Ghcl Limited · NSE:GHCL
Ghcl — Q3 FY23 Earnings Presentation
49 slides from Ghcl's earnings presentation, Jan 31, 2023
Slide 1: Exchange intimation letter: Investors' Presentation Q3FY23 Business Update
January 31, 2023 माघ – शक् ु लप� – दशमी, �वक्रम सम्वत २०७९ National Stock Exchange of India BSE Limited Limited Corporate Relationship Department, “Exchange Plaza” 1st Floor, New Trading Ring, Rotunda Building, Bandra – Kurla Complex, P.J. Towers, Bandra (E), Mumbai – 400 051 Dalal Street, Fort, Mum
Slide 2: GHCL Limited Q3 FY23 Investor Update
GHCL LIMITED Q3 FY23 Investor Update January 2023
Slide 3: Safe Harbour
This presentation and the accompanying slides (the “Presentation”), which have been prepared by GHCL Limited (the “Company” or “GHCL”), have been prepared solely for information purposes and do not constitute any offer, recommendation or invitation to purchase or subscribe for any securities, and sh
Slide 4: Table of Contents
Table of Contents Quarterly Update 4 Business Outlook & Other Dynamics 12 Company Overview 25 Inorganic Chemicals Segment 33 Textiles Segment (Spinning) 42 3
Slide 5: Quarterly Update
Quarterly ee Update
Slide 6: Management Commentary
Management Commentary Commenting on the Q3 FY23 performance, Mr. R. S. Jalan, MD said: “Our performance has been consistently strong, as demonstrated by positive demand trends. Both revenues and profitability reported healthy accretion during the quarter on y-o-y basis. While the Textile industry fa
Slide 7: Performance Highlights – Q3 FY23 (Continued operations)
Performance Highlights – Q3 FY23 (Continued operations) Q3 FY23 Vs 28% 50% 62% 92% Q3 FY22 (Y-o-Y) Revenue EBITDA PAT Cash Profit* Rs. 1,289 Rs. 376 Rs. 248 Rs. 278 crore crore crore crore Q3 FY23 Vs 7% 15% 16% 14% Q2 FY23 (Q-o-Q) 6
Slide 8: Performance Highlights – 9M FY23 (Continued operations)
Performance Highlights – 9M FY23 (Continued operations) 61% 115% 152% 74% 9M FY23 Vs 9M FY22 Revenue EBITDA PAT* Cash Profit* (Y-o-Y) Rs. 4,050 Rs. 1,247 Rs. 832 Rs. 879 crore crore crore crore 7 Note: * Excluding Exceptional Gain/ loss on divestment of Home textiles business.
Slide 9: Profit & Loss Statement
Profit & Loss Statement (Rs. In Crore) Particulars Q3 FY23 Q3 FY22 Y-o-Y Q2 FY23 Q-o-Q 9M FY23 9M FY22 Y-o-Y Revenue from continued operations 1,057 1,006 28% 1,389 (7%) 4,050 2,510 61% Operating Expenses of continued operations 914 755 21% 947 (4%) 2,803 1,929 45% EBITDA from continued operations 3
Slide 10: Resource allocation & Key financial ratios
Resource allocation & Key financial ratios Efficient Capital Allocation 9M FY23 “Zero” Debt Repayment Working Capital Rs. 253 crore Net Rs. 325 crore Debt Rs. 1,151 cr. Growth Capex Rs. 228 crore Net Cash Surplus of Rs. 6 Cr. Others Key Ratio’s Dividend Generated Cash inflows Gross Debt Net Debt Rs.
Slide 11: Q3 FY23 Segment Highlights – Inorganic Chemicals
Q3 FY23 Segment Highlights – Inorganic Chemicals (Rs. In Crore) Performance Highlights ❖ Revenue: Particulars Q3 FY23 Q3 FY22 Y-o-Y Q2 FY23 Q-o-Q ❖ On Y-o-Y basis, increased by 38% with higher Revenue 1,057 765 38% 1,130 (6%) realization coupled with better volumes. EBITDA 372 182 104% 413 (10%) ❖ O
Slide 12: Q3 FY23 Segment Highlights – Textiles (Spinning)
Q3 FY23 Segment Highlights – Textiles (Spinning) (Rs. In Crore) Performance Highlights Particulars Q3 FY23 Q3 FY22 Y-o-Y Q2 FY23 Q-o-Q ❖ Headwinds in textiles industry continued in the quarter with softening of cotton and yarn prices, which Revenue 233 241 (3%) 260 (10%) negatively impacted the perf
Slide 13: Business Outlook & Other Dynamics
Business Outlook & Other Dynamics 12
Slide 14: Business outlook
Business outlook Inorganic Textiles Chemicals As per global industry outlook, long term demand is very healthy and is likely to grow Currently, textile industry across all from 63 million MT to 78-83 million MT by 2030 domain is facing headwinds This increase in demand shall be driven by newer
Slide 15: Industry dynamics – Soda Ash
Industry dynamics – Soda Ash Inorganic Chemicals (Soda Ash) – Revenue & EBITDA Margin trend for GHCL 34% 36% 32% 35% • Soda Ash is a managed product given the 31% 31% 31% 3,283 29% 28% 28% 26% 26%2,700 complexities involved around raw material 1,872 2,182 2,198 24% management, process expertise and
Slide 16: Industry dynamics – Soda Ash
Industry dynamics – Soda Ash Soda Ash has shown the least price volatility when compared to other major high volume commodities over the last 12 years Standard Deviation of the Logarithmic Change in Consecutive Annual Prices (FY10 - FY23’H2) Soda Ash has shown the least price volatility when compa
Slide 17: Doing things differently
Doing things differently Optimum utilization of state-of-the-art equipments and processes to maintain top notch operating availability v/s. peers Adopted carbonation and AI embedded digital twin technology for processing data Using from met coke to briquette (made from coke fines) via patent technol
Slide 18: Doing things differently
Doing things differently Smart operations planning V/s. peers Regular & phase-wise debottlenecking of entire plant while maintaining capital allocation discipline to improve the return ratios Greenfield Expansion : In 2019, visualized the demand supply scenario and initiated the preliminaries for gr
Slide 19: Value added approach to business
Value added approach to business • Bulk chemicals/ managed commodity business is in the DNA of the Company and in-line with this, foraying Intent to do into Soda Ash was by design – what Company has achieved here over the last decade in terms of size, scale different but do and profitability is rema
Slide 20: Demerger of the Spinning business of GHCL
Demerger of the Spinning business of GHCL Fine prints of demerger The Board approved a scheme of demerger where Spinning business of GHCL will be demerged into a Focused GHCL Textiles Limited growth Shareholders of GHCL will be allotted shares in GHCL textiles Limited in the swap ratio of 1:1, o
Slide 21: Strong Institutional Holding - ~41.93%
Strong Institutional Holding - ~41.93% Non-Institutional Holding (Incl. Corporates) 39.02% Institutional & HNI Holding – ~41.93% Promoters & Promoters Group 19.05% 20 Note: Shareholding as of Dec 31, 2022; HNI - Individuals holding share capital in excess of Rs. 2 lakhs.
Slide 22: Focus on driving responsible future growth – Inorganic Chemical & Textiles (Spinning)
Focus on driving responsible future growth – Inorganic Chemical & Textiles (Spinning) Inorganic Chemicals Textiles (Spinning) Doubling RBC Capacity from 60k to 120K MT Expansion of Spinning facility: Focus on Greenfield Soda Ash project of 5L MT o 40k spindles expansion completed in Dec 22 A
Slide 23: Quality assets, high-potential runway for growth
Quality assets, high-potential runway for growth Chemicals business Spinning business ❖ 1.2 mn tons largest single location facility ❖ 225k spindles supported by ~47MW ❖ Comfort of key input material integration renewables ❖ Industry leading efficiency and productivity ❖ Differentiated capability ac
Slide 24: Our Journey since 2010..
Our Journey since 2010.. Revenue (Rs. Cr.) >3.5x increase in revenue and >7x growth in Profitability. > 3.5x 4499 3267 1222 2385 Debt reduction by Rs 1400 Cr. 2010 2015 2020 2022 Current debt-to-equity at 0.2x PBT (Rs. Cr.) > 7x 868 Rs. 500+ Cr. payout to shareholders through 2 buybacks & dividends
Slide 25: Awards & Recognitions
Awards & Recognitions 5 Notch Upgrades in last 6 years Enhanced Credit Ratings – Upgraded to AA- with Stable outlook, HR Excellence Award GHCL received 12th CII National HR Excellence Award for strong Mahatma Award for commitment 13th CEO CSR Excellence Conference Referred as Great Place to work in
Slide 26: Company Overview
/ GHCL Company ot <7 Overview
Slide 27: GHCL – An Introduction
GHCL – An Introduction Best-in-class 1 ❖ Focused management Targeting ❖ Operations management approach ❖ To grow profits at a CAGR 15% on a long-term horizon ❖ CAPEX planning and execution ❖ Strategy led by professional ❖ To inculcate value systems that defines our culture ❖ Financial management man
Slide 28: GHCL Overview
GHCL Overview Business Focus to ~75% 3 decades of Leading soda Philosophy of emerge as a Professionally Renewable Indian ash player in Inclusive sustainable managed Energy at Manufacturing India growth of all business workforce Yarn division experience stakeholders organization 27
Slide 29: Evolution of GHCL through the years
Evolution of GHCL through the years Spindles capacity Commenced Soda Ash increased to 175K, Production with 4.2 installed 3320 rotors Soda Ash production Lacs MTPA which was in spinning capacity increased to further increased to 11 Lacs MTPA / year Soda Ash production 5.25 Lakh MTPA Launch of ‘i-FLO
Slide 30: Our Objective
Our Objective Responsible Growth Organic Growth – CAPEX, Non-CAPEX led Growth, Growth – M&A/ JV and Optimize Return on Capital Brand Image Corporate Governance, Customer Focus and “Achieve the CAGR Stakeholder Engagement growth of 15% in bottom-line with ESG creating value for all our 5 stakeholders
Slide 31: Sustainability Vision 2023
Sustainability Vision 2023 Zero harm GHCL’s business goals include sustainability. To embed ❖ Zero reportable injuries Stakeholder centric sustainability in business and operations, concentrating ❖ Zero environmental ❖ 30% reduction of high- attention on material concerns like environmental incidenc
Slide 32: Core Values at forefront
Core Values at forefront MISSION VISION Responsibly maximising To grow our business responsibly, stakeholder value with governance, sustainability and core values as our foundation ❖ GHCL is a unique workplace which is dotted with its Core Values, defining its culture. ❖ Every employee in the Compan
Slide 33: Spearheaded by distinguished management
Spearheaded by distinguished management Experienced and accomplished Board of Directors Mr. Sanjay Dalmia Mr. Anurag Dalmia Neelabh Dalmia (Chairman) (Vice Chairman) (Executive Director, Textiles) Dr. Manoj Vaish Justice (Rtd.) Ravindra Singh Mr. Arun Kumar Jain R S Jalan (Independent Director) (Ind
Slide 34: Inorganic Chemicals
Inorganic Chemicals 33
Slide 35: Commanding leadership in Soda Ash manufacturing
Commanding leadership in Soda Ash manufacturing Limestone (25% Single largest Soda Soda Ash B2B to B2C captive) and Salt (35% Best in class ash plant in India at with supply chain a single location captive) mine located productivity existence within 40 km distance Key Differentiators Innovated from
Slide 36: Global outlook on the Soda Ash industry
Global outlook on the Soda Ash industry Soda Ash Market Outlook Globally, Soda ash market conditions remain balanced in most parts GLOBAL SIZE: CAPACITY-71 MMT, PRODUCTION-64 MMT of the world other than China where the demand scenario remained weak due to poor performance by the Construction Industr
Slide 37: Soda Ash Dynamics (Domestic Industry)
Soda Ash Dynamics (Domestic Industry) Domestic Demand Share 36
Slide 38: At GHCL, Soda Ash is managed unlike any commodity
At GHCL, Soda Ash is managed unlike any commodity Balanced Demand & Supply Historically, no mismatches in demand supply as supply Scenario always followed demand globally Sustaining high utilization rates while maintaining periodic Excellence in Execution enhancement in capacities. Achieved through
Slide 39: Application diversity of Soda Ash across end-user industries
Application diversity of Soda Ash across end-user industries Solar Panel 38
Slide 40: Inorganic Chemicals – Sodium Bicarbonate
Inorganic Chemicals – Sodium Bicarbonate Domestic Demand Share Doubled capacity from 30,000 to 60,000 MT in December 2017 Generally Domestic Demand Concentration Specialization and named as baking experience in soda, bread manufacturing of soda, cooking around a decade soda and bicarbonate of soda U
Slide 41: Key Application of Sodium Bicarbonate
Key Application of Sodium Bicarbonate Tannery Pharma Food Potential application of Sodium bicarbonate in flue gas treatment which is under trial phase; could be a game changer Animal Feed Chemicals 40
Slide 42: Marquee Clients
Marquee Clients & | - BOROSIL Hindi Unie na ac ‘renewables | CFENA PGE gets, qrutwvs, MODIGU RI OF fox eteae : 'G Piramal : ® a i Si Ss : Glass : HINDUSTAN ZINC
Slide 43: Textiles Segment (Spinning)
Textiles Segment (Spinning) 42
Slide 44: Spinning business: Performance synopsis
Spinning business: Performance synopsis ❖ Demonstrated sustained gains over the long term; on track to deliver next leg of growth ❖ High-margin value-added yarn accounts for ~70% of total revenue ❖ Elevated capacity utilization levels at ~100% 5 Years’ 10 Years’ Particulars 9M FY23 FY22 FY21 Avg. Av
Slide 45: Spinning manufacturing facility at a glance
Spinning manufacturing facility at a glance ❖ Journey Started with acquisition of sick spinning unit in 2002, Turnaround to one of the most reputed mill in southern India 2.25 Lacs ❖ State of art manufacturing infrastructure includes machines Spindles from LMW India, Rieter Switzerland, Schlafhorst
Slide 46: Key product offerings in Spinning
Key product offerings in Spinning Preferred supplier to premium customers both at domestic and international level with varied portfolio offerings Yarn Type Range End Use 100% cotton combed Compact Hosiery yarn from Indian, US and Australian Mix 25s to 60s Knitting 100% cotton combed compact yarn fr
Slide 47: Marquee Clients
Marquee Clients An WELSPUN vY MANTAFIL ALVIND FASHIONING POSSIBILITIES ME: FHt . S\ AAT, AAU INDO COUNT Complete Comfort CODEFINE® High Performance Solution: SHAHI ©) Ww Vardhman
Slide 48: About Us
About Us GHCL Limited was incorporated on 14th October, 1983. The Company has established itself as a well-diversified group with an ascertained footprint in chemicals, textiles (spinning) and consumer products segments. In chemicals, the Company mainly manufactures Soda Ash (Anhydrous Sodium Carbon
Slide 49: Thank You
Thank You 48