1. BGR Energy Systems CMP- Rs.453 Reco- Buy Target price – Rs.636 - based on 19xFY11 EPS of Rs.33.5

2. Business Segment A. Construction Contract Segment- turnkey EPC and BOP - Caters to power and Oil & Gas Sector Business Divisions - Power plant - Captive power plant - Oil and Gas - Environmental Engineering B. Capital Goods Segment - Sells heat exchangers, waste heat recovery units and pressure vessels used in power, oil and gas and petrochemical industries

3. Revenue Mix – FY05-12P

4. Revenue break up as on March 31 FY09

5. Investment Arguments -EPC business emerging as a key growth driver - Order accretion likely to pick up on account of huge power supply demand gap in the country -Oil and gas business division likely to perform better on account of higher order accretion -Agreement with Foster Wheeler would lead to in house manufacturing of boilers - Well poised to face competition

6. EPC business emerging as a key growth driver BGR Energy focusing on being an end-to-end EPC contractor It secured order worth Rs.31 bln from Tamil Nadu Electricity Board (TNEB) for setting up a 600 MW power plant at Mettur in July 2008 Another order worth Rs.49 bln from Rajasthan Electricity Board (REB) for setting up 2 units of 600 MW power plant at Kalisindh

7. Order book composition Current order book- Rs.12500 crore; over 6xFY09 sales

8. EPC and BOP contracts

9.  Power supply demand gap will drive order accretion

10.  Rise in demand in the energy industry calls for a efficient distribution network for oil and natural gas transportation  Agreement with Foster Wheeler would lead to in house manufacturing of sub critical and super critical boilers  This is likely to improve margins going forward

11. Be cautious to  Order book driven by 2-3 major orders  The company imports BTG from international suppliers which impacts company’s margins  Debt/Equity ratio of 1.3 will result in high interest cost

12. Income Statement FY2008FY2009FY2010PFY2011PFY2012P Sales1520519303290164013950751 OPBDIT15532089331945765811 Interest268579739885975 Depreciation5575162215267 PAT8851156171424123133 Sales Growth %9327503826 Op. Profit Growth %7634593827 PAT Growth %11231484130

13. Ratios RATIOS FY2008FY2009FY2010PFY2011PFY2012P Current Ratio 2.52.02.51.91.8 RONW(%) 18.720.524.627.227.7 ROCE(%) 15.417.319.522.724.4 OPM (%) 10.210.811.4 NPM(%) 5.86.05.96.06.2