Balkrishna Industries Limited has informed the Exchange about Investor Presentation
BALKRISHNA INDUSTRIES LTD
Investor Presentation - August 2021
August ‘21
Safe Harbor
GROWING TOGETHER
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 – Q1FY22
GROWING TOGETHER
68,608 MT
Sales Volume
+80% YoY
Rs 535 cr
EBITDA
+106% YoY
Rs 331 cr
Net Profit
+172% YoY
Rs. 1,828 cr Revenue
+94% YoY
29.2% EBITDA Margin
+169bps YoY
All Figures on Standalone basis
Declared 1st Interim Dividend of Rs. 4/- per equity share
3
Management Commentary
GROWING TOGETHER
Continue to witness strong demand tailwinds across geographies and segments. This is visible in our sales volume numbers where we have clocked 68,608 MT for Q1FY22 which is our highest quarterly sales volumes
Expect this momentum to continue as economic activity is in an uptrend and Government’s world over are creating infrastructure. Further end prices of commodities and agriculture produce continues to be robust thereby giving strong support to our sector
While on the demand front we remain positive, the raw material scenario is very challenging. All raw material prices are on an uptrend and this will impact our margin profile for the next few months. Further the logistics costs have gone up significantly across routes and we believe it could continue to be at similar levels through the current fiscal
In view of these cost pressures, we have been taking price hikes of our products in end markets on a quarterly basis. We are confident that we will be able to maintain 28-30% EBITDA margin on long term sustainable basis
4
Sales Volume Profile – Q1FY22
GROWING TOGETHER
In MT
1,99,213
1,72,419
+7%
2,11,261
2,27,131
201,760
FY17
FY18
FY19
FY20
FY21
Q1FY22
All Figures on Standalone basis
Highest ever Quarterly Sales Volume in Q1FY22
5
68,608
Volume Profile
GROWING TOGETHER
Segmental Sales
Channel Sales
Geographical Sales
3.2%
2.6%
12.2%
30.9%
25.6%
Q1FY22
Q1FY22
19.0%
Q1FY22
52.7%
65.9%
71.9%
16.1%
Agriculture
OTR
Others
Replacement
OEM
Others
Europe
Americas
India
RoW
All Figures on Standalone basis
6
Profit & Loss
Particulars (Rs in Cr)
Revenue from Operations
Sales (MT)
Q1FY22
68,608
1,813
Realized Gain on Foreign Exchange
15
Total Income
1,828
880
-98
94
417
535
EBITDA
Raw Material
(Increase) / Decrease in Stock
Employee Expenses
Other Expenses
EBITDA Margin
Other Income
Unrealized Gain / (Loss)
Interest & Finance Charges
Depreciation
Tax
Profit Before Tax
Profit After Tax
29.2%
27.6%
40
17
2
104
485
153
331
33
-29
2
100
162
40
122
Standalone
Q1FY21
38,096
929
13
942
420
-53
70
246
260
PAT Margin
18.1%
12.9%
All Figures on Standalone basis
YoY
80%
94%
106%
199%
172%
FY21
2,27,131
5,758
-18
5,740
2,452
-149
326
1,302
1,810
31.5%
119
18
10
406
1,531
376
1,155
20.1%
GROWING TOGETHER
The contingent liability as of 31st March
2021 was Rs. 65.4 Cr as disclosed in our
Annual Report
In Q1FY22 certain tax assessment has
been completed and the liability has been
crystalized at Rs. 35.7 Cr which has been
included in Tax expenses in Q1FY22, as
Income tax of earlier years
The balance amount will get crystalized
in coming quarters and will be accordingly
included in tax expenses
7
Net Forex Gain/(Loss)
GROWING TOGETHER
Particulars (Rs in 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
Q1FY22
Q1FY21
FY21
15
7
22
17
38
13
8
21
-29
-8
-18
42
24
18
42
All Figures on Standalone basis
8
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
Mar’21
Mar’20
Particulars (Rs. Cr.)
Mar’21
Mar’20
GROWING TOGETHER
5,649
3,247
856
86
1
1,026
15
70
348
2,391
909
392
730
34
23
4
35
4,854
3,189
586
86
2
712
13
90
177
1,877
580
351
649
23
22
4
14
264
8,040
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
6,007
39
5,969
5,028
39
4,989
262
238
1
0
25
204
33
2
0
24
178
34
1,771
1,465
892
633
75
165
5
859
361
165
75
4
8,040
6,731
9
Resilient Business Model
GROWING TOGETHER
Long Term Debt Free Cash and Cash equivalents of Rs. 1,557 Cr as on 30th June 2021
Diversified Product Portfolio, spread across Agriculture, Industrial, Construction, Earthmoving, Mining, Port, Lawn and Garden and ATV tires
Self Reliant in Carbon Black along with Multiple sourcing arrangements for other Raw Materials
New Capex planned
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
10
New Capex of Rs. 1,900cr
GROWING TOGETHER
▪ Debottlenecking and Brownfield expansion along with addition of balancing
and ancillary equipment at Bhuj
Brownfield Tire Plant
▪ Expansion to add ~50,000 MTPA capacity; expected completion by H2FY23 ▪ Capex cost of up to Rs. 800cr
Carbon Black and Captive Power Plant
▪ 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, Automation and Technology Upgradation
▪ Modernization, automation and technology upgradation of certain existing
equipment and install automated material handling systems
▪ Capex to be undertaken at existing facilities at Rajasthan and Bhuj leading to
improvement in quality and efficiency
▪ Capex cost of up to Rs. 450cr; expected to be completed by H1FY23
✓ Rs. 1,900cr Capex to be funded by Internal Accrual and Debt, if required
✓ Post Brownfield capex 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 coupled with strong demand captive consumption and 3rd for parties.
✓ Modernization capex to lead to better
efficiency
11
Strategy at BKT
GROWING TOGETHER
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Our Focus Area
GROWING TOGETHER
Expand reach within existing Sales
Channels as well increase footprint
within replacement segment and OEMs
Expand the product portfolio by adding
Reach 100% utilization levels at Bhuj
large sized tires and strengthen
relationship with Customer base
Plant in the next few years
Market Reach
+
Penetrate Americas
+
Product portfolio expansion
+
Indian Markets
+
Utilization
Increase share of business in USA
markets by increasing supplies from
India
Strengthen our distribution channels
within Indian Markets
13
To Serve Global OEMs…
GROWING TOGETHER
The Brand Names mentioned are the property of their respective owners and are used here for identification purposes only
14
With India Production and Global Sales
GROWING TOGETHER
Waluj, Maharashtra
Bhiwadi, Rajasthan
Chopanki, Rajasthan
Bhuj, Gujarat
Mould plant, Dombivali
India Our Manufacturing base
Note – Maps not to scale. All data, information, and maps are provided “as is” without warranty or any representation of accuracy, timeliness or completeness
15
Balkrishna Industries – A Snapshot
GROWING TOGETHER
01
02
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 SKUs
03
Capacities Achievable capacities of ~285,000 M.T.P.A
04
05
06
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
16
Our Strong Evolution
GROWING TOGETHER
1987
1995
2002
2003
1st Plant in Aurangabad inaugurated by our Founder Chairman, Late Mr. M P Poddar
Started Production of Off-Highway Tires
Plant in Bhiwadi, Rajasthan
Production of ATV, Gardening and earthmoving Tires
2011
2009
2008
2006
2004
Rebranding of BKT
Crosses Rs. 1,000 cr Turnover
Launch of Earthmax Tires
Plant in Chopanki, Rajasthan
Launch of Radial Agrimax Tires
2015
2018
2019
2020
Started Greenfield Plant in Bhuj, Gujarat
Announced Capex at Waluj and Bhuj
Started Manufacturing for large size 51” diameter tires at Bhuj
Self Reliant on Carbon Black with the completion of Phase 2 at Bhuj in Gujarat
India’s Largest Off-Highway Tire Manufacturer
17
BKT… at the forefront of Sustainability
GROWING TOGETHER
✓ Part of electricity needs of the North India plants are being met
by green energy generated through our own wind and solar
projects
✓ In Bhuj, the Company’s largest production site, the company has
✓ Planted over 100,000 trees
✓ Created two large water reservoirs and
✓ Set up a co-generation plant for self-efficiency
‘Sustainable Business Operations’ is core to our Business ethos
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BKT – A Strong Global Brand from INDIA
GROWING TOGETHER
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Strengthening BKT Brand : Americas
GROWING TOGETHER
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
20
Strengthening BKT Brand : Canada
GROWING TOGETHER
BKT Continental Cup – Curling: BKT is the Title Sponsor of Continental Cup
21
Strengthening BKT Brand: Spain
GROWING TOGETHER
BKT is the Official Global Partner for the Spanish Football League “La Liga”
22
Strengthening BKT Brand: Italy
GROWING TOGETHER
BKT is the Title Sponsor for the ITALIAN SERIE ‘B’ FOOTBALL CHAMPIONSHIP – THE NEWBORN - “SERIE BKT”
23
Strengthening BKT Brand: France, Europe
GROWING TOGETHER
BKT is the Sponsor for the “LIGUE de Football Professionel (LFP)” in France
24
Strengthening BKT Brand : EUROPE
GROWING TOGETHER
Premium Partner of EUROLEAGUE BASKETBALL
25
Strengthening BKT Brand : Tractor of the year (TotY) - EUROPE
GROWING TOGETHER
Team of 26 expert journalists in agricultural mechanization, assign the Tractor of the Year (TotY) award to the ‘Best European Tractor’
26
Strengthening BKT Brand : Australia
GROWING TOGETHER
BKT is the Official “OFF-HIGHWAY TIRE PARTNER” for KFC BIG BASH LEAGUE (THE AUSTRALIAN CRICKET LEAGUE)
27
Strengthening BKT Brand : India
GROWING TOGETHER
Official Partner of Teams in the Cricket T20 League
28
Thank You
Company
Investor Relations Advisor
Balkrishna Industries Ltd. CIN - L99999MH1961PLC012185 Mr. M S Bajaj President (Commercial) & CFO msbajaj@bkt-tires.com www.bkt-tires.com
Strategic Growth Advisors Pvt. Ltd. CIN - U74140MH2010PTC204285 Mr. Shogun Jain shogun.jain@sgapl.net +91 77383 77756 www.sgapl.net
All images, texts and graphics contained in this document are the copyright of BKT. Permission to print hard copies of this material and to share it with interested people is granted unless otherwise provided by the Author of the document. It is forbidden to extract parts of the presentation without the express consent of the author. Balkrishna Industries Limited (BKT) cannot be held responsible for any incorrect data contained in this document. Any other form of reproduction, electronic or otherwise, as well as the application of any changes, partially or entirely, to images, texts, graphs and data is strictly prohibited without prior written permission from BKT. Balkrishna Industries Limited (BKT) reserves itself the right to alter any details contained in the document without prior notice.