GANDHAR

January 23, 2024 To, Listing Compliance Department Listing & Compliance Department BSE Limited National Stock Exchange of India Phiroze Jeejeebhoy Towers, Limited Dalal Street, Mumbai – 400001 Exchange Plaza, 5th Floor BSE Scrip Code: 544029 Plot No. C/1, “G” Block Bandra-Kurla Complex Bandra (E), Mumbai – 400 051 Symbol: GANDHAR Subject: Investor Presentation Dear Sir(s)/ Madam(s), Pursuant to Regulation 30 of the SEBI (Listing Obligation and Disclosure Requirements) Regulations, 2015, we enclose herewith the Investor Presentation on the Unaudited Financial Results for the quarter and nine months ended December 31, 2023. You are requested to take the above information on record. Thanking you. Yours Faithfully, For Gandhar Oil Refinery (India) Ltd _________________ Jayshree Soni Compliance officer and Company Secretary Mem. No.: FCS 6528 Encl: As above Safe Harbor This presentation has been prepared by Gandhar Oil Refinery (India) Limited (“Company") solely for information purposes without any regard to any specific objectives, financial situations or informational needs of any particular person. This presentation may not be copied, distributed or disseminated, directly or indirectly, in any manner. Failure to comply with this directive may result in a violation of the applicable law in certain jurisdictions. By reviewing this presentation, you agree to be bound by the restrictions contained herein, and to maintain absolute confidentiality, regarding the information disclosed in these materials. This presentation does not constitute or form part of and should not be construed as, directly or indirectly, any offer or invitation or inducement to sell or issue, or any solicitation of any offer to purchase or subscribe for, any securities of the Company by any person in any jurisdiction, including in India, nor shall it or any part of it or the fact of its distribution form the basis of, or be relied on in connection with, any investment decision or any contract or commitment, therefore. This presentation contains statements that constitute forward looking statements. These statements include descriptions regarding the intent, belief or current expectations of the Company or its directors and officers with respect to the results of operations and financial condition of the Company. These statements can be recognized by the use of words such as ''expects", "plans", 'will", "estimates", "projects", or other words of similar meaning. Such forward-looking statements are not guarantees of future performance and involve risks and uncertainties, and actual results may differ materially from those in such forward-looking statements as a result of various factors and assumptions which the Company believes to be reasonable in light of its operating experience in recent years. The risks and uncertainties relating to these statements include, but not limited to, risks and uncertainties, regarding fluctuations in earnings, our ability to manage growth, competition, our ability to manage our international operations, government policies, regulations, etc. The Company does not undertake any obligation to revise or update any forward-looking statement that may be made from time to time by or on behalf of the Company including to reflect actual results, changes in assumptions or changes in factors affecting these statements. Given these risks, uncertainties and other factors, viewers of this presentation are cautioned not to place undue reliance on these forward-looking statements. This presentation may contain certain currency exchange rates and the same have been provided only for the convenience of readers. 2 Successful IPO Listing Shareholding Pattern As on 30th November 2023 (Post Issue) Overwhelming subscription of 66 times with a listing day gain of ~76% 20.0% November 2023 3.9% 11.6% 64.6% o Listing done on BSE & NSE Promoter & Promoter Group FII o IPO Price: ₹ 169 per share DII Other Public o Listing Price: NSE ₹ 298 per share BSE ₹ 295.4 per share IPO Subscription o Listing day gain: ~76% o Gross proceeds of the Fresh Issue: ₹ 302 crs Category Times Subscribed o Gross proceeds of the OFS: ₹ 198.69 crs QIB 129.1x NII 64.3x Retail 29.9x ₹ 3,034 Market Capitalization as on 15th December 2023 was crs Total 65.6x 3 Gandhar Oil – Unique Positioning India’s Largest White Oil Player Diversified Customer Base Focus on Consumer & Healthcare 01 India’s largest manufacturer of 02 Caters to leading Indian and global 03 PHPO, the largest business white oils in FY231 and one of companies including Procter & division, contributed ~54.96% of the top five players globally2 in Gamble, Unilever, Marico, Dabur, revenues from finished goods CY22 Emami, Bajaj Consumer Care, sold3 in FY23 Amrutanjan, Encube etc. Extensive Accreditation Processes Overseas Sales to 100+ Countries Direct Supplier Relationships 04 Long-standing relationships with 05 Overseas operations in 100+ 06 Transitioned to directly purchasing several leading Indian and global countries contributing 53.32% of from base oil suppliers and pro forma successfully built relationships with companies having completed rigorous consolidated revenue from sale of leading global base oil suppliers selection processes products in FY23 Manufacturing Facilities in India and Overseas Business Transformation Fastest-growing Industry 07 Operates 3 strategically located 08 Undertook strategic decision to focus 09 White oil is the fastest-growing manufacturing facilities in Taloja on the specialty oils business with segment of the Indian specialty enhancing production and supply oil market growing at a CAGR of (Maharashtra), Silvassa (Dadra and Nagar chain capabilities 9.9% between FY23-FY282 Haveli) and Sharjah (UAE) Large Scale of Operations Consistent Financial Performance Highest Return Ratios 10 Increased scale over the years 11 Revenue4 CAGR of 40.59% and 12 Industry leading2 RoE of with FY23 Revenues of INR EBITDA CAGR of 12.86% and 32.28% and RoCE of 41.19% in 40,806mn, EBITDA of INR PAT CAGR of 15.02% during FY23 3,177mn and PAT of INR 2,139mn FY21-23 Note:PHPO-Personalcare,healthcareandperformanceoils;1Includesdomesticandoverseassales;2Source: CRISILReport;3Referstoproformaconsolidatedrevenuefromfinishedgoodssold;4ReferstoProformaconsolidatedrevenuefromoperations 5 PHPO - Largest Business Division Key Customers include Leading Indian and Global Companies Key End Applications Products Cosmetics and skin care products White oils, waxes and jellies Ointments and over-the-counter medicines Contributes 54.96% revenues from finished goods sold1 Design and development of customized products in collaboration with customers Extensive Accreditation Process Key Business Metrics • Provision of service, safety and performance histories PHPO revenue growth at a CAGR of 64.90%2 and sales volume growth at a CAGR of • Product trials and plant audits 28.52%3 during FY21-23 • Financial capability and experience Primary end-industries are Consumer and Healthcare which contributed 69.34% of PHPO • Certifications to be registered, and approved to conduct business revenue2 in FY23 • Overall time for empanelment can take up to 4–5 years Access to highly refined grades of base oil that are primarily used in the PHPO division • Costs associated with changing suppliers are relatively high Note: 1 As a percentage of FY23 pro forma consolidated revenue from finished goods sold, 2 PHPO revenue growth CAGR during FY21-23= (FY23 PHPO revenue/ FY21 PHPO revenue)^(1/2)-1; 3 PHPO Sales volume growth CAGR during FY21-23= (FY23 PHPO sales volume/ FY21 PHPO sales volume)^(1/2)-1 6 Serving to Diversified Customers across Geographies Long Term Relationships with Leading Global and Indian Customers Global Footprint in 100+ Countries across 6 continents PHPO North America Europe Asia Lubricant PIO TOSHIBA Africa Australia South America Large Customer Base with High Customer Loyalty Antarctica 3,558 Customers Exports – Continent-wise % of customers with repeat orders 66.37% 68.86% 69.11% Overseas Sales contribute 53.32% of pro forma consolidated revenue from sale of products in FY23 FY21 FY22 FY23 7 Strategies Fueling Growth and Performance in the Recent Years Strengthening Customer Base Technological Upgradation Gandhar’s growth is the result of ▪ Equipped manufacturing facilities with advanced ▪ Increase in share of business with existing technological capabilities, including SCADA, jet- customers and winning new customers mixing and fast-unloading as well as infrastructure to support product testing and R&D capabilities ▪ Expansion of product portfolio ▪ Ability to respond to emerging industry trends towards consumer and healthcare end- industries Expanding Across Geographies Minimized Commodity Price Risk ▪ Set up Texol plant in 2017 in UAE to expand ▪ Adopted price pass-through contracts for certain overseas Leveraging existing customer clients and just-in-time inventory which reduce the relationships to expand into manufacturing risk of commodity price fluctuations ingredients for their products in other geographies, Strong Supplier Base ▪ Supplier arrangements incorporates index-linked such as Indonesia, Europe and the United States pricing based on ICIS benchmarks for base oil ▪ Transitioned to directly purchasing raw material from global base oil suppliers from using intermediaries earlier ▪ Contracts with suppliers are renewed on an annual basis and provide for assured volumes of raw material and include volume-based discounts 8 Largest Manufacturer of White Oils in India1 Leading Player in the White Oil Industry1 With Significant Revenue from Overseas Sales Revenue from Overseas sales (INR mn) Breakdown of overseas sales – FY23 #1 player in India in Top 5 player globally in CAGR 71.22% Europe Africa 2% FY232 CY22 21,733.50 13% 13,456.64 Americas 15% 7,413.61 26.5% market share in 9.6% market share globally 70% APAC India in white oil in FY23 in white oil in CY22 FY21 FY22 FY23 Overseasbusinessacross100+countries PHPO is the Largest Business Division with Exposure to Fast-growing Consumer and Healthcare End-Industries FY23 pro forma consolidated revenue from finished goods sold (%) Revenue from PHPO by end-industry (INR mn) CAGR (FY21-FY23)4 Channel Partners Consumer Healthcare Others Total 66.78% 72.92% 58.48% 64.90% 10.50% PIO Others3 9.51% 30.66% 20,983 6,433 14,797 54.96% PHPO 54.98% Consumer 4,751 3,013 25.03% 14.36% 7,717 2,013 Lubricants 2,561 11,537 Healthcare 1,008 8,033 4,148 FY21 FY22 FY23 Note:1Source:CRISILReport;2Includingdomesticandoverseassales,3OthersincludePlastics,Chemicals,TextilesandFragrances,4CAGR(FY21-FY23)=(FY23Revenue/FY21Revenue)^(1/2)-1forthetotalandrespectiveend-industries 10 Strategically Located Manufacturing Facilities and R&D Capabilities Operates Two Manufacturing Facilities in Western India and One in UAE Key highlights of the manufacturing facilities Sharjah 235,294 kL o Facilities equipped with advanced technological capabilities, including jet-mixing and fast-unloading and infrastructure to support product testing and R&D capabilities at Taloja and Silvassa Plants and SCADA WHO – GMP1 Maharashtra FDA1 capabilities Silvassa Taloja 143,853 kL o The Taloja Plant has close proximity to ports such as the 143,256 kL Mumbai port and the JNPT port besides connectivity to Total Capacity as of road and rail December 2023 Certified by FSSAI1 ISO-certified 522,403 kL o In the process of enhancing the capacity of the Taloja Plant by 100,000 kL Kosher Halal R&D Facility in Silvassa Capabilities to customize, Certificate of registration by 21 Employees Advanced laboratory equipment design and develop bespoke the DSIR R&D team for specialized product and quality tests to products for customers R&D center at Silvassa has been meet stringent quality requirements Specialized hair Vitamin A&D Automotive oil for use serum ointments in sub-zero granted temperature 11 Resilient Business Model with Prudent Risk Management Framework Risk Management Framework Commodity Price Risk Foreign Exchange Risk Credit Risk Liquidity Risk • For the supply arrangements with • Hedging and risk management • Gandhar has a diversified customer • As on 31st December 2023, key suppliers, pricing is linked to policy in place base of 3,558 customers during Gandhar has fund and non-fund ICIS benchmarks for base oil and FY23, which limits concentration based working capital facilities of pricing terms are adjusted on a • 53.32% of revenues in FY23 was risk and mitigates the risk of any INR 19,663.78 million in place monthly basis from overseas sales and primarily one of its customers defaulting or which helps maintain sufficient collected in USD, which acts as a delaying payments liquidity • Certain customers have contracts natural hedge against currency risks with provisions for price pass- • Top 5/10/20 customers account for through • Part of foreign exchange risk is 14.45%, 20.85% and 28.01% of the managed by entering into forward pro forma consolidated revenue • Estimates procurement and contracts from finished goods sold in FY23 inventory requirements based on expected sourcing levels, and anticipated demand Resilient, Flexible and Scalable Business Model ▪ Gandhar has increased the scale of our operations over three decades, while increasing efficiency and reducing costs ▪ Given the nature of our industry as well the stringent quality standards applicable to various products in the end-industries, it is difficult for new entrants to replicate its quality, scale and business operations 12 Diversified Product Range catering to Diverse industries Products End Industries Personal care, Healthcare and Performance Oils (‘PHPO’) White oil Waxes Petroleum jelly Consumer Healthcare Chemicals and plastics 54.96%1 Lubricant 25.03%1 Industrial machines and Automobile oil Industrial oil Automobile equipment PIO 9.51%1 Transformer Power generation Tyre & rubber Transformer oil Rubber processing oil manufacturers & distribution products Note: In addition to our three main business divisions, PHPO, lubricants and PIO, we also sell our PHPO, lubricant and PIO products to channel partners who sell such products onwards to end-users which contributed 10.50% of FY23 pro forma consolidated revenue from finished goods sold ; 1As a percentage of FY23 pro forma consolidated revenue from finished goods sold 13 Experienced Board of Directors and Leadership Team Ramesh Parekh Samir Parekh Aslesh Parekh Indrajit Bhattacharyya Chairperson & Managing Director Vice Chairperson & Joint Managing Director Joint Managing Director Chief Financial Officer • Founder of the company with 30 years of • 19+ years of experience in the specialty oils • 19+ years of experience in the specialty oil • Experience in finance and administration experience in the specialty oils industry industry industry • Previously CFO and Director at Interdril (Asia) • Responsible for overall management and • Responsible for overall management and Limited and CFO at Valecha Engineering • Acts as an exemplary mentor, providing organization of Gandhar organization of Gandhar Limited visionary insights and strategic guidance Deena Asit Mehta Raj Kishore Singh Amrita Nautiyal Jayshree Soni Independent Director Independent Director Independent Director CS and Compliance Officer • Experienced in the fields of financial services • Former Chairman and MD of BPCL and former • Practicing company secretary and member of • Over 19 years of experience in secretarial and management Director of ONGC WIRC-ICSI and is also serving as Chairperson – compliance • Director of Asit C Mehta Financial Services, • Director of Aegis Logistics, Tema India and WIRC-ICSI • Previously at Euro Ceramics Limited as Fino Payments Bank and Reliance Asset Essar UK Services • Director of Cipla Health and Jay Precision company secretary/manager-legal Reconstruction Company Pharmaceuticals 14 Industry Insights & Emerging Opportunities Overview of the Global and Indian Specialty Oil Market The growing specialty oil market both in India and global White Oil market is the fastest growing segment of the markets serves as key opportunity area for Gandhar Indian specialty oil market 2022 specialty oil market 2022 white oil market Indian white oil market Indian petroleum jelly market US$ bn US$ bn Global specialty oil CAGR 9.9% CAGR 6.8% Global white oil US$125.99 bn US$3.30 bn 0.76 0.19 0.14 0.47 Indian specialty oil Indian white oil US$7.02 bn US$0.43 bn FY23E FY28P FY23E FY28P Indian industrial oil market Indian automotive oil market US$ bn US$ bn Key Industry drivers CAGR 4.7% CAGR 3.8% 4.05 3.87 Growing consumerism and Robust growth in end-user focus on health and hygiene 3.20 3.21 industries and increase in R&D consciousness Expansion of electrical grids Increasing demand and usage and growing automotive of heavy equipment industry FY23E FY28P FY23E FY28P Source: CRISIL Report 16 White Oil is the Fastest Growing Segment of the Indian specialty oil market White mineral oil is used in various industries Key growth drivers White oil application overview in 2022 Favourable demographics Rising disposable income 6.7% Rising urbanisation will support job creation, Growing emphasis on personal looks, social boost consumer spending and aid economic status, personal hygiene, and wellness 13.5% Consumer products growth supported by the rising income levels Pharmaceuticals 40.4% Plastics/Polymers 8.8% Increased healthcare spending Government initiatives Adhesives and sealants Textiles Increased awareness for health, hygiene and Government schemes especially PLI schemes Others vaccination as well as increasing insurance for food processing industry and 17.0% penetration and medical spending pharmaceuticals industries 13.6% Indian Beauty and Personal Care Industry Indian Consumer Food Industry Indian Pharmaceuticals Industry US$ bn US$ bn US$ bn CAGR 9.1% CAGR 13.7% CAGR 12.6% 46.0 37.6 102.4 29.7 19.8 56.5 FY23 FY28P FY23 FY28P FY23 FY28P Source: CRISIL Report 17 Key Strategies for Future Growth Strengthen our customer base Enhanced focus on the Continue to increase overseas by growing existing customer Strengthen our manufacturing consumer and healthcare sales by strategically expanding business and acquiring and R&D capabilities end-industries product offerings new customers o End-use industries such as pharmaceuticals and o Working towards increasing penetration in o Explore opportunities to grow by: o In the process of enhancing the production consumer products are expected to grow existing geographies capacity of our Taloja Plant by an aggregate of strongly going forward driven by1: • Expanding the array of products and solutions o Potential entry into new geographies based on that we offer to our existing customers 100,000 kL by FY24 • Strong domestic consumption current customer relationships to support our growth globally • Win new customer business by developing o In addition, we would enhance the total • Favorable demographics products and solutions aligned with their production capacity by: • Government initiatives o Intend to leverage its existing customer needs relationships to expand into manufacturing • Adding 18,840 kL to our Silvassa Plant to o Leverage its relationships with existing ingredients for its key customers, particularly in o Moving up the value chain by expanding our cater to the increasing demand for customers in the consumer and healthcare end- the PHPO division, for their products in other contract manufacturing services for finished automotive oils industries by: geographies, such as Indonesia, Europe and the products to our customers United States • Expanding wallet share with them • And look at acquiring new customers in these end-industries 19 Quarterly Financial Performance Revenue (INR mn) Gross Profit & Manufacturing Gross Margin Spreads Manufacturing Gross Margin Spread (INR/kL) 9,024 10,413 10,837 10,060 10,223 10,980 10,704 11,026 9,882 10,010 1,289 1,352 1,219 1,164 1,220 Q3FY23 Q4FY23 Q1FY24 Q2FY24 Q3FY24 Q3FY23 Q4FY23 Q1FY24 Q2FY24 Q3FY24 Gross Profit (INR mn) EBITDA (INR mn) Profit After Tax (INR mn) 841 851 542 759 494 481 509 697 481 284 Q3FY23 Q4FY23 Q1FY24 Q2FY24 Q3FY24 Q3FY23 Q4FY23 Q1FY24 Q2FY24 Q3FY24 21 Q3 & 9M FY24 Profit & Loss Statement Particulars (₹ in Mn) Q3FY24 Q2FY24 Q3FY23 9M FY24 9M FY23 Revenue from Operations 11,026 10,010 10,980 31,740 30,924 Cost of Material Consumed 9,416 8,870 8,892 26,961 24,663 Purchases of stock in trade 42 40 568 894 2,084 Change in Inventories of Finished goods & Work in Progress 217 -120 302 23 97 Total Raw Material 9,674 8,790 9,762 27,879 26,844 Gross Profit 1,352 1,220 1,219 3,861 4,079 Gross Profit Margin (%) 12.36% 12.19% 11.10% 12.16% 13.19% Employee Expenses 101 104 86 315 265 Other Expenses 400 357 436 1,095 1,118 EBITDA 851 759 697 2,451 2,696 EBITDA Margin (%) 7.72% 7.58% 6.35% 7.72% 8.72% Other Income 17 22 160 51 177 Depreciation 50 49 40 146 122 EBIT 818 732 817 2,356 2,751 EBIT Margin (%) 7.42% 7.31% 7.44% 7.42% 8.89% Finance Cost 161 150 191 445 376 Profit before Tax 657 582 625 1,911 2,374 Profit before Tax(%) 5.96% 5.81% 5.69% 6.02% 7.68% Tax 148 102 131 379 519 Profit After Tax 509 480 494 1,532 1,855 PAT Margin (%) 4.62% 4.80% 4.50% 4.83% 6.00% EPS (As per Profit after Tax) 5.5 4.9 5.4 15.2 21.1 22 Historical Profit & Loss Statement Particulars (₹ in Mn) FY21* FY22* FY23# Revenue from Operations 20,639 33,891 40,806 Cost of Material Consumed 13,907 23,823 33,260 Purchases of stock in trade 3,253 5,725 2,146 Change in Inventories of Finished goods & Work in Progress -317 -224 156 Total Raw Material 16,844 29,324 35,562 Gross Profit 3,795 4,567 5,243 Gross Profit Margin (%) 18.39% 13.48% 12.85% Employee Expenses 248 340 524 Other Expenses 1,061 1,553 1,542 EBITDA 2,486 2,675 3,177 EBITDA Margin (%) 12.04% 7.89% 7.79% Other Income 57 88 225 Depreciation 138 141 168 EBIT 2,405 2,622 3,234 EBIT Margin (%) 11.65% 7.74% 7.92% Finance Cost 306 304 515 Profit before Tax 2,099 2,318 2,719 Profit before Tax(%) 10.17% 6.84% 6.66% Tax 487 475 579 Profit After Tax 1,611 1,843 2,139 PAT Margin (%) 7.81% 5.44% 5.24% EPS (As per Profit after Tax) 18.95 21.01 23.86 Note: *FY21,FY22 are pro forma restated consolidated financial numbers; # FY23 are non pro forma non restated consolidated financial numbers 23 Historical Balance Sheet Equity & Liabilities (₹ in Mn) FY21* FY22* FY23# H1FY24# Equity (a) Equity share capital 160 160 160 160 (b) Other equity 3,540 5,251 7,093 8,046 Equity attributable to equity holders of the parent 3,700 5,411 7,253 8,206 Non‐controlling interests 57 196 349 471 Total Equity 3,758 5,607 7,602 8,677 Liabilities Non ‐ Current Liabilities Financial liabilities (i) Borrowings 545 339 223 110 (ii) Lease liabilities 213 279 463 463 Deferred Tax Liabilities 2 Provisions 25 24 35 36 Total Non ‐ Current Liabilities 783 643 721 609 Current Liabilities Financial liabilities (i) Borrowings 1,223 1,243 1,472 3,212 (ii) Lease liabilities 45 47 41 124 (iii) Trade payables (a) total outstanding dues of micro enterprises and small enterprises 19 26 30 22 (b) total outstanding dues of creditors other than micro enterprises and small enterprises 4,686 5,147 5,642 6,926 (v) Other financial liabilities 223 222 175 415 Other current liabilities 237 187 421 255 Provisions 4 11 12 13 Current tax liabilities (net) 0 48 17 148 Total Current Liabilities 6,436 6,932 7,811 11,115 Total Equity and Liabilities 10,977 13,182 16,134 20,401 Note: *FY21,FY22 are pro forma restated consolidated financial numbers; # FY23 and H1FY24 are non pro forma non restated consolidated financial numbers 24 Historical Balance Sheet Assets (₹ in Mn) FY21* FY22* FY23# H1FY24# Non ‐ Current Assets Property, plant and equipment 1,582 1,583 1,747 1,892 Capital work‐in‐progress 216 440 727 886 Right of use assets 239 290 425 477 Goodwill on Amalgamation - 3 3 3 Intangible assets 13 12 11 10 Investment Property 7 8 8 8 (i) Investments 2 2 2 2 (ii) Loans 0 1 2 3 (iii) Other Financial Assets 64 204 624 359 Deferred Tax Assets (Net) 0 - 1 9 Other non‐current assets 19 22 35 40 Total Non ‐ Current Assets 2,142 2,566 3,585 3,691 Current Assets Inventories 2,013 3,256 4,509 5,371 Financial Assets (i) Trade receivables 4,352 4,420 5,618 7,933 (ii) Cash and cash equivalents 113 597 468 412 (iii) Bank balances other than (ii) above 950 1,231 614 1,000 (iv) Loans 1 2 87 49 (v) Other current financial assets 888 112 188 162 Current Tax Assets (Net) -21 2 Other current assets 539 998 1,064 1,780 Total Current Assets 8,835 10,616 12,549 16,710 TOTAL ASSETS 10,977 13,182 16,134 20,401 Note: *FY21,FY22 are pro forma restated consolidated financial numbers; # FY23 and H1FY24 are non pro forma non restated consolidated financial numbers 25 COMPANY : Gandhar Oil Refinery (INDIA) Ltd CIN : U23200MH1992PLC068905 Ms. Jayshree Soni Email: investor@gandharoil.com www. gandharoil.com INVESTOR RELATIONS ADVISORS : Orient Capital (a division of Link Group) Mr. Nikunj Jain Mr. Amar Yardi +91 9769060608 +91 7045121239 nikunj.jain@linkintime.co.in amar.yardi@linkintime.co.in Thank You