APAR Industries Limited · NSE:APARINDS
APAR Industries — Q3 FY2023 Earnings Presentation
69 slides from APAR Industries's earnings presentation, Jan 31, 2023
Slide 1: Exchange filing letter for Q3FY2023 corporate presentation
SEC/3101/2023 January 31, 2023 National Stock Exchange of India Ltd. BSE Ltd. “Exchange Plaza”, Corporate Relationship Department, C-1, Block G, 27th Floor, Phiroze Jeejeebhoy Towers, Bandra- Kurla Complex, Dalal Street, Bandra (E), Fort, Mumbai – 400 051. Mumbai - 400 001. Scrip Symbol : APARINDS S
Slide 2: Corporate Presentation January 2023
CORPORATE PRESENTATION January 2023
Slide 3: Table of contents
Table of contents 04 COMPANY OVERVIEW 42 FINANCIAL OVERVIEW 54 ANNEXURES 67 SHAREHOLDING PATTERN
Slide 4: Safe harbour
Safe harbour This presentation may have certain statements that may be “forward looking” including those relating to general business plans and strategy of APAR Industries Ltd., its outlook and growth prospects. The actual results may differ materially from these forward-looking statements due to se
Slide 5: Company Overview
COMPANY OVERVIEW
Slide 6: About APAR
About APAR o We are a technology-driven, customer-focused company that delivers – innovative, cost-effective, quality products & services o We believe that with an innovation-first mindset, we can find impactful solutions for our customers o Trusted by major Power Generation, Transmission, Distribut
Slide 7: APAR Industries: Tomorrow's solutions today
APAR Industries: Tomorrow’s solutions today #1 3rd #1 9,346 Cr Largest global aluminium & Largest global manufacturer of Cables manufacturer for FY22 Consolidated Revenue, alloy conductors’ manufacturer Transformer oils renewables in India 5 year CAGR at 14.1% Leveraging global network Leading the i
Slide 8: Our catalyst for innovation
Our catalyst for innovation To design and manufacture building blocks for energy infrastructure, transportation and telecommunication sectors that contribute MISSION meaningfully to make this world more energy efficient, environmentally sustainable and a safer place To be a global leader in the ener
Slide 9: Our 60 years of legacy (1/2)
Our 60 years of legacy (1/2) Company incorporated Greenfield expansion to meet Diversification into State-of-the-art R&D unit with conductor growing oils demand auto lubes segment setup at Rabale business (setup Rabale oils plant) (license agreement with (global presence in 100+ ENI Italy) countries
Slide 10: Our 60 years of legacy (2/2)
Our 60 years of legacy (2/2) Greenfield expansion Commissioning of Sharjah plant, New APAR logo! Geared up to grow the LDC to meet growing conductors Signed agreement with Hindalco (Together we fought through business with ambitious plans demand for molten metal covid-19) Signed Sonu Sood as (conduc
Slide 11: Well-diversified across industries & segments
Well-diversified across industries & segments Conductors Specialty Oils o One of the largest global manufacturers o 540 thousand KL capacity (including lubricants) o Pioneered turnkey solutions for reconductoring with HEC, live line o 3rd largest global manufacturer of T-oils installation with OPGW
Slide 12: APAR Group – House of Brands
APAR Group – House of Brands 11 Corporate Presentation – January 2023
Slide 13: State-of-the-Art facilities strategically located
APAR’s State-of-the-Art facilities strategically located Manufactures: Cables Gujarat Umbergaon Manufactures: Conductors Jharsuguda Odisha Manufactures: Wires & Cables Maharashtra Manufactures: Khatalwada Conductors Lapanga Manufactures: Polymers Manufactures: Umbergaon Conductors Rabale Silvassa Ma
Slide 14: Conductors – One of the largest global manufacturers
Conductors – One of the largest global manufacturers ACCC OPGW Copper Railway conductors CTC Turnkey Solutions Strong leadership & competitive edge Strategic focus on higher-value products (49% in FY22 up from 33% in FY21) FY22 revenue of INR 4,200 crore, 5 years CAGR at 13.3% Adj. EBITDA* per MT at
Slide 15: Transformation journey of Conductor division (1/2)
Transformation journey of Conductor division over the last decade (1/2) o Setup new conductor plant in Jharsuguda (Odisha) o Introduced a premium product line viz., o Introduced GAP-type conductors which has o Started the conductor division. APAR’s HTLS- ACCC & Turnkey project – special construction
Slide 16: Transformation journey of Conductor division (2/2)
Transformation journey of Conductor division over the last decade (2/2) o Bus Bar is launched for use in high voltage o With electrification in Indian Railways, we equipment and low voltage equipment introduced Copper Railway conductors as per o Increased volumes from export markets RDSO specificati
Slide 17: Growth drivers – Conductors
Growth drivers – Conductors o Completed 100+ turnkey solution projects o Delivered 1,07,000 MT of Conductors o Delivered 22,000 + km of OPGW Cables o Higher value-added products contribution - 49% o New order inflow - 123% o Green initiatives to reduce carbon intensity in operations o Highest record
Slide 18: Specialty Oils & Lubricants – 3rd largest in Transformer Oils
Specialty Oils & Lubricants – 3rd largest in Transformer Oils globally Transformer oil White oils Industrial & process oils Industrial & auto lubricants Petroleum jelly POWEROIL TO NE premium Strong leadership & competitive edge Leading domestic player in auto lubes. INR 229 crore invested in FY16-F
Slide 19: Growth drivers – Specialty Oils & Lubricants
Growth drivers – Specialty Oils & Lubricants o 400+ Grade Oils o Exported ~ 2,00,000 KL of speciality oils during the year o Transformer oils volumes up 10% vs. FY21 o White Oil sales up 16% vs. FY21 o Serving 140+ Countries o Launched best-in-class 99% biodegradable natural ester transformer oil 18
Slide 20: Cables - Largest domestic player in renewables
Cables - Largest domestic player in renewables Power cables House wire & cable Elastomeric cables E-beam irradiated cables OFC Speciality hybrid cables Strong leadership & competitive edge Strategic focus on higher-value products 60% share in domestic wind sector INR 309 crore invested in FY16-FY22
Slide 21: Growth drivers – Cables
Growth drivers – Cables o 500+ range of cables o 11 Certificate of compliance for US market, highest from India o Major presence in Africa, East Africa, Australia & Europe, o Increased demands from Railways, defence and non-conventional energy o Reached 2,000 crore in cables business in FY 2022 o 57
Slide 22: Sonu Sood as the face of APAR Industries
Sonu Sood as the face of APAR Industries SONU SOOD ENDORSING OUR LIGHT DUTY CABLES RANGE o House wire o CAT 6 LAN cable o House wiring o House wire o Round Multicore o Telephone cable o Round multicore o HFFR o Round Multicore o 3 core flat cable o CCTV o Core flat cable o Round Multicore o EBXL HFF
Slide 23: Channel expansion in Light Duty Cable business
Channel expansion in our Light Duty Cable business Particulars Mar’22 Dec’22 Distributor presence 19 97 Retail count presence 276 1,543 Active state presence 2 13 Product awareness Demo’s 6,348 24,371 Electrician Meets 474 2309 22 amounts in INR crore Corporate Presentation – January 2023
Slide 24: Focus on revenue growth and increased efficiency
Focus on revenue growth and increased efficiency Enhancing Operational Efficiency o Continue to seek to improve efficiencies, streamline capacities and asset utilization and manage capital expenditure for each of the production facilities o Implemented various initiatives to lower costs, such as pur
Slide 25: Unique capabilities
Unique capabilities Diversified business across product portfolio, market segments, Strong financial performance sustained over the years 01 customer base and geographies 04 Well positioned to capture industry trends related growth Robust in-house technology, innovation and R&D capabilities 02 both
Slide 26: Organisational structure – Senior leadership
Organisational structure – Senior leadership Board of Directors Managing Independent Directors/Director Directors Oil Conductor Cable CFO CHRO Treasury ESG CS Business Head – Operational Business Heads - Business Head - Domestic & Heads B2B Projects Exports Manufacturing Operational Business Head -
Slide 27: Strong financial performance sustained over the years
Strong financial performance sustained over the years Consolidated Revenue Exports contribution at 47% in 9M FY23 EBITDA Conductors Revenue Specialty Oils & Lubricants Revenue Cables Revenue 3,560 3,489 2,630 2,311 2,364 2,162 1,699 FY17 FY18 FY19 FY20 FY21 FY22 9M FY23 26 amounts in INR crore Corpo
Slide 28: Key financial ratios
Key financial ratios Debt/ Equity Ratio (x) Net Fixed Asset Turnover Ratio (x) * ROE (%) * annualised 27 amounts in INR crore Corporate Presentation – January 2023
Slide 29: Extensive global presence driving exports
Extensive global presence driving exports Export revenues up 92% YoY, contributed 47% to 9M FY2023 revenues o Present in 140+ countries with a focus on Southeast Asia, Middle East, o Hub and spoke manufacturing & distribution model for specialty oils, allows Africa & South America efficient delivery
Slide 30: Industries we cater to
Industries we cater to 03 Renewable Railways Energy 04 Defence 05 Transformers Mining Industrial 02 Nuclear Atomic Telecommunication & Data Communication Motors & 01 Generators 06 Power Transmission 08 Shipping & Distribution Wires & Cables 07 29 Corporate Presentation – January 2023
Slide 31: Key growth drivers
Key growth drivers Global Infrastructure Spends 01 Electrification • Rise in Power spending • New transmission and distribution systems globally. China Plus One 02 Risk diversification with increased manufacturing capabilities • New market access Carbon Neutrality 03 Adoption of diverse renewable en
Slide 32: Strategic outlook
Strategic outlook Product diversification with focus on premium offerings 1 Renewable energy power infrastructure – significant increase in products & capacities for solar, wind and power telecom 2 convergence. Exploring new markets with export-led focus B2B, 3 wider distribution network B2C 4 Impro
Slide 33: Making this world a better place - ESG
Making this world a better place - ESG RELEASED 2 ESG REPORTS: Year 2022 witnessed many firsts for ESG disclosures FY 2020-21 FY 2021-22 This includes: o Publishing first APAR’s TCFD report Download o Verified scope 1 & scope 2 GHG emissions by a renowned independent assurance provider CREATED SEPAR
Slide 34: Doing good for society
Doing good for society Dr. N.D Desai Faculty of Located in Nadiad, Gujarat Medical Science & Research Anamrita Foundation Provides Free midday meals in 21 cities Free Multispeciality hospital with 800+ beds Serving 6,500+ schools, 10 lakhs kids daily 37,000+ patients have received free treatment Ser
Slide 35: Significant change in customer mix with focus on premiumisation
Significant change in customer mix with focus on premiumisation Particulars 9MFY23 Exports 47.4% Industries/Corporate 16.6% Specific industry groups 9.1% OEM's 6.4% EPC - Transmission companies 5.3% Utilities - Transmission companies 7.8% Renewables 2.7% Utilities - Electricity Distribution Boards (
Slide 36: Quality of Receivables
Quality of Receivables Particulars % of Total* Secured under various means 44.6% Government Transmission and sector specific companies 22.0% Others (of which 60% are with entities where APAR is having business relationship with over 33.4% 3 years) Total 100.0% *based on December’22 closing 35 amount
Slide 37: Competitive advantage - Conductor division
Competitive advantage - Conductor division Premium products – o Technology & know-how involved in product and design, acting as a barrier to entry for competition o Special stringing mechanism with sophisticated equipment to protect the carbon composite core inside o Customers look at life-cycle cos
Slide 38: Competitive advantage - Cable division
Competitive advantage - Cable division o E-beam technology for house wiring - first mover advantage and the only company using this technology giving the product a 50-year life, melt resistant and flame retardant till 105 degrees. o India’s only Cable company with 3 e-Beam irradiation facilities. o
Slide 39: Competitive advantage - Oil division
Competitive advantage - Oil division o 3rd largest global player in transformer oils. o Diversified customer base and industries served viz., OEM's, Pharma, Tyres, Cosmetics, Auto Lubricants etc. o Limited organised players. o Approvals in place with most large OEM's & transmission companies. o Stra
Slide 40: Well-defined Risk Management framework in existence
Well-defined Risk Management framework in existence Customer / Credit Risk Management: o Structured process of evaluating customer & end customer background. o Defined practices for setting up of credit limits. o Process for securing credit thru various means. o In-house business-legal teams within
Slide 41: Telecom Vision
Telecom Vision CONNECTED WORLD CLOUD SHIFT from BLOCKCHAIN shaping with near ZERO LATENCY HYPERSCALE to EDGE WEB 2.0 to WEB 3.0 Massive Digital Transformation across Industries Market Dynamics CONVERGED NETWORKS DATA CENTERS RURAL CONNECTIVITY 5G/IOT/M2M Multiple Investments Coinciding in Next 5-7 y
Slide 42: Telecom OF Cable
Phase – I Telecom OF Cable APAR brings range of Hybrid Cables addressing Telecom & Power convergence across 5G, IOT & M2M Power DC Cable Optimised Connectivity Solutions Complexity Functionality Applications 41 Corporate Presentation – January 2023
Slide 43: Financial Overview
FINANCIAL OVERVIEW
Slide 44: Q3 FY23: Volume-led strong growth across divisions
Q3 FY23: Volume-led strong growth across divisions; Profitability at 3x v/s LY Revenue EBITDA PAT 77% YoY 174% YoY 210% YoY INR 3,942 crores INR 349 crores INR 170 crores Margin at 8.8% up 310 bps YoY Margin at 4.3% up 180 bps YoY o Q3FY23 revenue up 77% YoY with volume-led growths across divisions
Slide 45: 9M FY23: Historically high revenue, margins and profitability
9M FY23: Historically high revenue, margins and profitability over 2x v/s LY Revenue EBITDA PAT 63% YoY 110% YoY 127% YoY INR 10,270 crores INR 825 crores INR 395 crores Margin at 8.0% up 180 bps YoY Margin at 3.8% up 100 bps YoY o 9MFY23 revenue up 63% YoY with growths coming in from all the three
Slide 46: Conductors: Q3 FY23 highlights
Conductors: Q3 FY23 highlights Revenue Volume EBITDA 103% YOY 99% YOY 410% YOY INR 1,912 crores 44,538 MT INR 227 crores INR 44 crore (Q3FY22) Margin at 11.9%; 4.7% (Q3FY22) EBITDA per MT EBITDA post adj* EBITDA* per MT 157% YOY 423% YOY 163% YOY INR 50,886 INR 222 crores INR 49,942 INR 19,835 (Q3FY
Slide 47: Conductors: 9M FY23 highlights
Conductors: 9M FY23 highlights Revenue Volume EBITDA 81% YOY 51% YOY 235% YOY INR 4,899 crores 1,10,642 MT INR 434 crores INR 130 crore (9MFY22) Margin at 8.9%; 4.8% (9MFY22) EBITDA per MT EBITDA post adj* EBITDA* per MT 123% YOY 238% YOY 125% YOY INR 39,232 INR 419 crores INR 37,900 INR 17,626 (9M
Slide 48: Speciality Oils & Lubricants: Q3 FY23 highlights
Speciality Oils & Lubricants : Q3 FY23 highlights Revenue Volume EBITDA 38% YOY 9% YOY 64% YOY INR 1,245 crores 1,26,731 KL INR 27 crores INR 74 crores (Q3FY22) Margin at 2.1%; 8.2% (Q3FY22) EBITDA per KL EBITDA post adj* EBITDA* per KL 67% YOY 73% YOY 76% YOY INR 2,099 INR 21 crores INR 1,646 INR 6
Slide 49: Speciality Oils & Lubricants: 9M FY23 highlights
Speciality Oils & Lubricants : 9M FY23 highlights Revenue Volume EBITDA 33% YOY 3% YOY 8% YOY INR 3,489 crores 3,55,450 KL INR 202 crores INR 220 crores (9MFY22) Margin at 5.8%; 8.4% (9MFY22) EBITDA per KL EBITDA post adj* EBITDA* per KL 11% YOY 17% YOY 20% YOY INR 5,692 INR 184 crores INR 5,190 INR
Slide 50: Lubricants: Q3 FY23 highlights
Lubricants : Q3 FY23 highlights Revenue Volume 20% YOY 11% YOY INR 238 crores 17,063 KL o Revenue is up by 20% in Q3 FY23 vs Q3 FY22 o Industrial volume is up 12% YoY, Automotive volume is up by 11% YoY Note: Above numbers are given only for analytical purpose. These numbers are already included in
Slide 51: Lubricants: 9M FY23 highlights
Lubricants : 9M FY23 highlights Revenue Volume 16% YOY 11% YOY INR 662 crores 51,276 KL o Revenue up 16% YoY driven by growth of industrial and automotive volumes o Industrial volume up 22% YoY , Automotive volume up 7% YoY Note: Above numbers are given only for analytical purpose. These numbers are
Slide 52: Cables: Q3 FY23 highlights
Cables : Q3 FY23 highlights Revenue EBITDA EBITDA post adj* 89% YOY 588% YOY 612% YOY INR 921 crores INR 109 crores INR 109 crores INR 16 crores (Q3FY22) INR 15 crores (Q3FY22) Margin at 11.8%; 3.3% (Q3FY22) Margin at 11.8%; 3.1% (Q3FY22) o Revenue close to 2x v/s LY due to significant increase in E
Slide 53: Cables: 9M FY23 highlights
Cables : 9M FY23 highlights Revenue EBITDA EBITDA post adj* 77% YOY 289% YOY 294% YOY INR 2,320 crores INR 233 crores INR 227 crores INR 60 crores (9MFY22) INR 58 crore (9MFY22) Margin at 10.0%; 4.6% (9MFY22) Margin at 9.8%; 4.4% (9MFY22) o Revenue up by 77% YoY due to significant increase in Elasto
Slide 54: Division-wise EBITDA to PAT 9M FY23
Division-wise EBITDA to PAT 9M FY23 Particulars Oil Conductor Cable Others Total EBITDA pre-open period forex (Note 1) 202 434 233 6 875 Open period forex (Note 2) 18 15 5 0 38 EBIDTA post open period forex 184 419 227 5 837 Finance cost (ex open period forex) net of Interest income 48 106 29 0 184
Slide 55: Annexures
ANNEXURES
Slide 56: FY 2022: Consolidated Profit & Loss Statement
FY 2022: Consolidated Profit & Loss Statement Particulars FY22 FY21 % Chg YoY Gross sales 9,290.6 6,359.5 46% Other Operating Income 29.4 28.5 3% Total Operating Income 9,320.1 6,388.0 46% Total Expenditure 8,772.1 5,968.9 47% Cost of Raw Materials 7,207.8 4,800.1 50% Employees Cost 172.5 160.4 8% O
Slide 57: FY 2022: Consolidated Segment Analysis
FY 2022: Consolidated Segment Analysis Segment 2 FY22 FY21 % Chg YoY Revenue Conductors 4,203.9 2,908.0 44.6% Transformer & Specialty Oils 3560.4 2,363.8 50.6% Power & Telecom Cables 1993.7 1,269.5 57.0% Others/Unallocated 56.8 42.9 32.4% Total 9814.7 6584.2 49.1% Less: Inter - Segment Revenue 494.8
Slide 58: FY 2022: Consolidated Segment Analysis
FY 2022: Consolidated Segment Analysis Segment FY22 FY21 % Chg YoY Segment Results before Interest and Tax Conductors 162.8 68.0 139.4% Transformer & Specialty Oils 268.4 266.3 0.1% Power and Telecom Cables 79.8 32.8 143.3% Others/Unallocated 3.7 3.5 5.7% Total 514.6 370.6 38.9% Less : Finance costs
Slide 59: FY22: Financials
FY22: Financials Key Ratios FY22 FY21 EBITDA Margin 6.1% 6.6% Net Margin 2.8% 2.5% Total Expenditure/ Total Net Operating Income 94.1% 93.4% Raw Material Cost/ Total Net Operating Income 77.3% 75.1% Staff Cost/ Total Net Operating Income 1.8% 2.5% Other Expenditure/ Total Net Operating Income 14.9%
Slide 60: Q3 FY23: Consolidated Profit & Loss Statement
Q3 FY23: Consolidated Profit & Loss Statement Particulars Q3 FY23 Q3 FY22 % Chg YoY Q2 FY23 % Chg QoQ Gross sales 3,916.9 2,221.3 76.3% 3,215.8 21.8% Other Operating Income 25.5 7.6 237.1% 19.1 33.4% Total Operating Income 3,942.4 2,228.8 76.9% 3,234.9 21.9% Total Expenditure 3,595.7 2,113.1 70.2% 3
Slide 61: Q3 FY23: Consolidated Segment Analysis
Q3 FY23: Consolidated Segment Analysis Segments Q3 FY23 Q3 FY22 % Chg YoY Q2 FY23 % Chg QoQ Revenue Conductors 1,911.5 940.4 103.3% 1,438.90 32.8% Transformer & Specialty Oils 1,245.0 905.3 37.5% 1,175.80 5.9% Power & Telecom Cables 921.1 486.2 89.5% 761.60 20.9% Others/Unallocated 23.3 14.4 62.1% 2
Slide 62: Q3 FY23: Consolidated Segment Analysis
Q3 FY23: Consolidated Segment Analysis Segment Q3 FY23 Q3 FY22 % Chg YoY Q2 FY23 % Chg QoQ Segment Results before Interest and Tax Conductors 216.8 36.2 498.3% 113.3 91.31% Transformer & Specialty Oils 20.7 63.2 (67.2%) 51.6 (59.83%) Power and Telecom Cables 101.4 7.9 1,180.8% 63.8 59.00% Others/Una
Slide 63: Q3 FY23: Financials
Q3 FY23: Financials Key Ratios Q3 FY23 Q3 FY22 Q2 FY23 EBITDA Margin 8.9% 5.6% 7.4% Net Margin 4.3% 2.5% 3.2% Total Expenditure/ Total Net Operating Income 91.2% 94.8% 93.0% Raw Material Cost/ Total Net Operating Income 74.5% 77.5% 75.8% Staff Cost/ Total Net Operating Income 1.3% 2.0% 1.6% Other Ex
Slide 64: 9M FY23: Consolidated Profit & Loss Statement
9M FY23: Consolidated Profit & Loss Statement Particulars 9M FY23 9M FY22 % Chg YoY Gross sales 10,216.1 6,286.7 62.50% Other Operating Income 54.4 20.8 161.32% Total Operating Income 10,270.5 6,307.5 62.83% Total Expenditure 9,460.5 5,935.0 59.40% Cost of Raw Materials 7,726.8 4,863.6 58.87% Employ
Slide 65: 9M FY23: Consolidated Segment Analysis
9M FY23: Consolidated Segment Analysis Segment 9M FY23 9M FY22 % Chg YoY Revenue Conductors 4,898.7 2,700.5 81.40% Transformer & Specialty Oils 3,488.8 2,632.3 32.54% Power & Telecom Cables 2,320.5 1,311.1 76.99% Others/Unallocated 70.3 41.0 71.43% Total Revenue 10,778.2 6,684.8 61.23% Less: Inter -
Slide 66: 9M FY23: Consolidated Segment Analysis
9M FY23: Consolidated Segment Analysis Segment 9M FY23 9M FY22 % Chg YoY Segment Results before Interest and Tax Conductors 407.4 105.5 286.4% Transformer & Specialty Oils 184.8 203.5 (9.2%) Power and Telecom Cables 209.7 37.4 460.9% Others/Unallocated 5.0 2.5 104.1% Total 806.9 348.8 131.3% Less :
Slide 67: 9M FY23: Financials
9M FY23: Financials Key Ratios 9M FY23 9M FY22 EBITDA Margin 8.1% 6.3% Net Margin 3.9% 2.8% Total Expenditure/ Total Net Operating Income 92.1% 94.1% Raw Material Cost/ Total Net Operating Income 75.2% 77.1% Staff Cost/ Total Net Operating Income 1.5% 2.0% Other Expenditure/ Total Net Operating Inco
Slide 68: Market performance and shareholding structure
Market performance and shareholding structure APAR has been consistently outperforming market 270 220 234% 170 120 114% 103% 70 Jan-22 Jan-22 Mar-22 Apr-22 May-22 May-22 Jun-22 Jul-22 Aug-22 Sep-22 Oct-22 Nov-22 Dec-22 Apar Capital Goods Sensex Chart has been rebased to 100 As on December 31, 2022 O
Slide 69: Thank You
Mr. Sanjaya Kunder Mr. Ambesh Tiwari / Mr. Mohit Joshi Contact No : +91 22 67800400 Contact No : +91 84248 93404 / +91 99302 06777 E-mail – sr.kunder@apar.com E-mail – ambesh@s-ancial.com/ mohit@s-ancial.com Add: APAR house, Bldg no. 4 & 5, Corporate #215, Shiv Shakti Industrial Estate, 2Nd Floor, P