Vardhman Textiles Limited · NSE:VTL
Vardhman Textiles — Investor Presentation (May 2017)
42 slides from Vardhman Textiles's investor presentation, May 12, 2017
Slide 1: Regulation 30 compliance letter to stock exchanges
@ | Vardhman VARDHMAN TEXTILES LIMITED Vardhman | Delivering Excellence. Since 1965. CHANDIGARH ROAD LUDHIANA- 141010, PUNJAB T: +91-161-2228943-48 F: +91-161-260! 048 E: secretarial.lud@vardhman.com Ref/TALSCY:MAY:2017-18 Dated:15-May-2017 A e Deputy General Manager, The National Stock Exchange of
Slide 2: Vardhman Textiles: Invested for the Long Haul
Vardhman Textiles Invested for the Long Haul May 2017
Slide 3: 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 4: Snapshot
Snapshot Listing information : BSE/NSE The largest listed, integrated textile manufacturing company in India CMP (INR) (31st March, 2017) 1,312.65 CMP (USD) 20.24 Dominant player across yarn, fabric and sewing threads Market Cap (INR mn) 75,332.98 Strong position in acrylic staple fibre and pres
Slide 5: Corporate structure
Corporate structure Vardhman Textiles Limited (VTL) 1973 Yarn, Fabric Revenue: Rs. 65.58bn# (US$ 1.01bn) Listed on BSE, NSE Vardhman Yarns & Vardhman Acrylics VMT Spinning Co. VSS VNG Threads (VYTL) (VAL) (VMT) VTL Stake 11%** 70.75% 89% 31% 51% RMG / Industrial / Speciality Business Acrylic Staple
Slide 6: 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 7: Management Commentary on Key Businesses
Management Commentary on Key Businesses
Slide 8: Integrated Textiles Business – from commodity to fashion
Integrated Textiles 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 l
Slide 9: Yarn Business
Yarn Business Last year was a unique year because of demonetization . Since there was no money in circulation, farmers were forced to keep inventory of stock and therefore cotton prices shot up. Export from India to China has come down from 40-45% to 20-25%. Domestic Market consumption has inc
Slide 10: Fabrics Business Drives Growth
Fabrics Business Drives Growth In Vardhman, we work across the value chain from cotton to yarn to fabric which helps us to absorb the volatility in a better manner. Since there is captive consumption of yarn for making fabric so any increase in yarn prices will result into much better profitabilit
Slide 11: Fabrics Business Drives Growth
Fabrics Business Drives Growth We have undertaken Capex of Rs 116 Cr in FY 16-17 which is part of total capex in fabric of Rs 600 Cr which is ongoing since FY 15-16 . This was mainly on account of new printing unit in Baddi. The complete capex will increase our capacity in processed fabric from 11
Slide 12: 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 sold 40% stake to the Joint Venture partner American & Efird, Inc. USA (A&E). This is a win-win situation for bot
Slide 13: Stake sale in Sewing Threads Business
Stake sale in Sewing Threads Business Deal Summary VTL has sold 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). Now after this transaction, A&E holds 89% of the equity stake in VYTL, up from its
Slide 14: 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 15: Management views on global scenarios
Management views on global scenarios The China Factor India has consistently remained at par with China when it comes to competitiveness in spinning and efficient players like VTL have in fact made considerable exports to China. But this year Chinese Govt is doing stock auction, which will have
Slide 16: Tactical Change In Cotton Procurement Policy
Tactical Change In Cotton Procurement Policy Usually we procure good quality cotton during the cotton season & build inventory of 6-7 months as on 31.03.2017. But this time due to higher cotton prices, the procurement has been slow and we were holding 3-5 months of cotton as on 31.03.2017. Usual
Slide 17: 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 18: Vardhman Special Steels Limited
Vardhman Special Steels Limited VSSL was incorporated in May 14,2010 as a public limited company under the provisions of Companies Act 1956 although the plant was in existence since 1973. Engaged in the manufacturing of billet, steel bars, rods & bright bars of various categories of Special & Al
Slide 19: Issue of Rights Equity Shares in VSSL
Issue of Rights Equity Shares in VSSL We are in the process raising capital via Rights Issue. The salient details of the issue are as under. Right Issue in the ratio of 2:3 i.e. two equity shares for holding every 3 shares. In addition to this, 12 lakh Equity shares have been reserved for issuing
Slide 20: 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 21: Value creation roadmap
Value creation roadmap Way Forward Continued focus on sweating assets and cost efficiencies to drive ROCEs Treasury stock to be used opportunistically to unlock value for shareholders. Currently, treasury stock of 4.29% (1.1 m & 1.6 m shares held by VTL Investments and Mahavir Shares Trust res
Slide 22: Advocacy In Government Policy
Advocacy In Government Policy Vardhman has played a big role in formulating government policy. The details are as follows: Mr. Sachit Jain being chairman of National Textile Committee of CII played a pivotal role in promoting Textile & Apparel industry. As a outcome of that, Government announced v
Slide 23: Team & Culture Building
Team & Culture Building gD
Slide 24: Quality Circle Competition Organized at VTDC
Quality Circle Competition Organized at VTDC VSSL Team won 1st Prize in 8th National VAL awarded GOLD Award in State Kaizen Competition by CICU Level QC Competition 23
Slide 25: Some Other Cultural Events
Some Other Cultural Events SWASTH CORPORATE ABHIYAAN 2017 Celebrated Rangoli Competition on the Women’s day celebrations in the unit occasion of New Year Celebrations 24
Slide 26: Corporate Social Responsibility
Corporate Social Responsibility
Slide 27: CSR Activities
CSR Activities Vardhman is a responsible Corporate Citizen and would continue to make a serious endeavor for a quality value addition and constructive contribution in building a healthy and better society through its CSR related initiatives .Some of the work done by Vardhman under CSR are : Educat
Slide 28: Some CSR Clicks
Some CSR Clicks Before Photograph After Photograph Before Photograph After Photograph Donating an amount of Rs. 25 lakh to PGI, Chandigarh for poor patients 27
Slide 29: Awards & Recognitions
Awards & Recognitions Our company has been given various awards from Central Govt, state governments as well as various govt. bodies at various points of time for the outstanding works done in various fields. Some of them are as follows:- Silver Award Received from Texprocil- Second highest export
Slide 30: Financials
Financials gD
Slide 31: Key Financial Ratios- VTXL (Consolidated)
Key Financial Ratios- VTXL (Consolidated)
Slide 32: Key financials- VTXL (consolidated)
Key financials- VTXL (consolidated) INR Million USD Million Particulars FY12 FY 14 FY15 FY16 FY 17 FY14 FY15 FY16 FY 17 Total Revenues 62,403 69,522 60,058 65,583 962 1,072 926 1,011 EBITDA 15,342 12,793 12,868 17,174 237 197 198 265 Margin % 25% 18% 21% 26% 25% 18% 21% 26% PBT 10,476 6,222 8,237 12
Slide 33: Historical Stock Returns (Annualised)-VTXL
Historical Stock Returns(Annualised)-VTXL CMP @ 09.05.2017 (INR) 1323 Returns over: 5 Years 45% 4 Years 49% 3 Years 55% 2 Years 56% 1 Year 70% Above Returns are Calculated as on 31.03.2017 32
Slide 34: Key Financials- VSSL
Key Financials- VSSL Rs. In Crores $ In million FY'15 FY'16 FY'17 FY'15 FY'16 FY'17 Particulars Revenues 734.18 729.33 739.00 107.97 107.25 108.68 EBITDA 18.96 45.77 64.00 2.79 6.73 9.41 Margin % 2.58% 6.28% 8.66% 2.58% 6.28% 8.66% PBDT 1.25 22.24 36.50 0.18 3.27 5.29 Margin % 0.17% 3.05% 4.87% 0.17
Slide 35: Key Financial Ratios- VSSL
Key Financial Ratios- VSSL Bottom line growth over the years Comfortable debt/equity 800 734.18 729.33 756.52 20 19.01 700 18 602.03 16 600 15.13 14 500 13.17 12 400 10 300 8 6 200 5.21 4 100 2 0 0 FY 14 FY 15 FY 16 FY 17 Revenue PAT Return ratios* *Net Debt means Long term Loans plus Short term Loa
Slide 36: Historical Stock Returns (Annualised)-VSSL
Historical Stock Returns(Annualised)-VSSL CMP @ 09.05.2017 (INR) 119 Returns over: Since Inception 32% 4 Years 54% 3 Years 95% 2 Years 112% 1 Year 178% Above Returns are Calculated as on 31.03.2017 35
Slide 37: Annexures
Annexures gD
Slide 38: 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 39: 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 40: 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 41: 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 42: 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)