1QFY2013 Result Update | Trading

August 16, 2012

Cravatex
Performance Highlights
Y/E March (` cr) Total operating income Operating profit OPM (%) Adj. PAT
Source: Company, Angel Research

BUY
CMP Target Price
% chg (qoq) (5.3) (15.6) (57)bp (18.6) 1QFY12 43 3 6.2 2 % chg (yoy) 30.8 (0.8) (149)bp (15.2)

`507 `682
12 Months

1QFY13 57 3 4.7 2

4QFY12 60 3 5.2 2

Investment Period
Stock Info Sector Market Cap (` cr) Net Debt Beta 52 Week High / Low Avg. Daily Volume Face Value (`) BSE Sensex Nifty Reuters Code Bloomberg Code

Cravatex Ltd (Cravatex) reported a poor set of numbers for 1QFY2013. Its top-line came in 30.8% higher at `57cr, in line with our estimate of `59cr. The rise in the top-line was on account of a healthy growth of 60% in domestic sales which compensated for the revenue dip of 37% from the international segment. The EBITDA for the quarter dipped marginally by 0.8% yoy and came in at `2.7cr, lower than our estimate of `3cr. Operating margin contracted by 149bp mainly on account of 99bp yoy increase in other expenses. Consequently, the net profit for the quarter was lower by 15% yoy at `1.6cr, against our estimates of `2.4cr.

Trading 131 (0.2) 0.8 799 / 336 798 10 17,657 5,363 CRAV.BO CRAV.IN

Strategic partnerships & FILAs strong parentage to drive growth:

Cravatex has recently signed two new exclusive fitness equipment distribution agreements with Polar Electro OY (Finland) and Miha Body Tec (Germany). It has also further extended its distribution agreement with Johnson till 2025. The company continues to provide high-quality equipment and customer service to reputed health club chains such as Talwalkars and Golds Gym. It continues to broaden its presence in India, UK, Ireland and Europe through FILA, a 100-year old Italian sportswear brand. FILA plans to set up 60-70 stores across India by 2014 and be present in almost all large retail formats such as Shoppers Stop, Westside and Lifestyle.

Shareholding Pattern (%) Promoters MF / Banks / Indian Fls FII / NRIs / OCBs Indian Public / Others 75.0 0.7 0.3 24.0

Abs.(%) Sensex Crav

3m 10.2 (24.0)

1yr 5.5

3yr 19.4

24.0 805.0

Outlook and valuation: On the back of the above developments, Cravatex net revenue is expected to grow at a CAGR of 18.9% over FY2012-14E to `340cr. The EBITDA is expected to be `20cr while the margin is expected to rebound to 6% in FY2014E. The net profit is to post a CAGR of 26% to `15cr in FY2014E. At the current market price of `507, the stock is trading at an attractive valuation of 8.9x PE FY2014E earnings. We continue to recommend Buy on Cravatex with a revised target price of `682 based on a target PE of 12x for FY2014E.
Key financials (Consolidated)
Y/E March (` cr) Net sales % chg Adj. net profit % chg OPM (%) EPS (`) P/E (x) P/BV (x) RoE (%) RoCE (%) EV/Sales (x) EV/EBITDA (x)
Source: Company, Angel Research

FY2010 58 32.2 4 98.7 5.2 14.4 35.2 7.3 20.7 8.9 2.4 46.2

FY2011 91 56.1 6 73.6 7.5 25.0 20.3 5.5 27.3 14.8 1.6 21.6

FY2012 241 163.6 9 42.5 5.8 35.6 14.2 4.1 28.6 19.6 0.6 11.1

FY2013E 289 19.9 11 14.4 5.2 40.7 12.4 3.1 25.2 18.2 0.5 10.4

FY2014E 340 17.8 15 39.6 6.0 56.8 8.9 2.4 26.5 21.2 0.5 7.7

Twinkle Gosar Tel: 022- 3935 7800 Ext: 6848 gosar.twinkle@angelbroking.com

Please refer to important disclosures at the end of this report

Cravatex |1QFY2013 Result Update

Exhibit 1: 1QFY2013 performance (Consolidated)

Y/E March (` cr) Total operating income Net raw material (% of Sales) Employee cost (% of Sales) Other Expenses (% of Sales) Total expenditure Operating profit OPM (%) Interest Depreciation Other income PBT (% of Sales) Tax (% of PBT) Reported PAT PATM (%)
Source: Company, Angel Research

1QFY13 56.8 36.5 64.3 5.4 9.5 12.3 21.6 54.1 2.7 4.7 1.0 0.3 1.0 2.3 4.1 0.7 30.9 1.6 2.9

4QFY12 60.0 46.8 78.0 5.4 9.1 4.6 7.7 56.9 3.2 5.2 1.7 0.2 1.0 2.3 3.8 1.1 47.2 1.2 2.0

% chg (qoq) (5.3) (22.0) (1.0) 166.5 (4.8) (15.6) (57)bp (38.7) 54.5 (0.5) 2.4 (33.0) 33.9

1QFY12 43.4 27.8 64.1 4.0 9.1 8.9 20.6 40.7 2.7 6.2 0.6 0.3 1.1 2.8 6.6 0.9 33.0 1.9 4.4

% chg (yoy) 30.8 31.1 36.0 37.1 32.9 (0.8) (149)bp (6242.9) 18.8 (2.3) (17.8) (23.0) (15.2)

FY2012 240.5 154.9 64.4 19.9 8.3 51.8 21.5 226.5 14.0 5.8 3.6 1.0 4.2 13.6 5.6 4.4 32.2 9.2 3.8

FY2011 91.2 49.9 54.6 8.2 9.0 26.4 28.9 84.4 6.8 7.5 1.5 0.9 4.8 9.3 10.1 2.8 30.3 6.4 7.1

% chg 163.6 210.7 142.4 96.4 168.4 105.0 (167)bp 136.4 22.4 (12.3) 46.4 55.5 42.5

Exhibit 2: Actual vs Estimates

Actual v/s Angel's Estimates Total Income EBITDA EBITDA Margin Adjusted PAT
Source: Company, Angel Research

Actual (`cr) 57 3 4.7 2

Estimates(`cr) 59 3 5.1 2

% variation (3.7) (11.3) (40)bp (31.9)

Domestic sales drive the growth amid weak operating performance

Cravatex posted its top-line 30.8% higher at `57cr, in line with our estimate of `59cr. The rise in the top-line was on account of a healthy growth of 60% in domestic sales which compensated for the revenue dip of 37% from the international segment. The EBITDA for the quarter dipped marginally by 0.8% yoy and came in at `2.7cr, lower than our estimate of `3cr. Operating margin contracted by 149bp mainly on account of 99bp yoy increase in other expenses. Consequently, the net profit for the quarter was lower by 15% yoy at `1.6cr, against our estimates of `2.4cr.

August 16, 2012

Cravatex |1QFY2013 Result Update

Exhibit 3: Revenue growth trend

90 80 70 60 228 200 151 125 71 106 27 91 33 31 150 250

Exhibit 4: Increase in other expenses dents EBITDA margin

5 11.9 4 11.7 12.5 12.4 15 12 9 7.3 5.2 5.2 4.7 6 3 0

(` cr)

(` cr)

(%)

40 30 20 10 0

100 50 0

2 1 0

2.7

2.8

3.2

3.0

2.7

3.9

4.3

3.2

23

24

26

24

43

53

84

60

57

1QFY11

2QFY11

3QFY11

4QFY11

1QFY12

2QFY12

3QFY12

4QFY12

1QFY11

2QFY11

3QFY11

4QFY11

1QFY12

2QFY12

3QFY12

4QFY12

1QFY13

Revenue (LHS)

Revenue growth yoy (RHS)

EBITDA (LHS)

EBITDA Margin (RHS)

Source: Company, Angel Research

Source: Company, Angel Research

Investment arguments
Strategic partnership and organic growth to drive 24% growth
Cravatex is a market leader in fitness equipment distribution through its brand Proline Fitness. The company distributes products of Johnson Health Tech (third largest fitness company in the world); during the year this distribution agreement has been extended till 2025. Cravatex operates through a wide network of 51 retail stores across India. The company also recently signed two new exclusive distribution agreements with Polar Electro OY of Finland for heart rate monitors and Miha Body Tec of Germany. Both of these companies have cutting edge products. The company also has strategic partnerships with reputed health club chains in India such as Talwalkars and Golds Gym to provide them with high-quality equipment and customer service. Talwalkars expectation of around 30% growth in its business coupled with new strategic alliances provide healthy growth visibility for Cravatex. Owing to robust organic growth and strategic partnerships, the net revenue for the fitness equipment segment is expected to grow at 24% CAGR over FY2012-14E.

Healthy lifestyle and underpenetration provide growth visibility

The base for people using fitness equipment or enrolling for fitness programs is expanding rapidly, with an increase in the standard of living of people and increased awareness about fitness. In 2010, ~39% of Indias total population of 1.2bn was in the 20-44 years age group. According to the Planning Commission of India, the countrys population is expected to increase to 1.3bn by 2020. Thus, the company will also have a significant base of potential consumers even if a modest 1% of the countrys population aged 20-44 years is concerned about fitness. The Indian fitness industry is highly underpenetrated compared to developed countries, with only 0.4% population compared to 16% in the US possessing membership in fitness clubs in 2008 (as per the IHRSA Asia Pacific Market Report 2008). This provides a potential opportunity to the company.

August 16, 2012

1QFY13

2.7

(%)

50

3 6.2

Cravatex |1QFY2013 Result Update

Favorable demographics to provide growth prospects

According to Mckinsey Global Institutes recent research study, Indias urban population is expected to rise from 340mn in 2008 to 590mn in 2030, with an urbanization rate of 40% (lower than seen in most Asian countries due to strict definition of Indian Census). Moreover, Indias demographics reflect a sizable portion of young population and the market for both, fitness and sports, is showing healthy growth. Thus, such favorable demographics provide strong growth visibility for the company.

Sportswear segment to grow at 16% CAGR

Cravatex has acquired 100% of M/s BB (UK) Ltd, which is its wholly owned subsidiary with effect from February 2011. Through this subsidiary, Cravatex aims to acquire sub-license for certain distribution channels for FILA in the UK and Ireland. The subsidiary will design, develop and supply FILA apparel to other markets in Europe. Even in a very difficult economic environment, the subsidiary has achieved a turnover of `84cr in its first year of operation ended March12. Overall the revenue from the sportswear segment is therefore expected to grow at a CAGR of 16% over FY2011-14E to `182cr in FY2014E.

Strong parentage of FILA

FILA is a 100-year old Italian sportswear brand with a strong parentage in sports apparel, sports accessories and sports footwear industry. The brand plans to set up 60-70 stores across India by 2014. Besides being present in over 1,200 footwear stores, 200 apparel outlets and over 25 mono brand FILA stores across the country, FILA has further plans to be present in almost all large retail formats such as Shoppers Stop, Westside and Lifestyle. Kim Clijsters, a former US open singles champion is the brand ambassador for FILA.

Sports events to provide growth opportunities

The Indian sportswear industry is at a nascent stage with increasing organized retail space. An increasing number of sports events and activities such as the Common Wealth Games (CWG) and the Indian Premier League (IPL) are also providing scope and growth opportunities for players in the industry. Thus, on the back of mounting popularity of sports with increasing number of events, the sportswear industry is expected to grow at a CAGR 15% over 2011-14 as per the companys estimation.

August 16, 2012

Cravatex |1QFY2013 Result Update

Financials
Exhibit 5: Key assumptions
Particulars (%) Total revenue growth Sportswear segment Volume growth Change in price/unit Revenue growth Fitness equipment segment Volume growth Change in price/unit Revenue growth
Source: Angel Research

FY2013E 19.9 5.0 10.0 15.5 15.0 10.0 26.5

FY2014E 17.8 5.0 10.0 15.5 10.0 10.0 21.0

The revenue from fitness equipment segment is expected to grow at a CAGR of 24% over FY2011-14E to `155cr in FY2014E on the back of new strategic alliances with Polar Electro OY (Finland) and Miha Body Tec (Germany) and expansion plans of health club chains such as Talwalkars and Gold Gym to whom the company provides with fitness equipments. Also, Cravatex plans to expand its existing network of retail stores, which will provide it greater visibility among retail consumers. In case of the sportswear segment, the revenue is expected to grow at a CAGR of 16% over FY2011-14E to `182cr in FY2014E, owing to the acquisition of the sublicense for distribution through specified channels in the UK and Ireland. It is also expected that the retail-led approach of FILA along with the governments potential reform to allow up to 51% FDI in the retail sector will together enhance the companys earnings.

Exhibit 6: Change in estimates

Y/E March Net Sales (`cr) EBITDA Margin (%) EPS (`)
Source: Angel Research

Earlier estimates FY2013E 289 5.6 43 339 6.3 59

Revised estimates 289 5.2 41 340 6.0 57

% change (0.2) (33.1) (5.2) 0.2 (26.9) (3.1)

FY2014E FY2013E FY2014E FY2013E FY2014E

August 16, 2012

Cravatex |1QFY2013 Result Update

Net sales to grow at 18.9% CAGR over FY2012-14E

On the back of new strategic alliances and organic developments in fitness equipment and sportswear segment respectively, we expect the Cravatex top-line to post a CAGR of 18.9% over FY2012-14E to `340cr in FY2014E.

Exhibit 7: Net sales continue to move upwards

400 350 300 163.6 200 160 120 56.1 32.2 19.9 (12.6) 44 FY2009 58 FY2010 91 FY2011 241 FY2012 289 FY2013E 340 FY2014E 17.8 80 40 0 (40)

(`cr)

250 200 150 100 50 0

Net sales (LHS)

Source: Company, Angel Research

Net sales growth (RHS)

EBITDA to grow at a CAGR of 20% over FY2012-14E

On the back of a healthy top-line growth of 18.9%, the companys EBITDA is expected to grow at a CAGR of 20% over FY2012-14E, from `14cr in FY2012 to `20cr in FY2014E. The EBITDA margins which stood at 5.8% in FY2012 are expected to dip in FY2013E by 60bps due to expected increase in raw material cost by 40bp and employee cost by ~20bps, as a percentage of sales. However, margins are expected to revive by 80bps to 6% in FY2014 on account of reduction in raw material cost as a percentage of sales.

Exhibit 8: EBITDA margins to revive marginally

24 20 16 5.2 7.5 5.8 5.2 6.0 6 4 8

(` cr)

8 4 0 (4) (2.5) (1.1) FY2009 3.0 FY2010 6.8 FY2011 14.0 FY2012 15.1 FY2013E 20.3 FY2014E

0 (2) (4)

EBITDA (LHS)
Source: Company, Angel Research

EBITDA margin (RHS)

August 16, 2012

(%)

12

(%)

Cravatex |1QFY2013 Result Update

Subsequently, on the back of enhanced top-line and improved operating performance, the net profit of the company is expected to post a CAGR of 26.4% over FY2012-14E, from `9cr in FY2012 to `15cr in FY2014E.

Exhibit 9: Improved operating performance to drive PAT growth

16 98.7 100 12 73.6 80 120

(` cr)

42.5 4 20.3 1.9 FY2009 3.7 FY2010 6.4 FY2011 PAT (LHS)
Source: Company, Angel Research

39.6 14.4

40 20

9.2 FY2012

10.5 FY2013E

14.7 FY2014E

PAT growth (RHS)

August 16, 2012

(%)

60

Cravatex |1QFY2013 Result Update

Outlook and valuation

Cravatex net revenue is expected to grow at 18.9% CAGR over FY2011-14E to `340cr in FY2014E. The EBITDA of the company is expected to grow from `14cr in FY2012 to `20cr in FY2014E, at 20.4% CAGR. The net profit is expected to post a CAGR of 26.4% from `9cr in FY2012 to `15cr in FY2014E. At the current market price of `507, the stock is trading at an attractive valuations, with a PE of 8.9x and EV/Sales of 0.5x for FY2014E. We maintain our Buy recommendation on Cravatex with revised target price of `682, based on target PE of 12x for FY2014E earnings.

Exhibit 10: One-year forward PE band

1200 900
(`)

600 300 0
Feb-08 Feb-09 Feb-10 Feb-11 Aug-07 Aug-08 Aug-09 Aug-10 Aug-11 Feb-12 Aug-12

Price
Source: Company, Angel Research

6x

12x

18x

24x

Company Background
Cravatex is a trading company and mainly operates in two segments a) distribution of fitness equipment (share reduced from 49% in FY2007 to 40% in FY2011) and b) distribution of sports footwear and apparel of the brand FILA (share increased from 24% of the total revenue in FY2007 to 56% in FY2011). The company is a market leader (28% market share of organized sector) in distribution of fitness equipment under its brand Proline Fitness and represents the 100-year old Italian brand, FILA, in India. Cravatex has acquired sub-license to distribute the products of FILA in the UK and Ireland through its wholly owned subsidiary, BB Ltd. It also provides sourcing services to several FILA licensees across the world including the Middle East and Africa. The company has also been forming strategic partnerships with various health club chains in India such as Talwalkars and Golds Gym in the fitness equipment segment. Cravatex has recently issued bonus shares in the ratio of 1:1 by capitalizing the subsequent amount from the General Reserve account of the company.

August 16, 2012

Cravatex |1QFY2013 Result Update

Concerns
High cost of fitness equipment
India does not have quality fitness equipment manufacturers, due to which, a majority of the equipment are been imported, largely from the US. The duty structure on imported equipment is around 23%. Thus, considering the original cost of fitness equipment, the import duty inflates their cost, which further leads to higher fixed cost for both - individuals and institutions consumers.

Euro slowdown
The subsidiary in UK, which Cravatex recently acquired, is expected to deliver a potential annual revenue of around 10mn in two years. This revenue potential may be adversely impacted due to the recent slowdown in the euro zone.

Currency Impact
Cravatex imports most of its equipment. The rupee depreciation will make the imports expensive and increase the cost of acquiring the equipment. High procurement costs will thereby impact the margins of the company.

Lack of government focus

Unlike most developed countries, the fitness equipment and sportswear sectors in India lack industry status. Consequently, the governments focus to enhance awareness regarding fitness and sports-related products is quite low.

Inflation to impact growth

Rising inflation has caused the RBI to continue interest rate hikes and, thereby, sacrifice growth to stabilize inflation. Higher inflation, rising interest rates and a weak economic environment are expected to hold up consumers disposable incomes and, thereby, impact growth.

August 16, 2012

Cravatex |1QFY2013 Result Update

Profit and Loss (Consolidated)

Y/E March (` cr) Gross sales Less: Excise duty Net Sales Other operating income Total operating income % chg Net Raw Materials % chg Other Mfg costs % chg Personnel % chg Other % chg Total Expenditure EBITDA % chg (% of Net Sales) Depreciation & Amortisation EBIT % chg (% of Net Sales) Interest & other Charges Other Income (% of Net Sales) Recurring PBT % chg PBT (reported) Tax (% of PBT) PAT (reported) Extraordinary Expense/(Inc.) ADJ. PAT % chg (% of Net Sales) Basic EPS (`) Fully Diluted EPS (`) % chg FY2009 FY2010 FY2011 FY2012 FY2013E FY2014E 44 44 44 (12.6) 28 (10.4) 1 48.9 4 0.5 12 2.2 45 (1) (138.1) (2.5) 1 (2) (202.1) (4.4) 1 6 13.2 (3) (713) 3 1 31.2 2 (0) 2 20.3 4.2 7 7 20.3 58 58 58 32.2 33 20.7 1 (25.4) 5 19.3 16 31.9 55 3 (378.9) 5.2 1 2 (218.4) 4.0 1 6 9.5 1 (146) 7 3 47.5 4 (0) 4 98.7 6.4 14 14 98.7 91 91 91 56.1 50 50.1 2 63.0 8 71.7 25 50.5 84 7 125.0 7.5 1 6 159.3 6.6 2 5 5.3 4 205 9 3 30.3 6 6 73.6 7.1 25 25 73.6 241 241 241 163.6 155 210.7 (100.0) 20 142.4 52 109.4 227 14 105.0 5.8 1 13 116.7 5.4 4 4 1.8 9 110 14 4 32.2 9 9 43 3.8 36 36 43 289 289 289 19.9 187 20.6 25 23.5 62 19.9 273 15 7.7 5.2 1.1 14 7.6 4.8 4 5 1.8 10 10.5 16 5 32.2 11 11 14.4 3.6 41 41 14.4 340 340 340 17.8 218 16.4 29 17.8 73 17.8 319 20 34.6 6.0 1 19 37.4 5.6 4 6 1.8 16 51 22 7 32.2 15 15 39.6 4.3 57 57 39.6

August 16, 2012

10

Cravatex |1QFY2013 Result Update

Balance Sheet (Consolidated)

Y/E March (` cr) SOURCES OF FUNDS Equity Share Capital Preference Capital Reserves& Surplus Shareholders Funds Minority Interest Total Loans Other long term liabilities Net Deferred tax liability Total Liabilities APPLICATION OF FUNDS Gross Block Less: Acc. Depreciation Net Block Capital Work-in-Progress Lease adjustment Goodwill Investments Other non-current assets Current Assets Cash Loans & Advances Other Current liabilities Net Current Assets Mis. Exp. not written off Total Assets 20 9 11 1 0 2 27 3 11 14 13 15 29 20 8 11 1 0 2 41 2 12 27 21 20 35 21 9 12 0 5 57 1 8 48 24 33 50 23 10 13 0 5 90 3 10 78 39 51 69 25 11 14 0 6 106 2 12 92 47 59 78 25 12 13 0 7 128 2 14 112 55 72 92 3.3 29 3.4 35 1 14 15 11 1 17 18 13 1 23 24 18 5 3.4 50 3 30 32 28 5 3.5 69 3 39 42 28 5 3.5 78 3 53 55 28 5 3.5 92 FY2009 FY2010 FY2011 FY2012 FY2013E FY2014E

August 16, 2012

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Cravatex |1QFY2013 Result Update

Cash flow statement (Consolidated)

Y/E March (` cr) Profit Before Tax Depreciation Other Income Change in Working Capital Direct taxes paid Others Cash Flow from Operations (Incr)/ Decr in Fixed Assets (Incr)/Decr In Investments Other Income Others Cash Flow from Investing Issue of Equity/Preference Incr/(Decr) in Debt Dividend Paid (Incl. Tax) Others Cash Flow from Financing Incr/(Decr) In Cash Opening cash balance Closing cash balance
Source: Company, Angel Research

FY2009 FY2010 FY2011 3 1 (6) (0) (1) 8 5 0 (2) 6 (6) (2) 0 (1) (0) (0) (2) 1 2 3 7 1 (6) (6) (3) 5 (2) 1 0 6 (7) (1) 0 3 (1) 0 2 (1) 3 2 9 1 (5) (14) (3) 5 (6) (2) (3) 5 1 1 0 9 (1) (5) 4 (1) 2 1

FY2012 14 1 (4) (17) (4) 6 (5) (2) 0 4 (4) (1) 1 11 (1) (2) 8 2 1 3

FY2013E FY2014E 16 1 (5) (8) (5) (2) (2) (1) 5 2 0 0 (1) (1) (1) 3 2 22 1 (6) (14) (7) (4) 0 (1) 6 5 0 0 (1) (1) (0) 2 2

August 16, 2012

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Cravatex |1QFY2013 Result Update

Key Ratios (Consolidated)

Y/E March Valuation Ratio (x) P/E (on FDEPS) P/CEPS P/BV Dividend yield (%) EV/Net sales EV/EBITDA EV / Total Assets Per Share Data (`) EPS (Basic) EPS (fully diluted) Cash EPS DPS Book Value DuPont Analysis EBIT margin Tax retention ratio Asset turnover (x) ROIC (Post-tax) Cost of Debt (Post Tax) Leverage (x) Operating ROE Returns (%) ROCE (Pre-tax) Angel ROIC (Pre-tax) ROE Turnover ratios (x) Asset TO (Gross Block) Inventory / Net sales (days) Receivables (days) Payables (days) WC cycle (ex-cash) (days) Solvency ratios (x) Net debt to equity Net debt to EBITDA Int. Coverage (EBIT/ Int.)

FY2009 70.0 47.9 8.8 0.3 3.1 (125.5) 4.7 7 7 11 2 58 (4.4) 0.7 2.3 (6.9) 7.9 0.4 (12.7) (6.7) (10.0) 12.5 2.2 61 67 99 108 0.4 (5.4) (1.6)

FY2010 35.2 29.4 7.3 0.4 2.4 46.2 4.0 14 14 17 2 69 4.0 0.5 2.2 4.7 3.3 0.5 5.4 6.6 8.9 20.7 3.0 59 70 110 95 0.5 3.1 2.7

FY2011 20.3 17.9 5.5 0.5 1.6 21.6 3.3 25 25 28 3 92 6.6 0.7 2.3 10.3 6.1 0.7 13.4 13.4 14.8 27.3 4.3 64 86 97 101 0.7 2.5 3.9

FY2012 14.2 12.8 4.1 0.8 0.6 11.1 2.3 36 36 40 4 124 5.4 0.7 3.6 13.3 8.8 0.8 16.9 18.9 19.6 28.6 10.4 39 78 104 101 0.8 1.8 3.6

FY2013E 12.4 11.2 3.1 0.8 0.5 10.4 2.0 41 41 45 4 161 4.8 0.7 3.8 12.4 8.8 0.6 14.6 17.8 18.2 25.2 11.4 49 78 104 72 0.6 1.7 3.8

FY2014E 8.9 8.3 2.4 0.8 0.5 7.7 1.7 57 57 61 4 214 5.6 0.7 3.8 14.4 8.8 0.5 17.1 20.8 21.2 26.5 13.4 47 78 104 76 0.5 1.3 5.3

August 16, 2012

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Cravatex |1QFY2013 Result Update

Research Team Tel: 022 - 39357800

E-mail: research@angelbroking.com

Website: www.angelbroking.com

DISCLAIMER
This document is solely for the personal information of the recipient, and must not be singularly used as the basis of any investment decision. Nothing in this document should be construed as investment or financial advice. Each recipient of this document should make such investigations as they deem necessary to arrive at an independent evaluation of an investment in the securities of the companies referred to in this document (including the merits and risks involved), and should consult their own advisors to determine the merits and risks of such an investment. Angel Broking Limited, its affiliates, directors, its proprietary trading and investment businesses may, from time to time, make investment decisions that are inconsistent with or contradictory to the recommendations expressed herein. The views contained in this document are those of the analyst, and the company may or may not subscribe to all the views expressed within. Reports based on technical and derivative analysis center on studying charts of a stock's price movement, outstanding positions and trading volume, as opposed to focusing on a company's fundamentals and, as such, may not match with a report on a company's fundamentals. The information in this document has been printed on the basis of publicly available information, internal data and other reliable sources believed to be true, but we do not represent that it is accurate or complete and it should not be relied on as such, as this document is for general guidance only. Angel Broking Limited or any of its affiliates/ group companies shall not be in any way responsible for any loss or damage that may arise to any person from any inadvertent error in the information contained in this report. Angel Broking Limited has not independently verified all the information contained within this document. Accordingly, we cannot testify, nor make any representation or warranty, express or implied, to the accuracy, contents or data contained within this document. While Angel Broking Limited endeavours to update on a reasonable basis the information discussed in this material, there may be regulatory, compliance, or other reasons that prevent us from doing so. This document is being supplied to you solely for your information, and its contents, information or data may not be reproduced, redistributed or passed on, directly or indirectly. Angel Broking Limited and its affiliates may seek to provide or have engaged in providing corporate finance, investment banking or other advisory services in a merger or specific transaction to the companies referred to in this report, as on the date of this report or in the past. Neither Angel Broking Limited, nor its directors, employees or affiliates shall be liable for any loss or damage that may arise from or in connection with the use of this information. Note: Please refer to the important `Stock Holding Disclosure' report on the Angel website (Research Section). Also, please refer to the latest update on respective stocks for the disclosure status in respect of those stocks. Angel Broking Limited and its affiliates may have investment positions in the stocks recommended in this report.

Disclosure of Interest Statement 1. Analyst ownership of the stock 2. Angel and its Group companies ownership of the stock 3. Angel and its Group companies' Directors ownership of the stock 4. Broking relationship with company covered

Cravatex No No No No

Note: We have not considered any Exposure below ` 1 lakh for Angel, its Group companies and Directors.

Ratings (Returns):

Buy (> 15%) Reduce (-5% to 15%)

Accumulate (5% to 15%) Sell (< -15%)

Neutral (-5 to 5%)

August 16, 2012

14