INVESTOR MEETSeptember 2016

What are Pigments?

Addressable markets

From local dominance to global leader– Strategic development– Infrastructure– Competitive advantages– Culture– Financial overview

Key Messages

2

Overview

What are Pigments?

3

4

Colorants

Dyes

Major Application - Textiles

Pigments

Major Applications – Plastic, Ink & Coatings

It is dry color powder, Insoluble in medium but easily dispersible in medium (Resin/binder)

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Pigment - Definition

PlasticsCoatings Inks Cosmetics

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Pigment - End Markets

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Addressable markets

India market estimated to be USD 235 Mn = Rs. 1550 crs.

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Market size of Organic Pigment

GLOBAL

USD 5.5 Bn

RELEVANT

USD 3.5 Bn

PLASTIC + COATING

USD 1.25 Bn

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From Local dominance to Global Leader – Strategic Development

Evolution of Sudarshan from a local player to a global player is result of a well crafted strategy which can be divided in four phases

Strategic Development – Journey

Phase-II

Next Leap in technology(1989-2008)

Phase-I

Establishing the Business

( Before 1989)

Phase-IIIPhase-IV

Becoming the Market Leader

(Post 2020)Going Global(2008-2020)

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Current Phase

Strategic Development – Pigment Focus

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60%

90%

40%

10%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

2004-05 2015-16

Agro

Pigment

Agro business - Margins are low - Working capital cycle is long

Strategic Development – Phase III Objectives

• Increase global share

• Become a 1st division Global player

• Be among top-4 pigment players in the world

Phase-III

Going Global(2008-2020)

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Low end markets Specialized marketsGeneral Printing Inks

Plastics

Coatings

Automotive Paints

Machine Colorants/Decorative Paints

Plastics

Cosmetics

Commodity Pigments Specialty pigmentsChromes & Cadmiums

Blue Green

Azos

High Performance Pigment

Specialized Azos

Specialized Effects

Toll manufacturing Direct market access

Industry Shift

+

+Product Shift

Model Shift

Brand Shift

Strategic Development – Phase III

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From Local dominance to Global Leader – Infrastructure

Europe Office

North America Office

Global Head Office

Infrastructure - Global Presence

Brazil Office

China Office

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Mexico Office

Infrastructure - India

Global Head office in Pune

R&D in Ambadwet near Pune

India based Manufacturing

Roha

Mahad

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Infrastructure - Sales

Well established distribution network across the Globe

11 Sales offices

50+ member Sales team

(Brazil, China, Europe, India,, Mexico, Turkey,)

60+ channel partners

20+ Stocking points

Sales across 150+ countries

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From Local dominance to Global Leader – Competitive Advantage

Competitive Advantage – Reliability

We achieve excellent product and process reliability

Product consistency and process control

ISO 9001

Six Sigma

We conduct over 800 tests

We guarantee over 4,000 specifications

Reliable technical information

ISO 17025:2001 Our laboratories are certified by the National Accreditation Board for Testing and Calibration Laboratories

Reliable service Oliver Wight Class A Certificate

We are recognised for operational excellence in supply chain management

Easy access to order information

SAP We use fully traceable business processes

Environment & Occupational health

ISO 14001

OHSAS 18001

We ensure safety for our plant operatives.

British Safety Council 5 Star Rating

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We spend over $2million every year on research, development and technical service, with over

100 technicians in 3 laboratories.

Competitive Advantage – R&D and EHS

We spend over $4million every year on environmental compliance with a $3.4 million effluent plant. All plants are ISO 14000: OHSAS certified.

Technology

Health, safety & environment

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Won 5 star BSC rating in 2012 for Roha and Mahad

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From Local dominance to Global Leader – Culture

Culture - Four Components

Culture - Higher Purpose

To be amongst the top four pigment players in the world

Culture - Vision

World Class Global Colour Solution Provider

Innovative & vibrantculture

Culture - Mission

with an

Culture – Values

Seva (Serve)

Courage

Commitment & Passion

Respect

TrustT

R

C

C

S

Competitive Advantage – Why Sudarshan?

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• Pigment Focus – don’t compete with our customers

• Breadth of the product range

• Reliability

• Customer Partnerships

– R&D

– Technical Service

– Customer Service

• Culture and Values – ease of execution and focus

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From Local dominance to Global Leader – Financial Overview

Financial overview - Overall

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7,853 10,267 10,883 12,073

10.4%

12.5%12.2%

14.0%

8.4%

13.5% 13.8%

18.5%

5.0%

7.0%

9.0%

11.0%

13.0%

15.0%

17.0%

19.0%

-

2,000

4,000

6,000

8,000

10,000

12,000

14,000

2012-13 2013-14 2014-15 2015-16

INR Million PBDIT % ROCE

Sales CAGR 15.4%PBDIT CAGR 27.5%

Sales INR Mn

6,967 9,167 9,628 10,734

13.8%14.6%

15.3%

18.4%

6.5%

13.3% 13.5%

22.5%

5.0%

7.0%

9.0%

11.0%

13.0%

15.0%

17.0%

19.0%

21.0%

23.0%

-

2,000

4,000

6,000

8,000

10,000

12,000

2012-13 2013-14 2014-15 2015-16

INR Million PBDIT ROCE

Financial overview - Pigments

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Sales CAGR 15.5%PBDIT CAGR 27.2%

Sales INR Mn

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Financial Overview – Q1 2016-17

– Strategic Sourcing initiatives

– Manufacturing cost reduction

– Firm budgetary control

Q1 2016-17 Corporate Pigment

Sales INR Million

3,368 2,835

PBDIT % 18.2% 23.4%

Financials - Sales Split

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Exports48%

Domestic52%

2015-16

CAGR over 4 years Exports CAGR 19.2% Domestic CAGR 12.0%

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Financial overview – ROCE

• Capital investment towards high margin and high growth product lines

• Consistent focus on reduction of working capital; NWC as percent to sales reduced from 34% to 22%

• Margins are improved with various strategic initiatives

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From Local dominance to Global Leader – Key Messages

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Key Messages

Growth engine – in pursuit of the visiona. From a non existent to the 5th largest producer in the last

7 yearsb. Received Government permission and signed a MOU for

Rs. 1000 crs investment

Customer PartnershipTop global coatings, plastics and cosmetic players have engaged us as a strategic partner

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Key Messages

Reliability and Sustainabilitya. British Safety Council – Sword of Honorb. Amongst the top suppliers in the world, which meet the

stringent social compliance norms of the CosmeticIndustry

Cutting Edge TechnologyIntroduced 100+ new products – High Performancerange, Cosmetic range

Culturea. Among “Top 50 Dream Companies to Work”b. Strong culture enables ease of execution and focus

Questions