Bilcare Ltd - Initiating Coverage · Bilcare Ltd (BILC) is a research‐driven packaging solutions...

Bilcare Ltd - Initiating Coverage Dec 09 ’09

Jaypee Research Desk

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As on Dec 09, 2009.

Market Price (09/12/09) 461

Market Cap. (Rs. Cr.) 793

52 Week High/Low 549/279

Face Value 10.00

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Share Price Data

Praful Bohra

Sr. Research Analyst [email protected] Direct No : +91‐22‐43542012 Mobile No : +91‐9819915604

Codes

BSE Code 526853

ISIN No INE986A01012

Bloomberg Code BILC.IN

Reuters Code BIL.BO

Book Value per Share 248

A Value Pack

Bilcare Ltd (BILC) is a research‐driven packaging solutions and clinical services company catering to the pharmaceutical industry. The Company has gained a dominant position in the domestic packaging industry backed by a strong product portfolio, and expanded its ambit of operations through foray into the clinical supplies business. With concerns over its leveraged balance sheet now allaying, we believe the company is a good long term proxy play for the Pharmaceutical growth story.

Financials

Year ended 31 Mar (Rs mn) FY08 FY09 FY10E FY11E

Net sales 6,507 8,560 10,451 12,977

Net income 815 829 1,029 1,591

EPS (Rs) 49.5 48.2 44.7 69.2

% growth yoy 20.1 ‐2.7 ‐7.2 54.6

PER (x) 9.3 9.6 10.3 6.7

Price/Book (x) 2.1 1.7 1.1 1.0

Yield (%) 1.0 0.6 0.9 0.9

ROE (%) 24.2 19.7 14.5 15.6

ROCE (%) 15.0 11.8 12.4 16.2 FCCB concerns largely allayed: Bilcare’s recent debt conversions/repayments will bring down its leverage to 0.4x in FY11E from the current 1.8x. With most of the FCCB’s being repaid/converted, only US$ 8 mn remains for conversion in Dec,2010, not difficult in our view.

Anti‐counterfeit technology launch presents an interesting opportunity: Inclusion of technological solutions in its anti‐counterfeit portfolio (addressable domestic market size of ~Rs 12 bn) will further enhance the company’s offerings, and help it to maintain its leading position in the domestic market, where it currently has over 62% market share.

Steady Domestic business, International business gaining traction: While domestic business is expected to grow at a steady CAGR of 16%, international business (~50% of revenues) is expected to grow at a robust 31% CAGR over FY09‐11E as the company starts servicing new contracts it recently entered into and GCS business scales up.

Cheap Valuations; Merits Consideration: With reasonable success in its International business and a stable domestic business, BILC offers a good vehicle to play the market rally. In 1HFY10E, the EPS is already 60% of FY09 EPS and we expect a further 20% CAGR in EPS in FY09‐11E. The stock is currently trading at 7x FY11E EPS. We believe this discount will be bridged. We value Bilcare at 8x FY11E, to arrive at a fair price of Rs 553 for the stock, implying an upside of 20% from current levels. Buy

CMP: Rs 461BUY TARGET PRICE: Rs 553INITIATING COVERAGE



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According to WHO, approx. 10% of worldwide drug supply is counterfeit, equating to US$ 74 bn in lost sales in 2008 alone.

Countering ‘Counterfeits’ With nearly a third of the Indian pharmaceutical market (valued at ~ Rs 350 bn) plagued by spurious and fake drugs, the industry is suffering from significant revenue and value loss. Bilcare has focused R&D initiatives, aimed at aiding legitimate drug makers combat counterfeits, thus creating a large opportunity for itself. The company has been successful in commercializing anti‐counterfeit products like Patina (contributing ~8% of revenues) used by leading players like Ranbaxy and Elder for their brands Shelcal and Cifran, respectively. It is also on course to launch nanotechnology based solutions, thereby, adding technological solutions to its anti‐counterfeit portfolio.

Strong Player in the domestic Blister Barrier market Bilcare dominates the domestic blister barrier market with ~62% market share and has consistently outperformed the industry growth (25% CAGR over FY06‐09E v/s industry growth rate of ~10‐11%) on the back of a strong product portfolio and its ability to provide research based novel solutions. The company has forged strong relationships with major pharmaceutical companies, both globally and domestically, catering to over 500 customers, with the top 10 customers accounting for ~30‐35% of its revenues. It is now eyeing significant volumes from the multi‐million packaging contracts (US$ 10‐15 mn), that it recently entered into with Big pharma companies. These contracts are long‐term in nature, with lengths of up to three years. We expect Bilcare to tread its past growth momentum and register a CAGR of 16% over FY09‐FY11E.

Domestic Revenues: Annual run‐rate Domestic Revenues: Quarterly run‐rate

Source: Company, Jaypee Research



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Strong Technical Base creates entry barriers for peers Bilcare’s knowledge and experience in developing functional packaging

materials and its R&D expertise has created significant entry barriers for its

peers, in our view. The company has filed around 136 patents till date, in a

range of products and processes. Bilcare Optima, one of its key patented

technologies has reduced pharmaceutical packaging development time to

approximately four weeks, whereas pharma companies can spend upto two

years developing a suitable packaging structure. Another solution, Brandpak

Building Solutions (BBS) helps in re‐establishing brands by diagnosing the

problems and then addressing those with its unique, patented packaging

materials and designs.

We believe that Bilcare’s strong research base has led to long term

relationships with major global customers which regard Bilcare as their end‐

to‐end solutions partner. Currently, we estimate around 40% of the

company’s business comes from global customers, including Sanofi, GSK,

Merck, J&J, Novartis and Pfizer.

Number of patent filings every year has been rising constantly




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Global clinical supplies (GCS): An early mover advantage


Bilcare has an early mover advantage in the global clinical services (GCS)

business, which aids in speeding up clinical trials for molecules under research.

Being a service business, it has margins of ~40% and requires upfront

capacities for getting the contracts. While the lead time is generally high for

setting up capacities (18‐24 months), Bilcare, with capacities across US, Europe (acquisition of Proclinical Inc, USA and DHP ltd, UK) and Asia, is well positioned

to tap this US$ 1 bn market. For GCS, Bilcare is targeting global CROs and small

biotech companies, and has undertaken significant capacity expansion in

recent years. Contribution from this segment has scaled up gradually from 13%

in FY07 to 17% in FY09, though the management seems confident to scale it up

to 50% of revenues over the next five years.

Anti‐counterfeit technology presents an exciting opportunity Through its acquisition of Singapore based Singular ID for SGD 19.58 mn (~US$

14 mn), Bilcare gained access to its anti‐counterfeiting technology based on

fingerprint and nanotechnology. This technology works on the principles of

nano‐particles which would be scattered on a drug label. Drug packets bearing

the labels can then be swiped in scanners or at automatic teller machines

(ATMs) for authentication. The technology is a first‐of‐its‐kind and can be

deployed in other sectors as well, thus creating a larger opportunity for itself.

We estimate the total cost of this technology to be around ~US$ 25 mn

including US$ 13 mn spent for acquiring its global patents. The labels will be

manufactured in Singapore while the signature software will be provided by

IBM. Having completed extensive pilot tests in the past two years, we expect

commercial launch to happen in 4QFY10E‐1QFY11E in the price‐range of Rs

6,000‐8,000 for the entire package. We have factored Rs 200 mn from this

launch in FY11E, post which we expect revenues to ramp up at a faster pace.



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FCCB Concerns largely allayed

Bilcare has recently converted US$ 21 mn FCCBs held by its Singapore entity

into equity shares and bought back ~US$ 10 mn FCCB at a discount from the

market. It has also bought back most of its Singapore FCCB of US$ 90 mn, at a

discount. As a result, only US$ 8 mn will be due for conversion in Dec‐2010,

not difficult to redeem in our view.

This restructuring is largely funded through proceeds from GDR issue (US$ 35

mn; details yet to be public), additional debt and internal accruals and will

lead to an equity dilution of 34%, thus bringing down the promoter holding to

35%.


Debt/Equity to come down drastically As a result of FCCB restructuring and resulting equity dilution, we expect

Bilcare’s net Debt/Equity to come down to 0.4x in FY11E from 1.8x currently.

We do not have the complete debt repayment schedule, but for FY10 and

FY11, we do not see any issue over the company repaying its debts. The

company has cut its capex sharply to US$ 20 mn each for FY10 and FY11.

Management maintains that this will not impact company growth over the

next two to three years – India and Singapore are both underutilized and GCS

capacities are already expanded across US and Europe.

Maturity Initial Amount (US$ mn)

Outstanding amount as on 31.03.09(US$ mn)

Premium (%)

YTM Convertible Price

Exchange Rate

Disc. to CMP

CAGR required for conversion

Comments

Dec‐10 50 38.2 45.3 7.75 704* 45.7 ‐43% 68% Only US$ 8 mn remains in the books

Dec‐12 90 90.0 30.7 4% ‐ ‐ ‐ ‐ Largely bought back



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Lower coverage ratio in the past four years Leverage also at all time highs




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Key Risks 1) Negative free cash flows worry us: Bilcare’s cash flows have been

negative for most of its history except in FY04. The company has reinvested

most of the cash it generated in building capacities and acquiring companies

abroad. Despite most of the capex peaking out and only maintenance capex

of US$ 20 mn for each of FY10E and FY11E to be incurred, we believe higher

working capital requirements will strain the cash flows in the near term.


2) Raw material prices are closely linked to Oil Price movement:

Bilcare’s major raw material, PVDC is linked to oil prices and hence a sharp

movement in oil prices can have an impact on the company’s Gross margins.

As per the management, a 100% rise in PVC prices requires the company to

raise its prices by ~18%, to sustain similar margins.

Free cash flows in red



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Cheap Valuations; Merits consideration With reasonable success in its International business and a stable domestic business, BILC offers a good vehicle to play the market rally. The stock traded at 6x FY10 EPS when it was Rs 279 in Mar‐09 owing to lower expectations as a significant surge in the interest costs was already expected. In 1HFY10E, the EPS is already 60% of FY09 EPS and we expect a further 20% CAGR in EPS in FY09‐11E. The stock is currently trading at 7x FY11E EPS. We believe this discount will be bridged. We value Bilcare at 8x FY11E, to arrive at a fair price of Rs 553 for the stock, implying an upside of 20% from current levels. Buy.

PER chart P/BV chart

Source: Jaypee Research

Stock deserves to trade at a premium 1) Bilcare is currently trading at nearly 100% discount to its six years average

PER multiple of 13x. While the company has demonstrated reasonable success in its base business (over 8x revenue growth in last five years), higher debt and FCCB repayment remained an overhang on the stock. However, with likely announcements over debt repayment, these concerns will subside, and the stock will again trade at a premium in our view.



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2) Compared with its closest domestic rival Ess Dee aluminium (Domestic

leader in aluminium foil and films based packaging) , BILC trades at par on PE basis and 37% discount on EV/EBIDTA basis. While Ess Dee is also a fast growing pharma packaging player with only domestic presence, we believe Bilcare’s differentiated business model, (strong domestic presence, geographically diversified, low competition, R&D driven business model) deserves a premium to Ess Dee.

Peer Comparison EPS ROE EV/EBIDTA ROA P/E P/BV

Company Price

Market Cap (US$

mn) FY10E FY11E FY10E FY11E FY10E FY11E FY10E FY11E FY10E FY11E FY10E FY11E

Bilcare 461 172.3 44.7 69.2 14.5 15.6 5.0 3.7 11.5 14.9 10.3 6.7 1.1 1.0 Ess Dee Aluminium* 354 213.0 36.2 52.2 26.7 29.8 7.6 5.9 10.9 14.7 9.8 6.8 2.3 1.8 *Bloomberg Estimates

3) Whilst most pharmaceutical stocks reflect the attractiveness of the sector, the packaging sector has been largely ignored, and it continues to trade at cheap valuations despite similar growth opportunities.



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Financials Revenues to register a 23% CAGR over FY09‐11E: We expect Bilcare

to register a 23% CAGR in revenues over FY09‐11E. While we expect a stable

domestic business (CAGR of 16% over FY09‐11E), contribution will be higher

from international operations as the company starts servicing new contracts

from FY09 onwards and its GCS business scales up. We have factored in Rs

200 mn from the launch of anti‐counterfeit technology till FY11E. FY08 FY09 FY10E FY11E

Domestic 4064 4713 5373 6375

YoY 16% 14% 14%

As % of total revenue 62% 55% 51% 49%

International 2443 3847 5078 6601

YoY 57% 32% 30%

As % of total revenue 38% 45% 49% 51% Total 6507 8560 10451 12977


Better capacity utilization=Margin expansion: We believe Bilcare’s

margin expansion will be a function of its capacity utilization. Currently, both

India and Singapore are operating at ~60% utilization. With the servicing of

new contracts entered in FY09, capacity utilization is expected to improve in

this segment. Also, GCS will start contributing meaningfully to operating

revenues, since most of its fixed costs is already being absorbed. We expect

Bilcare’s EBIDTA margins to improve by 182 bps in FY11E.




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Higher tax outgo: Withdrawal of the tax benefits that the company

enjoyed in the past, have resulted in an increase in its tax incidence. For FY09,

the effective tax rate stood at 29%. Higher deferred tax in the past has also

resulted in higher tax outgo. Though some respite in tax rates may be seen, as

its Singapore plant gained zero tax status from FY08 onwards, we believe tax

rate would most likely remain at 29‐30% levels.


Notable expansion in ROCE expected, ROE will lag: Repayment of a

large portion of its debt will boost Bilcare’s ROCE to 16% in FY11E, while ROE is expected to dip to 15.6% on account of a higher equity base. Though ROE’s and ROCE’s have been on a declining trend since FY05 (company has expanded its balance sheet by 7x over FY05‐09), we note that further deterioration of return ratios will be cushioned as debt gets repaid and capacity utilization improves.




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Company background:

Pune based Bilcare was established 22 years ago in 1987, under the leadership of Mr Mohan Bhandari, a first generation technocrat entrepreneur. Since then, the company has grown manifold, expanded globally with acquisition of companies in US, Europe and Asia as well as attained leadership position in India. With ~62% market share, Bilcare is India’s largest producer of pharmaceutical blister barrier packaging, and provides research driven packaging solutions and clinical trial services to pharmaceutical companies. The company’s clientele includes domestic majors like Cipla, Ranbaxy, Cadila as well as innovators like GSK, Pfizer, Merck, Abbott, Wyeth, Novartis, Aventis and J&J. Bilcare currently derives 50% revenue from the domestic markets, through its range of patented and innovative solutions. The company is now scaling up its international operations by:

a) Diversifying into niche business opportunities like GCS b) Scaling up capacities in India and abroad. c) Inorganic initiatives

BILCARE’S STRATEGY



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Pharmaceutical packaging research (PPR): Bilcare’s pharma packaging research focuses on creation of novel technologies, processes and products which address the challenges of 5C's viz. counterfeiting, compliance, communications, convenience and cost encountered by pharmaceutical companies.

Source: Company, Jaypee Research This segment is further sub‐divided into pharmaceutical packaging research and pharmaceutical packaging materials.

Compliance Counterfeit Communication Convenience Cost

US$ 150 bn revenue loss

Unit Dose packaging

US$ 50 bn + brand credibility

Patented solutions like patina, ultra, duplex etc.

Accidental misuse Direct communication through printing methods

Senior citizen Child protection Patient friendly

Over‐packed Shelf life loss Reduce Over packing and Under packing of drugs

Bilcare

Pharmaceutical Packaging research Pharmaceutical packaging material Global clinical services

Pre‐ formulation studies

Analytical studies

Stability studies

Packaging Audit

Packaging Design

Poly Films

Aluminium Foils

Paper Composites

Wrap Systems

Project Management

Small Batch mfg

Clinical packing and Randomization

Storage and Distribution

Returns Management

IVRS

Labeling



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a) Pharmaceutical packaging research:

Bilcare partners with the R&D team of pharmaceutical companies right from the preclinical stages, to quantify the sensitivity of a drug and then decide upon the type of packaging material, through the following activities.

Type of Study Related to

Pre‐Formulation studies Physical properties of the molecule, compatibility studies and encapsulation of molecules

Analytical Studies Drug stressing, hygroscopic studies, shipping studies

Stability Studies Stress stability studies, geographical simulations, sample testing

Packaging Audits Compliance to cGMP standards, national and international regulations, packaging efficacy evaluation

Packaging Designs Packaging development for new products, repositioning of drugs with new packaging

b) Pharmaceutical packaging materials:

Bilcare provides a range of innovative packaging materials focusing on films and foils for its unit dose packaging. The materials are designed to address concerns like better shelf life, increased product stability, effective communication and counterfeit products. Materials mostly consist of PVC, Polyvineyldene chloride (PVDC), Aluminium foils and Alu‐Alu strip.

Type of film Properties Products

Blister Film Range Blister packs consist of two or more components, with the core layer, generally formed out of PVC, while outer layers

formed out of one or more resins.

Duplex, Ultra, Triplex, Topas, Super, Patina, Extra, Exel

Aluminium foils These generally form the flat, lower compartment of a blister with higher barrier properties

Zeon, Zenith

Cold form blisters (Alu‐Alu) Alu‐Alu is a combination of aluminium foil and polymer films, with the aluminum layer inserted between a sealable polymeric film and outer supportive malleable film

Venus

Wrap systems Used for drugs which are non sensitive or mid sensitive to moisture

Zing, Nova



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Global Clinical Supplies

Globally, complex clinical trial process necessitate CROs to focus on high end activities like patient enrollment,

data management, documentation and hospitalization, while outsourcing their basic clinical supplies needs to

clinical trials service providers. Bilcare, with its specialised team, helps to accelerate clinical trials by catering

to these specialised requirements of CROs and virtual biotech companies through the following services.

Service Related to

Formulation development/analytical services

A team of professionals including 15 Ph.Ds in the US undertake activities like small batch manufacturing for clinical trials, toxicology studies and other analytical services.

Clinical packing and randomisation Bilcare carries out packaging in GCS for placebos, which are useful for administering the effectiveness of drugs in the clinical trials.

Labeling

Through its 50% acquitision of International Labs (IT) with Meadwestvaco (US), Bilcare gained access to IT’s labeling expertise. IT has a three year contract with Walmart to supply labels for its US$ 4 drug program, covering around 350 drugs.

Storage and distribution

While manufacturing is done for a large amount of drugs, all the drugs are not distributed. Bilcare provides storage and distribution services and dispenses drugs as per the requirements.

Returns management and destruction The company undertakes returns management and destruction activities in case of drug recalls.

IVRS

Bilcare’s interactive voice response system (IVRS) allows doctors to enroll patients and accordingly the kits are dispensed. IVRS also tracks the results linked the kits, which are useful for placebo studies.

Clinical research academy (CRA) ‐ Bilcare has tied up with the Association of Clinical Research Professionals (ACRP) to provide a one‐year post‐graduate management course in clinical research. It operates from 2 centers in India situated at Pune and Bangalore and has invested ~Rs 70 mn for CRA till date. The academy plans to open up 25 centers in India and other parts of Asia by 2010, with an initial investment of Rs 200 mn.



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Annexure

Global Pharmaceutical packaging Industry World over packaging, is designed to address issues like low shelf life, impurities or moisture in the products leading to development of toxicity, over packaging or under packaging of tablets, erroneous labeling and printing etc. These factors lead to a rising number of product recalls and delay in the clinical approval process, which increase the costs of pharmaceutical companies and impacts their profitability. As these factors became more palpable, companies have started focusing more on their packaging aspect.

Globally, pharmaceutical packaging demand has grown to US$ 26 bn at a CAGR of 6% over FY01‐06 and is expected to rise 5.9% annually to US$ 34 bn in 2011 (Source: Freedonia Group). Within this market, the blister packaging segment, where Bilcare currently operates is the fastest growing segment and is expected to reach US$ 6.6 bn by 2012.

Demand would be driven by a rapidly aging population, preference for unit dose blisters, favorable FDA regulations, introduction of new and novel delivery methods and a need for product differentiation to survive competition. The US is the biggest pharmaceutical packaging market in the world and accounted for 32% of the total demand of US$ 26 bn market (Source: Freedonia Group).

Source: Freedonia Group



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The industry primarily competes in 13 major product segments, the seven largest of which are: plastic bottles, blister packaging, caps and closures, pouches and strip packs, secondary containers, labels and other accessories, and other primary containers. Due to more specialised end uses or intensifying competition, medication tubes, pre‐fillable syringes, parenteral vials and ampoules, intravenous containers, glass bottles and jars, and prescription containers have a comparatively lower use and demand.

Indian Pharmaceutical packaging Industry:

Total pharmaceutical packaging demand in India is expected to reach US$ 700 mn in 2010. Sales of most packaging materials are expected to benefit from the expanding healthcare penetration and the industry’s focus to improve their international market presence. This external focus is likely to favorably improve growth opportunities for both standard and specialty packaging products with blister packs and plastic bottles expected to generate the highest demand.

Blister packaging segment

Growth in blister packaging segment is likely to be influenced by innovations in materials and design, rising use of unit dose format, ease of use in clinical trials, need for patience drug compliance and favorable government regulations. Domestically, this market is dominated by blister and strip packaging. In the blister segment, PVC is the most widely used material, due to its strong barrier properties and cost advantage.



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Global clinical Supplies Industry (US$ 1bn)

Global spending on drug R&D has grown from US$ 20 bn in 1998 to US$ 59 bn in 2008. However, the number of new molecules introduced in the market has not increased correspondingly, due to lengthy drug development and trial processes. Notwithstanding the increase in R&D spending, mean drug development times have continued to increase over the last few years.

Comprehensive requirements of clinical trials require CRO’s and Biotech companies to focus on core activities like patient enrollment, data management, documentation, hospitalization etc, thereby outsourcing other specialized activities. In response, pharmaceutical companies are seeking innovative methods to enhance supply chain efficiency and are increasingly looking to clinical trials service providers for total management of their clinical supplies needs.

Clinical trial services commences with the design protocol stage which establishes key parameters of drug products including randomization, blind patient selection, and product assembly in order to establish a completely unbiased trial. It also includes distribution management, managing product returns and reconciliation and disposal of all unused trial products.



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Income Statement Cash Flow Statement Year ended 31 Mar (Rs m) FY08 FY09 FY10E FY11E Year ended 31 Mar (Rs m) FY08 FY09 FY10E FY11E Net sales 6,507 8,560 10,451 12,977 Pre‐tax profit 1,242 1,171 1,470 2,272 growth (%) 59.5 31.6 22.1 24.2 Depreciation 198 357 510 555 Operating expenses ‐5,072 ‐6,695 ‐8,160 ‐9,896 Chg in working capital ‐1,155 ‐1,339 ‐1,130 ‐1,287 Operating profit 1,435 1,865 2,291 3,081 Total tax paid ‐247 ‐16 ‐441 ‐682 Other operating income 0 0 0 0 Other operating activities 0 0 0 0

EBITDA 1,435 1,865 2,291 3,081 Cash flow from operations (a) 39 173 410 859

growth (%) 44.8 30.0 22.8 34.5 Capital expenditure ‐2,404 ‐3,118 ‐940 ‐900 Depreciation ‐242 ‐378 ‐510 ‐555 Chg in investments ‐361 ‐227 1,000 0 Other income 192 77 92 91 Other investing activities 0 0 0 0 EBIT 1,385 1,564 1,872 2,617 Cash flow from investing (b) ‐2,765 ‐3,345 60 ‐900 Interest paid ‐143 ‐393 ‐402 ‐345 Free cash flow (a+b) ‐2,726 ‐3,172 470 ‐41 Pre‐tax profit (before non‐recurring items) 1,242 1,171 1,470 2,272 Equity raised/(repaid) 923 423 3,804 0 Non‐recurring items 0 0 0 0 Chg in minorities 0 0 0 0 Tax on non‐recurring items 0 0 0 0 Debt raised/(repaid) 3,422 2,468 ‐4,991 900 Pre‐tax profit (after non‐recurring items) 1,242 1,171 1,470 2,272 Dividend (incl. tax) ‐71 ‐80 ‐50 ‐107 Tax (current + deferred) ‐427 ‐342 ‐441 ‐682 Other financing activities ‐927 0 0 0 Net profit 815 829 1,029 1,591 Cash flow from financing (c) 3,347 2,811 ‐1,238 793 Adjusted net profit 815 829 1,029 1,591 Net chg in cash (a+b+c) 622 (361) (768) 752 growth (%) 36.0 1.8 24.0 54.6 Prior period adjustments 0 0 0 0 Key ratios Minority interests 0 0 0 0 Year ended 31 Mar (Rs m) FY08 FY09 FY10E FY11E Preference dividend EPS (Rs) 49.5 48.2 44.7 69.2 Net income 815 829 1,029 1,591 EPS growth (%) 17.4 ‐2.7 ‐7.2 54.6

EBITDA margin (%) 22.0 21.8 21.9 23.7 Balance Sheet EBIT margin (%) 21.3 18.3 17.9 20.2 Year ended 31 Mar (Rs m) FY08 FY09 FY10E FY11E ROCE (%) 15.0 11.8 12.4 16.2 Current assets 5,243 6,483 6,948 9,234 Net debt/Equity (%) 148.9 178.9 44.7 40.0 Investments 1,228 1,455 455 455 Net fixed assets 5,682 8,444 8,873 9,218 Valuations Other non‐current assets 0 0 0 0 Year ended 31 Mar (Rs m) FY08 FY09 FY10E FY11E Total assets 12,153 16,381 16,276 18,906 PER (x) 9.3 9.6 10.3 6.7

PCE (x) 7.2 6.6 6.9 5.0 Current liabilities 812 1,168 1,329 1,575 Price/Book (x) 2.1 1.7 1.1 1.0 Total Debt 7,037 9,505 4,513 5,413 Yield (%) 1.0 0.6 0.9 0.9 Other non‐current liabilities 630 984 984 984 EV/Net sales (x) 1.9 1.8 1.1 0.9 Total liabilities 8,479 11,657 6,826 7,972 EV/EBITDA (x) 8.8 8.4 5.0 3.7

Share capital 165 172 230 230 Du Pont Analysis ‐ ROE Reserves & surplus 3,764 4,788 9,455 10,939 Year ended 31 Mar (Rs m) FY08 FY09 FY10E FY11E Less: Misc. expenditure ‐255 ‐235 ‐235 ‐235 Net margin (%) 12.5 9.7 9.8 12.3 Shareholders' funds 3,674 4,725 9,450 10,934 Asset turnover (x) 0.7 0.6 0.6 0.7 Minorities interests 0 0 0 0 Leverage factor (x) 2.9 3.4 2.3 1.7 Total equity & liabilities 12,153 16,381 16,276 18,906 Return on equity (%) 24.2 19.7 14.5 15.6



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Bilcare Ltd - Initiating Coverage · Bilcare Ltd (BILC) is a research‐driven packaging solutions...

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Transcript of Bilcare Ltd - Initiating Coverage · Bilcare Ltd (BILC) is a research‐driven packaging solutions...