Balkrishna Industries Limited has informed the Exchange about Investor Presentation
BALKRISHNA INDUSTRIES LTD
Investor Presentation
August‘22
Safe Harbor
GROWING TOGETHER
This presentation and the accompanying slides (the “Presentation”), which have been prepared by Balkrishna Industries Limited (the “Company”), have been prepared solely for information purposes and do not constitute any offer, recommendation or invitation to purchase or subscribe for any securities, and shall not form the basis or be relied on in connection with any contract or binding commitment whatsoever. No offering of securities of the Company will be made except by means of a statutory offering document containing detailed information about the Company.
This Presentation has been prepared by the Company based on information and data which the Company considers reliable, but the Company makes no representation or warranty, express or implied, whatsoever, and no reliance shall be placed on, the truth, accuracy, completeness, fairness and reasonableness of the contents of this Presentation. This Presentation may not be all inclusive and may not contain all of the information that you may consider material. Any liability in respect of the contents of, or any omission from, this Presentation is expressly excluded.
Certain matters discussed in this Presentation may contain statements regarding the Company’s market opportunity and business prospects that are individually and collectively forward-looking statements. Such forward-looking statements are not guarantees of future performance and are subject to known and unknown risks, uncertainties and assumptions that are difficult to predict. These risks and uncertainties include, but are not limited to, the performance of the Indian economy and of the economies of various international markets, the performance of the tire industry in India and world-wide, competition, the company’s ability to successfully implement its strategy, the Company’s future levels of growth and expansion, technological implementation, changes and advancements, changes in revenue, income or cash flows, the Company’s market preferences and its exposure to market risks, as well as other risks. The Company’s actual results, levels of activity, performance or achievements could differ materially and adversely from results expressed in or implied by this Presentation. The Company assumes no obligation to update any forward-looking information contained in this Presentation. Any forward-looking statements and projections made by third parties included in this Presentation are not adopted by the Company and the Company is not responsible for such third party statements and projections.
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Performance Snapshot – Q1FY23
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Sales Volume
83,153 MT
Revenue
Rs 2,726 cr
EBITDA
Rs 547 cr
EBITDA Margin
20.1%
Net Profit
Rs. 320 cr
All Figures on Standalone basis
Declared 1st Interim Dividend of Rs. 4/- per equity share
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Management Commentary
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Raw Material remained at elevated levels.
prices
have
In the current quarter. Raw material costs have come at 46.6% of sales versus 42.8% in Q1FY22 and 45.3% in Q4FY22.
We expect come in Q4FY23
some relief
to
We continue to see a sustained uptick in demand for BKT tires. in Q2 we expect However, sluggish demand given macro challenges in Europe coupled with Heatwaves and inflationary trends in USA
We continue to grapple with high logistics costs.
In the current quarter, the logistics costs have come at 14.2% of sales versus 7.1% in Q1FY22 and 13.8% in Q4FY22.
We expect relief towards the end of Q3/early Q4
in logistics costs
focus
continued
Our on customer servicing especially in the last 2 years, since the start of the pandemic, gives us to outperform the competition
confidence
the
Sales Volume guidance for FY23 stands at 320,000 – 330,000 MT
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Capex Status
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Brownfield Tire Plant at Bhuj
▪ Commissioned the 50,000 MTPA brownfield tire plant at Bhuj ▪ Expect complete ramp-up in production in H2FY23 ▪ Project Capex Cost - Rs. 800cr
Carbon Black and Captive Power Plant
▪ Expect commissioning for 55,000 MTPA Carbon Black capacity along with Power Plant during Q3FY23 ▪ The Project of advanced carbon material for 30,000 MTPA will be commissioned in Q4FY23 ▪ Project Capex cost - Rs. 650cr
Modernization, Automation and Technology Upgradation
▪ Capex on Track ▪ Expect completion by end H1FY23 ▪ Project Capex cost - Rs. 450cr
The achievable capacity by end of FY23 will be 360,000 MT p.a
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Sales Volume Profile – Q1FY23
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In MT
1,99,213
2,11,261
+10%
2,01,760
2,27,131
2,88,795
83,153
FY18
FY19
FY20
FY21
FY22
Q1FY23
All Figures on Standalone basis
FY23 Guidance : 320,000 MT – 330,000 MT
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Volume Profile
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Segmental Sales
Channel Sales
Geographical Sales
3.2%
2.4%
32.8%
27.8%
9.6%
21.2%
Q1FY23
Q1FY23
Q1FY23
49.7%
64.0%
69.8%
19.6%
Agriculture
OTR
Others
Replacement
OEM
Others
Europe
Americas
India
RoW
All Figures on Standalone basis
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Profit & Loss
Particulars (Rs in Cr)
Revenue from Operations
Realized Gain on Foreign Exchange
Raw Material
(Increase) / Decrease in Stock
Employee Expenses
Other Expenses
EBITDA Margin
Other Income
Unrealized Gain / (Loss)
Interest & Finance Charges
Depreciation
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Q1FY23
Sales (MT)
83,153
2,646
80
2,726
1,400
-131
107
803
547
Total Income
EBITDA
Q1FY22
68,606
1,813
15
1,828
880
-98
94
417
535
20.1%
29.2%
-15
26
3
126
429
109
320
40
17
2
104
485
153
331
Standalone
YoY
21%
49%
2%
-12%
-3%
Q4FY22
77,119
2,374
58
2,432
1,144
-42
90
663
576
23.7%
52
-21
2
117
488
115
374
YoY
8%
12%
-5%
-12%
-14%
11.7%
18.1%
15.4%
FY22
288,795
8,267
152
8,419
4,034
-255
380
2,078
2,182
25.9%
185
39
8
444
1,954
544
1,411
16.8%
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Tax
PAT Margin
All Figures on Standalone basis
Profit Before Tax
Profit After Tax
Net Forex Gain/(Loss)
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Particulars (Rs in Cr)
Q1FY23
Q1FY22
FY22
FY21
Foreign Exchange Fluctuation on Sales
Foreign Exchange Fluctuation on Others
Total Realised Gain/(Loss) – A
Total Unrealized Gain/(Loss) - B
Net Forex Gain/(Loss) = A + B
80
11
91
26
117
15
7
22
17
38
152
55
207
39
246
-18
42
24
18
42
All Figures on Standalone basis
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Balance Sheet
Particulars (Rs. Cr.)
ASSETS
Non-current assets
Property, Plant and Equipment
Capital work-in-progress
Investment Property
Other Tangible Assets
Financial Assets
(i) Investments
(ii) Other Financial Assets
Income Tax Assets (Net)
Other non-current assets
Current assets
Inventories
Financial Assets
(i)Investments
(ii) Trade Receivables
(iii) Cash and cash equivalents
(iv) Bank Balances other than (iii) above
(v) Loans
(vi) Others
Other Current Assets
TOTAL
All Figures on Standalone basis
Mar’22
Mar’21
Particulars (Rs. Cr.)
Mar’22
Mar’21
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7,054
3,906
1,258
79
0
5,652
3,247
856
86
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EQUITY AND LIABILITIES
EQUITY
Equity Share Capital
Other Equity
Non-Current Liabilities
Financial Liabilities
1,213
1,026
(i)Borrowings
83
8
506
3,803
1,639
685
1,098
29
6
3
65
277
10,857
18
70
348
2,389
909
392
730
34
20
4
35
264
8,040
(i)Other Financial Liabilities
Provisions
Deferred Tax Liabilities (Net)
Other Non-Current Liabilities
Current liabilities
Financial Liabilities
(i) Borrowings
(ii) Trade Payables
(iii) Other Financial Liabilities
Other Current Liabilities
Provisions
TOTAL
6,925
39
6,886
6,007
39
5,969
807
262
501
0
24
251
31
1
0
25
204
33
3,126
1,771
1,942
808
120
251
4
893
633
74
165
5
10,857
8,040
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Resilient Business Model
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Gross Cash and Cash equivalents of Rs. 1,972 Cr as on 30th June, 2022
Diversified Product Portfolio, spread across Agriculture, Industrial, Construction, Earthmoving, Mining, Port, Lawn and Garden and ATV tires
Self Reliant in Carbon Black along with Multiple sourcing arrangements for other Raw Materials
Ongoing Capex
BKT has built a resilient business model and is confident to withstand the near-term challenges to emerge stronger with a higher global market share
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Strategy at BKT
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Our Focus Area
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Expand reach within existing Sales
Channels as well increase footprint
within replacement segment and OEMs
Expand the product portfolio by adding
Reach 100% utilization levels at Bhuj
large sized tires and strengthen
relationship with Customer base
Plant in the next few years
Market Reach
+
Penetrate Americas
+
Product portfolio expansion
+
Indian Markets
+
Utilization
Increase share of business in USA
markets by increasing supplies from
India
Strengthen our distribution channels
within Indian Markets
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To Serve Global OEMs…
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The Brand Names and logos mentioned are the property of their respective owners and are used here for identification purposes only
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With India Production and Global Sales
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Waluj, Maharashtra
Bhiwadi, Rajasthan
Chopanki, Rajasthan
Bhuj, Gujarat
Mould plant, Dombivali
India Our Manufacturing base
Note – Maps not to scale. All data, information, and maps are provided “as is” without warranty or any representation of accuracy, timeliness or completeness
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Balkrishna Industries – A Snapshot
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02
Leading ‘Off-Highway Tire” Exporter BKT is India’s Leading player in the Global ‘Off Highway Tire (OHT)’ Market
Wide and comprehensive product portfolio Deep understanding of OHT market has led to capabilities to manufacture over 3,200 SKUs
03
Capacities Achievable Capacity at end of FY23 will be 360,000 M.T.P.A.
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05
06
Global reach Sales to over 160 countries through Distribution network in Americas, Europe, India and Rest of the World
Strong OEM Presence Strong Partnerships with Global OEM’s a testimony of our Brand Acceptance & Performance
Experienced Management Team Experienced Management Teams across business divisions and verticals
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Our Strong Evolution
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1987
1995
2002
2003
1st Plant in Aurangabad inaugurated by our Founder Chairman, Late Mr. M P Poddar
Started Production of Off-Highway Tires
Plant in Bhiwadi, Rajasthan
Production of ATV, Gardening and earthmoving Tires
2011
2009
2008
2006
2004
Rebranding of BKT
Crosses Rs. 1,000 cr Turnover
Launch of Earthmax Tires
Plant in Chopanki, Rajasthan
Launch of Radial Agrimax Tires
2015
2018
2020
2021
2022
Started Greenfield Plant in Bhuj, Gujarat
Announced Capex at Waluj and Bhuj
Self Reliant on Carbon Black with the completion of Phase 2 at Bhuj in Gujarat
Commercialized new replacement plant at Waluj (Waluj 2) with capacity of 30,000 MTPA
Commercialized brownfield tire plant at Bhuj with capacity of 50,000 MTPA
India’s Largest Off-Highway Tire Manufacturer
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Business Practices Driving our Long-Term Sustainability
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Energy Efficiency
Environment
Waste Management
•
To ensure energy efficiency Initiated use of ‘Green Energy’ – installing 5MW windmills and 2 MW solar power plants for our greenfield projects
•
•
•
Controlled emissions through electrostatic precipitators in boilers and discharge through appropriate effluent treatment plants Replacing existing coal fired boilers with ‘gas fired boilers Planted approximately 1,00,000 trees in and around Bhuj plant
•
•
Implemented disciplined waste management system for systematic collection of scrap and safe storage/disposal and re-use of wastes Promoted industrial recycling of waste like reclaim rubber, crumb powder and rubberised friction compound
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Outcomes of our Sustainability Process
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Key Performance
High-yield ratio between material input & output with 99% efficiency leading to minimal process
1:1
Proportion of recyclable raw materials wrt the total raw materials used
2.5%
Waste reduction over the past three years
14.9%
Reduction in consumption of natural resources like water and coal over the last four years
12-18%
Future Targets
•
Zero Liquid Discharge (ZLD)
• Green House Gas (GHG) emissions
• Waste reduction
•
Consumptions reduction
• Green energy
Recognitions
•
•
BKT plants have been achieving ‘Energy Conservation Award’
by both the State & Central Government every year
BKT-Bhuj has been awarded ‘National Water Excellence
Management Award’ by CII
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Promoting Education, Health & Rural Development
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Our Endeavour is to improve the lives of children and adults, and our mission is to ensure health with dignity to every underprivileged children and adult
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BKT – A Strong Global Brand from INDIA
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Strengthening BKT Brand : Americas
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BKT is the Official and Exclusive Tire manufacturer of MONSTER JAM and its fleet of Monster Trucks – Monster Jam is a top sporting event in America
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Strengthening BKT Brand : Canada
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BKT Continental Cup – Curling: BKT is the Title Sponsor of Continental Cup
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Strengthening BKT Brand: Spain, Europe
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BKT is the Official Global Partner for the Spanish Football League “La Liga”
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Strengthening BKT Brand: Italy, Europe
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BKT is the Title Sponsor for the ITALIAN SERIE ‘B’ FOOTBALL CHAMPIONSHIP – THE NEWBORN - “SERIE BKT”
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Strengthening BKT Brand: France, Europe
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BKT is the Sponsor for the “LIGUE de Football Professionel (LFP)” in France
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Strengthening BKT Brand: France, Europe
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BKT Is Official Tire Supplier for Rugby World Cup France 2023
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Strengthening BKT Brand : EUROPE
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Premium Partner of EUROLEAGUE BASKETBALL
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Strengthening BKT Brand : Tractor of the year (TotY) - EUROPE
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Team of 26 expert journalists in agricultural mechanization, assign the Tractor of the Year (TotY) award to the ‘Best European Tractor’
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Strengthening BKT Brand : Australia
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BKT is the Official “OFF-HIGHWAY TIRE PARTNER” for KFC BIG BASH LEAGUE (THE AUSTRALIAN CRICKET LEAGUE)
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Strengthening BKT Brand : India
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The Brand Names and logos mentioned are the property of their respective owners and are used here for identification purposes only
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Official Partner of Teams in the Cricket T20 League for Season 14
Strengthening BKT Brand : India
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Ranveer Singh is now the Brand Ambassador of BKT
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Thank You
Company
Investor Relations Advisor
Balkrishna Industries Ltd. CIN - L99999MH1961PLC012185 Mr. M S. Bajaj Senior President (Commercial) & CFO msbajaj@bkt-tires.com www.bkt-tires.com
Strategic Growth Advisors Pvt. Ltd. CIN - U74140MH2010PTC204285 Mr. Shogun Jain shogun.jain@sgapl.net +91 77383 77756 www.sgapl.net
All images, texts and graphics contained in this document are the copyright of BKT. Permission to print hard copies of this material and to share it with interested people is granted unless otherwise provided by the Author of the document. It is forbidden to extract parts of the presentation without the express consent of the author. Balkrishna Industries Limited (BKT) cannot be held responsible for any incorrect data contained in this document. Any other form of reproduction, electronic or otherwise, as well as the application of any changes, partially or entirely, to images, texts, graphs and data is strictly prohibited without prior written permission from BKT. Balkrishna Industries Limited (BKT) reserves itself the right to alter any details contained in the document without prior notice.