Grasim Industries Ltd. · NSE:GRASIM

Grasim Industries — Q3 FY2017 Earnings Presentation

31 slides from Grasim Industries's earnings presentation, Jan 30, 2017

  1. Slide 1: Quarterly Performance Review Q3 2016-17

    Quarterly Performance Review Quarter 3 : 2016-17 Mumbai, 30th January, 2017 Grasim Industries Limited Building, Consolidating, Growing 1

  2. Slide 2: Contents

    Contents  Highlights 3-6  Financial Performance 7-8  Business Performance 9 – 13  Capex Plan 14 - 15  Business Outlook 16 - 17 Glossary VSF : Viscose Staple Fiber, MT : Metric Ton, TPA : Tons Per Annum, YoY: Year on Year Comparison, CY : Current Year, LY : Last Year, YTD : Year to Date, EBITDA

  3. Slide 3: Challenging Environment: Liquidity Squeeze

    Challenging Environment : Liquidity Squeeze  High value currency notes replacement program led to temporary liquidity shortage in the trade channels  At the same time, it helped in lowering inflation and interest rates  Improvement in Government liquidity expected to increase in infrastructure an

  4. Slide 4: Highlights – Quarter 3: VSF Business

    Highlights – Quarter 3 VSF Business Leading Post firm pricing trend in Q2 globally, prices witnessed Global Player decline in Nov’16 and started to recover in Dec’16 Sales Volume Revenue EBITDA 122K Tons ` 1,762 Cr. ` 402 Cr. Up 1% YoY Up 10% YoY Up 31% YoY ROAvCE Op. EBITDA 26% 1,095 923 15% 464 65

  5. Slide 5: Highlights – Quarter 3: Chemical Business

    Highlights – Quarter 3 Chemical Business (Chlor Alkali, Chlorine Derivatives and Epoxy) - New capacities came on stream in Western region, Largest leading to pressure on Chlorine prices Indian Player - ECU realisation remained stable with higher caustic soda prices Caustic Sales Volume Revenue EBITD

  6. Slide 6: Highlights – Quarter 3: Cement Business

    Highlights – Quarter 3 Cement Business (UltraTech Cement) Market leader - Industry capacity utilisation contracted to 60% in India - Cost has started hardening Sales Volume Revenue EBITDA 12.3 Mn. Tons ` 5,998 Cr. ` 1,280 Cr. Flat YoY Down 2% YoY Up 1% YoY Greenfield expansion (South West MP) - Ceme

  7. Slide 7: Financial Performance – Quarter 3

    Financial Performance – Quarter 3 Standalone ` Cr. Revenue EBITDA Net Profit 22% 8% 21% 331 2,526 598 272 2,335 496 Q3FY16 Q3FY17 Q3FY16 Q3FY17 Q3FY16 Q3FY17 Consolidated Revenue EBITDA Net Profit 1% 14% 7% 8,520 8,601 728* 1,762 1,878 640 Q3FY16 Q3FY17 Q3FY16 Q3FY17 Q3FY16 Q3FY17 All-Round Growth i

  8. Slide 8: Robust Financial Ratios

    Robust Financial Ratios ` Cr. Consolidated Financial Ratios Consolidated Debt / Surplus 12500 10001 10259 3/31/2016 12/31/2016 8709 Debt:Equity (x) 0.35 0.25 3791 258 Net Debt: Equity (x) 0.10 - Mar-16 Dec-16 Net Debt / EBITDA 0.54 - Standalone Debt / Surplus 1839 2115 1603 ROAvCE (%) 11.3 12.9 (Exc

  9. Slide 9: Business Performance

    Business Performance  VSF  Chemical  Cement 9

  10. Slide 10: International Fibre Price Trend

    International Fibre Price Trend $/ Kg 2.3 2.1 2.10 1.9 1.85 1.7 1.5 1.3 1.1 1.04 0.9 0.7 Apr-15 Jun-15 Aug-15 Oct-15 Dec-15 Feb-16 Apr-16 Jun-16 Aug-16 Oct-16 Dec-16 Current VSF Cotton PSF  VSF : Prices started to recover from December after witnessing decline in Nov. 16  Cotton : Prices remained

  11. Slide 11: VSF: Performance

    VSF : Performance Revenue ( ` Cr.) EBITDA (` Cr.)  Volumes were maintained despite demand EBITDA Margin slowdown in textile value chain 10% 31%  Realisation up 9% YoY 402 19%  Uptrend in global prices 23% 1,602 1,762 308  Rupee depreciation and better product mix  EBITDA up by 31% at ` 402 Cr.

  12. Slide 12: Chemical: Performance

    Chemical : Performance  Volume down by 5% YoY Revenue ( ` Cr.) EBITDA (` Cr.)  Lower Chlorine demand restricted Caustic Soda 7% EBITDA Margin production 5% 20% 20%  ECU realisation up by 5% YoY 921 861 177  Firm Caustic prices due to lower supply 186  Partially negated by lower Chlorine prices

  13. Slide 13: Cement: Performance

    Cement : Performance  Domestic Volume lower by 2% Revenue (` Cr.) EBITDA (` Cr.)  Slowdown in cement off take EBITDA Margin (2%) 1%  Moderation in Operating cost 21% 21%  Reduction in logistic cost by 3% 6,093 5,998 1,274 1,280  Shrunk lead distances Q3FY16 Q3FY17 Q3 FY16 Q3 FY17  Increase in

  14. Slide 14: Capex

    Capex 14

  15. Slide 15: Capex plan

    Capex plan (` Cr.) Capex Cash Outflow Capex (Net of CWIP FY17 FY18 spent - as on Onward 9MFY17 01-04-16) Standalone Vilayat Caustic Plant Brownfield expansion (144K TPA) 513 VSF : Water supply augmentation & usage reduction, Research & Development, Environment and Other 483 normal capex Chemical cap

  16. Slide 16: Business Outlook

    Business Outlook VSF Business  Limited capacity addition globally leading to higher operating rates  Short term variations likely in utilisation level and pricing  Cotton stock expected to decline in Season 16-17 with consumption projected to be higher than production  Apparel sales growth highe

  17. Slide 17: Business Outlook & Scheme Update

    Business Outlook & Scheme Update Cement Business  Expected Cement demand growth drivers :  Increase in Government spending on infrastructure and low cost housing  AP and Telangana development  Reduction in interest rate and subsidies for housing  Slow demand recovery, urban housings (ex Tier I

  18. Slide 18: Thank You

    » x | Thank You 18

  19. Slide 19: Annexure - Financials

    Grasim Industries Limited Annexure - Financials 19

  20. Slide 20: Annexure

    Annexure  Consolidated Financial Performance  Standalone Financial Performance  Balance sheet  Revenue & EBITDA Chart  VSF Summary  Chemical Summary  Cement Summary  Organisational Structure  Plant Locations 20

  21. Slide 21: Consolidated Financial Performance

    Consolidated Financial Performance (` Cr.) Quarter 3 % Nine Months % 2016-17 2015-16 Change 2016-17 2015-16 Change Net Sales & Op. Income 8,601 8,520 1 26,073 25,033 4 Other Income 167 125 33 679 464 46 EBITDA 1,878 1,762 7 6,190 5,015 23 EBITDA Margin (%) 21.4% 20.4% 23.1% 19.7% Finance Cost 156 18

  22. Slide 22: Standalone Financial Performance

    Standalone Financial Performance (` Cr.) Quarter 3 % Nine Months % 2016-17 2015-16 Change 2016-17 2015-16 Change Net Sales & Op. Income 2,526 2,335 8 7,470 6,426 16 Other Income 55 35 56 443 301 47 EBITDA 598 496 21 2,073 1,411 47 EBITDA Margin (%) 23.2% 20.9% 26.2% 21.0% Finance Cost 11 40 (73) 49

  23. Slide 23: Balance Sheet

    Balance Sheet (` Cr.) Standalone Consolidated 31st Dec'16$$ 31stMar'16$ EQUITY & LIABILITIES 31st Dec'16$$ 31stMar'16$ 16,535 15,556 Net Worth 30,095 27,404 - - Minority Interest 9,426 8,729 796 1,839 Borrowings 10,001 12,500 630 519 Deferred Tax Liability (Net) 3,415 3,051 2,091 1,590 Liabilities &

  24. Slide 24: Revenue Chart

    Revenue Chart (` Cr.) Nine Months % Quarter 3 % 2016-17 2015-16 Change 2016-17 2015-16 Change 5,156 4,292 20 Viscose Staple Fibre 1,762 1,602 10 2,745 2,466 11 Chemical 921 861 7 61 76 Others 20 25 (493) (408) Eliminations (Inter Segment) (177) (153) 7,470 6,426 16 Standalone Net Revenue 2,526 2,335

  25. Slide 25: EBITDA – Chart

    EBITDA – Chart (` Cr.) Nine Months % Quarter 3 % 2016-17 2015-16 Change 2016-17 2015-16 Change 1,095 658 66 Viscose Staple Fibre 402 308 31 631 518 22 Chemical 186 177 5 347 234 Others 11 11 2,073 1,411 47 Standalone EBITDA 598 496 21 Subsidiaries 4,284 3,760 14 Cement 1,280 1,274 - 8 2 Textiles 2 (

  26. Slide 26: Viscose Staple Fibre: Summary

    Viscose Staple Fibre : Summary Quarter 3 % Nine Months % 2016-17 2015-16 Change 2016-17 2015-16 Change Capacity KTPA 125 125 - 375 375 - Production (in '000s) MT 131 126 4 373 341 9 Sales Volumes (in '000s) MT 122 121 1 367 337 9 Net Revenue ` Cr. 1,762 1,602 10 5,156 4,292 20 EBITDA ` Cr. 402 308 3

  27. Slide 27: Chemical: Summary

    Chemical : Summary Quarter 3 % Nine months % 2016-17 2015-16 Change 2016-17 2015-16 Change Capacity KTPA 210 201 4 630 603 4 Production (in '000s) MT 190 195 (2) 583 547 6 Sales Volumes (in '000s) MT 193 204 (5) 590 562 5 Net Revenue ` Cr. 921 861 7 2,745 2,466 11 EBITDA ` Cr. 186 177 5 631 518 22 E

  28. Slide 28: Cement: Summary

    Cement : Summary Quarter 3 % Nine Months % 2016-17 2015-16 Change 2016-17 2015-16 Change Grey Cement Capacity Mn. TPA 17.31 16.51 5 51.94 49.54 5 Production Mn. MT 11.95 12.01 - 36.60 36.31 1 Sales Volumes $ Mn. MT 12.32 12.36 - 37.67 36.82 2 Net Revenue ` Cr. 5,998 6,093 (2) 18,355 18,335 - EBITDA

  29. Slide 29: Grasim Group Structure

    Grasim Group Structure Pulp & Fibre Chemical UltraTech Cement (60.24%) Others VSF VSF JV Pulp Overseas Caustic Epoxy Domestic Overseas 498K TPA China 70K TPA Pulp JVs 840K TPA 51K TPA 3 Mn. TPA, (UAE, Bangladesh, Sri Lanka) Nagda Grey Cement Grasim Nagda Birla Jingwei Harihar AV Group NB 270K TPA Bh

  30. Slide 30: Plant Locations – Grasim & Its subsidiaries

    Plant Locations– Grasim & Its subsidiaries Bathinda(G) Jhajjar Bhiwani Panipat Dadri T Kotputli Aligarh Jodhpur Patliputra P T Malanpur Renukoot Shambhupura C Jawad P Katni Sewagram Bharuch Durgapur(G) UltraTech Cement Plants Wanakbori F Jafrabad Vilayat C Rehla Dankuni`(G) F C Nagpur UltraTech Grin

  31. Slide 31: Cautionary Statement

    Cautionary Statement Statements in this “Presentation” describing the Company’s objectives, estimates, expectations or predictions may be “forward looking statements” within the meaning of applicable securities laws and regulations. Actual results could differ materially from those expressed or impl

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