15. Factors considered for identification
Identification of Company
15
Management
Industry profile
Positioning of the Company within the industry
Sustainable business model
Competitive strength
Core values
Customer satisfaction
Financials and balance sheet
Valuations
Cashflows
Dividend policy
Capital allocation
16. Emkay Evaluation Matrix
Evaluation Matrix
16
Parameters Reading Points
Parameters Max Points Weightage Points Earned Weightage % Points Earned
Profitability Profitability 20 31% 7 16% 35%
EBITDA Margin 19% 2 Growth 10 15% 10 23% 100%
Adj. PAT Margin 10% 2 Leverage & Coverage 15 23% 10 23% 67%
RoCE 14% 1 Cash Flow 5 8% 4 9% 80%
RoE 18% 2 Corporate Governance 5 8% 5 11% 100%
+ EPS in all last 5 yrs. Y √ Others 10 15% 8 18% 80%
Dividend paid in all last 5 yrs. Y √ Total Points 65 100% 44 100% 68%
Growth Positive Negative
Net Sales (Last 5 Yrs.) 39% 5 No. of Ticks 8 4
Adj. EPS (Last 5 Yrs.) 36% 5
Leverage & Coverage
D / E 1.1x 3
Gross Debt / EBITDA 3.6x 2
EBIT / Interest Expense 4.5x 5
Cash Flow
+ FCF N X
CFO / Adj. PAT 47% 4
Corporate Governance
No. of Independent Directors 71% 5
Chairman - Executive Y √
Criminal Cases Against Promoter N √
Change in Depreciation Accounting Policy N √
Disclosure on Derivative Contracts N X
Capitalization of R&D Costs Y X
Others
Dividend Payout Ratio 14% 3
Promoter Holding 60% √
FII Holding Y √
Promoter Pledge 0% 5
Capital raised in last 5 yrs. Y X
Interest in Unrelated Businesses N √
Scorecard
19. Listed companies match our criteria (Rs. cr)
Companies fit our criteria (screener)
19
Sr. Company Mcap Net Sales 3yrs CAGR RONW (%) ROCE (%) D/E Div. Pay.(%) EBITDA (%)
41 Astra Microwave 891 634 46.3% 23.55 28.87 0.3 15.6% 24.7
42 R Systems Intl. 762 649 16.6% 27.36 38.04 0.0 95.5% 26.1
43 MT Educare 641 254 21.8% 24.45 35.04 0.0 35.5% 29.0
44 Alkyl Amines 630 476 18.3% 27.44 24.91 0.9 18.1% 18.6
45 Arrow Coated 596 49 129.8% 59.93 76.53 - 15.7% 82.9
46 Control Print 471 113 19.3% 20.5 27.57 0.1 20.9% 28.6
47 Stovec Inds. 439 102 19.4% 21.37 30.62 - 27.9% 25.3
48 Orbit Exports 373 158 15.7% 32.33 31.95 0.5 23.3% 33.7
49 Cupid 369 44 19.6% 36.02 48.5 0.1 21.7% 41.8
Criteria for Screener:
1. 3 yrs CAGR more than 15%
2. 9 months EBITDA (9mFY16) margin should be more than 18%
3. ROE & ROCE (FY15) should be more than 20%
4. Dividend Payout (FY15) more than 15%
5. Leverage (FY15) less than 1.00x
6. Market Capitalisation (latest) of more than Rs.300cr+
20. Thank You
DISCLAIMER: Emkay Global Financial Services Limited and its affiliates are a full-service, brokerage, investment banking, investment management, and financing group. We along with
our affiliates are participants in virtually all securities trading markets in India. Our research professionals provide important input into our investment banking and other business
selection processes. Investors may assume that Emkay Global Financial Services Limited and/or its affiliates may seek investment banking or other business from the company or
companies that are the subject of this material and that the research professionals who were involved in preparing this material may participate in the solicitation of such business. Our
salespeople, traders, and other professionals may provide oral or written market commentary or trading strategies to our clients that reflect opinions that are contrary to the opinions
expressed herein, and our proprietary trading and investing businesses may make investment decisions that are inconsistent with the recommendations expressed herein. In reviewing
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