Vardhman Textiles Limited · NSE:VTL
Vardhman Textiles — Investor Presentation (May 2016)
24 slides from Vardhman Textiles's investor presentation, May 2016
Slide 1: Vardhman Textiles: Invested for the Long Haul
Vardhman Textiles Invested for the Long Haul May 2016
Slide 2: Table of Contents
Table of Contents Snapshot Corporate Structure Management Commentary on Key Businesses Overall Growth Vision Management Philosophy towards Value Creation Value Creation Roadmap Financials Annexures 2
Slide 3: Snapshot
Snapshot Listing information : BSE/NSE The largest listed, integrated textile manufacturing company in India CMP (INR) (9th May, 2016) 1,002.2 Dominant player across yarn, fabric and sewing threads CMP (USD) 15.18 Market Cap (INR mn) 63,762.4 Strong position in acrylic staple fibre and presence
Slide 4: Corporate structure
Corporate structure Vardhman Textiles Limited (VTL) 1973 Yarn, Fabric Revenue: Rs. 67.25bn# (US$ 1.02bn) Listed on BSE, NSE Vardhman Yarns & Vardhman Acrylics VMT Spinning Co. VSS VNG Threads (VYTL) (VAL) (VMT) VTL Stake 51%** 70.75% 89% 31% 51% RMG / Industrial / Speciality Business Acrylic Staple
Slide 5: Manufacturing facilities & capacities
Manufacturing facilities & capacities • ~1mn Spindle- Punjab, Yarn Himachal & Madhya Pradesh Ludhiana, Pb. Baddi, H.P. • 1320 Looms – Himachal Hoshiarpur, Fabric Pradesh & Madhya Pradesh Malerkotla, • 110 MMPA – Himachal Processing Pradesh & Madhya Pradesh Acrylic Fiber • 20,000 TPA - Gujarat • 71 T
Slide 6: Management Commentary on Key Businesses
Management Commentary on Key Businesses
Slide 7: Yarn Business – from commodity to fashion
Yarn Business – from commodity to fashion Used technical tie-ups with well recognized global corporates from Japan and Korea to strengthen foundations of the Business. 1/3rd of total yarn production is exported, 1/3rd is sold domestically and remaining is used to feed the captive looms. Focus
Slide 8: Operational efficiency improvement continues…
Operational efficiency improvement continues… Parameter FY14 FY16 Change FY14-16 No. of Spindle* (average for the Period - Standalone) 954,367 994,651 4.2% Capacity Utilization (Excl. Open End & Vortex) 95.57% 97.29% 1.8% Production (in MT) / Day (Spinning) 478 564 18% Grams / Spindles / Shift (30’s
Slide 9: Fabrics business drives growth
Fabrics business drives growth Weaving and processing capacities continue to expand in tandem and stand at 170mn/110mn meters of fabric p.a. One of the few fully integrated fabric suppliers in the country and largest producer of stretched fabric. Producing wide variety of fabrics for Tops & Bo
Slide 10: Other segments steady with no major capex plans
Other segments steady with no major capex plans Sewing Thread Business Vardhman continues to be the 2nd largest brand of specialized threads in India In a strategic decision VTL has agreed to sell 40% stake to the Joint Venture partner American & Efird, Inc. USA (A&E). This is a win-win situatio
Slide 11: Stake sale in sewing threads business
Stake sale in sewing threads business Deal Summary VTL has agreed to sell 22.8 million shares (~40% stake) in its subsidiary Vardhman Yarns and Threads Ltd (VYTL) to its US-based JV Partner American & Efrid Global LLC (A&E). After the completion of the transaction, A&E will hold 89% of the equity
Slide 12: Management views on global scenarios
Management views on global scenarios Yarn v/s Fabric Spinning has low entry barriers but a large portion of the global capacity is old and inefficient, thereby leading to low utilization Given that there is over-capacity globally, return on capital expectations for investment in a new spinning u
Slide 13: Overall growth vision
Overall growth vision VTL will stick to its core competencies of textile manufacturing… Why not garmenting… VTL believes that garmenting is a business with very different skillsets, risks and rewards and although it has undergone a learning curve towards building a profitable garments business, VT
Slide 14: Management philosophy towards value creation
Management philosophy towards value creation Pursuit of well capitalized growth rather than excessively leveraged growth – VTL has always erred on the conservative side when it came to aggressive expansion funded by leverage which has helped it build a solid foundation and an inherently much stron
Slide 15: Value creation roadmap
Value creation roadmap Historical Perspective INR 1 Lac invested in VTL in May 2007 is worth INR 4.95 Lacs today including dividends Progressively increasing dividend payout ratio Way Forward Continued focus on sweating assets and cost efficiencies to drive ROCEs Treasury stock to be use
Slide 16: Financials
Financials
Slide 17: raha
raha
Slide 18: Key financials (consolidated)
Key financials (consolidated) INR Million USD Million Pa rti cul a rs FY14 FY15 FY16 Q4-FY15 Q4-FY16 FY14 FY15 FY16 Q4-FY15 Q4-FY16 Revenues 62,403 69,522 67,249 17,156 17,027 946 1,053 1,019 260 258 EBITDA 15,342 12,793 14,034 3,524 3,840 232 194 213 53 58 Ma rgi n % 25% 18% 21% 21% 23% 25% 18% 21%
Slide 19: Annexures
Annexures
Slide 20: VTL management
VTL management Name Designation Details Is an M.Com. Gold Medalist from Punjab University Chandigarh and also holds directorships in 22 other Chairman & companies S .P. Oswal Managing Holds Directorships in Confederation of Indian Textile Industry and New Delhi Institute of Management. Director
Slide 21: Independent directors
Independent directors Name Designation Details Holds degree in Bachelors of Commerce and B. Sc. (Economics) from London School of Economics Is associated with educational and research institutions like Indian Institute of Management (IIMA), Ahmedabad Independent Prafull Anubhai Education Society
Slide 22: Major global strategic alliances
Major global strategic alliances Product Alliance Partner Year Fibre and Yarn Dyeing Nihon Sanmo, Japan 1992 Technical collaboration for foray into yarn & fibre dyeing Gassed Mercerized Yarns Kyung Bang, South Korea 1994 Technical collaboration for foray into gassed mercerized yarns Cotton Yarns Toh
Slide 23: Government policies and regulations
Government policies and regulations TUFS – A new scheme (A-TUFS) has been launched by the central government from 13th Jan, 2016. This provides a capital subsidy which is 15% of eligible machinery on garmenting, 10% on weaving, 10-15% on composite units depending on their composition. This is furt
Slide 24: Thank You
Thank You This presentation has been prepared by Vardhman Textiles Limited (the “Company”) solely for your information and for your use and may not be taken away, reproduced, redistributed or passed on, directly or indirectly, to any other person (whether within or outside your organization or firm)