investor and analyst meet - presentation [company update]
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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
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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
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