markets. This along with a CPP of project is expected to be complete by 100 MW is scheduled to Q4FY12 or early FY13. be commissioned during the The specials plant capacity at end of FY12. The next phase of Belgaum will be raised from 189 ktpa expansion to 360 ktpa with additional to 301 ktpa, along with a coal-based CPP of 500 MW is under evaluation. co-generation plant. Currently, natural Consolidated Revenue The company is also in the process of gas adaptation for its rotary kilns is `72,078 crore transferring key equipment from FRP being evaluated. The company plans plant of Novelis in Rogerstone, UK to to invest US$300 mn to expand the PBDIT Hirakud at an estimated cost of ~`8 aluminium rolling operations in Pinda `8,433 crore production at bn. This would enable the company to to about 600 kt of aluminium sheets Renukoot increased by cater to the local and regional exports per year. This project is expected to 2% on the back of continued demand of superior engineering come on stream by 2012. focus on asset sweating. products, including can body stock. Novelis has announced plans to Downstream production declined by The company has also been evaluating invest US$400 mn in aluminium 3% in the case of flat rolled products as expansion of its Belgaum special rolling and recycling operations in compared to Q2FY11 due to demand aluminium plant capacity from 189 South Korea. This will increase sluggishness in the domestic market. ktpa to 301 ktpa. aluminium sheet capacity in Asia to Extrusion production was lower, Though there have been some 1,000 kt annually. The new capacity consequent upon the continuation of delays in all the projects due to various is expected to be commissioned in a lock-out at the company’s Alupuram externalities, analysts at Emkay Global financial year 2013. unit in Kerala. Financial Services believe FY13 Hindalco is set to start would see some comfort in terms of commissioning a 3,59,000 aluminium ON AN EXPANSION SPREE commissioning of Mahan and Utkal smelter along with a captive power Hindalco has embarked on a massive projects. We have assumed 90 kt of plant of 900 MW during Q4FY12 capacity expansion drive, with plans to incremental production from Mahan at Bargwan, Madhya Pradesh. The increase its capacity 3x to 1.64 mtpa in FY13. Further delay, however, estimated capex for the project is about through three greenfield projects viz. would be a deterrent due to significant `105 bn, of which `77.85 bn is being

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financed by debt — `60 bn has already been drawn down. The major setback for the project lies in the fact that the coal block of Mahan still awaits Ministry of Environment and Forests clearances. Hindalco will have to either source coal from linkages or will have to import coal till clearances are received and a coal mine is developed. This may result in significantly higher operating cost. Hindalco is in the process of setting up a 1.5 mtpa alumina plant along with a 90-MW captive cogeneration plant in Utkal, which has received all the clearances and licence for mining, is expected to be on stream by Q4FY13. The output from the Utkal plant will feed alumina to the Mahan and the Aditya smelters. The estimated project cost for the Utkal plant is about `72 bn, of which `49.06 bn will be financed through debt. The captive bauxite mines of the Utkal alumina project are located at Baphlimali hills of Kashipur

FAC T FACT

HINDALCO INDUSTRIES - ANALYSING THE TOP 14

Greenﬁeld projects will signiﬁcantly enhance the scale of operations and will further improve the company’s cost competitiveness.

block in Orissa’s Rayagada district.

ON AN ASPIRATIONAL GROWTH PATH The company has embarked on an aspirational growth path towards which, three new aluminium smelters and two new alumina refineries are being set up in Odisha, Madhya Pradesh and Jharkhand. With these projects on stream, aluminium smelting capacity will touch around 1.7 million tonne and alumina refining capacity around 6 million tonne. The site work on these greenfield projects is in various stages of progress. The company’s strategy to achieve global size and scale through the acquisition of Novelis has demonstrated its merit and so far, things have worked

as per the plan. The de-risked business model of Novelis, where LME is a pass through, its robust product portfolio with over 50% going into the manufacturing of beverage cans and strong presence in emerging markets has shown its strength and is now poised for a transformational growth. It has already become value accretive for Hindalco and offers significant synergistic benefits going forward. Hindalco is well poised to emerge as ‘one global metal business’ with the India-centric upstream business and the global value-added downstream business. The company has embarked on an ambitious growth path with an announced investment plan of over US$6.5 billion in India and overseas in the next three years. With these projects coming on stream, Hindalco is set for a quantum growth leap. Information sourced by Prerna Sharma

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Sterlite Industries (India) Ltd

FOCUSSING ON ORGANIC GROWTH PROJECTS trengthening prices, increased volumes and a continued strong focus on operational efficiency have contributed to a substantial growth of Sterlite Industries Limited in net sales of `30,248 crore — a 23.4% increase compared to last year and a record PBDIT of `10,522 crore. The company continued to deliver volume growth, with significant increases achieved in zinc-lead and commercial energy businesses. The company started two 600 MW units of the 2,400 MW power plant at Jharsuguda, Orissa, and also announced the addition of a fourth 660 MW unit at the Talwandi Sabo Power Limited (TSPL) project in Punjab, taking the total capacity of TSPL to 2640 MW. The power generated by this new unit will be largely sold in the merchant market, significantly enhancing the overall return of this project. The company completed the acquisition of the zinc assets of Anglo-American in the second half of the financial year, increasing zinclead capacity to 1.5 million tonne per annum. This acquisition makes the company the largest zinc producer in the world and extends its zinc footprint in Africa and Ireland. It has successfully added reserves and resources of 22.1 million tonne in Zinc-India business, thereby increasing the life of mines. As far as its copper business is concerned, cathode production has been to the tune of 3,03,991 MT and it also attained the highest-ever domestic sales of 2,06,653 MT. The highest-ever zinc and lead mined metal production is registered at 8,40,000 MT and refined zinc metal production of 7,12,000 MT and 1,74,000 kg of silver is posted by the company. Accelerated ramp up at the silver-rich Sindesar Khurd mine has successfully commissioned the 1.50

Sterlite Industries India Ltd (SIL) has been making rapid strides when it comes to organic expansion plans and this is what has yet again made it among the Top 500 Manufacturing Companies. With a vision to be the world’s leading copper producer delivering sustainable value to all stakeholders by leveraging technology and best practices, SIL is best placed to take the growth curve forward. million tonne per annum concentrator. The new 160 MW captive power plant has been commissioned at Dariba, Rajasthan. The acquisition of Skorpion Zinc, Namibia was completed in December 2010. The acquisitions of Black Mountain Mines in South Africa and Lisheen Mines in Ireland were completed in February 2011. In case of aluminium, hot metal production of 2,55,298 MT has been registered. The production of rods stands at 1,60,665 MT and rolled products at 66,706 MT. The power unit registered a record sales of 2,035 million units, up 44% from the previous year. The first 600

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MW unit of the 2,400 MW (600 MW x 4) independent power plant (IPP) at Jharsuguda has been commissioned and the second unit is under trial. This year, the company also entered into the growing port sector. It has secured successful contract to construct a coal berth of `675 crore at Vizag scheduled for completion by mid2012. Talking about the stupendous performance, Anil Agarwal, Chairman, Sterlite Industries India Ltd, said during AGM, “Against a background of robust demand for commodities, we have delivered an exceptional financial performance, achieving record levels of production and record sales of power. Our industryleading organic growth programme, supplemented by strategic acquisitions, places Sterlite in a strong position to capitalise on the growing demand for commodities, and will underpin our objective to deliver growth and long-term value for our shareholders.

Q2 PERFORMANCE As far as Sterlite Industries Limited’s Q2FY12 results are concerned, higher input costs led to a decline in EBITDA margins. The topline came at `10,133.8 crore, which was 67% higher YOY and 3% higher QOQ. On the back

45000

Net Worth ` Crore

40000 35000 30000 25000 20000 15000 10000 5000 0

FY-2011 FY-2010 FY-2009 FY-2008 FY-2007

ANALYSING THE TOP 14 - SIIL

of higher input costs, the EBITDA margin, however, declined steeply by 350 bps YOY and 60 bps YOY to 24.5%. The subsequent EBITDA stood at `2,482 crore, which was 62% higher YOY, but 10% lower QOQ. The ensuing reported PAT stood at `997.8 crore, which was 1% lower YOY and 37% lower QOQ. The reported PAT during the quarter under review was dented by foreign currency losses. Due to unprecedented depreciation of the Indian Rupee, the net impact of foreign currency exchange fluctuations during the quarter resulted in a loss of `466 crore. The subdued performance of the aluminium and power businesses during Q2FY12 impacted the overall performance of Sterlite Industries Limited. In the aluminium business, during the quarter under review, Balco reported a loss to the tune of `17 crore, while Vedanta Aluminium (VAL) reported a loss of `243 crore (Sterlite Industries Limited’s share). The subdued performance was due to a steep rise in the cost of production primarily on the back of higher coal costs. The energy business reported a sharp decline in EBIT margins. During

The company has lined up investments of `200 billion in three years to establish itself as the country’s largest aluminum producer and the world’s second-largest zinc maker. This marks a signiﬁcant departure from other corporation plans to grow through foreign acquisitions. the quarter, the EBIT margin further declined to ~8.5% due to higher input cost (coal), from 14.08% in Q1FY12 and 34.8% in Q2FY11.

CHARTING ORGANIC GROWTH The company has lined up investments of `200 billion in three years to establish itself as the country’s largest aluminum producer and the world’s second-largest zinc maker. This marks

Other 1% Power 3% Copper 12% Aluminium 7% Zinc & Lead 77%

2010-11 (PBIT)

a significant departure from other corporation plans to grow through foreign acquisitions. Analysts from Prabhudas Lilladher review that Balco coal mines are expected to become operational during Q1FY13. On the clearance front, the management expects to receive an environment clearance during November and Stage-II forest clearance during Q4FY12. The company dropped its plan of adding the fourth unit of merchant-based 660MW at Talwandi Sabo due to weak outlook for merchant power market and acute shortage of domestic coal. The company would stick with its original plan of 1,980MW (660X3). Looking forward, the company anticipates continued growth in metal consumption led by India and China, with tight supply in specific markets — particularly for copper and zinc. With significant growth in production capacities as they ramp up many of their organic expansion projects, the company is slated to post higher growth next year. Notably so, higher commodity prices are driving up input costs; the company believes that its structurally low-cost assets, combined with continuous improvement culture,

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will enable it to mitigate the effects of this phenomenon. With its industry leading organic growth programme and the successful integration of its recent strategic acquisitions, Sterlite is very well placed to capitalise on the positive outlook for commodities demand and to continue to deliver growth and long-term value for its shareholders. The company plans to continue to maintain its focus on mine exploration, which will be the key driver of its future growth. In the last seven years, exploration activities have added 167 mt, net of depletions to its reserve & resource base. The company is currently exploring over 6,200 sqkm area in 10 ‘Reconnaissance Permits’ (RPs). Its total reserves & resources base as of March 31, 2011 is 313.2 mt containing 34.7 mt of zinc-lead metal and 885 million ounces of silver, thus ensuring long mine life of 25+ years. The ramp-up of the Sindesar

Net Sales `30,248 crore

PBDIT `10,522 crore

Khurd mine is on track to achieve its targeted 2 mtpa capacity by the end of the year. The 100 ktpa Dariba lead smelter was commissioned during the quarter, taking the total refining capacity for lead to 185 ktpa. The new silver refinery of 350 tpa is scheduled to be commissioned in Q3 FY2012. The mining work at the underground Kayar mine has commenced and it is expected to start ore production in FY 2013-14. Information sourced by Prerna Sharma

Hindustan Unilever Limited

WINNING WITH BRANDS & INNOVATIONS iming to give consumers an unbeatable product experience, HUL is investing in formulations and constantly assessing product performance in order to drive consumer preference in blind product tests. Modern trade continued to be the fastest growing channel in the market and winning in this channel is one of the key priorities for the company. With such strong factors to lead growth, HUL was able to post significant figures for 2010-11. HUL posted a 6.46% increase in consolidated net profit to `2,296.05 crore for the year ended March 31, 2011. During the period, the company’s consolidated net sales stood at `19,691.02 crore — a 10.8% jump from `17,764.27 crore in the last fiscal. While HUL did not announce the consolidated figures for the quarter ended March 31, 2011, the company’s standalone net profit partly hurt by rising input costs for the period, which was at `569.15 crore — a marginal 2% decline from `581.20 crore in the yearago period. For the year ended March 31, 2011, the company’s standalone net sales increased by 13.5% to `4,899.35 crore from `4,315.75 crore in the corresponding quarter of the previous fiscal. During the year, the domestic consumer business grew 10.9% driven by a strong 13% volume growth. PBIT margins declined by 190 bps on account of higher input cost inflation and 60 bps increase in brand investment. Net profit increased by 4.7 per cent to `2,306 crore for the full year. The business saw growth across all segments. The home and personal care business grew by 9.8 per cent with competitive growth in both the laundry and personal wash, while personal products business grew strongly at 15.7%. The growth was broad-based across categories with skin

Brands and innovations are the lifeblood of HUL’s business success. Keeping pace with the changing lifestyle and consumer demand has led Hindustan Unilever Limited (HUL) to retain the position among the top 500 Manufacturing Companies. The undeterred spirit to keep with up the innovative streak ably supported by the very best marketing strategies will help the leading FMCG company to sustain its growth trajectory in the long run. care delivering a particularly strong performance. The foods business grew 13.4%. Red Label tea was relaunched and continued to deliver double-digit growth. The company’s water purifier brand, Pureit, grew strongly and continued to expand its franchise with product offerings across multiple price points. Pureit now protects 4.5 million

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homes. During 2010-11, HUL significantly increased its direct retail coverage by adding over 6,00,000 outlets. This meant tripling direct coverage in rural India, contributing to 50 per cent of rural growth. Project Shaktimaan, the second phase of Project Shakti, was launched. It proved to be a key enabler for this rural expansion. “Against the backdrop of a challenging environment, we have delivered one of our strongest quarters with topline growth well ahead of the market and improved operating margins. We will continue to leverage consumer insights to deliver winning innovations and maintain relentless focus on execution, cost management and building organisational capabilities for competitive advantage,” said Harish Manwani, Chairman, HUL.

PERFORMANCE HIGHLIGHTS Outstanding customer service and great in-store execution helped HUL sustain winning relationships with customers in 2010-11. Restructuring a front end selling system through a number of carefully crafted steps and streamlining the footprint has led to a sharp increase in the distribution of the brands. The FMCG giant attained several milestones in the last fiscal, they are: Household products recorded double-digit volume growth during the period. Vim bar continues to perform well, while Domex continued on its journey to provide better and germ-free toilets to the Indian consumer. During the year, the company launched OK bar in parts of India, where the penetration

Rising consumption must be met with responsible growth. Responsible growth refers to growth that respects the social and economic beneﬁts and also recognises the environmental constraints we face today. Tackling this with urgency and priority makes not just good common sense, but good business sense. Harish Manwani, Chairman, Hindustan Unilever Limited

ANALYSING THE TOP 14 - HUL

e gm

w vie e lR

of dish wash bars is low. Fabric wash recorded its highest volume growth on the back of brand innovations (Wheel) and a significant strengthening of Rin. The category witnessed significant competitive action and the company has responded strongly to defend and grow its market share in this critical portfolio. Personal wash category recorded good growth during the year. This was driven through innovations across the portfolio (relaunch of Lifebuoy and Hamam & launch of Lux variants) backed by strong micro marketing and market development. Dove led the premiumisation agenda with a comprehensive restage in the second half of the year. The brand continues to be the fastest growing brand in the category, thus gaining rapid market share. Clinic Plus strengthened its leadership position and continued to be the largest shampoo brand in the category.

Q2 PERFORMANCE HUL reported 22% YOY growth in net profit to `689 crore for the quarter ended September 2011, as compared to `566 crore in the corresponding quarter of the previous fiscal. The total income grew 17% to `5,688 crore on a YOY basis. “During the quarter, domestic consumer business grew at 18.5% with a strong underlying volume growth of

9.8%. The growth has been broad based, and ahead of the market. All segments have delivered double-digit growth for the third consecutive quarter,” said a company statement. “Against the backdrop of a challenging environment, we have delivered one of our strongest quarters with topline growth well ahead of the market and improved operating margins,” said Manwani.

ANALYSTS’ FEEDBACK While volume growth was maintained at close to 8-10% in 1HFY12, the management expects that comps will become increasingly tougher in 2HFY12, when the average volume growth comp is 13.5%. According to Nomura Equity Research analysis, this level of volume growth will be difficult to sustain, both in terms of having a high base effect, as well as in an environment when advertising & promotion (A&P) spend is relatively low. After announcing the results, management commented that the FMCG sector had shown solid growth during the quarter, although this was increasingly being led by pricing impact rather than by volume growth. The company does expect some moderation in volume growth and for contribution of pricing to revenue growth to be larger. The company continues to have

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a strong innovation pipeline with new launches and relaunches done during the quarter across the portfolio. This also helped with volume growth in the quarter, although the impact is difficult to quantify. The management mentioned that as per data received from AC Nielsen, urban growth was ahead of rural growth. However, internal data suggests otherwise with rural growth outpacing urban growth. This could also have impacted the overall growth for the company as consumers’ aspiration to trade up in rural areas is still high, which could have benefitted the company, particularly in the soaps and detergents segment. As per Nomura Financial Advisory and Securities India estimates, high competitive intensity will keep margins under pressure, which is believed not to be captured in the current stock price. FMCG markets are expected to grow, though there would be a change in the mix of volume and price. Input costs will continue to remain high, with the added challenge of volatility. The

13%

Volume Growth

9.8% Home and personal care business

15.7% Personal products

13.4% competitive Food business environment is also expected to remain intense. HUL’s strategy and focus remains consistent to robustly defend and strengthen leadership positions, and concurrently lead market development of categories and channels of future. Information sourced by Nishi Rath & Prerna Sharma

Jindal Steel & Power Ltd

TREADING ALONG THE SUCCESS PATH ommencing operations In Chhattisgarh, the regulated in 1991, Jindal Steel and tariff has increased from `2.3/unit to Power Limited (JSPL) `3/unit in October. This will provide is one of India’s leading upside to revenue from 2x135 MW steel manufacturers with and the 330 MW powerplants from a significant presence in mining, Q3FY12 onwards, which will result in power generation and infrastructure. a positive PAT going forward for the JSPL is an integrated steel producer 2x135 MW power plant. JSPL expects (3 mtpa) and the largest coal-based merchant power tariff, which are `3.63.75/unit, to move up to `4.5/unit sponge iron manufacturer in the world in FY13. Beyond the 3x135 MW with a capacity of 1.37 mtpa. The power units currently, the company company enjoys significant competitive is unlikely to commission more than advantage through vertical integration 1 unit for the rest of FY12. Most of — right from 100% captive coal and the balance 7x135 MW units would iron ore smines to captive power be commissioned in March 2012. The generation facilities. primary reason is that the company 2010-11 was a financially rewarding is awaiting the commencement of its year for JSPL, owing to higher steel captive coal mine near Angul in March production & sales, diversified product 2012. All approvals are in place for the basket and extensive global reach. Values when actively pursued with mine and hence, JSPL is confident of The consolidated income stood at deep conviction can generate commencing mining in March 2012. `13,193.59 crore in 2010-11, as tremendous wellsprings of energy All the 10 units are physically complete compared to `11,152.82 crore in 2009and focus. This is the true spirit of and most of the `56bn capex is done. 10. EBIDTA increased to `6,398.59 JSPL, which has taken it among the Steel Business crore in 2010-11 from `5,907.99 crore Top 500 Manufacturing Companies. In H1FY12, the sales volume was in 2009-10. Profit after tax escalated With the spirit of entrepreneurship, 1.05 mt. JSPL expects to maintain or to `3,804.01 crore in 2010-11 from innovation and optimum utilisation marginally increase this run-rate in `3,634.56 crore in 2009-10. The of resources, JSPL is charting the H2FY12 leading to FY12E volume of company’s future strategy would be to success route. 2-2.2mt. It expects 10% YOY growth sustain and improve on this operational in FY13E, thus implying a and financial performance, A 0.6 MTPA medium and light section mill at Raigarh, total volume of 2.2-2.4 mt. while remaining steadfast to Chhattisgarh has been completed and commenced The company is revising deep-rooted values that have production from January 2011. This mill has the capacity assumptions for FY12 from nourished the organisation to produce 400 mm beams, 300 mm channels and 200 2.4 mt to 2.2 mt and for since inception. mm channels which are in great demand. The capacity to FY13 from 2.6 mt to 2.4 mt. Energy represents a key produce a range of products has provided the company a input for steel making and For FY12, the production strong market edge. the backbone for social volume is estimated at mill in Maharashtra as a part of its advancement. JSPL has commissioned 2.5mt. Of the difference between sales commitment to a carbon-free world. a 300-MW (2x150 MW)-phase-I, and production volume, part will be Besides, Jindal Power Limited (JPL), out of 600 MW (4x150 MW) power utilised for its steel project at Angul a company promoted by JSPL, is project at Dongamahua, Chhattisgarh, with balance being for inventory planning to set up an environmentto address the additional power increase and yield loss. requirements. The company is also friendly thermal and hydro power JSPL is seeing a ramp up in its setting up captive power plants as part projects across India. relatively new product portfolio of of its integrated steel plants at Angul, medium/light sections, wire rods and Q2 PERFORMANCE Orissa, and Patratu, Jharkhand, for bars, which is helping volumes in a As per Edelweiss Securities Ltd meeting their power requirements. weak environment. Its downstream estimates, the power business of JSPL It has also forayed into wind energy capacity is 4 mtpa versus 3 mtpa registered the following record: currently operating a 24 MW wind crude steel capacity with a wide

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JSPL - ANALYSING THE TOP 14 13,193.59 11,151.82 10,913.37

product portfolio – plates, Total Income HRC, flanges/beams, sections, (`in Crores) wire rods and bars –provide flexibility to change mix as per the market environment. The 5,459.87 company has also started using distributors. JSPL maintained 3,548.78 pellet production and sales volume guidance at 4 mt and 2 mt, respectively, for both FY12 and FY13. 2006-07 2007-08 2008-09 2009-10 2010-11 The Angul steel project is on schedule — 1 mtpa plate Raipur, Chhattisgarh: The company is mill in Mar-12, 2.2 mtpa DRI and expanding production capacity of this 1.6 mtpa steel plant in Sep-12. Of division from 5,100 to 10,000 metric the total project cost of `150bn, the tonnes per annum. company has spent `95bn till date including `29bn on captive power STRONG PROSPECTS units. The project is being funded Although operating in a challenging in D:E of 70:30. The entire project macro-economic scenario, 2010-11 equity has already been infused by has been a busy JSPL. All incremental funding is and fruitful year to be through debt. The company for JSPL nationally is confident of running gas-based and internationally. DRI project at Angul considering a Domestically, the similar plant in Oman (Shadeed) and company commenced the successful completion of a pilot operations at the wire plant for gas production. As far as rod mill and bar mill at its international business is concerned, Patratu, Jharkhand, plant. the Bolivia project is moving slowly Moreover, it has considerably due to political challenges/local issues enhanced domestic investments and the company is not guiding any for the creation of additional specific volumes going forward from capacities and capabilities to emerge this project. as a significant player in the steel PROJECTS UNDER IMPLEMENTATION sector. Internationally, the company is Steel Plant in Angul, Orissa: The focussing on the acquisition of iron ore company is at an advanced stage of and coal mines in Australia, Indonesia, implementation of this project. All South American and African countries major orders for engineering, equipment to ensure raw material security. The supply and construction works have acquired Shadeed Iron & Steel Co. been placed. Target date of LLC (SISCO), a company Core Capacities commissioning of the steel incorporated under the laws plant is March 2012. of the Sultanate of Oman 3 MTPA Steel Steel plant in Patratu, in 2010, through its 100% Jharkhand: The company subsidiary Jindal Steel & 15 MTPA Iron Ore and Coal Mining is setting up an integrated Power, Mauritius, has been steel plant in Patratu in the 1,783 MW commissioned in record time Power state of Jharkhand. The and commercial operations steel plant is expected to began in December 2010, 1.5 MTPA Hot Briquetted Iron be commissioned in second four months ahead of 5 Pellet MTPA half of 2013. schedule. Plant Machinery Division, Through subsidiary

Jindal Steel Bolivia SA (JSB), JSPL acquired the development rights for 20 billion tonne of EL Mutun Iron Ore Reserves in Bolivia. Moreover, there are plans to build a 2.52 MMTPA natural gas-based Midrex Direct Reduction Plant. This new plant will be the single largest module till date of any commercial direct reduction technology in the world. The company also commenced the dispatch of iron ore from the EL Mutun mines recently. Iron ore from here will be transported mainly to China, the Middle East and the European & South American countries through the Parana Paraguay Hidrovia river way. It will be the first time that iron ore from JSB will be exported. JSPL’s steel business is attractive considering captive raw materials (iron

`6,398.59 crore Operating proﬁt

`13,193.59 crore Consolidated income

ore and thermal coal) and improved product mix, including pellets. The company’s steel volumes are expected to increase in FY13 and FY14, led by the ramp up of existing capacity and the Angul project. EBITDA margins of the existing power business of 1,000 MW are among the highest in India, due to captive coal and merchant tariffs. FY13 will see an upside from its 10x135 MW power plants. Upsides also likely from the company’s coal projects in Mozambique and Indonesia. Information sourced by Prerna Sharma

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GLOSSARY

GLOSSARY BCF

Billion Cubic Feet

CAGR

Compounded Annual Growth Rate

GRM

Gross Refining Margins

EBITDA

Earnings Before Interest, Tax, Depreciation & Amortisation

EPS

Earnings Per Share

OPM

Operating Profit Margin

MCAP

Market Capitalisation

MTPA

Million Tonne Per Annum

PAT

Profit After Tax

PBT

Profit Before Tax

PBIT

Profit Before Interest & Tax

PBDITA

Profit Before Depreciation, Interest, Tax and Amortisation

ROCE

Return On Capital Employed

RONW

Return On Net Worth

TPA

Tonne Per Annum

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PRODUCT INDEX To know more about the products featured in this magazine, fax (at 022-30034499) or tear & post to us the Product Inquiry Card by following the 5 easy steps given in the coupon. Alternately you may also write to us at search@infomedia18.in or call us on 022-30034684, and we will send your inquiries to the advertisers/companies directly to help you source better. Products

Pg No

AC motors..................................................25 Accessories .................................................10 Adjustable adaptors ....................................75 AGVs .........................................................93 Animal feed technology .......................... FIC As-interface systems ...................................33 Automated guided vehicles ........................93 Automatic PF compensation systems ........73 Automation & storage systems ..................33 Automation ................................................14 Balances ......................................................31 BOPT ........................................................81 Brake motors ..............................................25 Brewing ................................................... FIC Building automation ..................................14 Cable handling & processing systems .......33 Cables for bus systems ...............................33 Cables scanps .............................................33 Camlock couplings .....................................16 Capacitive & magnetic sensors ..................33 CED coating machines ..............................14 Center drills ...............................................53 Centerless grinders .......................................8 Centrifugal fans ..........................................97 Centrifugal pumps .....................................23 Chemlok coating machines ........................14 Chocolate/cocoa ...................................... FIC Cleaning section equipment.................... FIC CNC cutting machines ..............................14 CNC laser cutting machines ......................14 CNC machines ............................................7 CNC oxyfuel cutting machines .................14 CNC plasma cutting machines ..................14 CNC tap chucks & tap adaptors ...............75 CNC tap holders & pull studs ..................75 CNC tools holders & pulley studs ............75 CNC turning centres ...................................7 CNC vertical machining centres..................7 CNC.............................................................7 CNG gas saving product .........................105 Coating machines.......................................14 Coating plants ............................................14 Coating systems .........................................14 Cold form sections .....................................87 Collets ........................................................52 Colour sorting ......................................... FIC Connectors accessories ...............................33 Connectors ...........................................10, 21 Container cranes ........................................61 Control cabinets .........................................21 Control panels ............................................21 Control systems ..........................................21 Crimp contact & tools ...............................33 Cross connection acc ..................................10 Customised tooling solution ......................52 Custom-made cables ..................................33 Cutting machines .......................................14 Cylinders ....................................................91 Data cables .................................................33 Datalogic scanners......................................29 DC motors .................................................25 Didactic equipment for training ................21 Digital metering systems............................73 Digital panel meters ...................................66 Digital temperature controllers ..................66 Dip spin coating machines.........................14 Drill sleeves ................................................75

Products

Pg No

Electronic connectors .................................66 Electronic process controls instruments ..BIC Electronic timers ........................................66 End clap/shop ............................................10 End mills ....................................................53 End plates ..................................................10 Energy management systems .....................73 Energy meters ............................................66 Engineerâ&#x20AC;&#x2122;s files ...........................................53 Exhaust brake system parts ........................52 Extruded products ................................... FIC Factory automation ....................................14 Filtration.....................................................31 Flameproof motors .....................................25 Flange mounting motors............................25 Floating holders .........................................75 Flour milling ........................................... FIC Flow meters................................................31 Flow regulators...........................................91 Fluid handling............................................31 Fluidised bed coating machines .................14 Forging .......................................................10 Fork lifts .....................................................81 Fuel injection system parts .........................52 Gas saving products .................................105 Geared motors............................................25 Glass ...........................................................57 Glide coating machines..............................14 Grain handling systems .......................... FIC Grinding & dispersion ............................ FIC Grinding machines.....................................57 Grinding tools ............................................57 Group marker holders ................................10 Hand pallets ...............................................81 Handling system modules ..........................21 Harmonic filtration ....................................73 Heat transfer equipment ............................97 Heavy industrial steel structures ................87 Heavy-duty CNC machines ....................106 High-precision machining services ............52 High-pressure blowers ...............................97 Horizontal CNC machines ..........................7 Horizontal machining centres ......................7 HRC fuse fittings.......................................66 Hydraulic chucks ........................................52 Hydraulic rubber hoses ..............................16 Hydraulic SPMs .........................................77 Hydraulic valve housing .............................52 Identification systems .................................33 Imaging & vision systems ..........................14 Induction heaters........................................59 Industrial connectors ..................................33 Industrial cranes .........................................61 Industrial gearboxes....................................85 Industrial robots .........................................69 Instrumentation control panels ...............BIC Instrumentation made cables .....................33 Interface modules acc .................................10 Interface modules .......................................10 Investment analysis & research ..................99 Isolators ..................................................FGF Labels .........................................................29 Laboratory supplies ....................................31 Laser markers ........................................COC Laser shaping machines .............................57 Led module pilot lights .............................66 Lift trucks services .....................................61

Products

Pg No

Light lifting ................................................61 Limit switches ............................................66 Linear slides ...............................................77 Loom switches ...........................................66 LPG gas saving products .........................105 Machine tool accessories ............................75 Machined castings ......................................52 Manually operated values ...........................91 Marker plotters...........................................10 Markers ......................................................10 Masonry drills ............................................53 Material handling equipment ....................81 Material handling solutions .......................95 MCBs .....................................................FGF Measurement .........................................COC Metal cutting tools ................................... BC Metallic expansion bellow joints ................16 Micro control switches ...............................66 Micro filters................................................91 Micro switches ...........................................66 Microscope products .............................COC Miniature microswitches ............................66 Mixers.........................................................31 Modernisations...........................................61 Motors ........................................................25 Moulded cable assemblies ..........................66 Mounting brackets .....................................10 Mounting rails............................................10 Multi-level steel car parks ..........................87 Natural gas saving product .......................105 Non-metallic expansion joints ...................16 Oil milling machines............................... FIC Paint shop equipment ................................14 Paint shop machines ..................................14 Partition plates ...........................................10 Pasta ........................................................ FIC PF controllers .............................................73 Photoelectric sensors ..................................33 PID controllers........................................BIC Pilot lamp holders ......................................66 Piping systems ............................................83 Plaining machines ........................................8 Planning machines ...................................106 Planomillers..................................................8 Planomilling machines .............................106 Plastic pellets ........................................... FIC Plotter accessories ......................................10 Pneumatic press machines..........................77 Polypropylene piping systems ....................83 Poppet valves ..............................................91 Positioners ..................................................91 Power capacitors .........................................73 Power sources .............................................12 Precision steels ...........................................57 Pre-engineered metal buildings..................87 Pre-treatment systems ................................14 Process automation & control equipment .21 Process cranes .............................................61 Process gas blowers ....................................97 Product index catalogue .............................31 Protective conduit systems .........................33 Protective covers .........................................10 Pumps...................................................23, 31 Pushbutton switches...................................66 Quick-change tapping chucks &tap adaptors ...75 Quick-release couplings .............................16 RCCBs ...................................................FGF

Products

Pg No

Reamers ......................................................53 Reaming & tapping ...................................75 Relay sockets ..............................................66 Reversible tapping attachments..................75 Rice milling equipment ........................... FIC Robots ........................................................69 Roofing & cladding sheets.........................87 Rotary dry vacuum pumps ........................97 Rotary encoders..........................................33 Safety ..........................................................31 SCADA & DCS implementation .............14 Scanners .....................................................29 SCR BESS power regulators ..................BIC Self-opening die-heads...............................75 Sensing ..................................................COC Sensors .................................................33, 71 Separator plates ..........................................10 Shipyard cranes ..........................................61 Shrink-fit adaptors .....................................52 Side holding plates .....................................10 Silence flow packages .................................97 Single converter isolator modules ...........BIC Slipring crane-duty motors ........................25 SMPS systems............................................66 Sockets & switches ....................................10 Solid carbide drills & mills ...................... BC Solid carbide reamers ............................... BC Solid carbide special drills & mills .......... BC Solid carbide special reamers ................... BC Special induction hardening machines.......12 Special purpose machines ........................106 Spirac cables ...............................................33 Springs .....................................................102 SSM nuts ...................................................75 Stainless steel corrugated hoses..................16 Standard induction hardening machine .....12 Steels & stainless steels ................................9 Straightening machines ................................8 Structural floor decking sheets...................87 Sub-base mounted valves ...........................91 Switches..................................................FGF Taps ............................................................53 Teflon hose-assemblies ...............................16 Tefzel HHS isotactic PP materials ............83 Temperature ...............................................31 Terminal blocks ....................................10, 66 Terminal strips ...........................................66 Terminals ....................................................29 Thermal imaging cameras ..........................65 Thermal processes ................................... FIC Thermoplastic valves ..................................83 Thyristor switches ......................................73 Tool bits .....................................................53 Tool holders ...............................................52 Truck blowers .............................................97 Tubing accessories ......................................21 Turbo charger parts ....................................52 Twist drills..................................................53 Ultrasonic sensors.......................................33 Universal quick-change chucks & adaptors .......75 Valve terminals ...........................................21 Valves..........................................................21 Ventilators ..................................................89 Vertical cartoning machines .......................77 Vertical turning lathes ..............................106 Vision ....................................................COC Work holding devices.................................52 Zebra printers.............................................29 Zebra ribbons .............................................29

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ADVERTISERS’ INDEX

To know more about the advertisers in this magazine, refer to our ‘Advertisers’ List’ or write to us at search@infomedia18.in or call us on +91-22-3003 4640 or fax us at +91-22-3003 4499 and we will send your enquiries to the advertisers directly to help you source better Advertisers’ Name & Contact Details

Birla Precision Ltd T: +91-240-2554301 E: info@birlaprecision.com W: www.birlaprecision.in Buhler (India) Pvt Ltd T: +91-80-22890000 E: sujit.pande@buhlergroup.com W: www.buhlergroup.com C&S Electric Ltd. T: +91-11-30887520-29 W: www.cselectric.co.in

Pg No

FIC

FGF

Advertisers’ Name & Contact Details

Flir Systems India Pvt Ltd T: +91-11-4560 3555 E: manpreet.kaur@flir.com.hk W: www.flir.com G W Precision Tools India Pvt Ltd T: +91-80-40431252 E: info@gwindia.in W: www.gwindia.in

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Advertisers’ Name & Contact Details

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Nu-Teck Engineering Company Pvt. Ltd T: +91-20-27120644 E: info@nuteckindia.com W: www.nuteckindia.com

Pentair Technical Products India Pvt Ltd T: +91-80-28454640 E: contact.marketing@pentair.com W: www.pentairtechnicalproducts.com

Care Research Credit Analysis & Res T: +91-22-67543456 E: careresearch@careratings.com W: www.careratings.com

Hi-Tech Robotic Systemz Ltd T: +91-124-4715100 E: marketing@hitechroboticsystemz.com W: www.hitechroboticsystemz.com

CNP Pumps India Pvt Ltd T: +91-22-25818400 E: sales@nanfangpumps.com W: www.nanfangpumps.com

IMI Machine Tools Pvt Ltd T: +91-2764-233983 E: imi@imitoolsindia.com W: www.imitoolsindia.com

Riat Grinders T: +91-161-2530805 E: msriat@sify.com W: www.riatgrinders.com

Coatec India T: +91-172-5063436 E: info@coatecindia.com W: www.coatecindia.com

Indian Tool Manufacturers T: +91-253-2350320 E: ltmth@hathway.com W: www.indiantool.com

S P Engineers T: +91-20-9890990234 E: sp_engineers@yahoo.co.in W: www.spengineerspune.com

S Vagadia Innovatives T: +91-09925125625 E: info@svinnovaties.com W: www.svinnovaties.com

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Cognex Sensors India Pvt Ltd T: +91-20-40147840 E: sales.in@cognex.com W: www.cognex.com

Inventum Engineering Co Pvt Ltd T: +91-22-26730499 E: inventum@vsnl.com W: www.inventumindia.com

106

Cole-Parmer India T: +91-22-67162222 E: response@coleparmer.in W: www.coleparmer.in/3125

Sarabsukh Enterprises T: +91-1871-223893 E: sarabsukhbatala@yahoo.co.in W: www.sarabsukhmachines.com

COC

Connectwell Industries Pvt Ltd T: +91-251-2870636 E: connect@connectwell.com W: www.connectwell.com

Sreelakshmi Traders T: +91-44-24343343 E: sreelakshmitraders@gmail.com W: www.sreelakshmitraders.com

EFD Induction Limited T: +91-80-7820404 E: sales@efdgroup.net. W: www.efd-induction.com

Jyoti Cnc Automation Pvt. Ltd. T: +91-2827-287081 E: info@jyoti.co.in W: www.jyoti.co.in Keyence Corporation T: +91-44-4299-4192 E: info@keyence.co.in W: www.keyence.co.in

Pepperl+Fuchs (India) Pvt Ltd. T: +91-80-28378030 E: info@in.pepperl-fuchs.com W: www.pepperl-fuchs.com

Swam Pneumatics Pvt Ltd T: +91-120-4696222 E: swamatic@airtelmail.com W: www.swamatics.com

Konecranes India Pvt Ltd T: +91-20-40047470 E: india.sales@konecranes.com W: www.konecranes.com

The Indian Electric Co T: +91-20-24474303 E: icemktg@indianelectric.com W: www.indianelectric.com

Essae Technologies Private Limited T: +91-80-40453535 E: essaetec@essatec.com W: www.essaetec.com

Kuka Robotics (India) Pvt. Ltd. T: +91-124-4635774 E: pradeep@kuka.in W: www.kuka.in

Essen Deinki T: +91-172-4600600 E: info@essendeinki.com W: www.essendeinki.com

Libratherm Instruments Pvt. Ltd. T: +91-22-42555353 E: libratherm@libratherm.com W: www.libratherm.com

Federn Fabrik T: +91-44-24952371 E: peganesh@vsnl.net W: www.federn-fabrik.com

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Festo Controls Ltd T: +91-80-22894100 E: info_in@festo.com W: www.festo.com

Flexibles T: +91-129-2232542 E: flexibles2001@yahoo.com

.BIC

Toyota Material Handling India Pvt Ltd 81 T: +91-07838653304 E: karnatak.bk@tmhin.toyota-industries.com W: www.toyotamaterialhandlingindia.com

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