RESULTS REVIEW 4QCY16 28 FEB 2017

ITD Cementation (India)

NEUTRAL
INDUSTRY INFRASTRUCTURE Challenges persist
CMP (as on 28 Feb 2017) Rs 152 ITD Cementation (ITD) missed revenue estimates in Highlights of the quarter
4QCY16 by 20% owing to weak execution in its JNPT Order intake sub-par: ITD currently has a net order
Target Price Rs 144 project. Further, the Rs 124mn loss borne by the book of Rs 47.5bn (1.5x CY16 revenue), excluding L1
Nifty 8,880 Delhi Metro JV resulted in a 54% APAT miss. This orders of Rs 17bn and Rs 18.3bn from associates. L1
Sensex 28,743 project has been a thorn in ITDs road to recovery, mainly includes the Udangudi Port project. The total
KEY STOCK DATA contributing Rs 557mn to its CY16 loss, and the backlog (including associates) is Rs 65.8bn ex L1 of Rs
company pegs further loss of Rs 80mn in CY17E. 17bn. New order intake of Rs 42.2bn is sub-par, as
Bloomberg ITCE IN
after removing Rs 18.3bn Associate Order Book, net
No. of Shares (mn) 155 Whilst the CY16 new order wins stood at Rs 42.2bn, intake is Rs 24bn.
MCap (Rs bn) / ($ mn) 23/352 almost Rs 18.3bn of this will be treated as an Balance sheet provides comfort, net D/E at 0.5x: ITDs
6m avg traded value (Rs mn) 29 Associate Order Book, as ITD adopts IND-AS cash conversion cycle improved to 49 days, CY16-end
STOCK PERFORMANCE (%) standards from CY17E. Hence, the net executable (67 days CY15), driven by inventory reduction from 140
to 100 days. The debtors cycle improved to 35 days as
52 Week high / low Rs 179/86 order book from the revenue recognition perspective against 40 in CY15. Conso. gross/net debt decreased Rs
3M 6M 12M would stand at Rs 47.5bn (of which Rs 10bn is slow 1.4/1.7bn YoY to Rs 4.6/2.8bn and net D/E to 0.5x vs.
Absolute (%) 8.9 4.6 71.9 moving). This poses a risk to ITDs CY17E revenue 0.9x.
Relative (%) (2.3) 2.2 47.4 guidance of Rs 32bn. We have cut our CY17-18E Near-term outlook: (1) Execution recovery remains
SHAREHOLDING PATTERN (%) revenue by 25-30% and EPS by 20-42.7%. challenging on the back of weak order inflows, (2) Delhi
Promoters 51.63
Metro losses may continue through 1HCY17E, though
Owing to limited upside from current levels, we of a lower quantum, (3) IND-AS adoption may result in
DIIs & Local MFs 24.87 downgrade ITD to NEUTRAL with Rs 144/sh TP (15x weak 1HCY17E. Headwinds cloud near-term
FIIs 2.7 Mar-19E EPS vs Rs 175/sh earlier on CY18E EPS). performance.
Public & Others 20.8
Financial Summary (Consolidated)
Source : BSE
(Rs mn) 4QCY16 4QCY15 YoY (%) 3QCY16 QoQ (%) CY16 CY17E CY18E CY19E
Net Sales 7,299 10,632 (31.3) 4,827 51.2 30,896 26,223 30,451 34,871
EBITDA 556 657 (15.4) 461 20.7 2,099 2,380 2,763 3,205
APAT 130 301 (56.7) 69 89.7 481 793 1,451 1,595
Diluted EPS (Rs) 0.8 1.9 (56.7) 0.4 89.7 3.1 5.1 9.4 10.3
P/E (x) 49.0 29.7 16.2 14.8
Parikshit D Kandpal EV / EBITDA (x) 12.6 10.9 9.0 7.6
parikshitd.kandpal@hdfcsec.com RoE (%) 9.1 13.5 20.9 19.0
+91-22-6171-7317 Source: Company, HDFC sec Inst Research
HDFC securities Institutional Research is also available on Bloomberg HSLB <GO>& Thomson Reuters
 ITD CEMENTATION (INDIA): RESULTS REVIEW 4QCY16

Lower contribution from Consolidated Quarterly Financial

JNPT project (Rs 2.6bn vs Rs Particulars (Rs mn) 4QCY16 4QCY15 YoY (%) 3QCY16 QoQ (%) CY16 CY15 YoY (%)
3.7bn/qtr) resulted in Net Sales 7,299 10,632 (31.3) 4,827 51.2 30,896 30,709 0.6
4QCY16 revenue miss of 20% Material Expenses (4,943) (7,728) (36.0) (2,592) 90.7 (20,623) (21,053) (2.0)
Employee Expenses (612) (516) 18.7 (681) (10.1) (2,538) (2,224) 14.1
ITD incurred Rs 124mn loss Other Operating Expenses (1,188) (1,731) (31.4) (1,093) 8.7 (5,637) (5,516) 2.2
in DMRC JV resulting in EBITDA 556 657 (15.4) 461 20.7 2,099 1,916 9.5
EBIDTA margins of 7.6% (- Depreciation (119) (74) 60.3 (110) 7.8 (449) (367) 22.6
193bps QoQ); DMRC EBIT 437 583 (25.0) 350 24.7 1,649 1,549 6.4
residual order backlog now Other Income 92 66 39.8 60 52.4 252 222 13.7
Interest Cost (272) (316) (13.9) (286) (4.9) (1,165) (1,377) (15.4)
stands at Rs 560mn
PBT 257 333 (22.8) 125 105.9 736 394 86.8
Tax (126) (32) 295.9 (56) 125.8 (255) 253 (200.9)
EBITDA margins expanded
RPAT 130 301 (56.7) 69 89.7 481 647 (25.6)
by +144bps YoY and
E/o (adj for tax) - - 0.0 - 0.0 - (1,240) (100.0)
contracted -193bps QoQ to
APAT 130 301 (56.7) 69 89.7 481 (593) (181.1)
7.6%; adjusted for Metro
Source: Company, HDFC sec Inst Research
loss ITD reported EBIDTA
margins of 9.3% Margin Analysis
4QCY16 4QCY15 YoY (bps) 3QCY16 QoQ (bps) CY16 CY15 YoY (bps)
ITD won new orders worth Material Expenses % Net Sales 67.7 72.7 (497) 53.7 1,402 66.7 68.6 (181)
Rs 15.8bn in 4QCY16. Total Employee Expenses % Net Sales 8.4 4.9 354 14.1 (571) 8.2 7.2 97
orders secured in CY16 stand Other Operating Expenses % Net Sales 16.3 16.3 (0) 22.7 (637) 18.2 18.0 28
at Rs 42.2bn and order EBITDA Margin (%) 7.6 6.2 144 9.5 (193) 6.8 6.2 55
backlog is Rs 65.8bn Tax Rate (%) 49.3 9.6 3,966 44.9 434 34.6 (64.1) 9,879
APAT Margin (%) 1.8 2.8 (104) 1.4 36 1.6 (1.9) 349
Source: Company, HDFC sec Inst Research
Of this order book, Rs
18.4bn will be treated as Order Book Assumptions
Associate Order Book, Rs mn CY15 CY16E CY17E CY18E CY19E
hence net actionable order Opening Order Book 47,630 52,040 65,835 85,612 105,761
backlog from revenue Add: New Order Wins 35,119 42,230 46,000 50,600 56,672
recognition perspective Less: Orders Executed 30,709 30,896 26,223 30,451 34,871
stands at Rs 47.5bn (of this Closing Order Book 52,040 65,835 85,612 105,761 127,561
Rs 10bn is slow moving) Trailing Book-to-bill Ratio (x) 1.7 2.1 3.3 3.5 3.7
Source: Company, HDFC sec Inst Research

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 ITD CEMENTATION (INDIA): RESULTS REVIEW 4QCY16

The inventory cycle has WC cycle remains robust

improved from 140 days in ITDs cash conversion cycle has improved to 49 days in end. The working capital cycle will witness further
CY15 to 100 days in CY16 on CY16-end from 67 days in CY15-end. This is on account improvement, as ITD expects to settle claims with AP
account of higher share of of a reduction in the inventory from 140 days in CY15 Irrigation (~Rs 250mn), Telangana Irrigation (~Rs
the current orders being to 100 in CY16, while the debtor cycle has improved to 750mn) and other clients (~Rs 350mn).
outsourced 35 days as against 40 in CY15-end.
Our interactions with the Secretary of Telangana
As the inventory is funded by higher creditors, the Irrigation suggest that the state government is working
Debtor cycle stable at 35 reduction in inventory days has resulted in creditor on settling contractor dues.
days in CY16 from 40 in CY15. days coming down from 156 CY15-end to 131 CY16-
Better payment terms in the
Consolidated - Working Capital Cycle
JNPT project aided this
Particulars CY11 CY12 CY13 CY14 CY15 1QCY16 2QCY16 3QCY16 4QCY16 CY17E CY18E
Inventory Days 179 208 220 240 140 107 91 84 100 101 102
Cash conversion cycle has
Debtor Days 81 79 93 94 40 42 45 36 35 45 45
improved from 67 days in
Other Current Asset Days 42 38 50 51 46 39 40 44 49 56 50
CY15 to 49 days in CY16,
Payables Days 146 146 154 179 156 136 134 115 131 140 140
driven by an improvement in
Provisions Days 3 3 4 4 3 3 3 3 4 3 3
inventory cycle
Cash Conversion Cycle 154 177 206 202 67 50 40 46 49 60 55
Source: Company, HDFC sec Inst Research
WC cycle may improve
further as ITD settles pending Order Book Position
claims of Rs 1.35bn with Consolidated (Rs mn) Rs mn %
various clients who are partly Hydro / Dams / Tunnels / Irrigation 7,695 11.7
sitting in debtors and Marine 27,264 41.4
inventory as unbilled Specialist Works 1,518 2.3
Highways/Bridges/Flyovers 2,393 3.6
The order backlog is at Rs Industrial Structures 750 1.1
65.8bn, with marine Water & Sewage 1,457 2.2
contributing 41% to the order Urban Infrastructure / MRTS 22,751 34.6
book; L1 orders stand at Rs Buildings 1,756 2.7
17bn; Excluding Associate Airport 251
Order Book of Rs 18.4bn, net TOTAL 65,835 100
order book is Rs 47.5bn Order book JV/Associate Share 18,368 27.9
Net Order Book (for Revenue Recognition) 47,467 72.1
Source: Company, HDFC sec Inst Research

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 ITD CEMENTATION (INDIA): RESULTS REVIEW 4QCY16

Key Assumptions & Estimates

We expect 26.7% CY16-18E Consolidated (Rs mn) CY16 CY17E CY18E Comments
order book CAGR Net order book 47,467 69,898 97,422 Net order book (excluding associates)
Includes Mumbai Metro line 3, Vizhinzam, Kolkata Metro etc. Associate order book
JV orders to be accounted Associate order book 18,368 15,714 8,339 will be accounted under IND-AS, from 1QCY17E. Only profit/loss as single line item
will figure in consolidation
under IND-AS - Associate
Closing order book 65,835 85,612 105,761 Expect 26.7% CY16-18E order book CAGR
accounting from CY17E. Net
Order book growth (%) 26.5 30.0 23.5
order book, right matrix to New order booking 42,230 46,000 50,600 Excludes L1 Udangudi order of Rs 17bn ( ITD share of Rs 12bn)
evaluate execution Book to bill ratio 2.1 3.3 3.5 Book-to-bill ratio to remain healthy
We have modeled for -0.7% revenue CAGR over CY16-18E. CY17E, ITD has given Rs
Total Revenue 30,896 26,223 30,451 32bn of guidance vs our estimate of Rs 26bn. We estimate back ended order intake
We have modeled for -0.7% and Rs 18.3bn order moving to associate pool as key factor for muted growth.
revenue CAGR over CY16-18E Growth (%) 0.6 (15.1) 16.1
EBIDTA 2,099 2,380 2,763 14.7% CY16-18E EBIDTA CAGR
EBIDTA margin to expand JV losses get recognized below line. We have also factored
14.7% CY16-18E EBIDTA EBIDTA margin (%) 6.8 9.1 9.1
in 0.5% of royalty to ITD parent
CAGR Depreciation 449 483 524
With muted growth working capital demand may reduce. The interest cost shall fall as
Financial Charges 1,165 998 891 debt availed for Associate order book will not get consolidated. Hence from CY17E,
Muted WC demand and JV net debt should come down further
PBT 736 1,129 1,592 EBIDTA margins expansion and interest reduction to drive 47.1% CY17-18E PBT CAGR
order book being accounted
PBT margin (%) 2.4 4.3 5.2
as single line item would
Tax 255.0 361.4 509.5
result in Interest cost
Tax rate (%) 34.6 32.0 32.0
reduction owing to de-
Reported PAT 481 768 1,083
consolidation
We model for Rs 80mn residual Delhi metro losses in CY17E. Net profit from Mumbai
Associates Profit share 25 369
metro and other project to result in Rs 25mn profit for CY17E
Adjusted PAT 481 793 1,451 CY16-18E 73.7% APAT CAGR
Net margin (%) 1.6 3.0 4.8
73.7% APAT CAGR over CY16- Debtor days 35 45 45
18E CFO - a 3,592 2,135 2,595
CFI - b (64) (604) (605)
FCF - a+b 3,528 1,531 1,990
CFF - c (2,558) (1,148) (2,391) Reduction in debt and outflow on interest
Net cash position doesnt Change in cash - a+b+c 971 383 (401) Net cash position doesnt change debt materially
change debt materially Source: HDFC sec Inst Research

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 ITD CEMENTATION (INDIA): RESULTS REVIEW 4QCY16

We have cut revenue Change in Estimates

estimates owing to back CY17E CY18E
ended order book growth Rs mn Comments
New Old % Change New Old % Change
and Rs 18.3bn of orders
moving to Associate Back ended order growth to result in
revenue cut. Net revenue also to get
Accounting under IND-AS vs
impacted by Rs 18.3bn JV order
JV accounting under I-GAAP Net Revenues 26,223 37,652 (30.4) 30,451 40,712 (25.2) moving to Associate Accounting
from JV accounting. This will result in
Rs 2.6bn and Rs 7.4bn revenue de-
This will result in Rs 2.6bn consolidation for CY17-18E
and Rs 7.4bn revenue de- Material Expenses 17,103 24,800 (31.0) 19,893 27,251 (27.0)
consolidation for CY17-18E Employee Expenses 2,570 2,636 (2.5) 2,680 2,687 (0.3)

Other Operating Expenses 4,169 6,589 (36.7) 5,116 6,840 (25.2)

Accordingly, EBIDTA and EPS EBIDTA cut in line with revenue and
EBIDTA 2,380 3,627 (34.4) 2,763 3,934 (29.8)
builds 0.5% royalty to ITD Parent
estimates have been
EBIDTA (%) 9.1 9.6 (55.6bps) 9.1 9.7 (59.1bps)
adjusted
Depreciation 483 503 (3.9) 524 562 (6.8)
EBIT 1,897 3,124 (39.3) 2,239 3,372 (33.6)
Interest reduction as JV
interest will not get Other Inc (incl. EO Items) 230 179 28.5 245 175 39.5
consolidated Interest reduction as JV interest will
Interest 998 1,268 (21.3) 891 879 1.4
not get consolidated

Residual Rs 80mn of Metro PBT 1,129 2,036 (44.5) 1,592 2,668 (40.3)
Losses to dilute share of Tax 361 651 (44.5) 510 854 (40.3)
profit from associate to Rs
RPAT 768 1,384 (44.5) 1,083 1,814 (40.3)
25mn
Profit from Rs 18.3bn associate order
Share of associates 25 - 369 -
book
APAT 793 1,384 (42.7) 1,451 1,814 (20.0)
Adjusted EPS cut by 42.7/20%
Source: HDFC sec Inst Research
during CY17/18E

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 ITD CEMENTATION (INDIA): RESULTS REVIEW 4QCY16

HDFC Sec vs Consensus

Our CY17E & CY18E estimates are sub-consensus as we and hence interest attributable to the same will be de-
Our FY17E EPS estimates are expect execution to be more back ended. Despite our consolidated.
5-27% lower than consensus CY18E EBIDTA being 21.3% lower than consensus, our
APAT is only 4.9% lower. We have absorbed a 0.5% EBIDTA margin impact on
account of royalty to be paid to ITDs parent company
This is on account of contribution from Profit and Loss
from CY17E. Earlier, due to weak financial
from Associate.
performance, the parent company had exempted ITD
Interest expense is also lower than consensus, as
from paying royalty for the CY14-16 period.
orders worth Rs 18.3bn will move into associate pool,

HDFC SEC VS CONSENSUS

Consensus HDFC Sec % Divergence
Sales (Rs mn)
CY17E 34,295 26,223 (23.5)
CY18E 38,018 30,451 (19.9)
EBIDTA (Rs mn)
CY17E 2,893 2,380 (17.7)
CY18E 3,511 2,763 (21.3)
Net Profit (Rs mn)
CY17E 1,084 793 (26.9)
CY18E 1,526 1,451 (4.9)
Source: Bloomberg Consensus, HDFC sec Inst Research

Page | 6

Our target P/E multiple is in
line with KNR Construction
and J Kumar Infra. In the
past, ITD traded at 15-20%
premium to these companies
MNC parentage, high
corporate governance and
sustained balance sheet
improvement may justify
higher P/E multiple. In the
past, ITD has traded at 18-
20x 1-yr forward P/E
Whilst Balance sheet has
seen substantial repair,
revenue growth has been
faltering. Competition from
large players, conservative
stance on margins and tight
control on working capital
will result in back ended new
order wins. We have cut our
CY17-18E EPS estimate by 20-
42.7% to factor in the same
We value ITD core EPC
business at Rs 144/share (15x
one-year forward Mar-19E
EPS) vs Rs 175/sh earlier.
With limited upside we
downgrade ITD to NEUTRAL
from BUY
Outlook and valuation
Reduce Target price to Rs 144/sh
Valuation methodology: We have valued ITD on P/E
basis in line with peers, namely KNR/J Kumar, at 15x
one-year forward. With the L1 status in Rs 17bn orders
and likely bottoming out of EBIDTA margin (4QCY16),
we believe that ITDs valuation multiple should be
higher. A MNC parentage and strong corporate
governance are some of the other factors influencing
our decision.
Other fundamentals include (1) Improving order book
with ~1.6x increase over CY16-18E period to Rs
105.7bn (2) Improving balance sheet (4QCY16 net D/E
at 0.5x vs. 0.89x during CY15) (3) Likely recovery of
pending claims of Rs 1.4bn and (4) No exposure to
capex-intensive BOT segment.
ITD stands to benefit from the strong upcoming order
pipeline of Rs 1tn in Mumbai. These will be urban
infrastructure projects, where ITD has strong
credentials. Residual losses in the Delhi Metro project
are pegged at Rs 80mn vs Rs 556mn in CY16. We have
Valuation
Particulars Segments Value (Rsmn)
ITD Cementation Core construction business 22,309
Total 22,309
Source: HDFC sec Inst Research
ITD CEMENTATION (INDIA): RESULTS REVIEW 4QCY16
built in a meaningful margin recovery from CY17E as
the Delhi Metro project gets completed.
Government-led spends in the infrastructure sector
will continue to drive stock performance and ITD, with
its strong credentials, will likely benefit from the pickup
in order activity. The company, over the past many
years, has built strong pre-qualification in low
competitive segments such as marine, MRTS, etc. This
will aid margin recovery.
While the balance sheet has seen substantial repair,
revenue growth has been faltering. Competition from
large players, conservative stance on margins and tight
control on working capital will result in back ended
new order wins. We have cut our CY17-18E EPS
estimate by 20-42.7% to factor in the same. We value
the core EPC business at Rs 144/share (15x one-year
forward Mar-19E EPS) vs Rs 175/share earlier (15x one-
year forward Dec-18E EPS). With limited upside we
downgrade ITD to NEUTRAL.
Value per share(Rs) Rationale
144 At 15x Mar-19E EPS
144
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 ITD CEMENTATION (INDIA): RESULTS REVIEW 4QCY16

Income Statement (Consolidated) Balance Sheet (Consolidated)

Year ending December (Rs mn) CY15 CY16 CY17E CY18E CY19E Year ending December (Rs mn) CY14 CY15 CY16E CY17E CY18E
Net Revenues 30,709 30,896 26,223 30,451 34,871 SOURCES OF FUNDS
Growth (%) 78.7 0.6 (15.1) 16.1 14.5 Share Capital 155 155 155 155 155
Material Expenses 21,053 20,623 17,103 19,893 22,774 Reserves 4,927 5,352 6,090 7,486 9,026
Employee Expenses 2,224 2,538 2,570 2,680 2,859 Total Shareholders Funds 5,082 5,507 6,245 7,642 9,181
Other Operating Expenses 5,516 5,637 4,169 5,116 6,033 Long Term Debt 386 919 919 919 919
EBIDTA 1,916 2,099 2,380 2,763 3,205 Short Term Debt 5,621 3,711 3,561 2,061 1,911
EBIDTA (%) 6.2 6.8 9.1 9.1 9.2 Total Debt 6,007 4,630 4,480 2,980 2,830
EBIDTA Growth (%) 110.4 9.5 13.4 16.1 16.0 Deferred Taxes (442) (276) (276) (276) (276)
Depreciation 367 449 483 524 582 TOTAL SOURCES OF FUNDS 10,647 9,861 10,449 10,346 11,736
EBIT 1,549 1,649 1,897 2,239 2,623 APPLICATION OF FUNDS
Other Income (incl. EO Items) (1,018) 252 230 245 253 Net Block 3,490 3,818 3,935 4,011 4,029
Interest 1,377 1,165 998 891 853 CWIP 27 56 61 65 71
PBT (846) 736 1,129 1,592 2,023 Investments, LT Loans & Advances 2 0 0 0 0
Tax (253) 255 361 510 647 Total Non-current Assets 3,519 3,874 3,996 4,076 4,100
RPAT (593) 481 768 1,083 1,376 Inventories 11,754 8,457 7,256 8,510 9,649
EO items (net of tax) 1,076 - - - - Debtors 3,378 2,935 3,233 3,754 4,777
Profits from Associates 25 369 219 Cash & Equivalents 1,476 1,851 2,179 1,723 2,047
APAT 483 481 793 1,451 1,595 ST Loans & Advances, Others 3,879 4,186 4,023 4,171 4,777
APAT Growth (%) - (0.4) 64.8 83.1 9.9 Total Current Assets 20,487 17,428 16,691 18,158 21,250
Adj. EPS 3.1 3.1 5.1 9.4 10.3 Current Liabilities 13,127 11,096 10,058 11,680 13,375
EPS Growth (%) - (0.4) 64.8 83.1 9.9 Provisions 232 345 180 209 239
Source: Company, HDFC sec Inst Research Total Current Liabilities 13,358 11,441 10,238 11,889 13,614
Net Current Assets 7,128 5,987 6,454 6,270 7,636
TOTAL APPLICATION OF FUNDS 10,647 9,861 10,449 10,346 11,736
Source: Company, HDFC sec Inst Research

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 ITD CEMENTATION (INDIA): RESULTS REVIEW 4QCY16

Cash Flow (Consolidated) Key Ratios (Consolidated)

Year ending December (Rs mn) CY14 CY15 CY16 CY17E CY18E CY14 CY15 CY16E CY17E CY18E
PBT (846) 736 1,129 1,592 2,023 PROFITABILITY (%)
Non-operating & EO items/JV GPM 31.4 33.3 34.8 34.7 34.7
1,258 161 25 369 219
profits EBITDA Margin 6.2 6.8 9.1 9.1 9.2
Interest expenses 1,332 1,046 998 891 853 APAT Margin 1.6 1.6 3.0 4.8 4.6
Depreciation 367 449 483 524 582 RoE 9.0 9.1 13.5 20.9 19.0
Working Capital Change 2,790 1,566 (139) (272) (1,042) Core RoCE 11.8 13.5 15.6 17.7 18.4
Tax paid (250) (367) (361) (510) (647) RoCE 3.5 12.6 14.1 19.9 18.5
OPERATING CASH FLOW ( a ) 4,651 3,592 2,135 2,595 1,987 EFFICIENCY
Capex (460) (789) (600) (600) (600) Tax Rate (%) 29.9 34.6 32.0 32.0 32.0
Others 34 128 (4) (5) (5) Asset Turnover (x) 5.1 4.5 3.5 2.9 3.0
Free cash flow (FCF) 4,225 2,931 1,531 1,990 1,382 Inventory (days) 139.7 100 101 102 101
Investments (615) 597 0 0 0 Debtors (days) 40 35 45 45 50
INVESTING CASH FLOW ( b ) (1,041) (64) (604) (605) (605) Other Current Assets (days) 46 49 56 50 50
Share capital Issuance 0 0 0 0 0 Payables (days) 156 131 140 140 140
Debt Issuance (1,646) (1,378) (150) (1,500) (150) Provisions (days) 3 4 3 3 3
Interest expenses (1,375) (1,180) (998) (891) (853) Cash Conversion Cycle (days) 67 49 60 55 59
FCFE 1,204 373 383 (401) 379 Debt/EBITDA (x) 3.1 2.2 1.9 1.1 0.9
Dividend (0) (0) (55) (55) (55) Net D/E 0.89 0.50 0.4 0.2 0.1
FINANCING CASH FLOW ( c ) (3,021) (2,558) (1,203) (2,446) (1,058) Interest Coverage 1.1 1.4 1.9 2.5 3.1
NET CASH FLOW (a+b+c) 589 971 328 (456) 324 PER SHARE DATA
Closing Cash & Equivalents 838 1,809 2,179 1,723 2,047 EPS (Rs/sh) 3.1 3.1 5.1 9.4 10.3
Source: Company, HDFC sec Inst Research
CEPS (Rs/sh) (1.5) 6.0 8.1 10.4 12.6
DPS (Rs/sh) 0.0 0.0 0.3 0.3 0.3
BV (Rs/sh) 32.8 35.5 40.2 49.3 59.2
VALUATION
P/E 48.8 49.0 29.7 16.2 14.8
P/BV 4.6 4.3 3.8 3.1 2.6
EV/EBITDA 14.7 12.6 10.9 9.0 7.6
EV/Revenues 0.9 0.9 1.0 0.8 0.7
OCF/EV (%) 16.5 13.6 8.2 10.4 8.2
FCF/EV (%) 15.0 11.1 5.9 8.0 5.7
FCFE/Market Cap (%) 5.1 1.6 1.6 (1.7) 1.6
Dividend Yield (%) 0.0 0.0 0.2 0.2 0.2
Source: Company, HDFC sec Inst Research

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 ITD CEMENTATION (INDIA): RESULTS REVIEW 4QCY16

RECOMMENDATION HISTORY
Date CMP Reco Target
ITD Cementation TP
26-Feb-16 88 BUY 138
170 14-May-16 132 BUY 159
150
8-Jul-16 149 BUY 159
10-Aug-16 143 BUY 159
130 10-Nov-16 143 BUY 175
110 6-Jan-17 166 BUY 175
28-Feb-17 152 NEU 144
90

70
Rating Definitions
50
Dec-16 BUY : Where the stock is expected to deliver more than 10% returns over the next 12 month period
Oct-16
Aug-16
Apr-16

Nov-16

Jan-17
Feb-16

Sep-16

Feb-17
May-16

Jun-16

Jul-16
Mar-16

NEUTRAL : Where the stock is expected to deliver (-)10% to 10% returns over the next 12 month period
SELL : Where the stock is expected to deliver less than (-)10% returns over the next 12 month period

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 ITD CEMENTATION (INDIA): RESULTS REVIEW 4QCY16

Disclosure:
I, Parikshit Kandpal, MBA author and the name subscribed to this report, hereby certify that all of the views expressed in this research report accurately reflect our views about the subject
issuer(s) or securities. We also certify that no part of our compensation was, is, or will be directly or indirectly related to the specific recommendation(s) or view(s) in this report.
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