GICS Industry : Household Durables l Sub Industry : Consumer Electronics l Website : www.videoconworld.

com

Videocon Industries Ltd

Key Stock Indicators
NSE Ticker : Bloomberg Ticker : Face value / Share: Div. Yield (%): VIDEOIND VCLF:IN 10.0 1.0 CMP (as on 14 Feb 2011Rs/share): 52-week range up to 14 Feb 2011 (Rs)(H/L): Market Cap as on 14 Feb 2011 (Rs mn): Enterprise Value as on 14 Feb 2011 (Rs mn): Div. Yield (%): 0.0 197.1 291.1/186.75 59,517 170,579 Shares outstanding (mn) : Free Float (%) : Average daily volumes (12 months) : Beta (2 year) : 302.0 33.3 590,816 1.1

Videocon Industries Ltd (VIL) is an Indian multinational firm with presence in key sectors of consumer electronics, oil and gas, power and telecommunication. VIL reaches to its customers with consumer electronic products through its electronic store DigiHome.

Key Financial Indicators Revenue (Rs mn) EBITDA ma rgins (%) PAT (Rs mn) PAT ma rgi ns (%) Gea ring (x) EPS (Rs /s ha re) PE (x) P/BV (x) RoCE (%) RoE (%) EV/EBITDA (x)
n.m. : Not meaningful

KEY HIGHLIGHTS
Consumer electronics segment contributes to bulk of the revenues VIL has strong presence in India for consumer electronics market. The company manufacturers colour televisions, refrigerators, air conditioners, washing machines, microwave owens, etc. In FY10, company has ventured into direct to home service. During FY09, ~90% of revenues vis--vis ~84% in FY08 were contributed by consumer electronics segment. The break up of this revenue contribution in FY09 is ~63% from televisions, ~28% from refrigerators, DVD players, washing machine, microwave owens and ~8% from air conditioners. VIL signed an agreement with Philips for television In FY10, VIL signed a five year agreement with Philips Electronics NV to manufacture and sell the Philips brand televisions in India. This agreement enhanced VILs brand image to compete with other established players such as LG, Samsung etc. in television market. VIL gets an access to global technology of Philips due to this agreement. The company continues to manufacture TVs as per the specifications and standards of Philips. VIL enters into new segments to enhance growth During FY09, VIL entered into telecom and power segments. Videocon Telecommunications Limited (VTL) a subsidiary of VIL received licenses to provide unified access services in 21 local service areas and was allotted spectrum in 20 of those areas. In FY10, VTL successfully launched mobile services in areas where spectrum was allocated. VTL has signed interconnect and roaming agreements with various operators to provide continues network connectivity to customers while travelling from city to city. In FY09, Pipavav Energy Private Limited (PEPL), a subsidiary of VIL implemented thermal power project of 1200 MW in Gujarat, near Pipavav port which will be completed in two phases. PEPL has signed memorandum of understanding with the Government of Gujarat and has obtained required environmental clearances from Gujarat Pollution Control Board for constructing this plant.

Sep-07 Sep-08 Sep-09 123,503.4 119,285.6 104,873.3 14.7 22.5 18.7 6,869.4 10,852.9 4,888.8 5.6 9.1 4.7 1.0 1.5 1.7 31.1 47.3 21.3 14.4 6.5 9.2 1.4 0.9 0.6 10.0 12.6 7.7 10.8 14.9 6.6 8.3 6.3 8.0

Shareholding (As on December 31, 2010)

FII 3% DII 11% Others 19%

Promoter 67%

KEY RISKS

Volatility in price of raw materials like copper, steel, etc Intense competition from Indian established players and China market The consumer electronic and home appliance industry is seasonal in nature Fluctuations in crude oil and natural gas prices might impact margins

Indexed price chart

(index) 160 140 120 100 80 60 40 20 0 Nov-10 Apr-10 Mar-10 May-10 Dec-10 Aug-10 Feb-10 Sep-10 Oct-10 Jun-10 Jul-10 ('000) 8000 7000 6000 5000 4000 3000 2000 1000 0 Jan-11 NIFTY

Stock Performances vis--vis market

Returns (%) YTD VIDEOIND NIFTY
Note: 1) YTD returns are since Oct 01, 2009 to Feb 14, 2011. 2) 1-m, 3-m and 12-m returns are up to Feb 14, 2011.

1-m -5 -4

3-m -21 -11

12-m -9 14

-19 7

Volumes (RHS)

VIDEOIND

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Videocon Industries Ltd

BACKGROUND
VIL was incorporated in 1986. The company is an Indian multinational firm with presence in key sectors of consumer electronics, oil and gas, power and telecommunication. It has manufacturing plants located at Rajasthan, Maharashtra and Gujarat. In FY09, VIL had introduced concept store, DigiHome, to reach out to customers with consumer electronic products of 2 or 3 own brands from Kenstar, Kelvinator, Sansui, Electrolux and Akai. As on FY09, consumer electronic segment contributed ~90% and oil and gas segment ~10% of total revenues. During FY10, VIL commenced operations in telecom segment and construction of thermal power plant in two phases of 1200 MW for Gujarat state. As on FY09, the company has 25 subsidiaries across countries.

COMPETITIVE POSITION
Peer Comparison

Revenue (Rs mn) EBITDA ma rgins (%) PAT (Rs mn) PAT ma rgi ns (%) Gea ring (x) EPS (Rs /s ha re) PE (x) P/BV (x) RoCE (%) RoE (%) EV/EBITDA (x)
n.m: Not meaningful

Videocon Industries Ltd Sep-09 104,873.3 18.7 4,888.8 4.7 1.7 21.3 9.2 0.6 7.7 6.6 8.0

Whirlpool of (India) Ltd Mar-10 25,860.5 9.2 1,450.2 5.6 0.8 11.4 19.2 14.0 65.7 88.9 12.1

Blue Star Ltd Mar-10 25,278.5 11.1 2,114.6 8.4 23.5 18.2 8.0 64.1 50.1 13.7

Voltas Ltd Mar-10 48,287.3 10.1 3,845.6 8.0 11.6 18.9 7.2 58.0 44.1 14.0

MIRC Electronics Ltd Mar-10 15,284.7 4.0 200.0 1.3 0.5 1.4 13.4 1.1 9.6 8.1 5.9

FINANCIAL PROFILE
Decline in revenue and operating margin during FY09

Key Financial Indicators Units Revenue Rs mil li on Rs mil li on Per cent Per cent Per cent Ti mes Per cent Per cent EBITDA ma rgins Per cent PAT PAT ma rgi ns EBITDA growth PAT growth Gea ring RoCE RoE

Sep-07
123,503.4 14.7 6,869.4 5.6 -2.9 36.9 -13.9 1.0 10.0 10.8

Sep-08
119,285.6 22.5 10,852.9 9.1 -3.4 48.0 58.0 1.5 12.6 14.9

Sep-09
104,873.3 18.7 4,888.8 4.7 -12.1 -26.9 -55.0 1.7 7.7 6.6

Revenue has declined at a ~8% CAGR between FY07 and FY09, due to decline in realisations in consumer electronics and increasing competition. In FY09, revenue declined by ~12% vis--vis FY08 due to decline in revenue from both segments i.e consumer electronics and oil and gas. The revenues from oil and gas segment declined due to lower sales realisation. EBITDA margins declined to 18.7% in FY09 vis--vis 22.5% in FY08 due to increase in raw material costs. PAT declined by ~55% to Rs. 4.8 bn in FY09, due to decline in operating income, and increase in interest expenses.

Revenue growth Per cent

INDUSTRY PROFILE
Household appliances Rise in disposable incomes, boom in real estate industry & housing, stable prices of household appliances, rising distribution network & availability of financing schemes have driven the growth of the household appliances industry comprising colour televisions(CTVs), refrigerators, washing machines(WMs) and air conditioners(ACs) in India. Oil and gas exploration Domestic crude oil production rose from 6.8 MMT in 1970-71 to 33.0 million metric tonnes (MMT) in 1990-91. However, since 1987 no new oilfields (except for Cairn Indias Rajasthan fields) have been discovered, because of which, domestic production has stagnated at 31-34 MT till date. NELP was formulated in 1997-98 to encourage exploration activity and private sector participation in order to raise crude oil production in the country. The fiscal terms offered under the NELP rounds are attractive to augment investments - investors have been offered tax holiday for 7 years from the beginning of commercial production of crude oil. Subsequently, eight rounds under NELP have been conducted. A total of 126 discoveries have been made till date, of which 32 pertain to the pre-NELP period and 3 from the small and medium sized fields offered in 1992-93 and the remaining 70 pertain to the NELP blocks. The success of NELP is evident from the increase in the average accretion to in-place reserves, from 176.1 million metric tonnes (MMT) till 1999-2000 to 337.6 MMT till 2008-09. However, exploration stage is more risky as compared to production stage since there is high probability of misses and the gestation period is also very long. Power In India, power supply growth has lagged demand growth resulting in the country reeling under power deficit. In 2009-10, the base load deficit stood at 10 per cent while the peak load deficit was 12 per cent. The power sector comprises of three segments viz generation, transmission and distribution (T&D). The generation segment is controlled by all the sectors sectors central, state and private, while the T&D segment is primarily controlled by central and state sector utilities. Post the Electricity Act 2003, the sector has witnessed increased interest from private players especially in the generation segment. Generation capacity additions have gained traction with 9.6 GW of capacities being added in 2009-10, taking the total installed capacity to 159 GW. However, the T&D segment continues to be the weak link on account of high losses of around 30 per cent. The high T&D losses and inability to increase tariffs have led to the abysmal financial health of SEBs, which has become the biggest risk for the sector. CRISIL COMPANY REPORT | 2

Videocon Industries Ltd

ANNUAL RESULTS
Income Statement (Rs million ) Net Sales Operating Income EBITDA EBITDA Margin Depreciation Interest Other Income PBT PAT PAT Margin No. of shares (Mn No.) Earnings per share (EPS) Cash flow (Rs million ) Pre-tax profit Total tax paid Depreciation Change in working capital Cash flow from operating activities Capital Expenditure Investments and others Balance sheet (Rs million ) Equity share capital Reserves and surplus Tangible net worth Deferred tax liablity:|asset| Long-term debt Short-term-debt Total debt Current liabilities Total provisions Total liabilities Gross block Net fixed assets Investments Current assets Receivables Inventories Cash Total assets Ratio Sep-07 9,658.8 -1,344.7 6,585.2 -7,702.3 7,197.0 -17,735.0 -3,126.3 Sep-08 12,645.3 -1,746.2 7,804.9 -19,021.6 -317.6 -24,309.5 -18,003.3 Sep-09 6,076.3 -1,041.8 5,904.2 -11,044.9 -106.2 -22,714.6 16,651.5 Revenue growth (%) EBITDA growth(%) PAT growth(%) EBITDA margins(%) Tax rate (%) PAT margins (%) Dividend payout (%) Dividend per share (Rs) BV (Rs) Return on Equity (%) Return on capital employed (%) Gearing (x) Interest coverage (x) Debt/EBITDA (x) Asset turnover (x) Current ratio (x) Gross current assets (days) Sep-07 -2.9 36.9 -13.9 14.7 14.1 5.6 11.7 3.5 314.7 10.8 10.0 1.0 4.5 3.9 1.1 1.9 262 Sep-08 -3.4 48.0 58.0 22.5 11.5 9.1 2.1 0.8 332.4 14.9 12.6 1.5 3.8 4.2 1.1 1.7 283 Sep-09 -12.1 -26.9 -55.0 18.7 15.3 4.7 9.5 1.9 317.0 6.6 7.7 1.7 2.4 6.1 1.1 1.9 346 Sep-07 121,823.4 123,503.4 18,140.0 14.7 6,585.2 3,978.6 2,082.7 9,261.8 6,869.4 5.6 220.9 31.1 Sep-08 118,880.2 119,285.6 26,838.5 22.5 7,804.9 6,962.1 573.8 14,257.7 10,852.9 9.1 229.3 47.3 Sep-09 104,555.0 104,873.3 19,614.8 18.7 5,904.2 8,244.5 610.3 6,816.3 4,888.8 4.7 229.4 21.3 Sep-07 4,290.9 65,249.9 69,540.8 2,579.1 49,542.4 21,355.7 70,898.1 21,484.9 4,223.4 168,726.3 115,414.1 73,420.3 6,525.1 88,780.8 26,095.4 21,362.6 19,212.2 168,726.2 Sep-08 10,315.5 65,909.7 76,225.3 4,237.8 70,086.5 43,384.2 113,470.7 11,879.9 1,778.1 207,591.8 93,748.6 90,317.9 24,528.4 92,745.4 17,685.3 16,048.2 16,205.4 207,591.7 Sep-09 2,744.1 69,973.7 72,717.7 5,123.4 83,244.0 37,176.6 120,420.6 14,815.7 1,406.0 214,483.4 94,650.5 107,099.1 7,876.9 99,507.5 18,187.1 18,001.9 9,358.8 214,483.5

Cash flow from investing activities Equity raised/(repaid) Debt raised/(repaid) Dividend (incl. tax) Others (incl extraordinaries)

-20,861.3 -40.0 8,206.3 -982.6 5,722.0

-42,312.8 3,647.9 42,572.6 -311.5 -6,285.5

-6,063.1 -249.5 6,949.8 -584.2 -6,793.5

Cash flow from financing activities Change in cash position Opening cash Closing cash
n.m : Not meaningful;

12,905.7 -758.6 19,970.7 19,212.2

39,623.5 -3,006.9 19,212.2 16,205.4

-677.4 -6,846.7 16,205.4 9,358.8

QUARTERLY RESULTS

Profit and loss account (Rs million) No of Months Revenue EBITDA Interes t Depreci a tion PBT PAT Sep-10 3 29,980.4 5,471.0 1,778.7 1,443.1 2,249.2 1,599.2 100.0 18.2 5.9 4.8 7.5 5.3 % of Rev Sep-09 % of Rev 3 26,286.7 5,055.0 1,616.0 1,396.4 2,042.6 1,492.6 100.0 19.2 6.1 5.3 7.8 5.7 Jun-10 3 29,053.9 5,287.1 1,734.2 1,416.0 2,136.9 1,536.9 100.0 18.2 6.0 4.9 7.4 5.3 % of Rev Sep-10 % of Rev 12 115,599.7 20,928.9 6,944.2 5,660.4 8,324.3 5,949.3 100.0 18.1 6.0 4.9 7.2 5.1

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Videocon Industries Ltd

FOCUS CHARTS & TABLES
Rs mn 35,000 30,000 25,000 20,000 15,000 10,000 5,000 0 Dec-07 Dec-08 Dec-09 Sep-08 Sep-09 Mar-08 Mar-09 Mar-10 Sep-10 Jun-08 Jun-09 Jun-10

Quarterly sales & y-o-y growth

Per cent 40 30 20 10 0 -10 -20

Rs mn 3,000 2,500 2,000 1,500 1,000 500 0 Dec-07

Quarterly PAT & y-o-y growth

Per cent 150 100 50 0 -50 -100

Dec-08

Dec-09

Sep-08

Sep-09

Mar-08

Mar-09

Sales

Sales growth y-o-y (RHS)

Net Profit

Net profit growth y-o-y (RHS)

Rs/share 12 10 8 6 4 2

EPS

Per cent 25 20 15 10 5 0 Dec-07

Movement in operating and net margins

Dec-08

Dec-09

Sep-08

Sep-09

Mar-10

Sep-10 Sep-10 Jun-10

Jun-08

Jun-09

Jun-08

Mar-08

Mar-09

Jun-09

0 Dec-07 Dec-08 Dec-09 Sep-08 Sep-09 Mar-08 Mar-09 Mar-10 Sep-10 Jun-08 Jun-09 Jun-10

OPM

Shareholding Pattern (Per cent) Mar 2010 Jun 2010 Promoter 68.5 68.8 FII 3.6 4.3 DII 6.6 9.4 Others 21.3 17.6

Sep 2010 67.2 4.9 12.0 15.8

Dec 2010 66.7 3.3 11.4 18.6

Board of Directors Director Name Venugopa l Na ndl a l Dhoot (Mr.)

Ra dhey Shya m Aga rwa l (Mr.) Arun La xma n Bongi rwa r (Mr.) Pra di pkuma r Na ndl a l Dhoot (Mr.) Sudhir Chinta ma ni Ni lka nth Ja ta r (Mr.) Sus hil Umra v Muhnot (Mr.) Birgi t Gunil la Antoni o Nords trom (Ms .) Aja y Sa ra f (Mr.) Ka run Cha ndra Sri va s ta va (Mr.) Pa dma na bha n Dora i s wa my Subra ma ni a n (Mr.) Sa tya Pa l Ta l wa r (Mr.)

Designation Executi ve Cha irma n & Ma na gi ng Di rector, Promoter-Director Non-Executi ve Di rector

Non-Executi ve Di rector Whol eti me Director Non-Executi ve Di rector Nomi nee Di rector Nomi nee Di rector Nomi nee Di rector Non-Executi ve Di rector Non-Executi ve Di rector Non-Executi ve Di rector

Additional Disclosure This report has been sponsored by NSE - Investor Protection Fund Trust (NSEIPFT). Disclaimer This report is based on data publicly available or from sources considered reliable. CRISIL Ltd. (CRISIL) does not represent that it is accurate or complete and hence, it should not be relied upon as such. The data / report is subject to change without any prior notice. Opinions expressed herein are our current opinions as on the date of this report. Nothing in this report constitutes investment, legal, accounting or tax advice or any solicitation, whatsoever. The subscriber / user assume the entire risk of any use made of this data / report. CRISIL especially states that, it has no financial liability whatsoever, to the subscribers / users of this report. This report is for the personal information only of the authorised recipient in India only. This report should not be reproduced or redistributed or communicated directly or indirectly in any form to any other person especially outside India or published or copied in whole or in part, for any purpose. CRISIL is not responsible for any errors and especially states that it has no financial liability whatsoever to the subscribers / users / transmitters / distributors of this report. For information please contact 'Client Servicing' at +91-22-33423561, or via e-mail: clientservicing@crisil.com.

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Mar-10

NPM

Jun-10