KARV Y ||| EEE Financials-Consolidated Exhibit 9: Profit and Loss Statement FYE October 18,2012 YIE Mar (Rs mn) Net Revenues % Growth Raw Material Staff (ther Expenses Total Expenditures EBITDA, % Growth EBITDA Margins (%) Other Income Interest Depreciation Profit Before Tax Reported PAT % Growth ‘Adjusted Net Profit % Growth ‘Source: Company, Karey institutional Research Exhibit 10: Balance Sheet YE Mar (Rs mn) Figuity capital Reserves & surplus ‘Shareholders’ funds Minorities interests Total Debt Capital Employed Net fied assets Cash & Cash Eg, Net other Current Assets Investments Net Deferred Tax Assets Total assets ‘Source: Company, Karey insttadional Research FYI 7a 12,170 Ben a 10207 24,59 15311 2,805 1032 4197 (190) 2459 7,905 146 185 6449 163 5449 163 FYI2 72 15427 17169 33 10,743 27945 16,680 488 4st 4905 (ray 27,98 2.750 183 30332 4645 17201 52,178 10,572 230 168 79 “7 84 9.860 19 200 7896 224 7.896 224 FYE Te 21,285 23,027 9183 32,195 17,696 6,903 2907 4,825 (74 32,195, Dabur India FYME _FYISE ‘B68sT 77 7 35733 42,490 5481 6467 20,41 23,040 61,354 71,998 12490 14,883) 181 192 169 Wa 980 109 469 326 938 14032 12,068 14635, 2414 2927 200 200 9,662 ni6 2a aa 9,662 n7i6 224 213 FYE FYISE VD 28909 38,586 306s1 40328 7 10 801 693 3e7L 47281 Isis 19431 1931915616 4509-6966 4925 74) a7) 3571147281 66KARVYiIIl STOCK BROKING YPE Mar (Rs mn) FY Exhibit 11: Cash Flow Statement Par Depreciation 64 Tax (1.250) ‘Change in Wkg Cap. (1.353) CF from Operations 5311 Capex (0.260) Investments (458) CF from Investing 10,559) (Change in Equity 1 (Change in Debt Dividends & others CF from Financing ‘Change in Cash ‘Sours Company, Karey Pati Exhibit 12: Key Ratios FYI2 79 1357) on) 6204 222) (650) (2,305) 1 76 2.946) 219) 1,680 FYI2 FYIGE 9860 834 as) 16) 7906 (1.850) (1880) o (1,600) 2.038) 6,638) 2418 FYE October 18,2012 Dabur In FYE 72,068) 938 eau) 2.182) 8405 (1,850) 1,880) ° (1100) 2.038) 638) 3417 FYE FY T4635 1032 e927) @as7) 0282 (1,850) 1s0) Oo} (2,100) 2.038) 638) 5298 FYISE Raw Material Cost/Sales (%) 466 507 7 26.1 295 162 12 302 376 FYI2 a 74 273 183 168 126 327 3 FYISE 35 74 272 177 169 131 a4 315. FYE a0 74 265 17, Wa Bs 316 2a FYISE YIE Mar FYI YE Mar FYI Manpower CostSales (%) 73 ‘Operating & Other Cost/Sales (6) 27 Revenue Growth (1%) 203 EBITDA Margins (%) 184 Net Income Margins (%) 135 ROCE (%) 300 ROE (%) 399 ‘Source: Company, Karey rst Exhibit 13: Valuation Parameters EPS (Rs) 32 PIE () a4 BV (Rs) 80 PBV Ee) 165 EV/EBITDA (x) 309 Fixed assets tumover ratio (x) 55 Net Debt/Equity (x) 05. EviSales 57, Source: Company, Karoy Institutional Research a7 357 99 14 269 60 oa 44 oe 1 132 100 as 64 01 36 238 176 178 68 (ay 30 7 196 23 57 145 75 (02) 25 67FMCG KARV Y |S Institutional Equities India Research Bloomberg: CLGT IN Reuters: COLG.BO INITIATION REPORT Colgate Palmolive (India) October 18, 2012 HOLD Premium Play Colgate-Palmolive (India) is focusing on new launches — largely in the premium segment ~ which would help the Company in sustaining healthy sales growth, while protecting its high profitability in the long-run. However, wwe believe that the stock has factored in most of the positives, as the counter has run up by 24% in the past 12 month with 21% in initial 6 months. ‘Volume Growth to Sustain - Premiumisation to Aid Price Growth: The ‘Company has consistently maintained 12% volume growth in past several quarters despite undertaking ~10% price hike in last three quarters. Despite having higher sales base, the Company's growth rate was consistently higher than its peers, which led to expansion of its market share. However, we believe that the Company would sustain this volume growth rate, going forward primarily due to regular product launches, higher rural focus and continued dental awareness programmes. Besides, premiumisation in the oral care industry is helping the Company in registering better sales growth. We believe that Colgate would sustain 18% Sales CAGR in FY12-FYISE compared to 15.3% Sales CAGR in FY09-12. Robust Pricing Power to Protect Profitability: Being a leader in the oral care segment, Colgate enjoys robust pricing power to maintain its EBITDA margin, going forward. It is observed that the Company has consistently been expanding its EBITDA margin by means of successive hike and foray into premium segment. In the last three year, its margins were >22% vis-&-vis 17-18% range previously. We believe that Colgate has to invest high on A&P going forward to face the stiff competition, which would partially set off gross level profitability — through better price growth and higher contribution from premium segment — and cap the EBITDA margin at -21% in FY12-15E. Outlook & Valuation As oral care industry is set for premiumisation we expect better realization growth in ensuing years. We believe that Colgate would sustain volume growth going ahead, owing to regular product launches, higher rural focus and continued dental awareness programmes, albeit. with higher promotional spending in FYI3E & FYI4E, We value Colgate on 26x P/E (-1.5x PEG) on 24-month forward earnings and derive target price of Rs. 1,322 apiece. We initiate coverage Colgate with “HOLD” rating. Key Financials Recommendation oor: Bras “Target Price: Rs122 Stock Informat Market Cap. Rs ba / USS may aa ‘s2-eek High/Low (Rs) 1289982 3m ADV (Rs mn (US$ ma) Swi Beta 06 Sensex! Nity 18,5115,560 ‘Share outstanding (mn) 36 Stock Performance (%%) IM aM aM VID Absolute 18 78 236 248 Rel toSensex 14 (09) 36 Performance 19,500 1,300 1/200 2.300 17,500 24s 300 15,500 800 Colgan Source oomberg lve naa HS) 1 Year Forward EV/EBITDA m Styhitiea BLELELEI LIES eros wow Source: Karey Institutional Research Analysts Contact YE Mar (Rs mn) Fit Re ABE AME AYE Revenue DBI —«26982—~—~=«STSCR SOA EBITDA, 5148 5,785 7201 8,380 9.512 Net Profits (Ad) 4,026 4.465 5367 6357 7310 EPS (Rs) 296 328 395 467 538 PER () 18 376 313. 264 230 PIBV () 28 386 319 254 155 EVIEBITDA (5) 318. 284 28 194 166 Source: Company, Karey Institutional Research Naveen Trived 022-6184 4316 naveen trivediekarvy.com For Private Gclation only. Far important information about Koes! rating sysem and other dlselosures refer to the end ef this material Karvy Stock Broking Research aso available on: Bloomberg -KRVY , Thomson Publisher & Reuters.