Please refer to Sheet APL Financial Model.

Income Statement
Net Sales
Cost of Sales
Other Income
Depreciation
Other Expenses
Profit Before Interest and Tax
Finance Cost
Profit Before Taxation
Taxation
Profit After Taxation
Dividends
Retained Earnings

Balance Sheet
Cash
Current Assets
Fixed Assets
Fixed assets at cost
Accumulated depreciation
Net fixed assets
Long Term Investments
Long Term Prepayments

2008
Rs(000)
53,242,330
(50,493,929)
1,337,187
(77,187)
(459,565)
3,548,836
(19,284)
3,529,552
(888,000)
2,641,552
(960,000)
1,681,552

2008
Rs(000)
6,117,891
7,763,743

Total assets

822,138
(289,626)
922,621
709,081
15,513,336

Current Liabilities
Non Current Liabilities
Debt
Stock
Accumulated Net Earnings
Total Liabilities and Equity

9,842,530
14,000
121,137
480,000
5,055,669
15,513,336

2009
Rs(000)

2010
Rs(000)
61,863,152
(58,570,802)
1,719,329
(82,634)
(619,634)
4,309,411
(28,992)
4,280,419
(1,198,000)
3,082,419
(1,440,000)
1,642,419

2009
Rs(000)

Sales growth
Current Assets/Sales
Current Liabilities/Sales
Cost of Sales/Sales

2011
Rs(000)

82,791,918
(79,032,034)
2,331,977
(127,298)
(798,389)
5,166,174
(319,865)
4,846,309
(1,252,000)
3,594,309
(1,728,000)
1,866,309

2010
Rs(000)

109,394,725
(104,680,507)
3,034,980
(145,064)
(903,957)
6,700,177
(682,666)
6,017,511
(1,761,000)
4,256,511
(2,868,480)
1,388,031

2011
Rs(000)

2012
Rs(000)
152,843,437
(148,255,584)
3,575,255
(175,439)
(1,129,882)
6,857,787
(1,211,047)
5,646,740
(1,526,425)
4,120,315
(3,456,000)
664,315

2012
Rs(000)

7,434,910
8,973,250

9,275,603
10,153,630

5,218,037
17,029,359

6,813,730
21,249,065

1,294,352
(354,572)
1,130,875
733,397
18,272,432

1,472,927
(453,185)
1,217,217
765,739
30,463
21,442,652

1,626,336
(588,046)
1,374,767
842,957
15,231
24,480,351

2,103,778
(761,550)
1,601,576
856,037
10,733
30,531,141

10,938,626
92,000
159,538
576,000
6,506,268
18,272,432

11,917,167
110,000
178,908
576,000
8,660,577
21,442,652

12,613,827
111,000
209,316
691,200
10,855,008
24,480,351

28.20%
14.16%
48.39%
95.85%

177,350,589
167,000
245,729
691,200
(147,923,377)
30,531,141

Depreciation
Other Income
Taxation
Dividend Payout
Fixed Assets
Non Current Liab
Long Term Invest
Cash
Other Expenses
Debt/Assets
Average Finance Cost
Long Term Prepayments

10.82%
2.61%
24.92%
59.07%
1.59%
0.11%
0.85%
7.58%
0.85%
0.83%
(452,371) (finance cost includes bank charges and late payment cha
0.01%

Averages

92,027,112
(88,206,571)
2,399,746
(121,524)
(782,285)
5,316,477
(452,371) <-- includes late payment charges of the past and yearly bank charges
(1,325,085)
3,539,021
(2,090,496)

6,972,034
13,033,809
1,463,906
1,249,411
781,442
11,285
22,047,982
44,532,548
98,800
182,926
602,880

1122674

k charges and late payment charges)

Assumptions
Sales growth
Current Assets/Sales
Current Liabilities/Sales
Cost of Sales/Sales
Depreciation
Other Income
Taxation
Dividend Payout
Fixed Assets
Non Current Liabilities
Long Term Investment
Cash
Other Expenses
Debt/Assets
Average Finance Cost
Long Term prepayments

28%
14%
48%
96%
11%
3%
25%
59%
2%
0%
1%
8%
1%
1%
(452,371)
0.01%

Income Statement
2012
Net Sales
Cost of Sales
Other Income
Depreciation
Other Expenses
Profit Before Interest and Tax
Finance Cost
Profit before tax
Taxation
Profit After Taxation
Dividends
Retained Earnings

152,843,437
(148,255,584)
3,575,255
(175,439)
(1,129,882)
6,857,787
(1,211,047)
5,646,740
(1,526,425)
4,120,315
(3,456,000)
664,315

2012

2013
195,951,374
(187,816,377)
5,109,727
(258,759)
(1,665,704)
11,320,261
(452,371)
10,867,891
(2,821,475)
8,046,415
4,753,009
12,799,424

2013

Balance Sheet
Cash
Current Assets
Fixed Assets
Fixed assets at cost
Accumulated depreciation
Net fixed assets

6,813,730
21,249,065
2,103,778
(761,550)
1,601,576

14,845,404
27,752,613
3,117,064
(1,020,309)
4,137,374

Long Term Investments

Long Term Prepayments
Total assets

Current Liabilities
Non Current Liabilities
Debt
Stock
Accumulated Net Earnings
Total Liabilities and Equity

Year
FCF
PAT
Add back depreciation
Minus NWC
Minus increase in CA
Add back increase in CL
Subtract CAPEX

856,037
10,733
30,531,141

1,663,908
24,030
48,423,329

177,350,589
167,000
245,729
691,200
(147,923,377)
30,531,141

94,822,207
210,373
401,754
1,715,190
(48,726,195)
48,423,329

2012

2013

4,120,315
175,439

8,046,415
258,759
6,503,548
(82,528,382)
1,013,286

Free Cash Flow

(81,740,042)

WACC
Growth Rate

52.23%
28%

Year
FCF
Terminal value
Total

2012

2013
(81,740,042)
(81,740,042)

Enterprise value:
PV of FCFs and terminal value
Add back initial cash
Asset value
Subtract year 0 debt
Imputed equity value
Number of shares Outstanding(000)
Implied Value per share
Market Value per share

25,552,863
6,813,730
32,366,593
(245,729)
32,120,864
69,120
464.71
472.67

From the above analysis, it may concluded that the share price of APL is

2014
251,217,467
(240,788,077)
6,550,874
(331,740)
(2,135,498)
14,513,026
(452,371)
14,060,655
(3,617,244)
10,443,412
6,168,912
16,612,323

2014

2015
322,070,799
(308,699,905)
8,398,481
(425,304)
(2,737,794)
18,606,278
(452,371)
18,153,907
(4,637,451)
13,516,456
7,984,156
21,500,612

2016
412,907,593
(395,765,575)
10,767,188
(545,256)
(3,509,961)
23,853,989
(452,371)
23,401,618
(5,945,396)
17,456,222
10,311,371
27,767,593

2017
529,363,981
(507,387,231)
13,803,963
(699,040)
(4,499,910)
30,581,764
(452,371)
30,129,393
(7,622,235)
22,507,158
13,294,954
35,802,112

2015

2016

2017

19,032,400
35,579,956

24,400,294
45,614,920

31,282,149
58,480,145

40,104,961
74,973,875

3,996,201
(1,352,049)
5,348,250

5,123,288
(1,777,353)
6,900,641

6,568,260
(2,322,609)
8,890,869

8,420,771
(3,021,649)
11,442,420

price of APL is

2,133,197
30,807
62,124,609

2,734,843
39,496
79,690,195

3,506,178
50,635
102,209,976

4,495,060
64,917
131,081,232

121,565,847
269,706
515,430
1,715,190
(61,941,564)
62,124,609

155,852,258
345,774
661,166
1,715,190
(78,884,193)
79,690,195

199,808,803
443,296
848,006
1,715,190
(100,605,319)
102,209,976

256,162,844
568,323
1,087,542
1,715,190
(128,452,667)
131,081,232

2014

2015

2016

10,443,412
331,740

13,516,456
425,304

17,456,222
545,256

22,507,158
699,040

7,827,342
26,743,639
879,136

10,034,965
34,286,411
1,127,088

12,865,224
43,956,545
1,444,971

16,493,730
56,354,041
1,852,511

28,812,312

37,066,118

47,647,827

61,213,998

2015

2016

28,812,312

37,066,118

47,647,827

28,812,312

37,066,118

47,647,827

2014

Overvalued

2017

2017
61,213,998
326,613,437
387,827,435

Calculation of Sales Growth

Year
2007
2008
2009
2010
2011
2012
Compound growth rate (2008-2012)

Calculation of WACC at end 2007

Stock price 2012 June 30th
Dividend 2012
Dividend growth
Cost of Equity
WACC
Shares outstanding (000)
Share price, end 2012
Equity value, E
Net debt, D
Cost of debt, rD
APL's tax rate, TC

Net Sales
44,130,536
53,242,330
61,863,152
82,791,918
109,394,725
152,843,437
28%

Year

472.67 From www.khistocks.com

50
29%
42.64%
52.232%
69,120
472.67
32,670,950
(6,568,001)
6.9%
0.35

2007
2008
2009
2010
2011
2012
Growth

Calculation of Cost of Debt

Year 2012 interest expense

from APL's income statement
Year 2012 debt,
from APL's balance sheet
Year 2011 debt,
from APL's balance sheet
Average debt
Cost of debt, rD

15,798 This value is not the finance cost as finance cost includes the bank ch
245,729
209,316
227,523
6.9%

Applicable tax rate

0.35

Dividends per share

14
20
25
30
41.5
50
29%

ce cost includes the bank charges and the late payment charges from the past. This is only the bank charges incurred in 2012.

s incurred in 2012.