Vardhman Textiles Limited · NSE:VTL
Vardhman Textiles — Vardhman Group — Investor Presentation (March 2010)
26 slides from Vardhman Textiles's investor presentation, March 2010
Slide 1: Vardhman Group
Vardhman Group Rooted in Values, Creating World Class Textiles Vardhmān
Slide 2: Overview of the Presentation
Overview of the Presentation Brief Snapshot of Vardhman Group Business-wise Analysis Financial Performance Strategic Direction Corporate Social Responsibility Market Performance Vardhmān
Slide 3: Vardhman Group
Vardhman Group Incorporated in 1965 under the leadership of Mr. S.P. Oswal One of the largest integrated textile houses in the country with a turnover of over $700 million and a workforce of more than 23,000 employees One of the largest installed capacity in spinning in India at 800,000 spindles Amo
Slide 4: Group Snapshot
Group Snapshot Vardhman Holdings Vardhman Textiles Stake 26.66% Limited (VHL) Limited (VTEX) Year of Commencement 1965 1973 Business Investment & Financing Yarn, Fabric, Steel Revenue (Rs.Mln) 93 24,954 Listed on BSE, NSE Listed on BSE, NSE Market Status ISIN Code: INE701A01023 ISIN Code: INE825A010
Slide 5: Major Alliances...Partnering with Global Players
Major Alliances...Partnering with Global Players Fibre and Yarn Dyeing NIHON SANMO, JAPAN 1992 Gassed Mercerized Yarns KYUNG BANG, SOUTH KOREA 1994 Cotton Yarns TOHO RAYON, JAPAN 1995 Acrylic Fibre (ended in 2009) EXLAN AND MARUBENI CORP, JAPAN 1996 Fabric Dyeing & Finishing TOKAI SENKO, JAPAN 1998
Slide 6: Group Capacities
Group Capacities Sewing Thread (Tons per day) Yarn - Spindles (Mln) 0.87 0.75 0.79 33 33 33 0.51 30 0.40 0.59 25 0.39 0.50 19 19 16 1998 2000 2002 2006 2007 2008 2009 2010 (E) 1998 2000 2002 2006 2007 2008 2009 2010(E) Greige Fabric - Looms (No.) 900 900 Processed Fabric (Mln Mtrs pa) 810 82 82 82 4
Slide 7: Business-wise Analysis
Business-wise Analysis Brief Snapshot of Vardhman Group Business-wise Analysis Financial Performance Strategic Direction Corporate Social Responsibility Market Performance Vardhmān
Slide 8: Business - Yarn
Business - Yarn Largest spinning capacity in the country with > 0.87 mln spindles 12 production plants located in the states of Punjab, Himachal Pradesh and Madhya Pradesh Technical tie-ups with the world leaders from Switzerland, Germany, Japan and Korea Amongst the largest exporter of yarn from In
Slide 9: Yarn : De-risking the Revenue Model
Yarn : De-risking the Revenue Model De-risking by Value Addition Value Added Products Melange Slub Yarns Compact Cotton Lycra Yarn Compact Yarn Fibre Dyed Cotton Lycra Gas Mercerised Melange Yarn Fancy Yarns Cotton Dyed Slub Yarns PC Yarn Dyed Acrylic Yarns Gas Yarn Dyed Hand Knitted Yarns Mercerise
Slide 10: Changing Spreads in Cotton Yarns
Changing Spreads in Cotton Yarns Avg Cotton Prices 4 Avg Yarn Prices (30s CH) 1 Spread 1.2 3 1 1.0 Spread over Cot-A Index 3 1 ($/kg) ($ per kg) ($ per kg) 2 1 2 1 0.66 1 0 1 0 0 0 Jun06 Dec06 Jun07 Dec07 Jun08 Dec08 Jun09 Dec09 Avg Cotton Prices 140 53.01 Avg Yarn Prices (30s CH) 56.80 60 Spread 12
Slide 11: Business - Fabric
Business - Fabric Continuing its onward march on the value curve, the group entered Fabric business in 1992 with Greige (unprocessed) Fabric Entered the Processed Fabric market in 1999 Current capacity 900 Looms & 82 million meters of processed fabric. One of the few fully integrated fabric supplier
Slide 12: Changing Proportion of Fabric Sales
Changing Proportion of Fabric Sales Segment-Wise Sales Process-Wise Sales Other Exports Brands RM G Exports Full Bleach RFD Yarn Dyed Piece Dyed 50% 68% Distributors Buying Houses 70% 65% 63% 41% 42% 60% 39% 60% 40% 35% 37% 35% 30% 31% 50% 30% 40% 19% 20% 17% 17% 30% 14% 19% 20% 14% 16% 13% 12% 12%
Slide 13: Business - Sewing Thread
Business - Sewing Thread The Group entered Thread business in 1982 as a forward integration to its Yarn business. Current capacity 33 tpd in 4 plants at Punjab, Tamil Nadu & Himachal Pradesh. In 2002, joined hands with American & Efird, Inc. USA (A&E) for manufacturing & distribution of A&E branded
Slide 14: Business - Acrylic Fibre
Business - Acrylic Fibre Ventured into manufacture of Acrylic Staple Fibre in 1999 - Vardhman Acrylics Limited The plant was set up in Gujarat, in collaboration with Marubeni & Japan Exlan of Japan. Current Capacity 18,000 mtpa World class wet spun technology with highly automated, microprocessor co
Slide 15: Business - Steel
Business - Steel Started Steel business in 1972 as a diversification strategy, with capacity of 35,000 mtpa. Subsequently capacity has been expanded to 100,000 mtpa. Caters to high technology quality conscious special & alloy steel segment Application of products in automotive components, forging, b
Slide 16: Financial Performance
Financial Performance Brief Snapshot of Vardhman Group Business-wise Analysis Financial Performance Strategic Direction Corporate Social Responsibility Market Performance Vardhmān
Slide 17: Group Financials
Group Financials Vardhman Group Capital Employed 1,000 EBIDTA Revenue 1000 800 931 749 800 646 584 795 (Mln $) 600 510 613 (Mln $) 600 400 400 511 200 90 95 95 111 200 0 0 2006 2007 2008 2009 2006 2007 2008 2009 Steel, 8% Revenue Mix Fibre, 7% FY 2008-09 T hread , 10% Fabric, 20% Yarn, 55% Note: Con
Slide 18: Business-wise Financials
Business-wise Financials Yarn Business Fabric Business EBIDTA Revenue EBIDTA Revenue 200 500 416 146 400 361 150 277 313 (Mln $) 88 96 (Mln $) 300 100 70 200 50 19 52 57 60 64 11 10 11 100 0 0 2006 2007 2008 2009 2006 2007 2008 2009 Thread Business EBIDTA Revenue Fibre Business EBIDTA Revenue 100 10
Slide 19: Strategic Direction
Strategic Direction Brief Snapshot of Vardhman Group Business-wise Analysis Financial Performance Strategic Direction Corporate Social Responsibility Market Performance Vardhmān
Slide 20: Strategic Direction
Strategic Direction Yarn Continuous capacity expansion to maintain customer satisfaction. There is a capital proposal of Rs.2,500 mln currently on the drawing board to increase the spindlage by 55 k taking the total capacity upto 0.93 mln spindles Continuous improvement in capacity utilisations thro
Slide 21: Strategic Direction (cont…)
Strategic Direction (cont…) Thread In 2007 entered into a Joint Venture Agreement with American & Efird, Inc. USA in 51:49 ratio, for manufacturing & distribution of A&E branded sewing threads Consolidation of the thread business under Vardhman Yarns & Threads Limited It opens up a possibility of st
Slide 22: Corporate Social Responsibility
Corporate Social Responsibility Brief Snapshot of Vardhman Group Business-wise Analysis Financial Performance Strategic Direction Corporate Social Responsibility Market Performance Vardhmān
Slide 23: Corporate Social Responsibility & Human Development
Corporate Social Responsibility & Human Development Sri Aurobindo Socio-Economic and Management Research Institute Sri Aurobindo College of Commerce and Management (One of the leading colleges of management in Ludhiana) Sri Aurobindo Public School Promoter member of Nimbua Greenfield Punjab Limited
Slide 24: Corporate Social Responsibility
Corporate Social Responsibility Active member of Village Cluster Adoption Program (VCAP) in Punjab to improve the yield of cotton per hectare to match World average (724kg) Year No of No of Total Area under Yield Punjab Yield Villages Farmers cultivated Cotton Achieved (Kg lint/ ha) area (Acre) (Acr
Slide 25: Market Performance
Market Performance Brief Snapshot of Vardhman Group Business-wise Analysis Financial Performance Strategic Direction Corporate Social Responsibility Market Performance Vardhmān
Slide 26: Market Performance (VTXL)
Market Performance (VTXL) 450 400 350 300 250 200 150 100 50 0 2003 2004 2005 2006 2007 2008 2009 Vardhman Textiles Rs/share Last price 228.25 Market Cap (Rs mn) 13,186 52 Week High 280.95 52 Week Low 40.10 Vardhmān