MAHARASHTRA HYBRID SEEDS COMPANY LIMITED

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TABLE OF CONTENTS
1. 2. Executive Summary: Maharashtra Hybrid Seeds Company Limited Maharashtra Hybrid Seeds Company Limited Business Overview 2.1. 2.2. 2.3. 2.4. 3. Corporate Timeline Major Investments in the Company Evolution Maharashtra Hybrid Seeds Company Limited Organisational Structure Business Model of Maharashtra Hybrid Seeds Company Limited

Maharashtra Hybrid Seeds Company Limited Product Portfolio 3.1. 3.2. 3.3. 3.4. Hybrid Cotton Field Crop Seeds Oil Seeds Vegetable Crop Seeds

4.

Maharashtra Hybrid Seeds Company Limited Financial and Valuation Analysis 4.1. Valuation Analysis and Financial Summery

5. 6. 7.

Maharashtra Hybrid Seeds Company Limited Analyst Recommendations Maharashtra Hybrid Seeds Company Limited SWOT Analysis Maharashtra Hybrid Seeds Company Limited Key Professionals 7.1. Management Profile

8.

Macro Analysis of Seed Industry 8.1. 8.2. Indian Hybrid Seed Industry Market Size, FY2008-FY2012 Indian Hybrid Seed Industry Segmentations, FY2012 By Type of Crops

8.2.1. 8.3.

Market Share of Major Players in the Indian Hybrid Seed Industry, FY2012 By Hybrid Cotton By Hybrid Field Crop Seed By Hybrid Vegetable Crop Seed 2

8.3.1. 8.3.2. 8.3.3.

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9.

Maharashtra Hybrid Seeds Company Limited Competitive Analysis 9.1. By Products Offered/ Revenue/ Business Strategy

10. Maharashtra Hybrid Seeds Company Limited Management Outlook and Future Projections 10.1. 11. Maharashtra Hybrid Seeds Company Limited Future Projection

Appendix Market Definitions Abbreviations Research Methodology Disclaimer

11.1. 11.2. 11.3. 11.4.

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LIST OF FIGURES
Figure 1: Maharashtra Hybrid Seeds Company Limited Corporate Timeline 1964-2013 Figure 2: Maharashtra Hybrid Seeds Company Limited Organizational Structure Figure 3: Maharashtra Hybrid Seeds Company Limited Business Model Figure 4: Maharashtra Hybrid Seeds Company Limited Product Portfolio Figure 5: Maharashtra Hybrid Seeds Company Limited Financial Performance on the basis of Revenues and EBIT in INR Crore, FY2008-FY2012 Figure 6: India Hybrid Seed Industry Market Size and Contribution in the Overall Indian Seed Market on the Basis of Revenue in INR Crore and percentage, FY2008-FY2012 Figure 7: India Hybrid Seed Industry Segmentation on the Basis of Contribution in the Overall Hybrid Seed Industry in Percentage, FY2012 Figure 8: Market Share of Major Players in Indian Hybrid Seed Market on the Basis of Contribution by Revenue in Percentage, FY2012 Figure 9: Market Share of Major Players in Indian Hybrid Cotton Seed Segment on the Basis of Contribution by Revenue in Percentage, FY2012 Figure 10: Market Share of Major Players in Indian Hybrid Corn Seed Segment on the Basis of Contribution by Revenue in Percentage, FY2012 Figure 11: Market Share of Major Players in Indian Pearl Millet Seed Segment on the Basis of Contribution by Revenue in Percentage, FY2012 Figure 12: Market Share of Major Players in Indian Paddy Seed Segment on the Basis of Contribution by Revenue in Percentage, FY2012 Figure 13: Market Share of Major Players in Indian Vegetable Seed Segment on the Basis of Contribution by Revenue in Percentage, FY2012 Figure 14: Maharashtra Hybrid Seeds Company Limited Future Projections on the Basis of Revenues and EBIT in INR Crore and Percentage, FY2013-FY2017 Figure 15: Non-linear Regression Analysis and Scatter Chart Based upon Indian Hybrid Seed Industry Market size, FY2008-FY2012

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LIST OF TABLES
Table 1: Maharashtra Hybrid Seeds Company Limited Financial Summary on the Basis of Revenue, Growth and EBIT Margin in INR Crore and Percentage, FY2008-FY2012 Table 2: Maharashtra Hybrid Seeds Company Limited Major Investments in Company Evaluation on the Basis Deal Type, Stake, Deal Value and Implied Enterprise Value in INR Crore Table 3: Maharashtra Hybrid Seeds Company Limited Products Offered in Hybrid Cotton Seeds on the Basis of Different Zones in India Table 4: Maharashtra Hybrid Seeds Company Limited Products Offered on the basis of Different Field Crop Seeds Table 5: Maharashtra Hybrid Seeds Company Limited Products Offered on the Basis of Different Oil Seeds Table 6: Maharashtra Hybrid Seeds Company Limited Products Offered on the Basis of Vegetable Crop Seeds Table 7: Company Comparables on the Basis of Revenue in INR Crore, FY2008-LTM year ending 31st December 2012 Table 8: Company Comparable Analysis on the Basis of Market Capitalization, Net Debt and Enterprise Value and Valuation Multiples in INR Crore and Multiples, LTM 31 st December 2012 Table 9: Relative Valuation Analysis on the Basis of Deal Value, Deal Stake and Multiples in INR Crore, Percentage and Multiples Table 10: Maharashtra Hybrid Seeds Company Limited Board of Directors Table 11: Company Comparables on the basis of Services Offered, Revenue and Business Strategies Table 12: Regression Coefficients of the Maharashtra Hybrid Seeds Company Limited Table 13: Regression Intercepts of the Maharashtra Hybrid Seeds Company Limited

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EXECUTIVE SUMMARY: MAHARASHTRA HYBRID SEEDS COMPANY LIMITED

Maharashtra Hybrid Seeds Company Limited also known as Mahyco, is a privately owned company and is headquartered in Jalna, Maharashtra. Mahyco is among the largest hybrid seed producers in India. The company is involved in the research and development, production, marketing and distribution of various hybrid seeds such as cotton seeds, field crops, vegetable crops and oil seeds. The company has a prime focus in the generation and distribution of hybrid cotton seeds in the Indian hybrid seed market. Key Differentiators More than 1,000,000 cultivators are involved in seed production

Competition and Positioning

Leading position in the Indian hybrid cotton market

Key Developments

Worlds foremost company to commercialize F1 hybrid cotton based on GMS/CMS system

Financial Summary

Maharashtra Hybrid Seeds Company Limited Financial Summary on the Basis of Revenue, Growth and EBIT Margin in INR Crore and Percentage, FY2008-FY2012
Particulars Revenue Growth% EBIT Profit% FY2008E FY2009 FY2010 FY2011 FY2012

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CORPORATE TIMELINE

On 11th November 1964, the company started its operation with the prime focus towards genetic research of plant and production of different varieties of seeds. In 1966, the company started its first research and development center in India with an objective of develop new products and increase its penetration in the Indian seed market. In 2013, Performance Plant Inc. and Maharashtra Hybrid Seeds Company Limited have entered into a license agreement Maharashtra Hybrid Seeds Company Limited Corporate Timeline 1964-2013

MAHARASHTRA HYBRID SEEDS COMPANY LIMITED ORGANISATIONAL STRUCTURE

The company has 9 processing centers across the nation situated at Maharashtra, Karnataka, Andhra Pradesh, Gujarat, Madhya Pradesh, Rajasthan, Punjab, Haryana and Uttar Pradesh with annual seed processing capacity of over ~ quintal in these 9 centers

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Maharashtra Hybrid Seeds Company Limited Organizational Structure

BUSINESS MODEL OF MAHARASHTRA HYBRID SEEDS COMPANY LIMITED

Business cycle of the company starts with the procurement of input supplies for research and development departments. Input supplies are the principal driver for the production of new and improved hybrid seed products After harvesting of seeds, the company transfers these seeds to processing centers for further processing and quality testing 8

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Once the products are finished and packed the company distributes these products to different distributors across the nation

Maharashtra Hybrid Seeds Company Limited Business Model

MAHARASHTRA HYBRID SEEDS COMPANY LIMITED PRODUCT PORTFOLIO

The company has a product portfolio of more than ~ hybrid products in ~ different crop species offering hybrid cotton, field crops, oilseeds and vegetables crops. The company offered ~ types of hybrid cotton, ~ types of field crops, ~ types of oil seeds and different types of vegetable seeds verities. 9

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The company is continuously focusing on the research and developments of new products such as genetically modified (GM) rice, wheat, cauliflower, pigeon pea and okra Under the guidance of Department of Biotechnology, Government of India the company has been involved in different projects for the development of new products and new technologies and also the company has entered into various partnerships with other institutions

Maharashtra Hybrid Seeds Company Limited Product Portfolio

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MAHARASHTRA HYBRID SEEDS COMPANY LIMITED FINANCIAL AND VALUATION ANALYSIS

VALUATION ANALYSIS AND FINANCIAL SUMMERY

Revenue of the company has shown a CAGR growth of ~ % from FY2008-FY2012. The company has witnessed this growth due to constant development of new products and by improvements in its current product portfolio. Mahyco has spent INR ~ core in FY2011 on research and development as compare to INR ~ crore in FY2010 which showcase the companys interest to enhance the quality of its products In FY2011 and FY2012 the company has shown a marginal growth of ~% and ~% respectively in revenues mainly due to increased competition in the hybrid cotton market As on 31st December 2012, Mahyco has been valued at INR ~ crore on company comparables basis. The company has been valued at average revenue multiple of ~x of different publically listed seed companies in India Maharashtra Hybrid Seeds Company Limited Financial Performance on the basis of Revenues and EBIT in INR Crore, FY2008-FY2012
700.0 600.0 500.0 400.0 300.0 200.0 100.0 0.0 FY'2008 FY'2009 Revenues FY'2010E FY'2011 EBIT FY'2012

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Company Comparables on the Basis of Revenue in INR Crore, FY2008-LTM year ending 31st December 2012
Revenue (in INR Crore) JK Agri Genetics Ltd.* Advanta India Limited** Monsanto India Ltd. Kaveri Seeds Company Limited Nath Seeds India Limited FY2008 FY2009 FY2010 FY2011 FY2012 LTM

Company Comparable Analysis on the Basis of Market Capitalization, Net Debt and Enterprise Value and Valuation Multiples in INR Crore and Multiples, LTM 31st December 2012
(INR Crore, unless Stated) Last Twelve Months (LTM) Year Ending December 2012 Net Debt Enterprise Value (EV) EV/Revenue EV/EBITDA P/E

Company

Market Cap

JK Agri Genetics Ltd. Advanta India Limited Monsanto India Ltd. Nath Seeds India Limited Kaveri Seeds Company Limited Mean Median

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Relative Valuation Analysis on the Basis of Deal Value, Deal Stake and Multiples in INR Crore, Percentage and Multiples
Date Target Company Deal Type Deal Value INR (Cr) Stake % Implied EV/ Revenue Implied EV/ EBITDA Implied EV/ PAT

21-Feb-13

R J Biotech Limited Century Seeds Private Limited Advanta India Limited Bisco Bio Sciences Private Limited NaanDanJain Irrigation Limited Zero Waste Agro Organics Private Limited Super Agri Seeds Private Limited Gold'N Chicks Limited Metahellix Life Sciences Unicorn Seeds Limited Syngenta India Limited Golden Seeds Private Limited

IPO

24-Nov-12

Inbound Acquisition Inbound Acquisition Inbound Acquisition

26-Jul-12

21-May-12

14-May-12

Domestic Acquisition Domestic Acquisition

24-Apr-12

2-Apr-12

Private Equity Fund Raise Inbound Acquisition Domestic Acquisition Block Trade

5-Mar-12

9-Dec-10

7-Jan-08

22-Dec-07

Inbound Acquisition Block Trade Mean Median

1-Jun-07

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MACRO ANALYSIS OF SEED INDUSTRY

MARKET SHARE OF MAJOR PLAYERS IN THE INDIAN HYBRID SEED INDUSTRY, FY2012

The Indian hybrid seed industry is dominated by Nuziveedu Seeds Private Limited. The company has a market share of ~ % in the overall Indian hybrid seed industry followed by Mahyco and Monsanto India limited which have a share of ~% and ~% respectively For Monsanto India, corn hybrid seed was the single biggest focus in seed business. Through its Project Golden Rays project the company has signed a public-private partnership with Rajasthan state government for increasing the maize hybrid yields by two folds Market Share of Major Players in Indian Hybrid Seed Market on the Basis of Contribution by Revenue in Percentage, FY2012
Nuziveedu Seeds Private limited

Maharashtra Hybrid Corporation (Mahyco) Monsanto India Limited (MIL)

Rasi Seeds Private Limited

Bayer Crop Science limited - India

Pioneer Seeds

Syngenta India Ltd.

Others

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MAHARASHTRA HYBRID SEEDS COMPANY LIMITED MANAGEMENT OUTLOOK AND FUTURE PROJECTIONS
The company is planning to increase its focus on product portfolio of the company by increasing its expenditure on research and development. It is expected that the company will increase in research and development expenditure from INR 55.0 crore to INR 100.0 crore per year in the next four years. These expenditures will have a direct impact on the companys revenues by bringing new and innovative products. Additionally, these research and development expenditures will also improve the quality of current product portfolio of the company which will lead to more cost efficient production process for the company. Due to this revenue of the company is expected to cross INR 2,000.0 crore till FY2017 as improvement in products of the company through research and development will generate positive cash flows in the future and will lead to amplification of companys revenues. It is expected that with the increase in revenues, operating margin of the company would also showcase an increasing trend. Additionally, Mahyco is planning to expand its operations in different nation specially neighbor countries of India by bringing new and innovative products so as to increase its penetration in the international seed market.

MAHARASHTRA HYBRID SEEDS COMPANY LIMITED FUTURE PROJECTION

Maharashtra Hybrid Seeds Company Limited is expected to cover hybrid paddy seed market in different countries such as ~ and ~. In FY2012 the company has already started its commercial production in these nations and expected to increase the commercial production of these products in future as well. This will increase the market penetration of the company in the international seed market and will amplify the companys revenues. Additionally, the company is expected to diverse its focus towards the production of hybrid rice seeds in the Indian seed market. As of now hybrid rice is contributing only ~% of the companys overall revenues

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Maharashtra Hybrid Seeds Company Limited is planning to introduce genetically modified (GM) seeds in food items in ~ and ~. Introduction of these GM seeds will increase the companys revenues from the international seed market The company is expected to showcase a revenue growth at a CAGR of ~% from FY2012FY2017. Mahyco is focusing on the development of Bollgard-II roundup ready flex cotton (BGII RRF) EBIT margin of the company is expected to be little under pressure as the company is expected to spend substantial amount in research and developments. EBIT of the company is expected to grow at a CAGR of ~% from FY2012-FY2017 Maharashtra Hybrid Seeds Company Limited Future Projections on the Basis of Revenues and EBIT in INR Crore and Percentage, FY2013-FY2017
2,500.0 26.0% 25.0% 2,000.0 24.0% 1,500.0 23.0% 22.0% 21.0% 500.0 20.0% 0.0 FY'2013 FY'2014 Revenue FY'2015 FY'2016 EBIT Margin FY'2017 19.0% in Percentage INR Crore

1,000.0

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DISCLAIMER

The research reports provided by Ken Research are for the personal information of the authorized recipient and is not for public distribution and should not be reproduced or redistributed without prior permission. You are permitted to print or download extracts from this material for your personal use only. None of this material may be used for any commercial or public use. The information provided in the research documents is from publicly available data and other sources, which are reliable. Efforts are made to try and ensure accuracy of data. With respect to documents available, neither the company nor any of its employees makes any warranty, express or implied, including the warranties of merchantability and fitness for a particular purpose, or assumes any legal liability or responsibility for the accuracy, completeness, or usefulness of any information, apparatus, product, or process disclosed, or represents that its use will not infringe privately owned rights. The report also includes analysis and views expressed by our research team. The research reports are purely for information purposes. The opinions expressed are our current opinions as of the date appearing in the material and may be subject to change from time to time without notice. Investors should not solely rely on the information contained in the research documents and must make investment decisions based on their own investment objectives, risk profile and financial position. The recipients of this material should take their own professional advice before acting on this information. Ken Research will not accept returns of reports once dispatched due to the confidentiality of information provided in our reports. In case, a report qualify for return, we will issue a credit, minus shipping charges, of equal value to the original purchase price, toward a future purchase no refunds. The decision about whether the product return can be accepted or not is solely at our discretion. Any dispute will be subject to laws of India and exclusive jurisdiction of Indian Courts.

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