Vardhman Textiles Limited · NSE:VTL
Vardhman Textiles — Investor Presentation (January 2016)
30 slides from Vardhman Textiles's investor presentation, Jan 27, 2016
Slide 1: Vardhman Textiles Ltd Corporate Presentation
Vardhman Textiles Ltd Corporate Presentation January 2016
Slide 2: Vardhman Textiles Ltd. (VTL) – an overview
Vardhman Textiles Ltd. (VTL)– an overview ● VTL is the largest listed, integrated textile manufacturing company in the Country VTL has a strong position in the Indian textile sector in the manufacturing of fiber, yarn, sewing thread and fabrics Now also into garment manufacturing through a colla
Slide 3: Indian Textiles Sector
Indian Textiles Sector USD billion – current size of Indian Textile Sector 108 largest employment generator, providing direct employment to 2nd ~45 million and ~60 million people indirectly million Spindles capacity across ~1,300 mills 49 Contribution to India’s total foreign exchange 27 % Indian Te
Slide 4: Competitive Global Landscape – India v/s China
Competitive Global Landscape – India v/s China Global capacity ~250 million spindles Global cotton production ~26 m tonnes Global yarn production ~39 m tonnes Vardhman has a capacity of 1.0 million+ spindles Huge catch-up opportunities for Indian textile sector, when compared to China in global scen
Slide 5: Journey so far …
Journey so far … 1. Weaving unit @ Baddi 1. Stake of Barbour Slump sale of Threads MSML set up 72 looms Campbell Group Limited, Business of VTXL a new Incorporated Mohta 2. EOU (cotton yarn), Ireland bought. spinning unit with 6000 Industries 25,000 spindles Company renamed as with an spindles for L
Slide 6: VTL – Group Structure
VTL – Group Structure Vardhman Textiles Limited (VTL) 1973 Yarn, Fabric Revenue: Rs. 58,871.5 mn # (US$905.7 Mn) Listed on BSE, NSE Vardhman Yarns & Vardhman Acrylics VMT Spinning Co. VSS Ltd VNG Co. Ltd. Threads Ltd (VYTL) Limited (VAL) Limited (VMT) 51% 74.28% 89% 31% 51% VTL Stake RMG / Industria
Slide 7: Vardhman Textiles Ltd. – Core Competencies
Vardhman Textiles Ltd. – Core Competencies ● Cotton Procurement Policy ● Employee Engagement & Culture of innovation ● Economies of scale and Operational Efficiencies ● Customer Oriented approach ● Focus on diversified and Value added products ● Technology up gradation and continuous process improve
Slide 8: Manufacturing Facilities & Capacities
Manufacturing Facilities & Capacities Yarn • 1 Million+ Spindles Ludhiana, Pb. Fabric • 1320 Looms Baddi, H.P. Hoshiarpur, Malerkotla, Processing • 110 MMPA Acrylic • 20,000 TPA Fiber Dyeing • 71 TPD Sewing Jhagadia, GJ • 41 TPD Threads Budhni, M.P. • 120,000 TPA (Rolling and Visakhapatnam, A.P. Sat
Slide 9: Textiles Value Additions Through Supply Chain
Textiles Value Additions Through Supply Chain • Yarn: 30 combed yarn • Fabric: Twirl bottom weight fabric Exchange Rate: Rs 65/$ 9
Slide 10: Yarn Business – Key business driver
Yarn Business – Key business driver ● The largest spinning capacities in the country with 1.00 MN+ spindles ● 12 production plants located in the states of Punjab, Himachal Pradesh and Madhya Pradesh ● Technical tie-ups with the well recognized global corporate’s from Japan and Korea. ● De-risked bu
Slide 11: Hand-knit Yarn Business
Hand-knit Yarn Business ● Market leader in hand-knit yarn category ● 40% share of the organised sector and 30% of the total market. ● Pan India total outlets approx. 4,000. with Vardhman present at around 1,800 retail outlets in 650 cities/towns. ● Patronage of ~6.0 million consumers across country
Slide 12: Changing spreads in cotton yarns
Changing spreads in cotton yarns Spread over Cot-A Index ($/kg) Spread over Indian Cotton (INR/kg) 12
Slide 13: Fabrics Business
Fabrics Business Weaving and Processing capacities have expanded in tandem ● Continuing its onward march up the value chain, the 1500 120 group entered Fabric business in 1992 with Greige Weaving Looms (Nos) Processing Mmpa (RHS) Fabric and Processed Fabric in 1999. 1250 100 1000 80 ● Current capaci
Slide 14: Sewing Thread Business
Sewing Thread Business ● The Group entered the Thread business in 1982 as a Segmental Sales – Industry & Channel sales > ~ 90% forward integration to its Yarn business ● Current capacity is 41 tpd across 5 plants at Punjab, Tamil Nadu & Himachal Pradesh ● In 2002, entered into a strategic alliance a
Slide 15: Acrylics Fibre Business
Acrylics Fibre Business ● Ventured into manufacture of Acrylic Staple Fibre in 1999 - Vardhman Acrylics Limited (VAL) ● The plant was set up in Gujarat, in collaboration with Marubeni & Japan Exlan of Japan. ● Current capacity is 20,000 mtpa Fibre business (Rs Cr) Revenue EBITDA % ● World class wet
Slide 16: Steel Business Garments Business
Steel Business Garments Business ● Started Steel business in 1972 as a diversification ● Started Garments business in 2010 as a forward strategy, with capacity of 35,000 tpa. integration strategy in a JV with Nisshinbo Textiles Inc. for production of shirts in Ludhiana, Punjab ● Current Production C
Slide 17: Financials
Financials
Slide 18: Financial highlights (consolidated)
Financial highlights (consolidated) Bottom line growth over the years Comfortable debt/equity considering most debt under TUFS INR mn INR mn Return ratios* 3 year moving average of EBIDTA margins * Considering the business dynamics, we have used EBIDTA for calculating ROCE 18
Slide 19: Key financials (consolidated)
Key financials (consolidated) INR Million USD Million Particulars FY15 FY14 9M-FY16 9MFY15 Q3-FY16 Q3-FY15 FY15 FY14 9M-FY16 9MFY15 Q3-FY16 Q3-FY15 Revenues 69,522 62,403 50,206 52,366 17,204 17,364 1,070 960 772 806 265 267 EBITDA 12,840 15,342 10,194 9,318 3,509 2,912 198 236 157 143 54 45 Margin
Slide 20: Key parameters (standalone)
Key parameters (standalone) Amounts in INR bn FY15 FY14 FY13 Average Net Debt¹ 15.97 23.85 22.63 Capital Employed 66.80 71.94 63.35 ROE 14% 27% 16% ROCE ² 19% 23% 17% *The Net Debt / Equity figure on Consolidated Basis is 0.24 as of September 2015 (872 cr) Notes: ¹ Average net debt for the FY is cal
Slide 21: Shareholding Pattern
Shareholding Pattern As on 31st December 2015 Shareholder Group # Shares (mn) Key Institutional Investors Promoters 39.4 Treasury stock (held by 100% subsidiary VTL Investments) 1.1 Others 38.3 Foreign Institutions 7.9 Domestic Institutions 7.5 Public 8.9 Treasury stock (held by Mahavir Shares Trust
Slide 22: Historical Stock Returns
Historical Stock Returns CMP @ 25 Jan 2016 (INR) 716.55 Returns over: 5 Years 155.4% 3 Years 172.7% 2 Years 95.8% 1 Year 50.8% Source: Google Finance, Prices as quoted on BSE 22
Slide 23: Capital Expenditure & Capacities
Capital Expenditure & Capacities Spinning Capacity Amount FY 15-16 4000 spindles & line balancing 150 crores FY 16-17 onwards 11,500 spindles & modernization 75 crores Total 200-250 crores Process House Capacity Amount FY 15-16 170 crores FY 16-17 onwards 180 crores Total 48 MMPA 350 crores Weaving
Slide 24: Annexure
Annexure
Slide 25: VTL Management
VTL Management Name Designation Details Experience Is an M.Com. Gold Medalist from Panjab University Chandigarh and also holds directorships in 22 Chairman & other companies S .P. Oswal Managing 44 Holds Directorships in Confederation of Indian Textile Industry and New Delhi Institute of Directo
Slide 26: Independent Directors
Independent Directors Name Designation Details Experience 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), Independent Ahmedabad Education Society (AES
Slide 27: Independent Directors
Independent Directors Name Designation Details Experience holds the degrees of Doctor of Management, Maryland (USA), Bachelors in Science and Technology Dr. Subash (Mechanical Engineering), Manchester U.K. Independent Khanchand Rich experience in the areas of industrial and operational managemen
Slide 28: 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 29: Government Policies and Regulations
Government Policies and Regulations ● TUFS - Initiated in 1999 by the Govt. of India to catalyze investments in textiles and jute industry, the scheme has been revised from time to time and will be available for loan sanctions till 31.03.2017 in its present form and provides for a 2% interest subsid
Slide 30: 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)
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