Balkrishna Industries Limited has informed the Exchange about Investor Presentation for Q3FY21
BALKRISHNA INDUSTRIES LTD Investor Presentation - February 2021
Safe Harbor
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.
2
Performance Snapshot – Q3FY21
Sales Volumes
59,810 MT +26% YoY
EBITDA
Rs. 477 Cr EBITDA with margin of 31.9%
Revenue
Rs. 1,497 Cr +27% YoY
PAT
Rs. 322 Cr +46% YoY
Board of Directors have declared a 3rd Interim Dividend of Rs. 5/- per equity share
All figures on Standalone basis
3
Management Commentary
01
The demand continues to be strong in Agriculture segment across Geographies. In the other segments, demand continues to remain stable more or less stable post the recovery in the end markets of industrial, construction and mining segment
02
With 9MFY21 volumes of approximately 159,130 MT, we are increasing our guidance for FY21 and expect to end FY21 with sales volume of 215,000-220,000 MT. We strongly believe this demand trend to continue in FY22 and years to come
03
The Board of Directors have approved a capex plan of Rs. 1,900 cr. ➢ Brownfield project at Bhuj to increase tire capacity ➢ Increase carbon black capacity including advance carbon black and power plant at Bhuj ➢ Modernization, Automation and Technology upgradation capex at existing facilities
Further, the Board of Directors have shelved the USA Project
4
Update on Ongoing Capex
Ultra Large Giant Tires at Bhuj
Carbon Black Plant at Bhuj
Replacement Tire Plant at Waluj
USA Project
Project for 51” and 57” Ultra large All steel giant radial tire plant has been completed. The tires are under various stages of testing
2nd Phase of trial production was commenced in March 2020. This was ahead of schedule. With this our total installed capacity stood at 140,000 MTPA. Commenced sales to 3rd party buyers and received strong acceptance on the quality of product
Replacement Tire Plant at a greenfield location in Waluj for 30,000 MTPA is likely to commence by Q1FY22
The Board of Directors have decided to shelve the said project
5
Proposal for New Capex Program of Rs. 1,900cr
Brownfield Tire Plant
▪ Debottlenecking and Brownfield expansion along with addition of balancing and ancillary equipment at Bhuj ▪ Expansion to add ~50,000 MTPA capacity; expected
completion by H2FY23
▪ Capex cost of up to Rs. 800cr
▪ Current achievable capacity at 115,000 MTPA. With successful addition of new customers, carbon black capacity is planned to be increased to 200,000 MTPA including 30,000 MTPA of high value advanced carbon material and Power Plant
▪ Facility will allow larger control over supply chain while fulfilling internal demand on expanded capacity of Tires and meeting increased demand from 3rd parties
▪ Capex cost of up to Rs. 650cr; expected completion
by H1FY23
▪ Modernization,
technology upgradation of certain existing equipment and install automated material handling systems
automation
and
▪ Capex to be undertaken at existing facilities at in
leading to improvement
Rajasthan and Bhuj quality and efficiency
▪ Capex cost of up to Rs. 450cr; expected to be
completed by H1FY23
Carbon Black and Captive Power Plant
Modernization, Automation and Technology Upgradation
✓ Rs. 1,900cr Capex to be funded by Internal Accrual and Debt, if required
✓ Post
capex Brownfield achievable capacity of Tire Plant will stand at 335,000 MTPA
✓ Embarking on new capex in Carbon Black on back of Proven quality of product strong with coupled captive for demand consumption and 3rd parties.
✓ Modernization capex to lead
to better efficiency
6
Sales Volume Profile – 9MFY21
In MT
172,419
148,244
+8%
199,213
211,261
Lockdown Impact
159,130
201,760
FY16
FY17
FY18
FY19
FY20
9MFY21
FY21 Sales volume guidance: 215,000-220,000 MT
7
Volume Profile – 9MFY21
Segmental Sales
Channel Sales
Geographical Sales
Others
3%
OTR
33%
Others
4%
OEM
25%
RoW
13%
23%
49%
64%
71%
India
Agriculture
Replacement
15%
Americas
Europe
8
Profit & Loss
Particulars (Rs.Cr)
Q3FY21 Sales (MT) 59,810
Q3FY20
Growth
Standalone 9MFY21
9MFY20
Growth
FY20
47,321
26%
159,130
143,794
11%
201,760
Revenue from Operations Realized Gain on Foreign Exchange
1,505
1,161
-8
23
4,012
3,425
-22
83
Total Income
1,497
1,183
27%
Raw Material
(Increase) / Decrease in Stock
Employee Expenses
Other Expenses
EBITDA
EBITDA Margin
Other Income #
Interest & Finance Charges
Depreciation
Tax
Profit Before Tax
PAT
642
-39
83
333
477
501
-22
71
264
369
31.9%
31.2%
51
2
102
424
102
322
2
2
95
275
54
221
3,990
1,676
-94
238
915
1,256
31.5%
91
8
303
29%
54%
1,036
46%
253
783
3,508
1,559
-38
210
802
974
27.8%
86
5
270
784
96
688
PAT Margin
21.5%
18.6%
19.6%
19.6%
14%
29%
4,782
115
4,898
2,078
49
286
1,104
1,381
28.2%
117
7
368
32%
1,123
14%
178
945
19.3%
# Includes Investment Income and Unrealized Gain/(Loss)
9
Other Income and Net Forex Gain/(Loss)
Particulars (Rs. Cr)
Exchange Difference Gain (Realized)
Exchange Difference Gain (Un-Realized)
Others
Total Other Income
Particulars (Rs. Cr)
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
Standalone
Q3FY21
Q3FY20
9MFY21
9MFY20
1
15
36
51
28
-22
24
30
8
-5
95
99
97
6
79
182
Standalone
Q3FY21
Q3FY20
9MFY21
9MFY20
-8
8
1
15
15
23
5
28
-22
6
-22
30
8
-5
4
83
14
97
6
103
10
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
Sep’20
Mar’20
Particulars (Rs. Cr.)
Sep’20
Mar’19
5,118 3,186 666 85 1
837 12 80 251 2,100 761
410 672
30
23
4 35 167 7,218
4,854 3,189 586 86 2
712 13 90 177 1,877 580
351 649
23
22
4 14 232 6,731
EQUITY AND LIABILITIES
EQUITY
Equity Share Capital
Other Equity
Non-Current Liabilities
Financial Liabilities
(i) Borrowings
(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
5,429
5,028
39
39
5,390
4,989
251
238
1
0
26
174
49
2
0
24
178
34
1,539
1,465
815
387
136
195
6
859
361
165
75
4
7,218
6,731
11
Strong Balance Sheet performance in FY18 to FY20… Future Ready
Cash Accruals of Rs. 3,500cr
Distributed Dividend of over Rs. 800cr
Capex Spends to the tune of Rs.2,000cr from Internal Accruals
FY18 to FY20 Balance Sheet
Net Cash company
Repaid Debt undertaken for Capex in Bhuj
Cash and Cash equivalents of Rs. 1,086cr
Strong Balance Sheet provides financial flexibility
All figures on Standalone basis
12
Resilient Business Model
Long Term Debt Free with Cash and Cash equivalents of Rs. 1,423 crs as on 31st December 2020
Diversified Product Portfolio, spread across Agriculture,
Industrial, Construction and mining tires
Self Reliant in Carbon Black along with Multiple sourcing arrangements for other Raw Materials
Capex ready
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
13
Strategy at BKT
14
Our Focus Area
01
05
02
03
04
Market Reach Expand reach within existing Sales Channels as well increase footprint within replacement segment and OEMs
Penetrate Americas Increase share of business in USA markets by increasing supplies from India
Product portfolio expansion Expand the product portfolio by adding large sized tires and strengthen relationship with Customer base
Indian Markets Strengthen our distribution channels within Indian Markets
Utilization Reach 100% utilization levels at Bhuj Plant in the next few years
15
‘Atmanirbhar’ BKT – Our Pledge
We pledge to fulfil the vision of self-reliance by continuing to manufacture in India for domestic consumption and global markets
Our focus will be on improving our product portfolio, sustaining the consistent product quality and efficient service levels, thus enhancing the brand recognition with end customers
Make in India is going to provide an impetus to the self-reliant India serving the local and global markets thereby, enhancing the Brand equity of Indian Manufacturers
16
To Serve Global OEMs…
The Brand Names mentioned are the property of their respective owners and are used here for identification purposes only
17
With India Production and Global Sales
Waluj, Maharashtra
Bhiwadi, Rajasthan
Chopanki, Rajasthan
Bhuj, Gujarat
Mould plant, Dombivali
Our plants
India – Our Manufacturing base
18
Balkrishna Industries – A Snapshot
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 2,700 SKU
Capacities
Achievable capacities of ~285,000 M.T.P.A
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
19
Our Strong Evolution
Self Reliant on Carbon Black with the completion of Phase 2 at Bhuj in Gujarat
2 0 2 0
Started Manufacturing for large size 51” diameter tires at Bhuj
2 0 1 9
Plant in Chopanki, Rajasthan
2 0 0 6
Crosses Rs. 1,000 cr Turnover
Started Production of Off-Highway Tires
1 9 9 5
Plant in Bhiwadi, Rajasthan
2 0 0 9
2 0 0 2
Started Greenfield Plant in Bhuj, Gujarat
2 0 1 5
Announced Capex at Waluj and Bhuj
2 0 1 8
Production of ATV, Gardening and earthmoving Tires
2 0 0 3
Launch of Radial Agrimax Tires
2 0 0 4
1st Plant in Aurangabad inaugurated by our Founder, Mr. M P Poddar
1 9 8 7
India’s Largest Off-Highway Tire Manufacturer
20
BKT… at the forefront of Sustainability
•
•
50% of the production plants’ electricity needs in North India have been met by green energy generated in our own wind park since 2004
In Bhuj, the Company’s largest production site, the company has
o Planted over 100,000 trees o Created two large water reservoirs and o Set up a co-generation plant for self-efficiency
‘Sustainable Business Operations’ is core to our Business ethos
21
Application of our Tires
s e r i T e r u t l u c i r g A
s e r i T
l a i r t s u d n
I
s e r i T R T O
Cotton Pick Harvester
Tractor
Vineyard Tractor
Pivot Irrigator
Loader
Telehandler
Mobile Crane
Load Haul Dump
Underground Mining
Container Handler
22
BKT – A Strong Global Brand from INDIA
23
Strengthening BKT Brand : Americas
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
24
Strengthening BKT Brand : Canada
BKT Continental Cup – Curling: BKT is the Title Sponsor of Continental Cup
25
Strengthening BKT Brand : Italy, Europe
BKT is the new Title Sponsor for the ITALIAN SERIE ‘B’ FOOTBALL CHAMPIONSHIP – THE NEWBORN - “SERIE BKT”
26
Strengthening BKT Brand : Spain, Europe
BKT is the New Official Global Partner for the Spanish Football League “La Liga”
27
Strengthening BKT Brand : France, Europe
BKT is the Sponsor for the “LIGUE de Football Professionel (LFP)” in France
28
Strengthening BKT Brand : Europe
Premium Partner of EUROLEAGUE BASKETBALL
29
Strengthening BKT Brand : Tractor of the year (TotY) - EUROPE
Team of 26 expert journalists in agricultural mechanization, will assign the Tractor of the Year (TotY) award to the ‘Best European Tractor’
30
Strengthening BKT Brand : Australia
BKT is the Official “OFF-HIGHWAY TIRE PARTNER” for KFC BIG BASH LEAGUE (THE AUSTRALIAN CRICKET LEAGUE)
31
Strengthening BKT Brand : India
Official Partner of Teams in the Cricket T20 League
32
For further information, please contact:
Company :
Investor Relations Advisors :
Balkrishna Industries Ltd. CIN - L99999MH1961PLC012185 Mr. M S Bajaj – President (Commercia)l & CFO
www.bkt-tires.com
Strategic Growth Advisors Pvt. Ltd. CIN - U74140MH2010PTC204285 Mr. Shogun Jain shogun.jain@sgapl.net +91 77383 77756 www.sgapl.net