Sutlej Textiles and Industries Limited has informed the Exchange regarding Investor Presentation

suta

textiles and industries limited

SUTLEJ TEXTILES AND INDUSTRIES LIMITED Lotus Corporate Park, 'E' Wing, 5th/6th Floor, 185/A, Graham Firth Compound, Near Jay Coach, Goregaon (East), Mumbai - 400 063, INDIA. Phone : (022) 4219 8800/6122 8989 Fax : (022) 4219 8830 E-mail : info@sutlejtextiles.com Website : www.sutlejtextiles.com CIN No. L17124RJ2005PLCO20927

07th February, 2019

BSE Limited Phiroze Jeejeebhoy Towers, Dalal Street, Fort, Mumbai 400 001. Scrip Code: 532782

Dear Sirs,

National Stock Exchange of India Ltd. Exchange Plaza, 5th Floor, Plot No. C/1, G-Block, Bandra - Kurla Complex, Bandra (E), Mumbai 400 051. Scrip Code : SUTLEJTEX

Investors Presentation

Please find enclosed herewith a copy of the presentation with respect to the Un-audited

Financial Results of the Company for the quarter and nine months ended 31st December,

2018.

This is for the information of the exchanges and members.

Thanking you

Yours faithfully For Sutlej Textiles and Industries Limited

Manoj Contractor Company Secretary and Compliance Officer

End: a/a

Regd. Office : Pachpahar Road, Bhawanimandi - 326 502 (Rajasthan). Mills Bhawanimandi (Raj.), Kathua (J&K), Baddi (H.P.), Bhilad (Guj.)

(Govt. Recognised Three Star Export House)

Sutlej Textiles and Industries Ltd

Charged to Grow Higher

Investor Presentation | February 2019

1

Safe Harbor

This presentation and the accompanying slides (the “Presentation”), which have been prepared by Sutlej Textiles and Industries Limited (the “Company”), 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. Unless otherwise stated in this document, the information contained herein is based on management

information and estimates. The information contained is subject to change without notice and past performance is not indicative of future results 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 industry in India and worldwide, 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. You acknowledge that you will be solely responsible for your own assessment of the

market and the market position of the Company and that you will conduct your own analysis and be solely and completely responsible for forming your own view of the

potential future growth and performance of the Company. The Company will not be in any way responsible for any action taken based on such statements and undertakes

no obligation to publicly update, amend, modify or revise these forward looking statements to reflect subsequent events or developments. 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 statement/s and projection/s made by third parties included in this

Presentation are not adopted by the Company and the Company is not responsible for such third party statement/s and projection/s. The contents of this presentation have

not been reviewed by any regulatory authority in any jurisdiction where such presentation has been made or distributed.

22

Q3 & 9M FY19 Results Highlights

33

Key Quarter Highlights

Key Challenges during Q3 FY19 compared to Q3 FY18

•

•

•

•

Significant volatility in input prices, FX and Crude pricies

Increase in raw material prices, particularly PSF, created pressure on margins

– Cotton and Polyester prices increased by 10% (QoQ) & 14 % (QoQ) respectively

Reduction in export incentives from 11.50% to 2% impacted export margins

Uncertainty in market place and disrupting demand in domestic & export markets putting

pressure on realization rates and margins

44

Results Highlights – Q3 & 9M FY19

Total Income (Rs Cr)

EBITDA (Rs Cr)

ADJUSTED PAT (Rs Cr)

1,877 1,972

228

190

69

51

604 657

67

60

16

17

Q3 FY18

Q3 FY19

9M FY18

9M FY19

Q3 FY18

Q3 FY19

9M FY18

9M FY19

Q3 FY18

Q3 FY19

9M FY18

9M FY19

Performance updates:- • Export increased by about 23% on QOQ and YOY Basis • EBITDA and PAT for 9MFY19, impacted due to increase in PSF prices and reduction in export incentive

55

Key Performance Highlights – Q3 & 9MFY19

9MFY19 on 9MFY18 Revenue grew by 5%, the Yarn segment continues to give 95%+ of Revenue Share

Yarn Sales (in MT) Up by 4% in 9MFY19 Average Yarn Realization (Rs/kg) Up by 2% in 9MFY19

Export Revenue Up by 23% in 9MFY19

26,297

26,899

79,321 82,637

228

222

218

210

Q3 FY18

Q3 FY19

9M FY18

9M FY19

Q3 FY18

Q3 FY19

9M FY18

9M FY19

548

674

1302

1280

193

239

401

412

Q3 FY18

Q3 FY19

9M FY18

9M FY19

Domestic

Export

66

Profitability Highlights

Rs. in Cr Total Income Raw Material Cost Employee Cost Other Expenses EBITDA EBITDA Margin (%) Depreciation Finance Cost Profit Before Tax Exceptional Items Tax Net Profit After Tax Net Profit Margin (%)

Earning Per Share (Rs.)

Q3FY19 657 394 82 121 60 9.14% 25 13 22 - 5 17 2.63%

1.06

Q3 FY18 604 337 78 123 67 11.08% 27 13 27 - 11 16 2.71%

1.00

Q2FY19 694 400 80 140 74 10.70% 25 14 35 - 10 25 3.58%

0.53

9MFY19 1,972 1,148 241 393 190 9.61% 76 44 70 - 19 51 2.57%

3.10

9MFY18 1,877 1,043 227 379 228 12.15% 80 44 105 42 43 103 5.51%

6.31

Note :- Export incentive reduced significantly in current 9M FY 19 as compares to corresponding period

Adjusted Net Profit After Tax

51

69*

• Adjusted PAT - after adjusting Exceptional Income in 9MFY18 amounting to Rs.41.83 Cr and related tax provision •

Tax for 9MFY19 is lower due to lower PBT, MAT utilization and lower deferred tax

77

Executive Chairman’s comments

Commenting on the results, Mr. C.S. Nopany, Executive Chairman, Sutlej Textiles and Industries Limited said:

“Q3 FY19 has witnessed unprecedented fluctuations in rates of crude oil, Polyester Staple fibre, a derivative of crude oil, one of our major raw-materials, exchange rates etc., creating uncertainty in market place and disrupting demand in domestic as well as in export markets and putting severe pressure on realization rates and margins in synthetic yarns. However, because of our robust business model having varied product mix and value added yarns in our product portfolio, we could counter these challenges to a large extent. I am hopeful that once the stability returns and demand normalizes, Sutlej should be able to deliver better performance.”

Executive Chairman - Mr. C. S. Nopany

88

Sutlej

Creation of a Strong Foundation over the years

99

Year gone by…











Past few quarters saw unprecedented shift in structural changes in Indian Economy with DeMo, GST, Liquidity Crises and Oil Prices

Trade war between two largest economies in the world impacted global sentiments and growth projections

It was challenging environment with VUCA (Volatility, Uncertainty, Complexity and Ambiguity) across industry and particularly for Spinning

Input prices, Power Rates, Incentives, FX rates and interest rates all shown high volatility impacting margins

We responded decisively and effectively

 Consolidating our position in Domestic and Export Markets

 Stabilizing expansion at RTM and DGHT

 Continued to work closely with the customers to meet their requirements

 Focussed our efforts on R&D and Innovation for yarns and home textiles portfolio

 Ensured high plant efficiencies and output from our tangible and intangible assets

 Diversified our customer base and geographical presence

Our Business Model remained intact and future growth ready...

1010

Headwinds in last 2 years

Demonetisation

GST Implementation

Foreign Exchange Fluctuations

Crude price movement

Increase in Power & Fuel Cost

VUCA

Trade War

Witnessing Gradual Improvement in Business Environment

Sutlej Textiles - Overview

Largest

India’s largest spun dyed Yarn Manufacturer

One of the leading manufacturer of Melange Yarn

Patronage of Renowned K.K.Birla group

Part of a reputed group with excellent corporate governance

Niche Presence

Zero grey yarn manufacturing, presence in all value added yarns

Presence in curtains and upholstery in Home Textile segment

Exports to + 65 countries

Exports across Europe, North America, South-East Asia, USA, etc

Substantial Capacities

4,20,840 spindles capacity of Yarn

9.6 Million Meters Per Annum capacity of Home Textiles

Reputed Cliental

Marquee Clients like Page Industries, Siyaram’s, Donear, Arrow, etc

1212

Key Milestones

Commenced commercial production of 31,104 Spindles at Chenab Textile Mills, J&K to manufacture Cotton Mélange and Cotton Blended Dyed Yarn

Installed 12 MW Thermal Power Plant at Bhanwanimandi unit

Entered into Home Textiles

Bhawanimandi Expansion

Expansion of Kathua and Bhawanimandi units by 35,400 spindles and 2,112 spindles to manufacture PV Dyed Yarn completed

Completed Expansion of 7,488 spindles for PV Dyed Yarn

12,672 Spindles added for manufacturing Cotton Yarn

2009-10

2006-07

2008-09

31,104 spindles added at Chenab Textile Mills - J&K for value added cotton mélange and cotton blended dyed yarn

2014

Acquisition of Birla Textile Mills

35,280 spindles – commenced commercial production for Cotton blended dyed and Mélange Yarn at Rajasthan

9.6 MMPA - commenced production of Home Textile facilities at Gujarat

Acquired Design, Sales, and Distribution (DS&D) business along with brand of American Silk Mills LLC (ASM)

Invested USD 4.5 Million in Owned Wholly Subsidiary in USA

2015-17

2017-18

Business Verticals

Sutlej Textiles and Industries Ltd

Value Added Yarns

Home Textiles

Dyed Yarns

Melange Yarns

Curtains

Upholstery

Made Ups

14

Sutlej – Charged to grow higher

Focussed on Value Added Dyed yarns

Leading spun dyed & Melange

Yarn Manufacturer in India

Niche Home Textile

Curtains, Upholstery and Made ups

Improving Operating Efficiencies

One of the best Capacity Utilization in Industry

Better RM & Power through Green Fibre and Solar Energy

Growth Drivers

Home Textile

New Adjacent Segments

Inorganic Growth

15

Experienced Team

Board of Directors

Mr. C.S. Nopany

Mr. U.K. Khaitan

Mr. Amit Dalal

Mr. Rajan Dalal

Ms. Sonu Bhasin

Executive Chairman

Independent

Independent

Independent

Independent

Non Exec Director

Non Exec Director

Non Exec Director

Non Exec Director

Mr. Rajiv K. Podar

Independent

Non Exec Director

Mr. Rohit Dhoot

Independent

Non Exec Director

Key Executives

Mr. Ashok Mittal

Independent

Non Exec Director

Mr. S.K. Khandelia

Mr. Updeep Singh

Mr. Bipeen Valame

Mr. Manoj Contractor

President & CEO

Deputy CEO

WTD and CFO

CS & Compliance Officer

16

Focused on Value Added Speciality Yarns Always opted for expansion into high value speciality yarns

1717

Yarn Capacities

Bhawanimandi, Rajasthan • 35,280 Spindles (Cotton Mélange ) • 91,584 Spindles (Man –made Fibre) • Roof top solar plant of 2.7 MW

Baddi, Himachal Pradesh (Under Implementation) • Green Fibre Plant • 120 MT per day manufacturing

Raw White & Black Recycle Fibre

• Exp. Commercial production

Q1FY20-21

• Ability to handle variety of RM with

different counts

• Work very closely with customer to

fulfil requirements

• Manufacture to Sale and not to

Stock

Nearly 32% of the spindleage and 67% of the fabric weaving machines commissioned in the last decade, assuring high technological relevance.

Kathua, J&K • 1,09,154 Spindles (Cotton Mélange) • 1,01,446 Spindles (Man-made Fibre)

Baddi, Himachal Pradesh • 83,376 Spindles (Man-made Fibre)

18

Yarn Business

Acquisition

Captive consumption (Under Implementation)

Speciality Dyed Yarns – Backbone of our business

 Leading Yarn manufacturer in India

 4,20,839 Dyed Yarn Spindles

 ~ 35% dedicated to Melange Yarn

 ~ 65% dedicated to various blends

Continuous Increase in Spindle Capacities

 Well Diversified Product Portfolio

 Marquee clients like Page Industries, Siyaram, Raymond, Donear, etc

 B2B business model with over 60% revenue from organized sector

 Robust Business Model with low concentration and diversified

geographical spread

 Strong Brand Recall in Yarn Segment

2,61,736

1,55,456

4,20,840

 Strong Global Footprint

 30% + Revenue from Export to over 65 countries

 Export to all major countries in the world

 Star Export House Status holder

FY05

FY14

FY18

19

Niche Home Textile Presence One of the few listed Curtains & Upholstery players

2020

Home Textile - Emerging Business



Focus on Curtains, Upholstery & Made ups

 Leading producer & exporter of Home Decor

 Acquisition of American Silk Mills (ASM), leading Design & Distribution in USA

Gradual Increase in Weaving Capacities



Latest Technology in design & manufacturing

 State of Art manufacturing facility at Gujarat

 Capacity 9.6 Mn. metres/pa

 126 dobby & jacquard looms including 36 looms with double width

 Strengthening Product Portfolio

 Leveraging ASM design expertise and US presence

 Focus on higher end markets in developed counties

 Building world class design capabilities

 Improving product mix and broadening product portfolio

9.6

5.0

2.0

2.5

FY07

FY14

FY15

FY17

Capacity (MMT)

21

Strengthening Capabilities in Home Textiles

Enhance Manufacturing Capabilities

Expanding Product Portfolio

Adding wider width printing machines

Digital Printing capabilities

Steaming & Washing

Fancy Yarn

Embroidery

Better Designs

Sheer Material

Made-ups

Establish Geographic Presence

Improving Designing Strength

Establishing office in Dubai to strengthen middle east operations

Hired International Designers

New designs with latest trend

Latest design S/W

Leverage ASM Brand

Over 100 years of industry experience with rich design archives

Build Synergy to leverage designs

22

American Silk Mills (ASM)

Acquired Design, Sales, and Distribution (DS&D) business along with brand of American Silk Mills LLC (ASM)

 Stabilizing Operations

Working on improving margins

 Building Customers Confidence

Re-gaining customer confidence lost due to liquidity position before acquisition

 Introduced New Product Portfolio

Launched new product portfolio in July and Sept 2018

 Integration in Manufacturing with Sutlej’s Domestic Home Textile Facility

ASM

Large Design Portfolio

Sutlej

Manufacturing Facility

23

Improving Operating Efficiencies Our disciplined approach towards growth have always helped us to achieve new heights

2424

Backward Integration into Green Fibre

Captive Utilisation

PSF – A Key Raw Material for Sutlej

Bottle

Flake

Fibre

Yarn

Fabric

Description

Capacity

CAPEX

Details

120 MT / Day

Rs. 189 crore

Location – land acquired

Baddi, Himachal Pradesh

Expected Commercial Production

Q1FY20-21

Fulfil 75% of Captive Requirement of Key Raw Material PSF

Focus on Reducing Energy Cost

 Installed Roof Top Solar plant of 2.7 MW at new unit in Bhawanimandi, Rajasthan,

 Resulting ~40% less per unit cost compared to State Tariff

Solar Plant at Bhawanimandi, Rajashthan

Sutlej 2.0 – Growth Strategy Charged to grow higher backed by a strong Foundation

Well Placed for next Growth Phase

• Effective control on key

• Integration with ASM

Raw material cost

• Product Portfolio

expansion to strengthen Home Textiles Business

• Opportunities into

Forward Integration

• Opportunities in new

Speciality Yarns

•Strong Balance Sheet

•Generate better Return

Ratio’s

Backward Integration

Growth in Home Textile with better Margins

Exploring New Segments

Inorganic Growth opportunity

Annexure - Financials

2929

Always Focused on Disciplined Growth

Total Income

Total Debt

2,510

1,972

1,705

809

738

652

1,047

929

Networth

Total Debt

Total Debt to Equity

1,200

1,000

800

600

400

200

0

1,047

907

934

929

4.73

738

652

349

1.87

5.00

4.00

3.00

2.00

156

1.15

0.99

1.00

0.00

FY08

FY13

FY18

9MFY19

FY08

FY13

FY18

9MFY19

Growth financed from Re-investment of Profit

Enhancing value for Stakeholders

Dividend Per Share (Rs)

Dividend Payout (%)

FY14

FY15

FY16

FY17

FY18

8

10

13

13

* 13

FY14

FY15

FY16

FY17

FY18

12

17

18

16

23

* Dividend declared Rs.1.30 on FV of Rs.1 per share post split.

Depiction is for visual and comparative purpose only

Performance Highlights

Revenue

EBITDA

FY14

FY15

FY16

FY17

FY18

1,923

1,918

2,108

2,285

FY14

FY15

FY16

FY17

* 2,510

FY18

PAT

FY14

FY15

FY16

FY17

FY18

306

272

302

317

* 281

131

115

143

158

* 113

*The Company acquired American Silk Mills, LLC on 6th Nov 17 and hence

FY2017-18 is first year of consolidation

Balance sheet Ratios

Comfortable Total Debt/Equity Ratio

Robust Interest Coverage

Average Interest Rate of Term Loans (After TUF)

FY14

FY15

FY16

FY17

FY18

1.4

1.1

1.2

1.3

1.15

FY14

FY15

FY16

FY17

FY18

4

3.8

4.9

6.8%

5.2

4.8

7.5%

7.3%

6.2% 6.2%

FY14 FY15 FY16 FY17 FY18

Balance sheet

Gross Block (Rs Cr)

Net worth (Rs Cr)

Adjusted EPS (Rs.1 per share)

FY14

FY15

FY16

FY17

FY18

1,226

1,397

1,650

FY14

FY15

FY16

1,985

FY17

2,067

FY18

462

558

683

816

907

FY14

FY15

FY16

FY17

FY18

8.0

7.1

8.8

9.6

6.9

“WITHSTANDING FIRMLY DURING A STORM HELP’S TO CHERISH THE SUNSHINE LATER”

THANK YOU!

Let’s Connect

Mr. Bipeen Valame

bipeenvalame@sutlejtextiles.com

Mr. Vikash Verma / Mr. Abhishek Bhatt

vikash.verma@stellar-ir.com abhishek@stellar-ir.com

Lotus Corporate Park, Goregaon (East), Mumbai 400063

Kanakia Wall Street, Andheri (East), Mumbai 400 093

For more information visit: www.sutlejtextiles.com