Sudarshan Chemical Industries Limited has informed the Exchange regarding Investor Presentation which is enclosed herewith in advance for today's call at 4.00 p.m. (I.S.T.)
Sudarshan Chemical Industries Limited
Investor Presentation December, 2018
Safe harbour statement
This presentation may contain statements which reflect Management’s current views and estimates and could be construed as forward looking statements.
These forward-looking statements involve a number of risks, uncertainties and other factors that could cause actual results to differ materially from those suggested by the forward-looking statements.
These risks and uncertainties include, but are not limited to our exposure to changes in general economic conditions, market, Foreign currency and other risks, changes in government policies/regulations, tax regimes as also technological changes.
The company assumes no responsibility to publicly amend, modify or revise any forward looking statements, on the basis of subsequent development, information or events or otherwise.
Financial Overview December, 2018
Financial Performance
Income from Operations (In ₹ Cr)
EBITDA* (In ₹ Cr) & Margin%
384
343
377
348
325
46
56
55
56
14.2%
14.6%
16.0%
14.9%
37
10.5%
Q3FY18 Q4FY18 Q1FY19 Q2FY19 Q3FY19
Q3FY18 Q4FY18 Q1FY19 Q2FY19 Q3FY19
Income from Operations (In ₹ Cr)
EBITDA* (In ₹ Cr) & Margin%
962
1,067
141
14.7%
148
13.8%
e c n a m r o f r e P 9 1 Y F 3 Q
e c n a m r o f r e P 9 1 Y F M 9
9MFY18
9MFY19
9MFY18
9MFY19
EBITDA * as percent to Total Income from operations (excluding other income).
Business Performance
e c n a m r o f r e P n g r a M
i
s s o r G
s t h g
i l
i
h g H y e K
41%
41%
43%
41%
39%
Q3FY18
Q4FY18
Q1FY19
Q2FY19
Q3FY19
9MFY19 Gross Margins at ~41% as compared to FY’18 Gross Margins which were at ~43%
• Q3FY19 revenues at ₹ 348 cr, a growth of 7% versus Q3FY18, on the back of a seasonally soft quarter.
•
•
Raw Material price increase cycle which started in Q4FY18, has now peaked out. We expect raw material prices to stabilize going forward.
EBITDA Margins at 10.5%, impacted due to increase in raw material prices, higher employee cost from planned recruitments and costs towards strategic initiatives.
• Original capex plan for FY19 at ₹ 250 cr. Out of this, Projects worth ₹ 200 cr are under implementation.
•
•
Completed backward integration for one key raw material during Q3FY19.
Launched Eight new products during 9MFY19.
Key Ratios
Return on Capital Employed (annualized)
Debt/ Equity Ratio
18.4%
19.4%
18.6%
15.6%
13.9%
0.8
0.8
0.5
0.5
0.6
Q3FY18
Q4FY18
Q1FY19
Q2FY19
Q3FY19
Q3FY18 Q4FY18 Q1FY19 Q2FY19 Q3FY19
Current Ratio
Earnings per Share (annualized)
1.6
1.5
1.4
1.3
1.1
14.3
14.6
12.1
12.4
12.5
Q3FY18
Q4FY18
Q1FY19
Q2FY19
Q3FY19
Q3FY18 Q4FY18 Q1FY19 Q2FY19 Q3FY19
About Sudarshan
Our Company at a glance…
We are a leading world-class color solutions provider with a focus on exceptional and sustainable results.
CONSOLIDATED
MARKET
REVENUES FY18 turnover at $226M
CAPITALIZATION INR ~2,000 cr+ Listed on BSE (1981)
& NSE (1995)
PEOPLE 50+ sales team. 60+ channel partners.
2,000+ global workforce.
BUSINESS
FOCUS Pigment Focus. Don’t
compete with customers.
GEOGRAPHIC
REACH Largest pigment producer in India.
Exports to 85+ countries.
Our Mission, Vision & Values
Our growth is fueled by an immense drive to be a leading player in our field.
MISSION World class Global Color Solution provider with an innovative and vibrant culture
VISION To be amongst the top three pigment players in the world
VALUES Seva (Service), Courage, Commitment and Passion, Respect, Trust
Our Journey
Evolution of Sudarshan from a local player to a global player is result of a well crafted strategy.
Establishing the Business 1952 - 1989
Next leap in Technology 1989 - 2006
Efforts largely domestic with limited portfolio range
Building technical capabilities & infrastructure
Going Global 2006 - 2018
Scaled up infrastructure to world class standards
Footprints in Europe & USA
Manufacturing plant in Mahad for Pthalos & Effect Pigments
Net revenue at ₹ 400 Cr FY06
Listed on NSE
Manufacturing plant in Roha
Manufacturing plant in Pune
Inception of Sudarshan
Listed on BSE
Improved portfolio with HPPs and Effects for Cosmetics
Net revenue at ₹ 1,000 Cr FY14
State of art technology centre at Sutarwadi
Our Global Presence Exports to 85+ countries with 50+ sales members
GLOBAL HEAD OFFICE Sudarshan Chemical Industries Limited
NORTH AMERICA Sudarshan North Americas Inc.
EUROPE Sudarshan Europe B.V.
MEXICO Sudarshan Mexico S. de R.L de CV.
CHINA Sudarshan (Shanghai) Trading Co Ltd.
Our Product Portfolio
ORGANIC
Azo
Pthalos
HPPs
Dispersions
PIGMENTS
INORGANIC
Chromes
Cadmiums
Iron Oxides
EFFECT
Mica base for industrial and cosmetics
Organic Pigments Coloured material made of organic compound with pigment properties. Commonly used for Coatings, plastics, Inks & Textile applications.
Inorganic Pigments Made up of mineral compounds. Are mainly oxides, sulphides of one or more than one metals. Used for plastics and industrial coatings.
Effect Pigments Pigments with mica base and coated with oxides to give shimmer and glow. Mainly used in plastics, automotive coatings, cosmetics applications
Pigments Application
Sudarshan is uniquely placed to offer a comprehensive range - general purpose grades, high performance and effect pigments.
COATINGS
PLASTICS
INKS
COSMETICS
High performance and special effect for the coating industry.
Our key focus area with targeted significant growth in the automotive and decorative segments.
A pallete with a wide spectrum of colors and performance for plastic applications.
Enjoy leadership position in plastics segment in multiple geographies; attributed to our detailed know-how of the industry.
General purpose and high performance pigments for inks.
Effect pigments for cosmetics & personal care applications.
Focus on niche applications in the ink industry with necessary expertise in offset and liquid ink segments.
A strategically important growth area for Sudarshan; we continue building capabilities in end application.
Our Technical Capability
PEOPLE
• 100+ Scientists & Technical resources • Global experts panel for competency
enhancement
• Analytical & Application Lab experts
INFRASTRUCTURE
• Dedicated site for R&D with investments >
USD 10Mn
• State of art equipment for characterization
and composition analysis
• Ability to handle crystal modification &
surface treatments
• Ability to ensure reproducibility in end
application
PROCESS
• Stage Gate Process • DOE approach to solutions
Our Infrastructure
We spend over $4M every year on research, development & technical service and over $2M on environmental compliance with a $3.4M effluent plant.
Manufacturing Site: Roha Built in 1973; 1100+ trained team members. Products Manufactured: AZO, HPP, Effect Pigments, Dispersions
Manufacturing Site: Mahad Built in 1993; 500+ trained team members. Products Manufactured: B&G, HPP, Effect Pigments
Our Manufacturing Plants with Modern Water Treatment Facility and Certified by BSC and having won Sword of Honour for Safety.
Global Pigments Market Overview
Global Colour Pigment Market* - Relevant to Sudarshan
USD Billion
0.6
• Our estimate of the Global Colour Pigments Market is ~$ 10B, market opportunities open to Sudarshan are ~$ 8.6B.
• Global Organic Pigment market
is expected to grow at ~3% CAGR over the next 5 years.
3.0
• India is set for strong, sustainable growth in pigment manufacturing with substantial export opportunities.
5.0
• Sudarshan is well placed to expand market share for all its applications.
• We expect
this strong growth to come from our coatings, inks, plastics and cosmetics segments.
Organic
Inorganic
Effect
* Excludes Black, White and Metallic Pigments. Based on internal Pigment industry study and various market research reports
Our Pillars of Growth
Growth will come from a focused approach to broaden product portfolio and renewed application focus.
01
Product Portfolio • Enhance Product Portfolio across
• Organic (especially HPPs and Inks) • Inorganic HPPs • Effect Pigments • Solvent Dyes
02
03
Application Focus • Continued focus on decorative coatings
and plastics
• Additional focus on Automotive Coatings,
Industrial Effects & Cosmetics
Geographic Presence • Expand global footprint to newer
geographies, and gain market shares in US, EU and China
Building Capabilities
We focus on building capabilities across functions to achieve our vision
STRENGTHEN R&D Faster launch of new and innovative products, faster turnaround time on technical issues.
MANUFACTURING & OPERATIONS EXCELLENCE Lean & Six Sigma, Capex expansion, strengthening supply chain
COMMERICAL EXCELLENCE Improving reach, channel management and customer experience
ENVIORNMEMNT SUSTAINABILITY Best in class safety practices, continued efforts towards sustainable energy sources such as solar, windmill etc.
Our Competitive Advantage
We achieve excellent product and process reliability
Product Consistency & Process Control
Reliable technical information
Reliable Service
Environment & Occupational Health
800+ tests 4000+ specifications
Laboratories certified by the National Accreditation Board for Testing & Calibration Laboratories
Recognized for operational excellence in Supply Chain Management
Ensure safety of our plant operatives
Our Certifications
ISO 9001 Six Sigma
Oliver Wight Class A Certificate
ISO 17025:2001
ISO 14001 OHSAS 18001 British Safety Council 5 Star Rating Sword of Honour
Shareholding Pattern
As on 31st December, 2018
39.2%
1.7%
6.2%
* - Before proposed declassification of ~ 9.93% of Promoter holding to Public category.
52.9%
*
Promoters
FIIs and FPIs
Mutual Funds
Others
Board of Directors
Mr. Pradeep Rathi (Chairman)
Mr. Rajesh Rathi (Managing Director)
Mr. Ashish Vij (Whole Time Director)
Mr. S. N. Inamdar (Non-Executive, Independent Director)
Mr. D. N. Damania (Non-Executive, Independent Director)
Mrs. Subhalakshmi A. Panse (Non-Executive, Independent Director)
Mr. Naresh Raisinghani (Non-Executive, Independent Director)
Mr. Sanjay K. Asher (Non-Executive, Independent Director)
Mr. Ajoy B. Rathi (Non-Executive Director)
Mr. Narayan J. Rathi (Non-Executive Director)
Mr. S. Padmanabhan (Non-Executive, Independent Director)
Mrs. Rati F. Forbes (Non-Executive, Independent Director)
Awards and Accolades
HR Excellence Award 2018 1st in Chemicals & Fertilizer Sector
‘Dream Company to Work For’ in Chemical Sector World HRD Congress 2017
India CSR Award for CSR Community Initiative 2017-18
Global WasteMet Award 2018 - Gold Category
DMAI Award for Energy Conservation Initiative 2017- 18
‘Golden Peacock Award for Corporate Social Responsibility’ for 2016
Contact: Mr. Mandar M. Velankar +91 20 2622 6264 investorrelations@sudarshan.com
CIN: L24119PN1951PLC008409 www.sudarshan.com
Sudarshan Chemical Industries Limited 162, Wellesley Road, Pune, Maharashtra - 411001