PEER GROUPS CMP MARKET CAP EPS P/E (X) P/BV(X) DIVIDEND Company Name (Rs.) Rs. in mn. (Rs.) Ratio Ratio (%)

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1 BUY CMP Target Price BHARAT RASAYAN LTD Result Update (PARENT BASIS): Q2 FY16 DECEMBER 7 th 2015 ISIN: INE838B th h, 2013 Index Details Stock Data Sector Agrochemicals BSE Code Face Value wk. High / Low (Rs.) / Volume (2wk. Avg. Q.) 1165 Market Cap (Rs. in mn.) Annual Estimated Results (A*: Actual / E*: Estimated) YEARS FY15A FY16E FY17E Net Sales EBITDA Net Profit EPS P/E Shareholding Pattern (%) As on Sep 2015 As on Jun 2015 PROMOTER FIIs 0 0 DIIs 0 0 OTHERS Year Comparative Graph BHARAT RASAYAN LTD BSE SENSEX SYNOPSIS Bharat Rasayan Ltd has well equipped laboratories with modern and sophisticated instruments such as H.P.L.C., G.C., F.T.I.R., Spectrophotometer, Polari meter and Karl Fischer Titrators etc. The company s net sales increased by 9.08% y-o-y stood at Rs million for the 2 nd quarter of the financial year as against Rs million in the same period last year. In Q2 FY16, net profit rose by 23.60% y-o-y stood at Rs million against Rs million in the corresponding quarter of the previous year. EBITDA was at Rs million in Q2 FY16 from Rs million in the Q2 FY15. Registered a growth of 7.61% y-o-y. The company has reported an EPS of Rs for the 2 nd quarter as against an EPS of Rs in the corresponding quarter of the previous year. Profit before tax (PBT) at Rs million in Q2 FY16 compared to Rs million in Q2 FY15, registered a growth of 27.65% y-o-y. For the half year ended Sep 30, 2015 Net sales was at Rs million, registered a growth of 3.65% compared to Rs million for the half year ended Sep 30, Net profit grew by 5.28% to Rs million for the end of H1 FY16 compared to Rs million for the end of H1 FY15. Net Sales and PAT of the company are expected to grow at a CAGR of 30% and 45% over 2014 to 2017E respectively. PEER GROUPS CMP MARKET CAP EPS P/E (X) P/BV(X) DIVIDEND Company Name (Rs.) Rs. in mn. (Rs.) Ratio Ratio (%) Bharat Rasayan Ltd Dhanuka Agritech Ltd Rallis India Ltd UPL Ltd

2 QUARTERLY HIGHLIGHTS (PARENT BASIS) Results updates- Q2 FY16, Bharat Rasayan Ltd is one of the leading manufacturer and exporter of Pesticides Technicals, and their Formulations and Intermediates, has reported its financial result for the quarter ended 30 th September, Months Sep-15 Sep-14 % Change Net Sales PAT EPS EBITDA The company has achieved a turnover of Rs million for the 2 nd quarter of the financial year as against Rs million in the corresponding quarter of the previous year. EBITDA of Rs million, an increase of 7.61% in Q2 FY16 against Rs million in the corresponding period of last year. In Q2 FY16, net profit of Rs million, a growth of 23.60% increases y-o-y against Rs million in the corresponding quarter of the previous year. The company has reported an EPS of Rs for the 2 nd quarter as against an EPS of Rs in the corresponding quarter of the previous year. Break up of Expenditure Break up of Expenditure Cost of Material Consumed Employee Benefit Expenses Depreciation & Amortization Expenses (Rs. In millions) Q2 FY16 Q2 FY15 CHG % % % % Other Expenditure %

3 COMPANY PROFILE Bharat Groups established three decades ago, Bharat Groups are multi-product, multi-locational and one of India's leading Manufacturer and Exporter of large range of Pesticides Technical, Their Formulations and Intermediates for Crop Protection and Pharma Industry. All of Bharat Group companies are ISO 9001:2008 certified and two are ISO 14001:2004 certified. A state of the art Government approved, R&D center, with latest modern equipments and pilot plant is core strength of Bharat Group. Bharat Groups continuous endeavor is to invest in development of new molecules, and formulations that are environment and user friendly. Bharat Rasayan Ltd established in the year 1989 as a backward integration project, An ISO 9001:2008 & ISO 14001:2004 Certified Company. The company has in house facility for treatment of solid, liquid and gaseous effluent treatment system. The company has permanent Registration No. with Dun & Bradstreet is Bharat Rasayan Ltd has well equipped laboratories with modern and sophisticated instruments such as H.P.L.C., G.C., F.T.I.R., Spectrophotometer, Polari meter and Karl Fischer Titrators etc. All equipments used in manufacturing, testing and packaging of the materials are regularly maintained and calibrated both at company in-house and by third party laboratories. High quality performance standards are achieved through qualified and experienced staff, modern equipment, documented procedures and an established quality assurance system. Product Range Insecticides Herbicides Fungicides Intermediates Public Health Veterinary Use Business Areas Agro Business Bharat Group through its well qualified and large field force, advises the farmers about the right use of pesticides in their crops, so as to maximize their benefits by way of increase in yield at minimum cost. India is a predominantly agricultural economy with more than 1 billion population and 182 million hectares of cultivable land. Further it is estimated that world population will increase to approximately 9 billion in year 2050, up by over 50% from current level.

4 Institutional Business The Company has added Health & Hygiene products in its portfolio For Mosquito Control & Mosquito breeding with Larva Control. The products are used by various Municipal Corporations and other Agencies involved with National Vector Borne Disease Control Program (NVBDCP), Ministry of Defense, and Ministry of Railways are other major consumers of the Company's products. International Business The company has Government Recognized Star Export House. It exports to More than 60 Countries across the Globe & More than 195 Products Registered in Various Countries. Pet Bottle Business The Group companies receive supply of good quality PET Bottles to meet the growing demand and also to cater to the requirements of other industrial units in neighboring areas, a separate unit to manufacture PET bottles was set up at Kala Amb. The bottles are manufactured on state of art Japanese machines, with the use of best quality raw materials. Group Companies Bharat Insecticides Ltd. BR Agrotech Ltd. SIRIS Crop Sciences Ltd.

5 FINANCIAL HIGHLIGHT (PARENT BASIS) (A*- Actual, E* -Estimations & Rs. In Millions) Balance Sheet as at March31, E I. EQUITY AND LIABILITIES: A. Shareholders Funds BHARAT RASAYAN LTD. 2014A 2015A 2016E 2017E a) Share Capital b) Reserves and Surplus Sub-Total-Net worth B. Non-Current Liabilities: a) Long-term borrowings b) Deferred Tax Liabilities [Net] c) Long Term Provisions Sub-Total-Long term liabilities C. Current Liabilities: a) Short-term borrowings b) Trade Payables c) Other Current Liabilities d) Short Term Provisions Sub-Total-Current Liabilities TOTAL-EQUITY AND LIABILITIES (A+B+C) II. ASSETS: D. Non-Current Assets: Fixed Assets i. Tangible Assets ii. Intangible Assets iii. Capital work-in-progress a) Sub-Total-Fixed Assets b) Non Current Investments c) Long Term Loans and Advances Sub-Total-Non-Current Assets E. Current Assets: a) Current Investments b) Inventories c) Trade Receivables d) Cash and Bank Balances e) Short Term Loans and Advances f) Other Current Assets Sub-Total-Current Assets TOTAL-ASSETS (D+E)

6 Annual Profit & Loss Statement for the period of 2014 to 2017E Value(Rs.in.mn) FY14A FY15A FY16E FY17E Description 12m 12m 12m 12m Net Sales Other Income Total Income Expenditure Operating Profit Interest Gross profit Depreciation Exceptional Items Profit Before Tax Tax Net Profit Equity capital Reserves Face value EPS Quarterly Profit & Loss Statement for the period of 31 st Mar, 2015 to 31 st Dec, 2015E Value(Rs.in.mn) 31-Mar Jun Sep Dec-15E Description 3m 3m 3m 3m Net sales Other income Total Income Expenditure Operating profit Interest Gross profit Depreciation Profit Before Tax Tax Net Profit Equity capital Face value EPS

7 Ratio Analysis Particulars FY14A FY15A FY16E FY17E EPS (Rs.) EBITDA Margin (%) PBT Margin (%) PAT Margin (%) P/E Ratio (x) ROE (%) ROCE (%) Debt Equity Ratio EV/EBITDA (x) Book Value (Rs.) P/BV Charts

8 OUTLOOK AND CONCLUSION At the current market price of Rs , the stock P/E ratio is at x FY16E and x FY17E respectively. Earning per share (EPS) of the company for the earnings for FY1 6E and FY17E is seen at Rs and Rs respectively. Net Sales and PAT of the company are expected to grow at a CAGR of 30% and 45% over 2014 to 2017E respectively. On the basis of EV/EBITDA, the stock trades at 5.89 x for FY16E and 5.17 x for FY17E. Price to Book Value of the stock is expected to be at 3.14 x and 2.63 x respectively for FY16E and FY17E. We recommend BUY in this particular scrip with a target price of Rs for Medium to Long term investment.

9 INDUSTRY OVERVIEW Indian Economy has undergone a tremendous change over the past three decades. From being primarily agrarian it has continuously progressed towards secondary and tertiary sectors. Still agriculture continues to contribute extensively to the Indian GDP due to its significant implications on food security, employment and poverty. The growth of agrochemical industry is directly proportional to the growth of the agriculture sector. Any improved situation like increased purchasing power with the farmers to buy more of agro-chemicals is a further to the industry. The scope of the agro-chemical industry in India is quite wide given the fact that there is still a considerable part of the country not touched by the modern technology and irrigation facilities. The use of high-yielding variety seeds also has not been able to offset the decline in usage of irrigation and fertilizers. There is an urgent requirement of educating the farmers to understand the need of proper irrigation and use of agro-chemicals to enhance productivity. Since, the cultivable land cannot be further increased due to an aggressive industrial and residential demand due to urbanization, the only viable solution to bridge the demand-supply gap is through reduced crop losses through judicious and adequate use of agro-chemicals. Agrochemicals are manufactured as technical grades and converted into formulations for agricultural use. Technical grade Manufacturers, formulators producing the end products, distributors and end use customers constitute the Indian Agrochemical market. Technical grade manufacturers sell high purity chemicals in bulk to formulators. Formulators prepare the formulations by adding inert carriers, solvents, surface active agents etc. These formulations are then packed for retail sale, supplied to the distributors and finally sold to the end use customers (farmers). India due to its inherent strength of low-cost manufacturing and qualified low-cost manpower is a net exporter of pesticides to countries such as USA & some European & African countries. KEY CHALLENGES FOR THE INDUSTRY Amidst the wide scope of the industry in India, there are some formidable challenges that stand in the way of the Indian agro-chemical industry. While many companies in India as well as the World are able to apply their risk strategies to a considerable extent, some factors still make it difficult to be curtailed. Monsoon: The most apparent challenge is the advent and degree of monsoon that the country receives in a year. For both Kharif and Rabi cultivation, rain is the most important factor and a good rain is always conducive to a good harvest and good business for the agro-chemicals market. Use of Bio Products: The growing awareness amongst the farmers about the usage of bioproducts is eating away the share of agro-chemicals from the Indian market.

10 R&D Investments: The industry being a volatile offshoot of the wider chemicals market, mostly sees an advent of manufacturers from Global arena participate and produce generic products itself, which contributes to almost 65% of the business, globally. There is however, a lesser investment into new products as there is a huge R&D cost involved, which is not feasible for every small or middle cap player of the industry. Indian companies usually spend approx. 1-2% of their turnover on R&D while corresponding spend by MNC s is 12-15%. Distribution Systems: The smaller your reach, the poorer your market. The outreach of these companies has to be larger in view of the end users who are widespread. To this effect, these companies need to operate with good network of sellers and effective network. Most manufacturers operate with distributors catering to 25,000-30,000 retailers if they have a Pan India presence. Companies keep their stocks in warehouses or depots from where it is supplied to distributors. Disclaimer: This document is prepared by our research analysts and it does not constitute an offer or solicitation for the purchase or sale of any financial instrument or as an official confirmation of any transaction. The information contained herein is from publicly available data or other sources believed to be reliable but we do not represent that it is accurate or complete and it should not be relied on as such. Firstcall Research or any of its affiliates 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. Firstcall Research and/ or its affiliates and/or employees will not be liable for the recipients investment decision based on this document.

11 Firstcall India Equity Research: C.V.S.L.Kameswari Pharma & Diversified U. Janaki Rao Capital Goods B. Anil Kumar Auto, IT & FMCG M. Vinayak Rao Diversified G. Amarender Diversified Firstcall Research Provides Industry Research on all the Sectors and Equity Research on Major Companies forming part of Listed and Unlisted Segments For Further Details Contact: Tel.: / / Telefax: / info@firstobjectindia.com