An in depth qualitative and quantitative analysis of Eid Parry India Ltd to ascertain its stock movement in long and medium term.

1. Contents
• Introduction
• Qualitative Analysis
• Quantitative Analysis
• Industry Analysis
• Investor Considerations: SWOT Analysis
• Recommendations & Conclusion
05:14:38 1

2. Introduction
• E.I.D-Parry India Ltd
– Part of US $3 Billion Murugappa Group
– Sugar accounts for approx. 90% of total revenue
• 1167 crores
– Strong presence in other sectors:
• Bio Pesticides
• Nutraceuticals
• 9 sugar plants across South India
– 32000 TCD Sugarcane, 146 MW Power, 230 KLPD
Distillation
05:14:38 2

3. Others – 2.3 %
Neutraceuticals – 3.4 %
Bio Pesticides – 4.5 %
Power – 10.2 %
Alcohol – 6.7 %
Sugar – 72.9 %
Turnover Contribution (Total = 1291 Crores)
05:14:37 3

4. Introduction – Cont’d
Amongst Top 5
Sugar Producers of
India
1788, Thomas Parry
05:14:38 4

5. 05:14:38 5

6. 2004 – launched branded sugar – positive
response across thousands of retail outlets
05:14:38 6

7. Introduction – Cont’d
M&A’s & `Holdings
Acquisition Year
Coromandel 1995 & 2004
Godavari Fertilizers & Chem 2000
East India Sugars Pvt. Ltd. 2004
Santhanalakshmi Investments Pvt Ltd 2005
JV with Cargill – new plant 2006
New Horizons Sugar Mills Assets 2006
Valensa International Ltd (48%) 2008
Sadashiva Sugars (76%) 2009
Parrys Sugar Industries (65%) 2010
Valensa International Ltd (100%) 2011
05:14:38 7

8. 24.90%
45.80%
Promoters
6.60%
Individual Owners: 4.22% MFs, FI & Banks
FII
22.70% Others
05:14:37 8

9. Qualitative Analysis
A. Vellayan Anand Bhatia
Director
Chairman
Economics, Cambridge
MBA Warwick
Ex-Unilever South America
VP, SICC
Ex-Lipton MD, India
38 years Industrial Experience
Investors Greivance Commitee
V Ravichandran
Vice Chairman R A Savoor
PGDM, IIM-A Director
Cost accountant B.Sc. Technology
Company Secretary Ex-MD Castrol
Acquisition Expert 40 years experience
Chairman, Audit Committee
R S Singhvi M V N Rao
Managing Director Director
CA, LLB Agriculture Expert
Ex-CEO Associate, Chartered Inst. Of
29 years experience Bankers
Fellow, IIBF
05:14:38 Ex MD, Chairman Canara Bank9

10. • ISO 14001:1996
– Audited by British Standards Institute, UK
• ISO 9001:2000
– Bereau Veritas (BVQI), France
• Strong ERP Implementation
– SAP
– Computerized Procurement
• Web based cane management system
• GPS, GIS, Nutrient Analysis services for farmers
– Decision Engine
• HACCP Certification
– Food Safety
• GMP “Buy EID Parry as it is well managed”
• Kosher & Halal -G Chokkalingam
ED, CIO, Centrum
• Strong internal R&D
Nov 15, 2011
05:14:38 10

11. Quantitative Analysis
P/E Ratio & EPS Trend
90
80 77.8
75.0
70
60
50 46.8
40 P/E
EPS
30 23.8
22.0
20 14.3 14.3
13.0
9.0
10 4.6 3.6
0.0 1.9 20%
0
-1.9
Mar 06 Mar 07 Mar 08 Mar 09 Mar 10 Mar 11 Mar 12
-10
(Projected) Source:
Quantum
05:14:37 11

12. Quantitative Analysis
Other Ratios
Liquidity & Management
Profitability
Solvency Efficiency
80%
70%
ROCE
60%
RONW
50%
40%
30%
20%
10%
0%
-10% Mar '07 Mar '08 Mar '09 Mar '10 Mar '11
05:14:38 12

13. Liquidity & Management
Profitability
Solvency Efficiency
2.5
Current Ratio
2
Quick Ratio
1.5 Debt-Equity Ratio
1
0.5
0
Mar '07 Mar '08 Mar '09 Mar '10 Mar '11
05:14:38 13

14. Liquidity & Management
Profitability
Solvency Efficiency
12 Debtors Turnover Ratio
10 Inventory Turnover Ratio
Asset Turnover Ratio
8
6
4
2 0.94 0.99
0.75 0.78 0.69
0
Mar '07 Mar '08 Mar '09 Mar '10 Mar '11
05:14:38 14

15. Quantitative Analysis
Peer Comparison
Peers Avg Avg Sales Avg WC / PAT Debt / TTM P/E
ROE ROCE CAGR Sales Margin Equity
2007-2011 % % % %
EID Parry 23.4 19.1 27.5 41.3 28.2 0.6 34.3
Bannari Amman 14.7 12.1 7.0 52.4 11.4 0.7 11.9
Bajaj Hind 2.0 3.6 20.7 89.3 2.6 1.8 20.6
Shri Renuka 16.5 12.4 96.0 30.8 6.6 1.0 54.0
Triveni Ind. 13.2 12.1 5.9 31.8 6.0 0.9 17.6
05:14:38 15

16. Quantitative Analysis
EV/EBITDA
05:14:38 16

17. Quantitative Analysis
DCF Analysis
Dividend %
900
800
700
600
500
400
300
200
100
0
1996 1998 2000 2002 2004 2006 2008 2010 2012
05:14:38 17

18. Quantitative Analysis
DCF Analysis
• Discounted cash flow analysis of EID Parry
• Approach Style: Extremely conservative
• Assumptions
Assumptions
Initial Dividend 400%
FV 1
Dividend Value 4
Dividend growth Rate, Primary 15%
Dividend growth Rate, Tertiary 7%
Returns Expected 14%
05:14:38 18
Primary Period 5 Years

19. Quantitative Analysis
DCF Analysis cont’d
Parameter Value
Primary Value, PV 18.84
Terminal Value 160.91
Adjusted Terminal Value, TV 81.52
Total Intrinsic Value, IV = PV + TV 100.36
Paid up Equity, N 17.27
Total IV based Market Cap (IV x N) 1733.23
05:14:38 19

20. Quantitative Analysis
DCF Analysis – cont’d
EID Parry Ltd
62.7%
Coromandel International Ltd (CIL)
05:14:38 20

21. Quantitative Analysis
DCF Analysis cont’d
Inflection point
05:14:38 21

22. Quantitative Analysis
DCF Analysis cont’d
800 PAT Growth – Coromandel
700
600
500
INR, Crores
400
300
200
100
0
2007 2008 2009 2010 2011
05:14:38 22

23. Quantitative Analysis
DCF Analysis – cont’d
800%
Dividend Payouts of Coromandel
700%
700%
FV = 1
600%
500% 500%
500%
400%
300%
175%
200%
70% 75% 85% 100%
100% 50% 55% 65% 60% 65%
25% 30%
0%
1997
05:14:38 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011
23

24. Quantitative Analysis
DCF Analysis – cont’d
Parameter - Coromandel Value
Dividend % 450%
Dividend Value, FV=1 4.5
Dividend growth Rate, Primary 50%
Dividend growth Rate, Tertiary 7%
Returns Expected 14%
Primary Period 5 years
05:14:38 24

25. Quantitative Analysis
DCF Analysis – cont’d
298.4 Yesterday’s
Parameter
close
Value
DCF Intrinsic Value (IV) of Coromandel* 259.20
Paid Up Equity of Coromandel 28.24
Market Cap of Coromandel as per IV 7319.89 Crores
Liquidation Discount
Discount for lack of
EID Parry Stake in Coromandel Market Cap, %
control 62.86%
Discount for lack of
marketability
EID Parry Stake in Coromandel40%
Range: 15 –
Market Cap 4601.3 Crores
EID Parry Holding Discount* 50%
EID Parry Adjusted Stake in Coromandel 2300.64 Crores
Market Cap
05:14:38 25

26. Quantitative Analysis
DCF Analysis – cont’d
Parameter Value
EID Parry net value of Market Cap 1733.23 + 2300.64 =
(IV based Market Cap of EID Parry + IV based 4033.97
Market Cap of Coromandel)
197 Yeste
Paid up Equity, EID Parry 17.27 clos
(Underp
EID Parry DCF Price, 232.95
(including 62.7 % Coromandel’s stake value)
05:14:38 26

27. Industry Analysis
• Sugar Industry
– 2nd largest agro industry after textiles
• India: 2nd largest sugar producer
– 24.6 mt
• Sugarcane: 70% of total cost of production
• Regulation
– Supply price
• Statutory Minimum Price (SMP)
• Fair and Remunerative Price (FRP) @ 145/- per quintal
• States set State advised price (SAP)
– Most political commodity
• Used for vote bank
05:14:38 27

28. Quantitative Analysis
DCF Analysis – cont’d
05:14:38 28

29. Quantitative Analysis
DCF Analysis – cont’d
05:14:38 29

30. Quantitative Analysis
DCF Analysis – cont’d
05:14:38 30

31. Investor Consideration:
S
SWOT Analysis
200 year old brand/legacy/assets Farmer’s side supply price control
Recently consolidated capacities Labour unavailability
Govt Friendly policies for SAP Selling price cap and regulations
Strengths
Longer Crushing Season vs North
Internal R&D, Strong management
Weakness
Wheat/Paddy crop competition
Land availability, permissions
Beta = 0.96
Acres of land, book value = 38 Cr
Coromandel adds high value
SWOT
Burgening Middle Class – lifestyle
Monsoons
India is largest consumer for Sugar
Government Policy changes
Alcohol expansion, New 5% mixing law
International Supply/Demand issues
Opportunities
Bio-Pesticide & Nutraceuticals expansion Threats
Hostile Takeover
Valenza acquisition to help
Sugar surplus, prices 12% down in 2012
Exports
05:14:38 31

32. Recommendation
& Conclusion
EID Parry
• Poised for medium term bull run
• Short term fall of stock price
• due to sugar oversupply
• may hit sugar producers stock
prices in 2012
• Coromandel financial performance
• Driver for upside
• Positive outlook - fertilizer industry
• Demand – supply gap
• Candidate for a hostile takeover
Overall opinion – BUY
05:14:38 32

33. 05:14:38 33

34. 05:14:38 34

35. 05:14:38 35