Financing Options for Zugular

(Unless otherwise specified, all financials are in INR Lakhs) Units FY 2017A FY 2018P

Revenue Assumptions
Sales Prices
Hatchback Cars 1 Car Cleaning Cost 1000 1070
Inflation % 7%
Sedan Cars 1 Car Cleaning Cost 2000 2120
Inflation % 6%
Luxury Cars 1 Car Cleaning Cost 4000 4200
Inflation % 5%

Sales Volumes
Hatchback Cars Cars 6000 6600
Growth % 10%
Sedan Cars Cars 1750 1890
Growth % 8%
Luxury Cars Cars 125 131
Growth % 5%

Cost Assumptions
Volume Requirements
Detergents
Liquid wax ml 80,000 87,200
Growth % 9%
Ordinary chemicals ml 20,000 21,400
Growth % 7%
Speciality chemicals ml 10,000 10,500
Growth % 5%
Perfumes ml 5,000 5,250
Growth % 5%

Other materials
Clothes Pockets 500 515
Growth % 3%
Gloves Pockets 400 408
Growth % 2%
Brush & Dusters Unit 200 202
Growth % 1%

Raw Materials Price

Detergents
Liquid wax Paisa/ml 3.2 3.39
Inflation % 6%
Ordinary chemicals Paisa/ml 4.1 4.35
Inflation % 6%
Speciality chemicals Paisa/ml 6.5 6.96
Inflation % 7%
Perfumes Paisa/ml 7.2 7.74
Inflation % 7.5%
Other materials
 Clothes Rs/Pack 120 129.0
Inflation % 7.5%
Gloves Rs/Pack 80 86.4
Inflation % 8%
Brush & Dusters Rs/Pack 45 47.3
Inflation % 5%

Headcounts
Servicing # 8 8
Marketing professionals # 3 3
Corporate employees # 2 2
% Increase 5%

Average Monthly Salary

Servicing INR/ month 15000 15750
Marketing professionals INR/ month 20000 21000
Corporate employees INR/ month 25000 26250
% Hike 5%

Power Cost INR 100000 115000

% Inflation 15%

Ads as % of Sales % 5% 6%
Ads Cost INR 500000 530000
Maintenance as % of Sales % 2% 2%
Maintenance Cost INR 200000 204000

Insurance Premium INR 100000 100000

Asset Schedule Assumptions

Capex INR 2500000 0
Asset Life (SLM Method) Years 10 10
Disposal of Assets INR - -

Financing Assumptions
Interest Rates
Interest rate on Secured Loans % 9.5%
Interest rate on Unsecured Loans % 10.5%

Interest rate on Cash Balance % 4%

Interest rate on Overdraft % 9%

Repayments
Secured Loans Repayment Schedule INR - -
Unsecured Loans Repayment Schedule INR - 2.5

New Debt Issues

Secured Loans INR - -
Unsecured Loans INR 20 20

New Equity Raised INR - -

 Dividends Paid % 20% 40%

Tax Assumptions
Corporate Tax Rate % 30% 30%

Balance Sheet Assumptions

Advances from Customers INR Lakhs 19.7 21.7
Insurance Premium Payable INR Lakhs 1 1

Loans & Advances INR Lakhs 0 0

WIP INR Lakhs - -
Investments INR Lakhs 50 50

Key Ratios
Inventory (Days of raw materials cost) # days 30 30
Accounts Receivables (days of sales) # days 15 15
Provisions for Employees fund as % of Employee Cost % 2.7 10%
Accounts Payables (days of raw material costs) # days 30 30

Valuation Assumptions
Risk free rate (RBI T Bill) 7.5%
Beta 0.90
Expected return from market 14%
Cost of debt 10.5%
Target debt: Capital ratio 0.40
Terminal Growth Rate 6%
WACC 11.0%
FY 2019P FY 2020P FY 2021P FY 2022P FY 2023P

1145 1225 1299 1376 1459

7% 7% 6% 6% 6%
2247 2382 2501 2626 2757
6% 6% 5% 5% 5%
4410 4631 4862 5105 5360
5% 5% 5% 5% 5%

7326 8205 9272 10570 12050

11% 12% 13% 14% 14%
2041 2204 2403 2619 2855
8% 8% 9% 9% 9%
138 145 153 163 172
5% 5% 6% 6% 6%

95,048 103,602 112,927 123,090 134,168

9% 9% 9% 9% 9%
22,898 24,501 26,216 28,051 30,015
7% 7% 7% 7% 7%
11,025 11,576 12,155 12,763 13,401
5% 5% 5% 5% 5%
5,513 5,788 6,078 6,381 6,700
5% 5% 5% 5% 5%

530 546 563 580 597

3% 3% 3% 3% 3%
416 424 433 442 450
2% 2% 2% 2% 2%
204 206 208 210 212
1% 1% 1% 1% 1%

3.60 3.81 4.08 4.36 4.67

6% 6% 7% 7% 7%
4.61 4.88 5.22 5.59 5.98
6% 6% 7% 7% 7%
7.44 8.00 8.60 9.24 9.98
7% 7.5% 7.5% 7.5% 8%
8.32 8.90 9.53 10.10 10.70
7.5% 7% 7% 6% 6%
 138.7 149.1 161.0 173.9 187.8
7.5% 7.5% 8% 8% 8%
93.3 100.8 108.8 117.5 126.9
8% 8% 8% 8% 8%
49.6 52.1 54.7 57.4 60.3
5% 5% 5% 5% 5%

9 9 10 10 11
3 3 4 4 4
2 2 2 3 3
5% 5% 5% 5% 5%

16538 17364 18233 19144 20101

22050 23153 24310 25526 26802
27563 28941 30388 31907 33502
5% 5% 5% 5% 5%

132250 152088 174901 201136 231306

15% 15% 15% 15% 15%

7% 8% 9% 10% 11%
567100 612468 667590 734349 815128
2% 2% 2% 2% 2%
208080 212242 216486 220816 225232

100000 100000 100000 100000 100000

0 3000000 0 1500000 0
10 10 10 10 10
- - - - -

9.5% 9.5% 9.5% 9.5% 9.5%

10.5% 10.5% 10.5% 10.5% 10.5%

4% 4% 4% 4% 4%
9% 9% 9% 9% 9%

- - - - -
2.5 2.5 2.5 2.5 2.5

- - - - -
20 20 20 20 20

- - - - -
50% 60% 70% 80% 90%

30% 30% 30% 30% 30%

23.8 26.2 28.8 31.7 34.9

1 1 1 1 1

0 0 0 0 0
- - - - -
50 50 50 50 50

30 30 30 30 30
15 15 15 15 15
10% 10% 10% 10% 10%
30 30 30 30 30
 (Unless otherwise specified, all financials are in INR Lakhs) Units FY 2017A

Sales Prices
Hatchback Cars INR Thousand 1 Car Cleaning Cost 1000
Sedan Cars INR Thousand 1 Car Cleaning Cost 2000
Luxury Cars INR Thousand 1 Car Cleaning Cost 4000

Sales Volumes
Hatchback Cars Units in 0,000 6000
Sedan Cars Units in 0,000 1750
Luxury Cars Units in 000 125
Total Volumes 7875

Sales Revenue
Hatchback Cars 60
Sedan Cars 35
Luxury Cars 5
Revenue from Operation 100

Revenue Growth
FY 2018P FY 2019P FY 2020P FY 2021P FY 2022P FY 2023P

1070 1145 1225 1299 1376 1459

2120 2247 2382 2501 2626 2757
4200 4410 4631 4862 5105 5360

6600 7326 8205 9272 10570 12050

1890 2041 2204 2403 2619 2855
131 138 145 153 163 172
8621 9505 10554 11828 13352 15077

71 84 101 120 145 176

40 46 53 60 69 79
6 6 7 7 8 9
116 136 160 188 223 264
Average RG
16.2% 16.9% 17.6% 17.7% 18.4% 18.5% 17.5%
 (Unless otherwise specified, all financials are in INR Lakhs) Units FY 2017A FY 2018P FY 2019P

Raw Materials Prices

Liquid wax Paisa/ml 3.2 3.4 3.6
Ordinary chemicals Paisa/ml 4.1 4.3 4.6
Speciality chemicals Paisa/ml 6.5 7.0 7.4
Perfumes Paisa/ml 7.2 7.7 8.3

Other materials
Clothes Rs/Pack 120 129.0 138.7
Gloves Rs/Pack 80 86.4 93.3
Brush & Dusters Rs/Pack 45 47.3 49.6

Raw Materials Volumes

Liquid wax ml 80000 87200 95048
Ordinary chemicals ml 20000 21400 22898
Speciality chemicals ml 10000 10500 11025
Perfumes ml 5000 5250 5513

Other materials
Clothes Pockets 500 515 530
Gloves Pockets 400 408 416
Brush & Dusters Units 200 202 204

Raw Materials Cost

Liquid wax 256000 295782 341747
Ordinary chemicals 82000 93004 105486
Speciality chemicals 65000 73028 82046
Perfumes 36000 40635 45867

Other materials
Clothes 60000 66435 73560
Gloves 32000 35251 38833
Brush & Dusters 9000 9545 10122
Total INR Lakh 5.4 6.1 7.0

Headcounts
Servicing # 8 8 9
Marketing professionals # 3 3 3
Corporate employees # 2 2 2

Average Monthly Salary

Servicing INR/ month 15000 15750 16538
Marketing professionals INR/ month 20000 21000 22050
Corporate employees INR/ month 25000 26250 27563

Employee Cost
Servicing INR Lakh 14.4 15.9 17.5
Marketing professionals INR Lakh 7.2 7.9 8.8
Corporate employees INR Lakh 6 6.6 7.3
Total Employee Cost INR Lakh 27.6 30.4 33.5
Power Cost INR Lakh 1 1.2 1.3

Advertising Costs INR Lakh 5.0 5.3 5.7

Maintenance Costs INR Lakh 2.0 2.0 2.1

Insurance Costs INR Lakh 1.0 1.0 1.0

Total Costs INR Lakh 42.0 46.1 50.6

FY 2020P FY 2021P FY 2022P FY 2023P

3.8 4.1 4.4 4.7

4.9 5.2 5.6 6.0
8.0 8.6 9.2 10.0
8.9 9.5 10.1 10.7

149.1 161.0 173.9 187.8

100.8 108.8 117.5 126.9
52.1 54.7 57.4 60.3

103602 112927 123090 134168

24501 26216 28051 30015
11576 12155 12763 13401
5788 6078 6381 6700

546 563 580 597

424 433 442 450
206 208 210 212

394854 460519 537103 626423

119642 136978 156826 179550
92610 104533 117992 133803
51531 57895 64438 71719

81449 90604 100788 112117

42778 47124 51912 57187
10734 11384 12072 12803
7.9 9.1 10.4 11.9

9 10 10 11
3 4 4 4
2 2 3 3

17364 18233 19144 20101

23153 24310 25526 26802
28941 30388 31907 33502

19.3 21.3 23.5 25.9

9.6 10.6 11.7 12.9
8.0 8.9 9.8 10.8
37.0 40.8 45.0 49.6
 1.5 1.7 2.0 2.3

6.1 6.7 7.3 8.2

2.1 2.2 2.2 2.3

1.0 1.0 1.0 1.0

55.7 61.5 67.9 75.2

 (Unless otherwise specified, all financials are in INR Lakhs) FY 2017A FY 2018P FY 2019P FY 2020P

Depreciation Method SLM

Asset Life Years 10 10 10 10
Disposal of Assets INR Lakhs 0 0 0 0

Capex INR Lakhs 25 0 0 30

Depreciation Schedule

FY 2017A 2.5 2.5 2.5 2.5

FY 2018P - - -
FY 2019P - -
FY 2020P 3
FY 2021P
FY 2022P
FY 2023P
Total Depreciation 2.5 2.5 2.5 5.5

Gross Block
Opening Balance 0 25 25 25
Add: Capex 25 0 0 30
Less: Assets Sold/ Disposed 0 0 0 0
Closing Balance 25 25 25 55

Accumulated Depreciation
Opening Balance 0 2.5 5 7.5
Add: Depreciation during current year 2.5 2.5 2.5 5.5
Closing Balance 2.5 5 7.5 13
FY 2021P FY 2022P FY 2023P

10 10 10
0 0 0

0 15 0

2.5 2.5 2.5

- - -
- - -
3 3 3
- - -
1.5 1.5
-
5.5 7.0 7.0

55 55 70
0 15 0
0 0 0
55 70 70

13 18.5 25.5
5.5 7.0 7.0
18.5 25.5 32.5
 (Unless otherwise specified, all financials are in INR Lakhs) FY 2017A FY 2018P FY 2019P FY 2020P

Unsecured Loans
Opening Balance 20 17.5 15
Add: New Issued - - - -
Less: Repayments - 2.5 2.5 2.5
Closing Balance 20 18 15 13

Average Loan Outstanding 18.8 16.3 13.8

Interest Rate 10.5% 10.5% 10.5%
Interest Expense 2.0 1.7 1.4

Secured Loans
Opening Balance - - - -
Add: New Issued - - - -
Less: Repayments - - - -
Closing Balance - - - -

Average Loan Outstanding - - - -

Interest Rate 9.5% 9.5% 9.5%
Interest Expense - - -

Total Interest Expense 2.0 1.7 1.4

Cash/ (Overdraft) 2.4 24.4 45.5 37.3

Interest rate on Cash Balance 4% 4% 4%

Interest rate on Overdraft 9% 9% 9%

Interest Earned/ (Expense) 0.54 1.40 1.66

Net Interest Expense 1.43 0.31 (0.21)

FY 2021P FY 2022P FY 2023P

12.5 10 7.5
- - -
2.5 2.5 2.5
10 8 5

11.3 8.8 6.3

10.5% 10.5% 10.5%
1.2 0.9 0.7

- - -
- - -
- - -
- - -

- - -
9.5% 9.5% 9.5%
- - -

1.2 0.9 0.7

54.4 51.1 51.1

4% 4% 4%
9% 9% 9%

1.83 2.11 2.04

(0.65) (1.19) (1.39)

 (Unless otherwise specified, all financials are in INR Lakhs) FY 2018A FY 2019P FY 2020P FY 2021P

Paid-Up Capital
Opening Balance 50 50 50
Add: New Equity Raised - - - -
Closing Balance 50 50 50 50

Retained Earnings
Opening Balance 31.1 58.9 87.7
Add: Retained Earnings 27.8 28.8 27.7
Less: Dividends Paid - - - -
Closing Balance 31.1 58.9 87.7 115.4
FY 2022P FY 2023P FY 2024P

50 50 50
- - -
50 50 50

115.4 140.9 161.8

25.5 20.8 12.8
- - -
140.9 161.8 174.6
 (Unless otherwise specified, all financials are in INR Lakhs) FY 2018A FY 2019P FY 2020P FY 2021P

Sources of Funds

Liabilities

Current Liabilities & Provisions

Overdraft - - - -
Provisions for Employees fund 2.7 3.4 3.3 4.1
Advances from customers 19.7 21.7 23.8 26.2
Insurance premium payable 1 1 1 1
Accounts payable 5.4 6.1 7.0 7.9
Total Current Liabilities & Provisions 28.8 32.2 35.1 39.2

Non Current Liabilities

Secured Loans - - - -
Unsecured Loans 20.0 17.5 15.0 12.5
Total Non Current Liabilities 20 18 15 13

Shareholders Equity
Paid-up Capital 50 50 50 50
Retained Earnings 31.1 58.9 87.7 115.4
Total Shareholders' Equity 81.1 108.9 137.7 165.4

Total Liabilities & Shareholders' Equity 129.9 158.6 187.9 217.1

Usage of Funds

Current Assets
Cash & Cash Equivalent 2.4 24.4 45.5 37.3
Inventory 5 6.1 7.0 7.9
Account Receivables 50 58.1 67.9 79.9
Loans & Advances 0 0 0 0
Total Current Assets 57.4 88.6 120.4 125.1

Non Current Assets

Gross Block 25 25 25 55
Accumulated depreciation 2.5 5 7.5 13
Net Block 22.5 20 17.5 42
WIP - - - -

Investments 50 50 50 50

Total Assets 129.9 158.6 187.9 217.1

Balance Check 1 1 1 1
FY 2022P FY 2023P FY 2024P

- - -
4.1 4.9 5.0
28.8 31.7 34.9
1 1 1
9.1 10.4 11.9
43.0 48.0 52.8

- - -
10.0 7.5 5.0
10 8 5

50 50 50
140.9 161.8 174.6
190.9 211.8 224.6

244 267.3 282.4

54.4 51.1 51.1

9.1 10.4 11.9
94.0 111.3 131.9
0 0 0
157.5 172.8 194.9

55 70 70
18.5 25.5 32.5
36.5 44.5 37.5
- - -

50 50 50

244.0 267.3 282.4

1 1 1
 (Unless otherwise specified, all financials are in INR Lakhs) FY 2018A FY 2019P FY 2020P FY 2021P

Revenues
Hatchback Cars 60 71 84 101
Sedan Cars 35 40 46 53
Luxury Cars 5 6 6 7
Total Revenue from Operation 100 116 136 160

Operating Costs

Cost of Goods Sold

Raw Material Cost 5.4 6.1 7.0 7.9
Gross Income 94.6 110.1 128.8 151.8

Employee Cost 27.6 30.4 33.5 37.0

Power Cost 1 1.2 1.3 1.5
Advertisement Cost 5 5.3 5.7 6.1
Maintenance Cost 2 2.0 2.1 2.1
Insurance Premium 1 1.0 1.0 1.0
Total Operating Costs 36.6 39.9 43.6 47.8

EBITDA 58.0 70.1 85.2 104.0

Depreciation 2.5 2.5 2.5 5.5
EBIT 55.5 67.6 82.7 98.5
Interest expense 1.4 0.3 -0.2
PBT 55.5 66.2 82.4 98.8
Taxes 16.7 19.9 24.7 29.6
PAT 38.9 46.3 57.7 69.1
Dividends Paid 7.8 18.5 28.8 41.5
Retained Earnings 31.1 27.8 28.8 27.7
FY 2022P FY 2023P FY 2024P

120 145 176

60 69 79
7 8 9
188 223 264

9.1 10.4 11.9

178.9 212.2 251.8

40.8 45.0 49.6

1.7 2.0 2.3
6.7 7.3 8.2
2.2 2.2 2.3
1.0 1.0 1.0
52.4 57.5 63.3

126.5 154.6 188.6

5.5 7 7
121.0 147.6 181.6
-0.7 -1.2 -1.4
121.7 148.8 182.9
36.5 44.7 54.9
85.2 104.2 128.1
59.6 83.3 115.3
25.5 20.8 12.8
 (Unless otherwise specified, all financials are in INR Lakhs) FY 2018A FY 2019P FY 2020P FY 2021P

Cashflow from Operating Activities

PAT 0.0 46.3 57.7 69.1
Add: Depreciation 0 2.5 2.5 5.5
Add: Interest Expense 1.4 0.3 -0.2

Net Change in Working Capital

Add: Increase in Provisions for Employees fund 0.69 -0.06 0.75
Add: Increase in Advances from customers 1.97 2.17 2.38
Add: Increase in Insurance premium payable - - -
Add: Increase in Accounts payable 0.74 0.84 0.96
Less: Increase in Inventory -1.14 -0.84 -0.96
Less: Increase in Account Receivables -8.10 -9.81 -11.95
Less: Increase in Loans & Advances 0 0 0
Net Change in Working Capital 0.00 -5.85 -7.71 -8.82

Cashflow from Operations 0.0 44.4 52.8 65.6

Cashflow from Investment Activities

Less: Capex 0 0 0 -30
Add: Gain from Disposal of Assets 0 0 0 0
Less: Increase in WIP 0 0 0
Less: Increase in Investments 0 0 0
Cashflow from Investment Activities 0 0 0 -30

Cashflow from Financing Activities

Add: New Equity Raised 0 0 0 0
Add: New Secured Loans Raised 0 0 0 0
Add: New Unsecured Loans Raised 0 0 0 0
Less: Secured Loans Repaid 0 0 0 0
Less: Unsecured Loans Repaid 0 -2.5 -2.5 -2.5
Less: Dividends Paid 0.0 -18.5 -28.8 -41.5
Less: Interest Expense -1.4 -0.3 0.2
Cashflow from Financing Activities 0.0 -22.5 -31.7 -43.8

Net Cashflow 0.0 22.0 21.1 -8.2

Cash Balance
Opening Balance 0 2.4 24.4 45.5
Net Cashflow 0.0 22.0 21.1 -8.2
Closing Balance 2.4 24.4 45.5 37.3
FY 2022P FY 2023P FY 2024P

85.2 104.2 128.1

5.5 7 7
-0.7 -1.2 -1.4

0.01 0.83 0.09

2.62 2.88 3.17
- - -
1.15 1.32 1.52
-1.15 -1.32 -1.52
-14.11 -17.31 -20.60
0 0 0
-11.48 -13.60 -17.33

78.5 96.4 116.3

0 -15 0
0 0 0
0 0 0
0 0 0
0 -15 0

0 0 0
0 0 0
0 0 0
0 0 0
-2.5 -2.5 -2.5
-59.6 -83.3 -115.3
0.7 1.2 1.4
-61.5 -84.7 -116.4

17.1 -3.3 0.0

37.3 54.4 51.1

17.1 -3.3 0.0
54.4 51.1 51.1
 (Unless otherwise specified, all financials are in INR Lakhs) FY 2018A FY 2019P FY 2020P FY 2021P

Profitability Ratios
EBITDA Margin
EBIT Margin
PBT Margin
PAT Margin

Growth Rate
Revenue
EBITDA
EBIT
PBT
PAT

As % of Sales
Raw Material Cost
Employee Cost
Power Cost
Advertisement Cost
Maintenace Cost
Insurance Premium

Liquidity Ratios
Quick Ratio

Rate of Returns
ROAE
ROACE
ROAA

Leverage Ratios
Debt/ Equity
Debt/ EBITDA
Interest Coverage
FY 2022P FY 2023P FY 2024P
 (Unless otherwise specified, all financials are in INR Lakhs) FY 2017A FY 2018P FY 2019P

DCF Valuation using FCFF

EBIT
Tax Rate (%)
EBIT*(1-t)
Add: Depreciation
Less: Increase in Working Capital
Less: Capex and increase in WIP
Free Cashflow to the Firm (FCFF)

Risk free rate

Beta
Expected return from market
Cost of equity
Cost of debt
Post tax cost of debt
Target debt: Capital ratio
WACC

Terminal Growth Rate

Terminal Value

No. of Years
Discount Factor

Present Value of FCFF

Present Value of Terminal Value

Enterprise Value
Less: Total Debt
Add: Total Cash
Less: Any Contingent Liabilities
Equity Value
No. of Shares
Share Price (INR)

Sensitivity Analysis
Terminal Growth Rate and Equity Value
FY 2020P FY 2021P FY 2022P FY 2023P