Investor and Analyst Meet - Presentation [Company Update]

8/21/2019 Investor and Analyst Meet - Presentation [Company Update]

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SUTLEJ TEXTILES ANDINDUSTRIES LTDInvestor and Analyst Meet Presentation5th June 2015


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Certain statements in this document may be forward-looking statements which are

assumptions and expectations of future events. Such forward-looking statements are subje

and uncertainties like regulatory changes, domestic or international economic developm

other factors that could cause the actual results to differ materially from those conte

relevant forward-looking statements. Further, past performance is not necessarily indicative

Given these risks, uncertainties and other risk factors, viewers of this presentation are cautio

undue reliance on these forward looking statements. Sutlej Textiles and Industries Ltd will no

responsible for any action taken based on such statements and undertakes no oblig

update, amend, modify or revise these forward-looking statements to reflect subseq

developments.


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5-year Track Record

Future Growth Milestones

Company Overview

Q4 & FY15 – Performance Update

Business & Sector Outlook


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COMPANY OVERVIEW


5/33“Delivering robust growth on a sustainable basis”

Spun Dyed

Yarn Manufacturer

Last 5 yearsRevenue Growth

Last 5 YearsPAT Growth

Total Capacity(Spindles)

Cotton Mélange Yarn(Spindles)

Last 5 YearsEBITDA Growth

Total C(Loo

Credit Rating(CARE / India Ratings, A Fitch Group Co.)


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Compa

Product Mix

Ω One stop shop for all types of yarn

Ω Focus on Value added yarns – SpunDyed Yarn, Cotton Mélange

Ω Diversified offerings with presence

across value chain with – Yarns &Home textile

Manufacturing Snapshot

Ω Manufacturing units (3) – Jammu &Kashmir, Rajasthan & Gujarat

Ω Total Capacity: Spindles – 293,736;Home Textile looms – 62;

Ω Employs about 12,000 people

Domestic and

Ω Marquee clients

Ω Global footprin60 countries acr

o Europe,

o North Ameo South East

Sutlej Textiles and Industries Ltd (STIL) is India’s largest Spun Dyed Yarn manufacturer and lea

Value added / Specialty yarns

Marquee ClientsPage Industries


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Comp

Ω One stop shop for all types of spun dyed yarns

Ω Largest manufacturer of Value Added Dyed Synthetic

and Cotton Mélange Yarn in India – sustained growth

strategy wherein Company has added 138,280

spindles in last 10 years.

o Commissioning of value added products from

newer capacities resulting in higher proportion of

margin accretive products in overall product mix

o Brownfield expansion involving addition of 31,104

spindles. Incremental capacity would bededicated towards producing Value Added

Cotton Mélange and Cotton Blended Dyed Yarn.

STIL’s position to strengthen post completion of

the project

Ω Grey Cotton yarn contributes ~6% to Revenues as

compared to around 80% - 100% of other spinning mills


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Comp

Ω Scaling up presence in Home Textile business, byexpanding capacities to 9.6 million metres p.a.Increased presence in Home Textile segment will resultin further strengthening of Company’s end to endoperations – Yarn to Home Textile

Ω Optimum & efficient capacity utilization owing to themost modern Plant and Machinery – 56% ofCompany’s spindle age are less than a decade old

Ω Extensive Research and Development departmentwith latest Equipment's

Ω Robust order booking procedure – production basedon specific client requirements and advance ordersleading to negligible order cancellation and betterworking capital management

Ω Delivering consistent & robust returnthe healthiest Return Ratios in the iROE in FY2015 stood at 23% and 21%

Ω Consistent track record of payinincorporation. Declared highest payear of 17% in FY15

Ω In line with Company’s philosoph

shareholders, the Company allottethe ratio 1:2 (June 2013)


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Multiple Raw Material inputs

Innovative R&D in sourcing Raw Materials

Strong procurement management systems

Well-organized order booking procedure

Strong marketing network

Global footprint

Best-in-industry utilization levels

Strategically located units

Access to captive and continuous power supply

Ope

Sourcing

Raw MaterialEfficiencies

ProficientManufacturing

Processes

Robust OrderBooking andDistributionStrategies

In-house success – Strong in-house R&D capabilities facilitates higher efficiency &

performance

State of the art Research and Development department with latest equipment's

StrongR&D

Focus on Niche & Value added Products


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Key Gr

Value Added Products

Highly automated Production line

Strong & continuous R&D

Optimum & efficient resource utilization

Strong Balance-sheet

Sharpened focus on Home Text

Higher proportion of CottCotton Blended Dyed Ya

Strategically locat

GrowthDrivers


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India’s largest spun dyed yarn manufacturer – “one stop shop for all types of

Broad & Diversified Product mix

Strengthening presence in fast growing categories

State of the art manufacturing facilities

Strong Balance Sheet

Extensive Domestic and Global Marketing & Distribution Presence

Consistently rewarding shareholders


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5-YEAR TRACK RECORD


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Delivering resilient and sustainable growth

Financial Performanc

*Adjusted figs post incorporating bonus effect(During June 2013, STIL allotted bonus shares in the ra

1,582 1,537 1,6801,881 1,878

2010-11 2011-12 2012-13 2013-14 2014-15

F i g s i n

c r o r e

Revenue

275 178 234 306

17%

12%14%

16%

0

100

200

300

400

2010-11 2011-12 2012-13 2013-1

F i g s i n

c r o r e

EBITDA Margi

70

19

47

2010-11 2011-12 2012-13 20

F i g s i n

R s .

EPS*

114 32 77 131 115

7%

2%

5%

7%6%

0%

2%

4%

6%

8%

0

50

100

150

2010-11 2011-12 2012-13 2013-14 2014-15

F i g s i n

c r o r e

PAT Margin


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Operational P

186 200207 222 219

2010-11 2011-12 2012-13 2013-14 2014-15

Avg. Yarn realisation (Rs/Kg)

78,12472,346 76,334

79,666 80,040

2010-11 2011-12 2012-13 2013-14 2014-15

Sales (MT)

1,455 1,447 1,5811,768 1,754

2010-11 2011-12 2012-13 2013-14 2014-15

Sales (Rs. crore)

Y a

r n s


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Delivering maximum returns at minimal risk

Key Financ

1,090 1,136 1,147 1,2261,393

2 0 1 0 - 1 1

2 0 1 1 - 1 2

2 0 1 2 - 1 3

2 0 1 3 - 1 4

2 0 1 4 - 1 5

Gross Block (Rs. cr)

6.68.0

2 0 1 0 - 1 1

2 0 1 1 - 1 2

(after TU

1.9 1.5

3.2 2.6

2 0 1 0 - 1 1

2 0 1 1 - 1 2

D/E ratio

Avg. rate o

153 168211

282341

2 0 1 0 - 1 1

2 0 1 1 - 1 2

2 0 1 2 - 1 3

2 0 1 3 - 1 4

2 0 1 4 - 1 5

BVPS* (Rs.)

46

1222

2821

2 0 1 0 - 1 1

2 0 1 1 - 1 2

2 0 1 2 - 1 3

2 0 1 3 - 1 4

2 0 1 4 - 1 5

ROE (%)

2618

2328

23

2 0 1 0 - 1 1

2 0 1 1 - 1 2

2 0 1 2 - 1 3

2 0 1 3 - 1 4

2 0 1 4 - 1 5

ROCE (%)

*Adjusted figs post incorporating bonus effect (During June 2013, STIL allotted bonus shares in the ratio 1:2)


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Key Financ

INR Million

• *Adjusted figs post incorporating bonus effect (During June 2013, STIL allotted bonus shares in the ratio 1:2)

• USD calculations based on Avg rate: FY13: Rs. 53/ USD; FY14: Rs. 57/USD; FY15: Rs. 61/USD

Particulars FY13 FY14 FY15 FY13 FY14

Revenues 16,802 18,806 18,782 317 330 EBITDA 2,343 3,056 2,718 44 54 EBITDA Margin % 14% 16% 14% 14% 16% PBT 928 1,717 1,482 18 30 PBT Margin % 6% 9% 8% 6% 9% PAT 770 1,314 1,155 15 23 PAT Margin % 5% 7% 6% 5% 7%

Total Assets 11,492 12,729 13,408 217 223

Net Worth 3,464 4,625 5,582 65 81 Long Term Debt 3,377 2,667 3,392 64 47 Total Debt 6,517 6,303 5,976 123 111 EV as at year end 8,680 9,830 11,061 164 172

ROCE 23% 28% 23% 23% 28% ROE 22% 28% 21% 22% 28% Debt – Equity 1 0.6 0.6 1 0.6 EV/EBITDA 3.7 3.2 3.6 3.7 3.2 EPS* - Basic & Diluted 47 80 70 0.9 1.4

USD Millio


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FUTURE GROWTH MILESTONES


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Future Growt

Sutlej Textilesacquires Birla

Textile Mills with83,376 spindles

New capacities of31,104 spindles

producing Value Added Cotton

Mélange and CottonBlended Dyed Yarnstarts functioning

Brownfield project–

Addition of 31,104spindles producing

Value Added CottonMélange and CottonBlended Dyed Yarn

ScalinTexti

with amillio

Issuance ofCommercial Paper

Awards &Recognition –

Felicitated withNiryat Shree &

SRTEPC

Board of Directorsrecommend highest

ever dividend ofRs. 10 per share

translating into a payout of 17%


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Future Growt

Ω Board of Directors approved the purchase of Birla Textile Mills (BTM) ason a slump sale basis

Ω BTM, a unit of Chambal Fertilisers and Chemicals Ltd, is located atPradesh

Ω The consideration for purchase of BTM works out to Rs 232.63 crore (incassets) subject to closing and other adjustments, if any.

Ω Margin accretive transaction will be funded through a mix of Internalother options

Ω BTM’s present capacity of 83,376 spindles – manufacturing cotton, synyarn in Grey & dyed form; STIL’s total spinning capacities to reach 3,77acquisition

Ω During FY15, BTM reported revenues of Rs. 413 crore

Ω Transaction to be effective from April 1, 2015 – subject to approval fromother statutory clearances

Acquisition ofBirla Textile Mills

Ω Commenced commercial production of Value Added Cotton MéBlended Dyed Yarn from its additional 31,104 spindles installed at its uMills, Kathua (J&K) w.e.f. 1st November 2014 at a cost of Rs.151 crore.

Ω Existing total spinning capacity stands at 2,93,736 spindles, of which utilized to manufacture Cotton Mélange and Cotton Blended Dyed Yar

Ω The Company targets achieving higher utilization than planned withinoperations (FY2016) following higher acceptance of product from the c

Ω Higher output of value added products to enhance the Comp

profitability going forward

Increasing capacitiesresulted in Strong

contribution from highmargin Value AddedCotton Mélange andCotton Blended Dyed

Yarn


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Future Growt

Ω The Company’s Board of Director has approved brownfield capacity espindles at its Bhawani Mandi, Rajasthan facility

Ω Incremental capacity would be dedicated towards producing VaMélange and Cotton Blended Dyed Yarn

Ω Estimated Project Cost is Rs. 235 crore to be funded by mix of internal a

Ω Work on the project is likely to commence from Q3 FY16

Brownfield project -capacity expansion of

Value AddedProducts

Ω Expanding operations in Home Textiles division at one of the CoDamanganga Home Textiles, Daheli, Bhilad, Gujarat. Post completionexisting facility will increase to 9.6 million metres p.a. from earlier 2.5 mi

Ω Total project cost - Rs. 88.5 crore

Ω Project is to be completed in phases; with first phase to be operative in

Ω Increased presence in Home Textile segment will result in furtheCompany’s end to end operations – Yarn to Home Textile

Augmenting HomeTextiles Division


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Future Growt

Ω Invested around Rs. 58 crore during FY15, towards technology

debottlenecking, etc. this will result in further improvement of effi

utilization. It intends to make further investment of Rs. 53 crore towards

Ω The Company was felicitated with the esteemed “Niryat Shree”

President of India on December 01, 2014 at Vigyan Bhawan, New Del

growth in exports.

Ω The Company was also presented the prestigious “SRTEPC” award by

Gangwar, Hon’ble Minister of State for Textiles (Independent Charge

2014 in Mumbai.

Modernization Update

Award for ExportPerformance


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Q4 & FY15 – PERFORMANCE UPDATE


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Results Snapshot

INR crore

Q4 FY15

Q4 FY14

% Changew.r.t Q4 FY14

FY15

FY14

Revenue 468 482 (2.9) 1,878 1,881

EBITDA 68 70 (2.9) 272 306

EBITDA Margin (%) 14.5 14.5 - 14.5 16.3

EBIT

47 46 2.2 202 230

EBIT Margin(%) 10.0 9.5 +50 bps 10.8 12.3

PAT 27 21 32.7 115 131

PAT margin (%) 5.8 4.4 +140 bps 6.1 6.9

EPS 16.7 13.3 28.6 70.5 80.0


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Financial Perform

Ω Stable revenue for the year despite higher production, as presence of headwinds such as sharp decprices especially cotton & polyester resulted in lower realisations

Ω Moderation of operating profitability and margins on account of sluggish demand and weak pricing e

Ω The Company reported a marginal decline in profitability despite operating in a challenging business e

1,881 1,878

FY14 FY15

F i g s i n

c r o r e

Revenue

306272

FY14 FY15

F i g s i n

c r o r e

EBITDA131

FY14

F i g s i n

c r o r e

“Future growth levers: BTM acquisition, increased capacities of value added products, improvedBalance Sheet”


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Financial Performanc

Ω Revenue performance remained mixed during the quarter, with benefits from commissioning higher pMélange getting negated by softer pricing environment

Ω Enhanced operating profitability following improved product mix & higher generation of margin accproducts

Ω Profitability improvement owing to higher share of value added Cotton Mélange product in the overa

482 468

Q4 FY14 Q4 FY15

F i g s i n

c r o r e

Revenue

70 68

Q4 FY14 Q4 FY15

F i g s i n

c r o r e

EBITDA

21

Q4 FY14

F i g s i n

c r o r e


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Segment-wise Performance

Ω Q4 FY15 PBIT stood at Rs. 48 crore as against Rs. 49 cRs. 193 crore during FY15 as against Rs. 217 crore in FY14

Ω During FY15, the Company produced 74,983 MT as agalast year.

Ω Proportion of high margin Cotton Mélange and Cottonproduct increased in the overall product mix pooperations from new capacities.

459 449

1,789 1,784

49 48217 193

Q4 FY14 Q4 FY15 FY14 FY15

Yarns

Revenue (Rs. in crore) PBIT (Rs. in crore)

30 19

116 101

-9 -6 -11 -8

Q4 FY14 Q4 FY15 FY14 FY15

Home Textile

Revenue (Rs. in crore) PBIT (Rs. in crore)

Ω Revenues during FY15 stood at Rs. 101 crore as againsFY14.

Ω Reduction in loss following the Company’s decision of cDivision of Damanganga Fabrics due to unviable operathe year

Ω Expect the segment to deliver growth post completion oIncreasing capacities to 9.6 million metres p.a. from ea

p.a


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BUSINESS & SECTOR OUTLOOK


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~Rs. 235

(31,10

Capital Expenditure &

FY14 TotalAcquisition

Y a r n

( N

o . o f S p i n d l e s )

Cotton Mélange

(65,000)

Man-made Fibre

(107,200)

Cotton, Synthetic &Blended

(83,376)

~Rs. 151 crore

(31,104)

H o m e

T e x t i l e

Cotton andMan-made Fibre

(90,432)

RajasthanTextile

Mills

ChenabTextile

Mills

Capex

BirlaTextile Mills

2.5 million metres

96,104

107,200

90,432

~Rs.88.50

(7.1 million

DamangangaHomeTextiles

324,840

Completed Ongo

~Rs. 233 crore(inclusive of current assets)

Cape


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60%

10%

30%

65%

5%

Optimal Pr

25%

65%

10%

Higher proportion of margin accretive products in overall product mix

8%

95%

5%

95%

5%

FY15 FY16 FY


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Busin

Enhancing capacities at Bhawani Mandi bdedicated towards manufacturing value adCotton Blended Dyed Yarn. Incremental capCompany’s 30 acre free hold land

Sharpened focus on core yarn business couplehome textile segment to result in improved athereby enabling the Company to deliver susta

Greater production of high margin value completion of capacity expansion plan to reCotton Mélange and Cotton Blended Dyed Ya

Acquisition of Birla Textile Mills to offer scale andeconomies of scale benefits which will enable g

1

2

3

4

Niche ValueAdded

Products

Renewed Focus -Core Business

GrowthDrivers

ValueGenerators

12

34

6

5 GrowingCoreBusiness

InorganicGrowth

Domestic Drivers - Changing lifestyle, growing income and greater demand for quality produc

Overseas Drivers - Recovery in developed ecpolitical instability in neighboring countries

Higher production of value added items, incretextile business and lowering of leverage to driv5

6


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current size of Indian Textile Sector

largest employment generator and employs 45 million people

Million spindles capacity across ~1300 mills

share of the country’s total exports basket in 2013-14

Contribution to India’s total industrial production

Contribution to India’s gross domestic product

Indian Textile Sec


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Indian Textile Sect

58141

2011 2021P

Domestic textile & apparel industry ($ bn)

3182

2011 2021P

Textile & apparel exports ($ bn)

6.585

FY13

Total Fibre P

Source: Ministry of Textiles,Planning Commission,Technopak, ArancaResearch

ManifoldGrowth

GovernmentInitiatives

The sector is expected to witness significant growth resulting in expanding from present size$220bn by 2020

• Setting up of Textile parks across the country

• Setting up of venture capital fund (USD 16.53 mn) to provide equity support to start-ups in

• Integrated Skill Development scheme to train people covering all sub-segments of the sec

• Measures directed towards increasing Share of India’s exports over the next decade


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THANK YOU

Documents

Investor and Analyst Meet - Presentation [Company Update]