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RUCHIRA PAPERS LIMITED Investor Presentation

s s t t n n e e t t n n o o C C f f o o e e b b a a T T

l l

Company Overview

Business Overview

Industry Overview

Financial Overview

2

Company Overview

3

About Us

Incorporated in 1980. We take great pride in creating a quality range of ‘Tree-Free’ papers for writing, high-volume print and packaging

Writing & Printing paper Writing & Printing paper finds its applications in printing and finds its applications in printing and stationery, comprising note books, stationery, comprising note books, writing & publishing material, spiral writing & publishing material, spiral notebooks, greeting cards, coloring notebooks, greeting cards, coloring books, colored copier paper, bill books, books, colored copier paper, bill books, dairies and calendars etc dairies and calendars etc

Kraft paper finds its application in manufacturing of corrugated boxes, cartons and other packaging material

WPP contributed 61% to revenues in 2018-19

One of the Largest manufacturers of ‘Kraft’ and ‘Writing & Printing’ paper in Northern India from Agro Residue

Kraft paper contributed 39% to revenues in 2018-19

Facilities located in Himachal Pradesh for manufacturing of Kraft Paper and Writing and Printing Paper

Pan India presence through strong network of distributors and dealers

A low debt company with Debt to Equity ratio at 0.11x

PAT growing at 25.69% CAGR

4

Our Journey

2006-07: Came up with an IPO and got listed on BSE & NSE.

2007-08: 2007-08: Launched Launched Writing & & Writing Printing paper Printing paper production in in production 2008 2008

by by

Production Production increased increased de- de- bottlenecking bottlenecking various at various at intervals post post intervals from 2008 on from 2008 on continuous continuous basis basis

2015-16: 2015-16: Certified for FSC Certified for FSC of chain of chain custody by by custody Rainforest Rainforest Alliance Alliance

Incorporated in 1980

1983- Commenced Commercial production Kraft with 2310 TPA

of Paper

1992-1994 : PM-2 installed for manufacturing of Kraft Paper and production capability increased 21000 TPA

to

a) a)

De- De-

2017-18: 2017-18: Implemented Implemented Modernization Modernization and and bottlenecking bottlenecking programmee programmee b) Announced b) Announced Greenfield Greenfield for project for project Writing and and Writing Printing Paper Printing Paper Chamkaur at Chamkaur at Sahib, Punjab, Sahib, Punjab,

5

Management Team

Mr. Jatinder Singh (Chairman & Whole Time Director)

is an Engineering Graduate from Punjab •Jatinder Singh, aged 65 years, University. He is one of the Promoters of Ruchira Papers Limited and has been looking after the affairs of the company as a Whole Time Director. Over the years, he has acquired deep insight of Paper Industry. He has been looking after the Finance, Administration and Raw Material Procurement of the company.

the working

into

Mr. Subhash Chander Garg (Co-Chairman & Whole Time Director)

•Subhash Chander Garg, aged 77 years, is Law graduate and has expertise in •Subhash Chander Garg, aged 77 years, is Law graduate and has expertise in field of taxation. He is one of the Promoters of Ruchira Papers Limited and field of taxation. He is one of the Promoters of Ruchira Papers Limited and has been looking after the affairs of the company as a Whole Time Director. has been looking after the affairs of the company as a Whole Time Director. He has been looking after the Taxation, Marketing and Sales functions of He has been looking after the Taxation, Marketing and Sales functions of Ruchira Papers Limited since its inception and has acquired rich marketing Ruchira Papers Limited since its inception and has acquired rich marketing experience. experience.

Mr. Umesh Chander Garg (Managing Director)

•Umesh Chander Garg, aged 70 years is a Graduate and has been associated with Ruchira Papers Limited right He is controlling day-to-day affairs of the Company as the Managing Director. He has been the key man in the selection of various machineries and all expansion projects were executed under his guidance. He has been looking after the Production, Maintenance and Technical aspects of the company.

from the conceptual stage.

Mr. Vipin Gupta (CFO & Whole Time Director)

•Mr. Vipin Gupta, aged 50 Years is working as professional Whole Time Director With the Company. He is heading the Finance and Accounts of the Company. He is associated with the Company for the past 26 Years.. He is a Post Graduate in Commerce.

6

Competitive Advantage

Diversified Product Portfolio

Dedicated Workforce

Strong relations with Customers and suppliers

Strategic Location & PAN India Presence

Robust Balance sheet

Ruchira Papers has Ruchira Papers has Ruchira Papers has diversified into better diversified into better diversified into better product mix across Kraft product mix across Kraft product mix across Kraft paper and Writing & paper and Writing & paper and Writing & Printing paper Printing paper Printing paper

The Company has a highly The Company has a highly The Company has a highly dedicated , skilled and dedicated , skilled and dedicated , skilled and efficient employee base of efficient employee base of efficient employee base of 1014 1014 1014

Understanding customer Understanding customer Understanding customer needs, emerging trends and needs, emerging trends and needs, emerging trends and accordingly providing accordingly providing accordingly providing products to customers is the products to customers is the products to customers is the prime responsibility prime responsibility prime responsibility

Plant is located in Himachal Plant is located in Himachal Plant is located in Himachal Pradesh and well connected Pradesh and well connected Pradesh and well connected to state and national to state and national to state and national highways highways highways

Ruchira’s debt to equity Ruchira’s debt to equity Ruchira’s debt to equity ratio is the modest in the ratio is the modest in the ratio is the modest in the industry industry industry

Diversification helps de- Diversification helps de- risking of business in the risking of business in the event of any volatility in event of any volatility in demand and prices demand and prices

Ruchira Papers provides Ruchira Papers provides extensive training to its extensive training to its employees on skill building employees on skill building

Strong relations with Strong relations with suppliers keeps the flow of suppliers keeps the flow of operations smooth operations smooth

The Company has a PAN The Company has a PAN India distribution network to India distribution network to market its products market its products

Ruchira is comfortably Ruchira is comfortably placed in terms of short placed in terms of short term liquidity term liquidity

7

Awards & Recognitions

Udyog Ratna Award by Himachal Pradesh Udyog Ratna Award by Himachal Pradesh in 2005 in 2005

FSC Certificate (Forest Stewardship Council) from Rain FSC Certificate (Forest Stewardship Council) from Rain Forest Alliance, New York, USA Forest Alliance, New York, USA

ISO 9001 : 2015 ISO 9001 : 2015

Appreciation Award from Himachal Pradesh Corrugated Box Manufactures Association in the year 2009

Certificate of Excellence from INC 500 in 2013

8

Business Overview

9

Our Products

Writing & Printing Paper

 Manufactured by using agricultural residues, such as wheat straw, Baggase, sarkanda,

Softwood Pulp and other materials

 Writing and Printing paper is used in the fabrication of note books and writing & publishing material; coloured paper is used in the fabrication of spiral notebooks, wedding cards, shade cards, children’s colouring books, coloured copier paper and bill books

 Contributed 61% of total revenues generated in FY2019  Writing and Printing paper brands are ‘Tarang’.

‘Safeda’,

‘Kora’,

‘Savera’,

‘Karigar’,

‘Gehua’, ‘Mela’, ‘Pahari

 Manufactured by using agriculture residues, such as Bagasse, wheat straw, sarkanda and waste paper. The Company also uses some quantity of Imported Waste paper to produce value added products.

 Used in the packaging industry especially in making corrugated boxes / cartons and other

packaging requirements

 Special features of the Company’s Kraft Paper are the load bearing capacity and tensile

strength, which make it suitable for corrugated packing applications.

 Contributed 39% to the revenue in FY2019  Kraft paper brands include ‘Multani’, ‘Maati’, ‘Khadi’.  Also manufactures special tube grade paper known as DTY and POY.

Kraft Paper

10

Plant Location & Capabilities

• •

• •

• •

• •

Plant located at Kala Amb, in District Sirmaur of Himachal Pradesh and Plant located at Kala Amb, in District Sirmaur of Himachal Pradesh and

well connected to state and national highways well connected to state and national highways

For Writing Paper & Printing unit the Company has set up 8.1 MW Power For Writing Paper & Printing unit the Company has set up 8.1 MW Power

Co-generation plant for captive purpose to get uninterrupted power Co-generation plant for captive purpose to get uninterrupted power

supply for its operations. supply for its operations.

The Company has set up ‘Chemical Recovery Plant’ for process of black The Company has set up ‘Chemical Recovery Plant’ for process of black

liquor generated during the process for captive consumption. liquor generated during the process for captive consumption.

The Company ‘s water requirement is The Company ‘s water requirement is

sourced from ground water sourced from ground water

through tube-wells. through tube-wells.

s e n n o T c i r t e M n

I

140000

120000

100000

80000

60000

40000

20000

0

Production (In MT)

8 0 4 7 9

2 0 1 9 9

1 2 0 4 5

7 8 3 3 4

8 2 0 2 5

4 7 0 7 4

7 5 9 6 1 1

4 2 4 5 1 1

6 2 4 6 6

1 3 5 0 5

9 9 9 7 6

5 2 4 7 4

1 3 8 8 2 1

7 8 2 7 7

4 4 5 1 5

FY15

FY16

FY17

FY18

FY19

Kraft Writing

Total

11

Industry Overview

12

Industry Highlights

The domestic demand of paper in India has been growing at a CAGR of 6.7% and is likely to touch 23.5 million tonnes in FY 25

In spite of the sustained growth witnessed by the industry, the per capita paper consumption in India stands at a little over 13 kg which is well below the global average of 57 kg and significantly below 200 kg in North America. This gap is a clear indication of the huge growth opportunity that lies ahead for the paper sector in India.

As per IPMA’s (Indian Paper Mills Association) estimates, this industry contributes approximately Rs 4,500 crore to the exchequer and provides employment to over 5 lakh people across approximately 750 paper mills.

India's share of the Global Paper Market

India vs. World - Segment wise consumption

Per Capita Consumption of Paper (kg)

4%

96%

51%

49%

31%

20%

World

India

16%

12%

17%

4%

India

Global

P&W

Packaging

Speciality

Newsprint

229

250

200

150

100

50

0

74

57

13

Source: IPMA & CARE report

US

China

India

World

13

Paper Industry Financials

Imports

Exports

2254

2347

2028

3002

3168

2610

508

534

624

656

660

978

18

16

14

12

10

8

6

4

2

0

Domestic Paper Demand (In Mn tonnes)

15.3

17.1

12.8

9.3

FY13

FY14

FY15

FY16

FY17

FY18

FY08

FY13

FY16

FY 18

Segment wise Demand for FY19P (In Mn tonnes)

India vs. World - Segment wise consumption

7.5

4.7

9.7

5.3

2.5

0.6

0.6

0.8

51%

49%

31%

20%

60%

50%

40%

30%

20%

10%

0%

17%

4%

16%

12%

s e n n o T d n a s u o h T

3500 3000 2500 2000 1500 1000 500 0

12

10

8

6

4

2

0

FY16

FY19P

P&W

Packaging

Speciality

Newsprint

Printing & Writing

Packaging Paper & Board

Newsprint

Speciality

Global

India

Source: IPMA & CARE report

14

Demand Drivers-Indian Paper Industry

Rising income levels. Growing per capita expenditure

Demand Demand Drivers Drivers

Govt. boost to the education sector & increasing literacy rate

Rising circulation

Requirement of better quality packaging of FMCG products marketed through organized retail

Rapid urbanization and increased consumption by earning population

The per capita personal disposable income surged from Rs 73,476 in FY12 to Rs. 1,19,296 in FY17 at a CAGR of 10.2%. Also, the per capita private final consumption expenditure too rose from Rs 40,250 in FY12 to Rs.68,049 in FY17 at a CAGR of 11.1%. The growth in country’s per capita GDP in turn has increased the disposable income of the populace ultimately driving the country’s consumption.

Increase in the number of colleges and institutions, rising enrolment numbers, rising literacy (continued government spending on education through the Sarva Shiksha Abhiyan) is expected to lead to an increased expenditure on textbooks, notebooks and other assorted paper products thereby driving demand.

Aspirations of higher income, higher standard of living etc. has drawn more and more people from villages to settle in towns and cities. This transition from rural to urban areas has led to an increase in the demand. Earning populations has grown from 55.4% to 66.2% which will drive consumption going forward

of

needs

Packaging as FMCG, Pharmaceuticals, Food & beverages, textiles etc. has shown consistent growth over the last few years which has led to increased demand for packaging paper.

industries

such

As per the Audit Bureau of Circulation (ABC), the circulation of print media reached 62 million copies a day in 2016, implying a 10 year CAGR of nearly 5%.

Source: Annual report & CARE report

15

Key Challenges-Indian Paper Industry

has

• On account of cheaper imports the domestic faced industry challenges in pricing its products. • With FTAs and lower costs, imports are continue challenging the domestic industry in the medium term

expected

to

Competition from imports

Climate change risk and Market risk

Access to quality and cost competitive raw material

Technology

• Adverse changes in climate can

affect the business operations

is industry market • The paper extremely is volatile susceptible to risks that arise from in changes demand, price, competition, custo mers, suppliers and raw materials.

and

• Inadequate

availability

raw material domestically possesses a major constraint the Indian Paper Industry

for

of

• Dependence

on

imports and their

of even pulp, wastepaper raw pulpwood to meet material needs and often have to pay impacts profitability

premium which

• Indian Paper

Industry is largely fragmented and is prone to using outdated technology

• Usage

of

outdated technology, both the raw material as well as power consumption is higher as compared to a modern paper mill

16

Financial Overview

17

Quarterly Highlights

Revenue from Operations (Rs. In cr) 128.64

124.44

107.33

Q4FY19

Q4FY18

Q3FY19

PAT (Rs. In cr)

10.26

9.34

5.92

135

130

125

120

115

110

105

100

95

12.00

10.00

8.00

6.00

4.00

2.00

0.00

EBIDTA (Rs. In cr)

20.65

19.31

12.97

Q4FY19

Q4FY18

Q3FY19

PBT (Rs. In cr)

16.54

14.06

8.89

25.00

20.00

15.00

10.00

5.00

0.00

18.00 16.00 14.00 12.00 10.00 8.00 6.00 4.00 2.00 0.00

Q4FY19

Q4FY18

Q3FY19

Q4FY19

Q4FY18

Q3FY19

18

Q4FY19 Performance Highlights

Q4FY19 Performance Overview

• Revenue from operations stood at Rs. 128.64 cr. • Revenue from operations stood at Rs. 128.64 cr.

• •

EBIDTA at Rs. 20.65 cr; EBIDTA margins stood at EBIDTA at Rs. 20.65 cr; EBIDTA margins stood at

16.05 % 16.05 %

• PAT at Rs 10.26 cr; PAT margins stood at 7.97 % • PAT at Rs 10.26 cr; PAT margins stood at 7.97 %

• •

EPS stood at Rs. 4.23 per share EPS stood at Rs. 4.23 per share

• Board has recommended Dividend of Rs 2.25 per • Board has recommended Dividend of Rs 2.25 per

share. share.

Production highlights: WPP: Production during Q4FY19 was 13397 MT.

Kraft Paper: Production during Q4FY19 was 20994 MT

Net Sales Realization: Net Sales Realization: WPP: NSR for Q4FY19 was Rs. 59,532/- WPP: NSR for Q4FY19 was Rs. 59,532/- PMT. PMT.

Paper: NSR Paper: NSR

Kraft Kraft Rs. 25,517/- PMT Rs. 25,517/- PMT

for Q4FY19 was for Q4FY19 was

Commenting on the financial performance of the company Mr. Jatinder Singh, Chairman & Whole Time Director, Ruchira Papers Limited, said, “During the year we faced many challenges, in spite of these challenges we have registered positive growth in every field as compare to FY 18. Our revenues grew by 10.36%, while profits grew by 5.83% and EBIDTA improved by 10.71%. We are confident that we shall be able to maintain this growth rate in FY 20 also.”

19

Revenue Break-up & Margins

16.57%

16.62%

15.33%

13.10%

600

500

400

11.40%

e e r r o o r r c c n n

I I

. . s s R R

300

200

100

0

8.50%

8.15%

7.68%

5.37%

3.70%

346.56

362.58

417.1

447.6

493.99

18.00%

16.00%

14.00%

12.00%

10.00%

8.00%

6.00%

4.00%

2.00%

0.00%

) )

% %

( ( e e g g a a t t n n e e c c r r e e P P

) )

% %

( ( e e g g a a t t n n e e c c r r e e P P

70.00%

60.00%

50.00%

40.00%

30.00%

20.00%

10.00%

0.00%

% % 1 1 8 8 . . 8 8 5 5

% 9 1 . 1 4

% % 5 5 3 3 . . 2 2 6 6

% % 9 9 1 1 . . 2 2 6 6

% 5 6 . 7 3

% 1 8 . 7 3

% % 3 3 8 8 . . 7 7 5 5

% 7 1 . 2 4

% % 0 0 0 0 . . 1 1 6 6

% 0 0 . 9 3

FY15

FY16

FY17

FY18

FY19

FY15

FY16

FY17

FY18

FY19

Total Revenue

EBIDTA Margins (%)

PAT Margins (%)

WPP (% of Revenue)

Kraft Paper (% of Revenue)

20

Financial Performance

Total Income (Rs. In cr)

PAT (Rs. In cr)

500 450 400 350 300 250 200 150 100 50 0

90 80 70 60 50 40 30 20 10 0

347.92

363.73

418.10

451.35

495.88

45 40 35 30 25 20 15 10 5 0

38.24

40.24

32.05

12.83

19.47

FY15

FY16

FY17

FY18

FY19

FY15

FY16

FY17

FY18

FY19

EBIDTA (Rs. In cr)

PBT (Rs. In cr)

74.17

82.12

63.96

39.82

47.48

70

60

50

40

30

20

10

0

58.31

62.42

46.44

31.77

20.44

FY15

FY16

FY17

FY18

FY19

FY15

FY16

FY17

FY18

FY19

21

Key Ratios

30.00%

25.00%

20.00%

15.00%

10.00%

5.00%

0.00%

4.07

14.00

12.00

10.00

8.00

6.00

4.00

2.00

0.00

19.61%

12.19%

21.39%

16.13%

ROE

ROCE

25.15%

25.06%

20.98%

19.98%

23.60%

16.29%

FY15 FY15

FY16 FY16

FY17 FY17

FY18 FY18

FY19 FY19

Interest Coverage ratio

8.74

7.46

11.37

12.09

0.28

0.28

Debt to Equity

0.22

0.21

0.11

0.3

0.25

0.2

0.15

0.1

0.05

0

FY15

FY16

FY17

FY18

FY19

FY15

FY16

FY17

FY18

FY19

22

e g a t n e c r e P

. s R n

I

Production Highlights

54.13%

50.71%

51.22%

48.18%

48.46%

19.43%

16.81%

16.85%

16.92%

19.35%

60.00%

50.00%

40.00%

30.00%

20.00%

10.00%

0.00%

s n o T c i r t e M n

I

90000

80000

70000

60000

50000

40000

30000

20000

10000

0

1 2 0 4 5

7 8 3 3 4

8 2 0 2 5

4 7 0 7 4

1 5 3 0 5

6 2 4 6 6

9 9 9 7 6

5 2 4 7 4

7 8 2 7 7

4 4 5 1 5

FY15

FY16

FY17

FY18

FY19

FY15

FY16

FY17

FY18

FY19

Raw Material (% of Revenue) Raw Material (% of Revenue)

Power & Fuel (% of Revenue) Power & Fuel (% of Revenue)

WPP WPP

Kraft Kraft

35000

30000

25000

20000

15000

10000

5000

0

27676

24702

24863

30434

28323

FY15

FY16

FY17

FY18

FY19

Capital Cost Per Tonne

) e n n o t

r e p s t i n U

( n o i t p m u s n o c

r e w o P

1400

1200

1000

800

600

400

200

0

50.48

45.56

45.62

43.86

1243

18.97

1163

18.8

1141

1200

40.58

1155

14.14

12.51

11.57

449

423

392

400

434

FY15

FY16

FY17

FY18

FY19

WPP

Kraft

WPP.

Kraft.

60

50

40

30

20

10

0

) e n n o t

r e p e b u c e r t e m

( n o i t p m u s n o c

r e t a W

23

Key Statics & Shareholding as on 31 March, 2019

Shareholding (%)

Key Investors

(%) holding

Non Institutions:: Dolly Khanna

1.11

35.25%

0.68%

64.07% 64.07%

Promoter & Promoter Group

Institutions

Non- Institutions

Key Statistics

CMP (Rs.)

As on 28th May, 2019 106

Market Cap (Rs. In crore)

No. of outstanding shares (Crore)

Face Value BSE Code NSE Code

257

2.42

10.00 532785

RUCHIRA

24

Disclaimer

This presentation and the following discussion may contain “forward looking statements” by This presentation and the following discussion may contain “forward looking statements” by Ruchira Papers Limited (“Ruchira” or “RPL” or the “Company”) that are not historical in nature. Ruchira Papers Limited (“Ruchira” or “RPL” or the “Company”) that are not historical in nature. These forward looking statements, which may include statements relating to future results of These forward looking statements, which may include statements relating to future results of operations, financial condition, business prospects, plans and objectives are based on the operations, financial condition, business prospects, plans and objectives are based on the current beliefs, assumptions, expectations, estimates and projections of the management of current beliefs, assumptions, expectations, estimates and projections of the management of operates. operates. RPL RPL

and markets and markets

in which in which

business, business,

industry industry

about about

RPL RPL

the the

These statements are not guarantees of future performance and are subject to known and These statements are not guarantees of future performance and are subject to known and unknown risks, uncertainties and other factors, some of which are beyond RPL’s control and unknown risks, uncertainties and other factors, some of which are beyond RPL’s control and difficult to predict, that could cause actual results, performance or achievements to differ difficult to predict, that could cause actual results, performance or achievements to differ statements. statements. the the materially materially

forward forward

looking looking

those those

from from

in in

Such statements are not and should not be construed as a representation of future Such statements are not and should not be construed as a representation of future performance or achievements of RPL. In particular, such statements should not be regarded as performance or achievements of RPL. In particular, such statements should not be regarded as a projection of future performance of RPL. It should be noted that the actual performance or a projection of future performance of RPL. It should be noted that the actual performance or achievements of RPL may vary significantly from such statements. achievements of RPL may vary significantly from such statements.

25

Contact Details

Ruchira Papers Limited Ruchira Papers Limited Mr. Vipin Gupta Mr. Vipin Gupta (CFO & Executive Director) (CFO & Executive Director) Email: vipingupta@ruchirapapers.com; Email: vipingupta@ruchirapapers.com;

Mr. Vishav Sethi Mr. Vishav Sethi (Company Secretary) (Company Secretary) Email: cs@ruchirapapers.com Email: cs@ruchirapapers.com

Website : www.ruchirapapers.com Website : www.ruchirapapers.com

26