Ador Weld-Dec-2010

8/7/2019 Ador Weld-Dec-2010

1/4

CRISIL COMPANY REPORT | 1

Ador Welding Ltd.

GICS Industry : Machinery l Sub Industry : Industrial Machinery l Website : www.adorwelding.com

NSE Ticker : ADORWELD

Bloomberg Ticker : AWL:IN

Face value / Share: 10.0

Div. Yield (%): 3.0

CMP (as on 10 Dec 2010Rs/share): 191.8

52-week range up to 10 Dec 2010 (Rs)(H/L): 233.65/166.85

Market Cap as on 10 Dec 2010 (Rs mn): 2,608

Enterprise Value as on 10 Nov 2010 (Rs mn): 2,478

Shares outstanding (mn) : 13.6

Free Float (%) : 43.6

Average daily volumes (12 months) : 85,667

Beta (2 year) : 0.86

Ke Stock Indicators

Ador Welding Limited (AWL), previously known as Advani Oerlikon Ltd, was incorporated on

October 22, 1951. The company is primarily engaged in the manufacturing of welding products,

power equipment and providing technologies & services. The company has five manufacturing

plants for the production and supply of welding and cutting consumables, power sources and

accessories.

KEY HIGHLIGHTS

AWL diversifying into newer areas

AWL is working on many new projects in the areas of nuclear power, more efficient and reliable

steel construction for the infrastructure sector and modern production lines for shipyards and

offshore fabrication yards. This is in-line with its strategy to widen its product portfolio and

improve its earnings potential.

Decline in export due to financial crisis in gulf countries

Overall exports contributed around 9% of its revenue for FY10. AWL exports mainly to oil producing

Gulf countries like UAE, OMAN, Saudi Arabia, Qatar, Bahrain and Kuwait. During FY10, AWLs

export declined by 24% on account of gulf financial crisis.

KEY RISKS

Intensifying competition in its areas of operation especially from international players.

Fluctuations in steel prices and currency exchange rates.

YTD 1-m 3-m 12-m

ADORWELD 10 -15 -17 -8

NIFTY 9 -8 2 13

Returns (%)

Note:

1) YTD returns are since April 1, 2010 to Dec 10, 2010.

2) 1-m, 3-m and 12-m returns are up to Dec 10, 2010.

Mar-08 Mar-09 Mar-10

Revenue (Rs mn) 2,710.9 2,272.7 2,674.0

EBITDA margins (%) 16.9 15.5 17.5

PAT (Rs mn) 225.6 121.6 256.0

PAT margins(%) 8.3 5.4 9.6

Gearing (x) - - -EPS (Rs/share) 16.6 8.9 18.8

PE (x) 8.4 9.0 10.2

P/BV (x) 1.5 0.8 1.8

RoCE (%) 27.0 17.1 26.2

RoE (%) 18.7 9.5 18.4

EV/EBITDA (x) 4.0 2.9 5.3 n.m. : Not meaningful

Promoters

56%

FII

0%

DII

11%

Others

33%

0

500

1000

1500

2000

2500

3000

0

20

40

60

80

100

120

140

Dec-0

9

Jan-1

0

Feb-1

0

Mar-10

Apr-10

May-1

0

Jun-1

0

Jul-10

Aug-1

0

Sep-1

0

Oct-10

Nov-1

0

('000)(index)

Volumes (RHS) ADORWELD NIFTY

Indexed price chart

Shareholding (As on September 30, 2010)

Key Financial Indicators

Stock Performances vis--vis market


2/4


Ador Welding Ltd.

BACKGROUND

AWL, previously known as Advani Oerlikon Ltd, was incorporated on October 22, 1951, by J B Advani & Co and the Oerlikon-Buhrle group, Switzerland. The company is

engaged in the manufacturing of welding products, power equipment and providing technologies & services.

AWL is equipped with five manufacturing plants for the production and supply of welding and cutting consumables, power sources and accessories and having wide range

of sales and distribution network, the company is one of the major players in the Indian welding industry.

COMPETITIVE POSITION

Peer Comparison

Ador Welding Ltd. Esab India Ltd. H E G Ltd.

Mar-10 Dec-09 Mar-10

Revenue (Rs mn) 2,674.0 4,251.0 11,332.6

EBITDA margins (%) 17.5 24.6 30.6

PAT (Rs mn) 256.0 661.8 1,710.6

PAT ma rgins(%) 9.6 15.6 15.1

Gearing (x) - 0.0 0.9

EPS (Rs/sha re) 18.8 40.1 33.7

PE (x) 10.2 13.5 7.5

P/BV (x) 1.8 4.2 1.4

RoCE (%) 26.2 58.6 18.5

RoE (%) 18.4 40.6 20.6EV/EBITDA (x) 5.3 7.3 5.2

n.m: Not meaningful

FINANCIAL PROFILE

Robust domestic demand improves top-line and profitability in FY10

Top line of the company rose by 17% in FY10 Y-o-Y due to increase in domestic

business from its two segments Consumables, Equipments and project

engineering. The improvement in demand scenario also caused an increase in the

EBITDA margins of AWL rising from 15.5 % in FY09 to 17.5 % in FY10.

Units Mar-08 Mar-09 Mar-10

Reven ue Rs mi ll ion 2,710.9 2,272.7 2,674.0

EBITDA margins Per cent 16.9 15.5 17.5

PAT Rs mi l l ion 225.6 121.6 256.0

PAT margins Per cent 8.3 5.4 9.6

Revenue growth Per cent -2.6 -16.2 17.7

EBITDA growth Per cent -0.6 -23.3 32.9

PAT growth Per cent -29.3 -46.1 110.5Gearing Times 0.0 0.0 0.0

RoCE Per cent 27.0 17.1 26.2

RoE Per cent 18.7 9.5 18.4

Key Financial Indicators

INDUSTRY PROFILE

Construction (erection and commissioning)

The construction (erection and commissioning) sector comprises infrastructure and industrial construction. Infrastructure construction incorporates design and

construction of roads, bridges, canals, dams, ports and airports, while industrial construction includes construction activities in key industries such as automobiles, textiles,

petrochemicals, and oil and gas. In construction (erection and commissioning) sector, demand is determined by expected investments in the sector. The increase in

investments has been driven primarily by the roads and power sector, followed by irrigation and urban infrastructure.


3/4


Ador Welding Ltd.

ANNUAL RESULTS

Income Statement Balance sheet

(Rs million ) Mar-08 Mar-09 Mar-10 (Rs million ) Mar-08 Mar-09 Mar-10

Net Sales 2,693.9 2,255.3 2,659.1 Equity share capital 136.0 136.0 136.0

Operating Income 2,710.9 2,272.7 2,674.0 Reserves and s urplus 1,120.0 1,178.0 1,338.8

Tangible net worth 1,256.0 1,313.9 1,474.8

EBITDA 459.4 352.2 468.0 Deferred tax l iablity:|asset| -2.8 12.2 9.4

EBITDA Margin 16.9 15.5 17.5 Long-term debt 0.0 0.0 0.0

Short-term-debt 0.0 0.0 0.0

Depreciation 119.2 132.9 131.2 Total debt 0.0 0.0 0.0

Interest 28.8 9.0 8.1 Current l iabil ities 224.4 264.8 235.0

Other Income 13.3 5.5 32.5 Total provisions 175.2 104.3 132.7

Total liabilities 1,652.8 1,695.2 1,851.9

PBT 310.6 214.2 361.6 Gross block 1,709.9 1,807.5 1,929.0

PAT 225.6 121.6 256.0 Net fixed assets 849.7 923.3 822.5

Investments 40.0 0.0 110.7

PAT Margin 8.3 5.4 9.6 Current assets 763.1 771.9 918.5

Receivables 229.6 130.7 262.7

No. of shares (Mn No.) 13.6 13.6 13.6 Inventories 336.2 358.1 379.9

Cash 64.0 74.8 130.2

Earnings per share (EPS) 16.6 8.9 18.8 Total assets 1,652.8 1,695.2 1,851.7

Cash flow Ratio

(Rs million ) Mar-08 Mar-09 Mar-10 Mar-08 Mar-09 Mar-10

Pre-tax profit 324.7 215.8 361.2 Revenue growth (%) -2.6 -16.2 17.7

Total tax paid -87.6 -77.5 -108.5 EBITDA growth(%) -0.6 -23.3 32.9

Depreciation 119.2 132.9 131.2 PAT growth(%) -29.3 -46.1 110.5

Change in working capital -116.3 -28.6 -92.5

EBITDA margins(%) 16.9 15.5 17.5

Cash flow from operating act ivit ies 240.0 242.6 291.4 Tax rate (%) 28.2 36.2 30.0

Capital Expenditure -262.4 -206.5 -30.4 PAT margins (%) 8.3 5.4 9.6

Investments and others 183.0 40.0 -110.7

Dividend payout (%) 48.2 44.7 31.9

Cash flow from investing act ivit ies -79.4 -166.5 -141.1 Return on Equity (%) 18.7 9.5 18.4

Equity raised/(repaid) 0.0 0.0 0.0 Return on capital employed (%) 27.0 17.1 26.2

Debt raised/(repaid) 0.0 0.0 0.0

Dividend (incl. tax) -127.3 -63.6 -95.1 Gearing (x) 0.0 0.0 0.0Others (incl extraordinaries) -14.0 -1.6 0.4 Interest coverage (x) 15.9 39.0 57.7

Debt/EBITDA (x) 0.0 0.0 0.0

Cash flow from financing act ivit ies -141.3 -65.2 -94.7

Change in cash position 19.3 10.9 55.6 Asset turnover (x) 1.7 1.3 1.4

Opening cash 44.8 64.0 74.8 Current ratio (x) 1.9 2.1 2.8

Closing cash 64.0 74.8 130.2 Gross current assets (days) 99 117 124

n.m:Notmeaningful;

QUARTERLY RESULTS

(Rs million) Sep-10 % of Rev Sep-09 % of Rev Jun-10 % of Rev Sep-10 % of Rev Sep-09 % of Rev

No of Months 3 3 3 6 6

Revenue 7,606.3 100.0 6,434.3 100.0 5,854.3 100.0 13,460.6 100.0 11,351.5 100.0

EBITDA 1,434.5 18.9 1,178.0 18.3 922.0 15.7 2,356.5 17.5 1,940.5 17.1

Interest 13.8 0.2 12.8 0.2 12.1 0.2 25.9 0.2 27.3 0.2

Depreci ation 310.4 4.1 309.7 4.8 292.4 5.0 602.8 4.5 613.0 5.4

PBT 1,110.3 14.6 855.5 13.3 617.5 10.5 1,727.8 12.8 1,300.3 11.5

PAT 791.6 10.4 605.7 9.4 449.1 7.7 1,240.7 9.2 916.2 8.1

Profit and loss account


4/4


Ador Welding Ltd.

FOCUS CHARTS & TABLES

Dec 2009 Mar 2010 Jun 2010 Sep 2010

Promoter 56.3 56.3 56.3 56.4FII 0.2 0.2 0.2 0.2

DII 10.9 10.7 11.1 11.0

Others 32.6 32.8 32.4 32.4

Shareholding Pattern (Per cent)

Director Name Designation

Aruna Bhagwansingh Advani (Ms.) Executive ChairpersonVippen Sareen (Mr.) Non-Executive Director

Ra ma n Ku ma r To gn atta (Mr.) Ma na gi ng D i re cto r

Ani l Hari sh (Mr.) Non-Executive Director

Deep As hda La lva ni (Mr.) Promote r-Di re ctor

Manoj Kumar Madangopa l Non-Executive Director

Aditya Tarachand Malkani (Mr.) Promoter-Director

Ra vi n Aji t Mi rch an da ni (Mr.) Pro mo te r-D ire cto r

Ninotchka Malkani Nagpal (Ms.) Director

Ra ke s h Na ra i n Sa pru (Mr.) Non-Exe cuti ve D ire ctor

Kunwar Digvijay Mahendra

Sin gh (Mr.)

Non-Executive Director

Piyush Kamlesh Kumar Gupta (Mr.) Non-Executive Director

Board of Directors

Additional Disclosure

This report has been sponsored by NSE - Investor Protection Fund Trust (NSEIPFT).

Disclaimer

This report is based on data publicly available or from sources considered reliable. CRISIL Ltd. (CRISIL) does not represent that it is accurate or complete and hence, it should not be relied upon as

such. The data / report is subject to change without any prior notice. Opinions expressed herein are our current opinions as on the date of this report. Nothing in this report constitutes investment,

legal, accounting or tax advice or any solicitation, whatsoever. The subscriber / user assume the entire risk of any use made of this data / report. CRISIL especially states that, it has no financial

liability whatsoever, to the subscribers / users of this report. This report is for the personal information only of the authorised recipient in India only. This report should not be reproduced or

redistributed or communicated directly or indirectly in any form to any other person especially outside India or published or copied in whole or in part, for any purpose.

CRISIL is not responsible for any errors and especially states that it has no financial liability whatsoever to the subscribers / users / transmitters / distributors of this report. For information please

contact 'Client Servicing' at +91-22-33423561, or via e-mail: [email protected].

-20

-15

-10

-5

0

5

10

15

20

25

30

0

100

200

300

400

500

600

700

800

900

1,000

Dec-07

Mar-08

Jun-08

Sep-08

Dec-08

Mar-09

Jun-09

Sep-09

Dec-09

Mar-10

Jun-10

Sep-10

Per centRs mn Quarterly sales & y-o-y growth

Sales Sales growth y-o-y (RHS)

Quarterly PAT & y-o-y growth

0

20

40

60

80

100

120

Dec-07

Mar-08

Jun-08

Sep-08

Dec-08

Mar-09

Jun-09

Sep-09

Dec-09

Mar-10

Jun-10

Sep-10

Rs mn

-1,000

0

1,000

2,0003,000

4,000

5,000

6,000

7,000

Per cent

Net Profit Net profit growth y-o-y (RHS)

0

1

2

3

4

56

7

8

9

Dec-07

Mar-08

Jun-08

Sep-08

Dec-08

Mar-09

Jun-09

Sep-09

Dec-09

Mar-10

Jun-10

Sep-10

Rs/share EPS

0

5

10

15

20

25

Dec-07

Mar-08

Jun-08

Sep-08

Dec-08

Mar-09

Jun-09

Sep-09

Dec-09

Mar-10

Jun-10

Sep-10

Per cent Movement in operating and net margins

OPM NPM

Ador Weld-Dec-2010

Documents

Transcript of Ador Weld-Dec-2010