Aarti Industries Ltd · NSE:AARTIIND
Aarti Industries — Investor Presentation (June 2021)
42 slides from Aarti Industries's investor presentation, Jun 4, 2021
Slide 1: Exchange filing cover letter
Ref. No.: AIL/B-40/2021/023 June 4, 2021 To, To, Listing/Complianpce Department Listing/Compliance Department BSE LTD. National Stock Exchange of Phiroze Jeejeebhoy Towers, India Limited Dalal Street, “Exchange Plaza”, Plot No. C/1, Mumbai – 400 001. G Block Bandra-Kurla Complex, Bandra (E), Mumbai
Slide 2: Investor Presentation Aarti Industries Ltd. June 2021
Investor Presentation Aarti Industries Ltd. June 2021
Slide 3: Disclaimer
Disclaimer This presentation (“Presentation”) does not constitute a prospectus, offering memorandum or an offer, or a solicitation of any offer, to purchase or sell any securities. This presentation should not be considered as a recommendation that any investor should subscribe for or purchase any s
Slide 4: Our Values
Our Values We care for our people, our We strive to maintain the highest We continuously raise the bar for customers, our suppliers, and our ethical and moral standards. We our performance standards in safety, community. Care for our people is honour our commitments towards productivity and employee
Slide 5: Agenda
Agenda Company Overview 5 Investment Highlights 14 Growth Strategy 31 Key Financials 34 Appendix 37
Slide 6: Company Overview
Company Overview Overview Key Metrics1 ▪ One of the leading Speciality chemical company in Benzene based derivatives with integrated operations which helps in cost optimization 200+ 400+ 700+ ▪ Strong R&D capabilities – 4 R&D facilities; dedicated pool of over 4001 Global Domestic engineers & scient
Slide 7: Our Products have Multiple End Uses
Our Products have Multiple End Uses Agrochemicals Pharma Printing Inks Paints & Coatings Lightweight polymers Fuel Additives Personal Care Products F&F 6
Slide 8: Key Milestones with Adaptive Growth Strategies
Key Milestones with Adaptive Growth Strategies 1984 - 1991 1992 - 2011 2012 - 2021 Consolidation, Scale, cost SSI1, Licensing import substitution competitiveness, exports Productivity with Sustainability • Operationalized Phase 1 Unit at • Commenced Calcium Dahej SEZ for agrochemical chloride facili
Slide 9: Strategically Located Plants
Strategically Located Plants Bhachau, Kutch Dahej Jhagadia Vapi Location within India Tarapur Chemical Plants Dombivali Mumbai Head Office Pharma Plants R&D Center • Over 100 acres of land available in Jhagadia and over 120 acres at Atali for future development Note: Map not to scale 8
Slide 10: Key Management Team
Key Management Team Richly experienced Technocrats Mr. Chandrakant Mr. Rashesh Mr. Rajendra Mr. Parimal Gogri Gogri Gogri Desai Chairman Vice Chairman & Chairman & M.D. Founder Director Emeritus M.D. Mrs. Hetal Mr. Renil Gogri Gogri Gala Director Director Marketing Administration Operations (Pharma)
Slide 11: Independent Directors
Independent Directors Rich and Diverse Experienced Banking Academia / Technical Mr. K.V.S Prof. Ganpati D. Mr. P. A. Sethi Shyamsundar Yadav Independent Independent Director Independent Director Director Legal Versatile Industry Experience Mr. Ramdas Mr. Vinay Mr. Lalit Gandhi Nayak Naik Independent
Slide 12: Highly Professional and Experienced Management Team
Highly Professional and Experienced Management Team Specialty Chemicals Corporate Pharma Ajay Gupta, Prashant Potnis Chetan Gandhi Dr. Bharat Chief Chief Scientific Chief Financial Patravale Manufacturing officer Officer President R&D Officer (Pharma) Pankaj Mehta Jt President Corporate Relations &
Slide 13: Financials - Consolidated
Financials - Consolidated Robust Revenue Growth Strong EBITDA Growth Strong PAT Growth FY17-20 CAGR: 13% FY17-20 CAGR: 14% FY17-20 CAGR: 19% INR (Cr) INR (Cr) INR (Cr) 5,023 965 977 982 536 524 4,705 4,621 492 3,806 654 699 3,163 316 333 FY17 FY18 FY19 FY20 FY21 FY17 FY18 FY19 FY20 FY21 FY17 FY18 FY
Slide 14: Agenda
Agenda Company Overview 5 Investment Highlights 14 Growth Strategy 31 Key Financials 34 Appendix 37
Slide 15: Investment Highlights
Investment Highlights 1 • Global Player in Benzene based Derivatives with Integrated Operations o Strong/Leadership position in key products and processes o Integrated operations across product chain of Benzene and Toluene o Ability to effectively use co-products and generate value-added products 2
Slide 16: Global Player in Benzene based derivatives with Integrated Operations (1/2)
1 Global Player in Benzene based derivatives with Integrated Operations (1/2) Benzene product chain A B C D E F PNCB PNA PCA 35 DCA PFNB • Integrated operations NCB MCB across product chain Chain ONCB ONA OCA 24 DNCB OFNB of Benzene and ODCB 34 DCNB OCPNA 34 DCA 33 DCBH OFA Toluene DCB PDCB 23 DCNB
Slide 17: Global Player in Benzene based derivatives with Integrated Operations (2/2)
1 Global Player in Benzene based derivatives with Integrated Operations (2/2) Toluene product chain Sulphuric acid product chain Sulphuric Acid Nitration Hydrogenation Others OLEUM 23% & 65% NOET Leen SO2 SULPHUR 1000 OC SO2 Gas SO3 99% ONT OT Steam MEA Di Methyl Sulphate Co Gen Power Plant Di Ethyl
Slide 18: Well Diversified Across Multiple Dimensions
2 Well Diversified Across Multiple Dimensions High level of geographic diversification… …with a well diversified product portfolio, and low dependence on individual products FY21 consolidated ROW FY21 consolidated 14% Top 5 product contribution Top 10 product contribution Japan 3% China 57% 6% Domes
Slide 19: Pharmaceuticals – Exposure to multiple segments & products (1/2)
3 Pharmaceuticals – Exposure to multiple segments & products, with strong infrastructure in place (1/2) End User Industry • Global generic pharma companies Pharmaceuticals • Innovator and large pharma MNCs • Branded generic Indian pharma companies Xanthine derivatives 60%1 Pharma Intermediates & Ing
Slide 20: Pharmaceuticals – Exposure to multiple segments & products (2/2)
3 Pharmaceuticals – Exposure to multiple segments & products, with strong infrastructure in place (2/2) Pharma - Significant Top Line and Margin Growth… CAGR FY17-21: 20% CAGR FY17-21: 44% 24% 16% 18% 14% 11% 426 556 726 756 872 48 79 113 136 205 FY17 FY18 FY19 FY20 FY21 FY17 FY18 FY19 FY20 FY21 Rev
Slide 21: Pharmaceuticals – Strong Market Growth
3 Pharmaceuticals – Strong Market Growth India’s API domestic and exports market to witness strong growth 1 429 298 254 382 613 1,074 FY15 FY21E FY26P Domestic Consumption (Rs bn) Exports (Rs bn) API’s share by application1 Others Anti-infective 19% 32% • Transition expected towards Specialty produc
Slide 22: Strong Return Profile despite Significant Capex over Last 5 Years
4 Strong Return Profile despite Significant Capex over Last 5 Years Strong return profile despite significant capex spend Capex (Rs Cr) ROCE ROCE (exc CWIP) ROE • Expanded capacity to scale base businesses (NCB and Chlorination) 24% 24% and downstream value added products 22% 23% 22% 23% 18% • Diver
Slide 23: Strong Focus on R&D & Process Innovation – Spec Chem
5 Strong Focus on R&D & Process Innovation – Spec Chem Process Innovation World Class Technology • Scrub NOx in Sulphuric Acid from MDCB • Adopted Swiss technology for plant to manufacture commercial grade o Continuous Loop reactor for eco- Nitrosyl Sulphuric Acid World Class friendly hydrogenation
Slide 24: Strong Focus on R&D & Process Innovation – Pharma
5 Strong Focus on R&D & Process Innovation – Pharma Innovation at various reactions • Carbohydrate Chemistry • Chryele Chemistry o Asymmetric Synthesis o Bio Catalysts o Chryele Epoxides o Kinetic Resolution • Coupling Reactions Chemistry o C-C Coupling o C-N Coupling • Isomerization Reactions • Tri
Slide 25: Growth with Sustainability for a Sustainable Growth
6 Strong Focus on Sustainability (1/2) Our Strategy Growth with Sustainability for a Sustainable Growth Commitment Commitment Commitment Commitment to Safety and to towards to Energy Health Environment Society Efficiency 24
Slide 26: Strong Focus on Sustainability (2/2)
6 Strong Focus on Sustainability (2/2) Health & Safety Process safety audits and ▪ Focused on Zero tolerance and Zero harm inspections from external ▪ Process of 'Learning from Incident' is established experts ▪ Focus on Behavior Base Safety INR 350+Cr Amount invested in EHS DCS control systems and
Slide 27: Well placed to benefit from sector tailwinds – Global (1/2)
7 Well placed to benefit from sector tailwinds – Global (1/2) Global Speciality chemicals market size and region-wise share Global Speciality chemicals market size and region-wise share US$ billion 2020 Others China 830-850 15% 740-760 26% Other Asia 595 11% 740-760 India US$ Bn 4% Japan North Ameri
Slide 28: Well placed to benefit from sector tailwinds – Global (2/2)
7 Well placed to benefit from sector tailwinds – Global (2/2) Speciality chemicals market has been shifting eastwards with China …India emerging as an alternative to China benefitting significantly over the last 2 decades… MNC’s looking to for alternate sourcing destinations to China Shift towards E
Slide 29: Well placed to benefit from sector tailwinds - Indian
7 Well placed to benefit from sector tailwinds - Indian Growth drivers for speciality chemicals demand in India… …Driven by rising end-use demand Consumption World 100 Per capita Major sub-segments FY20 Domestic market (US$bn) consumption (US$) Intensity India 23 Paints & Coatings Others 14% 48-50 4
Slide 30: Aarti is well placed to capture market opportunity
7 Aarti is well placed to capture market opportunity ▪ Opex Cost Savings ▪ Strong Safety, Health & Environment ▪ Availability of Feed Stock ▪ Better Project Management ▪ Skilled Manpower ▪ Strong R&D ▪ Access to Ports ▪ Customer Relations Management ▪ Geographic De-Risking ▪ Operating Efficiencies ▪
Slide 31: Agenda
Agenda Company Overview 5 Investment Highlights 14 Growth Strategy 31 Key Financials 34 Appendix 37
Slide 32: Our Growth Strategy (1/2)
Our Growth Strategy (1/2) Value Chain Customer New Value Expansion Collaboration Chains • Scale up of capacities in existing • Co-development and scale up of new • Extension of process and chemistry products products through customer partnerships expertise to enter new value chains • New markets and
Slide 33: Our Growth Strategy (2/2)
Our Growth Strategy (2/2) Introducing Chloro Toulenes Value Chain: (Range of products) Expansion & Introduction of new Newer range of range of Pharma APIs & Value Added products & Intermediates 6 2 Other Speciality Chemicals Growth Initiatives under way Setting up Universal Manufacturing Outsourcing
Slide 34: Agenda
Agenda Company Overview 5 Investment Highlights 14 Growth Strategy 31 Key Financials 34 Appendix 37
Slide 35: Consolidated Financial Statements (1/2)
Consolidated Financial Statements (1/2) In Rs Cr FY19 FY20 FY21 Balance Sheet Property, Plant and Equipment 2145 2468 3592 Capital Work-in-Progress 795 1418 1298 Intangible Assets 1 1 0 Investments 33 37 64 Other Non-Current Assets 306 404 320 Total Non-Current Assets 3281 4328 5274 Inventories 772
Slide 36: Consolidated Financial Statements (2/2)
Consolidated Financial Statements (2/2) In Rs Cr FY19 FY20 FY21 Profit and Loss Gross Revenue from Operations 4706 4621 5023 EBITDA 965 977 982 Depreciation 163 185 231 Profit Before Tax 622 676 665 Tax 118 129 129 PAT 491 536 523 % EBITDA 21% 21% 20% % ROCE 20% 17% 14% % ROCE (ex CWIP) 24% 23% 18%
Slide 37: Agenda
Agenda Company Overview 5 Investment Highlights 14 Growth Strategy 31 Key Financials 34 Appendix 37
Slide 38: Awards and Industry Accreditation (1/3)
Awards and Industry Accreditation (1/3) 37
Slide 39: Awards and Industry Accreditation (2/3)
Awards and Industry Accreditation (2/3) CHEMTECH Foundation accorded Aarti Industries with the “Outstanding Achievement – Innovation” award for the Industry Accreditation company’s commendable efforts in conserving the for Innovation environments as well as ensuring sustainable growth through path b
Slide 40: Awards and Industry Accreditation (3/3)
Awards and Industry Accreditation (3/3) ICC (Indian Chemical Council) conferred the prestigious "Lifetime Achievement Award 2018” to Shri. ICC Lifetime Chandrakant V. Gogri in recognition of his outstanding & Achievement Award tremendous contribution towards the Indian Chemical Industry Indian Insti
Slide 41: AIL has been involved in various CSR activities focused on health and education
AIL has been involved in various CSR activities focused on health and education Research & Water Development Conservation for social and uplift Environment Aarti Industries is engaged in Cluster and Rural community welfare through associated Eradication of Development Hunger and Poverty trusts (Aart
Slide 42: Thank You
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