EID PARRY- Enrich life by creating value from agriculture

Stronger… Greener… Bigger…

COMPANY OVERVIEW“ Ranked 51 amongst the Top 200 Companies in India” -Economic Times 2009 survey

• EID Parry Limited is a public company headquartered in Chennai, South India • In been in business for more than 225 years.• No.1 Sugar Producer in South India including Refinery.• Dominant player in sugar industry with interests in promising areas of bio-

pesticides and nutraceuticals.

Main States :-

• Tamil Nadu• Andhra Pradesh• Karnataka

PARRY’S PRESENCE

ECONOMIC SCENARIO2014-15

• The Global economy grew at 3.4%• GDP of India 7.3%• A global surplus of sugar production for 4 years, beginning

from 2011, continued to tilt the demand - supply equilibrium, sending sugar prices on a downward spiral• Sugar Prices trailed at Rs 22,000/ Mt ,lowest in the last six

years

ECONOMIC SCENARIO (CONTD…)

2015-16

• Global economy grew at 3.1 %• India grew at 7.6 %• According to the USDA estimate, because of :- - The growing demand for renewable energies, - Rising demand for global sugar consumption, - Supportive government policiesThe industry is expected to outperform in the next five years. Due to cyclicality, however, world price of sugar is still expected to remain highly volatile• Sugar prices are expected to rise, due to fall in production.

Production declined in India - drought impacting yields in Maharashtra, Karnataka and Andhra Pradesh and because of the floods in Tamil Nadu

FY 20

12-13

FY 20

13-14

FY 20

14-15

FY20

15-16

010002000

Chart Title

Sales Other Income

PRODUCTION ( Global and India )

Sugar Prices• Steady increase in the Fair and Remunerative Price (FRP)

stipulated by the Central Government• Sugarcane accounts for around 80 per cent of the cost of sugar

production. Consequently, leading to an increase in production costs, affecting operating margins

Acquisitions :-

• Increased the basic customs duty on raw sugar imports from 25% to 40%, to reduce imports• Extending soft loans to sugar

mills, to help them from the liquidity crunch• Export subsidy of 4,000/MT,

for raw sugar3.0

Government Initiatives :-

Sadashiva –Bagalkot (Karnataka)• 76% Shareholding, Investment

Rs. 496 Mn

Parrys Sugars Industries Ltd –(Haliyal, Ramdurg, Sankili) (Karnataka & Andhra)• 65% Shareholding, Investment

Rs. 988 Mn

PARRY PRODUCTS

• SEGMENTS : –- Sugar

• Confectionary Sugar• Beverage Sugar• Biscuits Sugar• Pharma Sugar

- Nutraceuticals- Ethanol (by Product)- Power (by product)- Bio- Pesticides

REVENUE CONTRIBUTION

PRODUCT- Sugar

• EID Parry has decided to focus on differentiated sugar-related offerings to boost market share.

• As a Brand, it has introduced Amrit- a 100% natural cane sugar.• R&D division is focused on developing sugarcane varieties having high yield,

better sucrose content

PRODUCT- Nutraceuticals• Parry Nutraceuticals’ products have

become an integral part of several major brands in more than 38 countries.

• The main markets being in North America, Europe, South East Asia and the Far East for many years now.

• The Nutraceuticals Division’s standalone turnover was at 72 Crore in 2015-2016

• On a consolidated basis the Nutraceutical Business registered sales of 235 Crore as compared to

PRODUCT - Bio- Pesticides

• The core of this business is the Neemazal range of products made from neem seed kernel at the Company's production facility at Thyagavalli near Cuddalore, Tamil Nadu.

• The Bio-Pesticides Division registered a turnover of 104 Crore in 2015-16

• New products from this company include AbdA, SpreadMax, Yieldsmor, and Beemax

MAIN COMPETITORS ( Financials)

NAME LAST PRICE

M-CAP NET PROFIT

TOTAL ASSET

EID Parry 250.85 4,411.72 -66.45 2,100.02

Balrampur Chini

112.80 

2,763.68 99.42 2,731.54

Bajaj Hind 14.45 1,637.99 -114.28 8,741.67

Shree Renuka

13.40 

1,244.61 -285.30 6,496.24

Sakthi Sugars

29.90 355.36 -55.07 1,178.06

Comparison is Based on -Market Capitalisation-Net Profit-Total Asset

FUNCTIONS

PRODUCTION• Domestic sugar production

upto March 31, 2016 stood at 23.7 million tonnes• Uses Production practices like

drip-irrigation, trash shredding, trash multching and inter-cropping.• Innovative Enviro-friendly

crop production solutions

OPERATION• Standalone Revenue of

your Company for the year was ` 2,265.04 Crore • Overall expenses for the

year was ` 2129.06 Crore, • Performance of the Bio

division and Cogen operations was better than the last year

FUNCTIONS (contd..)

Human Resource• Farm Labour Relations• Parry Service Kiosks

(PARRY MAYYAM)• Harvesting / Transport

Labourers Insurance• Company believes that

people are the key to success

Technology• Encourage Innovation• Co-generation concept• Additional stream of

revenue by Co-generation power• Substituting the

conventional thermal alternative.

Financial Performance

FY 2012-13 FY 2013-14 FY 2014-15 FY2015-160

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1000

1500

2000

2500

REVENUES

Sales Other Income

FY 2012-13 FY 2013-14 FY 2014-15 FY2015-16

-200

-100

0

100

200

300

400

PAT

Axis Title

FY 2012-13 FY 2013-14 FY 2014-15 FY2015-160

500

1000

1500

2000

EXPENSES

Expenses

FY 2012-13 FY 2013-14 FY 2014-15 FY2015-160100200300400500600700

EBIT

Axis Title

FINANCIAL RATIOS

GROSS MARGIN = GROSS PROFIT

NET SALES

• ROCE = NET INCOMECAPITAL EMPLOYED

• ROA = NET INCOMETOTAL ASSETS

FY 2012-13 FY 2013-14 FY 2014-15 FY2015-16

45.5%

-22.6%

18.2%

-23.6%

GROSS MARGINOPERATING MARGIN

FY 2012-13 FY 2013-14 FY 2014-15 FY2015-16

14.8

1.16

7.06

-3.46

9.120.69

3.8 -1.91

ROCE ROA

FINANCIAL RATIOS (Contd... )

FY 2012-13

FY 2013-14

FY 2014-15

FY2015-16

01 1.28 1.4 1.17

0.63

D/E RATIO

D/E

FY 20

12-13

FY 20

13-14

FY 20

14-15

FY20

15-16-5

51525

19.08

1.518.43

-3.78

Basic EPS (Rs.)

Basic EPS (Rs.)

DEBT/ EQUITY RATIO = DEBT

EQUITY

EPS = NET INCOME - PREFERENCE DIV

No. OF O/S SHARES

AFFECTING FACTORS :- Environment: • In order to reduce pollution hazards,• Implementing environment

management system (EMS). • To Improve economic and

environmental performance of sugar processing unit

Technology: • Advanced technologies in Indian

market made both product and production processes enhanced.

• R&D centers have been established for product innovation

Government: • The industry operates under strict

legal regulations.• Although in some cases it affects

the industry and producers.

Socio Economic: • It includes Income levels of

consumers.• Purchasing power of people.• Cost of plant setup.• Industry wage rates

SWOT ANALYSIS

STRENGTHS : - Farmers Loyalty- Portfolio has Bio pesticides and nutraceuticals.- Strong Management- Government friendly Policies

WEAKNESS : - Volatility in sugarcane prices - Supply at concessional price to the PDS- Labour Unavailability- Wheat/ Paddy crop competition

OPPURTUNITIES :- Technology upgradation- Opportunities in terms of export- Burgeoning Middle class- Lifestyle

THREATS :- Cheap sugar imports- Monsoons- Government Policy Changes- Sugar Surplus

SWOT

PARTNERS (GLOBAL)

CANE GROWING MILLING MARKETING

Mitr Phol –Thailand CTC –Brazil ICSB ISSCT

SPRI –USA SRI –Australia Mitr Phol –Thailand TLPT –UK Honeywell Tech IPRO –Germany ISSCT

Cargill Sucden Czarnikow

MAJOR STRATEGIES 2013-14

• Introduced drip irrigation and solar pumps to resolve the issues of water scarcity and power interruptions respectively.

• Developed an in-house steam conservation process that consumes 3% less steam for every ton of cane used.

• Introduced an innovative “Parry Roller” design which helps us in recovering more sugar from every ton of cane used.

• Through the “Bon Sucro” initiative, farmers are educated on several best practices in farming.

MAJOR STRATEGIES (CONTD….)2014-15• Parry pioneered the programme of introducing Trichogramma, a bio-control agent, for

eliminating the use of chemical pesticides in the sugar industry. • It sees farmers not as suppliers of raw material but as customers.• Helping key stakeholders is a forward-looking corporate strategy, as it helps build

managerial capabilities by promoting stronger employee involvement with farmers, and reduces the uncertainty due to the decontrol of the sugar industry.

2015-16• In September 2015, the company has announced plans to adopt portfolio diversification and

invest in brand development as a means of notching up better revenues.• In line with future strategies of growth, capacity augmentation and plant modernization were

carried out at the plants at Haliyal and Bagalkot. Together these two plants at Karnataka crushed a total 15.27 LMT of cane, an increase of 3.37 LMT over the same period of 11.89 LMT for the previous year.

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