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Result Update

February 20, 2013


Rating matrix
Rating Target Target Period Potential Upside : : : : Hold | 48 12 months - 2%

Shipping Corporation of India (SCI)


| 49
WHATS CHANGED
PRICE TARGET. ............................Unchanged EPS (FY13E) ............................................................................ Changed from | -0.6 to | 1.7 EPS (FY14E)Unchanged EPS (FY15E)...Introduced at | -3.6 RATING.Changed from Sell to Hold

Key Financials
(| cr) Net Sales EBITDA Net Profit EPS (|) FY12 FY13E FY14E FY15E 3867.6 4460.5 5078.0 6110.5 23.4 446.0 584.0 763.8 -428.2 80.7 -291.4 -168.6 -9.2 1.7 -6.3 -3.6

Valuation summary
PE (x) Target PE (x) EV to EBITDA (x) Price to book (x) RoNW (%) RoCE (%) FY12 FY13E FY14E FY15E -5.3 28.3 -7.8 -13.5 -5.2 27.7 -7.7 -13.3 272.4 18.1 14.9 11.2 0.3 0.3 0.3 0.4 -6.4 1.2 -4.5 -2.7 -4.7 -2.4 -2.0 -1.1

Steering in turbulent times


Shipping Corporation (SCI) reported a loss at the PAT level. However, the operating margin showed a marked improvement QoQ. Revenue growth for Q3FY13 remained flattish at 0.3% at | 1031.7 crore against | 1028.7 crore in Q2FY13. EBITDA doubled in Q3FY13 on a QoQ basis to | 139.7 crore vis--vis | 67.3 crore in Q2FY13 on account of an improvement in EBITDA margin by 700 bps to 13.5% for the present quarter. PAT for Q3FY13 turned negative to - | 75.3 crore in the absence of any extraordinary gain. On a segmental basis, the liner segment recorded the steepest fall of revenue by 24% while the bulk segment revenue was down 11% QoQ. However, at the EBIT level, the bulk segment posted a loss of | 110.4 crore whereas the liner segment recorded a profit of | 14.1 crore. The heartening factor has been the continual growth in the high margin offshore segment where revenues grew 8% sequentially and 97% YoY. On the fleet profile front, a decline in global asset prices due to impending tonnage addition (141 million dwt for CY12) pushed SCIs net NAV to | 79 in Q3FY13 from | 84 in Q2FY13. Planned induction of offshore vessels to improve fleet profile SCI expanded its fleet in Q3FY13 by adding a crude oil tanker, two Panamax, one Kamsarmax bulk carrier & one platform support vessel taking total fleet size to 79. A conscious effort is being made to increase the fleet size in the offshore segment, which contributes ~9% of revenue and forms ~20% of the fleet size (in numbers). Going ahead, within a year SCI is mulling adding eight offshore vessels along with two VLCC, three bulk carriers & four Liner vessels at a total outlay of $728 million. Capital budget for FY12-13 is | 2500 crore and FY13-14 is | 1800 crore. High fixed cost with suppressed charter rates to depress profit SCI continues to expand its fleet amid declining time charter yield rates (TCY $/day). Further, rates are expected to remain depressed owing to excess tonnage addition leading to insufficient revenue generation for covering depreciation and interest charges. Consequently, we anticipate SCI will report loss at the net profit level. Rolling over to FY15 estimates, we believe charter rates will remain under pressure. Hence, we value the stock at 0.35x FY15E book value and assign a target price of | 48. We change our rating on the stock from SELL to HOLD.
Exhibit 1: Financial Performance
(| cr) Net Sales EBITDA EBITDA Margin (%) Depreciation Interest Reported PAT EPS (|) Q3FY13 1031.7 139.7 13.5 193.3 46.6 -75.3 -1.6 Q3FY13E 1091.0 87.3 8.0 210.0 30.0 -122.7 -2.6 Q3FY12 978.9 -50.6 -5.2 158.0 102.8 74.1 1.6 Q2FY13 1028.7 67.3 6.5 196.5 30.0 297.2 6.4 YoY Gr. (%) 5.4 LP LP 22.4 -54.7 PL PL QoQ Gr.(%) 0.3 107.6 700 bps -1.6 55.5 PL PL

Stock data
Market Cap. (| cr) Debt( FY12) (| cr) Cash (FY12) (| cr) EV (| cr) 52 week H/L (| cr) Equity capital (| cr) Face value (|) DII Holding (%) FII Holding (%) 2282 5525 1442 6365 82 / 46 465.8 10 19.4 2.1

Price movement
6,500 6,000 5,500 5,000 4,500 4,000 3,500 3,000 2,500 2,000 Mar-12 May-12 Aug-12 Nov-12 Nifty (L.H.S) Price (R.H.S) 80 70 60 50 40 30 20 Feb-13

Analysts name
Bharat Chhoda bharat.chhoda@icicisecurities.com Soumojeet Kr Banerjee soumojeet.banerjee@icicisecurities.com

Source: Company, ICICIdirect.com Research

ICICI Securities Ltd | Retail Equity Research

We expect revenue growth to pick up post completion of fleet addition by end of FY14. Average TCY $/day in case of dry bulk and product carriers have declined 44% and 15%, respectively YoY whereas crude carrier rates have improved 8% YoY. Massive tonnage addition in the dry bulk segment to the tune of ~106 million dwt in CY12 and another 99 million dwt by end of CY13 is expected to put pressure on freight rates

Exhibit 2: Topline performance trend


7000 6000 5000 4000 3000 2000 1000 0 Q3FY12 Q2FY13 Q3FY13 FY13E Revenue FY14E FY15E 978.9 1028.7 1031.7 4460.5 5078.0

6110.5

Source: Company, ICICIdirect.com Research


In the container segment, SCI merged the Mediterranean and North Sea route and replaced the existing service with larger capacity ships. SCI also started a new container service on the African sector Both bulk and liner segments registered de-growth on a QoQ basis, declining 24% and 11%, respectively. Also, revenue in 9MFY13 declined 10% over 9MFY12. At the EBIT level, the liner segment made a modest profit of | 5.3 crore whereas the bulk segment continues to report loss on 9M basis. However, the offshore segment continues to post robust growth with revenue improving 97% and EBIT increasing 86% YoY basis.

Exhibit 3: Segmental analysis


Q3FY13 Revenue Liner Segment Bulk Segment Others EBIT Liner Segment Bulk Segment Others EBIT Margin Liner Segment Bulk Segment Others 279.7 639.2 112.8 Q2 FY13 Q3FY12 369.3 721.3 104.6 376.8 888.7 57.1 YoY(Ch %) -25.8 -28.1 97.7 QoQ(Ch %) 9MFY13 9MFY12 -24.3 898.7 -11.4 2,190.3 7.9 298.4 998.4 2,197.4 148.1 YoY(Ch %) -10.0 -0.3 101.5

14.1 (110.4) 42.8

31.6 (126.2) 44.8

(24.1) 137.9 23.0

LP PL 85.7

-55.4 NA -4.5

5.3 (186.6) 114.3

(87.1) 124.1 60.2

LP PL 90.0

5.0 (17.3) 37.9

8.6 (17.5) 42.8

(6.4) 15.5 40.4

PL -244 bps

-352 bps NA -491 bps

0.6 (8.5) 38.3

(8.7) 5.6 40.6

NA NA -232 bps

Source: Company, ICICIdirect.com Research

Exhibit 4: EBITDA performance trend


900 800
EBITDA margin for Q3FY13 improved 700 bps to 13.5%. Going ahead, the EBITDA is expected to improve though at a capped rate. Bunker cost and other expenses continue to play a pivotal role in determining the EBITDA margin.

13.5 6.5

10.0 584.0

700 600 500 | cr 400 300 200 100 0 -100 Q3FY12 -50.6 EBITDA OPM Q2FY13 Q3FY13 FY13E -5.2 67.3 139.7 446.0

11.5

12.5 763.8

15 10 5 0 -5 %

FY14E

FY15E

-10

Source: Company, ICICIdirect.com Research

ICICI Securities Ltd | Retail Equity Research

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Exhibit 5: PAT performance trend


400
Inadequate EBITDA generation and higher depreciation expense owing to its new vessel induction schedule would add to the stress on profitability and lead the company to

297.2 74.1 29 80.7

35 30 25 20 15 10 5 0 -5 -10 %

300 200 100 | cr 0 -100 -200 -300 -400 Q3FY12 8

report loss at the net profit level in FY14E and FY15E in the absence of any extraordinary gain

Q2FY13

Q3FY13 -75.3

FY13E 2

FY14E

FY15E -168.6 -3

-6 -7 PAT NPM -291.4

Source: Company, ICICIdirect.com Research

Exhibit 6: Current fleet profile


20 18 16 14 12 10 8 6 4 2 0 19 15 16 15

1 Crude Product Chemical

6 1 Passenger
6110.5 5078.0 4460.5 FY15E

VLCC

Source: Company, ICICIdirect.com Research

Exhibit 7: Revenue expected to improve in FY14E and FY15E


7000 6000 5000 | cr 4000 3000 2000 1000 0 FY11 FY12 Revenue FY13E FY14E 3594.6 3867.6

Source: Company, ICICIdirect.com Research

ICICI Securities Ltd | Retail Equity Research

Dry bulk

Liners

Gas

OSV

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Exhibit 8: Operating margin to recover in FY13E & FY14E


Significant fleet addition (~22% of current fleet) over the coming year by SCI would lead to higher revenues in FY14E and FY15E (to an extent also aided by exchange rate). However, revenue generation is expected to remain strained (in spite of a reduction in age of fleet) due to weak freight rates across vessel categories. The offshore segment is expected to add significantly (more than 8%) to revenue of SCI

900 800 700 600 | cr 500 400 300 200 100 0

824.9 22.9 584.0 446.0 10.0

763.8

25.0 20.0

5.0 23.4 0.6 FY11 FY12 EBITDA FY13E FY14E EBITDA % FY15E 0.0 -5.0

Exhibit10:Tanker freight rates (yearly average) trend

US$/day

80 70 60 50 40 30 20 10 CY04 CY05 CY06 CY07 CY08 CY09 CY10 CY11 CY12

Thousands

Source: Company, ICICIdirect.com Research

Exhibit 9: PAT expected to be negative in FY14E & FY15E


800 600 400 | cr 200 0 -200 -400 -600 -428.2 PAT PAT % FY11 FY12 FY13E 80.7 1.9 FY14E -5.8 FY15E -2.8 -168.6 -11.2 -291.4 567.3 16.0 20.0 15.0 10.0 5.0 0.0 -5.0 -10.0 -15.0 %

VLCC

Suezmax

Aframax

Source: Bloomberg, ICICIdirect.com Research


Globally, average tanker freight rates are near their eight year low and a revival in the near term seems unlikely owing to high proportion of fleet expected to be added over the next two years.

Exhibit 11 : Dry bulk indices trend

8000 6000 Index 4000 2000 0 Jan-10 Jan-11 Jan-12 Jan-13 Jul-09 Jul-10 Jul-11 Jul-12

Source: Company, ICICIdirect.com Research

Conference call highlights


The industry continues to face the challenge of a downturn in global trade and oversupply of tonnage resulting in depressed operating margin There was route consolidation in major services like China, Mediterranean and North Sea segment, where existing ships were replaced with greater capacity ones. The Asia-Europe route remains the largest revenue generator for the liner segment Bulk and tanker division freight rates continue to face pressure. Tanker rates saw a revival due to seasonal demand. Offshore market has been steady compared to other segments in the shipping sector. SCI is mulling ramping up the offshore division with addition of eight vessels next year & partnering with other private players besides ONGC in the offshore business SCI is also expecting delivery of two VLCC, three bulk carrier & four liner vessels next year. Total cost was to the tune of $728 million Capital budget numbers for FY12-13 and FY13-14 stood at | 2500 crore and | 1800 crore, respectively

BDI

BCI

BPI

Source: Bloomberg, ICICIdirect.com Research


Dry bulk carrier freight rates continue to remain depressed under challenging global conditions.

ICICI Securities Ltd | Retail Equity Research

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11.5

12.5

15.0 10.0

Valuation
SCI continues to expand its fleet amid declining time charter yield rates (TCY $/day). Further, rates are expected to remain depressed owing to excess tonnage addition leading to insufficient revenue generation for covering depreciation and interest charges. Consequently, we anticipate SCI will report loss at the net profit level. Rolling over to FY15 estimates, we believe charter rates will remain under pressure. Hence, we value the stock at 0.35x FY15E book value and assign a target price of | 48. We change our rating on the stock from SELL to HOLD.
Exhibit 12 : Valuation parameter
Valuation based on Price to book value (x) Target price (|) Current market price (|) Upside (%) Global average 0.9 Target multiple 0.35 Target price (|) 48.0 48.0 49.0 -2.0

Source: ICICIdirect.com Research

Exhibit 13: Valuation


FY13E FY14E FY15E Sales (| cr) 4460.5 5078.0 6110.5 Sales Growth (%) 15.3 13.8 20.3 EPS (|) 1.7 -6.3 -3.6 EPS Growth (%) LP PL -42.1 PE (x) 28.3 -7.8 -13.5 EV/EBITDA (x) 18.1 14.9 11.2 RoNW (%) 1.2 -4.5 -2.7 RoCE (%) -2.4 -2.0 -1.1

Source: Company, ICICIdirect.com Research

Exhibit 14 : Revised estimates


Rolling over to FY15 we have revised our estimates to factor in the fleet addition, higher depreciation charges and challenging freight rate scenario

(| cr) Sales EBITDA Net Profit EPS

Old FY14E 4729.8 595.2 -198.6 -4.3

FY15E 0.0 0.0 0.0 0.0

New FY14E 5078.0 584.0 -291.4 -6.3

FY15E 6110.5 763.8 -168.6 -3.6

Source: Company, ICICIdirect.com Research

ICICI Securities Ltd | Retail Equity Research

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Financial summary
Profit and loss statement
(Year-end March) Total operating Income Growth (%) Direct Operating Expenses Bunker Cost Hire of chartered ships Administration expenses Other expenses Total Operating Expenditure EBITDA Growth (%) Depreciation Interest Other Income PBT Others Total Tax PAT Growth (%) EPS (|) FY12 3,867.6 9.1 597.5 1,560.3 402.1 101.6 923.1 3,844.2 23.4 -97.2 608.7 387.3 599.6 -373.0 33.0 88.2 -428.2 PL -9.2 FY13E 4,460.5 15.3 857.1 1,605.8 401.4 133.8 1,025.9 4,014.4 446.0 1,808.6 766.2 210.6 188.8 -341.9 500.0 77.4 80.7 NA 1.7 FY14E 5,078.0 13.8 847.5 1,929.6 406.2 152.3 1,025.8 4,494.0 584.0 30.9 868.0 176.9 157.9 -303.0 100.0 88.4 -291.4 NA -6.3 (| Crore) FY15E 6,110.5 20.3 980.1 2,322.0 488.8 183.3 1,179.3 5,346.7 763.8 30.8 915.2 190.3 179.7 -162.1 100.0 106.5 -168.6 NA -3.6

Cash flow statement


(Year-end March) FY12 Profit after Tax -428.2 Add: Depreciation 608.7 (Inc)/dec in Current Assets 440.3 Inc/(dec) in CL and Provisions -19.2 Others 0.0 CF from operating activities 601.6 (Inc)/dec in Investments -19.1 (Inc)/dec in Fixed Assets -1,524.6 Others 0.0 CF from investing activities -1,543.6 Issue/(Buy back) of Equity -1.9 Inc/(dec) in loan funds 1,469.5 Dividend paid & dividend tax 0.0 Inc/(dec) in Sec. premium 0.0 Others 0.0 CF from financing activities 1,467.6 Net Cash flow -355.0 Opening Cash 2,466.7 Closing Cash 1,442.4 Source: Company, ICICIdirect.com Research FY13E 80.7 766.2 222.7 161.6 0.0 1,231.2 0.0 -2,500.0 0.0 -2,500.0 0.0 981.5 0.0 0.0 0.0 981.5 -732.7 1,442.4 702.3 FY14E -291.4 868.0 -175.6 117.0 0.0 518.0 0.0 -1,500.0 0.0 -1,500.0 0.0 1,137.2 0.0 0.0 0.0 1,137.2 506.4 702.3 1,221.5 (| Crore) FY15E -168.6 915.2 282.6 211.9 0.0 1,241.1 0.0 -500.0 0.0 -500.0 0.0 -62.8 0.0 0.0 0.0 -62.8 113.2 1,221.5 1,334.7

Source: Company, ICICIdirect.com Research

Balance sheet
(Year-end March) Liabilities Equity Capital Reserve and Surplus Total Shareholders funds Total Debt Long term Provisions Other Long term liabilities Total Liabilities Assets Gross Block Less: Acc Depreciation Net Block Capital WIP Total Fixed Assets Intangible assets Non-current Investments Long term loans & advances Other non-current assets Inventory Debtors Loans and Advances Other Current Assets Cash Current investments Total Current Assets Creditors Other liab & Provisions Total Current Liabilities Net Current Assets Application of Funds FY12 465.8 6,268.5 6,734.3 5,525.8 77.4 10.0 12,347.6 FY13E 465.8 6,349.2 6,815.0 6,507.3 0.0 0.0 13,322.3 FY14E 465.8 6,057.8 6,523.6 7,644.5 17.0 0.0 14,185.1 (| Crore) FY15E 465.8 5,889.2 6,355.0 7,581.7 17.0 0.0 13,953.7

Key ratios
(Year-end March) FY12 Per share data (|) EPS -9.2 Cash EPS 3.9 BV 144.6 DPS 0.0 Cash Per Share 31.0 Operating Ratios (%) EBITDA Margin 0.6 PBT / Total Operating income -9.6 PAT Margin -11.1 Inventory days 17.0 Debtor days 75.1 Creditor days 57.7 Return Ratios (%) RoE -6.4 RoCE -4.7 RoIC -4.0 Valuation Ratios (x) P/E EV / EBITDA 272.4 EV / Net Sales 1.6 Market Cap / Sales 0.6 Price to Book Value 0.3 Solvency Ratios Debt/EBITDA 236.4 Debt / Equity 0.8 Current Ratio 1.7 Quick Ratio 4.4 Source: Company, ICICIdirect.com Research FY13E 1.7 18.2 146.3 0.0 15.1 10.0 -7.7 1.8 15.0 70.0 60.0 1.2 -2.4 0.6 18.1 1.8 0.5 0.3 14.6 1.0 1.3 3.0 FY14E -6.3 12.4 140.1 0.0 26.2 11.5 -6.0 -5.7 10.0 60.0 60.0 -4.5 -2.0 -2.3 14.9 1.7 0.4 0.3 13.1 1.2 1.4 3.1 FY15E -3.6 16.0 136.4 0.0 0.0 12.5 -2.7 -2.8 10.0 60.0 60.0 -2.7 -1.1 0.0 11.2 1.4 0.4 0.4 9.9 1.2 1.4 0.0

13,271.2 4,399.6 8,871.6 362.0 9,233.6 41.2 192.4 1,705.0 5.0 177.5 785.9 190.4 175.9 1,442.4 82.3 2,854.4 603.8 1,080.2 1,684.0 1,170.4 12,347.6

15,883.2 5,165.8 10,717.4 250.0 10,967.4 0.0 192.4 1,671.1 0.0 179.1 835.9 238.8 298.5 702.3 82.3 2,337.0 716.5 1,129.1 1,845.6 491.4 13,322.3

17,183.2 6,033.7 11,149.4 450.0 11,599.4 0.0 192.4 1,675.3 0.0 137.7 826.1 206.5 206.5 1,221.5 82.3 2,680.6 826.1 1,136.5 1,962.6 718.0 14,185.1

17,683.2 6,949.0 10,734.2 450.0 11,184.2 0.0 192.4 1,675.3 0.0 165.9 995.6 248.9 248.9 1,334.7 82.3 3,076.3 995.6 1,178.9 2,174.5 901.8 13,953.7

Source: Company, ICICIdirect.com Research

ICICI Securities Ltd | Retail Equity Research

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Company Description
Shipping Corporation of India is the national maritime carrier with 79 vessels. It manages a fleet of bulk carriers, liquid/dry bulk service, international container service and offshore supply vessels. The companys fleet primarily transports crude oil.
Exhibit 15:Recommendation History
80 70 60 50 40 30 20 10 0 Mar-12 Apr-12 May-12 Jul-12 Price Aug-12 Oct-12 Nov-12 Jan-13 Feb-13

Target Price

Source: Company, ICICIdirect.com Research

Exhibit 16: Recent Releases


Date 21-Feb-12 4-Apr-12 4-Jun-12 5-Jul-12 14-Aug-12 8-Nov-12 8-Jan-13 Event Q3FY12 Result update Q4FY12 Result preview Q4FY12 Result update Q1FY13 Result preview Q1FY13 Result update Q2FY13 Result update Q3FY13 Result Preview CMP 77 64 50 59 54 54 59 Target Price 57 57 44 44 46 48 48 Rating SELL SELL SELL SELL SELL SELL SELL

Source: Company, ICICIdirect.com Research

Exhibit 17: Assumptions Assumptions


FY14E Total days Avg blended rates ($ per day) Dollar Rupee Exchange rate
Source: ICICIdirect.com Research

FY15E 33578 34532 54

27392 34438 54

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ICICIdirect.com coverage universe (Shipping)


CMP (|) TP (|) Aban Offshore 323 386 ABG Shipyard 368 349 G.E Shipping 243 280 Global Offshore 62 85 Mercator Ltd 18 20 Pipavav Defence 85 89 SCI 50 48 Source: ICICIdirect.com Research EPS (|) P/E (x) EV/EBITDA (x) RoCE (%) RoE (%) Rating Mcap (| Cr) FY12E FY13E FY14E FY12E FY13E FY14E FY12E FY13E FY14E FY12E FY13E FY14E FY12E FY13E FY14E BUY 1,392.0 40.2 60.4 65.5 8.9 5.9 5.4 6.0 5.7 5.3 10.4 10.5 11.0 5.5 8.1 8.5 HOLD 2,005.5 22.2 25.6 26.5 16.6 14.4 13.9 4.4 4.0 3.6 19.4 20.6 21.8 11.1 11.6 11.1 HOLD 3,739.2 35.1 38.6 44.6 7.1 6.4 5.6 4.8 3.5 2.3 4.6 5.5 5.9 8.0 8.2 8.8 BUY 142.8 21.8 19.8 21.1 2.8 3.1 2.9 4.6 5.8 5.6 9.0 8.7 8.3 17.1 13.5 12.6 HOLD 441.0 0.8 1.9 3.6 23.5 5.4 5.0 4.3 3.8 3.5 4.7 5.6 0.8 1.9 3.5 HOLD 5,944.3 0.3 0.6 1.5 260.8 150.3 54.3 19.1 15.8 13.6 8.5 9.0 10.0 1.1 1.8 4.7 HOLD 2,496.7 1.7 -6.3 -3.6 28.3 -7.8 -13.5 18.1 14.9 11.2 -2.4 -2.0 -1.1 1.2 -4.5 -2.7

Global Valuation (Shipping)


Company Tankers Frontline Ltd* Overseas Shipholding Group* Teekay Corp.* GE Shipping# SCI# Country Norway USA USA India India P/BV (x) P/E (x) EV/EBITDA (x) ROE (%) CY11E CY12E CY13E CY11E CY12E CY13E CY11E CY12E CY13E CY11E CY12E CY13E 2.0 0.0 1.7 0.6 0.3 2.0 0.0 1.8 0.6 0.3 1.9 0.0 2.0 0.6 0.3 118.7 8.1 4.0 206.1 11.9 23.1 30.1 7.1 NA 34.3 12.6 6.1 4.7 NA 16.7 11.5 5.6 272.4 NA 10.9 10.5 4.8 18.1 2.0 -12.9 -2.9 7.8 7.9 -1.3 -8.8 2.5 5.3 -6.4 5.9 -2.8 6.0 8.0 1.2

Company Dry Bulk Diana Shipping* DryShips* Genco Shipping* Mercator Lines#

Country USA USA USA India

P/BV (x) P/E (x) EV/EBITDA (x) ROE (%) CY11E CY12E CY13E CY11E CY12E CY13E CY11E CY12E CY13E CY11E CY12E CY13E 0.5 0.2 0.1 0.2 0.5 0.2 0.2 0.2 0.6 0.2 0.2 0.2 12.2 NA NA 23.5 NA 18.8 NA 10.1 64.7 2.0 NA 5.5 5.7 12.2 23.0 5.0 11.3 7.7 18.3 4.3 8.1 4.8 10.1 3.8 4.7 -4.0 -11.7 0.8 -0.1 0.5 -11.9 2.0 0.9 7.2 -6.8 3.5

Company Offshore Diamond Offshore* ENSCO* Hercules Offshore* Transocean* Aban Offshore#

Country USA USA USA USA India

P/BV (x) P/E (x) EV/EBITDA (x) ROE (%) CY11E CY12E CY13E CY11E CY12E CY13E CY11E CY12E CY13E CY11E CY12E CY13E 2.2 1.2 1.1 1.2 0.9 2.1 1.1 1.1 1.1 0.6 1.8 1.0 1.0 1.0 0.6 15.4 11.5 15.6 4.8 14.0 8.7 20.6 11.3 8.9 9.6 7.5 13.1 8.9 5.9 7.7 8.9 11.0 8.4 6.9 7.1 7.0 7.0 5.0 6.9 6.0 4.6 5.1 6.4 4.6 6.0 5.7 5.8 15.2 10.6 -12.8 3.7 11.5 9.0 17.0 14.1 5.1 10.4 5.5 17.1 19.9 13.3 6.7 12.2 8.1 13.5

Global Offshore# India 0.6 0.5 0.4 6.2 2.8 3.1 Source: Bloomberg, ICICIdirect.com Research *consensus # With regards to Indian companies, three year data represents FY12, FY13 and FY14 (financial year ending in March)

ICICI Securities Ltd | Retail Equity Research

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RATING RATIONALE

ICICIdirect.com endeavours to provide objective opinions and recommendations. ICICIdirect.com assigns ratings to its stocks according to their notional target price vs. current market price and then categorises them as Strong Buy, Buy, Hold and Sell. The performance horizon is two years unless specified and the notional target price is defined as the analysts' valuation for a stock. Strong Buy: >15%/20% for large caps/midcaps, respectively, with high conviction; Buy: >10%/15% for large caps/midcaps, respectively; Hold: Up to +/-10%; Sell: -10% or more;

Pankaj Pandey

Head Research ICICIdirect.com Research Desk, ICICI Securities Limited, 1st Floor, Akruti Trade Centre, Road No. 7, MIDC, Andheri (East) Mumbai 400 093 research@icicidirect.com

pankaj.pandey@icicisecurities.com

ANALYST CERTIFICATION
We /I, Bharat Chhoda MBA, Soumojeet Kr Banerjee, MBA research analysts, authors and the names subscribed to this report, hereby certify that all of the views expressed in this research report accurately reflect our personal views about any and all of 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. Analysts aren't registered as research analysts by FINRA and might not be an associated person of the ICICI Securities Inc.

Disclosures:
ICICI Securities Limited (ICICI Securities) and its affiliates are a full-service, integrated investment banking, investment management and brokerage and financing group. We along with affiliates are leading underwriter of securities and participate in virtually all securities trading markets in India. We and our affiliates have investment banking and other business relationship with a significant percentage of companies covered by our Investment Research Department. Our research professionals provide important input into our investment banking and other business selection processes. ICICI Securities generally prohibits its analysts, persons reporting to analysts and their dependent family members from maintaining a financial interest in the securities or derivatives of any companies that the analysts cover. The information and opinions in this report have been prepared by ICICI Securities and are subject to change without any notice. The report and information contained herein is strictly confidential and meant solely for the selected recipient and may not be altered in any way, transmitted to, copied or distributed, in part or in whole, to any other person or to the media or reproduced in any form, without prior written consent of ICICI Securities. While we would endeavour to update the information herein on reasonable basis, ICICI Securities, its subsidiaries and associated companies, their directors and employees (ICICI Securities and affiliates) are under no obligation to update or keep the information current. Also, there may be regulatory, compliance or other reasons that may prevent ICICI Securities from doing so. 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Nothing in this report constitutes investment, legal, accounting and tax advice or a representation that any investment or strategy is suitable or appropriate to your specific circumstances. The securities discussed and opinions expressed in this report may not be suitable for all investors, who must make their own investment decisions, based on their own investment objectives, financial positions and needs of specific recipient. This may not be taken in substitution for the exercise of independent judgment by any recipient. The recipient should independently evaluate the investment risks. The value and return of investment may vary because of changes in interest rates, foreign exchange rates or any other reason. ICICI Securities and affiliates accept no liabilities for any loss or damage of any kind arising out of the use of this report. Past performance is not necessarily a guide to future performance. 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ICICI Securities Ltd | Retail Equity Research

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