Capital Structure

1
2
3
4
5
6
Group Members
1
2
3
4
5
Color Coding Convention Used
a)
b)
c)
d)
e)
f)

Capital Structure
Assumption and Approach
Market Analysis/Beta Calculation
Cement Industry-UltraTech
Pharma Industry-GlenMark
IT Software Industry-HCL
Industry Ratios
Group Members
Amit Kumar
Madhu Prasad
Deepak Nauriyal
Jagdish Kumar Agarwal
Karthiksreenivas Vankadari
Color Coding Convention Used
Hard coding and assumption in BLUE color
Formulas entered in the model should be in BLACK
Cells linked to other cells should be in GREEN color
Enter all negetive values with a negetive sign
Negative numbers be expressed as -ve 250.0, not (250.0) 0r (-250.0)
Use '%" instead of the word 'percent'

INDEX

Methodology: Capital Asset Pricing Model (CAPM) model is used to estimate the return on equity
expected by any power generation company operating in India considering the specific characteristics of th
profitability

Methodology for calculating Return on Equity

S.No
1

Description
Return on
equity

Parameter

Beta value

Hamada equation

Risk free rate

Rf

Market return

WACC

Rm
Cost of Capital

Govt Security rate

Arithmetic mean of BSE SENSEX market return is
considered
for 3ofyears
Weighted Cost
Capital is calculated using the formula

Methodology

Rs = Rf + s (Rm- Rf) Using CAPM model

Ke* E/(D+E) + Kd* D/(D+E)*(1-T)

Assumption
S.No

Description

Parameter

Industry

2
3
4

Debt Ratio
Market return
Risk free rate

Debt Equity Ratio

Capital Structure
Market Return
Rf

Market return

Rm

Assumption

Industry taken for particular segment in India only based o

diversification

Only Long term and short term debt considered

Market Return of last 3 years taken as 10%
364 day latest T- Bill rate taken as 8.6%

Arithmetic mean of BSE SENSEX market return is consider

timate the return on equity

ering the specific characteristics of the project type and not linked to subjective

Methodology

Reference

National Stock Exchange

of India Limited -

el

Capital line Plus

e
of BSE SENSEX market return is
ears is calculated using the formula
Capital

364 day T-Bill

BSE SENSEX
(www.bseindia.com)

* D/(D+E)*(1-T)

Assumption

Reference

particular segment in India only based on its

Capitaline
MoneyControl
MoneyControl
RBI
BSE SENSEX
(www.bseindia.com)
of BSE SENSEX market return is considered for 3 years

nd short term debt considered

last 3 years taken as 10%
Bill rate taken as 8.6%

INDEX
Date
24/01/2014
23/01/2014
22/01/2014
21/01/2014
20/01/2014
17/01/2014
16/01/2014
15/01/2014
14/01/2014
13/01/2014
10/1/2014
9/1/2014
8/1/2014
7/1/2014
6/1/2014
3/1/2014
2/1/2014
1/1/2014
31/12/2013
30/12/2013
27/12/2013
26/12/2013
24/12/2013
23/12/2013
20/12/2013
19/12/2013
18/12/2013
17/12/2013
16/12/2013
13/12/2013
12/12/2013
11/12/2013
10/12/2013
9/12/2013
6/12/2013
5/12/2013
4/12/2013
3/12/2013
2/12/2013
29/11/2013
28/11/2013
27/11/2013
26/11/2013

BSE_SENS Ultratech
EX
Price
HCL
GlenMark
21,133.56 1,699.90 1,413.45
509.05
21,373.66 1,709.70 1,411.65
508.35
21,337.67 1,700.15 1,446.35
504.80
21,251.12 1,700.20 1,441.50
502.55
21,205.05 1,719.95 1,431.90
501.60
21,063.62 1,716.15 1,381.15
508.35
21,265.18 1,745.85 1,391.90
504.30
21,289.49 1,705.65 1,335.40
501.80
21,032.88 1,651.40 1,322.55
503.60
21,134.21 1,675.30 1,344.80
511.05
20,758.49 1,672.95 1,299.25
515.00
20,713.37 1,684.35 1,285.05
514.65
20,729.38 1,697.10 1,249.15
513.90
20,693.24 1,691.25 1,255.20
514.55
20,787.30 1,720.95 1,251.30
517.80
20,851.33 1,729.25 1,260.95
515.55
20,888.33 1,731.60 1,251.50
524.25
21,140.48 1,765.95 1,258.15
530.00
21,170.68 1,763.35 1,263.10
533.35
21,143.01 1,740.55 1,248.05
532.05
21,193.58 1,770.60 1,249.30
537.70
21,074.59 1,779.85 1,246.20
533.10
21,032.71 1,795.15 1,238.20
541.80
21,101.03 1,766.65 1,242.45
528.10
21,079.72 1,744.45 1,236.30
526.25
20,708.62 1,730.10 1,233.95
525.50
20,859.86 1,757.10 1,197.55
522.25
20,612.14 1,753.65 1,173.35
525.70
20,659.52 1,770.60 1,187.15
520.20
20,715.58 1,806.65 1,182.05
522.45
20,925.61 1,870.00 1,180.25
522.95
21,171.41 1,902.35 1,176.10
527.65
21,255.26 1,928.60 1,154.60
537.70
21,326.42 1,930.05 1,142.35
532.00
20,996.53 1,883.55 1,127.10
525.10
20,957.81 1,873.25 1,108.15
528.55
20,708.71 1,874.85 1,116.80
524.70
20,854.92 1,894.65 1,118.65
519.85
20,898.01 1,896.30 1,131.60
522.00
20,791.93 1,905.30 1,086.55
515.90
20,534.91 1,904.40 1,062.00
506.70
20,420.26 1,869.60 1,057.85
491.15
20,425.02 1,856.70 1,058.20
504.00

Return(
Market)
-0.0113
0.001685
0.004064
0.00217
0.006692
-0.00952
-0.00114
0.012127
-0.00481
0.017938
0.002176
-0.00077
0.001745
-0.00454
-0.00308
-0.00177
-0.012
-0.00143
0.001308
-0.00239
0.00563
0.001989
-0.00324
0.00101
0.017761
-0.00728
0.011947
-0.0023
-0.00271
-0.01009
-0.01168
-0.00395
-0.00334
0.015589
0.001846
0.011957
-0.00704
-0.00206
0.005089
0.012439
0.005599
-0.00023
-0.00878

Return(Ult
ratech )
-0.00575
0.005601
-2.9E-05
-0.01155
0.002212
-0.01716
0.023295
0.032323
-0.01437
0.001404
-0.00679
-0.00754
0.003453
-0.01741
-0.00481
-0.00136
-0.01964
0.001473
0.013014
-0.01712
-0.00521
-0.00856
0.016003
0.012646
0.00826
-0.01549
0.001965
-0.00962
-0.02016
-0.03446
-0.01715
-0.0137
-0.00075
0.024388
0.005483
-0.00085
-0.01051
-0.00087
-0.00473
0.000472
0.018442
0.006924
-0.01643

Return(HC
L)
0.001274
-0.02428
0.003359
0.006682
0.036086
-0.00775
0.041439
0.009669
-0.01668
0.034458
0.01099
0.028334
-0.00483
0.003112
-0.00768
0.007523
-0.0053
-0.00393
0.011987
-0.001
0.002484
0.00644
-0.00343
0.004962
0.001903
0.029943
0.020415
-0.01169
0.004305
0.001524
0.003522
0.01845
0.010666
0.01344
0.016956
-0.00778
-0.00166
-0.01151
0.040625
0.022854
0.003915
-0.00033
0.004974

Return(Gl
enMark)
0.001376
0.007008
0.004467
0.001892
-0.01337
0.007999
0.00497
-0.00358
-0.01469
-0.0077
0.00068
0.001458
-0.00126
-0.0063
0.004355
-0.01673
-0.01091
-0.0063
0.00244
-0.01056
0.008592
-0.01619
0.025611
0.003509
0.001426
0.006204
-0.00658
0.010517
-0.00432
-0.00096
-0.00895
-0.01887
0.010657
0.013055
-0.00655
0.007311
0.009286
-0.00413
0.011755
0.017994
0.03117
-0.02583
-0.01311

25/11/2013
22/11/2013
21/11/2013
20/11/2013
19/11/2013
18/11/2013
14/11/2013
13/11/2013
12/11/2013
11/11/2013
8/11/2013
7/11/2013
6/11/2013
5/11/2013
3/11/2013
1/11/2013
31/10/2013
30/10/2013
29/10/2013
28/10/2013
25/10/2013
24/10/2013
23/10/2013
22/10/2013
21/10/2013
18/10/2013
17/10/2013
15/10/2013
14/10/2013
11/10/2013
10/10/2013
9/10/2013
8/10/2013
7/10/2013
4/10/2013
3/10/2013
1/10/2013
30/09/2013
27/09/2013
26/09/2013
25/09/2013
24/09/2013
23/09/2013
20/09/2013
19/09/2013
18/09/2013
17/09/2013

20,605.08
20,217.39
20,229.05
20,635.13
20,890.82
20,850.74
20,399.42
20,194.40
20,281.91
20,490.96
20,666.15
20,822.77
20,894.94
20,974.79
21,239.36
21,196.81
21,164.52
21,033.97
20,929.01
20,570.28
20,683.52
20,725.43
20,767.88
20,864.97
20,893.89
20,882.89
20,415.51
20,547.62
20,607.54
20,528.59
20,272.91
20,249.26
19,983.61
19,895.10
19,915.95
19,902.07
19,517.15
19,379.77
19,727.27
19,893.85
19,856.24
19,920.21
19,900.96
20,263.71
20,646.64
19,962.16
19,804.03

1,887.45
1,818.40
1,851.50
1,894.00
1,920.40
1,932.10
1,883.35
1,862.55
1,882.85
1,901.55
1,921.95
1,934.25
1,944.30
1,942.75
1,957.85
1,961.00
1,966.05
1,969.95
1,986.25
1,937.60
1,944.05
1,943.55
1,934.75
1,959.90
1,955.40
1,963.50
1,960.85
1,969.25
1,976.00
1,965.05
1,971.10
1,970.40
1,946.00
1,904.85
1,907.45
1,889.05
1,813.00
1,809.55
1,826.05
1,805.65
1,793.85
1,816.05
1,790.50
1,850.40
1,770.65
1,719.50
1,697.65

1,052.95
1,050.15
1,063.10
1,086.15
1,102.95
1,096.30
1,085.80
1,093.20
1,095.35
1,104.30
1,111.95
1,103.10
1,084.85
1,100.15
1,100.70
1,099.70
1,093.25
1,085.20
1,080.10
1,063.45
1,078.95
1,053.85
1,105.25
1,106.65
1,084.05
1,103.15
1,083.15
1,160.40
1,160.00
1,154.90
1,116.50
1,111.80
1,106.50
1,116.90
1,095.65
1,103.95
1,071.65
1,088.30
1,070.85
1,052.80
1,056.85
1,074.00
1,092.70
1,061.15
1,023.15
1,031.05
1,037.70

510.65
511.25
509.05
514.60
523.85
518.95
509.40
496.40
510.50
511.05
524.10
522.45
520.15
527.35
545.90
540.10
561.90
552.90
535.80
532.55
548.70
548.25
558.60
560.20
557.50
558.45
562.10
559.25
568.80
565.25
586.70
570.55
568.55
569.70
555.35
538.20
537.15
530.95
522.85
522.35
503.70
499.85
494.80
525.15
535.50
528.55
530.65

0.018995
-0.00058
-0.01988
-0.01231
0.00192
0.021883
0.010101
-0.00432
-0.01025
-0.00851
-0.00755
-0.00346
-0.00381
-0.01253
0.002005
0.001525
0.006187
0.005003
0.017289
-0.00549
-0.00202
-0.00205
-0.00466
-0.00139
0.000527
0.022635
-0.00645
-0.00291
0.003838
0.012533
0.001167
0.013206
0.004439
-0.00105
0.000697
0.01953
0.007064
-0.01777
-0.00841
0.001892
-0.00322
0.000967
-0.01806
-0.01872
0.033714
0.007953
0.003113

0.03727
-0.01804
-0.02269
-0.01384
-0.00607
0.025555
0.011106
-0.01084
-0.00988
-0.01067
-0.00638
-0.00518
0.000798
-0.00774
-0.00161
-0.00257
-0.00198
-0.00824
0.024798
-0.00332
0.000257
0.004538
-0.01292
0.002299
-0.00413
0.001351
-0.00427
-0.00342
0.005557
-0.00307
0.000355
0.012461
0.021373
-0.00136
0.009693
0.041091
0.001905
-0.00908
0.011235
0.006556
-0.0123
0.014169
-0.03291
0.044055
0.029313
0.012789
0.025323

0.002663
-0.01226
-0.02145
-0.01535
0.006048
0.009624
-0.00679
-0.00196
-0.00814
-0.0069
0.007991
0.016683
-0.014
-0.0005
0.000909
0.005883
0.007391
0.004711
0.015535
-0.01447
0.023538
-0.04762
-0.00127
0.020633
-0.01747
0.018296
-0.06889
0.000345
0.004406
0.033815
0.004218
0.004778
-0.00936
0.019209
-0.00755
0.029695
-0.01542
0.016164
0.016999
-0.00384
-0.0161
-0.01726
0.029298
0.036467
-0.00769
-0.00643
0.040513

-0.00117
0.004312
-0.01084
-0.01782
0.009398
0.018574
0.025852
-0.02801
-0.00108
-0.02522
0.003153
0.004412
-0.01375
-0.03457
0.010682
-0.03957
0.016147
0.031416
0.006084
-0.02988
0.00082
-0.0187
-0.00286
0.004831
-0.0017
-0.00651
0.005083
-0.01693
0.006261
-0.03725
0.027913
0.003512
-0.00202
0.025511
0.031368
0.001953
0.01161
0.015373
0.000957
0.036357
0.007673
0.010154
-0.05953
-0.01952
0.013063
-0.00397
-0.0016

16/09/2013
13/09/2013
12/9/2013
11/9/2013
10/9/2013
6/9/2013
5/9/2013
4/9/2013
3/9/2013
2/9/2013
30/08/2013
29/08/2013
28/08/2013
27/08/2013
26/08/2013
23/08/2013
22/08/2013
21/08/2013
20/08/2013
19/08/2013
16/08/2013
14/08/2013
13/08/2013
12/8/2013
8/8/2013
7/8/2013
6/8/2013
5/8/2013
2/8/2013
1/8/2013
31/07/2013
30/07/2013
29/07/2013
26/07/2013
25/07/2013
24/07/2013
23/07/2013
22/07/2013
19/07/2013
18/07/2013
17/07/2013
16/07/2013
15/07/2013
12/7/2013
11/7/2013
10/7/2013
9/7/2013

19,742.47
19,732.76
19,781.88
19,997.45
19,997.09
19,270.06
18,979.76
18,567.55
18,234.66
18,886.13
18,619.72
18,401.04
17,996.15
17,968.08
18,558.13
18,519.44
18,312.94
17,905.91
18,246.04
18,307.52
18,598.18
19,367.59
19,229.84
18,946.98
18,789.34
18,664.88
18,733.04
19,182.26
19,164.02
19,317.19
19,345.70
19,348.34
19,593.28
19,748.19
19,804.76
20,090.68
20,302.13
20,159.12
20,149.85
20,128.41
19,948.73
19,851.23
20,034.48
19,958.47
19,676.06
19,294.12
19,439.48

1,655.20
1,721.60
1,751.40
1,732.30
1,705.00
1,601.55
1,533.25
1,484.80
1,441.50
1,497.50
1,471.65
1,446.55
1,477.35
1,557.70
1,592.50
1,581.30
1,635.90
1,622.95
1,646.75
1,651.10
1,682.55
1,727.25
1,698.65
1,689.10
1,671.90
1,642.95
1,670.15
1,774.05
1,777.40
1,818.45
1,832.70
1,866.40
1,880.00
1,865.00
1,853.55
1,917.70
1,905.20
1,920.55
1,933.50
1,925.30
1,943.90
1,936.35
1,944.10
1,941.00
1,979.55
1,952.05
1,927.85

996.50
1,045.70
1,073.55
1,065.25
1,059.85
1,016.40
1,016.95
1,040.35
1,022.90
1,037.90
1,038.25
1,017.20
977.85
948.25
945.10
946.65
902.90
884.35
898.35
928.60
919.80
920.80
940.30
931.60
904.60
906.25
943.40
949.55
936.00
929.45
937.75
905.85
897.25
903.95
902.25
899.40
899.75
890.15
892.50
858.15
875.10
875.50
874.00
860.10
839.45
839.00
821.75

531.50
534.70
541.75
535.50
524.00
528.80
514.80
508.10
514.20
516.85
514.05
513.85
514.95
534.05
544.45
536.35
515.35
515.95
505.40
533.15
536.40
532.55
546.85
551.70
568.25
568.85
553.05
548.20
558.85
572.30
576.65
579.95
584.50
592.50
584.05
602.75
602.05
601.00
602.60
598.25
595.60
602.45
601.00
597.70
604.60
591.75
585.55

0.000492
-0.00249
-0.01084
1.8E-05
0.037034
0.015179
0.021958
0.018091
-0.0351
0.014207
0.011814
0.022249
0.001561
-0.03231
0.002087
0.011213
0.022477
-0.01882
-0.00336
-0.01575
-0.04054
0.007138
0.014819
0.008355
0.006646
-0.00365
-0.0237
0.000951
-0.00796
-0.00147
-0.00014
-0.01258
-0.00788
-0.00286
-0.01433
-0.01047
0.007069
0.00046
0.001065
0.008967
0.0049
-0.00919
0.003801
0.014251
0.019602
-0.00751
0.005918

-0.03933
-0.01716
0.010965
0.015885
0.062593
0.043582
0.03211
0.029596
-0.03811
0.017413
0.017203
-0.02107
-0.05296
-0.02209
0.007058
-0.03395
0.007948
-0.01456
-0.00264
-0.01887
-0.02622
0.016697
0.005638
0.010235
0.017467
-0.01642
-0.06035
-0.00189
-0.02283
-0.00781
-0.01822
-0.00726
0.008011
0.006158
-0.03402
0.00654
-0.00802
-0.00672
0.00425
-0.00961
0.003892
-0.00399
0.001596
-0.01967
0.013989
0.012475
0.016448

-0.04819
-0.02628
0.007761
0.005082
0.04186
-0.00054
-0.02275
0.016915
-0.01456
-0.00034
0.020483
0.039453
0.030738
0.003327
-0.00164
0.047318
0.020759
-0.01571
-0.03312
0.009522
-0.00109
-0.02096
0.009295
0.029411
-0.00182
-0.04018
-0.0065
0.014373
0.007022
-0.00889
0.03461
0.009539
-0.00744
0.001882
0.003164
-0.00039
0.010727
-0.00264
0.039248
-0.01956
-0.00046
0.001715
0.016032
0.024302
0.000536
0.020774
0.004574

-0.006
-0.0131
0.011604
0.021709
-0.00912
0.026832
0.0131
-0.01193
-0.00514
0.005432
0.000389
-0.00214
-0.03642
-0.01929
0.014989
0.039941
-0.00116
0.02066
-0.05345
-0.00608
0.007203
-0.0265
-0.00883
-0.02956
-0.00106
0.028168
0.008808
-0.01924
-0.02378
-0.00757
-0.00571
-0.00781
-0.01359
0.014364
-0.03152
0.001162
0.001746
-0.00266
0.007245
0.004439
-0.01144
0.00241
0.005506
-0.01148
0.021483
0.010533
0.009351

8/7/2013
5/7/2013
4/7/2013
3/7/2013
2/7/2013
1/7/2013
28/06/2013
27/06/2013
26/06/2013
25/06/2013
24/06/2013
21/06/2013
20/06/2013
19/06/2013
18/06/2013
17/06/2013
14/06/2013
13/06/2013
12/6/2013
11/6/2013
10/6/2013
7/6/2013
6/6/2013
5/6/2013
4/6/2013
3/6/2013
31/05/2013
30/05/2013
29/05/2013
28/05/2013
27/05/2013
24/05/2013
23/05/2013
22/05/2013
21/05/2013
20/05/2013
17/05/2013
16/05/2013
15/05/2013
14/05/2013
13/05/2013
11/5/2013
10/5/2013
9/5/2013
8/5/2013
7/5/2013
6/5/2013

19,324.77
19,495.82
19,410.84
19,177.76
19,463.82
19,577.39
19,395.81
18,875.95
18,552.12
18,629.15
18,540.89
18,774.24
18,719.29
19,245.70
19,223.28
19,325.87
19,177.93
18,827.16
19,041.13
19,143.00
19,441.07
19,429.23
19,519.49
19,568.22
19,545.78
19,610.48
19,760.30
20,215.40
20,147.64
20,160.82
20,030.77
19,704.33
19,674.33
20,062.24
20,111.61
20,223.98
20,286.12
20,247.33
20,212.96
19,722.29
19,691.67
20,122.32
20,082.62
19,939.04
19,990.18
19,888.95
19,673.64

1,896.40
1,918.30
1,901.35
1,905.00
1,923.85
1,925.80
1,875.95
1,876.50
1,776.15
1,785.90
1,783.35
1,813.90
1,817.20
1,841.65
1,870.15
1,907.40
1,872.95
1,822.30
1,840.15
1,860.15
1,890.10
1,856.55
1,898.80
1,850.70
1,860.90
1,858.50
1,889.15
1,990.70
1,972.15
1,978.25
2,007.40
1,947.55
1,948.55
1,953.45
1,933.50
2,019.55
2,015.30
2,000.00
1,971.25
1,969.95
1,953.00
1,977.35
1,974.50
1,998.35
1,974.75
1,927.20
1,911.65

818.00
794.35
798.85
767.40
766.60
759.00
776.10
794.70
767.50
751.35
760.15
759.40
759.45
779.45
778.70
776.75
761.40
755.40
762.55
756.45
753.80
744.60
747.60
727.30
736.10
741.30
746.80
741.65
746.25
744.70
741.45
736.30
736.75
742.95
736.20
728.10
719.65
737.70
745.90
746.30
757.35
772.05
774.15
769.95
750.40
752.80
749.25

580.10
584.00
574.30
568.20
575.30
568.55
548.05
540.15
521.80
555.90
549.25
542.85
553.35
571.15
575.10
569.00
570.25
570.20
581.90
569.80
554.35
576.55
579.10
600.50
597.45
585.55
591.15
573.30
562.15
558.50
560.10
551.20
572.00
563.00
573.75
573.30
572.10
577.30
558.25
547.65
533.25
539.85
539.70
524.60
525.40
520.65
516.35

-0.00881
0.004368
0.01208
-0.01481
-0.00582
0.009318
0.027168
0.017305
-0.00414
0.004749
-0.01251
0.002931
-0.02773
0.001166
-0.00532
0.007684
0.01846
-0.0113
-0.00534
-0.01545
0.000609
-0.00463
-0.00249
0.001147
-0.0033
-0.00761
-0.02277
0.003358
-0.00065
0.006472
0.016431
0.001524
-0.01952
-0.00246
-0.00557
-0.00307
0.001914
0.001699
0.024575
0.001554
-0.02163
0.001975
0.007175
-0.00256
0.005077
0.010885
0.004994

-0.01148
0.008875
-0.00192
-0.00985
-0.00101
0.026226
-0.00029
0.05496
-0.00547
0.001429
-0.01699
-0.00182
-0.01337
-0.01536
-0.01972
0.018226
0.027415
-0.00975
-0.01081
-0.01597
0.01791
-0.0225
0.025658
-0.0055
0.001291
-0.01636
-0.05236
0.009362
-0.00309
-0.01463
0.030268
-0.00051
-0.00251
0.010265
-0.04354
0.002107
0.007621
0.014479
0.00066
0.008642
-0.01239
0.001442
-0.01201
0.01188
0.024374
0.008101
0.013747

0.029338
-0.00565
0.040165
0.001043
0.009963
-0.02228
-0.02368
0.034826
0.021267
-0.01164
0.000987
-6.6E-05
-0.02599
0.000963
0.002507
0.01996
0.007911
-0.00942
0.008032
0.003509
0.01228
-0.00402
0.027529
-0.01203
-0.00704
-0.00739
0.00692
-0.00618
0.002079
0.004374
0.00697
-0.00061
-0.00838
0.009127
0.011063
0.011673
-0.02477
-0.01105
-0.00054
-0.0147
-0.01922
-0.00272
0.00544
0.025719
-0.00319
0.004727
-0.0012

-0.0067
0.016749
0.010678
-0.01242
0.011802
0.036723
0.01452
0.034563
-0.0633
0.012035
0.011721
-0.01916
-0.03166
-0.00689
0.010664
-0.00219
8.77E-05
-0.02031
0.021013
0.027489
-0.03927
-0.00441
-0.03629
0.005092
0.020119
-0.00952
0.030661
0.01964
0.006514
-0.00286
0.016018
-0.03704
0.015859
-0.01891
0.000785
0.002095
-0.00905
0.033555
0.01917
0.026646
-0.0123
0.000278
0.028377
-0.00152
0.009082
0.008293
0.033177

3/5/2013
2/5/2013
30/04/2013
29/04/2013
26/04/2013
25/04/2013
23/04/2013
22/04/2013
18/04/2013
17/04/2013
16/04/2013
15/04/2013
12/4/2013
11/4/2013
10/4/2013
9/4/2013
8/4/2013
5/4/2013
4/4/2013
3/4/2013
2/4/2013
1/4/2013
28/03/2013
26/03/2013
25/03/2013
22/03/2013
21/03/2013
20/03/2013
19/03/2013
18/03/2013
15/03/2013
14/03/2013
13/03/2013
12/3/2013
11/3/2013
8/3/2013
7/3/2013
6/3/2013
5/3/2013
4/3/2013
1/3/2013
28/02/2013
27/02/2013
26/02/2013
25/02/2013
22/02/2013
21/02/2013

19,575.64
19,735.77
19,504.18
19,387.50
19,286.72
19,406.85
19,179.36
19,169.83
19,016.46
18,731.16
18,744.93
18,357.80
18,242.56
18,542.20
18,414.45
18,226.48
18,437.78
18,450.23
18,509.70
18,801.64
19,040.95
18,864.75
18,835.77
18,704.53
18,681.42
18,735.60
18,792.87
18,884.19
19,008.10
19,293.20
19,427.56
19,570.44
19,362.55
19,564.92
19,646.21
19,683.23
19,413.54
19,252.61
19,143.17
18,877.96
18,918.52
18,861.54
19,152.41
19,015.14
19,331.69
19,317.01
19,325.36

1,885.55
1,886.50
1,901.10
1,919.80
1,907.30
1,929.05
1,864.35
1,878.75
1,927.35
1,899.05
1,895.00
1,858.60
1,814.60
1,778.95
1,787.20
1,793.30
1,786.20
1,770.25
1,743.65
1,848.00
1,843.60
1,856.75
1,868.00
1,850.55
1,863.20
1,856.45
1,855.30
1,845.15
1,882.65
1,899.55
1,923.55
1,907.20
1,899.45
1,905.40
1,893.35
1,900.60
1,878.70
1,896.90
1,896.45
1,846.10
1,884.75
1,870.15
1,901.30
1,905.25
1,911.20
1,939.00
1,936.85

750.15
737.45
721.05
701.20
683.65
718.40
732.50
720.75
735.90
751.15
762.70
765.70
776.10
789.80
766.05
740.45
745.20
757.45
743.40
780.35
796.10
790.00
795.95
775.10
768.60
767.75
772.45
775.80
781.40
800.05
791.60
791.45
778.35
774.85
783.70
773.25
771.80
755.75
746.10
714.90
722.20
724.60
719.75
725.75
733.00
719.85
719.45

499.50
493.30
486.45
478.65
469.45
476.75
475.00
483.30
487.15
484.80
495.00
491.60
486.85
495.20
498.05
487.75
492.25
466.65
467.00
475.20
487.00
467.70
462.55
471.65
468.60
485.90
494.35
493.80
499.55
499.65
493.25
497.50
494.90
487.45
504.35
506.80
505.00
505.20
494.45
498.60
499.80
502.15
507.50
508.10
508.95
509.00
501.90

-0.00815
0.011804
0.006
0.005212
-0.00621
0.011791
0.000497
0.008033
0.015116
-0.00073
0.020869
0.006297
-0.01629
0.006914
0.01026
-0.01153
-0.00068
-0.00322
-0.01565
-0.01265
0.009297
0.001537
0.006992
0.001236
-0.0029
-0.00305
-0.00485
-0.00654
-0.01489
-0.00694
-0.00733
0.010679
-0.0104
-0.00415
-0.00188
0.013796
0.008324
0.005701
0.013951
-0.00215
0.003016
-0.0153
0.007193
-0.01651
0.00076
-0.00043
-0.01629

-0.0005
-0.00771
-0.00979
0.006532
-0.01134
0.034115
-0.00769
-0.02554
0.014792
0.002135
0.019395
0.023958
0.019842
-0.00463
-0.00341
0.003967
0.00897
0.01514
-0.05812
0.002384
-0.00711
-0.00604
0.009385
-0.00681
0.003629
0.00062
0.005486
-0.02012
-0.00894
-0.01256
0.008536
0.004072
-0.00313
0.006344
-0.00382
0.01159
-0.00964
0.000237
0.026908
-0.02072
0.007777
-0.01652
-0.00208
-0.00312
-0.01444
0.001109
-0.0061

0.017075
0.02249
0.027915
0.025347
-0.04958
-0.01944
0.016171
-0.0208
-0.02051
-0.01526
-0.00393
-0.01349
-0.0175
0.030532
0.033989
-0.00639
-0.0163
0.018723
-0.04851
-0.01998
0.007692
-0.0075
0.026544
0.008421
0.001107
-0.0061
-0.00433
-0.00719
-0.02359
0.010618
0.00019
0.01669
0.004507
-0.01136
0.013424
0.001877
0.021015
0.012851
0.042717
-0.01016
-0.00332
0.006716
-0.0083
-0.00994
0.018103
0.000556
-0.00354

0.01249
0.013983
0.016164
0.019408
-0.01543
0.003677
-0.01732
-0.00793
0.004836
-0.02082
0.006892
0.009709
-0.01701
-0.00574
0.020897
-0.00918
0.053407
-0.00075
-0.01741
-0.02453
0.040437
0.011072
-0.01948
0.006488
-0.03625
-0.01724
0.001113
-0.01158
-0.0002
0.012892
-0.00858
0.00524
0.015168
-0.03408
-0.00485
0.003558
-0.0004
0.021508
-0.00836
-0.0024
-0.00469
-0.0106
-0.00118
-0.00167
-9.8E-05
0.014047
0.002893

20/02/2013
19/02/2013
18/02/2013
15/02/2013
14/02/2013
13/02/2013
12/2/2013
11/2/2013
8/2/2013
7/2/2013
6/2/2013
5/2/2013
4/2/2013
1/2/2013
31/01/2013
30/01/2013
29/01/2013
28/01/2013
25/01/2013

http://www.
capitaline.co
m

19,642.75
19,635.72
19,501.08
19,468.15
19,497.18
19,608.08
19,561.04
19,460.57
19,484.77
19,580.32
19,639.72
19,659.82
19,751.19
19,781.19
19,894.98
20,005.00
19,990.90
20,103.35
20,103.53

1,948.70
1,946.70
1,904.85
1,930.90
1,950.00
1,935.65
1,916.75
1,909.90
1,884.00
1,921.65
1,961.80
1,918.40
1,892.40
1,860.85
1,902.15
1,886.95
1,857.50
1,889.30
1,918.30

722.00
706.35
691.00
698.40
705.30
707.55
678.40
659.40
670.85
668.80
670.30
671.30
681.60
688.20
688.85
689.80
692.15
697.10

500.45
510.00
500.15
496.45
502.55
506.65
502.75
490.05
491.20
496.55
504.20
510.95
513.55
513.60
501.95
495.35
504.05
504.05

0.000358
0.006881
0.00169
-0.00149
-0.00567
0.002402
0.005149
-0.00124
-0.00489
-0.00303
-0.00102
-0.00464
-0.00152
-0.00574
-0.00551
0.000705
-0.00561
-9E-06

0.001027
0.021732
-0.01358
-0.00984
0.007386
0.009812
0.00358
0.013654
-0.01979
-0.02068
0.022371
0.013646
0.016812
-0.02195
0.008023
0.01573
-0.01697
-0.01523

0.021914
0.021971
-0.01065
-0.00983
-0.00319
0.042071
0.028407
-0.01722
0.003061
-0.00224
-0.00149
-0.01523
-0.00964
-0.00094
-0.00138
-0.0034
-0.00713

-0.0189
0.019503
0.007425
-0.01221
-0.00813
0.007727
0.025586
-0.00234
-0.01083
-0.01529
-0.0133
-0.00508
-9.7E-05
0.022944
0.013236
-0.01741
0

Market data
Return(Daily)
Variance(Daily)
SD(Daily)
Annual Returns
Annual Variance
Annual SD
Beta (Slope)
Alpha ( Intercept)
Covariance wrt Mkt
Correlation
Coefficient Of Variance

Market
Ultrtech Cement
0.000201
-0.000485421
0.000122
0.000311605
0.011024
0.01765234
0.050168
-0.121355373
0.030381
0.077901277
0.1743
0.279108003
1
0.869129027
0
-0.00065983
0.000122
0.000105618
1
0.54276214
3.474359
-2.299922914

HCL
GlenMArk
0.00285
3.98015E-05
0.000331
0.000316253
0.018186
0.017783501
0.71256
0.009950377
0.082685
0.079063231
0.28755
0.281181847
0.424015
0.366906255
0.002765
-3.41358E-05
5.17E-05
4.47669E-05
0.257537
0.22789717
0.403544
28.25841126

INDEX
Indifference Point

Impact of Finnaci

Actual
Capital
108643.2
Face Value
2
Cost of Debt
12.2%
Tax Rate
20%
Debt
6%
Debt Value
6265.8
Equity Value
102377.4
No Of Share
54321.6
Interest
764.6
EPS= (1-T)(EBITInterest)/No of Share
EBIT ( Indifference Point)

Very poor
Tax Rate
20%
Debt Cost
12%
Face Value of Share
2
Capital
108643.2
Debt Percentage
89%
Debt Value
6.00
Equity Value
108637.20
Change in EBIT
500
Less Interest @ 10% 0.73
PBT
499.27
TAX Value
99.98

Plan 1
Plan 2
108643.2
108643.2
2
2
12.2%
12.2%
20%
20%
0%
10%
0
10864.32
108643.2
97778.88
54322
48889
0 1325.745966
0.19515
13255.51

0.19515
13255.51

PAT
No of Share
EPS

399.28
54318.60
0.01

Cost of Capital Estimate with different Debt Equity Mix

Capital
108,643.20
108,643.20
108,643.20
108,643.20
108,643.20
108,643.20
108,643.20

Debt

Equity

6,265.80

102,377.40

0.00

108,643.20

4,000.00

104,643.20

10,000.00

98,643.20

20,000.00

88,643.20

50,000.00

58,643.20

70,000.00

38,643.20

D/E Ratio

Interest
Coverage
Ratio

Estimated Beta

Cost of Equity

0.42

9.4%

0.40

9.3%

0.42

9.3%

0.44

9.4%

0.48

9.5%

0.68

9.8%

0.99

10.4%

6.1%
66.22
0.0% No debt
3.8% 126.58
10.1%
42.19
22.6%
19.47
85.3%
7.23
181.1%
4.99

Capital Structure
Total Fund
Cost of
Cost of
Requirement Debt
Debt
Equity
Equity
EBIT
108643.20
6265.80
12.2%
102377.40
9.4%
108643.20
0.00
6.0%
108643.20
9.3%
108643.20
4000.00
10.0%
104643.20
9.3%
108643.20
10000.00
12.0%
98643.20
9.4%
108643.20
20000.00
13.0%
88643.20
9.5%
108643.20
50000.00
14.0%
58643.20
9.8%
108643.20
70000.00
14.5%
38643.20
10.4%

50631.10
50631.10
50631.10
50631.10
50631.10
50631.10
50631.10

Interest
764.60
0.00
400.00
1200.00
2600.00
7000.00
10150.00

Impact of Finnacial Leverage

Poor
Regular
Normal
20%
20%
20%
12%
12%
12%
2
2
2
108643.2
108643.2
108643.2
89%
89%
89%
96692.45
96692.45
96692.45
11950.75
11950.75
11950.75
13255.51
100000
200000
11799.14
11799.14
11799.14
1456.37
88200.86
188200.86
291.65
17663.07
37689.04
1164.72
5975.38
0.19
0.00

70537.79
5975.38
11.80

150511.82
5975.38
25.19

Good
20%
12%
2
108643.2
89%
96692.45
11950.75
300000
11799.14
288200.86
57715.00

Very Good
20%
12%
2
108643.2
89%
96692.45
11950.75
1000000
11799.14
988200.86
197896.75

230485.86
5975.38
38.57

790304.11
5975.38
132.26

Mix

Cost of Debt Cost of Capital

12.20%

9.39%

6.00%

9.33%

10.00%

9.30%

12.00%

9.41%

13.00%

9.63%

14.00%

10.46%

14.50%

11.16%

Constants
Cost of Debt
Return(HCL)
Rm
Rf
s
Tax Rate
B Unlvered

12.2%
71.3%
10.4%
8.6%
0.42
20%
0.40

ructure

EBT
Value of Equity
49866.50
532578.11
50631.10
542808.74
50231.10
537239.26
49431.10
526613.25
48031.10
507787.16
43631.10
444138.92
40481.10
389927.63

Value of
Overall Cost of
Debt
Value of Firm Capital
6265.80
538843.91
9.39%
0.00
542808.74
9.33%
4000.00
541239.26
9.30%
10000.00
536613.25
9.41%
20000.00
527787.16
9.63%
50000.00
494138.92
10.46%
70000.00
459927.63
11.16%

16.0%
C
o
s
t

14.0%
12.0%
10.0%

o
f
F
u
n
d
i
n
g

8.0%

9.33%
9.3%

6.0%
4.0%

6.00%

2.0%
0.0%
0.0%
Debt Ratio


14.50%

14.00%
13.00%
9.33%
9.3%

9.30%
10.00%
9.3%

12.00%
9.41%
9.4%

9.63%
9.5%

10.46%
9.8%

11.16%
10.4%

6.00%
Cost of Equity
Cost of Debt
Cost of Capital

0.0%
Debt Ratio

3.8%

10.1%

22.6%

85.3%

181.1%

INDEX

Impact of Finnaci

Indifference Point
Actual
Plan 1
Plan 2
Capital
31038.3
31038.3
31038.3
Face Value
1
1
1
Cost of Debt
7.5%
7.5%
7.5%
Tax Rate
17%
17%
17%
Debt
19%
0%
10%
Debt Value
5806.5
0
3103.83
Equity Value
25231.8
31038.3
27934.47
No Of Share
31038.3
31038
27934
Interest
436.9
0 233.5422935
EPS= (1-T)(EBITInterest)/No of Share
0.06211
0.06210
EBIT ( Indifference Point)
2330.92
2330.92

Capital
31,038.3
31,038.3
31,038.3
31,038.3
31,038.3
31,038.3
31,038.3

Debt

Very poor
Tax Rate
17%
Debt Cost
8%
Face Value of Share
1
Capital
31038.3
Debt Percentage
89%
Debt Value
6.00
Equity Value
31032.30
Change in EBIT
500
Less Interest @ 10% 0.45
PBT
499.55
TAX Value
86.38
PAT
No of Share
EPS

413.17
31032.30
0.01

Cost of Capital Estimate with different Debt Equity Mix

Interest
Coverage
Equity
D/E Ratio
Ratio
Estimated Beta Cost of Equity

5,806.5

25,231.8

0.0

31,038.3

5,000.0

26,038.3

7,000.0

24,038.3

9,000.0

22,038.3

10,000.0

21,038.3

15,000.0

16,038.3

23.0%
10.27
0.0% No debt
19.2%
12.82
29.1%
8.84
40.8%
6.65
47.5%
5.61
93.5%
2.72

0.37

9.3%

0.31

9.2%

0.36

9.2%

0.38

9.3%

0.41

9.3%

0.43

9.4%

0.55

9.6%

Capital Structure
Total Fund
Cost of
Cost of
Requirement Debt
Debt
Equity
Equity
EBIT
31038.30
5806.50
7.5%
25231.80
9.3%
31038.30
0.00
6.0%
31038.30
9.2%
31038.30
5000.00
7.0%
26038.30
9.2%
31038.30
7000.00
7.3%
24038.30
9.3%
31038.30
9000.00
7.5%
22038.30
9.3%
31038.30
10000.00
8.0%
21038.30
9.4%
31038.30
15000.00
11.0%
16038.30
9.6%

4486.90
4486.90
4486.90
4486.90
4486.90
4486.90
4486.90

Interest
436.90
0.00
350.00
507.50
675.00
800.00
1650.00

Impact of Finnacial Leverage

Poor
Regular
Normal
17%
17%
17%
8%
8%
8%
1
1
1
31038.3
31038.3
31038.3
89%
89%
89%
27624.09
27624.09
27624.09
3414.21
3414.21
3414.21
2330.92
100000
200000
2078.53
2078.53
2078.53
252.39
97921.47
197921.47
43.64
16931.89
34223.18
208.75
3414.21
0.06
0.00

80989.58
3414.21
23.72

163698.29
3414.21
47.95

Good
17%
8%
1
31038.3
89%
27624.09
3414.21
300000
2078.53
297921.47
51514.48

Very Good
17%
8%
1
31038.3
89%
27624.09
3414.21
1000000
2078.53
997921.47
172553.53

246407.00
3414.21
72.17

825367.94
3414.21
241.74

Mix

Cost of Debt Cost of Capital

7.52%

8.69%

6.00%

9.15%

7.00%

8.69%

7.25%

8.55%

7.50%

8.43%

8.00%

8.48%

11.00%

10.27%

Constants
Cost of Debt
R(GlenMark)
Rm
Rf
s
Tax Rate
B Unlvered

7.5%
1.0%
10.4%
8.6%
0.37
17%
0.31

12.0%
C
o
s
t

ructure

EBT
4050.00
4486.90
4136.90
3979.40
3811.90
3686.90
2836.90

Value of Equity
43734.46
49011.30
44757.37
42842.42
40802.89
39335.53
29600.34

Value of
Overall Cost of
Debt
Value of Firm Capital
5806.50
49540.96
8.69%
0.00
49011.30
9.15%
5000.00
49757.37
8.69%
7000.00
49842.42
8.55%
9000.00
49802.89
8.43%
10000.00
49335.53
8.48%
15000.00
44600.34
9.35%

o
f
F
u
n
d
i
n
g

10.0%

9.2%
9.15%

8.0%
6.0%
6.00%

4.0%
2.0%
0.0%
0.0%
Debt Ratio

9.2%

9.15%

8.69%

7.00%

9.3%
8.55%
7.25%

9.3%
8.43%
7.50%

9.6%10.27%
11.00%

9.4%
8.48%
8.00%

Cost of Equity
Cost of Debt
Cost of Capital

19.2%

29.1%

40.8%

47.5%

93.5%

INDEX

Capital
Face Value
Cost of Debt
Tax Rate
Debt
Debt Value
Equity Value
No Of Share
Interest

Impact of Finnaci
Indifference Point
Actual
Plan 1
Plan 2
216034.2
216034.2
216034.2
10
10
10
5.2%
5.2%
5.2%
26%
26%
26%
29%
0%
10%
63686
0
21603.42
152348.2 216034.2
194430.78
21603.42
21603
19443
3300
0 1119.418491

EPS= (1-T)(EBITInterest)/No of Share

EBIT(Indifference Point)

Capital
216,034.20
216,034.20
216,034.20
216,034.20
216,034.20
216,034.20
216,034.20

Debt

0.38253
11195.74

0.38253
11195.74

Very poor
Tax Rate
26%
Debt Cost
5%
Face Value of Share
10
Capital
216034.2
Debt Percentage
20%
Debt Value
43206.84
Equity Value
172827.36
Change in EBIT
500
Less Interest
2238.84
PBT
-1738.84
TAX Value
-455.38

PAT
No of Share
EPS

-1283.46
17282.74
-0.07
Check

Cost of Capital Estimate with different Debt Equity Mix

Interest
Coverage
Equity
D/E Ratio
Ratio
Estimated Beta Cost of Equity

63,686.00

152,348.20

0.00

216,034.20

20,000.00

196,034.20

40,000.00

176,034.20

50,000.00

166,034.20

60,000.00

156,034.20

80,000.00

136,034.20

41.8% 122.27
0.0% No debt
10.2% 474.71
22.7% 224.17
30.1% 161.40
38.5% 103.46
58.8%
63.05

0.87

10.2%

0.66

9.8%

0.71

9.9%

0.78

10.0%

0.81

10.1%

0.85

10.1%

0.95

10.3%

Capital Structure
Total Fund
Cost of
Cost of
Requirement Debt
Debt
Equity
Equity
EBIT
Interest
216034.20
63686.00
5.2%
152348.20
10.2%
403500.00
3300.00
216034.20
0.00
4.0%
216034.20
9.8%
403500.00
0.00
216034.20
20000.00
4.3%
196034.20
9.9%
403500.00
850.00
216034.20
40000.00
4.5%
176034.20
10.0%
403500.00
1800.00
216034.20
50000.00
5.0%
166034.20
10.1%
403500.00
2500.00
216034.20
60000.00
6.5%
156034.20
10.1%
403500.00
3900.00
216034.20
80000.00
8.0%
136034.20
10.3%
403500.00
6400.00

Impact of Finnacial Leverage

Poor
Regular
Normal
26%
26%
26%
5%
5%
5%
10
10
10
216034.2
216034.2
216034.2
20%
20%
20%
43206.84
43206.84
43206.84
172827.36
172827.36 172827.36
11195.74
100000
200000
2238.84
2238.84
2238.84
8956.90
97761.16
197761.16
2345.69
25602.31
51790.95

6611.21
17282.74
0.38
0.00

72158.85
17282.74
4.18

145970.22
17282.74
8.45

Good
26%
5%
10
216034.2
20%
43206.84
172827.36
300000
2238.84
297761.16
77979.58

Very Good
26%
5%
10
216034.2
20%
43206.84
172827.36
1000000
2238.84
997761.16
261300.02

219781.58
17282.74
12.72

736461.15
17282.74
42.61

Mix

Cost of Debt Cost of Capital

5.18%

8.30%

4.00%

9.80%

4.25%

9.26%

4.50%

8.76%

5.00%

8.59%

6.50%

8.65%

8.00%

8.68%

Constants
Cost of Debt
R(Ultratech)
Rm
Rf
s
Tax Rate
B Unlvered

5.2%
-12.1%
10.4%
8.6%
0.87
26%
0.66

ructure

EBT
Value of Equity
400200.00
3937258.77
403500.00
4119220.10
402650.00
4073107.14
401700.00
4018583.01
401000.00
3985573.95
399600.00
3942822.40
397100.00
3849920.17

Value of
Overall Cost of
Debt
Value of Firm Capital
63686.00
4000944.77
8.30%
0.00
4119220.10
9.80%
20000.00
4093107.14
9.26%
40000.00
4058583.01
8.76%
50000.00
4035573.95
8.59%
60000.00
4002822.40
8.65%
80000.00
3929920.17
8.68%

C
o2
s
3
t
4
o5
f
6
F
u
n
d
i
n
g

C
o
s
t
o
f
F
u
n
d
i
n
g

12.0%
10.0%

9.8%
9.80%

8.0%

9.9%

9.26%

10.0%

10.1%

10.1%

8.76%

8.59%

8.65%

6.0%

6.50%

4.0%
4.00%

4.25%

0.0%

10.2%

4.50%

5.00%
Cost of Equity
Cost of Debt
Cost of Capital

2.0%
0.0%
Debt Ratio

22.7%

30.1%

38.5%

10.3%

8.68%
8.00%

Cost of Equity
Cost of Debt
Cost of Capital

58.8%

INDEX
Industry Analysis: Debt/Equity Ratio

Pharma
Industry
0.35

Cement

IT- Software

Sun Pharma
0.01

Glenmark
0.23

Cipla
0.06

Dr. Reddy
0.25

Ranbaxy-Dec Optimum
122
Glenmark
2.38
0.41

Industry
0.44

Ambuja
0.01

Ultratech
0.34

Birla
0.5

JK
0.9

Prism
1.3

Optimum
Ultratech
0.3

Industry
0.11

Infy/MS/TCS/C
ognizent/HP/C
apeg.
0

HCL
0.1

Wipro
0.23

IBM
0.25

Tech
Mahindra
0.33

Optimum
HCL
0.038

D/E Ratio

Interest
Coverage
Ratio

Estimated
Beta

Cost of Equity

Cost of
Debt

Industry

Capital

HCL Current
HCL Optimal
Glenmark Current
Glenmark Optimal
Ultratech Current
Ultratech Optimal

108,643.20
108,643.20
31,038.30
31,038.30
216,034.20
216,034.20

Equity

102,377.40
104,643.20
25,231.80
22,038.30
152,348.20
166,034.20

6.12%
3.82%
23.01%
40.84%
41.80%
30.11%

6621.91%
########
1026.99%
664.73%
########
########

0.4240
0.4166
0.3669
0.4124
0.8691
0.8118

9.36%
9.35%
9.26%
9.34%
10.16%
10.06%

12.20%
10.00%
7.52%
7.50%
5.18%
5.00%

Cost of
Capital

9.39%
9.30%
8.69%
8.43%
8.30%
8.59%