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BPL Ltd

Customer Credit Analysis

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Credit Risk Analysis

Construction & ContractingCivil/Emerging Market/Asia/India

1. Executive Summary
2. Company Overview 3. Financial Performance 4. Debt & Financing Overview 5. Performance Benchmarking
Appendix I: Profit & Loss statement Appendix II: Balance sheet

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Company Overview
Company

- A household name in India with a diversified product range of Consumer Products


-

and leading manufacturer of Professional Products with an annual turnover of 1,118 mn INR as on 31st March 2010.

Group

Market presence

-BPL has its footprint across the country through a distribution network comprising of over 7000 channel partners. Manned by customer friendly and informed sales persons. -BPL is an integrated group with cross shareholdings and shareholders. The current market capitalization is approximately Rs. 107 Crores of which about 66 % equity stake is held by its promoters

Shareholdin g pattern

Promoters

- Incorporated in 1963 as British Physical Laboratories India Private Limited by TPG


Nambiar. It has grown from a hermetically sealed manufacturer to a strong brand in Consumer Durable market.

Financials summary Expansion plans


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- The company has plans to put the HMS Division on a fast track, thus entering into agreements with a number of global technologies. It also has plans to expand its operations to SAARC country areas and avail Export incentives.
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Financial Performance
Operating Performance EBITDA Margin (%) EBITMargin (%) Net Profit Margin (%) Liquidity And Solvency C urrent Ratio Debt Equity Ratio Debt/ EBITDA Ratio Financial Strength Debt C overage Ratios Interest C overage Debt Service C overage Ratio Return on Investment C omposite Ratios Asset Turn Ratio Return on C apital Employed (%) Return on Net Worth (%) Earnings Per Share (diluted) C omposite Ratios ash C Flow Indicator C - Div / Debt (%) FO FC / Debt (%) F Divident payout to cash profit (%)
Source: www.moneycontrol.com
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2008 -25.2 -33.6 -39.1 2008 1.2 5.7 -10.3 2008 -2.8 -1.8 2008 0.4 -6.2 -57.0 -9.5 2008 -1.0 -1.3 --

2009 -39.9 -54.1 -17.5 2009 1.2 7.0 -9.9 2009 -3.4 -2.5 2009 0.3 -7.6 -19.9 -2.8 2009 1.2 0.6 --

FinancialINR mn Highlights 2010


-8.0 -20.4 0.4 2010 1.3 6.5 -41.9 2010 -1.0 -0.2 2010
1,400.0 1,200.0 1,000.0 800.0 600.0 400.0 200.0 Mar '06 Mar '07 1,260.8 1,122.2

Net Revenue

C AGR

-10.3% -10.3%

1,118.9

761.6 815.4

Mar '08

Mar '09

Mar'10

INR mn

Operating Profit

C AGR

-48.9%
-65.6 -200.0 -400.0 -600.0 -800.0 Mar '06 Mar '07 -71.8 Mar '08 -281.9 Mar '09 -304.0 Mar'10

0.3 -2.7 0.5 0.1 2010 -8.1 8.6 -ROS

-1,000.0 -1,200.0

-965.5

-6.4%

-8.0%
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Performance Benchmarking
Peer Group Comparison
Particulars J aiprakash Asso GMR Infra Unitech Lanco Infratech J aypee Infra IRB Infra ILandFSTrans Last Price Market C ap. Sales Net Profit Total Assets 110 23306 5979 897 26409 47 18158 169 13 8415 62 15623 1852 740 13052 62 14868 5937 486 5894 68 9389 7714 229 7611 0 56 2024 292 5672 3101

-4thnd largest market cap of INR 14868 INR Cr. - P/E multiple at 43.37 close to the market avg. of 48.15 - ROE at 15.76% being one of the best in the industry

Stock Market Performance

- Lancos stock has outperformed the Sensex over past 12 months stock gained 17.39% compared to market index gain of 15.06%

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Source:

Peer Group Comparison as on 30.04.2010.

Source of Information
Source of information: Financials tables used in slide # 7 & # 8 and Appendix I & II: http://www.moneycontrol.com/india/stockpricequote/constructioncontractingcivil/lancoinfratech/LI10 Stock code: LITL

Find below links to additional sources of information used in the presentation: Lanco Infratech: http://www.lancogroup.com/ Lanco Infratech Annual Report: http://www.lancogroup.com/investor/financials.html

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Appendix

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Appendix I : P/L account & Cash flow statement

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Appendix II : Balance Sheet

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Reference Material
Financial Indicators for

Customer Credit Analysis

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Financial Ratio

Standard definition & value range - Moody's


Very satisfactory Satisfactory Not satisfactory Not Acceptable Profit before Interest and tax Net sales Profit before interest and tax Avg C apital Employed Gross debt - cash & cash equivalent Equity capital + Reserves & surplus Gross debt - cash & cash equivalent EBITDA EBIT Net interest C flow from operation - Dividend ash Net Debt C flow from operation - C ash apex Net Debt

E Margin BIT Return on C apital E mployed Debt/ E quity Debt/ E BITDA Interest coverage C FO-Div / Debt FC / Debt F

= = = = = = =

> 20% > 15% < 0.4 < 1.25 > 10.0 > 45% > 20%

8%-20% 5%-15% 0.4 - 1.0 1.25 - 3.0 4.0 - 10.0

2%-8% 1%-5% 1.0 - 2.0 3.0 - 5.5 1.0 - 4.0

< 2% < 1% > 2.0 > 5.5 < 1.0 < 10% < 0%

25% - 45% 10% - 25% 8% - 20% 0% - 8%

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Financial Ratiocont.
Profit after tax Net sales C urrent asset C urrent liabilities PAT + Interest + Depreciation Interest + Installment Net sales Total operation asset Profit after tax Euqity + Reserves & surplus Profit after tax No of shares (issued) Dividned PAT + Depreciation

Net profit margin

C urrent ratio

Debt service coverage ratio =

Asset turn

Return on net worth

E arning per share

Divident payout ratio (cash) =

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Z- score (Higher is better)


[Listed Manufacturer Model]

Ratios
(A) EBIT/TA (B) Net Sales/TA

Weights/Coefficients
X 3.3 X 0.999

(C) Market Value of Equity/TL


(D) Retained Earnings/TA (E) WC/TA

X 0.6
X 1.4 X 1.2

Z- score = 3.3A + 0.999B + 0.6C + 1.4D + 1.2E


Interpretation: Z>3 2.7 < Z < 2.99 1.8 < Z < 2.7 Z < 1.8 Company is safe based on the financial figures only On alert; exercise caution Good chances of the company going bankrupt within two years of operation from the date of financial figures given In distress; Probability of financial embarrassment is really high

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Z- score cont.
[Private Firm Model]

Ratios
(A) EBIT/TA (B) Net Sales/TA

Weights/Coefficients
X 3.107 X 0.998

(C) Book Value of Equity/TL


(D) Retained Earnings/TA (E) WC/TA

X 0.420
X 0.847 X 0.717

Z- score = 3.107A + 0.998B + 0.420C + 0.847D + 0.717E Interpretation:


Z > 2.9 1.23 < Z < 2.90 Z < 1.23 Company is safe based on the financial figures only On alert; exercise caution; Good chances of the company going bankrupt within two years of operation from the date of financial figures given In distress; Probability of financial embarrassment is really high

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Thank you for your attention

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