GICS Industry : Auto Components l Sub Industry : Auto Parts & Equipments l Website : www.federalmogulgoetze.

com

Federal-Mogul Goetze (India)

Limited
Key Stock Indicators
NSE Ticker :
Bloomberg Ticker :
Face value / Share:
Div. Yield (%):

FMGOETZE
FMGI:IN
10.0
0.2

CMP (as on 11 May 2011 Rs/share):

52-week range up to 11 May 2011 (Rs)(H/L):
Market Cap as on 11 May 2011 (Rs mn):
Enterprise Value as on 11 May 2011 (Rs mn):

280
282.50/99.05
15,574
16,125

Shares outstanding (mn) :

Free Float (%) :
Average daily volumes (12 months) :
Beta (2 year) :

Federal-Mogul Goetze (India) Limited (FMGIL) was established in 1954. The company manufactures
pistons, piston rings, sintered parts, cylinder liners and others. It serves various verticals of the
automobile industry including two and three wheelers, cars, sport utility vehicles, tractors, light
commercial vehicles, etc.

KEY HIGHLIGHTS
Focuses on pistons and piston rings
The company offers pistons and piston rings ranging from 30 millimetre (mm) to 300 mm diameter.
It serves demand from both original equipment manufacturers and the after-market. As of
December 2010, FMGIL had installed manufacturing capacity of ~59 mn piston rings, ~19 mn
pistons and ~18 mn piston pins.
Raised funds to finance capex, repay debt
In November 2008, FMGIL raised ~Rs 1.3 bn through a rights issue to finance purchase of
machinery (estimated expenditure ~Rs 929 mn), repay debt (~Rs 304 mn), for corporate
expenditure (~Rs 52 mn) and for issue expenses (~Rs 12 mn). The company, as of December 2010,
has spent ~Rs 875 mn on purchase of machinery, ~Rs 304 mn on repayment of debt, ~Rs 44 mn on
corporate expenses and ~Rs 11 mn for compensating issue expenses.

55.6
25.0
35,940
0.9

Key Financial Indicators

Dec -08
7,203.2
15.2
11.2
0.2
0.6
0.2
198.2
0.7
12.2
0.5
3.7

R evenue (R s m n)
E B ITD A m a rg ins (% )
P AT (R s m n)
P AT m a rg ins (% )
G ea ring (x)
E P S (R s /s ha re)
P E (x)
P /B V (x)
R oC E (% )
R oE (% )
E V/E B ITD A (x)

Dec -09
8,047.7
19.5
606.0
7.5
0.2
10.9
13.3
2.1
19.6
17.6
5.7

Dec -10
9,557.3
14.6
485.5
5.1
0.1
8.7
32.1
3.7
16.5
12.2
11.6

n.m. : Not meaningful

Shareholding (As on March 31, 2011)

DII
12%

Others
13%

KEY RISKS

Cyclical nature of the auto industry

Volatility in raw material prices viz aluminium, iron ore, steel, etc

Intense domestic and international competition

Promoter
75%

Stock Performances vis--vis market

R eturns (%)

(index )
300
250
200
150
100
50

V olumes (R HS )

FMGOETZ E

Mar-11

J an-11

Apr-11

('000)
500
450
400
350
300
250
200
150
100
50
0
F eb-11

D ec -10

157

O c t-10

84

-4

Nov -10

18

S ep-10

54
-10

Indexed price chart

Aug-10

12-m

J ul-10

Note:
1) YTD returns are since Jan 03, 2011 to May 11, 2011.
2) 1-m, 3-m and 12-m returns are up to May 11, 2011.

3-m

J un-10

N IF TY

1-m

May -10

F MG O E T Z E

YTD

NIFTY

CRISIL COMPANY REPORT | 1

Federal-Mogul Goetze (India) Limited

BACKGROUND
FMGIL was established in 1954. The company is part of the Federal-Mogul group which is a global supplier of automobile components, modules and systems. The
companys product range includes pistons, piston rings, sintered parts, cylinder liners and others. Its pistons and piston rings are marketed under the name Goetze while
sintered products under the name Brico Goetze. These are used in small engines like mopeds to large bore locomotives catering to engines utilising petrol, diesel,
liquefied petroleum gas and compressed natural gas. FMGIL operates with single subsidiary viz Federal-Mogul TPR (India) Ltd. Its facilities are located in Patiala (Punjab),
Bengaluru (Karnataka), Bhiwadi (Rajasthan) and Pantnagar (Uttarakhand). As of December 2010, it had installed manufacturing capacity of ~59 mn piston rings, ~19 mn
pistons, ~18 mn piston pins, ~47 mn valve train components and ~7 mn structural components.

COMPETITIVE POSITION
Peer Comparison

Federal-Mog ul
Goetz e (India) L td
Dec -10
R evenue (R s m n)
9,557.3
14.6
E B ITD A m a rg ins (% )
P AT (R s m n)
485.5
P AT m a rg ins (% )
5.1
G ea ring (x)
0.1
8.7
E P S (R s /s ha re)
P E (x)
32.1
P /B V (x)
3.7
R oC E (% )
16.5
R oE (% )
12.2
E V/E B ITD A (x)
11.6

P ric ol L im ited
Mar-10
8,023.5
12.8
239.6
3.0
1.8
2.7
7.1
1.1
14.6
16.0
4.2

Om ax Autos L td
Mar-10
8,656.1
8.0
174.6
2.0
2.1
8.2
4.9
0.5
11.4
11.4
5.1

L um ax Auto
Tec hnolog ies L td
Mar-10
4,172.6
8.7
231.5
5.5
0.1
19.9
7.1
2.1
33.4
32.5
4.4

n.m: Not meaningful

K ey Financ ia l Indic ators

FINANCIAL PROFILE
Top line grows, but EBITDA margin shrinks in CY10
Top line grew 18.8% year-on-year in CY10, reaching ~Rs 9.6 bn, primarily
due to strong growth in the automobile sector. There was increase in
demand from both original equipment manufacturers and aftermarket
segments. During the year, the company sold ~124 mn components
against ~101 mn in the previous year.
EBITDA margin, however, declined to 14.6% in CY10 from 19.5% in CY09,
primarily as a result of increase in material cost as a percentage of total
revenues, which increased to ~30% in CY10 from ~27% CY09.
On account of decrease in operating profit, PAT declined to ~Rs 486 mn
from ~Rs 606 mn in CY09.

Units

De c -08

De c -09

De c -10

R evenue

R s m illion

7,203.2

8,047.7

9,557.3

E B ITD A m a rg ins

P er cent

15.2

19.5

14.6

P AT

R s m illion

11.2

606.0

485.5

P AT m a rg ins

P er cent

0.2

7.5

5.1

R evenue g rowth

P er cent

13.3

11.7

18.8

E B ITD A g rowth

P er cent

43.3

42.6

-11.0

P AT g rowth

P er cent

107.0

5,324.8

-19.9

G ea ring

Tim es

0.6

0.2

0.1

R oC E

P er cent

12.2

19.6

16.5

R oE

P er cent

0.5

17.6

12.2

INDUSTRY PROFILE
Auto Component
The auto components industrys production in India is estimated at around Rs 1,212 billion in 2009-10. The industry has been reducing its dependence on the domestic
automobile industry over the long term; it also continues to maintain its ability of being cost-competitive and technically proficient in niche segments. These factors, along
with the foray of Indian auto component players in the international markets through acquisitions, have enhanced the industrys popularity among international original
equipment manufacturers (OEMs) in terms of their outsourcing needs. Currently, domestic OEMs account for around 67% of the total auto component production off-take,
whereas the replacement and export segments account for around 21% and 12%, respectively. The industry is largely fragmented with over 558 players operating in the
organised segment and many unorganised players catering to the replacement demand. However, with auto OEMs adopting vendor rationalisation, the proportion of the
organised segment is likely to increase over the long term. In the long term, exports are expected to grow at a faster pace as global OEMs are expected to implement cost
rationalisation strategies by increasing their sourcing from low-cost regions. The bargaining power of players with OEMs is moderate, and has been historically high in the
replacement market. The technological edge of a particular auto component segment determines the bargaining power of its players. Further, players with higher
exposure to replacement segment are able to have better margins given higher bargaining power in the segment. However, increasing competition from imports is
impacting the ability to pass on input cost increases in replacement market as well.

CRISIL COMPANY REPORT | 2

Federal-Mogul Goetze (India) Limited

ANNUAL RESULTS
Inc om e S ta te m e nt
(R s m illion )
Net S ales
Ope ra ting Inc om e

De c -08
7,022.5
7,203.2

De c -09
7,875.3
8,047.7

De c -10
9,314.9
9,557.3

E B IT DA
E B IT DA Ma rg in

1,097.9
15.2

1,565.7
19.5

1,393.1
14.6

504.9
541.4
9.5

538.9
232.2
-54.5

519.7
114.2
-53.2

66.8
11.2

721.8
606.0

690.6
485.5

0.2

7.5

5.1

55.6

55.6

55.6

E arnings per s hare (E P S )

0.2

10.9

8.7

C a sh flow
(R s m illion )
P re-tax profit
Total tax paid
Deprec iation
C hange in working c apital

De c -08
61.2
-61.6
504.9
144.9

De c -09
740.1
-79.6
538.9
-87.6

De c -10
705.9
-96.4
519.7
-171.9

649.4
-686.1
0.2

1,111.8
-178.2
-0.4

957.3
-574.8
5.5

Deprec iation
Interes t
O ther Inc ome
PBT
P AT
P AT Ma rg in
No. of s hares (Mn No.)

B a la nc e she e t
(R s m illion )
E quity s hare c apital
R es erves and s urplus
T a ng ible ne t worth
Deferred tax liablity:|as s et|
L ong-term debt
S hort-term-debt
T ota l de bt
C urrent liabilities
Total provis ions
T ota l lia bilitie s
G ros s bloc k
Net fixed as s ets
Inve stm e nts
C urre nt a sse ts
R ec eivables
Inventories
C as h
T ota l a sse ts

De c -08
556.3
2,584.3
3,140.6
25.1
127.7
1,699.8
1,827.5
1,583.4
308.9
6,885.5
6,958.8
4,334.2
108.8
2,442.5
971.3
1,075.4
19.9
6,885.5

De c -09
556.3
3,206.4
3,762.7
61.3
123.5
799.8
923.3
1,554.7
405.7
6,707.7
7,047.5
3,991.8
109.2
2,606.7
1,068.1
984.8
28.4
6,707.7

De c -10
556.3
3,670.4
4,226.7
170.0
80.5
551.8
632.3
1,694.7
510.9
7,234.6
7,295.5
4,053.8
103.7
3,077.1
1,263.1
1,104.7
81.8
7,234.6

R evenue growth (% )
E B ITDA growth(% )
P A T growth(% )

De c -08
13.3
43.3
107.0

De c -09
11.7
42.6
5,324.8

De c -10
18.8
-11.0
-19.9

E B ITDA margins (% )
Tax rate (% )
P A T margins (% )

15.2
92.3
0.2

19.5
11.0
7.5

14.6
14.3
5.1

Dividend payout (% )
Dividend per s hare (R s )
B V (R s )
R eturn on E quity (% )
R eturn on c apital employed (% )

53.7
0.1
56.5
0.5
12.2

3.8
0.4
67.6
17.6
19.6

6.8
0.5
76.0
12.2
16.5

G earing (x )
Interes t c overage (x )
Debt/E B ITDA (x )

0.6
2.0
1.7

0.2
6.7
0.6

0.1
11.9
0.5

A s s et turnover (x)
C urrent ratio (x)
G ros s c urrent as s ets (days )

1.1
0.7
121

1.1
0.9
107

1.3
1.1
108

R a tio

C a sh flow from ope ra ting a c tivitie s

C apital E x penditure
Inves tments and others

C a sh flow from inve sting a c tivitie s

E quity rais ed/(repaid)
Debt rais ed/(repaid)
Dividend (inc l. tax )
O thers (inc l ex traordinaries )

-685.9
1,277.9
-1,280.3
-7.0
43.4

-178.6
1.0
-904.2
-30.3
8.7

-569.3
-291.0
-52.4
8.6

C a sh flow from fina nc ing a c tivitie s

C hange in c as h pos ition
O pening c as h
C los ing c as h

34.0
-2.5
22.7
19.9

-924.8
8.4
19.9
28.4

-334.8
53.2
28.4
81.8

n.m : Not meaningful;

QUARTERLY RESULTS
P rofit a nd los s ac c ount
(R s m illion)
No of Months
R evenue

Dec -10
3

% of
R evenue

Dec -09
3

% of
R evenue

S ep-10
3

% of
R evenue

2,642.6

100.0

2,167.6

100.0

2,384.2

100.0

EB ITDA

283.9

10.7

249.8

11.5

273.0

11.5

Interes t

37.7

1.4

65.2

3.0

29.9

1.3

D eprecia tion

127.8

4.8

137.9

6.4

118.8

5.0

PBT

118.4

4.5

46.8

2.2

124.3

5.2

P AT

32.2

1.2

(32.5)

(1.5)

110.9

4.7

CRISIL COMPANY REPORT | 3

Federal-Mogul Goetze (India) Limited

FOCUS CHARTS & TABLES

Sales

Net Profit

Per c ent
20

EP S

D ec -10

-200
S ep-10

D ec -10

S ep-10

J un-10

Mar-10

Sales growth y-o-y (RHS)

Rs /s hare
5
4
3
2
1
0
-1
-2
-3
-4
-5

Net profit growth y-o-y (RHS)

Movem ent in operating and net m arg ins

15
10
5
0
-5
-10

Dec 2010
75.0
0.2
11.9
12.9

Ma r 2011
75.0
0.4
12.0
12.7

OPM

D ec -10

S ep-10

J un-10

Mar-10

D ec -09

S ep-09

J un-09

Mar-09

D ec -08

S ep-08

J un-08

Mar-08

D ec -10

S ep-10

J un-10

Mar-10

2010
75.0
0.2
12.1
12.8

D ec -09

S ep-09

S ha reholding P a ttern (P er c ent)

J un 2010
S ep
P rom oter
75.0
F II
0.1
D II
11.5
Others
13.4

S ep-08

J un-09

Mar-09

D ec -08

-15
J un-08

Mar-08

D ec -09

S ep-09

J un-09

Mar-09

D ec -08

-20
S ep-08

0
J un-08

-10
Mar-08

500

200

J un-10

Mar-10

1,000

400

D ec -09

10

S ep-09

1,500

600

J un-09

20

Mar-09

2,000

800

D ec -08

30

Per c ent
1,000

Qua rte rly P AT & y-o-y g row th

S ep-08

2,500

Rs mn
300
250
200
150
100
50
0
-50
-100
-150
-200
J un-08

Per c ent
40

Qua rte rly sa le s & y-o-y g rowth

Mar-08

Rs mn
3,000

NPM

B oard of Direc tors

Direc tor Nam e
K ris hna m urthy N a g a S ubra m a nia m
(Mr.)
J ea n H um bert L ouis D e Villa rdi D e
Montla ur (Mr.)
Mukul G upta (Mr.)

Non-E xecutive D irector

R a iner J uecks tock (Mr.)

D a n B rug g er (Mr.)

P rom oter-D irector

Wholetim e D irector

Des ig nation
Non-E xecutive C ha irm a n
Ma na g ing D irector

Additional Disclosure
This report has been sponsored by NSE - Investor Protection Fund Trust (NSEIPFT).
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CRISIL COMPANY REPORT | 4