400 350 300 250 200chats.moneycontrol.com/plus/upload_pdf_file/VSTTillers...collaboration between VST Motors and Mitsubishi Heavy Industries (Japan). Thereafter, over the course of

VST Tillers Tractors Ltd

BUY

- 1 of 22 - Wednesday 13th

July, 2016

This document is for private circulation, and must be read in conjunction with the disclaimer on the last page.

ST

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Target Price `2451 CMP `1966 FY19E PE 19X

Index Details After facing a strenuous period over FY14-16 the tractor industry is all

set to emerge on the growth track, given the favorable monsoon

outlook and the steadfast government initiatives to ramp up the

agricultural economy. While bucking the recent bearish trend in

industry sales, VST Tillers Tractors Ltd (VST) has not only grow over

the said period but enhanced market share both in the tiller and

tractors segment. We are optimistic about the company’s

performance over the next three years and expect overall revenue to

grow at a CAGR of 16.3% to `1017 crore by FY19 while the EBITDA is

expected to increase at a CAGR of 17.0% from `113 crore to `181

crore. The PAT, in turn, is expected to increase at a CAGR of 18.3%

from `74.1 crore to `122.7 crore.

We initiate coverage on VST with a Buy, with a price objective of

`2451 (19X FY19) representing an upside potential of 24.9% from the

CMP of `1966 over a period of 27 – 30 months. Currently the stock is

trading at 15X its estimated earnings for FY19.

While our valuation target is demanding, we believe that

a) the dominance in the tillers segment and

b) strong growth of the compact tractor segment puts VST in a sweet

spot for strong visibility of earnings over the forecast period, while

c) robust margins and

d) superior return ratios warrant a premium.

Our optimism stems from the following:

Favorable monsoon and government initiatives augur well for the

agricultural sector

I. With the meteorology department forecasting a favorable monsoon

and several initiatives taken by the government viz

I. Water conservation and irrigation

II.

Sensex 27,126 Nifty 8323

Industry Automobiles-

Tractors

Scrip Details Mkt Cap(` cr) 1,688.9 BVPS (`) 505.8

O/s Shares (Cr) 0.9

Av Vol (Lacs) 0.1

52 Week H/L 2005/1265

Div Yield (%) 0.7 FVPS (`) 10.0

Shareholding Pattern

Shareholders %

Promoters 53.9

Public 46.1 Total 100.0

VST Tillers Tractors Ltd vs. Sensex

00000000000

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VST Tillers Tractors Ltd Sensex

0000000000000000000;/’;;.

Key Financials (` in Cr)

Y/E Mar Net

Sales EBITDA PAT EPS

EPS Growth

(%)

RONW (%)

ROCE (%)

P/E EV/EBITDA

(x) (x)

2016 646.7 112.9 134.8 86.2 7.1 17.6 26.8 22.8 13.6

2017E 768.2 134.8 89.3 103.8 20.4 18.5 28.1 18.9 11.2

2018E 887.3 157.1 105.1 122.2 17.7 18.8 28.4 16.1 9.3

2019E 1017.5 180.6 122.7 142.7 16.8 18.9 28.5 13.7 7.9

- 2 of 22- Wednesday 13th

July, 2016


II. Crop insurance scheme to provide income security to farmers

III. Soil Cards to examine soil health and optimize farm

productivity with regards to judicious choice of crop plantation

and fertilizer inputs

IV. Market integration towards better price discovery Should help

improve farmers’ prosperity and thereby provide impetus for

better farming practices and hence, tractor demand.

V. Monopoly in tillers and significant latent demand potential augur well

for VST.

VI.

VII. Despite the previous two years of poor rainfall and negative growth of

the tractor industry, VST has grown its tiller sales by 19%. Going

forward, we expect tiller sales to grow at 12-13%, leading to a 13.5%

CAGR growth in revenues to `519 crore by FY19.

VIII.

IX. Compact tractor segment to see robust growth in the near to medium

term.

X.

XI. As per the management, the compact tractors segment (sub 35 hp) is

expected to grow to 2,00,000 units in 4-5 years. VST operates within

this segment entirely and is expected to be one of the biggest

beneficiaries. Further, it has launched a new model VST Shakti 270

MT (27 hp), which should help propel tractor sales growth. Going

forward, we expect tractor sales to grow at 15%, leading to a 21.3%

CAGR growth in revenues to `347 crore by FY19.


July, 2016


Company Background :

VST Tillers & Tractors (VST) was founded in 1967 as a joint venture technical

collaboration between VST Motors and Mitsubishi Heavy Industries (Japan).

Thereafter, over the course of time, VST acquired majority ownership in the

company (current holding stands at 51%).

The company is a major player in the domestic farm equipment industry,

manufacturing power tillers & tractors.VST is also present in the segment of

rice translators& power reapers. The company imports the same from China

and Japan and sells them in the domestic market, earning a trading margin on

the same. VST also exports a few power tillers & tractors to Africa, Russia,

Myanmar, etc.

VST’s Ltd manufacturing locations

Source: VST Tillers Tractors Ltd, Ventura Research

Tamil Nadu manufactures tractors with 18.5HP and 22HP

Bengaluru manufactures power tillers of 9HP, 13HP

and 15HP


July, 2016


Key Investment Highlights

Strong operational performance on the cards

Historically VST’s revenues have grown at a CAGR of 6.8% from FY12 - FY16

to `647 crore, mainly propelled by market share gains in the tillers segment

and a foray into tractors. Given the favorable thrust of the government on

increasing rural incomes and patronizing agri growth, we expect VST Tillers to

be one of the biggest beneficiaries. Going forth we expect overall revenue to

grow at a CAGR of 16.3% to `1017 crore by FY19, driven by faster growth of

the tiller segment (13.5% CAGR to `519 crore by FY19) and the introduction of

a new tractor model in the 27 hp segment (which should drive tractor revenues

by 21.3% CAGR to `347 crore by FY19).

Strong revenue growth on the cards

Source: VST Tillers Tractors Ltd, Ventura Research,TMA

201 232 289 325 267 346 296 356 402 459 5195387

111167

149180

176194

254299

347

2025

2840

67

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Tillers Tractors Others

` In Crore


July, 2016


Tiller market has huge untapped potential It is quite surprising that Bangladesh, despite having an arable land mass

(76,800 Sq. Km)that is only 5% of India’s total arable land mass of 15,69,844

Sq Km, has a tiller market size of nearly 2,00,000 or around 4X of that of India

(FY16 sales of 50,000 units). One of the reasons for the widespread use of

tillers in the Bangladesh market is the dearth of cattle for agricultural purposes

(which are primarily consumed as part of their staple diet).

Tractor revenue share set to increase

73 67 67 61 55 57 54 55 52 52 51

20 26 26 3131 30 32 30 33 34 34

7 7 7 8 14 13 14 15 15 14 15

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Tillers Tractors Others

Source: VST Tillers Tractors Ltd, Ventura Research,TMA

In %


July, 2016


Considering the area of arable land of major states of India which is of comparable size with that of Bangladesh, the potential for growth of the tillers market in India is stupendous. In India, mainly cattle is used for ploughing and with the cost of maintaining cattle going up, it is but natural that the shift towards automation would take place sooner rather than later. Also, farm mechanization has a tendency to improve farm yield.

Farm mechanization chart

State wise arable land

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Farm Yield Farm Mechanization (RHS)

Kg/hectare Kw/hr

Source: EIMA agrimach 2015 report, Ventura Research


July, 2016


Tillers are the preferred choice for marginal farmers over expensive tractors

In a country where farm size holdings are diminishing and there is a rise in the

number of marginal holdings, the cost of tractor ownership (range of ~ `2.5-8

lakh/unit) can be quite prohibitive, given the high cost. This, in turn, throws up a

huge opportunity for the domestic power tiller sector wherein a power tiller

costs ~ ` 1.25 lakh but suffices to perform all requisite agricultural operations

performed by a tractor.

Further, given the government’s thrust on increasing farm productivity through

greater penetration of farm mechanization and its support through various

subsidy programmes, power tillers may turn out to be the preferred farm

equipment choice for domestic farmers. VST with its dominant share in the

tillers market is best placed to exploit this opportunity.

Strong Government initiative to improve farm produce to fuel demand for tillers

We believe that as the efforts of the government to enhance productivity and

double the income of farmers over the next five years bears fruit, demand for

tillers would also improve.

Pradhanmantri Fasal Bima Yojna (PMFBY) to ensure income security which in turn should lead to increased investments

Historically, farm produce has been erratic and highly dependent on

precipitation and its timeliness. While the crop insurance scheme is nothing

new, however, the earlier NAIS scheme (National Agriculture Insurance

Scheme) had many drawbacks which thwarted its success:

Farm holdings

2000-01 2005-06 2010-11 2000-01 2005-06 2010-11

Marginal(< 1 hectare) 75.4 83.7 92.4 29.8 32 35.4

Small(1-2 hectare) 22.7 23.9 24.7 32.1 33.1 35.1

Semi-Medium(2-4 hectare) 14 14.1 13.8 38.2 37.9 37.5

Medium(4-10 hectare) 6.6 6.4 5.9 38.2 36.6 33.7

Large(> 10 hectare) 1.2 1.1 1 21.1 18.7 17.4

All Holdings 119.9 129.2 137.8 159.4 158.3 159.1

(hectare/holding) 1.33 1.23 1.15

Holdings (%) 81.8 83.3 85

No of Holding (mn) Area (mn hectare)

Category of Holding

Source: VST Tillers Tractors Ltd ,Ventura Research

Marginal and small farm holdings have increased while size of

holdings have also shrunk


July, 2016


It was implemented only in 14 states of India whereas PMFBY is

implemented in all the states of India.

Premium of NAIS were higher as compared to PMFBY.

Schemes were only given to those farmers who had taken a loan for

purchasing agriculture machineries, crop seeds, insecticides, pesticides

etc.

There was a provision of capping the premium rate due to which low

claims were paid to farmers. In PMFBY it is removed and now farmers

will get their full claim against the assured sum.

The PMFBY (Pradhanmantri Fasal Bima Yojna) has replaced the NAIS,

which provides crop insurance to farmers on liberal terms which should go a

long way in raising farmers’ income security. The PMFBY scores on many

counts over its predecessor the NAIS:

Prevented Sowing/ Planting Risk: Insured area is prevented from

sowing/ planting due to deficit rainfall or adverse seasonal conditions

Standing Crop (Sowing to Harvesting): Comprehensive risk

insurance is provided to cover yield losses due to non- preventable

risks, viz. Drought, Flood, etc.

Post-Harvest Losses: Coverage is available only up to a maximum

period of two weeks from harvesting for those crops which are allowed

to dry in cut and spread condition in the field after harvesting against

specific perils of cyclone and cyclonic rains and unseasonal rains.

Localized Calamities: Loss/ damage resulting from occurrence of

identified localized risks of hailstorm, landslide, and inundation affecting

isolated farms in the notified area.

These measures will ensure stability of farm income encouraging investments

in automation.

Farm subsidy to boost demand for tillers

Subsidy given by the government enables farmers to significantly reduce the cost of ownership


July, 2016


Good monsoon expectation portend strong sales for tillers

The sale of tillers is strongly correlated with the intensity of the monsoon with

sales spiking when rainfall has been plentiful and sharply contracting when the

rainfall is deficient. And with better rainfall expected during the current year, we

expect strong sales during the current year.

Sales of VST tillers to grow ahead of the market

Barring FY11, VST Tillers has always grown faster than the market and during

the period FY12-FY16, when the rainfall has been rather erratic, VST has

increased its market share (with FY16 seeing a huge share add of 700 bps

YoY to 55%).

Tiller sales strongly dependant on good monsoons

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Tillers Industry Sales Rainfall (RHS)

as a % of LPA


Government subsidy for tillers

% Max Amt % Max Amt

<8 HP 40 0.4 lakh 50 0.5 lakh

>8 HP 40 0.6 lakh 50 0.75 lakh

General subsidy For reserved categoryPower


In %


July,

2016


The strong growth in FY16 sales can be attributed to

new incentive based sales schemes,

strengthening of the dealer network,

replacement of the sales team by younger, motivated and dynamic

personnel,

exploring newer markets for tillers

We expect tillers’ sales numbers to grow at a CAGR of 12.3% to 38,820 units

by FY19 and correspondingly revenues are expected to grow at a CAGR of

13.46% to Rs 519 crore over the commensurate period. Margins which,

however, are in the range of ~17% -18%, are more or less expected to trend as

per historicals.

VST tillers market share

4749

43 44 4549 48

55 56 57 57

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In %


July,

2016


Low Tractor penetration in India presents a huge opportunity

With over 52% of India’s population directly or indirectly associated with the agricultural economy, it is only logical that India’s economy cannot grow while ignoring the agricultural sector. Further, as per World Bank forecasts, the workforce in the rural segment is expected to drop to 25.7% by 2050 thereby giving an impetus to farm mechanization. Tractors constitute a bulk of the farm mechanization industry and India’s tractor penetration being one of the lowest among major economies represents significant latent demand. Although tractor penetration has increased from one per 150 hectares to one per 30 hectares in 2015, it is still one of the lowest among major economies. Further, given the fact that use of proper equipment can increase the productivity by up to 30% and reduce costs by ~20%, the need for farm mechanization is a top priority. Recognizing this, the Modi government has announced path breaking reforms in the agricultural sector, which should boost the trajectory of growth.

VST tillers revenues to exhibit strong growth

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July,

2016


Agricultural reforms announced in Budget 2016


July,

2016


Agriculture reforms in budget 2016

Farmer welfare & education

• Allocation for Agriculture and Farmers’ welfare has increased from `15,000 crore to `

35,984 crore.

• Promote organic farming through ‘Parmparagat Krishi Vikas Yojana’ and 'Organic Value

Chain Development in North East Region'.

• To reduce the burden of loan repayment on farmers, a provision of `15,000 crore has

been made in the BE 2016-17 towards interest subvention.

• Allocation under Pradhan Mantri Gram Sadak Yojana increased to `19,000 crore. Will

connect remaining 65,000 eligible habitations by 2019.

• Allocation under Prime Minister Fasal Bima Yojana ` 5,500 crore.

Irrigation

• ‘Pradhan Mantri Krishi Sinchai Yojana’ to be implemented in mission mode. `28.5 lakh

hectares will be brought under irrigation.

• Implementation of 89 irrigation projects under AIBP (Acclerated Benefit Irrigation

Programme), which are languishing for a long time, will be fast tracked.

• A dedicated Long Term Irrigation Fund will be created in NABARD with an initial corpus of

about ` 20,000 crore.

• Programme for sustainable management of ground water resources with an estimated

cost of ` 6,000 crore will be implemented through 3 multilateral funding.

• 5 lakh farm ponds and dug wells in rain fed areas and `10 lakh compost pits for

production of organic manure will be taken up under MGNREGA.

Soil & Seeds

• Soil Health Card scheme will cover all 14 crore farm holdings by March 2017.

• 2,000 model retail outlets of Fertilizer companies will be provided with soil and seed

testing facilities during the next three years.

Marketing of Agricultural Products

• Unified Agricultural Marketing ePlatform to provide a common e- market platform for

wholesale markets.

VST a strong player in 20 HP Segment


July,

2016


The tractor industry in India can be bifurcated on the basis of power. VST is

present in the lowest category i.e. sub 20 HP, which constitutes 4.1% of the

total tractor industry.

Player wise breakup of tractor industry (In %)

12 11 10 9

6 6 7 9

41 40 38 38

10 10 12 12

25 25 24 23

1 1 1 1

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Escorts John Deere M&M Group

Sonalika Tafe Group VST Tractors

in %


Player wise breakup upto 30HP tractor (In %)


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M&M Sonalika Others Tafe VST

FY13 total tractor sales -66562 units

FY16 total tractor sales - 54736 units

3 year CAGR growth - 6.7%


July,

2016


Compact tractor segment to grow manifold

Although this segment has experienced tepid growth over the last few years,

the management believes that the compact tractors segment should grow 4X

(to 2,00,000 units from the current 55,000 units over the next 4-5 years).

VST has made significant inroads and grown faster than the market (18%

CAGR over FY11-FY16). Its current market share stands at an enviable 33% in

the sub 20HP segment. We believe that VST’s performance will continue to

outstrip the segment growth and project sales should hit 11,535 units by FY19

(15 % CAGR for sub 20 HP segment).

VST entering new segment

Recently VST has also made a foray into the 30 HP segment with the launch of

its model VST Shakti MT 270 (27 HP). Initial sales of 150 units in the last two

months of the previous year are encouraging and the management is hopeful

of selling 1000 units. However, we have conservatively modeled 950 nos. in

our forecast for FY17 with sales scaling 1425 units by FY19.

Overall forecasted sales for the tractor segment should grow at a CAGR of

18% from the current 7,801 to 12,960 units by FY19. Accordingly, revenues

VST Tractor sales in units


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July,

2016


from tractor sales should grow at a CAGR of 21% from the current `194 crore

to `347 by FY19.

Brisk growth in VST tractor revenues

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Financial Performance :

In Q4FY16, VST’s consolidated revenues grew by 26% to `177.3 crore driven

by some aggressive marketing schemes as well as the launch of the 27-HP

tractor towards the fag end of the year. Although the EBIDTA margin

contracted by 100 bps to 17%, the EBITDA grew by 15% to `29.5 crore over

the same period. The PAT came in flat at `19.5 crore compared to `19.0 crore

in Q4FY15, due to an increase in the depreciation cost by 15% and tax

expenses by 20% and a decrease in other income by 18% compared to

Q4FY15.

Overall, for FY16 the consolidated revenue increased by 17% YoY to `646.7

crore. The EBITDA at `112.9 crore was 12.7% higher compared to `100.2

crore in FY15. However, margins contracted by 100 bps. In FY16, the PAT

grew 6.6% to `74.1 crore compared to `69.5 crore.

Quarterly financial performance (` in crore)

Particulars Q4FY16 Q4FY15 FY16 FY15

Sales 177.3 140.9 646.7 551.6

Growth 26% 17%

Expenditure 147.9 115.3 533.8 451.4

EBITDA (ex Ol) 29.5 25.7 112.9 100.2

as a % of sales 17% 18% 17% 18%

Depreciation 3.2 2.8 12.5 9.4

EBIT(Ex.Ol) 26.3 22.9 100.3 90.8

Other Income 4.7 5.6 12.3 11.9

EBIT 30.9 28.6 112.6 102.7

Margin % 17% 20% 17% 19%

Interest 0.7 0.5 2.6 2.1

PBT 30.3 28.1 110.0 100.5

Margin % 17% 20% 17% 18%

Provision for tax 10.8 9.1 35.9 31.0

PAT 19.5 19.0 74.1 69.5

PAT Margin % 11% 13% 11% 13%



July,

2016


Financial Outlook :

We expect VST’s revenue to grow at a 3 year CAGR of 16.31% to `1017 crore

by FY19 driven by the growth at 13.46% CAGR in tillers sales to `519.4 crore

and the 21.35% CAGR rise in tractor sales to `346.7 crore, respectively.

Margins are expected to increase from 17.5% in FY16 to 17.8% in FY19. The

EBITDA is expected to increase at a CAGR of 17.0% from `113 crore to `181

crore. The PAT is expected to increase at a CAGR of 18.3% from `74.1 crore

to `122.7 crore.

ROE and ROCE to remain stable

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EBITDA PAT

Source: VST Tractors Tillers Ltd, Ventura Research

Source: VST Tractors Tillers Ltd ,Ventura Research

In % In%


July,

2016


Peer comparison

Y/E March Sales EBITDA PAT

EBITDA

Margin (%)

PAT

Margin (%) ROE(%) P/E P/BV EV/ EBITDA

VST Tillers

2015 552.0 100.0 70.0 18.1% 12.7% 20.6% 23.6 4.5 14.2

2016 647.0 112.9 74.1 17.5% 11.5% 17.6% 22.0 3.9 10.9

2017E 768.0 134.8 89.3 17.6% 11.6% 18.5% 18.3 3.4 9.2

2018E 887.0 157.1 105.1 17.7% 11.8% 18.8% 15.6 2.9 7.8

2019E 1,017.5 180.6 122.7 17.8% 12.1% 18.9% 13.3 2.5 7.8

Mahindra & Mahindra

2015 38,391.6 4,232.6 3,321.1 11.0% 8.7% 18.4% 21.1 3.7 16.6

2016 40,396.7 4,571.2 3,167.5 11.3% 7.8% 15.5% 22.6 3.3 15.1

2017E 46,903.0 5,642.4 3,790.0 12.0% 8.1% 16.4% 23.5 3.5 15.6

2018E 53,533.9 6,570.5 4,505.7 12.3% 8.4% 16.8% 19.9 3.1 13.4

2019E 60,150.2 7,261.0 4,993.8 12.1% 8.3% 17.4% 17.6 2.8 12.1

Escorts Ltd

2015 4,112.7 160.5 75.7 3.9% 1.8% 4.1% 20.4 0.9 0.4

2016 3,537.6 146.4 76.3 4.1% 2.2% 4.2% 32.8 1.4 0.7

2017E 4,103.4 272.3 153.2 6.6% 3.7% 7.9% 16.5 1.3 0.6

2018E 4,727.5 340.4 208.7 7.2% 4.4% 10.0% 12.1 1.2 0.5 Source: VST Tillers Tractors Ltd, Ventura Research

Attractive ROE as compared to peers

VST Tillers

Mahindra

Escorts

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P/E


ROE


July,

2016


Valuation :

We initiate coverage on VST with a Buy, with a price objective of `2451 (19X

FY19), representing an upside potential of 24.9% from the CMP of `1966 over

a period of 27 – 30 months. Currently, the stock is trading at 15X its estimated

earnings for FY19.

While our valuation target is demanding, we believe that the following factors

warrant a premium:

I. the dominance in the tillers segment

II. strong growth of the compact tractor segment puts VST in a sweet spot

for strong visibility of earnings over the forecast period

III. robust margins

IV. superior return ratios

VST P/E chart VST P/B chart


Source: VST Tractors Tillers Ltd ,Ventura Research

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CMP 2X 4.5X 7X 9.5X 12X

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CMP 0.5X 1X 1.5X 2X 2.5X

Price in ` Book value in `


July,

2016


VST EV/EBITDA chart

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EV 2X 3.5X 5X 6.5X 8X


EV in crore


July,

2016


Financials and Projections


July,

2016


Y/E March, Fig in ` Cr FY16 FY17E FY18E FY19E Y/E March, Fig in ` Cr FY16 FY17E FY18E FY19E

Profit & Loss Statement Per Share Data (Rs)

Net Sales 646.7 768.2 887.3 1017.5 Adj. EPS 86.2 103.8 122.2 142.7

% Chg. 18.8% 15.5% 14.7% Cash EPS 100.3 118.9 138.3 159.3

Total Expenditure 533.8 633.4 730.3 836.9 DPS 13.0 13.0 13.0 13.0

% Chg. 18.7% 15.3% 14.6% Book Value 488.5 559.6 648.4 755.5

EBDITA 112.9 134.8 157.1 180.6 Capital, Liquidity, Returns Ratio

EBDITA Margin % 17.5% 17.6% 17.7% 17.8% Debt / Equity (x) 0.0 0.0 0.0 0.0

Other Income 12.3 13.8 16.0 19.3 Current Ratio (x) 5.4 4.6 5.5 6.3

PBDIT 125.1 148.6 173.0 199.9 ROE (%) 17.6% 18.5% 18.8% 18.9%

Depreciation 12.5 13.5 14.4 14.9 ROCE (%) 26.8% 28.1% 28.4% 28.5%

Interest 2.6 1.9 1.8 1.8 Dividend Yield (%)

Exceptional items 0.0 0.0 0.0 0.0 Valuation Ratio (x)

PBT 110.0 133.2 156.8 183.2 P/E 22.8 18.9 16.1 13.7

Tax Provisions 35.9 44.0 51.8 60.4 P/BV 4.0 3.5 3.0 2.6

Reported PAT 74.1 89.3 105.1 122.7 EV/Sales 2.4 2.0 1.7 1.4

Minority Interest 0.0 0.0 0.0 0.0 EV/EBIDTA 13.6 11.2 9.3 7.9

Share of Associate 0 0 0 0 Efficiency Ratio (x)

PAT 74.1 89.3 105.1 122.7 Inventory (days) 45 38 35 32

PAT Margin (%) 11.5% 11.6% 11.8% 12.1% Debtors (days) 70 73 73 73

RM / Sales (%) 65.1% 64.8% 64.8% 64.6% Creditors (days) 18 24 20 18

Balance Sheet Cash Flow Statement

Share Capital 8.6 8.6 8.6 8.6 Profit Before Tax 110.0 133.2 156.8 183.2

Reserves & Surplus 411.5 472.7 549.0 641.1 Depreciation 12.5 13.5 14.4 14.9

Minority Interest 0.0 0.0 0.0 0.0 Working Capital Changes 4.7 -32.7 -36.2 -47.0

Long Term Borrowings 0.0 0.0 0.0 0.0 Others -55.0 9.4 6.4 16.0

Deferred Tax Liability 4.6 5.3 5.9 6.3 Operating Cash Flow 72.3 123.5 141.5 167.2

Other Non Current Liabilities 38.7 38.2 39.0 42.0 Capital Expenditure -5.6 -19.6 -17.2 -14.0

Total Liabilities 463.3 524.8 602.5 698.0 Other Investment Activities -21.8 3.6 4.0 6.3

Gross Block 189.4 208.4 225.0 238.5 Cash Flow from Investing -27.3 -16.0 -13.2 -7.7

Less: Acc. Depreciation 62.4 75.9 90.4 105.3 Changes in Share Capital 0.0 0.0 0.0 0.0

Net Block 127.0 132.4 134.7 133.2 Changes in Borrowings 0.0 0.0 0.0 0.0

Capital Work in Progress 2.8 3.5 4.0 4.5 Dividend and Interest -18.2 -17.6 -17.5 -17.5

Other Non Current Assets 16.5 16.5 16.5 16.5 Cash Flow from Financing -18.2 -17.6 -17.5 -17.5

Net Current Assets 305.5 360.8 435.3 531.8 Net Change in Cash 26.7 89.9 110.8 142.0

Long term Loans & Advances 11.5 11.6 12.0 12.0 Opening Cash Balance 18 28 50 75

Total Assets 463.3 524.8 602.5 698.0 Closing Cash Balance 28 50 75 110

Disclosures and Disclaimer


July,

2016


Ventura Securities Limited (VSL) is a SEBI registered intermediary offering broking, depository and portfolio management services to clients. VSL is member of BSE, NSE and MCX-SX. VSL is a depository participant of NSDL. VSL states that no disciplinary action whatsoever has been taken by SEBI against it in last five years except administrative warning issued in connection with technical and venial lapses observed while inspection of books of accounts and records. Ventura Commodities Limited, Ventura Guaranty Limited, Ventura Insurance Brokers Limited and Ventura Allied Services Private Limited are associates of VSL. Research Analyst (RA) involved in the preparation of this research report and VSL disclose that neither RA nor VSL nor its associates (i) have any financial interest in the company which is the subject matter of this research report (ii) holds ownership of one percent or more in the securities of subject company (iii) have any material conflict of interest at the time of publication of this research report (iv) have received any compensation from the subject company in the past twelve months (v) have managed or co-managed public offering of securities for the subject company in past twelve months (vi) have received any compensation for investment banking merchant banking or brokerage services from the subject company in the past twelve months (vii) have received any compensation for product or services from the subject company in the past twelve months (viii) have received any compensation or other benefits from the subject company or third party in connection with the research report. 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Similarly, this document does not have regard to the specific investment objectives, financial situation/circumstances and the particular needs of any specific person who may receive this document. The securities discussed in this report may not be suitable for all investors. The appropriateness of a particular investment or strategy will depend on an investor's individual circumstances and objectives. Persons who may receive this document should consider and independently evaluate whether it is suitable for his/ her/their particular circumstances and, if necessary, seek professional/financial advice. And such person shall be responsible for conducting his/her/their own investigation and analysis of the information contained or referred to in this document and of evaluating the merits and risks involved in the securities forming the subject matter of this document. The projections and forecasts described in this report were based upon a number of estimates and assumptions and are inherently subject to significant uncertainties and contingencies. Projections and forecasts are necessarily speculative in nature, and it can be expected that one or more of the estimates on which the projections and forecasts were based will not materialize or will vary significantly from actual results, and such variances will likely increase over time. All projections and forecasts described in this report have been prepared solely by the authors of this report independently of the Company. These projections and forecasts were not prepared with a view toward compliance with published guidelines or generally accepted accounting principles. No independent accountants have expressed an opinion or any other form of assurance on these projections or forecasts. You should not regard the inclusion of the projections and forecasts described herein as a representation or warranty by VSL, its associates, the authors of this report or any other person that these projections or forecasts or their underlying assumptions will be achieved. For these reasons, you should only consider the projections and forecasts described in this report after carefully evaluating all of the information in this report, including the assumptions underlying such projections and forecasts. The price and value of the investments referred to in this document/material and the income from them may go down as well as up, and investors may realize losses on any investments. Past performance is not a guide for future performance. Future returns are not guaranteed and a loss of original capital may occur. Actual results may differ materially from those set forth in projections. Forward-looking statements are not predictions and may be subject to change without notice. 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400 350 300 250 200chats.moneycontrol.com/plus/upload_pdf_file/VSTTillers...collaboration between VST Motors and Mitsubishi Heavy Industries (Japan). Thereafter, over the course of

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