Case Study

Case Study
Model information
Features
◦ DCF
◦ Multiple based valuation
◦ WACC calculation
◦ Assumptions benchmarking
◦ PMO page
◦ Financial page

Tab Structure
Tab name here Tab description here
Model Details

Company
Analysis date 5-Apr-19
Convert local currencies to INR
Units mm
Analyst Name Chandraneel Polavarapu
Case 1.0
Circular Switch 0
Initial Investment (mm)
1200
% debt
25%
% equity
75%
Discretionary repayment of debt
0

Formatting

Input
Hard coded
Formulas
 1 2 3

1 2 3
(Base case) (Bull case) (Bear case)

0 1
Case Study Hist. Hist. Hist. Proj. Proj.
INR mm FY0 FY1 FY2 FY3 FY4

Revenue 93 408 641 1,034 1,629

COGS + change in inventory (68) (334) (513) (673) (986)

Contribution Margin 25 74 128 362 643

% sales 35% 39%

Other Direct manu costs (8) (31) (41) (47) (59)

Employee benefit expenses (43) (99) (163) (171) (180)
Selling Expenses (50) (221) (197) (264) (330)
Other Expenses (13) (31) (50) (53) (55)

EBITDA (89) (308) (323) (172) 19

% Sales -96% -75% -50% -17% 1%

Other Income 2 4 1 11 18
Depriciation & Amot (4) (20) (39) (51) (80)
EBIT (91) (324) (361) (212) (43)

Finance Cost (1) (48) (140) (140) (136)

PBT (92) (372) (501) (352) (180)

Taxes 0 0 0 0 0
Earlier Taxes 0 0 0 0 0
Deferred Tax 33 39 0 0 0

NI (59) (333) (501) (352) (180)

Income Statement Assumptions

Other Direct manu costs % C 12% 9% 8% 7% 6%

Other Income as % sales 2% 1% 0% 1% 1%
Selling Expenses as % rev 54% 54% 31% 25% 20%
Other Expenses as % rev 14% 8% 8% 8% 8%

Employee benefit expenses growth 5% 5%

Tax rate 30% 30% 30%

Net deferred tax calculations

Beginning deferred tax 73 73 73

Tax payable 0 0 0
Incremental tax assets 0 0 0
Ending balance 73 73 73
Proj. Proj. Proj.
FY5 FY6 FY7

2,339 2,843 3,370

(1,324) (1,561) (1,791)

1,015 1,282 1,579

43% 45% 47%

(66) (78) (89)

(190) (200) (211) >>> Assumed to grow 5% every year
(351) (426) (505)
(58) (61) (64) >>> Assumed to grow 5% every year

350 516 710

15% 18% 21%

26 31 37
(115) (140) (166)
261 408 580

(132) (128) (114)

129 280 467

0 50 190
0 0 0
0 0 0

90 196 327

5% 5% 5%
1% 1% 1%
15% 15% 15%
8% 8% 8%

5% 5% 6%
30% 30% 30%

73 34 (50)
(39) (84) (140)
0 0 0
34 (50) (190)
Case Study Hist. Hist. Hist. Proj.
INR mm FY0 FY1 FY2 FY3

Assets
Current Assets
Cash and Cash equi 5 7 7 377
Inventories 13 106 136 139
Receivables 3 14 40 44
Loans & Advances 223 117 105 147
Other Current Assets 1 4 5 9
Deferred Tax 34 73 73 73
Total Current Assets 279 321 366 790

Net Fixed Assets 82 792 916 916

CWIP 1 3 3 3
Total Assets 362 1,116 1,285 1,709

Liabilities & Equity

Current Liabilites 27 312 253 113

Provisions 1 6 6 12
Borrowings 363 1,010 1,582 1,592

Share Capital 0 150 150 150

Share application money 0 0 30 30
Reserves (28) (361) (736) (188)

Total 363 1,117 1,285 1,709

Balance? (1.0) (1.0) 0.0 0.0

Balance Sheet Assumptions

Depreciation as % of beginnning Net PP&E 24% 5% 4.9%

Other current assets % revenues 1% 1% 0.9%

Long term loans and advances % revenues 29% 16% 14%

Provisions % revenues 1% 1% 1.2%

Inventory Days 65 86 76

Receivables days 12 13 23 16

Payable days 61

CCC 30

Balance Sheet Calculations

Capex 730 163 51

as % revenue 179% 25%

Beginning PP&E 82 792 916

Capex 730 163 51
Depriciation 20 39 51
Ending PP&E 82 792 916 916

Beginning Reserve (28) (361) (736)

Net Income (333) (501) (352)
Dividends 0 0 0
Plug-in (Extra surplus / New equity) 126 900
Ending Reserve (28) (361) (736) (188)

Beginning Inventory 13 106 136

COGS 334 513 673
Ending Inventory 13 106 136 139
Purchases 427 543 676

Inventories 13 106 136 139

Receivables 3 14 40 44
Loans & Advances 223 117 105 147
Other Current Assets 1 4 5 9
Current Liabilites 27 312 253 113
Provisions 1 6 6 12

Operating working capital 212 (77) 27 215

Net change in WC (289) 104 188
Change in rev 315 233 393

Change in WC/ Change in rev 45% 45%

Balance Sheet

Fixed assets (net) 82 792 916

CWIP 1 3 3
Investments
Working Capital
Inventories 13 106 136
Receivables 3 14 40
Loans and Advances 223 117 105
Other current assets 1 4 5
240 241 286
Current Liabilities (27) (312) (253)
Provisions (1) (6) (6)

Net Working Capital 212 (77) 27

Net Debt
Borrowings (363) (1,010) (1,582)
Cash and Bank 5 7 7
Net Debt (358) (1,003) (1,575)
Deferred tax 34 73 73
Net assets (29) (212) (556)

Share capital 0 150 150

Share Application money 0 0 30
Reserves and surplus (28) (361) (736)
Net worth (28) (211) (556)
Proj. Proj. Proj. Proj.
FY4 FY5 FY6 FY7

7 7 7 7
204 274 323 371
70 101 122 145
198 234 284 337
14 21 25 30
73 34 0 0
566 670 762 889

916 916 916 916

3 3 3 3
1,485 1,589 1,681 1,808

166 222 262 301

20 28 34 41
1,488 1,488 1,406 1,162

150 150 150 150

30 30 30 30
(368) (278) (82) 245

1,485 1,641 1,801 1,928

0.0 (51.4) (119.9) (119.9)

4.9% 4.9% 4.9% 4.9% >>> Since FY1 was the year of rapid expansion and FY2 was

0.9% 0.9% 0.9% 0.9%

12% 10.0% 10.0% 10.0%

1.2% 1.2% 1.2% 1.2%

 76 76 76 76

16 16 16 16

61 61 61 61

30 30 30 30

80 115 140 166

916 916 916 916

80 115 140 166
80 115 140 166
916 916 916 916

(188) (368) (278) (82)

(180) 90 196 327
0 0 0 0
0 0 0 0
(368) (278) (82) 245

139 204 274 323

986 1,324 1,561 1,791
204 274 323 371
1,051 1,394 1,611 1,838

204 274 323 371

70 101 122 145
198 234 284 337
14 21 25 30
166 222 262 301
20 28 34 41

301 378 458 541

86 78 80 83
595 710 504 527

45% 45% 45% 45%

apid expansion and FY2 was more of maintanance capex, we can assume the 5% to continue
Case Study Hist. Hist. Hist. Proj.
INR mm FY0 FY1 FY2 FY3

Net income (333.0) (501.0) (352.5)

D&A 20.0 39.0 50.9
Deferred tax (39.0) 0.0 0.0
Change in OWC 289.0 (104.0) (187.8)

Operating Cash Flow (63.0) (566.0) (489.3)

Capex (730.0) (163.0) (50.9)

Change in CWIP (2.0) 0.0 0.0

Investing Cash Flow (732.0) (163.0) (50.9)

Change in debt 647.0 572.0 10.0

Equity Raising 150.0 0.0 0.0
Share application money 0.0 30.0 0.0
Plug-in / New equity raised 0.0 126.0 900.0

Financing Cash Flow 797.0 728.0 910.0

Net change in Cash 2.0 (1.0) 369.7

Beginning Cash 5.0 7.0 6.0

Ending Cash 7.0 6.0 375.7

Proj. Proj. Proj. Proj.
FY4 FY5 FY6 FY7

(179.5) 90.3 195.7 326.8

80.2 115.2 140.0 165.9
0.0 0.0 0.0 0.0
(86.0) (77.7) (79.7) (82.6)

(185.3) 127.8 256.0 410.1

(80.2) (115.2) (140.0) (165.9)

0.0 0.0 0.0 0.0

(80.2) (115.2) (140.0) (165.9)

(104.2) 0.0 (81.7) (244.2)

0.0 0.0 0.0 0.0
0.0 0.0 0.0 0.0
0.0 0.0 0.0 0.0

(104.2) 0.0 (81.7) (244.2)

(369.7) 12.6 34.3 0.0

375.7 6.0 18.6 52.9

6.0 18.6 52.9 52.9

Case Study Hist. Hist. Hist. Proj. Proj.
INR mm FY0 FY1 FY2 FY3 FY4

Savories 76 153 243 361 500

Spices & Masalas - 111 78 92 110
Instant mixes - 96 107 120 138
Sweets 15 31 93 239 506
Beverages - 7 46 80 126
RTE - 4 12 32 72
Pickles - 4 6 10 15
Others 2 1 3 4 5
Frozen - 1 16 32 57
Pure Spices - - 17 30 48
Vermicelli - - 19 34 53

Total Revenues 93 408 640 1,034 1,629

% overall growth 338% 57% 62% 57%

% growth per category

Savories 102% 58% 49% 39%

Spices & Masalas - -30% 19% 19%
Instant mixes - 12% 12% 15%
Sweets 99% 204% 158% 111%
Beverages - 520% 76% 57%
RTE - 199% 162% 125%
Pickles - 75% 61% 47%
Others -34% 162% 19% 19%
Frozen - 1864% 100% 79%
Pure Spices - - 76% 57%
Vermicelli - - 76% 57%

Revenue Mix

Savories 81.5% 37.6% 37.9% 34.9% 30.7%

Spices & Masalas 0.0% 27.1% 12.1% 8.9% 6.7%
Instant mixes 0.0% 23.5% 16.7% 11.6% 8.4%
Sweets 16.5% 7.5% 14.5% 23.1% 31.1%
Beverages 0.0% 1.8% 7.1% 7.7% 7.7%
RTE 0.0% 1.0% 1.9% 3.1% 4.4%
Pickles 0.0% 0.9% 1.0% 1.0% 0.9%
Others 2.0% 0.3% 0.5% 0.4% 0.3%
Frozen 0.0% 0.2% 2.5% 3.1% 3.5%
Pure Spices 0.0% 0.0% 2.7% 2.9% 2.9%
Vermicelli 0.0% 0.0% 3.0% 3.3% 3.3%

Gross Margin (Incl Offers)

INR mm

Savories 27 49 66 125 189

Spices & Masalas - 41 28 35 45
Instant mixes - 41 53 36 51
Sweets 7 12 42 111 251
Beverages - 1 4 12 23
RTE - 1 3 10 26
Pickles - 1 0.3 1 2
Others 3
Frozen - 7 16 30
Pure Spices - - 6 10 17
Vermicelli - - 3 4 9

Total Gross Profit 35 147 209 362 643

% margin 37% 36% 33% 35% 39%

Gross Margin % (ex- offers) >>> Forecasted gross margins are inclusive of offers

Economies of Scale 3% 3%

Savories 36.2% 31.8% 27.2% 35% 38%

Spices & Masalas 0.0% 37.3% 36.7% 38% 41%
Instant mixes 0.0% 42.9% 49.1% 30% 37%
Sweets 45.3% 40.1% 45.3% 47% 50%
Beverages 0.0% 17.8% 8.5% 15% 18%
RTE 0.0% 35.3% 24.3% 33% 36%
Pickles 0.0% 16.2% 4.6% 13% 16%
Others 11.6% 3.2% -109.2% 3% 3%
Frozen 0.0% 50.9% 43.2% 50% 53%
Pure Spices 0.0% 0.0% 33.1% 33% 36%
Vermicelli 0.0% 0.0% 16.9% 11% 16%

Offers % revenues

Savories 0.1% 0.0% 0.0% 0% 0%

Spices & Masalas 0.0% 9.5% 1.2% 2% 2%
Instant mixes 0.0% 35.6% 25.9% 19% 12%
Sweets 0.0% 0.0% 0.0% 0% 0%
Beverages 0.0% 0.0% 0.7% 1% 1%
RTE 0.0% 0.0% 0.0% 0% 0%
Pickles 0.0% 0.0% 0.0% 0% 0%
Others 0.0% 0.0% 0.0% 0% 0%
Frozen 0.0% 0.0% 0.0% 0% 0%
Pure Spices 0.0% 0.0% 0.0% 0% 0%
Vermicelli 0.0% 0.0% 7.6% 6% 4%
Proj. Proj. Proj.
FY5 FY6 FY7

645 767 913

131 156 185
164 195 232
836 995 1,184
174 207 246
135 205 236
20 24 28
5 6 8
90 123 141
66 79 93
73 87 104

2,339 2,843 3,370

44% 22% 19%

29% 19% 19% >>> Savories have been one of the first products to be laun
19% 19% 19% >>> The decline can be partly due to the introduciton of 'Pu
19% 19% 19%
65% 19% 19% >>> While sweets being one of the first products have seen
38% 19% 19% >>> Considering both the low base and the since it's just th
88% 52% 15% >>> Since these are MT focused their expansion would be l
33% 19% 19% >>> Assumed a constant decline in growth and attain stabil
19% 19% 19% >>> Assumed to grow at the industry average
58% 36% 15%
38% 19% 19%
38% 19% 19%

27.6% 27.0% 27.1%

5.6% 5.5% 5.5%
7.0% 6.9% 6.9%
35.7% 35.0% 35.1%
7.4% 7.3% 7.3%
5.8% 7.2% 7.0%
0.9% 0.8% 0.8%
0.2% 0.2% 0.2%
3.9% 4.3% 4.2%
2.8% 2.8% 2.8%
3.1% 3.1% 3.1%

262 328 408

58 72 89
72 84 100
439 543 670
37 48 63
52 84 101
4 5 7

51 71 85
26 32 40
13 15 18

1,015 1,282 1,579

43% 45% 47%

>>> Assuming the economies of scale to kick in from FY4 which might lea

3% 2% 2%

41% 43% 45% >>> Economies of scale to kick-in from 3 year of launch / operation of the
44% 46% 48%
44% 43% 43%
53% 55% 57%
21% 23% 25%
39% 41% 43%
19% 21% 23%
3% 3% 3% >>> Took the median to eliminate the outliers
56% 58% 60%
39% 41% 43%
18% 17% 17%

0% 0% 0%
2% 2% 2% >>> Due to introduction of pure spices cateogry I have assumed that this
5% 5% 5% >>> Assumed to linearly decrease the offers to 10%
0% 0% 0%
1% 1% 1% >>> Assumed the current discounts to continue
0% 0% 0%
0% 0% 0%
0% 0% 0%
0% 0% 0%
0% 0% 0%
2% 2% 2% >>> Assumed to linearly decrease the offers to 2%
he first products to be launched by the company and you can see that the growth as a % has decreased from 102% to 58%, so w
ue to the introduciton of 'Pure Spices' cateogry in FY2 which might have been cannibalizing sales taking portions of this cateogry

the first products have seen a rapid growth in all the years of operation. So we assume that they continue to grow and attain a s
ase and the since it's just the 3rd year of the product we can assume the beverages to grow at 4 times the steady state growth a
their expansion would be less in comparison to the other cateogries
e in growth and attain stability in FY6, also due to lower base assumed to attain stability in FY6
ustry average
n from FY4 which might lead to a 1% increase in gross margin every year

of launch / operation of the product

ry I have assumed that this cateogry shall see a 2% discount
sed from 102% to 58%, so we can assume that this trend shall continue and from FY6 they shall continue to grow as the indust
ing portions of this cateogry

tinue to grow and attain a steady state by FY6 a year after the savories attain steady state
es the steady state growth and gradually decrease to the steady state in FY6
tinue to grow as the industry
Case Study Hist. Hist. Hist. Proj.
INR mm FY0 FY1 FY2 FY3

Net debt assumptions

Long term debt interest rate 0% 7% 9% 9%

Net Debt and Interest Calculations

Net income (352)

Depreciation 51
Deferred Tax 0
Change in OWC (188)
Change in CWIP 0
Capex (51)

CF generated to service debt (540)

Beginning Cash 1,207

Min cash required 7

Cash Available to service debt 660

Long term debt Issuance / (repayment) 10

Beginning LT debt 1,582

Net Issuance / repayment 10
Issuance 300
Repayment -290
Ending LT debt 1,582 1,592
Interest rate 9%
Inerest cost 140

Ending cash 377

Circ 1
EBIT (212)
Interest payment 140
EBT (352)
Tax 0

Net Income (352)

Proj. Proj. Proj. Proj.
FY4 FY5 FY6 FY7

9% 9% 9% 9%

(180) 90 196 327

80 115 140 166
0 (39) (34) 0
(86) (78) (80) (83)
0 0 0 0
(80) (115) (140) (166)

(266) (26) 82 244

377 7 7 7

7 7 7 7
104 0 82 244

(104) 0 (82) (244)

1,592 1,488 1,488 1,406

(104) 0 (82) (244)
0 0 0 0
(104) 0 (82) (244)
1,488 1,488 1,406 1,162
9% 9% 9% 9%
136 132 128 114

7 7 7 7

(43) 261 408 580

136 132 128 114
(180) 129 280 467
0 (39) (84) (140)

(180) 90 196 327

Case Study Hist. Hist. Hist. Proj.
INR mm FY0 FY1 FY2 FY3

Profitability and efficiency ratios

Operating revenue 93 408 641 1,034

EBITDA (89) (308) (323) (172)
EBIT (91) (324) (361) (212)
OWC 212 (77) 27 215
Net PP&E 82 792 916 916
Capex 730 163 51
Depreciation 20 39 51
ETR N/A N/A N/A N/A
NOPAT N/A N/A N/A N/A
Invested capital 330 792 1,019 1,207
Capital employed 336 805 1,032 1,596

Revenue (% growth) 339% 57% 61%

EBITDA (% margin) -75% -50% -17%
ROIC N/A N/A N/A
ROCE N/A N/A N/A

Free Cash flow forecast

NOPAT (212)
Depreciation 51
Deferred Taxes 0.0
Change in OWC (188)
Change in CWIP 0.0
Capex (51)

FCF (400)

Terminal Values

WACC 10%
LTGR 4%
Terminal value using long term growth rate

Discounting Model
Year 0 1
Discount factor 0.91
PV of FCF (362)
Sum of PV of FCF (54)
Sum of PV of FCF (54)
PV of terminal value 3,226
Enterprise value 3,172
Cash 7
Debt 1,582
Net Debt 1,575
Implied Equity Value 1,597

Liquidity Discount 25.0% >>> Since the company is a private company we need to fac

Adjusted Equity Value 1,198

Equity Infused 900

MOIC 1.8 x

Sensitivity analysis - terminal value using a long term growth rate

Long term growth rate

Equity Value 1,198 3.0% 3.5% 4.0%
8.4%
9.4%
10.4%
11.4%
12.4%

Long term growth rate

MOIC / IRR 2 3.0% 3.5% 4.0%
8.4%
9.4%
10.4%
11.4%
12.4%
Proj. Proj. Proj. Proj.
FY4 FY5 FY6 FY7

1,629 2,339 2,843 3,370

19 350 516 710
(43) 261 408 580
301 378 458 541
916 916 916 916
80 115 140 166
80 115 140 166
N/A 30% 30% 30%
N/A 183 285 406
1,293 1,383 1,497 1,580 >>> Fixed assets + Net working capital
1,319 1,418 1,538 1,627 >>> Fixed assets + Working capital

57% 44% 22% 19%

1% 15% 18% 21%
N/A 14% 20% 26%
N/A 19% 28% 37%

(43) 183 285 406

80 115 140 166
0.0 0.0 0.0 0.0
(86) (78) (80) (83)
0.0 0.0 0.0 0.0
(80) (115) (140) (166)

(129) 105 206 324

5,284

2 3 4 5
0.82 0.74 0.67 0.61
(106) 78 139 198
ate company we need to factor the liquidity discount

rm growth rate
4.5% 5.0%

rm growth rate
4.5% 5.0%
Case Study
INR mm

Company Sales
Share price Market Cap EV 2,018
DFM Foods 224.50 11,270.00 12,180.00 4,253.10
Prataap Snacks 910.00 21,340.00 19,270.00 10,370.00
Agro Tech foods 583.00 14,210.00 13,920.00 8,120.00
ADF Foods 244.55 4,896.60 4,594.30 2,088.10
KRBL 333.80 78,573.00 90,327.50 32,470.00
Other FMCG Peers
Britannia 2,972.00 714,110.00 714,250.00 99,140.00
Nestle 10,850.00 1,046,214.90 1,030,465.70 112,920.00
GSCL 7,032.00 295,805.90 259,953.90 43,170.00

Company ROCE ROE 3yr CMP/BV EV / Sales

2,018
DFM Foods 24.1% 29.7% 10.4 x 2.9 x
Prataap Snacks 15.4% 11.9% 4.0 x 1.9 x
Agro Tech foods 14.8% 8.2% 4.1 x 1.7 x
ADF Foods 19.2% 8.1% 3.1 x 2.2 x
KRBL 22.2% 21.6% 15.4 x 2.8 x
Britannia 47.5% 38.2% 19.5 x 7.2 x
Nestle 57.0% 33.8% 28.5 x 9.1 x
GSCL 32.5% 23.5% 8.2 x 6.0 x

Average 4.2 x
Median 2.8 x
 EBITDA EBITDA
2,018 BV Margin Receivable days Inventory Days Payable Days CCC
510.60 21.65 12% 0.00 20.81 35.46 -14.65
870.00 229.51 8% 7.19 32.41 41.77 -2.17
660.00 143.69 8% 22.46 51.45 34.17 39.74
295.50 79.78 14% 75.08 49.50 28.14 96.44
7,740.00 21.65 24% 27.44 330.59 14.71 343.32

15,020.00 152.08 15% 11.21 28.51 44.51 -4.79

26,180.00 381.01 23% 4.03 39.30 54.17 -10.84
8,830.00 853.83 20% 23.57 46.26 111.73 -41.90

21.37 74.85 45.58

EV / EBITDA

23.9 x
22.1 x
21.1 x
15.5 x
11.7 x
47.6 x
39.4 x
29.4 x
Case Study
INR mm
Comparables % Debt % Equity Beta L

DFM Foods 9.0% 91.0% 0.8

Prataap Snacks 0.2% 99.8% 0.7
Agro Tech foods 0.0% 100.0% 0.7
ADF Foods 0.3% 99.7% 1.2
KRBL 10.6% 89.4% 1.2
Britannia 0.3% 99.7% 0.9
Nestle 0.0% 100.0% 0.9
GSCL 0.0% 100.0% 0.7

Median

CAPM

Ten year on-the-run Indian government bond 7.3%

Equity risk premium 5.0%

Target % debt 30.0%

Target % equity 70.0%

Unlevered Beta 0.80

Levered Beta 0.97
Target cost of equity 12.2%

Cost of Debt 9%
After tax cost of debt 6%

WACC 10%

Liquidity Discount 25.0% >>> Since the company is a private company we ne

 Tax rate Beta U

30.0% 0.75 >>> From BBG

30.0% 0.69 >>> From BBG
30.0% 0.70 >>> From BBG
30.0% 1.23 >>> From BBG
30.0% 1.12 >>> From BBG
30.0% 0.85 >>> From BBG
30.0% 0.90 >>> From BBG
30.0% 0.69 >>> From BBG

0.80

pany is a private company we need to factor the liquidity discount

Case Study Hist. Hist. Hist. Proj.
INR mm FY0 FY1 FY2 FY3

Profitability and efficiency ratios

Operating revenue 93 408 641 1,034

EBITDA (89) (308) (323) (172)
EBIT (91) (324) (361) (212)
OWC 212 (77) 27 215
Net PP&E 82 792 916 916
Capex 730 163 51
Depreciation 20 39 51
ETR N/A N/A N/A N/A
NOPAT N/A N/A N/A N/A
Invested capital 330 792 1,019 1,207
Capital employed 336 805 1,032 1,596

Revenue (% growth) 339% 57% 61%

EBITDA (% margin) -75% -50% -17%
ROIC N/A N/A N/A
ROCE N/A N/A N/A

Multiple Based

FV/Rev Multiple of Peers 2.8 x

Revenue 3,370

Enterprise Value 9,513

Cash 7
Debt 1,162
Net debt 1,155

Implied Equity Value 8,358

Liquidity Discount 25.0%

Adj- Equity Value 6,269

Equity Infusion 900

Number of Years to exit 5

IRR 56%

Adj-IRR 47%
Proj. Proj. Proj. Proj.
FY4 FY5 FY6 FY7

1,629 2,339 2,843 3,370

19 350 516 710
(43) 261 408 580
301 378 458 541
916 916 916 916
80 115 140 166
80 115 140 166
N/A 30% 30% 30%
N/A 182.5080589 285 406
1,293 1,383 1,497 1,580 >>> Fixed assets + Net working capital
1,319 1,418 1,538 1,627 >>> Fixed assets + Working capital

57% 44% 22% 19%

1% 15% 18% 21%
N/A 14% 20% 26%
N/A 19% 28% 37%
Case Study Hist. Hist. Hist. Proj. Proj.
INR mm FY0 FY1 FY2 FY3 FY4

Revenue Last FY 641

Acquisition Multiple 3.2 x
Acquisition FV 2,035
Net Debt and Adjustments 1,575
Acquisition Equity Value 460

Exit Multiple 3.2 x

Investment Structure

Debt 25%
Equity 75%

Year Count 0 1 2
Entry
Target Revenue 641 1,034 1,629
Exit Multiple 3.2 x 3.2 x 3.2 x
FV 2,035 3,310 5,214
(-) Net Debt (1,575) (1,215) (1,481)

Equity Value 460 2,095 3,733

MOIC 4.6 x 8.1 x

IRR 355% 185%

IRR Target 30.0%

Implied Equity at Entry 1,612 2,209

Debt at Entry 1,575 1,575

Implied FV 3,187 3,784

Assume Exit at 5 years

Exit Multiple
Implied FV 4,168 2.7 x 3.0 x
 25.0%
27.5%
30.0%
32.5%
35.0%

Implied Entry Multiple

Exit Multiple
7 2.7 x 3.0 x
25.0%
27.5%
30.0%
32.5%
35.0%
 Proj. Proj. Proj.
FY5 FY6 FY7

3 4 5

2,339 2,843 3,370

3.2 x 3.2 x 3.2 x
7,484 9,097 10,784
(1,481) (1,399) (1,155)

6,003 7,698 9,629

13.0 x 16.7 x 20.9 x

135% 102% 84%

2,733 2,695 2,593

1,575 1,575 1,575

4,308 4,270 4,168

6.5 x

Exit Multiple
3.2 x 3.5 x 3.7 x
Exit Multiple
3.2 x 3.5 x 3.7 x
Case Study
INR mm

Date Company Investors Amount ($mm)

Dec-15 Adinath Agro Carpediem Capital 2.54
May-15 Manna Foods Fulcrum 5.00
Aug-14 Manpasand Bev SAIF, Aditya Birla PE 11.78
Mar-14 Bikaji Foods Light house 15.00
Mar-14 Himadri Foods SEAF 3.24
Jan-14 DFM Foods WestBridge 10.30
Jan-13 Globus Spritis Templeton Strategic EM funds 13.00
Aug-11 Manpasand Bev SAIF 10.00
May-11 Troplite SEAF 1.50
Nov-10 Sula Vineyards Verlinvest 15.00
Sep-10 Cremica Motilal Oswal 10.67
Feb-10 Capital Foods Future Ventures 10.00
Oct-07 ADF Foods Schroders 4.70
Jul-07 Sula Vineyards Everstone 11.00
Dec-06 Asian Health and Nutri Foods SAIF 8.00
Apr-06 Capital Foods Everstone 8.00
Apr-05 Indage Vintners Reliance Capital (Fairwinds) 1.71

Mean
Median

Growth Stage

Mean

Late Stage

Mean
Stake Stage Equity Val (INR mm) Rev Multiple EBITDA Multiple
28.4% Late 564.4 1.3 x 12.5 x
34.0% Late 882.4 2.4 x 16.0 x
8.8% Pre-IPO 8,079.9 2.7 x 17.7 x
12.5% Late 7,200.0 1.8 x 16.1 x
27.6% Late 723.8 1.9 x 13.3 x
24.9% PIPE 2,590.0 1.0 x 10.8 x
17.1% PIPE 4,124.6 0.7 x 5.3 x
26.5% Late 1,700.0 2.0 x 11.8 x
10.8% Late 600.0 2.1 x 14.3 x
19.5% Late 3,500.0 3.4 x 18.1 x
22.4% Late 2,139.0 0.6 x 7.5 x
40.8% Late 1,102.6 1.5 x 17.5 x
15.0% PIPE 1,236.7 1.5 x 7.5 x
24.6% Growth 1,860.0 3.7 x 15.6 x
35.0% Late 971.7 0.9 x 11.4 x
33.0% Growth 402.6 2.7 x 23.5 x
9.9% PIPE 752.3 2.0 x 6.7 x

1.9 x 13.3 x
1.9 x 13.3 x

3.2 x 19.6 x

1.8 x 13.9 x
% Revenue GM % (ex-offers)
FY12 FY13 FY14YTD FY12 FY13
Savories 81.5% 37.6% 37.9% 36.2% 31.8%
Spices & Masalas 0.0% 27.1% 12.1% 0.0% 37.3%
Instant mixes 0.0% 23.5% 16.7% 0.0% 42.9%
Sweets 16.5% 7.5% 14.5% 45.3% 40.1%
Beverages 0.0% 1.8% 7.1% 0.0% 17.8%
RTE 0.0% 1.0% 1.9% 0.0% 35.3%
Pickles 0.0% 0.9% 1.0% 0.0% 16.2%
Others 2.0% 0.3% 0.5% 11.6% 3.2%
Frozen 0.0% 0.2% 2.5% 0.0% 50.9%
Pure Spices 0.0% 0.0% 2.7% 0.0% 0.0%
Vermicelli 0.0% 0.0% 3.0% 0.0% 0.0%

Total 100.0% 99.9% 99.9% 37.2% 36.1%

INR mm Revenue GM (ex-offers)

FY12 FY13 FY14YTD FY12 FY13
Savories 75.8 153.4 242.9 27.4 48.8
Spices & Masalas 0.0 110.6 77.6 0.0 41.2
Instant mixes 0.0 95.9 107.0 0.0 41.1
Sweets 15.3 30.6 92.9 7.0 12.3
Beverages 0.0 7.3 45.5 0.0 1.3
RTE 0.0 4.1 12.2 0.0 1.4
Pickles 0.0 3.7 6.4 0.0 0.6
Others 1.9 1.2 3.2 0.2 0.0
Frozen 0.0 0.8 16.0 0.0 0.4
Pure Spices 0.0 0.0 17.3 0.0 0.0
Vermicelli 0.0 0.0 19.2 0.0 0.0

Growth Growth (%)

FY12 FY13 FY14YTD
Savories 102.4% 58.4%
Spices & Masalas - -29.9%
Instant mixes - 11.6%
Sweets 99.4% 203.7%
Beverages - 519.7%
RTE - 198.5%
Pickles - 74.6%
Others -34.2% 161.8%
Frozen - 1863.8%
Pure Spices - -
Vermicelli - -
% (ex-offers) GM % (incl-offers) Offers (%)
FY14YTD FY12 FY13 FY14YTD FY12 FY13 FY14YTD
27.2% 36.1% 31.8% 27.2% 0.1% 0.0% 0.0%
36.7% 0.0% 27.8% 35.5% 0.0% 9.5% 1.2%
49.1% 0.0% 7.3% 23.2% 0.0% 35.6% 25.9%
45.3% 45.3% 40.1% 45.3% 0.0% 0.0% 0.0%
8.5% 0.0% 17.8% 7.8% 0.0% 0.0% 0.7%
24.3% 0.0% 35.3% 24.3% 0.0% 0.0% 0.0%
4.6% 0.0% 16.2% 4.6% 0.0% 0.0% 0.0%
-109.2% 11.6% 3.2% -109.2% 0.0% 0.0% 0.0%
43.2% 0.0% 50.9% 43.2% 0.0% 0.0% 0.0%
33.1% 0.0% 0.0% 33.1% 0.0% 0.0% 0.0%
16.9% 0.0% 0.0% 9.3% 0.0% 0.0% 7.6%

32.6% 37.1% 25.1% 27.8%

(ex-offers) GM (incl offers)

FY14YTD FY12 FY13 FY14YTD
66.1 27.4 48.8 66.1
28.5 0.0 30.7 27.5
52.6 0.0 7.0 24.8
42.1 7.0 12.3 42.1
3.9 0.0 1.3 3.5
3.0 0.0 1.4 3.0
0.3 0.0 0.6 0.3
-3.5 0.2 0.0 -3.5
6.9 0.0 0.4 6.9
5.7 0.0 0.0 5.7
3.2 0.0 0.0 1.8
Income Statement Balance Sheet
Rs. In millions FY2 Rs. In millions

Sales 198 ASSETS

EXPENDITURE Fixed Assets
Cost of Materials Consumed -98 Cash on hand & at Bank
Direct Expenses -56 Deposits
Gross Profit 44 Loans & Advances
Gross Margin 22% Receivables
Indirect Expenses -66 Inventory

EBITDA -22 TOTAL

Margin -11%
D&A -11 LIABILITIES
Interest -5 Capital A/c’s
Term Loans
EBT -38 Cash Credit/Overdraft
Income Tax 0 Current Liabilities

P AT -38 TOTAL
FY2

84
2
20
6
4
10

126

35
50
7
34

126
Case S Hist. Hist. Hist. Proj. Proj. Proj.
INR mm FY0 FY1 FY2 FY3 FY4 FY5

Snacks
GT 23,772 79,342
MT 160 735

Beverages
GT 9,620 32,144
MT 302 775

Spices
GT 13,404 38,953
MT 147 751

Instant Mix
GT 9,710 39,083
MT 160 840

Ready To Eat
MT 239 793

Frozen Foods
MT 80 669
Proj. Proj.
FY6 FY7