SMLTNSE12 February 2022

Sarthak Metals Limited has informed the Exchange about Investor Presentation

Sarthak Metals Limited

To, The Manager, Listing & Compliance, BSE Limited Phiroze Jeejeebhoy Towers, Dalal Street, Mumbai - 400 001.

Date: 12/02/2022

To, Listing Department, National Stock Exchange of India Limited, C-1, G-Block, Bandra-Kurla Complex Bandra (E), Mumbai – 400 051

Ref: Scrip Code - 540393

Ref: Scrip Symbol - SMLT

Subject: Earnings Presentation Q3 FY2022.

Dear Sir/Ma’am,

Pursuant to Regulation 30(6) of the SEBI (Listing Obligation and Disclosure Requirements) Regulation 2015, we are enclosing herewith Earnings Presentation of the Company. The said presentation is also being made available at the website of the Company at www.sarthakmetals.com You are requested to kindly take the same on your record.

Thanking You,

For, Sarthak Metals Limited

Pratik Jain Company Secretary and Compliance Officer

Encl. as above.

Earnings Presentation

S A R T H A K M E TA L S L I M I T E D M o de r n m e ta llur gica l s o lutio ns fo r fine tuning s te e l

Q3FY22 Result Summary

OPERATIONAL HIGHLIGHTS

P&L SUMMARY

MANAGEMENT COMMENTARY

M E

Q3FY22 Operational Highlights

Cored Wire Volumes & Realizations

Aluminium Flipping Coil Volumes & Realizations

( I N T O N N E S & ₹ / T O N N E )

1 ,8 00

4 ,0 0,0 00

( I N T O N N E S & ₹ / T O N N E )

3 ,0 00

1 ,6 00

1 ,4 00

1 ,2 00

1 ,0 00

8 00

6 00

4 00

2 00

3,79,796

3 ,5 0,0 00

2,66,404

2,33,812

1 0 5 0

1 7 1 0

1 2 2 4

Revenue

Increase in Volume YoY

Increase in Realizations YoY

3 ,0 0,0 00

2 ,5 0,0 00

2 ,0 0,0 00

1 ,5 0,0 00

1 ,0 0,0 00

5 0, 00 0

2,23,363

2,40,494

1,56,603

1 7 2 5

2 5 7 7

2 2 3 4

2 ,5 00

2 ,0 00

1 ,5 00

1 ,0 00

5 00

Q3FY21

Q2FY22

Q3FY22

Q3FY21

Q2FY22

Q3FY22

Volume

Realiaztion

Volume

Realiaztion

3 ,0 0,0 00

2 ,5 0,0 00

2 ,0 0,0 00

1 ,5 0,0 00

1 ,0 0,0 00

5 0, 00 0

Revenue

Increase in Volume YoY

Increase in Realizations YoY

S A R T H A K M E T A L S L I M I T E D |

Q3FY22 P&L Summary

PARTICULARS ( ₹ I N C R O R E S )

Revenue from Operations

Total Income

Operating Expenses

EBITDA

EBITDA %

Finance Cost

Depreciation & Ammortization

PBT

PAT

EPS (₹)

Q3FY22

Q2FY22

Q3FY21 YoY % Change QoQ % Change

106.8

106.9

95.9

10.8

10.2%

1.0

0.4

9.6

7.1

5.19

108.0

108.2

100.4

7.6

7.1%

1.0

0.4

6.5

4.9

3.60

59.1

52.9

6.2

81%

75%

-1%

-4%

42%

10.5%

-31 bps

+308 bps

0.7

0.5

5.0

3.7

2.74

49%

-22%

92%

90%

89%

14%

48%

44%

S A R T H A K M E T A L S L I M I T E D |

Management Commentary

Commenting on the Q3FY22 performance, Sanjay Shah, Executive Director, said:

"We are pleased to share that Sarthak Metals has maintained its growth trajectory and has delivered a robust performance, at par with the previous quarters. Our Revenue from Operations for Q3FY22 stood at INR 106.8 crores as compared to INR 59.1 crores in corresponding Q3FY21, a growth of 81% on a YoY basis. On the profitability front, our EBITDA margins grew from 7.1% in Q2FY22 to 10.2% in Q3FY22. The robust 9MFY22 performance of your company all but guarantees a strengthened position as a market leader in its industry. With such performance being delivered quarter on quarter, we are certain that we will end this year on a firm footing for future growth.

This performance is on the backdrop of a solid industry outlook and strong tailwinds. Our clients, some of the largest steel players in India, are on a constant lookout for expansion opportunities, as India eyes to become an export hub for the steel industry in the coming decade. Union Budget affirms this assertion by prioritizing investments and spending in the infrastructure sector & special steels sector. The government’s expenditure on special steel & infrastructure is a good macro setting for our business to grow and expand. We are well-positioned to corner a higher market share in our existing product categories, while harnessing new opportunities coming up in integrated applications both at vertical & horizontal levels. To capitalize on the new & existing opportunities, your company has recently acquired a 5-acre plot next to our facility, which will be utilized for a new strategic business opportunity that the Board and Management is currently validating.

As for our existing business, all efforts are being undertaken to run our manufacturing lines at peak productivity levels. We see headroom for growth, with debottlenecking and additional manufacturing lines within the same premises to cater to unfulfilled demand. We look forward to expanding our capacity of aluminium flipping coils by 50% in H1FY23 and are confident of a quick turnaround time for the future expansion of our existing product categories.

Lastly, we are happy to report that we had announced an interim dividend of Re 1 to our shareholders in Jan 2022, and we look forward to building on this further and sharing value with our stakeholders. Your company looks forward to capitalize on the long-term opportunities offered by the Indian steel industry and the growing Indian economy."

S A R T H A K M E T A L S L I M I T E D |

Inside the Presentation

ABOUT 08

DB GROUP

SNAPSHOT

MILESTONES

PRODUCT CATEGORIES

INFRASTRUCTURE

CLIENTS

WAREHOUSING CAPABILITIES

LEADERSHIP

BOARD OF DIRECTORS

STRATEGIC REVIEW INVESTMENT THESIS 19

STRENGTHS AND WEAKNESS

BUSINESS CANVAS

FINANCIAL SUMMARY 23

5 YEAR SUMMARY

P&L SUMMARY

BALANCE SHEET SUMMARY

CASH FLOW SUMMARY

MARKET STATISTICS

ABOUT

DB GROUP

SNAPSHOT

MILESTONES

PRODUCT CATEGORIES

INFRASTRUCTURE

CLIENTS

WAREHOUSING CAPABILITIES

LEADERSHIP

BOARD OF DIRECTORS

M E

Desraj Bansal Group

The ~400 crore* Desraj Bansal Group ("DB Group") is a leading business group with interests in the Metals and Energy sector. DB Group has 5 state-of-the-art fully-functional manufacturing facilities in Bhilai, Chhattisgarh, housed under 3 group entities.

MANUFACTURING FACILITIES

GROUP ENTITIES

*Provisional figure

SARTHAK METALS LIMITED

SARTHAK ENERGY (P) LIMITED

BANSAL BROTHERS

CORED WIRES & ALUMINUM FLIPPING COIL

SOLAR ENERGY

FERROALLOYS

10,000 TPA

02 MW

6,000 TPA

CAPACITY FOR CORED WIRES

SOLAR POWER PLANT

CAPACITY FOR FERROALLOYS

10,000 TPA

CAPACITY FOR ALUMINUM FLIPPING COILS

S A R T H A K M E T A L S L I M I T E D |

Sarthak Metals Snapshot

Sarthak Metals Limited ("Sarthak") part of the Desraj Bansal Group is India's leading manufacturer and exporter of Cored Wires and Aluminium Flipping Coils that find application in the metallurgical industry. Being an experienced and quality conscious manufacturer, Sarthak is the preferred supplier for these products to some of India’s largest steel units.

Headquarter in Bhilai, Chhattisgarh, with its state-of-the-art, ISO 9001-2000 certified manufacturing units, the Company is strategically located in close proximity to a critical steel hub in the country.

*Provisional figure

LEADING

AMONGST THE LEADING CORED WIRE MANUFACTURERS IN INDIA

~400 CRORE

PART OF THE ~400 CRORE* DB GROUP

10,000 TPA

CAPACITY FOR CORED WIRES

10,000 TPA

CAPACITY FOR ALUMINUM FLIPPING COILS

200+

30+

COMMITTED WORKFORCE

ACTIVE CLIENTS

S A R T H A K M E T A L S L I M I T E D |

Milestones

1995

Incorporated in 1995 with an industrial gases unit producing industrial oxygen and carbon dioxide catering to industries units in its vicinity

2008

2017

Commenced production of Aluminium flipping coils with its first mill built in-house

Raised funds through its initial public offer and got listed on BSE SME

Cross 200 crores sales benchmark

2002

In efforts to cater to the growing metallurgical industry in the country, commenced its first cored wire mill built in-house

2012

2018

Started manufacturing cored wire feeder machines

Started producing Aluminium wire rods (backward integration)

S A R T H A K M E T A L S L I M I T E D | 10

Product Categories

The Company has two primary product categories i.e., Cored Wires and Aluminium Flipping Coils. In addition, the Company also produces Cored Wire Feeder Machines.

Cored Wires

Aluminium Flipping Coils

• Cored Wires are a product of wire injection

• Aluminium flipping coils are used in steel

technology of steels. They consist of steel tubes (wires) filled with various alloys that are injected in molten metal for introducing different characteristic in the metal.

• Some key cored wires manufactured by Sarthak are – Calcium Silicide, Calcium Iron, Calcium Aluminium Iron, Calcium Solid Wire, Lead Cored Wire, Ferro Titanium, Carbon, Ferro Boron, Magnesium Ferrosilicon, Nitride Manganese, Ferro Niobium.

• Key functions of cored wires is steel refining, alloy

addition, deoxidation, desulphurization, denitrification, etc.

Why cored wires? Cored wires (or wire injection technology) are a substitute to single-shot addition of alloys into molten metal. Cored wire helps in uniform and homogeneous mixing of alloys in the ladle. It is a more accurate and efficient process of adding chemical elements in the casting. Cored wires have become a indispensable part of metallurgical plants today.

manufacturing process for de-oxidising of molten steel, and as a alloying element for manufacturing specialized steel.

• Key function of Aluminium wire is de-oxidising,

grain refining, nitride forming and alloying of steel.

Wire Feeder Machines

• Machines that are designed to inject

cored wires into molten steel for metallurgical process control. The Company offers a wide range of customized machines, with 2 and 4 strand options that can draw wires from 5 to 15 mm diameter with a speed of up to 300 meters per minute.

S A R T H A K M E T A L S L I M I T E D | 11

Infrastructure

•

• •

•

• • •

The Company has two state-of-the-art manufacturing facilities in Bhilai, Chhattisgarh

Strategically located in proximity to many clients

Cumulative ~2,50,000 sq. ft. plot area, with land availability for future expansions

4 lines for manufacturing cored wires and 2 lines for Aluminium flipping coils, built in-house specific to the Company’s needs

Equipped with sophisticated machinery and testing equipment’s

ISO 9001:2008 certified unit

Equipped with a fully-functional chemical lab, and atomic absorption spectrophotometer for testing and QC of raw materials & finished products

Manufacturing Capacity (double-shift)

10,000 TPA

CORED WIRES

10,000 TPA

Aluminium FLIPPING COILS

Capacity Utilization

( I N T P A )

1 2,0 00

1 0,0 00

8 ,00 0

6 ,00 0

4 ,00 0

2 ,00 0

6,652

2,804

5,619

4,363

4,446

6,381

FY19

FY20

FY21

Cored Wire Capacity (Single-shift)

Aluminium Flipping Coil Capacity (Double-shift)

S A R T H A K M E T A L S L I M I T E D | 12

Clients

Domestic

Exports

SHADEED IRON & STEEL CO. LLC

S A R T H A K M E T A L S L I M I T E D | 13

Clients (Contd.)

Customer Profile

FABRICATION UNITS

STEEL PLANTS

FOUNDRIES

10 YEAR+ RELATIONSHIPS

5 YEAR+ RELATIONSHIPS

35%

TOP 5 CLIENTS SALES CONTRIBUTION

~85%

REPEAT BUSINESS

S A R T H A K M E T A L S L I M I T E D | 14

Warehousing Capabilities

• Equipped with state-of-the-art warehousing capabilities

• Ensuring uninterrupted and reliable supply of metallurgical solution to our clients

• Establishing Sarthak’s as a preferred supplier with leading Indian steel mills

Cored Wires

Aluminium Flipping Coils

• 1,500 Sq. Mt. material storage space

• 2,800 Sq. Mt. material storage space

for Cored Wires

for Aluminium Flipping Coil

• Sufficient to stock 2,000+ tonnes of

• Sufficient to stock 4,000+ tonnes of

material, equivalent to 3 months buffer

material, equivalent to 4 months buffer

• Sufficient space to stock finished

products as well

S A R T H A K M E T A L S L I M I T E D | 15

Leadership

Anoop Kumar Bansal M A N A G I N G D I R E C T O R

Sanjay Shah W H O L E - T I M E D I R E C T O R

Mayur Bhatt W H O L E - T I M E D I R E C T O R & C E O

Mr Bansal has a Bachelors in Commerce degree from Nagpur, as Managing Director he has been instrumental in strategic planning. He brings innovative commercial ideas, execution-led experience, and vision to the table, which has contributed to the Company’s success. He is also entrusted with looking after DB Group’s ferroalloys division and the Company’s industrial gases division (which has been sold in 2021). In addition, he leads the CSR initiatives at the Company.

Mr Shah is a Whole-Time Director and the head of Marketing team at Sarthak. He has been instrumental in creating the domestic business of Sarthak, and getting the Company empaneled with leading steel institutions of the country, and as a result Sarthak works with the largest Indian steels mills today.

Mr Bhatt is a Whole-Time Director and the Chief Executive Officer of the Company. He is an essential link between the production and sales functions of the organisation; he also manages the day-to-day business and financial activities of the Company. He also contributes to raw materials management. His contributions have been of great value to the Company.

S A R T H A K M E T A L S L I M I T E D | 16

Board of Directors

Mr Sunil Kumar Agarwal CHAIRMAN & NON-EXECUTIVE, NON-INDEPENDENT DIRECTOR

Ms Rama Kohli NON-EXECUTIVE, INDEPENDENT WOMAN DIRECTOR

Mr Sunil Dutt Bhatt NON-EXECUTIVE, INDEPENDENT DIRECTOR

Mr Dwadasi Venkata Giri NON-EXECUTIVE, INDEPENDENT DIRECTOR

Mr Agarwal is the Chairman of the board and a Non-Executive Director in the Company. He holds a Bachelors Degree in Engineering (Mechanical) (Honors). In his past roles, Mr Agarwal has been associated with GCET Raipur, Indian Railways Traffic Services, and served prestigious roles such as Divisional Railway Manager, Chief Commercial Manager SEC Railway, Chief Operating Manager and additional member to the Ministry of Railways.

Ms Rama Kohli is a Non-Executive and Independent Director of the Company. She holds a Bachelors Degree in Science from Pt. Ravishankar Shukla University, Raipur. In addition, she has also completed her PGDBM from Pt. Ravishankar University, Raipur. She is currently undertaking various management advisory activities.

Ms Sunil Bhatt is a Non-Executive and Independent Director of the Company. He has more than 35 years of work experience as a part of the department of Instrument and Weighing in Bhilai Steel Plant, SAIL. He recently retired in 2020 and joined the Company's board in 2021.

Mr Dwadasi Venkata Giri is a Non-Executive and Independent Director of the Company. He has completed his Post Graduation (M.Com) from Pt. Ravishankar Shukla University, Raipur. He also completed LLB and CA IIB from Raipur. He has vast experience in the banking and finance domain.

S A R T H A K M E T A L S L I M I T E D | 17

STRATEGIC DRIVERS

INVESTMENT THESIS

STRENGTHS AND WEAKNESS

BUSINESS CANVAS

M E

Investment Thesis

Industry tailwinds

Expansion – Aluminum flipping coils

Ramp-up – Cored wires

Export opportunities

Integration in value-chain and Diversification

Healthy financial performance

Indian steel industry is expected to register healthy volume growth, with growing capacity utilizations and addition of new capacities on back on growing domestic & international demand. This bodes well for our Cored Wire business.

The Company is planning to expand capacity of this vertical with installation of a new furnace within the coming 12 months, that will expand capacity by 50%.

Ramping up operations of Cored wires by cornering higher market share and leveraging the growing crude steel production in India.

Getting export growth back on track by adding newer markets, while growing in existing markets.

Evaluating opportunities in the value-chain, that will aid in growth and margin expansion. In addition, the Company is exploring diversification opportunities in adjacent categories.

Operating leverage in profitability margins is expected to kick in with growing scale of operations. The Company expects to maintain healthy dividend payouts on the back of growing profitability.

S A R T H A K M E T A L S L I M I T E D | 19

Strengths and Weakness

STRENGTHS

WEAKNESS

• Among the leading players in metallurgical cored wires

•

Fragmented market

•

Strategically located facilities

• Cyclicality of the steel industry

Strong clientele with India’s leading steel players

• Working capital intensive operations

Long standing track record as a consistent, quality solution provider

Experienced promoters and strong parentage of the Group

2nd generation management driving newer segments and exploring ideas for expansion in adjacent categories

S A R T H A K M E T A L S L I M I T E D | 20

Business Canvas

Key Partnerships

Key Activities

Value Proposition

Customer Relationships

Customer Segmentation

• Cordial relationships with

• Manufacturing

suppliers

• Sales & marketing

• Purchase planning

Key Resources

• State-of-the-art

manufacturing setup

• Steel plants

• Fabrication units

• Foundries

• Quality products for

metallurgical industry as per client specifications

• Long standing customer relations based on trust & quality

• Cored wires

• Aluminum flipping coils

• Cored wire machines

Channels

• Directly engaged with all

the customers

S A R T H A K M E T A L S L I M I T E D | 21

FINANCIAL SUMMARY

5-Y SUMMARY

P&L SUMMARY

BALANCE SHEET SUMMARY

CASH FLOW SUMMARY

MARKET STATISTICS

M E

5 Years Summary

Revenue from Operations

Profit After Tax

EBITDA & EBITDA Margins

( ₹ I N C R O R E S )

( ₹ I N C R O R E S & I N % )

1 8.0

1 5 2 1 8

1 7 1 2 6

1 8 9 2 6

2 1 4 1 7

2 2 1 5 6

3 9 5

4 7 6

5 7 6

4 6 2

7 9 7

7.0%

6.3%

6.0%

5.7%

5.2%

8 6

1 0 3

1 2 0

1 1 2

1 5 6

1 6.0

1 4.0

1 2.0

1 0.0

8 .0

6 .0

4 .0

2 .0

0 .0

Equity & Debt to Equity

( ₹ I N C R O R E S & T I M E S )

6 0

5 0

4 0

3 0

2 0

1 0

0.83

0.85

0.71

0.58

0.51

3 2 6 8

3 6 6 1

4 2 3 7

4 6 1 7

5 3 4 5

8 .0%

7 .0%

6 .0%

5 .0%

4 .0%

3 .0%

2 .0%

1 .0%

0 .0%

0 .9

0 .8

0 .7

0 .6

0 .5

0 .4

0 .3

0 .2

0 .1

FY17

FY18

FY19

FY20

FY21

FY17

FY18

FY19

FY20

FY21

FY17

FY18

FY19

FY20

FY21

FY17

FY18

FY19

FY20

FY21

EBITDA

EBITDA Margin

Equity

Debt to Equity

S A R T H A K M E T A L S L I M I T E D | 23

P&L Summary

PARTICULARS ( ₹ I N C R O R E S )

Revenue from Operations

Total Income

Operating Expenses

EBITDA

EBITDA %

Finance Cost

Depreciation & Ammortization

PBT

PAT

EPS (₹)

*Shareholding data as of September 2021

FY17

152.18

153.87

143.57

8.61

5.7%

3.38

1.06

5.87

3.95

3.26

FY18

171.26

172.90

160.95

10.31

6.0%

3.46

1.35

7.14

4.76

3.47

FY19

189.26

190.83

177.27

12.00

6.3%

3.87

1.58

8.11

5.76

4.21

FY20

214.17

215.26

202.93

11.24

5.2%

3.63

2.25

6.46

4.62

3.38

FY21

221.56

222.08

205.96

15.60

7.0%

3.30

2.10

10.72

7.97

5.82

S A R T H A K M E T A L S L I M I T E D | 24

Balance Sheet Summary

PARTICULARS ( ₹ I N C R O R E S )

Shareholders' Funds

Non-Current Liabilities

Long Term Borrowings

Current Liabilities

Short Term Borrowings Trade Payables

Total Equity and Liabilities

Non-Current Assets Tangible Assets CWIP

Current Assets Inventories

Trade Receivables Cash & Bank Balances

Total Assets

FY17

32.68

1.29 1.00

28.77 26.24 0.35

62.74

9.29 7.03 1.94

52.70 10.15

29.77 8.90

61.99

FY18

36.61

2.53 2.28

26.00 23.59 0.93

65.14

10.98 8.73 0.57

54.17 15.55

29.13 1.63

65.14

FY19

42.37

3.25 2.75

38.22 33.35 3.46

83.84

15.59 13.78 0.20

68.25 26.05

23.24 3.54

83.84

FY20

46.17

2.38 1.61

27.72 21.84 3.87

76.26

18.10 14.45 0.00

58.16 21.93

28.20 1.28

76.26

FY21

53.45

7.35 6.61

30.64 24.59 0.29

91.45

15.65 13.65 0.08

75.80 29.76

38.37 3.46

91.45

S A R T H A K M E T A L S L I M I T E D | 25

Cash Flow Summary

PARTICULARS ( ₹ I N C R O R E S )

Cash from Operating Activities

Cash from Investing Activities

Cash from Financing Activities

Net Cash Flow

Cash at the Beginning of Year

Cash at the End of Year

FY17

4.10

(2.21)

5.50

7.39

1.51

8.90

FY18

0.04

(1.52)

(5.78)

(7.27)

8.90

1.63

FY19

1.14

(6.12)

6.89

1.91

1.63

3.54

FY20

17.14

(2.61)

(16.79)

(2.26)

3.54

1.28

FY21

(0.56)

(1.32)

4.05

2.17

1.28

3.46

S A R T H A K M E T A L S L I M I T E D | 26

Market Statistics

SHAREHOLDING PATTERN

30.17%

69.83%

Promoters

Public

Current Market Price

₹121.2

52 Week High/Low

₹145.3 / ₹28.0

Market Capitalization

₹165.9 Crore

Shares Outstanding

BSE Scrip Code

1.37 Crore

540393

*Shareholding data as of December 2021

Market price data as of 11th February 2022

S A R T H A K M E T A L S L I M I T E D | 27

Get in touch

Anirudh Singhal Sarthak Metals Limited cfo@sarthakmetals.com

Pratik Jain Sarthak Metals Limited cs@sarthakmetals.com

Sayam Pokharna TIL Advisors sayam@theinvestmentlab.in +91 94266 60791

SAFE HARBOR

This document which has been prepared by Sarthak Metals Limited (the “Company”, “Sarthak”), 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 what so ever. 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 document 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 Document. This Document 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 Document is expressly excluded.

Certain matters discussed in this Document 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 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 Document. The Company assumes no obligation to update any forward-looking information contained in this Document. Any forward-looking statements and projections made by third parties included in this Document are not adopted by the Company and the Company is not responsible for such third-party statements and projections.

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