ABOUT THE COMPANY

Sundaram-Clayton Limited (SCL) is part of the US $3 billion TVS group of companies, the largest automotive component manufacturing and distributing group in India. SCL established its Die casting division in 1968 for quality and high precision aluminium castings. The division's two plants, one at Chennai and the other at Hosur are equipped with the latest technology in Pressure Die Casting, Gravity Die Casting and Low Pressure Die Casting. Having a wide customer base, SCL is one of the largest supplier of aluminium die castings in the country. SCL exports its products to international Original Equipment Manufacturers having proven its credentials as a reliable supplier of world class products. The Die casting division's infrastructure supports two modern and fully equipped plants: Plant-I at Chennai with a capacity of 14000 Metric Tonnes per annum and Plant-II at Hosur with a capacity of 10000 Metric Tonnes per annum. Together these two plants have capability to produce Pressure Die Castings in the weight range of 0.25 kg to 22 kg, Gravity die Castings ranging from 0.2 kg to 28 kg and Low pressure Die castings ranging from 2.5 kg to 18 kg. Additionally these facilities are supported by the company's allied capabilities in product design and development, machining and assembly and machine building. Thus, providing a robust foundation to the company's intent of providing total engineering solutions for the industry's die casting needs (full service support).

PRODUCTS
Products & Services:

Commercial Vehicles Assembly Passenger Cars Assembly Two Wheelers Assembly Air Connectors Charge Air Pipe Filtration Module Casting Lube Oil Cooler Cover Assembly Turbo Charger

PROMOTERS HOLDING
Share Holding as on : Face Value 30 Jun 2010 5.00 No. Of % Shares Holding 31 Mar 2010 5.00 No. Of % Shares Holding 31 Dec 2009 5.00 No. Of % Shares Holding 80.00 80.00

Indian Promoters Sub Total

PROMOTER'S HOLDING 30,348,128 80.00 30,348,128 30,348,128 80.00 30,348,128 NON PROMOTER'S HOLDING Institutional Investors 2,329,677 6.14 1,427,470 804 11,626 2,342,107 0.00 804

80.00 30,348,128 80.00 30,348,128

Mutual Funds and UTI Banks Fin. Inst. and Insurance FII's Sub Total Private Corporate Bodies NRI's/OCB's/Foreign Others Sub Total General Public GRAND TOTAL

3.76 0.00 0.06 3.82 2.32 0.21 2.53 13.65

1,429,338 804 153,664 1,583,806 796,253 75,794 872,047 5,131,187

3.77 0.00 0.41 4.18 2.10 0.20 2.30 13.53 100.00

0.03 21,626 6.17 1,449,900 Other Investors 718,803 1.89 878,443 64,839 0.17 2.07 11.76 80,208 958,651 5,178,489

783,642 4,461,291 37,935,168

100.00 37,935,168

100.00 37,935,168

http://www.indiamart.com/company/2422841/products.html http://www.valuenotes.com/valuenotes/ShareHolding.asp? companycode=13520019

PRESENT GLOBAL ECONOMIC ANALYSIS

Global Economic Analysis is a macro-level study of all the economies of the world taken as a whole. Globalization has helped the world economy become more integrated and homogenized with the free movement of goods and services. Global economic Analysis tends to project a skewed picture of the economic development experienced by the world in general. Although globalization has marched on rapidly in recent years, it has not been a bed of roses all the way. The darks days of the East Asian Currency Crisis and the recession of the Latin American economies of the 90s may have been forgotten by the world but a lot more needs to be done to regulate the global financial markets further. International Trade has to be rationalized to give way to equitable development and to bring about a drastic reduction in poverty levels globally. The broad macro-economic indicators on the basis of which an analysis can be done are the following :

Gross Domestic Product (GDP), Growth of GDP Rate of inflation Per capita income Unemployment Level Balance of Payments External Debt as a percentage of GDP .

Countries from different regions across the world including newly industrialized nations such as China, Brazil and India and developed economies such as USA, Russia and some East European countries like the Czech Republic and Poland have been considered while doing the analysis. Analyses on South Africa and Australia have also been done. Although inflation rates have been found to be the highest in Zambia and Russia, both these countries have been experiencing steady economic growth of late. While high growth rates coupled with inequality in income continue to plague the BRIC (Brazil, Russia India and China) economies, Africa continues to be the poorest continent of the world with low per capita income and high population growth rates. The economies of the East European countries like Poland and the Czech Republic have however grown steadily over the years. While analysing trends in the global economy it has been observed that serious challenges confront the WTO as far as implementation of the Doha Round of World Trade Talks are concerned. The Trade Talks aims to allow greater accessibility to world markets to goods produced in the Third World Countries. Agriculture continues to be the primary occupation in developing countries with more than 50% of the population employed in this sector. Environmental degradation also poses a major challenge to globalization and adequate steps should be taken to curb this menace. http://www.economywatch.com/node/6451/

PRESENT INDIAN ECONOMIC ANALYSIS

3

About India economic analysis

India economic analysis provides various inputs on economic condition of this south-east Asian country. It can be done both at a microeconomic as well as a macroeconomic level. India economic analysis could also be described as being an explanation of various economic phenomena going on in this country. According to the estimates by the Ministry of Statistics and Programme Implementation, the Indian economy has registered a growth of 7.4 per cent in 2009-10, with 8.6 per cent year-on-year (y-o-y) growth in its fourth quarter. The growth is driven by robust performance of the manufacturing sector on the back of government and consumer spending. GDP growth rate of 7.4 per cent in 2009-10 has exceeded the government forecast of 7.2 per cent for the full year. According to government data, the manufacturing sector witnessed a growth of 16.3 per cent in January-March 2010, from a year earlier. Economic activities which showed significant growth rates in 2009-10 over the corresponding period last year were mining and quarrying (10.6 per cent), manufacturing (10.8 per cent), electricity, gas and water supply (6.5 per cent), construction (6.5 per cent), trade, hotels, transport and communications (9.3 per cent), financing, insurance, real estate and business services (9.7 per cent), community, social and personal services (5.6 per cent). The Gross National Income is estimated to rise by 7.3 per cent in 200910 as compared to 6.8 per cent in 2008-09. The per capita income is estimated to grow at 5.6 per cent in 2009-10. Indias industrial output grew by 17.6 per cent in April 2010. The manufacturing sector that accounts for 80 per cent of the index of industrial production (IIP) grew 19.4 per cent in April 2010, as against 0.4 per cent a year-ago. Capital goods production grew by 72.8 per cent against a contraction of 5.9 per cent a yearago. Consumer durables output continued to grow at a fast pace of 37 per cent, mirroring higher purchase of goods such as televisions and refrigerators.

The Economic scenario

The number of registered foreign institutional investors (FIIs) was 1710 as on May 31, 2010 and the total FII inflow in equity during January to May 2010 was US$ 4606.50 million while it was US$ 5931.80 million in debt. Net investment made by FIIs in equity between June 1, 2010 and June 14, 2010 was US$ 530.05 million while it was US$ 875.73 million in debt. As on June 4, 2010, India's foreign exchange reserves totalled US$ 271.09 billion, an increase of US$ 9.88 billion over the same period last year, according to the Reserve Bank of India's (RBI) Weekly Statistical Supplement. Moreover, India received foreign direct investment (FDI) worth US$ 25,888 million during AprilMarch, 2009-10, taking the cumulative amount of FDI inflows during August 1991 - March 2010 to US$ 1, 32,428 million, according to the Department of Industrial Policy and Promotion (DIPP).

The services sector comprising financial and non-financial services attracted 21 per cent of the total FDI equity inflow into India, with FDI worth US$ 4,392 million during April-March 2009-10, while construction activities including roadways and highways attracted second largest amount of FDI worth US$ 2,868 million during the same period. Housing and real estate was the third highest sector attracting FDI worth US$ 2,844 million followed by telecommunications which garnered US$ 2,554 million during the financial year 2009-10.

Exports from India were worth US$ 16,887 million in April 2010, 36.2 per cent higher than the level in April 2009, which touched US$ 12,397 million, according to the Ministry of Commerce and Industry. India's imports during April 2010 were valued at US$ 27,307 million representing a growth of 43.3 per cent over April 2009. India's logistics sector is witnessing increased activitythe country's major ports handled 560,968 metric tonnes (MT) of cargo during April-March 2009-10, an increase of 5.74 per cent over previous year traffic, according to revised estimates released by the Ministry of Shipping. Foreign tourist arrivals in India during the month of May 2010 were 345,000, an increase of 15.5 per cent over May 2009. Foreign tourist arrivals during January-May 2010 were 2.263 million, an increase of 11.3 per cent over the corresponding period last year. Foreign exchange earnings during May 2010 were US$ 951 million, an increase of 42.2 per cent over May 2009. Foreign exchange earnings during January-May 2010 were US$ 5822 million, an increase of 38.3 per cent over the corresponding period last year, according to data released by the Ministry of Tourism. The total telephone subscriber base in the country reached 638.05 million in April 2010, taking the overall tele-density to 54.10, according to the figures released by the Telecom Regulatory Authority of India (TRAI). Also the wireless subscriber base increased to 601.22 million. According to the latest statistics from the Association of Mutual Funds in India (AMFI), the assets under management (AUM) of mutual funds were worth US$ 170.46 billion in May 2010 as compared to US$ 135.58 billion in May 2009. As per NASSCOMs Strategic Review 2010, the BPO sector continues to be the fastest growing segment of the industry and is expected to reach US$ 12.4 billion in 2009-10, growing at 6 per cent. According to data released by Society of Indian Automobile Manufacturers (SIAM), the total number of vehicles including passenger cars, commercial vehicles, two wheelers and three wheelers produced in 2009-10 was 14,049,830, as compared to 11,172,275 produced in 200809. According to the Gem and Jewellery Export Promotion Council, the exports of gems and jewellery from India including rough diamonds, rose by 57.08 per cent during April-May 2010 to touch US$ 5551.24 million. According to the Ministry of Civil Aviation, domestic airlines carried 211,380 passengers between January-May 2010, an increase of 21.95 per cent over 173,340 passengers carried in the same period last year. The number of corporate merger & acquisitions (M&As) and private equity (PE) transactions, have more than doubled during January-May 2010. 439 M&A and PE deals valuing over US$ 30 billion took place between January-May 2010 as compared to 179 deals worth US$ 8.1 billion in the corresponding period in 2009. The HSBC Markit Business Activity Index, which measures business activity among Indian services companies, based on a survey of 400 firms, rose to 62.1 in April 2010, its highest since

Agriculture
5 Agriculture is one of the strongholds of the Indian economy and accounted for 15.7 per cent of the

PRESENT INDUSTRY ANALYSIS AUTO ANCILLARY INDUSTRY

The Indian auto ancillary industry is one of India's sunrise industries with tremendous growth prospects. The automotive industry is an important segment of the economy in any country as it links many industries and services. Presently, India is: The largest two-wheeler manufacturer in the world. The largest three-wheeler market in the world. The second-largest two-wheeler market in the world. The fourth largest commercial vehicle market in the world. The fortunes of the automotive components segment are linked to the performance of the auto industry. The auto ancillary industry gives support to sectors such as metals that includes steel, aluminum, copper and also to many other machine tools, plastics, rubbers, polymers, glass, surface transport. As per Indian Suppliers report, the automotive sector in India contributes to 5% of the nations GDP and 17% of the indirect taxes as a result of which the government last year charted a 10-year blueprint for the sectors growth. This envisages the automotive sector output reaching a level of $145 billion accounting for more than 10% of the GDP by 2016. Industry Structure & Segments:- An auto ancillary company comprises of: OEM (original equipment manufacturers). Replacement Market.

Industry Turnover
The Indian organized auto ancillary industr y revenue grew 6% y o y to INR720bn in FY09. Exports increased by 6% y o y to INR150bn. The recent financial performance of auto ancillary companies with a greater reliance on OEMs and exports has been inferior to those with a larger focus on the replacement market. Yet, replacement stocks have underperformed. Despite the recent rise in commodity prices, the average price for FY10f to be lower . This would provide little benefit to the - OEM dependent stocks, while the stronger INR is likely to hurt exports. Replacement stocks are likely to retain the savings from decreased material prices and a rising INR. Profitability may improve for both groups, but replacement stocks are more likely to outperform over the medium term as the market appreciates their stronger position. Performance of Indian Auto Ancillary Industry companies INR(bn) Revenue Exports Imports FY-08 720 141 210 FY-09 763 150 275 Y-O-Y increase (%) 6 6 31

http://www.valuenotes.com/fairwealth/fairwealth_AUTOANCILLARY_05Jan10.asp? ArtCd=150897&Cat=I&Id=11 6

RISK
YE AR BETA 0.6692 0.6102 0.574 6 0.330 1 0.488 3 6.725 4 7.213 7 0.067 7 0.932 3 0.747 0 0.558 0 1.419 3 6.511 3 7.930 6 0.179 0 0.821 0 0.1694 0.587 1 0.344 7 0.923 4 6.766 9 7.690 3 0.120 0 0.880 0 0.261 7 0.068 5 0.164 3 3.200 1 3.364 4 0.048 8 0.951 2 0.714 2 0.510 0 5.036 6 26.68 57 31.72 23 0.158 8 0.841 2 0.3817 0.8854 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010

BETA SQUARE SYSTEMATI C RISK (SR) UNSYSTEM ATIC RISK (UR) TOTAL RISK (TR) SR/TR

0.4478

0.3723

0.0286

0.1457

0.7839

1.8957

0.5194

0.0339

0.7283

0.8638

28.415 6 30.311 33 0.0625

9.5100

2.6018

10.387 7 11.116 0 0.0655

8.8162

10.029 4 0.0518

2.6357

9.6800

0.0129

0.0892

UR/TR

0.9375

0.9482

0.9871

0.9345

0.9108

ANALYSIS OF SYSTEMATIC AND UNSYSTEMATIC RISK

8

 From the above values we can see that the company is less depends on the market forces and conditions, as the proportion of unsystematic risk is more than the systematic risk in all the years so we can conclude the company risk does not depend on the market forces.

As the value of beta indicates the amount of change taken place in the market, so as we can conclude that the value of beta is less than 1 in all the years which shows that systematic risk have less impact than the unsystematic risk proportion to the total risk.

RATIO ANALYSIS LIQUIDITY RATIOS

9

CURRENT RATIO

Interpretation- According to International Accounting Standard this should be in the ratio of 2:1 on the other hand in Indian context it is 1.33:1 while here it is about 0.90 on average. In 2008 current asset is
YE AR CALCULATE D CAPITAL LINE 1.24 1.30 1.26 1.25 1.30 1.15 1.21 0.95 1.04 0.76 0.98 0.86 1.09 1.21 1.36 1.13 1.33 0.99 2001 2002 2003 2004 2005 2006 2007 2008 2009

less than the average because of may be recession effect otherwise the current asset if fine in previous years. INVENTORY TURNOVER RATIO:

YE AR CALCULATE D CAPITAL LINE

2001 17.35 17.35

2002 20.79 23.63

2003 23.79 27.65

2004 21.69 25.40

2005 16.32 18.95

2006 11.00 13.18

2007 9.30 10.84

2008 3.88 4.48

2009 4.06 4.41

Interpretation-This ratio present that what is the ratio of Inventory the company is keeping against its Sales. Lower ratio is good to save option for investment, while the high ratio presents the safety if high sale is occur. DEBTORS TURNOVER RATIO:
YE AR CALCULATE D CAPITAL LINE 1.02 3.72 1.01 4.53 1.10 6.45 1.17 7.1 1.12 7.14 1.08 7.22 1.13 7.52 0.69 4.42 1.07 6.23 2001 2002 2003 2004 2005 2006 2007 2008 2009

Interpretation - This ratio represents the debtor ratio with sales. Debtors are divided by the net sales made. The ratio in 2009has increased from 2008 due to the occurring of losses during the financial year. 10

STRUCTURAL RATIOS
YE AR CALCULATE D CAPITAL LINE 0.22 0.22 0.14 0.14 0.06 0.06 0.14 0.14 0.35 0.35 0.48 0.48 0.57 0.57 0.83 0.83 1.27 1.27 2001 2002 2003 2004 2005 2006 2007 2008 2009

DEBT TO EQUITY RATIO

Interpretation -This ratio shows in what ratio the company has kept the debt on equity. This also represents the capabilities of the company to work. Yet other people says using other money and earn is a big challenge. On the standard it is said that the ratio of 2:1 is better. Here we can see the ratio as 0.83
YE AR CALCULATE D CAPITAL LINE 0.05 0.08 0.05 0.07 0.04 0.04 0.12 0.03 0.25 0.06 0.26 0.2 0.26 0.39 0.45 0.36 0.66 0.43 2001 2002 2003 2004 2005 2006 2007 2008 2009

in 2008 as compare to other years is more due to recession. In the year 2009 company is occurring losses which lead to make increment in debt component of capital structure. LONG TERM DEBT TO EQUITY RATIO

Interpretation - The analysis of Long Term Debt-Equity ratio shows that the firm had 0.66 Long term D-E ratio

11

YE AR CALCULATE D CAPITAL LINE

2001 1.78 1.77

2002 1.65 1.87

2003 1.78 2.03

2004 2.10 2.3

2005 2.11 2.18

2006 1.85 2.04

2007 1.93 2.18

2008 1.08 1.2

2009 1.36 1.37

ACTIVITY RATIO
FIXED ASSETS TURNOVER RATIO

Interpretation: Fixed Assets turnover ratio show the proportion of the fixed assets in net sales made during the year. Fixed Assets turnover ratio is showing the fluctuation in the table. TOTAL ASSETS TURNOVER RATIO:

12

Interpretation: The ratios show that on an average Total Assets get converted into sales In 1 days which is satisfactory figure for the firm. INTEREST COVERAGE RATIO:

Interpretation: This is the ratio shows that what the ratio between interest earned on the assets. In the table the ratio of investment is continuous reducing the reason behind is company is earning less interest on their assets.

YE AR YE CALCULATE AR days) D(in CALCULATE D

2001 2001 78 1.35

2002 2002 79 1.39

2003 2003 66 1.65

2004 2004 62 1.94

2005 2005 66 1.92

2006 2006 70 1.67

2007 2007 51 1.63

2008 2008 64 0.80

2009 2009 36 0.93

DEBTORS VELOCITY RATIO:

200 0 26. 93 26. 93 2001 13.51 13.51 2002 19.36 19.36 200 3 806 806 2004 66.06 66.06 2005 17.67 17.67 2006 13.41 13.41 2007 8.72 8.72 2008 3.68 3.40 2009 1.27 1.27

YEAR CALCULAT ED CAPITAL LINE

Interpretation:If the average collection period is 1 month (or 30 days), it means debtors on an average are collected in 1 month (or 30 days).The lesser, the better.A very long collection period implies either poor credit selection or inadequate collection effort.A very short collection period will severely curtail sales.In this case , the time is 69 days which is less than previous years. CREDITORS VELOCITY RATIO:

13

Interpretation: It is better for the firm to have a low payables T/O ratio or larger credit period availed from the creditors and in this case period availed for creditors is shorti.e. for 36 days.
YE AR AR CALCULATE YE 2000 1182001 112 2002 81 2003 742004 712005 75 2006 70 2007 1042008 69 2009 D(in days) 16.62 17.04 14.69 14.66 16.98 14.91 20.09 17.36 19.70 16.92 18.98 16.44 21.87 18.80 21.30 18.65 17.25 14.70 13.00 12.03 2001 2002 2003 2004 2005 2006 2007 2008 2009

CALCULATE D CAPITAL LINE

PROFITABILITY RATIOS
PROFIT BEFORE INTEREST AND DEPRECIATION TAX MARGIN:

PROFIT BEFORE INTEREST AND TAX MARGIN:

14

 PROFIT BEFORE DEPRECIATION AND TAX MARGIN:

CASH PROFIT MARGIN:

Y EAR CALCULAT ED CAPITAL LINE

2000 13.18 13.59

2001 10.76 10.72

2002 12.58 11.04

2003 16.07 13.91

2004 16.04 13.79

2005 14.98 13.00

2006 17.60 15.24

2007 17.29 15.21

2008 10.75 9.07

2009 6.70 6.22

ADJUSTED PROFIT AFTER TAX MARGIN:

2000 YEAR CALCULA TED CAPITAL LINE 16.12 16.53 13.90 13.87 16.34 14.34 20.07 17.35 19.46 16.71 18.13 15.70 20.51 17.67 19.27 16.91 14.17 12.03 7.67 7.11 2001 2002 2003 2004 2005 2006 2007 2008 2009

2000 YEAR CALCULA TED CAPITAL LINE 12.81 13.23

2001 11.35 11.31

2002 13.29 11.66

2003 15.98 13.82

2004 14.79 12.72

2005 13.82 12.00

2006 15.44 13.44

2007 14.75 13.03

2008 11.49 9.94

2009 7.55 7.00

15

Interpretation: There is a big difference in the ratio of year 2007 to 2008 and 2009. The reason behind it is the slowdown in the profits of the company adjusted ones.
2000 YEAR CALCULAT ED CAPITAL LINE 9.36 9.78 7.41 7.37 8.89 7.79 11.96 10.37 11.13 9.59 9.83 8.55 11.17 9.88 10.73 9.58 4.99 4.32 1.24 1.18 2001 2002 2003 2004 2005 2006 2007 2008 2009

RETURN ON CAPITAL EMPLOYED:

Interpretation: This ratio represents the percentage of return provided on capital the company had
YE AR CALCULATE D CAPITAL LINE 14.45 14.41 18.10 17.73 27.99 27.62 30.43 30.84 26.10 26.97 27.45 29.28 27.36 29.06 8.18 8.42 6.02 6.18 2001 2002 2003 2004 2005 2006 2007 2008 2009

made. For few years in the beginning Return on capital employed is increasing due to the increase in profit due to interest but later on decrement is shown due to the declining in profits.

RETURN ON NET WORTH:

YE AR CALCULATE D CAPITAL LINE

2001 12.10 12.05

2002 14.28 14.22

2003 21.57 21.74

2004 24.24 24.47

2005 23.64 23.88

2006 26.56 28.13

2007 27.65 28.77

2008 7.31 7.31

2009 2.55 2.64

Interpretation:This ratio present the percentage of return provided on the equity shareholders fund.Again the reason behind it is the slowdown in the profits of the company adjusted ones.

16

 VALUE OF OUTPUT/TOTAL ASSETS:

YE AR CALCULATE D

2001 1.78

2002 1.64

2003 1.76

2004 1.98

2005 1.91

2006 1.75

2007 1.90

2008 1.08

2009 1.27

VALUE OF OUTPUT/GROSS BLOCK:

2001 YEAR CALCULAT ED 1.35

2002

2003

2004

2005

2006

2007

2008

2009

1.41

1.73

1.93

1.82

1.64

1.67

0.83

0.91

RATIOS- DUPONT MODEL

17

YE AR PBDIT/SALE S SALES/NET ASSETS OPERATING PROFIT/NET ASSETS PAT/PBIDT

2001

2002

2003

2004

2005

2006

2007

2008

2009

0.17

0.15

0.17

0.20

0.19

0.19

0.22

0.21

0.17

5.30

6.98

11.36

16.21

19.97

11.68

6.58

2.22

2.27

0.76

1.71

2.15

3.54

3.37

1.83

1.04

0.36

0.29

0.57

0.50

0.522

0.60

0.57

0.53

0.51

0.31

0.09

NET ASSETS/ NET WORTH ROE

0.30

0.16

0.16

0.11

0.13

0.27

0.49

0.89

0.92

0.121

0.142

0.216

0.242

0.236

0.265

0.276

0.073

0.025

ALTMAN Z-SCORE
Formula to calculate Altman's Z-Score:
18

Z-score = 1.2 a + 1.4 b + 3.3 c + d e

.6 f g

Where: a = working capital, b = retained earnings, c = operating income, d = sales, e = total assets, f = net worth and g = total debt

The Altman z-score is a bankruptcy prediction calculation.

YE AR CALCULATE D VALUES 9.85 12.42 20.36 14.82 11.43 10.23 10.13 5.74 5.70 2001 2002 2003 2004 2005 2006 2007 2008 2009

The z-score measures the probability of insolvency (inability to pay debts as they become due).

1.8 Or less indicates a very high probability of insolvency. 1.8 to 2.7 indicates a high probability of insolvency. 2.7 to 3.0 indicate possible insolvency. 3.0 Or higher indicates that insolvency is not likely.

ANALYSIS: In this case, company is having z-score value as more than 3 in all the years which indicate that insolvency is not likely.

JUSTIFICATIONS FOR ASSUMPTIONS

19

Rf

7.5 % CCIL Rf

SOURCE: http://www.rbi.org.in/SCRIPTs/FAQView.aspx? Id=79#1

Coupon 7.49% paid on face value

Maturity : AFTER 10 YRS.

Coupon Payment Dates : Half-yearly every year

Minimum Amount of issue/ sale : Rs.10,000

20

last 3 years average

Rm Corporate India issue 15th August 2010 ,page 77 ,equity research report of company by S.P Tulsian and also the industry report n its future which is expected to boom by 14 % [ref:

http://www.ncaer.org/downloads/journals/macrotrack_june2006.pdf

http://www.moneycontrol.com/news/stocks-views/buy-prism-cement-tulsian_450674.html

Explicit Period in years - 6 years company will make fast growt rate due to the emerging trends in the industry Growth in assets 1 year Growth in assets 2 year Growth in assets 3 year Growth in assets 4year Growth in assets 5 year Growth in assets 6 year

Growth in assets 7 year onwards Growth in assets 7 year onwards (all estimated as per average of % increment in total assets/capital employed of the company )

Tax Rate- referred slab rate for public company (corporate income tax)

21

Pre Tax Kd - percentage of interest to total debt only from current year (5.18%) estimated to b (7%)

NOPAT as % of Capital Employed for the previous year came to be 14% & on average 11% so estimated to be 9%

%Increase in Sales/Total Income/E25% as expansion of company will lead to increased sales & exports also

Increase in Sales/Total Income/E by- 25%. % of Total Operating Expenses- In comparison to previous year % of operating expenses to sales is also 90% approx

Increase decrease in Interest amonut -due to fall in fixed interest rate overall fall of 200

Depreciation for next year 20% - notes of account :-

Prime Lending Rates -RBI reports & Inflation

http://www.moneycontrol.com/news/economy/rbi-sees-policy-impacting-6-12mths_477493.html

http://www.moneycontrol.com/news/economy/inflation-concerns-remain-medium-termkaushikbasu_477560.html

Inflation next yearThe estimates of future salary increases of 4 to 5%, considered in actuarial valuation, take into account the general trend in salary rise and the inflation rates. Inflation considered 5 % so as to get accuracy and make balance to other effects .
22

GDP growth rate next year-Coprorate India magazine 15 th August issue as per IMF & RBI PAGE 1 DIV1 as per last year dividend history 5.48% .

DFCF METHOD

Total of PV of all FCFs = EV= Less Total Debt (EV-TD)=Eq = Eq V/N = Po =

885.112978 545.812978 287.8760432

2 b. DFCF Method

PE MULTIPLIER APPROACH
EPS Projected Total Income Total Operating Expenses PBIT Interest Projected Depreciation PBT PAT EPS P/E Po = 671.05 597.234 5 73.8155 -173.75 20.01 227.555 5 152.462 19 80.4125 45 3.56537 94 286.70 123

4 a. PE Multipler, Projected Growth Rate in Earnings= 4 b. PE Multipler, Prime Lending Rates = 4 c. PE Multipler, Inverse of Real Return, Real Return = Real Return = Rm-Inflation

89.1 34 46.3 5

In decimals Invers e Po =

9 0.09 11.1 1 39.6

23

4 d. PE Multipler, Expected GDP Growth Rate =

15 32.0 88 PE inverse of RR PE GDP MVA EVA DGM Price as on , 39.61 533 32.08 841 426.06 7.938 99 46.76 799 767.3

SUMMARY OF ABOVE METHODS

Asset Based Approach Earning Capitalization Approach DCF or FCF P-E Multiplier Approach PE Multi, Gr Rate in Earnings PE Multi, PLR 122.4 21 171.4 99 287.8 76 286.7 01 89.13 45 46.34 99

TECHNICAL ANALYSIS ROC Graphs For 100 days data:

24

For 200 days data:

25

26

For 60 days data:

27

 MACD Graphs
28

For 60 days data:

29

For 100 days data:

30

For 200 days data:

31

32

33