SATIA

Governance INVESTOR PRESENTATION FEBRUARY, 2023 Society Environment SAFE HARBOUR Certainstatementsin this documentmaybe forward-looking statements. Such forward- lookingstatementsare subjectto certainrisksand uncertaintieslike governmentactions,local, political or economicdevelopments,technologicalrisks, and manyother factors that couldcauseour actual results to differ materially fromthose contemplated by the relevantforward-lookingstatements.Satia IndustriesLtd. will not be in anyway responsible for anyactiontaken basedon suchstatementsand undertakes no obligation to publicly update these forward-looking statementsto reflectsubsequent eventsor circumstances. COMPANY OVERVIEW Overview • • • Satia IndustriesLimited(SIL),locatedin the SILhas 540 acres of eucalyptusplantations, SIL supplies40%-50% ofitsproductionto State DistrictofMuktsar,Punjabwasincorporated developedasper Karnal Technologywhich textbook boards with the balance sold in the by Dr. Ajay Satia and commenced its consumes total treatedwaterdischarge. open market throughpan-Indianetworkof70+ operations in 1984. dealers and 3 branchoffices located in Delhi, • Chandigarh & Jaipur with total Employee strength SILhasrecentlyaddeda4thstateoftheart • of 2,200+ headcounts SILis one of the leading WoodandAgro-based paper machinery to its production facilities with a paper manufacturers in India, with a completely capacityof 100,000 MTPA.With adiverseCapex • integrated manufacturing setup with 4paper program tomodernizeandscaleup its capacities, SIL is Carbon Credit Surplus and has a regular machines,100% in-house powergeneration, SIL now has total installed capacity of 2,05,000 income accruing from renewable energy credits soda recovery plant and one of the best effluent MT inFY23. (REC) treatment facilities inthe nation. Vision Mission ‘To become a leader in its own segment with excellence ‘Tosustaingrowthwithtechnological upgradationand inall-round performancecreatingvalue forall innovationon acontinuousbasisforachievingcost stakeholders of the company,societyandthe economy’ competitivenesswithsustainedprofitability, excellencein qualityandwin customersatisfactionandloyalty’ InvestorPresentationIDec 2022 3 LEADERSHIP TEAM Mr. Chirag Satia Mr.R.K.Bhandari Dr.AjaySatia ExecutiveDirector JointManagingDirector Chairman&M.D Dr. Satia is an MBBS, he has been the pioneer He has been driving force behind new initiatives Mr.Bhandari isanMBA, hehas been for setting up this integrated paper mill.Dr. since he joined in 2015 and looks after Finance, instrumental in marketing and other Satia has apassionforwork, aflair for Accounts and Commercial Operations. His administrativeresponsibilitiessincethe last33 technology and possesses unparalleled enterprising spirit and visionary outlook have years. He has been instrumental in formulation enterprising spirit forexpansionand addednew energyto theworkforce.Mr.Chirag &executionof SIL’scorebusiness strategiesHe modernization.Hisgreateststrengthlies in has hugeexpansionaspirationsforthe company has also been instrumental in providing new building and retaining a strong and trusted and is currently spearheading the cutlery direction tothemarketingdepartmentand teamwhichhasturnedhisdreams into reality. segmentset-upandexpansion. placingthe companyon domestic map. InvestorPresentationIDec 2022 4 FROM THE DESK OF THE MANAGEMENT W SIL is aiming to on-board maximum orders arising in the domestic market with its price eare pleased to state that we have reported competitive advantage and fully integrated a strong quarter despite the challenges faced by setup. Because of our long-standing the industry. Our revenues jumped by 125%and relationship with State Textbook Corporations EBITDA by 182% YoY. Similarly, our performance and our robust dealer networkwe are able to for 9MFY23 was also encouraging. Revenue from deliver quality paper at competitive cost operations in during ninemonths grew by 129% across the nation. and PAT by 105% as compared to 9MFY22. The company has declared an interim dividend of 20%. Toconclude,I wouldliketo extendmyheartfelt gratitude to all our stakeholders, who have been with We believe that fundamental demand prospects for us in these timesandassureyouthatSatiaIndustries paper will remain stable over the medium term, given will continue in its endeavors to emerge as a market its under penetration across segments. We are on our leaderanddeliver value to eachstakeholder. track to accomplish our objective and turn SIL in to one of the country’s top paper manufacturer. Chirag Satia ExecutiveDirector I amdelightedtostatethatwe continue to gain the benefits from our recently commenced PM4 which recently started commercial production last year . With the additional capacity, SIL would be in a position to cater to any incremental demand from the State book boards. InvestorPresentationIDec 2022 5 JOURNEY & KEY MILESTONES A. CRP and Started production Powercogeneration power plant With Paper Second Paper plant (5 MW) 5MWTG Installed. Increased Incorporation Machine-1; Paper Production Machine-3 Installed/ B. 220 MT agro powerplantto ofSatiaIndustries capacity4,950 Machine-2 Crossed10,000 and80 150TPDcontinue Pulpmill(unbleached 23.30 MW.200 TPD Limited MTPA installed MTPA TPDWastePulp Digester. &Bleachedplant) continueDigester. 1980 1984 1989 1993 1998 2002-03 2006 2011-12 Installation of Recorded Highest MultifuelBoiler(acost Productionof1,33,191 Additional savingofappox.`250 MTandcapacity AddedSolar Power generation Capacity of millionperyear) ofCRPplantincreased PM-1 speed Capacity3.25 of10.45MWand ChemicalRecovery 14MWturbine from400-650TPD. increased MW.PM2 NewSolarplantof2.29 Plant Machineryprocured ListingofSIL’sEquity upgrading Speedfrom MW. ListingofSIL’sEquity wasenhancedandalso forTableCutlery SharesonNSEinJuly From500-700 400-650 120TPD SharesonBSEin ODLin Segment 2019 MPM MPMdone WoodpulpMill. September2015 PulpPlant 2020-21 2019-20 2018-19 2017-18 2016-17 2015-16 2014-15 ●CommencementofCommercialProductionfrom PaperMachine4withcapacityof1,00,000tons. ●EnhancementofPulpingCapacityto150TPD 2021-22 InvestorPresentationIDec 2022 6 OVERVIEW OF COMPANY PRODUCTION CAPACITIES FaciltyType Description CompetativeAdvantage PulpingCapacity Total Capacity-550 TPD –Mix of Agro,Wood Pulp ● Strategic Location in the Wheat belt area of Punjab makes and Waste Paper procurement of RM easy and costeffectivewith noother papermill in 100Kmradius. ● WoodPulp Digesterautomationwillled to reductionin steamconsumptionresultingin savings of ~220 MN PA. PaperMachines 4Plantshavingcapacityof700TPD PM 4 gives SIL an opportunity to manufacture superior quality paper & allows it to addnew productsto itscurrentproduct mix. ChemicalRecovery Capacity-650 TPD ● Re-useofCausticsodatotheextent of 90%-95% Recovery&re-useofCausticSoda which is used ● Steam Generatedisusedtogeneratepower for cooking of agro andWood chipsfromBlack in-house. Liquor, apollutingeffluentgeneratedin the process ofpulpmaking InvestorPresentationIDec 2022 7 OVERVIEW OF COMPANY PRODUCTION CAPACITIES FaciltyType Description CompetativeAdvantage Powergeneration 4Turbineswithtotal capacityof ● 100%Selfsufficiencyofpowerrequirements. 41.95MW ● REC/carboncreditsforcleanpower generation ● Low costofpowervis-à-vis drawnfromgrid EffluentDischarge Eucalyptus plantations of 540 acresasperKarnal ● ThePlantationsactasafuture sourceof Raw Technology Material ● OpenMarketsalegeneratestax free AgriculturalIincome Alleffluentsaretreatedtothe desired standards and no effluent is dischargedinto anywaterbody of thestate. InvestorPresentationIDec 2022 8 GROWTH PROSPECT - INDUSTRY OVERVIEW OF PACKAGING INDUSTRY Packaging is the According to Care In order to further Withthe“SingleUse fifth largest sector in Ratings, a prominent maximize the potential Plastic Ban” being India’s economy and credit rating company of the packaging fullyenforceable isoneofthehighest in India, more than sector in India, the by the government growth sectors in the 49% of the paper governmenthasbeen by July 2022, the country. According to produced in the continuously consulting PaperIndustrysees the Packaging Industry country is used for theindustryexperts. ahugeprospectfor Association of India packagingpurposes. For instance, PIAI establishingitselfasa (PIAI), the sector is (Packaging Industry environment friendly growingat24%to27% Association of India) and sustainable perannum. has been asked to alternative to plastic. formulate policies and guidelines that are expected to augment India’s export potential in the international market. Source:https://www.mordorintelligence.com/industry-reports/packaging-industry-in-india InvestorPresentationIDec 2022 9 Transforming a perceived cyclical business into a non cyclical business through consistent and sustainable financial performance 1 2 3 4 Focusedrawmaterial Thoroughly backward integrated Deeply rooted Customer Duetoabovefactors procurement –Satia is manufacturingfacilityleading relationship –Satia has there is continuous one of the largest wood to sustainable margins –Satia developed substantial and growth in revenues, and agro based (based has always followed a step ahead long standing relationship profitability, cash on wheat straw) paper approach in terms backward with various state boards flows and return producer.Itdoesn’t integrationat variouslevels and publishers of text ratios. depend solely on waste –power,causticsoda,wood books. Some relations paper.Satia's facilityis plantation which gives prominent extend to beyond 10-15 located in the wheat belt, cost savings and helps in achieving years. The customers of which giveseasyaccess better profitmargins.Further, Satiaarespread across toprocuredesiredraw the captive power plant enables India. material as there is no Satia to earn Renewable Energy other facility in 200 KM Certificates(REC). vicinity. InvestorPresentationIDec 2022 10 REVENUE MIX SIL’s Strategic and Sustainable Revenue Model A. SuppliestoStateboards:~40-50%ofRevenues B.Openmarketsupplies:~50-60%ofRevenues 11% 13% ● SIL supplies High quality watermark paper to ● SILsuppliestoretailtradersthrough its 1% variousstateboards. strongPan- India distribution network with 10% 70+ dealers and 3 branchoffices locatedin ● Consolidateddemand fromallText-books Delhi,Chandigarh&Jaipur. board isapproximately5,00,000 TPAofpaper ● Outoftotal sales from Open MarketSupplies, Region-Wise 4% ● Bysupplying ~50-75k TPAtovariousstate Sales Revenue ~5-10% of sale comes from Rajasthan and boards, SIL boasts of a majormarket share in inFY22 Delhi in a Direct sale, toend users,and thisvertical. facilitatedbythe SIL’s employees. ● The State Text-book orders are tender driven ● A variety of paper grades are 61% business, these projects are State government manufactured for thisverticali.e. funded under Sarva Shiksha Abhiyaan and do Exercisebookpaper, notrelyuponschool feesto paythevendors, theaveragereceivabledays happentobe ● Snow white paper, SS Maplitho CENTRAL EAST 45-60days paper, Ledgerpaper,Copier paper,Colour printing paper EXPORT NORTH ● Salesto Textbookboards commandhigher etc. (10%) operating margins as compared to open SOUTH WEST market, attributing to higher GSM and less finishing loss due to single sizeandmore filler inthe paper. InvestorPresentationIDec 2022 11 MARQUEE CLIENTS BalBharti Assam State Text Book Production & OdishaStateBureauofTextbook ChhatttisgarhPathyaPustakNigam Publication CorporationLtd Rajasthan Rajya BurdaDruckIndia West Bengal TextBook HimachalPradeshBoardof Pathyapustak Mandal PrivateLimited CorporationLtd SchoolEducation Indian Railway StateElectionCommission(UP) InvestorPresentationIDec 2022 12 KEY PERFORMANCE INDICATORS (RATIO’S) Income (₹ in Mn) EBITDA Margins (in %) 9MF… 13,743.7 9MF… 20.0 FY22 9,167.5 FY22 20.3 FY21 5,951.6 FY21 23.1 FY20 8,238.4 FY20 21.63 FY19 7528.5 FY19 22.23 ROE ROCE* H1FY… 25.9 H1FY… 23.2 FY22 18.5 FY22 14.5 FY21 11.8 FY21 9.7 FY20 26.1 FY20 19.8 FY19 28.6 FY19 26.0 *ROCEiscalculated onEBIT(PBT+financecost) EPS (in ₹) 9MF… 14.6 FY22 11.0 FY21 5.0 FY20 9.2 FY19 8.8 *The Company declared an interim dividend of 20% InvestorPresentationIDec 2022 14 FINANCIAL STATEMENT HIGHLIGHTS Particulars (INR Mn) Q3FY22 Q3FY23 9MFY22 9MFY23 Revenue from Operations 2163.0 4867.7 5939.8 13631.0 Other Income 116.8 25.3 191.5 112.7 Total Income 2279.8 4893.0 6131.3 13743.7 Expenses Cost of material consumed 866.9 2319.6 2407.0 6695.9 Purchases of traded goods 0.0 28.8 0.0 205.6 Change in inventory of finished goods, stock in trade and work in progress 39.9 -41.0 96.4 -67.8 Employee Benefit Expenses 156.4 236.2 434.3 620.3 Finance Cost 35.3 80.5 127.1 243.3 Depreciation 135.2 313.9 440.6 926.3 Other Expenses 708.9 1222.1 1752.6 3451.7 Total Expenses 1942.5 4160.0 5258.0 12075.3 Profit before Tax 337.3 732.9 873.2 1668.4 Current tax 69.8 119.8 200.1 288.2 Deferred Tax -21.8 -35.2 -38.0 -78.7 Profit for the period 289.3 648.4 711.1 1458.9 Other Comprehensive Income (i) items that will not be reclassified to profit & loss 4.8 -0.1 7.2 -0.2 (ii) Income tax relating to items that will not be reclassified to profit & loss -1.6 0.0 -2.4 0.1 Total Comprehensive Income 292.5 648.3 715.9 1458.8 Paid-up equity share capital (FV Re.1 per equity share) 100.0 100.0 100.0 100.0 Earnings per share (not annualised) Basic 2.9 6.5 7.1 14.6 Diluted 2.9 6.5 7.1 14.6 InvestorPresentationIDec 2022 CAPITAL MARKET INDICATORS MarketIndicators Shareholding ason 31st December2022 IssuedShares SharePriceason(09-02-23) Particulars Holding % 100,000,000 ₹124; Promoters&Promotersgroup 51.79 Public 48.21 Market Capitalization(inMN) 52Weeks High/Low ₹12,355 ₹164/87 Stock Performance 200.0 150.0 100.0 50.0 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 - - - - - - - - - - - - - - - - - - - - n a J - 3 0 n a J - 2 2 b e F - 0 1 r a M - 1 0 r a M - 0 2 r p A - 8 0 r p A - 7 2 y a M - 6 1 n u J - 4 0 n u J - 3 2 lu J - 2 1 lu J - 1 3 g u A - 9 1 p e S - 7 0 p e S - 6 2 t c O - 5 1 v o N - 3 0 v o N - 2 2 c e D - 1 1 c e D - 0 3 InvestorPresentationIDec 2022 16 Outlook Future Outlook • The management is well on track of achieving its target of 50% increase in production of paper on YoY basis. • Revenue from operations is likely to grow by over 100% in FY23. • The company is committed to improve its EBITDA margins by 100 basis points YoY in current year. InvestorPresentationIDec2022 17 For further information on the Company, please visit www.satiagroup.com Thank Rachit Nagpal (CFO) Satia Industries Limited rachit@satiagroup.com you P: +01633-262001 Runjhun Jain /Jeevika Hemani EY LLP runjhun.jain1@in.ey.com/ jeevika.hemani@in.ey.com M: + 91 9820720993/9811685619