Result Update

May 30, 2016

Rating matrix
Rating
Target

:
:

Hold
| 65

Target Period
Potential Upside

:
:

12 months
-6%

Shipping Corporation of India (SCI)

Subdued scenario impacts business prospects

Whats changed?
Target

Unchanged

EPS FY17E

Unchanged

EPS FY18E

Unchanged

Rating

Unchanged

Quarterly performance
Q4FY16 Q3FY15

YoY (%) Q2FY16

Revenue

983.8

1,025.8

-4.1

EBITDA
EBITDA %

271.0
27.5

185.3
18.1

46.2
947 bps

-6.5

16.0

-140.6

PAT

1,085.0

QoQ (%)
-9.3

312.8
-13.4
28.8 -129 bps
19.0

-134.2

Key financials
| Crore

FY15

FY16

FY17E

FY18E

Net Sales
EBITDA

4,188
837.3

4,112
1,136.0

4,157
1,163.9

4,257
1,213.4

Net Profit

201.0

377.4

468.5

487.8

4.3

8.1

10.1

10.5

FY15

FY16

FY17E

FY18E

16.0

8.5

6.9

6.6

15.06

8.02

6.46

6.21

EPS

Valuation summary
P/E (x)
Target P/E(x)
EV/EBITDA (x)

8.2

5.1

5.3

4.5

P / BV (x)

0.38

0.36

0.34

0.32

RONW (%)

3.1

5.5

6.3

6.2

ROCE (%)

0.55

4.77

4.33

4.33

Stock data
Particular

Amount

Market Capitalisation (| Crore)

3214

Total Debt (FY15) (| Crore)

4,598.0

Cash and Investment (FY15) (| Crore)

EV (| Crore)

1,286.3
6,525.7

52 week H/L
Equity Capital (| Crore)

| 100 / | 46
465.8

Face Value (|)

|69

10.0

Stock Return
Stocks
Mercator

1M

3M

6M

1Yr

-7.0

29.4

-2.8

60.5

Shreyas Shipping

-7.0

45.5

-38.1

-53.0

GE Shipping Co

-7.0

11.3

-18.6

-11.2

SCI

-5.1

22.7

-16.0

31.1

Research Analysts
Bharat Chhoda
bharat.chhoda@icicisecurities.com
Ankit Panchmatia
ankit.panchmatia@icicisecurities.com

ICICI Securities Ltd | Retail Equity Research

SCIs Q4FY16 revenue remained flat sequentially (down 6% YoY) to

| 984 crore (I-direct estimate: | 1037 crore). Liner segment continues
to remain weak with a fourth consecutive sequential de-growth to
| 104 crore vs. | 195 crore in Q4FY15. With continued stressed BDI
levels, coupled with sustained higher charter rates for tankers, bulk
segment remained subdued with flattish revenues (up 3.5% QoQ) to
| 798 crore. Technical & offshore segment de-grew for the second
consecutive quarter to | 79 crore
Lower bunker costs coupled with a decline in charter hire expenses
continue to support higher levels of EBITDA. However, higher
provisions for the quarter tapered the momentum, following which
EBITDA de-grew 4% YoY (up 20% QoQ) to | 271 crore (I-direct
estimate: | 300 crore). Consequently, EBITDA margins remained
flattish YoY at 27.5% (I-direct estimate: 29%)
PAT in the quarter was dented by impairment charge worth | 136.4
crore taken on dry bulk vessels. Including the same, reported PAT
was at a loss of | 7 crore. However, excluding the onetime costs,
PAT grew 28% YoY to | 129 crore (I-direct estimate: | 135 crore)
For full year FY16, revenue marginally declined 2% YoY to | 4112
crore. EBITDA grew 36% YoY to | 1136 crore with 27.6% margins.
PAT was at | 377 crore vis--vis | 201 crore in FY15
Liner continues to remain bleak; offshore uncertain; tankers support
SCIs liner segment (includes break-bulk, container transport, passenger
and research vessels) continue to dent the overall performance of the
company. In addition to the fourth consecutive decline in revenue,
profitability also remains a concern for the segment. EBIT margins for
FY16 for liner segment were at -30% vs. 2% in FY15. The impact was
completely offset by upbeat performance in bulk segment (includes
tankers, dry bulk, gas and LNG vessels). Favourable fleet composition
with 36 tankers has led the segment EBIT margins to improve from 1.5%
in FY15 to 15% in FY16. With two consecutive quarter of de-growth, the
offshore segment reflected signs of softness, which, as per management,
is expected to revive given the upbeat E&P guidance provided by oil
exploration companies. With ~40% of the fleet on a time charter basis,
we believe the revenue visibility for SCI remains intact.
Bunker costs boon for FY16; sustainability remains key
Bunker costs for FY16 were at 15.5 percentage points (pps) to sales
compared to 28 pps to sales in FY15. Following this, EBITDA margins for
FY16 grew ~8 pps to 27.6% vs. 20% in FY15. Crude prices for the year
declined 45% to an average of $47 in FY16 vs. $86 in FY15, providing
tailwind to margins. However, average crude price for April, May (YTD)
grew 8%, 10% MoM, respectively. Though the impact of crude prices
comes with a lag effect, uptrend would restrict SCIs margin expansion.
Upgrade hinges on ascent of inland waterway subsidiary; maintain HOLD
The governments recent initiatives promoting inland shipping and
coastal movement of goods (if realised) position SCI as one of the biggest
beneficiary. To benefit from the same, SCI is planning to set up a
subsidiary to cater entirely to the inland waterways of the country. Given
the lower drafts available, the capex requirement in terms of barges/small
ships is minimal. In the near term, the management expects | 500 crore
revenues from this subsidiary. We believe that ramp up in this subsidiary
remains key for an upgrade. However, given the current subdued
scenario, we continue to retain HOLD rating with a target price of | 65.

Variance analysis
Q4FY16 Q4FY16E
983.8 1,037.4

Revenue
Operating Expenses

312.7

378.7

Q4FY15
1,041.9

YoY (%)
-5.6

389.0

-19.6

Q3FY16 QoQ (%)

987.0
-0.3
419.6

-25.5

Employee Expenses

124.6

114.1

123.9

0.5

113.2

10.0

Administrative & Oth Expenses

275.6

243.8

246.3

11.9

227.8

21.0

Total Expense

712.9

736.6

759.2

-6.1

760.6

-6.3

EBITDA

271.0

300.9

282.7

-4.2

226.4

19.7

27.5

29.0

146.8

149.5

Interest

39.8

40.0

35.5

12.0

39.6

0.4

Other Income

38.5

39.3

34.2

12.4

38.9

-1.0

34.0

77.7

EBITDA Margin (%)

Depreciation

27.1 41 bps
189.8

Exceptional Gain/Loss

136.4

0.0

35.0

PBT

122.9

150.6

91.7

22.9 460 bps

-22.6

-6.5

15.1

25.2

PAT

-7.0

135.5

101.5

-106.9

Liner Segment

Q4FY16
104.7

Q4FY15
195.4

YoY
-46.4

Q3FY16
127.0

Bulk Segment

797.8

792.7

0.6

771.0

79.4

84.9

-6.5

2.0

4.5

-55.6

Technical & Offshore Segment

Others

Lower bunker costs continued to benefit. However, this was completely offset by
an increase in provisions for the quarter

Operating margins continue to remain upbeat

-0.8

0.0

Total Tax

Key Metrics

148.0

Comments
Revenue impacted by continued softness in liner segment

Impairment taken on dry bulk assets

58.2

18.0
59.7

-111.8

QoQ
-17.6

Continue to remain stressed. Containers worst hit by subdued trade

3.5

Impact of recovery in BDI

84.6

-6.1

Showing signs of weakness

4.5

-55.6

Source: Company, ICICIdirect.com Research

Change in estimates
FY17E

FY18E

(| Crore)
Revenue

FY16
4112.39

Old
4,233.4

New % Change
4,156.9
-1.8

Old
4,296.8

New % Change Comments

4,257.5
-0.9 Revenue growth to be moderate as strategy to keep assets on time charter

EBITDA

1136.03

1,121.9

1,163.9

3.7

1,117.2

1,213.4

27.6

26.5

28.0

150 bps

26.0

28.5

377.4

470.4

468.5

-0.4

479.4

487.8

1.8

8.1

10.1

10.1

-0.3

10.3

10.5

1.8

EBITDA Margin (%)

PAT
EPS (|)

8.6
250 bps Fleet composition on time charter would lead to range bound margins with positive bias

Source: Company, ICICIdirect.com Research

Assumptions
Current

Comments

FY15
21

FY16
13

Bulk segment (% of revenues)

69

71

79

75

75

68

69 Revival in BDI; coupled with supportive tanker rates to revive contribution

Offshore segment

10

12

12

11

11 Better E&P guidance to inch up contribution from offshore

-3

-2

Liner segment (% of revenues)

Total revenue YoY growth (%)

FY17E
14

Earlier

FY14
21

FY18E
13

FY17E
21

FY18E
21 Liner to continue to stay impacted by low container rates

Source: Company, ICICIdirect.com Research

ICICI Securities Ltd | Retail Equity Research

Page 2

Company Analysis
Loss in liner segment continues to dent overall performance
The profitability of SCIs liner segment has been the depressing its overall
profitability over FY08-16. However, post a minor revival in the same in
FY15, the segment again slipped into losses. The liner segment includes
break bulk, container transport vessels, passenger vessels and research
vessels. Overcapacity coupled with a benign trade scenario impacted the
rates and utilisation levels for container vessels. The softness was
completely offset by bulk segment, which also includes tankers. The
charter rates for tankers more than doubled in the current year following
the oversupply of crude coupled with higher strategic reserves build by
various countries. The bulk segment contributed 78% of total revenues
vs. 71% in FY15. However, the contribution from the liner segment degrew from 21% in FY15 to 13% in FY16. With BDI continuing at depressed
rates, revenues in FY16-18E are expected to grow at a CAGR of 2%.
Exhibit 1: Segmental revenue trend
3500
3000

2671

2500

2901

2799

3225

3047

2989

2484

| cr

2000
1500
1000

1174

1141

1157

934

834

500

177

405

233

196

904
383

535

360

353

0
FY10

FY11

FY12

FY13

Liner

FY14

Bulk

FY15

FY16

Offshore

Source: Company, ICICIdirect.com Research

EBIT loss for liner segment was at | 159 crore for FY16 compared to a
profit of | 15.7 crore in FY15. The negativity in the liner segment was
completely offset by a recovery in the bulk segment. Tankers contributed
the most to the revival.
Exhibit 2: Segmental EBIT margin trend

Exhibit 3: Segmental EBIT trend

1200

80

1000
61

40
20
0
-20

28
12

30
28

800
43

27
18

16
5

FY08 FY09 FY10 FY11

-23
-11
-27

-40

39

40

33

32
15

2
2
-3
-6
FY12 FY13 FY14-21 FY15 FY16
-13
-27
-30

485.9

600
400

| cr

60

980.1
822.3

200
0

-200

13.7
FY08

48.6

53.7
FY09

FY10

493.57

398.0
120.0 67.9
100.4
FY11

FY12

-400

Bulk

Offshore

Source: Company, ICICIdirect.com Research

ICICI Securities Ltd | Retail Equity Research

FY13

120.3
114.09
45.99

FY14 FY15
-164.8

FY16

-367.7

-600
Liner

156.0 151.6

Liner

Bulk

Offshore

Source: Company, ICICIdirect.com Research

Page 3

Operational performance to be range bound in the near term

For FY16, revenues from operational activities declined modestly by 2%
YoY to | 4112 crore. Bulk segment (dry + tanker) continued to remain the
largest contributor with 78% of total revenues. Profitability of the bulk
segment has been impressive, aiding its overall profitability in FY14-16.
After two consecutive years of loss, the segment reported an EBIT profit
of | 493.5 crore. Improvement in tanker rates, coupled with lower bunker
costs were key contributors. Coupled with this, its liner segment has been
in the red from FY12 onwards. The liner segment EBIT margin has
remained negative in FY08-16 except for FY11 and FY15 when it reported
an EBIT margin of 5% and 2%, respectively.
Revenues in the high margin offshore segment continued to remain range
bound due to subdued E&P activities. For FY16, BDI has remained volatile
touching a 30-year low level and doubling from the same in a very short
time frame. Following this, freight revenues from the bulk segment are
expected to remain pressurised. Though tankers continue to combat the
weakness, the volatility in the same is expected to keep tabs on revenue
growth. For FY16, EBITDA margins continued to remain elevated due to
benefits from low crude prices. The operational performance of the
company was at the highest level during the year and is, thus, expected
to remain range-bound in the near term. Thus, revenue is expected to
grow at a CAGR 2% in FY16-18. However, the operational performance
would have a similar to marginally negative bias over the same period.
Exhibit 4: Segmental revenue trend
5000

4240

4306

4188

4257

4157

4112

| cr

4000
3000
2000
1000

393
-114

0
FY13

610
-275
FY14

1164

1136

837

377

201
FY15

FY16E

468
FY17E

1213
488

FY18E

-1000
Revenue

EBITDA

PAT

Source: Company, ICICIdirect.com Research

More tankers in fleet insulate revenues from dryness in bulk

For FY16, the company disposed off one VLCC and added a tanker during
the same period. The companys fleet composition is heavily skewed in
favour of tankers, which constitutes 52% of the total fleet strength.
Further, bulk carriers form 25% of the total fleet, which was impacted
during the year due to historic low levels of Baltic Dry Index (BDI). The
stable and high margin offshore segment now has just nine vessels,
which has an average age of three years. Liners and passengers
constitute five and one vessels, respectively. The company had planned
to increase its presence in the offshore segment by ordering six offshore
vessels. However, SCI has had to cancel those orders due to a delay in
delivery from the shipyard impacting its fleet expansion plans. Further,
the management has toned down its capex plans in the near future until
the freight rate scenario improves. The management has changed its
earlier strategy of ordering new ships and focus on buying second hand
ship so as to take advantage of volatility in freight rates.

ICICI Securities Ltd | Retail Equity Research

Page 4

Exhibit 5: SCI fleet profile

19

20
18

18
16 16

16

15

14

16

17 17 17
15

14 14 14

11

No. of vessels

12

9 9

10

8
6

4 4

6 6
3 3

2 2

0
VLCC

Crude

Product

Fleet Profile in FY13

Dry Bulk

Fleet profile in FY14

Offshore

Container/Liner Chemical/LPG

Fleet profile in FY15

Fleet profile in FY16

Source: Company, ICICIdirect.com Research

Markdown in market value of vessel impacting NAV

SCI over a few years has focused on adding newer vessels with higher
tonnage carrying capacities. This has resulted in an improvement of its
fleets average age to 8.7 years in FY15 compared to 18 years in 2010.
However, from the current year SCI has changed its strategy to open up
to second hand vessels to take advantage of market volatility. During the
year, SCI has acquired a second hand PSV from Greatship. However, as
there was a near carnage in bulk and offshore vessels, the current market
price prevailing in the market is lower than the book value. Following this
the SCI in Q4FY16 took an impairment of | 1368 crore to write down the
value of the assets. Due to this strategy, its NAV has seen a significantly
decline to | 107 compared to | 154 in Q4FY15.
Exhibit 6: Recent NAV per share
180
160
140

127

138

146

154
107

120
100
80
60
40
20
0
Q4FY15

Q1FY16

Q2FY16

Q3FY16

Q4FY16

NAV |

Source: Company, ICICIdirect.com Research

ICICI Securities Ltd | Retail Equity Research

Page 5

Valuation
SCI is the largest shipping company of India and currently operates a fleet
of 69 vessels with a total capacity of 5.9 million dwt. Over the last four
years, the company has incurred a capex of ~ | 7000 crore to acquire
new vessels to replace its ageing fleet. The fleet expansion has hurt the
companys profitability as new vessels have joined the fleet when rates
were at historically low levels due to overcapacity in the industry.
Realising the same, SCI started cancelling ordered vessels. Since April
2013, SCI had cancelled orders for building 12 new ships after shipyards
jumped delivery dates. This allowed the company to preserve cash. SCIs
debt equity has increased from 0.3x in FY08 to 0.9x in FY15. However, the
company has initiated debt repayment of approximately | 1000 crore.
With no planned capex during the year, the company intends to further
reduce another | 1000 crore in FY17. This would lower the interest
expenses and improve the debt to equity ratio. Following which we
expect debt levels to decline over FY16-18E.
The average PBV valuation in the last two years is ~0.3x. From a
valuation perspective, SCIs five year average price/book value multiple
has been 0.7x. Though the company has been able to report profits in
FY15, majority of the same came from higher other income and profit in
sale of ships. Further, lower depreciation due to rescinding of vessels by
shipyards and consequent increase in other income (penalty paid by
shipyards and refund of payments) aided PAT. With the positive swing
from bunker costs and rationalisation of other expenses, we expect
margins to increase to ~25% in the near term. SCI operates in a similar
business environment to Great eastern shipping (Gesco). However, the
operational performance of the latter is far superior, following which we
apply a 25% discount to the valuation ascribed to the same. We rollover
maintain our FY18 estimates and continue value SCI at 0.38x (25%
discount to 0.5 P/BV of Gesco) FY18E book value with a target price of |
65 and have a HOLD recommendation on the stock.
Exhibit 7: P/BV trend
250
200
150
100
50

Close -Unit Curr

0.4 X

0.5 X

0.8 X

1.0 X

May-16

Jan-16

Sep-15

May-15

Jan-15

Sep-14

May-14

Jan-14

Sep-13

May-13

Jan-13

Sep-12

May-12

Jan-12

Sep-11

May-11

Jan-11

Sep-10

May-10

1.3 X

Source: Company, ICICIdirect.com Research

Exhibit 8: Valuations
Sales

Sales

EPS

EPS

PE

EV/EBITDA

RoNW

(| cr)

Growth (%)

(|)

Growth (%)

(x)

(x)

(%)

(%)

FY15

4187.6

-2.7

4.3

NA

16.0

8.2

3.1

0.5

FY16E

4112.4

87.8

8.5

5.1

5.5

4.8

4156.9

-1.8
1.1

8.1

FY17E

10.1

24.1

6.9

5.3

6.3

4.3

FY18E

4257.5

2.4

10.5

4.1

6.6

4.5

6.2

4.3

Source: Company, ICICIdirect.com Research

ICICI Securities Ltd | Retail Equity Research

RoCE

Page 6

Company snapshot
150
130
110
90

Target Price: | 65

70
50
30

May-17

Feb-17

Nov-16

Aug-16

May-16

Feb-16

Nov-15

Aug-15

May-15

Feb-15

Nov-14

Aug-14

May-14

Feb-14

Nov-13

Aug-13

May-13

Feb-13

Nov-12

Aug-12

May-12

Feb-12

Nov-11

Aug-11

-10

May-11

10

Source: Bloomberg, Company, ICICIdirect.com Research

Key events
Date
Mar-09

Event
Defers acquisition of eight ships for a year

Jun-09

FY09 profit up 16% YoY

Jun-10

A 10% disinvestment on cards

Sep-10

Stock moves up on planning a stake buyout in a shipyard

Jan-11

Likely to enter into JV with Coal India

Apr-13

To take possession of seven ships from Irano Hind Shipping

Jun-13

Inks agreement for shipping LNG gas from US

Aug-13

Hikes container freight by 80%

May-15

Posts positive EBIT for all segments after three years

Aug-15

Posts highest EBITDA margins of 30% since FY10 in Q1FY16 on the back of lower bunker costs

Nov-15

Reports Q2FY16 resutls with 28% EBITDA margins and | 161 crore of PAT

Feb-16

Reports Q3FY16 results. Quarter impacted by nine dry docking. EBITDA margins at 23%. PAT reported at | 60 crore

May-16

Reports Q4FY16 results. Topline muted; EBITDA margins at 28%. PAT impacted by impairment on dry bulk assets. Subsidairy to be set for Inland waterways

Source: Company, ICICIdirect.com Research

Top 10 Shareholders
Rank
1
2
3
4
5
6
7
8
9
10

Name
Government of India
Life Insurance Corporation of India
Dimensional Fund Advisors, L.P.
General Insurance Corporation of India
The New India Assurance Co. Ltd.
The Vanguard Group, Inc.
L&T Investment Management Limited
Van Eck Associates Corporation
HDFC Asset Management Co., Ltd.
Mellon Capital Management Corporation

Shareholding Pattern
Latest Filing Date
31-Mar-16
31-Mar-16
31-Jan-16
31-Mar-16
31-Mar-16
30-Apr-16
31-Mar-16
30-Apr-16
31-Mar-16
31-Mar-16

%O/S
0.6
0.1
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0

Position(m) Change (m)

296.9
0.0
65.8
0.0
6.4
0.3
5.2
0.0
5.0
0.0
1.9
0.0
1.4
0.0
1.0
0.1
0.9
0.0
0.7
0.0

(in %)
Promoter
FII
DII
Others

Mar-15 Jun-15 Sep-15 Dec-15 Mar-16

63.8
63.8
63.8
63.8
63.8
2.0
2.0
2.4
3.8
4.1
18.7
18.7
19.4
19.1
19.1
15.6
15.6
14.4
13.3
13.1

Source: Reuters, ICICIdirect.com Research

Recent Activity
Buys
Investor name
Dimensional Fund Advisors, L.P.
LGT Capital Partners Ltd.
Van Eck Associates Corporation
Mellon Capital Management Corporation
BlackRock Institutional Trust Company, N.A.

Value

Shares
0.35
0.19
0.13
0.02
0.00

Sells
Investor name
0.29 Taurus Asset Management Co. Ltd.
0.15 ICICI Prudential Asset Management Co. Ltd.
0.12 State Street Global Advisors (US)
0.02
0.00

Value
-0.44
-0.41
-0.11

Shares
-0.54
-0.33
-0.13

Source: Reuters, ICICIdirect.com Research

ICICI Securities Ltd | Retail Equity Research

Page 7

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 (|)

| Crore
FY15
4,187.6
-2.7
360.7
1,184.2
473.7
494.4
837.3
3,350.2
837.3
37.3
770.2
179.3
267.8
155.7
120.6
75.2
201.0
NA
4.3

FY16E
4,112.4
-1.8
345.7
637.5
503.8
528.4
961.0
2,976.4
1,136.0
35.7
580.0
160.6
164.8
560.3
-136.4
46.5
377.4
87.8
8.1

FY17E
4,156.9
1.1
353.3
748.2
457.3
519.6
914.5
2,992.9
1,163.9
2.5
649.4
158.8
173.1
528.7
0.0
60.2
468.5
24.1
10.1

FY18E
4,257.5
2.4
361.9
830.2
468.3
468.3
915.4
3,044.1
1,213.4
4.2
693.9
150.4
181.7
550.7
0.0
62.9
487.8
4.1
10.5

Source: Company, ICICIdirect.com Research

Cash flow statement

(Year-end March)
Profit after Tax
Add: Depreciation
(Inc)/dec in Current Assets
Inc/(dec) in CL and Provisions
Others
CF from operating activities
(Inc)/dec in Investments
(Inc)/dec in Fixed Assets
Others
CF from investing activities
Issue/(Buy back) of Equity
Inc/(dec) in loan funds
Dividend paid & dividend tax
Inc/(dec) in Sec. premium
Others
CF from financing activities
Net Cash flow
Opening Cash
Closing Cash

| Crore
FY15
201.0
770.2
-689.4
-248.7
805.1
838.1
0.0
-719.8
0.0
-719.8
0.0
-1,000.4
0.0
0.0
0.0
-1,000.4
496.7
746.7
1,256.2

FY16E
377.4
580.0
-424.7
-115.1
8.8
426.4
-14.3
-259.5
12.8
-261.0
0.0
-971.9
0.0
0.0
0.0
-971.9
42.9
1,243.4
1,286.3

FY17E
468.5
649.4
692.4
-513.2
0.0
1,297.0
0.0
-200.0
0.0
-200.0
0.0
-118.9
0.0
0.0
0.0
-118.9
-406.6
1,286.3
879.7

FY18E
487.8
693.9
122.8
-235.1
0.0
1,069.5
0.0
-200.0
0.0
-200.0
0.0
-364.6
0.0
0.0
0.0
-364.6
259.2
879.7
1,138.9

FY15

FY16E

FY17E

FY18E

4.3
20.8
140.3
0.0
27.0

8.1
20.6
148.4
0.0
27.6

10.1
24.0
158.6
0.0
18.9

10.5
25.4
169.1
0.0
24.5

20.0
3.7
4.8
8.1
69.2
110.5

27.6
13.6
9.2
10.0
80.0
95.0

28.0
12.7
11.3
8.0
75.0
75.0

28.5
12.9
11.5
10.0
80.0
50.0

3.1
0.5
1.9

5.5
4.8
3.7

6.3
4.3
4.3

6.2
4.3
4.5

16.0
8.2
1.6
0.8
0.4

8.5
5.1
1.4
0.8
0.4

6.9
5.3
1.5
0.8
0.3

6.6
4.5
1.3
0.8
0.3

6.7
0.9
0.9
2.2

4.0
0.7
0.8
2.3

4.1
0.7
1.2
3.0

3.7
0.6
1.5
5.1

Source: Company, ICICIdirect.com Research

Balance sheet

| Crore

(Year-end March)
Liabilities
Equity Capital
Reserve and Surplus
Total Shareholders funds
Total Debt
Long term Provisions
Other Long term liabilities
Total Liabilities

FY15

FY16E

FY17E

FY18E

465.8
6,067.8
6,533.6
5,569.9
138.0
0.4
12,241.9

465.8
6,444.6
6,910.4
4,598.0
144.5
0.1
11,653.0

465.8
6,921.3
7,387.1
4,479.1
17.0
0.0
11,883.2

465.8
7,409.2
7,875.0
4,114.5
17.0
0.0
12,006.4

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
Short term borrowing
Other liab & Provisions
Total Current Liabilities
Net Current Assets
Application of Funds

17,704.9
6,272.5
11,432.4
490.9
11,923.3
12.1
13.1
444.7
12.2
91.9
787.8
484.1
102.5
1,256.2
77.1
2,799.6
1,257.4
35.0
1,670.5
2,963.0
-163.4
12,241.9

18,455.3
6,852.4
11,602.8
0.0
11,602.8
0.6
27.3
452.8
12.4
85.6
708.8
200.5
85.9
1,286.3
38.0
2,405.0
989.6
0.0
1,858.3
2,847.9
-442.9
11,653.0

18,655.3
7,501.9
11,153.4
0.0
11,153.4
0.0
27.3
346.4
0.0
89.8
841.7
673.3
168.3
879.7
38.0
2,690.8
854.1
341.7
1,138.9
2,334.7
356.1
11,883.2

18,855.3
8,195.8
10,659.4
0.0
10,659.4
0.0
27.3
346.4
0.0
114.9
919.3
689.4
172.4
1,138.9
38.0
3,072.8
583.2
349.9
1,166.4
2,099.6
973.3
12,006.4

Source: Company, ICICIdirect.com Research

ICICI Securities Ltd | Retail Equity Research

Key ratios
(Year-end March)
Per share data (|)
EPS
Cash EPS
BV
DPS
Cash Per Share
Operating Ratios (%)
EBITDA Margin
PBT / Total Operating income
PAT Margin
Inventory days
Debtor days
Creditor days
Return Ratios (%)
RoE
RoCE
RoIC
Valuation Ratios (x)
P/E
EV / EBITDA
EV / Net Sales
Market Cap / Sales
Price to Book Value
Solvency Ratios
Debt/EBITDA
Debt / Equity
Current Ratio
Quick Ratio

Source: Company, ICICIdirect.com Research

Page 8

ICICIdirect.com coverage universe (Shipping)

Sector/Company
G.E Shipping
Reliance Defence & Eng.
SCI
Dredging Corp Ltd.

CMP
(|)
310
58
68
386

TP (|)
325
80
65
500

Rating
HOLD
BUY
HOLD
BUY

Mcap
(| Cr)
4,674.2
4,270.0
3,214.0
1,080.8

EPS (|)
P/E (x)
EV/EBITDA (x)
FY15 FY16E FY17E FY15 FY16E FY17E FY15 FY16E FY17E
49.6 68.9 70.3
7.1
4.5
4.4
5.4
3.4
3.5
-5.0
-8.0 -3.1
NA
NA
NA 139.7 -77.4 39.5
4.3
8.1 10.1 16.0
8.5
6.9
8.2
5.1
5.3
22.3 22.5 32.6 17.4 17.2 11.9 10.9
10.7
9.2

RoCE (%)
RoE (%)
FY15 FY16E FY17E FY15 FY16E FY17E
6.3 10.2
8.4 10.1 12.5 11.6
-1.4 -4.1
0.5 -26.9
-9.4 -1.1
0.5
4.8
4.3
3.1
5.5
6.3
6.8
7.1
8.1
4.3
4.1
5.4

Source: Company, ICICIdirect.com Research

ICICI Securities Ltd | Retail Equity Research

Page 9

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

pankaj.pandey@icicisecurities.com

ICICIdirect.com Research Desk,

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

ICICI Securities Ltd | Retail Equity Research

Page 10

ANALYST CERTIFICATION
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reflect our views about 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.

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ICICI Securities Ltd | Retail Equity Research

Page 11