Team Medallion, CFA Research Challenge'22 Presentation, Final Round

1. RENATA LIMITED (DSE: RENATA)
Pharmaceuticals & Chemicals
Target Price (30.06.2022): 1323 BDT
Closing Price (31.01.2022): 1332 BDT
Capital Gain: -0.69%
HOLD
0.36% Net Upside
Target Price: 1323 BDT

2. Business Description
62.87%
2.66%
16.96%
14.90%
2.12% 0.49%
Revenue Contribution by Segments
Local Pharma
Pharma Export
Animal Health
Contract
Purnava
Agro
10.29
12.68
15.54 16.33
18.88
0.99 0.61 0.47 0.69 0.80
-
3.00
6.00
9.00
12.00
15.00
18.00
21.00
2016-17 2017-18 2018-19 2019-20 2020-21
Local vs Export Pharma Sales (in Mn USD)
Local Export
Segment Current Scenario Potential
Pharma • 5th largest in the country
• 47 new formulations in 2020-21
• Maxpro is the star product
• Have multiple certifications and subsidiaries abroad
• Focus on CNS, cardiovascular and oncology products
• Objective to target a $9.9bn European niche market
• Higher focus on R&D
Contract Manufacturing • Strong partnerships with government and other organization
• Supplies 2/3rd contraceptives of the government
• Recently got a BDT 600mn contract
• Objective to be the biggest suppliers of birth control pills
Animal Health • Market leader with 22.05% market share
• Cyclical pattern of sales and market
• Market expected to grow at 12.50% for the next five years
• Improved husbandry practices
Other Subsidiaries • Restructuring Renata Agro
• Purnava reached profitability this year for the first time
• Foreign subsidiaries to start generating revenue
• Fast growing market of Purnava
Company & Market ESG Considerations Thesis & Analysis Valuation Sensitivity & Risk
Source: Renata Annual Report 2020-21 Source: Renata Annual Report

3. Local and Export Market Growth
2269
2413
2711
2886
3195
0
1000
2000
3000
4000
2017 2018 2019 2020 2021
Revenue of Pharma (in Mn USD)
72.64
89.17
103.46
129.95
135.79
169.02
-
30.00
60.00
90.00
120.00
150.00
180.00
2015-16 2016-17 2017-18 2018-19 2019-20 2020-21
Pharma Exports (in Mn USD)
1.4xin 4 years 2.3xin 4 years
Company & Market ESG Considerations Thesis & Analysis Valuation Sensitivity & Risk
Source: IMS Report, Q3 2021 Source: Export Processing Bureau

4. Market Overview
27%
9%
6%
2%
38%
10%
8%
30%
12% 10%
3%
26%
7%
12%
0%
10%
20%
30%
40%
Cardiovascular Cancer Respiratory Diabetes Communicable Injury Other NCDs
Shift in Global Disease Profile
2008 2018
Demographic Shift
45-55years
Population Mode to Shift
from 15-25 years
Anti-Biotics
Chronic Care
Company & Market ESG Considerations Thesis & Analysis Valuation Sensitivity & Risk
Source: Country Dashboard, United Nations Population Fund
Source: World Health Organization

5. Company & Market ESG Considerations Thesis & Analysis Valuation Sensitivity & Risk
Competitive Positioning
24.07%
21.68%
17.78%
0.00%
5.00%
10.00%
15.00%
20.00%
25.00%
30.00%
2019 2020 2021
Market Share of MaxPro in Esomeprazole
Oligopolistic Market
Heavily Competitive
Source: IMS Report, Q3 2021
Source: IMS Report, Q3 2021
4.35%
5.06%
5.37%
6.90%
8.94%
11.51%
17.39%
4.21%
5.35%
5.20%
6.27%
8.64%
11.63%
16.96%
4.01%
5.19%
5.26%
5.66%
8.17%
11.13%
16.65%
0.00% 2.00% 4.00% 6.00% 8.00% 10.00% 12.00% 14.00% 16.00% 18.00% 20.00%
ESKAYEF
OPSONIN PHARMA
RENATA
HEALTHCARE PHARMA
BEXIMCO
INCEPTA PHARMA
SQUARE
Market Share of Top 7 Pharmaceuticals in Bangladesh
Q3'2019 Q3'2020 Q3'2021

6. Company & Market ESG Considerations Thesis & Analysis Valuation Sensitivity & Risk
Environmental & Social: Giving Back to the Community by Design
2.95%
Of Net Profit Went to CSR
Activities
51.00%
Of the Company Owned
by Sajida Foundation
2.70Mn KG
CO2 Emission Reduced a
Year by the Company
Source: Renata Insight

7. Company & Market ESG Considerations Thesis & Analysis Valuation Sensitivity & Risk
Strong Corporate Governance & Transparency
Category Key Indicators Score
Executive
Committee
• Independence to scrutinize strategy
3.77
/4.00
• Thorough evaluation of BoD
• Accountability reflected in BoD's activities
• General and Technical Competence of BoD
Audit
Committee
• Power and Access provided to auditor
4.00
/4.00
• Independence of audit committee
• Shareholder's ratification in auditor selection
• Shareholders have knowledge of performance
metrics
Compensation
Committee
• Equity is a part of BoD's compensation
2.75
/4.00
• Performance metrics aligned with shareholders'
wealth maximization
• Rights of minority shareholders protected
Protection of
Shareholder
Right
• Shareholders receive timely dividend payment
3.75
/4.00
• Shareholders can call class meetings and special
meetings
• Each share holds one vote
3.57/4.00
Combined Corporate
Governance Scorecard
Source: Team Analysis

8. Company & Market ESG Considerations Thesis & Analysis Valuation Sensitivity & Risk
Our Recommendation
Sustainable Revenue Growth in an
Attractive but Competitive Local Market
Shifting Product Focus while Losing
Edge of Star Product
Strong Corporate Governance Leading
to Lower Beta
Despite Good Fundamentals, Current
P/E Leads to a Precautionary Stance
Date 31-Jan-2022
Current Price BDT 1332
Capital Gain -0.69%
Shares Outstanding 107Mn
Market Cap BDT 142Bn
Free Float 48.73%
HOLD
Target Price: BDT 1323
Potential Upside: 0.36%

9. Company & Market ESG Considerations Thesis & Analysis Valuation Sensitivity & Risk
1. Sustainable Revenue Growth in an Attractive but Competitive Local Market
Renata’ local pharmaceutical revenue has
grown at a CAGR of 16.40% compared to
11.60% CAGR of the market
Source: Renata Annual Reports, IMS Report, Q3’2021
23.18%
22.52%
5.11%
15.64%
14.70%
16.30%
4.00%
11.60%
0.00%
5.00%
10.00%
15.00%
20.00%
25.00%
2017-18A 2018-19A 2019-20A 2020-21A
Revenue Growth Rate (Renata vs Market)
Renata Market

10. Company & Market ESG Considerations Thesis & Analysis Valuation Sensitivity & Risk
1. Sustainable Revenue Growth in an Attractive but Competitive Local Market
Renata has grown at a CAGR of 16.40%
compared to 11.60% CAGR of the market
Growing but Highly
Competitive Existing Market
59.8
66.1
73.2
78.2
80.5
86.1
91.1 91.4
97.3
109.6
0
20
40
60
80
100
120
2009 2010 2011 2012 2013 2014 2015 2016 2017 2018
Healthcare Exp. per Capita in Bangladesh (in USD)
Source: Global Healthcare Expenditure Database, WHO

11. Company & Market ESG Considerations Thesis & Analysis Valuation Sensitivity & Risk
1. Sustainable Revenue Growth in an Attractive but Competitive Local Market
Renata has grown at a CAGR of 16.40%
compared to 11.60% CAGR of the market
Growing but Highly
Competitive Existing Market
Source: Renata Annual Report 2020-21
7.30% 7.10%
8.00%
10.00% 9.80%
10.80% 11.00%
11.50% 11.30%
6.00%
5.60%
7.30% 7.40%
7.70% 7.60%
8.50%
8.00%
7.60%
0.00%
2.00%
4.00%
6.00%
8.00%
10.00%
12.00%
14.00%
Jul Aug Sep Oct Nov Dec Jan Feb Mar
Renata's Market Share in Cardiovascular Category
FY20-21 FY19-20
Attractive and Less
Competitive New Market

12. Company & Market ESG Considerations Thesis & Analysis Valuation Sensitivity & Risk
2. Shifting Product Focus while Losing Edge of Star Product
Renata has grown at a CAGR of 16.40%
compared to 11.60% CAGR of the market
Growing but Highly
Competitive Existing Market
Source: IMS Report, Q3’2021
Attractive and Less
Competitive New Market
4.89%
2.56%
28.39%
12.86%
0.00%
5.00%
10.00%
15.00%
20.00%
25.00%
30.00%
Q3'2020 Q3'2021
Maxpro vs Sergel
Growth Rate
Maxpro Sergel
6.9
3.6
0
1
2
3
4
5
6
7
8
Sergel Maxpro
Market Size of Sergel
vs Maxpro (in Bn
BDT)
Source: IMS Report, Q3’2021
Maxpro, Renata’s
star product is
losing market
share

13. Company & Market ESG Considerations Thesis & Analysis Valuation Sensitivity & Risk
2. Shifting Product Focus while Losing Edge of Star Product
Source: Renata Annual Report 2020-21
Source: Renata Annual Report 2020-21
14
17
8
18
47
0
10
20
30
40
50
2016-17 2017-18 2018-19 2019-20 2020-21
Number of New Formulations of Renata
1
3
2
2
8
0 1 2 3 4 5 6 7 8 9
Anti-Inflammatory
Oncology
Cadiovascular
Anti-Diabetic
CNS
Renata's New Formulations by Segment in 2020-21
Renata has grown at a CAGR of 16.40%
compared to 11.60% CAGR of the market
Growing but Highly
Competitive Existing Market
Attractive and Less
Competitive New Market
MaxPro, Renata’s
star product is
losing market
share
Renata is creating
a new market in
other product
categories
Renata is gaining
higher market
share through
subsidiaries

14. Company & Market ESG Considerations Thesis & Analysis Valuation Sensitivity & Risk
Forecasting the Revenue
Renata has grown at a CAGR of 16.40%
compared to 11.60% CAGR of the market
Growing but Highly
Competitive Existing Market
Attractive and Less
Competitive New Market
MaxPro, Renata’s
star product is
losing market
share
Source: Renata Annual Report 2020-21
Renata is creating
a new market in
other product
categories
Renata is gaining
higher market
share through
subsidiaries
Initially higher revenue
than market, but
eventually growing at
market growth rate
14.50% to 13.50%
Revenue Growth Rate
for Renata
23.18%
22.52%
5.11%
15.64%
14.50% 14.50%
14.00% 14.00%
13.50% 13.50%
14.70%
16.30%
4.00%
11.60%
13.50% 13.50% 13.50% 13.50% 13.50% 13.50%
0.00%
5.00%
10.00%
15.00%
20.00%
25.00%
Revenue Growth Rate (Renata vs Market)
Renata Market

15. Company & Market ESG Considerations Thesis & Analysis Valuation Sensitivity & Risk
Forecasting the Revenue
63.00% 62.86%
61.82%
2.66% 2.79% 3.56%
16.99% 16.78% 16.07%
14.94%
14.90% 14.66%
1.33% 1.33% 1.34%
2.12% 2.40% 3.60%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
2020-21A 2021-22F 2026-27F
Revenue Distribution
Pharmaceutical Products - Local Pharmaceutical Products - Export
Animal Health Contract Manufacturing
Renata Agro Industries Limited Purnava Limited
14%
20%
13%
14%
15%
25%
0%
5%
10%
15%
20%
25%
30%
Pharmaceutical
Products - Local
Pharmaceutical
Products -
Export
Animal Health Contract
Manufacturing
Renata Agro
Industries
Limited
Purnava Limited
Revenue CAGR
Source: Team Analysis Source: Team Analysis

16. Company & Market ESG Considerations Thesis & Analysis Valuation Sensitivity & Risk
3. Strong Corporate Governance Leading to Lower Beta
Low Beta Originating from High Investor Confidence
Source: Dhaka Stock Exchange
SAJIDA Foundation as the Majority
Shareholder
Transparent Business Processes
Reflected in Awards, Recognitions, and
Contracts
Strong Balance Sheet from 19% Debt to
Equity Ratio

17. Company & Market ESG Considerations Thesis & Analysis Valuation Sensitivity & Risk
4. Despite Good Fundamentals, Current P/E Leads to a Precautionary Stance
26.78
13.89
11.27
10.68
-
5.00
10.00
15.00
20.00
25.00
30.00
35.00
Feb-17 Aug-17 Feb-18 Aug-18 Feb-19 Aug-19 Feb-20 Aug-20 Feb-21 Aug-21 Feb-22
Comparison of PE
RNTL.DH PE BXPH.DH PE SQPH.DH PE ACMR.DH PE
Source: Dhaka Stock Exchange
Optimistic Bias in a Bull Run
48.70%
Increase of Renata’s Price in
Last 2 Years
54.60%
Increase of DSEX in Last 2
Years

18. Company & Market ESG Considerations Thesis & Analysis Valuation Sensitivity & Risk
Financial Health: Revenue & Profitability
49.50% 49.60%
47.10% 47.30% 48.00% 48.00% 48.50% 48.50% 49.00% 49.00%
23.80% 23.20% 23.70% 22.90% 23.40% 23.40% 23.90% 24.00% 24.50% 24.50%
26.70% 26.90%
28.30%
26.40%
27.50% 27.40% 27.80% 27.80% 28.20% 28.10%
16.30% 16.50% 16.30% 16.90% 16.90% 17.00% 17.50% 17.60% 18.10% 18.20%
0.00%
10.00%
20.00%
30.00%
40.00%
50.00%
60.00%
Profitability Margins
Gross Margin Operating Margin EBITDA Margin Net Profit Margin
Source: Refinitiv
19,050
22,809
24,675
29,971
34,397
39,495
45,167
51,670
58,850
67,041
0
10,000
20,000
30,000
40,000
50,000
60,000
70,000
80,000
Total Revenue (in BDT mn)
Source: Team Analysis
14.36%
CAGR
1.00%-1.60%
Increase in All
Profitability Ratios

19. Company & Market ESG Considerations Thesis & Analysis Valuation Sensitivity & Risk
Financial Health: Capex & Financing
1279 1269
1849
2584
4423
3452
3805
4171
4565
4964
0
1200
2400
3600
4800
6000
2016-17A
2017-18A
2018-19A
2019-20A
2020-21A
2021-22F
2022-23F
2023-24F
2024-25F
2025-26F
Forecasted Capex
16.2%
13.8%
13.7%
18.7%
18.0%
17.0%
16.5%
16.0%
15.5%
15.0%
11.7%
10.4%
10.1%
13.8%
13.5%
13.0%
12.8%
12.5%
12.3%
12.0%
8.0%
10.0%
12.0%
14.0%
16.0%
18.0%
20.0%
2017-18A 2018-19A 2019-20A 2020-21A 2021-22F 2022-23F 2023-24F 2024-25F 2025-26F 2026-27F
Leverage Ratios
Debt-to-Equity Debt-to-Asset
Source: Team Analysis Source: Team Analysis

20. Company & Market ESG Considerations Thesis & Analysis Valuation Sensitivity & Risk
Financial Health: NWC, NAV & NOCFPS
Source: Team Analysis Source: Team Analysis
30.19%
27.16%
28.87%
29.33%
28.91%
28.90%
28.76% 28.76%
28.64% 28.64%
26.50%
27.00%
27.50%
28.00%
28.50%
29.00%
29.50%
30.00%
30.50%
NWC/Sales
221.45
230.90
245.65
263.85
281.57
300.01
319.84
337.10
355.73
371.10
38.12
52.54 52.89
44.34
56.95
57.86
61.78
63.68
67.87
69.53
0.00
10.00
20.00
30.00
40.00
50.00
60.00
70.00
80.00
0.00
50.00
100.00
150.00
200.00
250.00
300.00
350.00
400.00
NAV per share & NOCFPS
NAV per share Net Operating Cashflow per share

21. DCF Valuation
Company & Market ESG Considerations Thesis & Analysis Valuation Sensitivity & Risk
4.47%
Terminal Growth Rate
Average Real
Growth Rate per
Capita
Long Term
Inflation Goal
Global Medicine
Market Growth
Rate
6.87%
Cost of Debt
Interest Coverage Ratio: 50.40
Spread: 0.75%
Country Default Spread: 3.06%
Tax Rate: 22.5%
11.23%
Cost of Equity
Risk-free Rate: 7.10%
Beta: .53
Equity Risk Premium: 7.80%
15.58%
Debt to Asset Ratio
10.65%
WACC
Target Price
1277 BDT
Current Price
1323 BDT
Downside
3.48%
Enterprise Value
126 Bn
No. of Shares
107 Mn

22. Relative Valuation
Company & Market ESG Considerations Thesis & Analysis Valuation Sensitivity & Risk
PE Ratio
1243 BDT
PEG Ratio
1494 BDT
Target Price
1369 BDT
50% 50%
Current Price
1323 BDT
Upside
2.78%
Factors Considered
Similarity in Business, Profitability, Revenue, and
Demographic traits of the consumers

23. Decision
Company & Market ESG Considerations Thesis & Analysis Valuation Sensitivity & Risk
DCF
1277 BDT
PEG (Relative)
1494 BDT
PE (Relative)
1243 BDT
Target Price
1323 BDT
Current Price
1332 BDT
50%
25%
25%
Capital Loss
0.69%
Dividend Yield
1.05%
Net Upside
0.36%

24. Sensitivity Analysis
Company & Market ESG Considerations Thesis & Analysis Valuation Sensitivity & Risk
Source: Team Analysis

25. Monte Carlo Simulation
Company & Market ESG Considerations Thesis & Analysis Valuation Sensitivity & Risk
Parameters Used
WACC, Revenue Growth, COGS, Operating
Margin, Terminal Growth Rate
Number of Trials
100,000
25.51%
Outcomes result in a price with
a price yielding 10% upside

26. Risk Matrix
Company & Market ESG Considerations Thesis & Analysis Valuation Sensitivity & Risk
Impact
M1. Steep Local
Competition
M2. Supply Chain
Disruption
M2. Supply Chain
Disruption
B1. Capacity
Overutilization
P2. Stringent
Regulations for
Export
F1. Foreign
Exchange
B2.
Underperforming
Subsidiaries
P1. Graduation
from LDC Status
Probability
B1. Capacity Overutilization
B2. Underperforming Subsidiaries
P1. Graduation from LDC Status
P2. Stringent Regulations for Export
M1. Steep Local Competition
M2. Supply Chain Disruption
F1. Foreign Exchange
Business Risk
Financial Risk
Political Risk
Market Risk
Source: Team Analysis

27. Mitigation Strategy
Company & Market ESG Considerations Thesis & Analysis Valuation Sensitivity & Risk
B1. Capacity Overutilization
B2. Underperforming Subsidiaries
P1. Graduation from LDC Status
P2. Stringent Regulations for Export
M1. Steep Local Competition
M2. Supply Chain Disruption
F1. Foreign Exchange
Business Risk
Financial Risk
Political Risk
Market Risk
• Effective capital reinvestment
• Healthy D/E ratio in favor of expansion
• Declining marketing costs of Purnava
• Change in business strategy
• 80% products with expired patents
• Regulatory approvals from MHRA
• Goodwill with UNICEF & WHO
• Targeting high growth products
• Focusing on R&D
• Diversification of sourcing
• Utilizing API park
• USD-denominated receipts from export
• Average lower net exposure

28. Our Recommendation
Sustainable Revenue Growth in an
Attractive but Competitive Local Market
Shifting Product Focus while Losing
Edge of Star Product
Strong Corporate Governance Leading
to Lower Beta
Despite Good Fundamentals, Current
P/E Leads to a Precautionary Stance
Date 31-Jan-2022
Current Price BDT 1332
Capital Gain -0.69%
Shares Outstanding 107Mn
Market Cap BDT 142Bn
Free Float 48.73%
HOLD
Target Price: BDT 1323
Net Upside: 0.36%

29. Appendix 1: Revenue Forecasts
2016-17A 2017-18A 2018-19A 2019-20A 2020-21A 2021-22F 2022-23F 2023-24F 2024-25F 2025-26F 2026-27F
Schedule 6: Revenue Projections
Pharmaceutical Products - Local
Market Growth Rate 15.00% 14.70% 16.30% 4.00% 11.60% 13.50% 13.50% 13.50% 13.50% 13.50% 13.50%
Renata Growth Rate 23.18% 22.52% 5.11% 15.64% 14.50% 14.50% 14.00% 14.00% 13.50% 13.50%
Revenue 10,294 12,680 15,535 16,329 18,883 21,621 24,756 28,222 32,173 36,516 41,446
Pharmaceutical Products - Export
Country Export Growth Rate 18.82% 18.82% 18.82% 18.82% 18.82% 18.82%
Renata Export Growth Rate -38.57% -23.25% 48.58% 15.13% 20.00% 20.00% 20.00% 20.00% 20.00% 20.00%
Revenue 990 608 467 694 799 958 1,150 1,380 1,656 1,987 2,385
Animal Health
Total Market Size 30,000 33,000 36,300 39,930 43,923 48,315 53,147 58,462
Supply by Local Producers 70.00% 70.00% 72.10% 74.26% 76.49% 78.79% 81.15% 83.58%
Market of Local Producers 21,000 23,100 26,172 29,653 33,597 38,066 43,128 48,864
Renata Market Share 22.28% 22.05% 22.05% 22.05% 22.05% 22.05% 22.05% 22.05%
Revenue 3,175 3,464 3,821 4,680 5,093 5,770 6,538 7,407 8,393 9,509 10,774
Contract Manufacturing
Contract Manufacturing to Local Sales Ratio 15.39% 14.61% 15.44% 15.07% 23.71% 23.71% 23.71% 23.71% 23.71% 23.71% 23.71%
Revenue 1,585 1,852 2,398 2,462 4,476 5,126 5,869 6,690 7,627 8,657 9,825
Renata Agro Industries Limited
Market Growth Rate 14.50% 14.50% 14.50% 14.50% 14.50% 14.50%
Renata Growth Rate -31.36% 16.20% -32.49% 32.05% 14.50% 14.50% 14.50% 14.50% 14.50% 14.50%
Revenue 560 385 447 302 398 456 522 598 685 784 898
Purnava Limited
Growth Rate % 56.22% 38.45% 35.95% 35.74% 30.00% 30.00% 25.00% 25.00% 20.00% 20.00%
Revenue 159 249 344 468 635 826 1,074 1,342 1,678 2,013 2,416
Intra Company Sales
Total Sales 16,763 19,237 23,012 24,934 30,285 34,757 39,909 45,640 52,211 59,466 67,743
Ratio 0.70% 0.97% 0.88% 1.04% 1.04% 1.04% 1.04% 1.04% 1.04% 1.04% 1.04%
Intra company sales 118 187 203 259 314 360 414 473 541 617 702
Net Turnover
Total Net Turnover 16,645 19,050 22,809 24,675 29,971 34,397 39,495 45,167 51,670 58,850 67,041
Revenue Growth Rate 14.45% 19.73% 8.18% 21.46% 14.77% 14.82% 14.36% 14.40% 13.90% 13.92%
CAGR 14.36%

30. Appendix 2: CapEx Forecasts
2016-17A 2017-18A 2018-19A 2019-20A 2020-21A 2021-22F 2022-23F 2023-24F 2024-25F 2025-26F 2026-27F
Schedule 3: Capital Expenditure
Sales 19,050 22,809 24,675 29,971 34,397 39,495 45,167 51,670 58,850 67,041
Depreciation 747 852 955 1,029 1,448 1,572 1,700 1,843 2,003 2,178
CapEx 1,269 1,849 2,584 4,423 3,452 3,805 4,171 4,565 4,964 5,386
Depreciation/Sales 3.92% 3.73% 3.87% 3.43% 4.21% 3.98% 3.76% 3.57% 3.40% 3.25%
CapEx/Sales 6.66% 8.11% 10.47% 14.76% 10.03% 9.63% 9.23% 8.83% 8.43% 8.03%
Maintenance CapEx 3.92% 3.73% 3.87% 3.43% 3.43% 3.43% 3.43% 3.43% 3.43% 3.43%
Growth CapEx 2.74% 4.37% 6.60% 11.32% 6.60% 6.20% 5.80% 5.40% 5.00% 4.60%
CapEx Rate 6.66% 8.11% 10.47% 14.76% 10.03% 9.63% 9.23% 8.83% 8.43% 8.03%
Additional Capital Work-in-Progress 943 1,093 1,441 1,945 3,819 2,416 2,664 2,920 3,195 3,475 3,771
Additional Direct PPE Expense 337 175 408 639 605 1,035 1,142 1,251 1,369 1,489 1,616
Total CapEx 1,279 1,269 1,849 2,584 4,423 3,452 3,805 4,171 4,565 4,964 5,386

31. Appendix 3: Working Capital Forecasts
2.45
2.65
2.49 2.62 2.61 2.61 2.61 2.61 2.61 2.61
7.29
8.28
7.84
8.14
7.93 7.93 7.93 7.93 7.93 7.93
7.45
8.42
7.15
10.30
9.13 9.13 9.13 9.13 9.13 9.13
0.00
2.00
4.00
6.00
8.00
10.00
12.00
2017-18A 2018-19A 2019-20A 2020-21A 2021-22F 2022-23F 2023-24F 2024-25F 2025-26F 2026-27F
Turnover Ratios
Inventory Turnover Receivables Turnover Payables Turnover

32. Appendix 4: ROA, ROE, ROCE
14.5%
15.2%
13.7%
14.6% 14.4% 14.5% 14.7% 14.8% 15.1% 15.2%
20.0% 20.2%
18.4%
19.7%
19.3% 19.0% 19.0% 18.9% 19.1% 19.0%
25.9%
26.4%
26.0%
25.4% 25.3% 25.2% 25.3% 25.3% 25.5% 25.5%
0.0%
5.0%
10.0%
15.0%
20.0%
25.0%
30.0%
2017-18A
2018-19A
2019-20A
2020-21A
2021-22F
2022-23F
2023-24F
2024-25F
2025-26F
2026-27F
ROA, ROE, ROCE
ROA ROE ROCE

33. Appendix 5: Payout Ratio & EPS
24.1%
23.2%
30.0% 30.0% 30.0% 30.0%
35.0% 35.0%
40.0% 40.0%
15.0%
20.0%
25.0%
30.0%
35.0%
40.0%
45.0%
2017-18A
2018-19A
2019-20A
2020-21A
2021-22F
2022-23F
2023-24F
2024-25F
2025-26F
2026-27F
Payout Ratio
30.00
40.00
50.00
60.00
70.00
80.00
2017-18A
2018-19A
2019-20A
2020-21A
2021-22F
2022-23F
2023-24F
2024-25F
2025-26F
2026-27F
EPS (in BDT)

34. Appendix 6: Ratio Analysis
Renata: Key Financials FY2017-18 FY2018-19 FY2019-20 FY2020-21 2021-22F 2022-23F 2023-24F 2024-25F 2025-26F 2026-27F
Revenue Growth *all figuresin mn BDT
Total Revenue (in BDT mn) 19,050 22,809 24,675 29,971 34,397 39,495 45,167 51,670 58,850 67,041
Revenue Growth Rate 14.45% 19.73% 8.18% 21.46% 14.77% 14.82% 14.36% 14.40% 13.90% 13.92%
Local Pharmaceutical Market Growth 14.70% 16.30% 4.00% 11.60% 13.50% 13.50% 13.50% 13.50% 13.50% 13.50%
Renata Local Pharma Revenue Growth 23.18% 22.52% 5.11% 15.64% 14.50% 14.50% 14.00% 14.00% 13.50% 13.50%
Export Revenue Growth -38.57% -23.25% 48.58% 15.13% 20.00% 20.00% 20.00% 20.00% 20.00% 20.00%
Contract Manufacturing Growth 16.89% 29.49% 2.64% 81.85% 14.50% 14.50% 14.00% 14.00% 13.50% 13.50%
Animal Health Revenue Growth 9.09% 10.31% 22.48% 8.84% 13.30% 13.30% 13.30% 13.30% 13.30% 13.30%
Shareholder Indicator
EPS 44.35 46.63 45.29 51.94 54.21 57.01 60.84 63.87 67.78 70.54
EPS (Diluted) 28.98 35.03 37.43 47.22 54.21 62.71 73.61 85.01 99.24 113.60
DPS 11.00 11.00 14.00 15.50 13.97 14.73 18.54 19.50 23.83 25.43
Payout Ratio 24.1% 23.2% 30.0% 30.0% 30.0% 30.0% 35.0% 35.0% 40.0% 40.0%
P/E Ratio 39.52 30.54 24.22 25.54 24.57 21.24 18.09 15.67 13.42 11.73
Profitability Ratio
Gross Margin 49.5% 49.6% 47.1% 47.3% 48.0% 48.0% 48.5% 48.5% 49.0% 49.0%
Operating Margin 23.8% 23.2% 23.7% 22.9% 23.4% 23.4% 23.9% 24.0% 24.5% 24.5%
EBITDA Margin 26.7% 26.9% 28.3% 26.4% 27.5% 27.4% 27.8% 27.8% 28.2% 28.1%
EBIT Margin 22.8% 23.1% 24.4% 23.0% 23.3% 23.4% 24.0% 24.2% 24.8% 24.9%
EBT Margin 22.3% 22.6% 23.8% 22.6% 22.6% 22.8% 23.4% 23.6% 24.2% 24.3%
Net Profit Margin 16.3% 16.5% 16.3% 16.9% 16.9% 17.0% 17.5% 17.6% 18.1% 18.2%
Return on Asset (ROA) 14.5% 15.2% 13.7% 14.6% 14.4% 14.5% 14.7% 14.8% 15.1% 15.2%
Return on Equity (ROE) 20.0% 20.2% 18.4% 19.7% 19.3% 19.0% 19.0% 18.9% 19.1% 19.0%
Return on Capital Employed (ROCE) 25.9% 26.4% 26.0% 25.4% 25.3% 25.2% 25.3% 25.3% 25.5% 25.5%
Liquidity and Solvency Ratio
Current Ratio 2.12 2.55 2.46 2.24 2.37 2.55 2.73 2.88 3.05 3.19
Interest Coverage Ratio 49.33 44.65 39.32 65.75 36.80 38.42 39.58 40.63 42.13 43.40
Debt to Equity Ratio 0.16 0.14 0.14 0.19 0.18 0.17 0.17 0.16 0.16 0.15
Debt to Assets Ratio 0.12 0.10 0.10 0.14 0.13 0.13 0.13 0.13 0.12 0.12
Net Operating Cash Flow per Share 38.12 52.54 52.89 44.34 56.95 57.86 61.78 63.68 67.87 69.53
Net Asset Value per Share 221.45 230.90 245.65 263.85 281.57 300.01 319.84 337.10 355.73 371.10

35. Appendix 6: Ratio Analysis
Renata: Key Financials FY2017-18 FY2018-19 FY2019-20 FY2020-21 2021-22F 2022-23F 2023-24F 2024-25F 2025-26F 2026-27F
Operational Ratio *all figuresin mn BDT
Net Working Capital 5,751 6,195 7,125 8,791 9,944 11,415 12,992 14,862 16,852 19,203
Total CapEx 1,269 1,849 2,584 4,423 3,452 3,805 4,171 4,565 4,964 5,386
NWC/Sales 30.2% 27.2% 28.9% 29.3% 28.9% 28.9% 28.8% 28.8% 28.6% 28.6%
CapEx/Sales 6.7% 8.1% 10.5% 14.8% 10.0% 9.6% 9.2% 8.8% 8.4% 8.0%
Inventory in Days 149 138 146 139 140 140 140 140 140 140
Receivables in Days 50 44 47 45 46 46 46 46 46 46
Payables in Days 49 43 51 35 40 40 40 40 40 40
Inventory Turnover 2.45 2.65 2.49 2.62 2.61 2.61 2.61 2.61 2.61 2.61
Receivable Turnover 7.29 8.28 7.84 8.14 7.93 7.93 7.93 7.93 7.93 7.93
Payable Turnover 7.45 8.42 7.15 10.30 9.13 9.13 9.13 9.13 9.13 9.13
Asset Turnover 0.95 0.99 0.91 0.93 0.92 0.91 0.90 0.90 0.89 0.89
Cash conversion cycle in Days 150 138 142 149 146 146 146 146 146 146
Cash as % of sales 5.69% 3.73% 5.74% 4.69% 4.97% 4.92% 5.94% 6.02% 6.77% 6.55%
Profitability Figures
Turnover 19,050 22,809 24,675 29,971 34,397 39,495 45,167 51,670 58,850 67,041
Gross Profit 9,432 11,316 11,612 14,184 16,511 18,958 21,906 25,060 28,836 32,850
Operating Profit 4,535 5,290 5,859 6,863 8,049 9,242 10,795 12,401 14,418 16,425
EBITDA 5,081 6,124 6,986 7,911 9,446 10,813 12,540 14,353 16,594 18,868
EBIT 4,334 5,273 6,031 6,882 7,998 9,241 10,840 12,510 14,591 16,690
EBT 4,246 5,154 5,878 6,777 7,780 9,001 10,566 12,203 14,245 16,306
Net Profit 3,106 3,756 4,012 5,062 5,810 6,722 7,891 9,113 10,638 12,177
No. of Shares 70 81 89 97 107 118 130 143 157 173
EV/Sales 3.68 3.20 2.80 2.45 2.15 1.89
EV/EBITDA 13.39 11.69 10.08 8.81 7.62 6.70
EV/EBIT 15.81 13.68 11.66 10.11 8.67 7.58
EV/EBT 16.25 14.05 11.97 10.36 8.88 7.75

36. Appendix 7: Balance Sheet
2016-17A 2017-18A 2018-19A 2019-20A 2020-21A 2021-22F 2022-23F 2023-24F 2024-25F 2025-26F 2026-27F
Balance Sheet *all figures in mn BDT
Assets
Non-Current Assets
Property, Plant & Equipment 9,799 10,203 10,866 12,179 13,690 16,584 18,703 20,901 23,306 25,941 28,804
Capital Work-in-Progress 1,259 1,377 1,705 2,021 3,889 2,999 3,114 3,387 3,703 4,030 4,375
Long Term Investment 12 11 11 10 0 0 0 0 0 0 0
11,070 11,590 12,583 14,209 17,580 19,583 21,817 24,288 27,010 29,971 33,179
Current Assets
Inventories 3,396 3,927 4,337 5,240 6,021 6,861 7,877 8,922 10,207 11,512 13,114
Trade & Other Receivables 2,327 2,614 2,754 3,149 3,683 4,335 4,977 5,692 6,512 7,417 8,449
Advances, Deposits & Prepayments 340 501 469 564 620 709 811 927 1,060 1,212 1,387
Investment in Shares & FDR 935 1,643 3,683 4,807 5,464 7,106 8,942 11,097 13,541 16,406 19,635
Cash & Cash Equivalents 652 1,084 850 1,417 1,406 1,708 1,943 2,681 3,108 3,986 4,390
7,649 9,768 12,093 15,176 17,194 20,719 24,550 29,320 34,428 40,534 46,975
Total Assets 18,719 21,359 24,676 29,386 34,773 40,302 46,367 53,608 61,437 70,504 80,155
Equity & Liabilities
Share Capital 609 700 805 886 974 1,072 1,179 1,297 1,427 1,569 1,726
Revaluation Surplus 155 155 154 154 153 153 153 153 153 153 153
Tax Holiday Reserve 47 47 47 47 0 0 0 0 0 0 0
Fair Value Reserve 50 57 54 14 25 25 25 25 25 25 25
Other Reserves 0 0 0 -43 -43 -43 -43 -43 -43 -43 -43
Retained Earnings 12,082 14,550 17,535 20,705 24,602 28,975 34,061 40,053 46,534 54,125 62,204
Equity Attributable to Equity Holders 12,943 15,508 18,596 21,762 25,711 30,182 35,375 41,485 48,095 55,829 64,065
Non-Controlling Interests 0.07 0.07 0.06 0.05 0.05 0.05 0.05 0.05 0.05 0.05 0.05
Total Equity 12,943 15,508 18,596 21,762 25,711 30,182 35,375 41,485 48,095 55,830 64,065
Non-Current Liabilities
Long Term Loan 96 0 0 0 0 0 0 0 0 0 0
Deferred Tax Liabilities 1,170 1,245 1,344 1,447 1,369 1,369 1,369 1,369 1,369 1,369 1,369
1,266 1,245 1,344 1,447 1,369 1,369 1,369 1,369 1,369 1,369 1,369
Current Liabilities
Long Term Loan 161 100 0 0 0 0 0 0 0 0 0
Short Term Bank Loan & Overdrafts 1,972 2,405 2,563 2,981 4,802 5,433 6,014 6,846 7,698 8,658 9,615
Trade & Other Payables 1,617 1,291 1,366 1,827 1,533 1,960 2,251 2,549 2,916 3,289 3,747
Provision for Taxation 759 810 808 1,368 1,358 1,358 1,358 1,358 1,358 1,358 1,358
4,510 4,606 4,736 6,177 7,693 8,751 9,622 10,753 11,973 13,306 14,720
Total Equity & Liabilities 18,719 21,359 24,676 29,386 34,773 40,302 46,367 53,608 61,437 70,504 80,155
No. of Shares 61 70 81 89 97 107 118 130 143 157 173
NAV per Share 212.54 221.45 230.90 245.65 263.85 281.57 300.01 319.84 337.10 355.73 371.10

37. Appendix 8: Income Statement
2016-17A 2017-18A 2018-19A 2019-20A 2020-21A 2021-22F 2022-23F 2023-24F 2024-25F 2025-26F 2026-27F
Income Statement *all figures in mn BDT
Turnover 16,645 19,050 22,809 24,675 29,971 34,397 39,495 45,167 51,670 58,850 67,041
Cost of Goods Sold -8,301 -9,618 -11,494 -13,063 -15,787 -17,886 -20,537 -23,261 -26,610 -30,013 -34,191
Gross profit 8,344 9,432 11,316 11,612 14,184 16,511 18,958 21,906 25,060 28,836 32,850
Administrative Expenses -349 -407 -453 -478 -657 -722 -829 -948 -1,033 -1,177 -1,341
Selling, Marketing and Distribution Expenses -3,866 -4,489 -5,573 -5,275 -6,664 -7,739 -8,886 -10,162 -11,626 -13,241 -15,084
Total Administrative, Selling and Distribution Expenses -4,215 -4,897 -6,025 -5,753 -7,321 -8,462 -9,716 -11,111 -12,659 -14,418 -16,425
Operating Profit 4,129 4,535 5,290 5,859 6,863 8,049 9,242 10,795 12,401 14,418 16,425
Other Income 45 138 279 546 421 422 537 665 816 987 1,187
Other Expenses -202 -210 -155 -228 -168 -281 -304 -338 -372 -410 -448
Profit before WPWF 3,972 4,463 5,415 6,177 7,115 8,190 9,474 11,122 12,845 14,995 17,164
Contribution to WPWF -192 -217 -261 -300 -338 -409 -474 -556 -642 -750 -858
Profit before tax 3,780 4,246 5,154 5,878 6,777 7,780 9,001 10,566 12,203 14,245 16,306
Current Tax -907 -1,067 -1,299 -1,758 -1,795 -1,970 -2,279 -2,675 -3,090 -3,607 -4,129
Deferred Tax -195 -74 -100 -108 79 0 0 0 0 0 0
Total Tax Expenses -1,102 -1,140 -1,399 -1,866 -1,716 -1,970 -2,279 -2,675 -3,090 -3,607 -4,129
Net Profit after Tax for the Year 2,678 3,106 3,756 4,012 5,062 5,810 6,722 7,891 9,113 10,638 12,177
EPS 24.98 28.98 35.03 37.43 47.22 54.21 62.71 73.61 85.01 99.24 113.60
Other Comprehensive Income
Adjustments for Other Comprehensive Income 18 7 -3 -41 55 0 0 0 0 0 0
Total comprehensive income for the year 2,696 3,113 3,753 3,971 5,116 5,810 6,722 7,891 9,113 10,638 12,177
Attributable to:
Equity holders of Renata Limited 2,696 3,113 3,753 3,971 5,116 5,810 6,722 7,891 9,113 10,638 12,177
Non-controlling interests 0 0 0 0 0 0 0 0 0 0 0
Total comprehensive income for the year 2,696 3,113 3,753 3,971 5,116 5,810 6,722 7,891 9,113 10,638 12,177

38. Appendix 9: Cash Flow Statement
FY2016-17 FY2017-18 FY2018-19 FY2019-20 FY2020-21 2021-22F 2022-23F 2023-24F 2024-25F 2025-26F 2026-27F
Cash Flows from Operating Activities *all figuresin mn BDT
Profit before tax 3,780 4,246 5,154 5,878 6,777 7,780 9,001 10,566 12,203 14,245 16,306
Adjustments for -
Depreciation and Amortization Expenses 747 852 955 1,029 1,448 1,572 1,700 1,843 2,003 2,178
Provision for Bad Debts & Others 20 22 9 7 0 0 0 0 0 0
Finance Costs 210 155 228 168 281 304 338 372 410 448
(Gain)/ Loss on Disposal of PPE 1 -3 -14 -18 0 0 0 0 0 0
Loss from Sale of Quoted Shares 2 0 0 0 0 0 0 0 0 0
Income from Investment -5 -4 -2 0 0 0 0 0 0 0
Cash Generated from Operations before WC Changes 5,221 6,175 7,053 7,965 9,509 10,876 12,603 14,417 16,658 18,932
Adjustments for Changes in Working Capital
(Increase) in inventories -531 -411 -902 -781 -840 -1,017 -1,045 -1,285 -1,305 -1,602
(Increase) in trade and other receivables -307 -183 -403 -542 -652 -642 -715 -820 -905 -1,032
(Increase) in advances, deposits and prepayments -161 36 -93 -49 -89 -102 -116 -133 -152 -174
(Decrease) / increase in trade and other payables -326 72 463 -305 427 291 298 367 373 458
Cash generated by operations 3,896 5,691 6,117 6,287 8,356 9,406 11,026 12,547 14,668 16,581
Finance costs -210 -154 -233 -155 -281 -304 -338 -372 -410 -448
Payment of tax -1,016 -1,306 -1,199 -1,811 -1,970 -2,279 -2,675 -3,090 -3,607 -4,129
Net cash flow from operating activities 3,659 2,669 4,231 4,686 4,320 6,105 6,823 8,013 9,086 10,651 12,004
Cash Flows from Investing Activities
Purchase of PPE -1,279 -1,269 -1,849 -2,584 -4,423 -3,452 -3,805 -4,171 -4,565 -4,964 -5,386
Investment in Shares & FDR -764 -704 -2,017 -1,167 -634 -1,642 -1,835 -2,156 -2,444 -2,865 -3,229
Income from Investment 0 5 4 2 28 0 0 0 0 0 0
Sale Proceeds from PPE 21 1 8 15 32 0 0 0 0 0 0
Net Cash Used in Investing Activities -2,022 -1,967 -3,853 -3,734 -4,998 -5,094 -5,640 -6,326 -7,009 -7,829 -8,616
Cash Flows from Financing Activities
Loan (Repaid) / Received (Net) -774 275 50 413 1,808 631 581 832 852 960 957
Cash Dividend Paid -685 -546 -664 -800 -1,141 -1,340 -1,529 -1,781 -2,502 -2,904 -3,941
Net cash flow from/ (used) in financing activities -1,459 -270 -615 -386 667 -709 -948 -948 -1,650 -1,944 -2,985
Effect of Exchange Rate Changes on Cash 0 0 3 2 0 0 0 0 0 0 0
Net Cash (Outflow)/ Inflow for the Year 178 432 -234 567 -11 302 235 738 427 878 404
Cash and Cash Equivalents at the Beginning of the Year 474 652 1,084 850 1,417 1,406 1,708 1,943 2,681 3,108 3,986
Cash and Cash Equivalents at the End of the Year 652 1,084 850 1,417 1,406 1,708 1,943 2,681 3,108 3,986 4,390

39. Appendix 11: DCF Valuation
DCF Valuation *all figuresin mn BDT
2021-22F 2022-23F 2023-24F 2024-25F 2025-26F 2026-27F
EBIT 7,998 9,241 10,840 12,510 14,591 16,690
Depreciation and Amortization 1,448 1,572 1,700 1,843 2,003 2,178
Taxes -1,970 -2,279 -2,675 -3,090 -3,607 -4,129
Changes in NWC -1,153 -1,471 -1,577 -1,870 -1,990 -2,351
Capital Expenditure -3,452 -3,805 -4,171 -4,565 -4,964 -5,386
Unlevered FCFF 2,871 3,258 4,116 4,829 6,034 7,002
Discount Period (years) 1 2 3 4 5 6
Discount Factor 0.90 0.82 0.74 0.67 0.60 0.54
PV of Unlevered FCFF 2,595 2,661 3,039 3,222 3,638 3,816
DCF Valuation Price Weightage
WACC 10.65% 1,277 50%
Growth to Perpetuity 4.47% 1,369 50%
Terminal Value at 2027F 197,210
PV of Terminal Value 107,475 1,323
1,332
Enterprise Value 126,446 -0.69%
Less: Debt 4,802 1.05%
Add: Cash 1,406 0.36%
Equity Value 123,050 HOLD
Shares Outstanding 107
Price Per Share (2020-21) 1148
Cost of Equity 11.23%
Price Per Share (2021-22) 1277
Expected dividend yield
Total potential upside/(downside)
Recommendation
DCF
Relative Valuation
June 2022 target price
Current Price, 31 Jan 2022
Expected capital gain/(loss)

40. Appendix 11: DCF Valuation
DCF Valuation *all figuresin mn BDT
2021-22F 2022-23F 2023-24F 2024-25F 2025-26F 2026-27F
EBIT 7,998 9,241 10,840 12,510 14,591 16,690
Depreciation and Amortization 1,448 1,572 1,700 1,843 2,003 2,178
Taxes -1,970 -2,279 -2,675 -3,090 -3,607 -4,129
Changes in NWC -1,153 -1,471 -1,577 -1,870 -1,990 -2,351
Capital Expenditure -3,452 -3,805 -4,171 -4,565 -4,964 -5,386
Unlevered FCFF 2,871 3,258 4,116 4,829 6,034 7,002
Discount Period (years) 1 2 3 4 5 6
Discount Factor 0.90 0.82 0.74 0.67 0.60 0.54
PV of Unlevered FCFF 2,595 2,661 3,039 3,222 3,638 3,816
DCF Valuation Price Weightage
WACC 10.65% 1,277 50%
Growth to Perpetuity 4.47% 1,369 50%
Terminal Value at 2027F 197,210
PV of Terminal Value 107,475 1,323
1,332
Enterprise Value 126,446 -0.69%
Less: Debt 4,802 1.05%
Add: Cash 1,406 0.36%
Equity Value 123,050 HOLD
Shares Outstanding 107
Price Per Share (2020-21) 1148
Cost of Equity 11.23%
Price Per Share (2021-22) 1277
Expected dividend yield
Total potential upside/(downside)
Recommendation
DCF
Relative Valuation
June 2022 target price
Current Price, 31 Jan 2022
Expected capital gain/(loss)

41. Appendix 12: Relative Valuation
Peer Company P/E Ratio PEG Ratio
Beximco 17.3 37.8
Square 12.3 63.8
Pfizer India 41.6 1300.0
Sanofi India 35.3 230.8
Zhangzhou Pientzenhaung 96.6 177.8
Abbott Laboratories 15.8 6.3