SIRCANSE27 January 2023

Sirca Paints India Limited has informed the Exchange about Investor Presentation

Sirca Paints India Limited

January 27, 2023

To, The Managing Director National Stock Exchange of India Limited Exchange Plaza, 5th Floor, Plot No. C/1 G-Block, Bandra-Kurla Complex, Bandra (E) Mumbai – 400051

To, The General Manager BSE Limited Department of Corporate Services Phiroze Jeejeebhoy Towers, Dalal Street, Mumbai - 400001

NSE Symbol-SIRCA

BSE Scrip Code:543686

SUB: SUBMISSION OF INVESTOR PRESENTATION

Dear Sir/Ma’am,

Pursuant to Regulation 30 of the SEBI (Listing Obligations & Disclosures Requirements) Regulation, 2015, please find enclosed herewith Earnings Presentation of Q3 & FY23 of the Company.

This is for your information and record.

Thanks & Regards,

For Sirca Paints India Limited

Suraj Singh Company secretary & Compliance officer

Place: Delhi

Encl: As above

NSE: SIRCA | BSE: 543686 | Bloomberg: SIRCA:IN CIN: L24219DL2006PLC145092

Q3FY23

Earnings Presentation

J A N U A R Y 2 0 2 3

INSIDE

Introduction

Sirca at a Glance

Sirca’s Value Proposition

Brand Portfolio

Sirca’s Footprint & Distribution

Customer Segments

Manufacturing Facilities

Marketing & Promotional Activity Industry

Contractor Loyalty Program

Indian Paints Industry

Wood Coatings & Finishes

Board of Directors

5Y Financial Summary

Q3FY23 Result Discussion

Get in Touch

Disclaimer

Company Profile

C O M P A N Y P R O F I L E

INTRODUCTION

About Sirca Paints India Limited • Sirca Paints India Limited (SPIL) is among the country’s leading manufacturers of wood coating

products. With its history dating back to more than 2 decades, today the company fulfils emerging aesthetic wood finishes needs of lakhs and adds extra mileage to India’s growing furnishing market. • The company is engaged in the manufacturing, sales and exports of wood coatings and other decorative

paints under the brands ‘Sirca’, ‘Unico, and others.

• With its newly commissioned manufacturing facility, SPIL is progressing on its journey to become a

leading brand in the Indian wood coatings & paints market.

• The company is recognized for its hallmark of superior quality wood finishes. With a vision to have a global footprint, the company is working towards exporting its products to neighboring countries i.e. Nepal, Bangladesh and Sri Lanka catered by its state-of-the-art manufacturing facility at Sonipat.

About Sirca S.P.A (Italy) Founded in the 1973, Sirca is an integral part of the Durante Group. It is among the leaders in the field of Italian wood paints, with a widespread presence in 85+ countries, 300+ employees, 4 production plants, and a turnover of €180+ million. Sirca is a research and development-oriented organization, employing more than 20% of its personnel in technical areas, such as analysts, testers, colorists, and applicators.

Sirca's value proposition revolves around premium Italian wood coatings & finishes, which are developed in collaboration with Italy’s most prestigious furniture brands.

Exclusive licensee products to Nepal, Bangladesh & Sri Lanka

Newly commissioned manufacturing facility

85+ Countries

300+ Employees

4 Production Plant

€180+ Mn Turnover

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SPIL AT A GLANCE

EXCLUSIVE LICENSEE Of Globally Established ‘Sirca’ brand for India, Nepal, Bangladesh and Sri Lanka

MARKET LEADER Among the Top 3 Premium wood coatings brand in India

Market Leader in North India

OEM VENDOR Preferred OEM Vendor on its way to become a Dominating Retail Brand

486 Team Strength

2,417 Nodes* in Distribution Network

13 Branches & Depots

26 Sirca Studios

* Inc l udi ng OE M ’ s

02 Manufacturing Facilities

659 OEM’s Clientele

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VALUE PROPOSITION

The promise and quality of ‘Made in Italy’ blended with innovation, research and development to provide the most sophisticated and customized products and services in the paints industry.

CORE OFFERING :

Premium Italian Wood Coatings

Metal Coatings

Glass Coatings

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VALUE PROPOSITION

Portfolio Expansion

Wall Paints Range

Recent Additions

Wood Coatings MASS MARKET RANGE • Nitrocellulose (NC), Melamine, PU Coatings and Thinners

• Hygiene Plus Additives

Wall Paints & others • San Marco Portfolio

(Decorative, Solid Colour Finishes, and Texture Coatings) • DuranteVivan Portfolio

(Adhesives)

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BRAND PORTFOLIO

Sirca • Luxury Italian Wood

Coatings

• High-end Wall Paints

Unico • Mass-market Wood Coatings products

San Marco • High-end Decorative, Solid Colour Finishes and Texture Coatings

DuranteVivan • Adhesives Product Portfolio

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T N O C B U S

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E N T R Y- L E V E L

E C O N O M I C

L U X U R Y

* Inc l udes Indi a, B angl ades h, Nepal and S r i Lank a

P R I C I N G

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C O M P A N Y P R O F I L E

SIRCA’S FOOTPRINT

MOHALI

KARNAL RAI & SONIPAT

DELHI

GURUGRAM

INDORE

NAGPUR

MUMBAI

THRISSUR

JAGADHARI

AMBALA

NOIDA DEHRADUN NEPAL

SILLIGURI

GUWAHATI BANGLADESH KOLKATA

RAIPUR

CHENNAI

SRI LANKA

1,746 Dealers & Distributors

26 Sirca Studios

Key

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13 Branches & Depots

02 Manufacturing Facilities

BRANCHES

MANUFACTURING FACILITIES

SIRCA STUDIOS

EXPORT MARKETS

C O M P A N Y P R O F I L E

CUSTOMER SEGMENTS

~70% Revenue Contribution

1,746 Aggressively growing Distribution Network with 1,746* nodes

Growth Strategy

• Chain of studios being opened across India,

currently 26 studios & 13 branches are operational. • Creating a wider and self-sufficient product portfolio to

expand & strengthen distribution network.

* E x c l udi ng OE M ’ s

CUSTOMER SEGMENTS

~30% Revenue Contribution

APPROACH

• Dealing in Premium products. • Providing strong technical support and after sales

services to OEM’s.

Clientele (of 659 OEM’s)

• Key Clientele includes: Godrej, Jindal Stainless,

Indoline, Space Wood, Pyramid, MAS Furniture, Alsorg, Soundarya Decorators, etc.

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MANUFACTURING FACILITIES

COMMISSIONED

In Nov’2019, Sirca commissioned a manufacturing facility for Nitrocellulose, Melamine, Economical PU products, and PU thinner at Sonipat (NCR).

~33.20 CRORES

This unit has been established with a total CAPEX of ~33.20 Crores, as a primary ‘Object of Issue’ from our initial public offer in 2018.

COMISSIONED WALL PAINT & WALL PUTTY MANUFACTURING

PRODUCTION CAPACITY

This Company has a production capacity of:

In Q1FY21 the company shifted it’s wall paint manufacturing unit to a new, bigger premises in response to higher than originally anticipated demand.

~225 CRORES

MAXIMUM CAPACITY

8,000 Tonnes

For NC, Melamine and Economical PU products

4,000 Tonnes

For PU Thinner and above-mentioned products

At peak capacity utilization this manufacturing facility has a capacity to generate ~225 Crores in revenue with an optimal product-mix.

48 Lakh Liters

Wall Paints

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MARKETING AND PROMOTIONAL ACTIVITIES

INCREASE EXPENDITURE ON ADVERTISEMENTS

To achieve a greater brand-recall for ‘Sirca’, the company is increasing its expenditure on advertisements, marketing, and sales promotion efforts.

IMPLEMENTED 360° MARKETING CAMPAIGN

The company has implemented a 360° marketing campaign in its target markets, especially in the newly tapped regions.

Radio commercials & tv commercials in regional languages

Increase expenditure on Advertisements

TV COMMERCIALS IN REGIONAL LANGUAGES

TV commercials have been launched in Hindi and other regional languages, along with advertisements in movie theaters. Recently also launched Radio City campaign in NCR.

INCREASED DEALER NETWORK

To strengthen Sirca’s outdoor presence, the company is installing shop boards at its dealer network. At present, a total of ~1,270 shop boards have been installed.

Implemented 360° Marketing Campaign

Shop Boards & Hoardings at Dealer Network

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MARKETING AND PROMOTIONAL ACTIVITIES

Sirca studios for a class-apart consumer experience

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MARKETING AND PROMOTIONAL ACTIVITIES

~1,270 shop board installed for enhanced visibility. Refreshed brand positioning as “Your Italian Autograph”.

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C O M P A N Y P R O F I L E

CONTRACTOR LOYALTY PROGRAM

Sirca Parivaar 2.0 – App Update

11,000+ Contractors Registered

5,000+ Average Daily Product Scans

5,000+ Application Downloads

Enhanced Version of Sirca Parivaar App

The main objective of this app is to automate the process of loyalty program and streamline the process of rewards and redemption.

Key Features

• Specifically designed for architects, contractors, and

dealers using Sirca products

• Bringing all industry stakeholders together on the

application

• Automate Sirca loyalty program • Maintain, view reward points easily on a real-time basis • Users can check account balance on a real-time basis • Users can redeem points at any given point • Users can access account statement & reports in the

application

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INDIA PAINT INDUSTRY

55,000 CRORE MARKET The Indian Paints industry is estimated to be a 55,000 Crore market annually

PAINT INDUSTRY IS BROADLY DIVIDED INTO

3/4th

1/4th

Decorative Paints & Coatings

Industrial Paints & Coatings

Decorative Paints constitute almost 3/4th of the market share while the rest 1/4th lies with Industrial Paints.

2/3rd SHARE IN INDIA WITH ORGANIZED INCUMBENTS In between the organized and unorganized incumbents, the former holds the majority of 2/3rd share in the India paint industry, while the rest lies with unorganized incumbents.

~12% CAGR DECORATIVE SEGMENT GROWTH IN BETWEEN FY09-19

The decorative segment is the relatively faster- growing segment of the paints industry. It had maintained a growth CAGR of ~12% between FY09- 19, this was led by strong demand from the rural and tier-II, tier-III cities and reduced repainting cycle from the consumers.

PAINT INDUSTRY IS EXPECTED TO GROW AS:

• An increase in disposable income. • Rising urbanization & rural economy.

• Increasing trend of nuclear families. • Reduction in average repainting cycle on

account of improvement in disposable income and improving lifestyles.

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WOOD COATINGS & FINISHES SEGMENTS

Overview

Market Trends

• Wood coatings are used for their

adhesion, anti-corrosion, durability, appearance enhancing & aesthetics features on wooden furniture.

• In the last decade, India has shaped

up to be one of the largest markets for wood coatings products in the Asia-Pacific region.

• Indian furniture industry, which

happens to be a key demand driver of wood coatings products, is estimated to be a USD 5 billion market in 2018- 19, with nearly USD 1.5 billion in exports and USD 0.6 billion in imports, respectively.

• The wood coatings product category is facing a shift in consumer preferences from toxic and environmentally harmful products to eco-friendly and non-toxic products.

• There is a shift underway from harmful products like Nitrocellulose

(NC) and Melamine coating products to high-quality Polyurethane (PU) coatings on account of multiple factors such as:

•

Increasing health-consciousness and awareness about the harm-full effects of these degrading wood coatings,

• Growing awareness about environment-friendly products, • Greater artistic and aesthetic value, • Other factors include - lower emission of odour, increased durability

and resistance which make these products more preferable. • The increasing value of aesthetics and expenditure towards the

furnishing segment is supporting this transition. In the long-run, an increase in disposable income and a shift towards higher-end wood coating products in the value chain will be the leading growth driver for the wood coatings market.

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BOARD OF DIRECTORS

Mr. Sanjay Agarwal

CHAIRMAN AND MANAGING DIRECTOR

Mr. Apoorv Agarwal

JOINT MANAGING DIRECTOR

Mr. Gurjit Singh Bains

NON-EXECUTIVE DIRECTOR

Mr. Ugo Pelosin

NON-EXECUTIVE DIRECTOR

Mr. Agarwal is one of the co-founders of Sirca Paints India Limited, he has been working the Paints & Coatings industry for more than two decades. Under his able leadership, Sirca has risen the ranks as one of the most prominent brands of luxury wood coatings in the country. A Chartered Accountant by qualification, Mr. Agarwal currently looks after the finance and strategy functions of the organization.

Mr. Agarwal has holds a bachelor's degree from Delhi University and a masters degree in Finance & Marketing from IIPM. He has a decade of experience & training in the Italian furnishing and Italian wood coatings space. He has worked with prominent Italian furnishing brands like B&B Italia, Reflex, Laura Meroni, Simon Cenedese, and many others. At Sirca Paints India, he looks after the Sales and Marketing functions. He has also been bestowed with the responsibilities of establishing Sirca's presence through its distribution network across the country.

Mr. Gurjit Singh Bains is one of the co- founders of Sirca Paints India, he has more than two decades of experience in wood coatings and the Italian furniture industry. He was among the early introducers & promoter of branded Italian furniture in India.

Mr. Pelosin has more than two decades of experience in exporting wood coatings globally. Apart from being the Non-Executive Director of Sirca Paints India, he is also the Export Director of Sirca S.p.A (Italy). He was appointed as the Non-Executive Director of the company in 2018, nominated by Sirca S.p.A (Italy) as per the Shareholder Agreement entered between the companies.

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BOARD OF DIRECTORS

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Mr. Shyam Lal Goyal

NON-EXECUTIVE & INDEPENDENT DIRECTOR

Mr. Anil Kumar Mehrotra

NON-EXECUTIVE & INDEPENDENT DIRECTOR

Mrs. Anu Chauhan

NON-EXECUTIVE & INDEPENDENT DIRECTOR

Mr. Sanjay Kapoor

NON-EXECUTIVE & INDEPENDENT DIRECTOR

Mr. Goyal was the Audit and Finance Advisor at Ghazanfar Bank. He leads each firm’s lines of business - Banking Sector and FMCG industries in an expeditious manner. He holds experience of over 30 years and has held various senior positions in India and abroad. His experience in global financial operations, Corporate Governance, Enterprise-wide systems, and Financing is a proven asset.

Mr. Mehrotra is an experienced professional who has worked as a CFO in the Automotive and FMCG industry for over 30 years in 4 different countries. His area of expertise includes - business strategy and financial planning, international operations, acquisitions, corporate governance controllership and taxation, business unit restructuring & integration systems.

Mrs. Chauhan has a vast experience of over a decade in management and team leadership skills. She has a proven track record of running successful operations and nurturing & growing businesses. Her core area of expertise includes - business management, directing and planning, supervising multi- disciplinary teams, processes, documentation, business Control checks, audits, and vendor management.

Mr. Kapoor is a doctor by profession, he has an MBBS and DCH (Diploma of Child Health) with over 20 years of experience in the pediatrics department. He was appointed on the Board of the company in 2017.

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5Y Financial Summary

5 Y F I N A N C I A L S U M M A R Y

5Y PROFIT & LOSS SUMMARY

PARTICULARS

Revenue from Operations

Total Income

Total Operating Expenses

EBITDA (Excluding OI)

EBITDA (Excluding OI) %

Interest Cost

Depreciation & Ammortisation

Profit Before Taxes

Profit After Taxes

Note: 1. Figures up till FY18 and not as per Ind AS 2. FY20 EBITDA (Excluding OI) & Total Operating Expenses adjusted for one-time impairment loss of 0.76 crores 3. FY21 EBITDA (Excluding OI) & Total Operating Expenses adjusted for net-loss of fire incident

FY22

FY21

FY20

200.02

204.43

162.27

37.76

18.9%

0.08

4.13

37.95

27.73

143.18

157.32

121.37

21.81

15.2%

0.10

3.65

22.58

16.61

135.05

140.66

103.26

31.78

23.5%

0.08

2.39

34.18

25.15

(₹ in crores)

FY18

89.22

93.57

63.26

25.96

29.1%

0.18

0.59

29.54

19.38

FY19

125.34

131.46

93.81

31.53

25.2%

0.11

0.93

31.97

22.23

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5 Y F I N A N C I A L S U M M A R Y

5Y BALANCE SHEET SUMMARY

PARTICULARS

Shareholders Fund

Non Current Liabilities

Current Liabilities

- Trade Payables

Total

Non Current Assets

Current Assets

- Inventories

- Trade Receivables

Total

Note: 1. Figures up till FY18 and not as per Ind AS

FY22

225.15

0.05

37.16

31.40

262.37

57.47

204.90

69.69

45.63

262.37

FY21

201.60

0.28

52.88

34.84

254.75

45.89

208.86

64.95

43.05

254.75

FY20

184.65

0.18

24.98

20.29

209.82

52.83

154.13

51.44

45.59

209.82

(₹ in crores)

FY18

67.63

0.33

26.57

6.93

94.56

22.43

72.11

14.85

33.53

94.56

FY19

167.84

0.48

22.45

17.02

190.79

36.74

154.04

26.77

39.7

190.79

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5 Y F I N A N C I A L S U M M A R Y

5Y CASH FLOW SUMMARY

PARTICULARS

Cash from Operating Activities

Cash from Investing Activities

Cash from Financing Activities

Net Cash Flow

Net Cash at Beginning of Year

Net Cash at End of Year

Note: 1. Figures up till FY18 and not as per Ind AS

FY22

FY21

FY20

FY19

FY18

(₹ in crores)

35.16

-11.06

-17.38

6.73

38.46

45.18

19.24

14.74

-0.10

33.87

4.59

38.46

-7.56

4.81

-8.45

-11.21

15.79

4.58

12.34

-71.28

68.36

9.42

6.37

15.79

-18.28

-12.87

15.5

1.31

13.33

14.65

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Q3FY23 Result Discussion

Q 3 F Y 2 3 R E S U L T D I S C U S S I O N

PROFIT & LOSS SUMMARY

Standalone

(₹ in crores)

PARTICULARS

Q3FY23

Q2FY23

Q3FY22

YoY %

QoQ %

Revenue from Operations

Total Income

Total Operating Expenses

EBIDTA (Excluding OI)

EBIDTA (Excluding OI) %

Interest Cost

Depreciation & Ammortisation

Profit Before Taxes

Profit After Taxes

Earnings Per Share (₹)

65.22

66.18

51.15

14.07

72.92

74.45

53.75

19.17

53.20

54.56

41.15

12.05

22.6%

21.3%

24.3%

16.7%

-10.6%

-11.1%

-4.8%

-26.6%

21.6%

26.3%

22.7%

-108 BPS

-472 BPS

0.01

0.87

14.16

10.53

3.84

0.01

1.15

19.55

14.42

5.26

0.02

1.19

12.20

9.16

3.34

-36.8%

-27.1%

16.1%

14.9%

15.0%

50.5%

-24.3%

-27.6%

-26.9%

-27.0%

Li nk to Fi nanc i al Res ul ts

Note: Interest Cost figures have been rounded-off to 2 decimals. Interest Cost for Q3FY23 is 1.46 Lakhs, Q2FY23 is 0.97 Lakhs and Q3FY22 is 2.31 Lakhs.

22.6%

Q3FY23 Revenue from Operations at 65.22 Crores compared to 53.20 Crores in Q3FY22

16.7%

Q3FY23 EBITDA at 14.07 Crores compared to 12.05 Crores in Q3FY22

14.9%

Q3FY23 PAT at 10.53 Crores compared to 9.16 Crores in Q3FY22

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Q 3 F Y 2 3 R E S U L T D I S C U S S I O N

MANAGEMENT COMMENTARY

Q3FY23 Result Discussion

Sirca Paints reports healthy financial performance in Q3FY23, despite Q3 being a seasonally tepid quarter for the Company. Revenue from Operations for the quarter stood at 65.22 Crores, up 22.6% YoY and reporting a decrease of 10.6% QoQ. The key reason for the sequential decrease in topline is the annual, temporary ban on spray painting in the NCR region due to pollution related guidelines. Overlooking the effects of the temporary ban in the end of November & December, the Company has a robust demand outlook for the coming months.

On the profitability front, the Company reported slightly better GPM, but lower EBITDA margins due to the following reasons: •

A FOREX loss of 1.45 Crores in Q3, compared to a gain of 0.72 Crores in the previous quarter. Higher Sales Promotion & Advertisement expenses on account of the annual national dealer meet organized in NCR, and higher Trade Exhibition expenses. Employee Benefit Expenses were slightly higher on account of payout of annual bonuses to the team.

•

As a result, the EBITDA margin stood at 21.6% in Q3FY23 compared to 26.3% in Q2FY23 and 22.7% in Q3FY22.

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Q 3 F Y 2 3 R E S U L T D I S C U S S I O N

MANAGEMENT COMMENTARY (Cont.)

Business Update

Product Portfolio Performance

Adding Resins Manufacturing at Sonipat Facility

In efforts to establish more control and achieve consistency in quality, the Company started resins manufacturing at its Sonipat facility. Resins are being manufactured for the NC and Melamine.

• The Company has witnessed good performance across all product segments. • Italian portfolio performance continue to be the core driver for the Company. • Unico’s scale of operations is improving and contribution to overall sales increasing. • The Company has recently launched a new waterbased coatings range – D’Aqua PU. This is a key launch in the luxury PU product kitty, in keeping with the global trend of transition from solvent based coatings towards waterbased coatings.

Other Updates

• The Company is also undertaking additional investments in the current Sonipat

facility to increase capacity to the tune of 20%.

• During the quarter the Company also listed its shares on BSE, as opposed to

being listed only on NSE earlier.

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Q 3 F Y 2 3 R E S U L T D I S C U S S I O N

Sirca Paints India Limited has informed the Exchange about Investor Presentation

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