Indian radio cab market 2012 challenges and growth opportunities

UR Associates Research
Indian Radio Cab Market 2012 - Challenges and Growth

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Opportunities

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Contact us: research@urassociates.in

Indian radio cab market outlook

A “Sunrise Industry in India”, Indian Radio Cab industry is characterized by huge demand, high growth
rates and plenty of buzz

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Current market size –
Major players – Meru Major presence in XX cabs
Cabs, Easy Cabs, Mega Mumbai, Delhi NCR,

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Current market value –
Cabs and TAB Cabs Bangalore & Hyderabad Rs X bn

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Radio cab market size Current – 2017E (By value & volume)
e Current market share (By volume)
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XX
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XX X%
XX X%
XX
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X%
XX XX
X%
X%

Current 2013 2014 2015 2016 2017
Meru cabs Easy cabs Mega cabs Tab cabs Others
Total radio cabs

Copyright © UR Associates www.urassociates.in

Business model

Please read our Please read our Please read our
industry report for industry report for industry report
further details further details for further details

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Please read our Please read our Please read our

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industry report for industry report for industry report for
further details further details further details

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Advertising revenues are another source of revenues. Please read our industry
report for further details.


Radio cab fares vary from city-to-city
Radio cab fares
City Fare per km (Rs)
Day time charges Waiting charges Night time charges

Mumbai XX XX XX

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Delhi NCR XX XX XX

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Delhi NCR (Economy radio cabs) XX XX XX
Bangalore XX XX XX

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Hyderabad XX XX XX

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Kolkata XX XX XX
Chandigarh XX XX XX

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Amritsar XX XX XX
Ludhiana XX XX XX
Jaipur
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B&Y taxi fares
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City Fare per km (Rs)
Day time charges Waiting charges Night time charges

Mumbai XX XX XX
Delhi XX XX XX
Kolkata XX XX XX


Stakeholders of a radio cab company

Person H Person A Person B

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Person G Radio cab company Person C

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Person F Person E Person D
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Overview of major players
MERU CABS EASY CABS MEGA CABS TAB CABS

Incorporation year 20-- 20-- 20-- 20--
Fleet size XX XX XX XX

Area under operations Mumbai, Delhi NCR, Mumbai, Delhi NCR, Mumbai, Delhi, Bangalore, Mumbai
Bangalore and Hyderabad Bangalore and Hyderabad Kolkata, Ludhiana,

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Chandigarh and Amritsar

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Market share (volume terms) xx% xx% xx% x%

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FY11 Net sales (Rs mn) XX XX XX XX

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Sales CAGR (FY07-11) xx.x% xx.x% xx.x% xx

FY11 net profit/(loss) (Rs mn)
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Accumulated profit/(losses) XX XX XX XX
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FY07-11 (Rs mn)
FY11 Total debt (Rs mn) XX XX XX XX
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Meru cabs, Easy cabs and Mega cabs are the three major companies that have
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dominated the radio cab market till date. Tab Cabs is the latest entrant into the
industry and ……………………


Demand drivers & growth opportunities
Please read our Industry report for further
Huge demand exists due to
details

Increasing urbanization Domestic passengers throughput forecasts

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City A XX X X
City Census 20-- Census 20-- % addition % growth Mn

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City B XX X X
x%
X

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x%

City C XX X X
X
X X
x%

City D XX X X

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x%

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Total XX X X x% FY 02 FY 07 FY 11 FY 17E

Favourable economic indicators
International passengers throughput forecasts
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Rs XX
XX Mn
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40,000 XX XX X
XX XX XX
10.0%
30,000
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x.x% x.x% X
x.x%
20,000 x.x% x.x% X
x.x% x.x% 5.0%
X
10,000
0 0.0%
2005-06 2006-07 2007-08 2008-09 2009-10 2010-11 2011-12
FY 02 FY 07 FY 11 FY 17E
Per per capita (at constant prices) GDP growth rate


The big four need another XXXX-XXXX more cabs to meet the current demand

Please read our industry report for further details.

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Current demand analysis for the big 4 companies

Min Max Min Max Min Max Min Max

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Metrics Meru cabs Easy cabs Mega cabs Tab cabs

No. of calls --- per xxx X Y X Y X Y X Y
Average call ---- ---

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No. of calls ---- X Y X Y X Y X Y
x% y% x% y% x% y% x% y%

Current fleet size
Pr X X X X X X X X
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Trips per -- per --- x y x y x y x y
% -- x% y% x% y% x% y% x% y%
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No. of additional cabs XX YY XX YY XX YY XX YY
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required

Total cabs requirement X Y
Min Max

assuming no ----
% of ---- x% y% z% x% y% z%
Total cab requirement X Y Z X Y Z


Comparative analysis of Income of Radio Cab drivers Vs. Income of Black & Yellow taxi drivers
Black & Yellow taxi driver avg. income Radio cab driver avg. income

Avg. xx X Avg. xx Y
Metrics Values Metrics Values

Avg. xx X Avg. xx Y
Charge xx (Rs) X Charge xx (Rs) Y

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Charge above x X Charge above x Y

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Avg. income xx (Rs) X Avg. income xx (Rs) Y

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Cost x (Rs) X Cost x + y (Rs) Y

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xx (Rs) X x (Rs) Y
Total take home income xx (Rs) X Total take home income xx (Rs) Y

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Avg. no. of xx X Avg. no. of xx Y

Taxi rent for xx(Rs)
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Avg. take home income per month (Rs) XX Avg. take home income per month (Rs) YY
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On an average, a radio cab driver earns xx% more than a Black & Yellow taxi driver.
Please read our industry report for further details.



Many large cities like xx, xx, xx and xx are relatively untapped

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Top 10 most populous cities

XX XX XX
City Population Major Cab Operators

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XX XX XX

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XX XX XX
XX XX XX

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XX XX XX
XX
XX
XX
XX
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XX
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XX XX XX
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XX XX XX
XX XX XX
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There are no big players with fleet size more than xx in other major cities like xx,
xx, xx, xx, xx, xx and xx….. Please read our industry report for further details


Challenges

Availability of Eight major reasons for the shortage of drivers
due to
drivers, a key hurdle – detailed viewpoints of drivers, cab operators
and regulatory authorities

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A highly regulated leading to Please read our Industry report for further

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market details

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Operational Please read our Industry report for further

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leading to
challenges details
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Please read our industry report to get the insight of the challenges faced by the
radio cab operators in carrying out their operations


Competitive challenges
The online car aggregators have the ability to be a worthwhile competitors to the
radio cab operators in the long run

Characteristics

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Point-to-point services

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Local travel services

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Airport transfer services
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The online aggregators do not own the fleet, but they can be credited with ...................


Competitive challenges
Economy radio cabs – the business model yet to be successful

Quick Cabs - Financials

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The concept of economy radio cabs

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Rs mn Z

started in City A in 20xx. However, even
after xx years there is still no sizeable

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X

player in terms of fleet size and more
Z

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X

importantly in terms of revenues. Quick
X
Z

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cabs, Player A, Player B, Player C and
Player D are some of the players who
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Y

have entered the City A as economy
Y Y
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radio cab service providers.
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FY09 FY10 FY11
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Operating income Net profit after tax Total debt

The economy radio cab companies charge a daily rental of around Rs XXX-XXX from the
drivers, which is at a xxx of about xx-xx% compared to the rentals charged by the standard
radio cab companies.


Financial estimates
This industry incurs high operational cost along with high depreciation expenses. As this is a capital intensive
sector, the companies also have to bear high interest cost.
MERU CABS (Rs mn)

XXXX XXXX XXXX
Year FY13E FY14E FY15E

XXX XXX XXX

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The companies have reported ----- operating
Revenues

XX XX XX

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performance with an EBITDA margin of ~X-X%
EBITDA
PAT

but have reported ----- bottom line --- high

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depreciation as well as interest costs. We estimate
EASY CABS (Rs mn)

XXXX XXXX XXXX

the following ranges for expenditure as a % of

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XXX XXX XXX
Revenues

sales:
XX XX XX
EBITDA

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• Operational expenses: x%
PAT

• Administrative & marketing expenses: x%
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MEGA CABS (Rs mn)

• Employee expenses: x%
XXXX XXXX XXXX

XXX XXX XXX
• Depreciation expenses: x%
e Revenues

XX XX XX
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• Interest expenses: x%
EBITDA
PAT
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TAB CABS (Rs mn)

XXXX XXXX XXXX
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XXX XXX XXX
Revenues

XX XX XX
EBITDA

We expect the cab companies to report an EBITDA margin of ~x.x - x.x% during FY13-15E with a PAT margin
PAT

in the range of x.x – x.x% over the period.


Company standings and our suggestions to the industry
We have rated the performance of the companies vis-à-vis their peers on various parameters. The ratings are
based on UR Associates research and interaction with the various stakeholders of the Indian Radio Cab
Industry

Rating of radio cab operators UR Associates suggestion to the industry

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Parameters Meru Cabs Easy Cabs Mega Cabs Tab Cabs

XX XX XX XX

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We have outlined 6 suggestions /
Current fleet

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XX XX XX XX
recommendations to the Indian
size

Radio Cab Industry for better
Brand

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XX XX XX XX
operating performance and
recognition

overcoming challenges faced by
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Financial

the industry.
performance

XX XX XX XX
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Please read our industry report
Operational

for further details.
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efficiency

XX XX XX XX
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Management
comfort

Ability to XX XX XX XX
expand


Company profiles

MERU CABS EASY CABS MEGA CABS

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TAB CABS SUPER CABZ

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We are only presenting MERU CABS profile in the presentation, all other cab companies
profiles are prepared on similar lines.
Please Read Our Industry Report For Further Details


Company profile – Meru Cabs

Launched: Month 20xx
 #x player in Indian Radio cab market with the “MERU” name
Total fleet: XXXX
Company highlights

being the synonymous with radio cab.
Fleet type: Cab A, Cab B,

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 Largest fleet of radio cabs with about xx% market share in

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Cab C and Cab D
terms of volume

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City A, City B, City C and  Revenues from radio cab services are almost x times of the

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Area of operations:

City D nearest competitor

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Existing PE/VCs: XXX  xrd largest radio taxi company in the world
Fund Pr  Serves more than x million passengers a month
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Meru Cabs was started in 20xx by Mr. XYZ, a first generation entrepreneur in partnership with private equity
firm ABC Ltd. Meru has ushered the Radio cab market in India and has been one of the most popular names in
this industry


Current fleet size Group structure

xxxx xxxx V-Link Travel
Solutions Pvt.

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Ltd.

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xxx

xxxx

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V-Link Fleet Meru Cabs Pvt. Car Rentals Automotive
Management Ltd. Solutions

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Solutions

Please read Please read Please read Please read
Fleet size evolution
Mumbai Delhi Hyderabad Bangalore

our industry our industry our industry our industry

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report for report for report for report for
further details further details further details further details
No. of cabs
e XXXX
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XXXX XXXX
x
m

x
XXXX x x
x
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x x
x
XXXX x x x
x
x
XXX x x x x
x x
X x

2007 2008 2009 2010 2011 2012
Current

Mumbai Delhi Hyderabad Bangalore



Ownership Board of Directors Management

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Neeraj Gupta: He is a first Siddhartha Pahwa: He was
generation entrepreneur and recently appointed as the CEO.

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Meru Cabs Pvt. Ltd. was
the Managing Director of V-Link Prior to this, he was the COO of
established by V-Link Travel

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Travel Solutions Pvt. Ltd. and Meru Cabs. He has over 15
Solutions Pvt. Ltd. in
Meru Cabs Pvt. Ltd. Neeraj years of experience in Supply

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partnership with India Value
started his passenger transport Chain, Operations and Finance
Fund Advisors (IVFA). IVFA is a
private equity fund established
in 2000 with .………………...
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business under the name
'Travel Link' in 20xx and had
management. Earlier, he was
the President - Supply Chain &
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started Meru Cabs in Generics at Abbott Healthcare
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partnership with IVFA. Pvt. Ltd.
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for further details.
For other Directors of the Board for other members of the
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please read our industry report. management team.


CABVERTISE: An important driver for growth

“Cabvertise” is the
advertising services offered Meru currently has xxx companies as its

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by Meru cabs which is seen customers for cabvertise services. The

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as a much more effective advertising formats are:

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and cost beneficial
alternative to outdoor

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 Advertisement format A:
media. At present  Advertisement format B:

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advertising revenues  Advertisement format C:
contribute ~x% to the total
revenues of the company.
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Meru quotes Rs xxxx – xxxx per xx for cabvertise services. Please read our industry
report for further details.



SWOT ANALYSIS

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Strengths Please read our industry report for details

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Weakness Please read our industry report for details

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Opportunities Please read our industry report for details
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Threats Please read our industry report for details


Financial performance

Rs million
Rs million
Gross revenues Net profit

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XX

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XX Please read our

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industry report X
XX for further

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details. X
XX XX
X

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FY07 (4 FY 08 FY 09 FY 10 FY 11
months)

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X
FY07 (4 FY 08 FY 09 FY 10 FY 11
Rs million months)
X

EBITDA
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X Please read our Please read our
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industry report industry report
for further for further
X X details. details.
X

FY07 (4 FY 08 FY 09 FY 10 FY 11
months)


Revenue forecasts

MERU CABS

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Fleet size XXXX XXXX XXXX XXXX
Metrics FY 12E FY 13E FY 14E FY 15E

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Avg. xxxx per xxx XX XX XX XX

We expect that with

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No. of xxxx per xxx X X X X

xxxx cities, Meru should

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Avg. no. of xxxx per xxx X X X X

reach the xxxx mark in

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Cab xx rate x% x% x% x% the next x years time.
Total no. of xxxx XXX XXX XXX XXX

Revenue (Rs million)
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XXXX XXXX XXXX XXXX
Please read our
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industry report for
Advertising revenues per xx/yy XXX XXX XXX XXX
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xxx rate x% x% x% x%
further details.
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Advertising revenues per xx/yy XXXX XXXX XXXX XXXX
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Total advertising revenues (Rs
XX XX XX XX
million)
Total revenues (Rs million) XXXX XXXX XXXX XXXX

% growth x% x% x% x%


Key Balance Sheet items Potential risks

(Rs million) FY07 FY08 FY09 FY10 FY11

Five Potential Risks
Paid-up share

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capital x x x x X

which can impact the

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Reserves surplus xxx xxx xxx xxx xxx

operational efficiency of

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the company as well as
Share application xx xx xx xx xx
Shareholders' funds XXXX XXXX XXXX XXXX XXXX

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money

other cab operators.

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Gross block xxxx xxxx xxxx xxxx xxxx
Loan funds xx xx xx xx xx

Please read our industry
Accumulated D&A xx xx xx xx xx

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details.
Capital work-in- X X X X X
Net Block XXX XXX XXX XXX XXX
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progress
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Fixed Assets XXXX XXXX XXXX XXXX XXXX
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Please read our
industry report for
further details.


Contact us for the full report: research@urassociates.in

Please read our 75 page comprehensive industry report to get in-depth insight of
the Indian Radio Cab Market, the Growth Drivers, Challenges, Regulatory
Framework, Company profiles and Financial Performance and Estimates.

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All rights reserved. No part of this publication may be reproduced, stored in a retrieval system, or transmitted, in any form or
Disclaimer:

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by any means, electronic, mechanical, print, publishing, photocopying, recording or otherwise without the permission of UR
Associates. Any unauthorized act in relation to all or any part of the material in this publication may call for appropriate

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statutory proceedings.

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The information contained herein is confidential and is intended solely for the addressee(s). Any unauthorized access, use,
reproduction, disclosure or dissemination is prohibited. The information and opinions on which this communication is based
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have been complied or arrived at from sources believed to be reliable and in good faith, but no representation or warranty,
express or implied, is made as to their accuracy, correctness and are subject to change without notice. Certain matters
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discussed in this Document may contain statements that are individually and collectively forward-looking statements. Such
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forward-looking statements are not guarantees of future performance and are subject to known and unknown risks,
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uncertainties and assumptions that are difficult to predict. Recipient/s should consider this report only for information
purpose. The information enclosed in the report has not been vetted by the compliance department due to the time sensitivity
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of the information/document. UR Associates shall not assume any legal liability or responsibility for any incorrect, misleading
or altered information contained herein.


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