RCI Industries & Technologies Limited Investor Presentation Q2 - PDF document

RCI Industries & Technologies Limited Investor Presentation Q2 & H1 FY18

Disclaimer This presentation has been prepared by RCI Industries and Technologies Limited (the “Company”) solely for information purposes and does not constitute any offer, recommendation or invitation to purchase or subscribe for any securities, and shall not form the basis or be relied on in connection with any contract or binding commitment what so ever. No offering of securities of the Company will be made except by means of a statutory offering document containing detailed information about the Company. This Presentation has been prepared by the Company based on information and data which the Company considers reliable, but the Company makes no representation or warranty, express or implied, whatsoever, and no reliance shall be placed on, the truth, accuracy, completeness, fairness and reasonableness of the contents of this Presentation. This Presentation may not be all inclusive and may not contain all of the information that you may consider material. Any liability in respect of the contents of, or any omission from, this Presentation is expressly excluded. Certain matters discussed in this Presentation may contain statements regarding the Company’s market opportunity and business prospects that are individually and collectively forward-looking statements. Such forward-looking statements are not guarantees of future performance and are subject to known and unknown risks, uncertainties and assumptions that are difficult to predict. These risks and uncertainties include, but are not limited to, the performance of the Indian economy and of the economies of various international markets, the performance of the industry in India and world-wide, competition, the company’s ability to successfully implement its strategy, the Company’s future levels of growth and expansion, technological implementation, changes and advancements, changes in revenue, income or cash flows, the Company’s market preferences and its exposure to market risks, as well as other risks. The Company’s actual results, levels of activity, performance or achievements could differ materially and adversely from results expressed in or implied by this Presentation. The Company assumes no obligation to update any forward-looking information contained in this Presentation. Any forward-looking statements and projections made by third parties included in this Presentation are not adopted by the Company and the Company is not responsible for such third party statements and projections. 2

Table of Contents Business Overview Q2 & H1 FY18 Financial Highlights Annual Financial Highlights Company Overview Opportunity & Way Ahead

Business Overview 01

Integrated & complete product suite Flat Products - Production of Strips, Foils & Coils of Copper, Brass and other special alloys - Acquired Devi Metals in FY17; manufacturing unit in Baddi with capacity of 2,400 MT - Ongoing ~Rs. 80 crore capex towards enhancing capacity; upto 6,000 MT by FY18 & 24,000 MT by FY19 (~ replacement cost of such capacity is upwards of Rs 200cr) - Partial capex met through preferential allotment in two tranches ~Rs 10 Cr @125 (in October 2016) and ~Rs 39 Cr @225 (in February 2017), subscribed by promoter group and others ;Balance to be met through internal sources - Potential to achieve asset turnover of 10:1 at 80% capacity utilisation - Higher Margin Products and strong metallurgy team in place Round Products - Merged manufacturing unit Satya Metals with RCI Industries in FY14 - Production of Annealed / un-annealed copper wires, bunched copper wires; Handicrafts and Art ware; Tin Solder/Alloys - Current capacity of 24,000 MT - Production of ~20,000 MT in FY17 Trading of Copper - Although low margin business, provides economies of scale as copper is raw material for other two divisions - No underlying commodity price risk 5

Product Portfolio with wide & diverse applications... Round Products Flat Products Copper / Brass – Foils / Coils Annealed / Un-Annealed Copper Wire & Bunched Copper Wire  Used in Automobiles: radiators, bulb and lamp caps, imitation jewellery,  Used in automotive cables, television & eyelets, thimbles, clocks, pens, and electronic Industry, construction various sheet metal pressed  High tolerance bunched copper wire components ropes used as connectors due to its  Also used in Defence/ Ordinance flexibility and strength factories – mint/ coins for domestic & exports Copper/Brass Special Alloys Tin Solder Wires/Strips and Bars  Applications in houses, power grids and aircraft industry  Used in all electronic appliances & goods, PCB,  Used in construction, cement industry, Mobiles, etc. ship building and allied industries Indian Handicrafts  Over 1,000 handicraft products 6 fabricated in Copper and Brass

Journey So Far  Flat product capacity to  Established 100% EOU - Satya  Merged manufacturing unit expand to 24,000 MT by end Metals as partnership Firm Satya Metals ; Round products FY19 2006 2014 2017 1992 2014 2016  RCI Industries & Technologies  Acquired M/s. Devi Metals;  Listed on BSE SME Platform  Started subsidiary in Dubai - RCI Limited incorporated as trader of manufacturing unit in Baddi  Entry into flat products (strips, Copper and Non Ferrous Metals World Trade Link DMCC foils, coils, sheets)  Listed on BSE Mainboard 7

Journey from BSE SME to BSE Main Revenue ( Rs Cr.) 1734.83 58% 427.79 42% FY14 FY17 Trading Manufacturing EBITDA ( Rs Cr.) PAT ( Rs Cr.) 35.83 52.33 5.91 1.79 FY14 FY17 FY14 FY17 Strategic shift and expanded product suite driving profitability & growth 8

Q2 & H1 FY18 Financial Highlights

Chairman’s Message Commenting on the quarterly results, Mr. Rajiv Gupta, Chairman & Managing Director, RCI Industries & Technologies Ltd. said: “I am happy to share that our Q2FY18 performance has been in line with our expectations, in terms of volume and profitable growth. We are in line with our proposed plan to expand our capacities in flat products and are targeting to reach 24,000 MT by FY19. We continue to be client centric in our approach and remain committed to delivering high quality, integrated and complete suite of product offerings to our customers. I thank my valued team and all my stakeholders for their dedication, untiring efforts and continued support, which enable us to achieve our vision and targets.”

Half Year Consolidated P&L Highlights – H1FY18 v/s H1FY17 31.4% 97.8% Revenue EBTIDA Rs. 1084.1 cr Rs. 28.9 cr 192.5% 137.4% PAT EPS Rs 17.2 cr Rs. 12.82 v/s Rs 5.40 in H1FY17 Board approves and declares maiden interim dividend for FY18 at Re 0.50 per share 11

Consolidated H1FY18 Highlights Rs. Cr H1 FY18 H1 FY17 YoY % Revenue from Operations 1,078.87 824.50 30.85% Other Income 5.25 0.38 Total Income 1,084.12 824.88 31.43% 1035.76 785.91 Raw Materials Employee Cost 4.25 2.25 Other Cost 15.26 22.12 Total Expenditure 1,055.27 810.29 EBITDA 28.85 14.59 97.78% EBIITDA Margin 2.66% 1.77% 89 bps Interest 7.01 6.10 2.36 0.97 Depreciation Profit Before Tax 19.48 7.51 Tax 2.25 1.63 PAT 17.22 5.89 192.54% 1.59% 0.71% 88 bps PAT Margin Other Comprehensive Income 0.0 (0.002) Total Comprehensive Income 17.22 5.89 192.43% EPS in Rs. 12.82 5.40 137.41% Significant jump in EBIDTA on account of increase in operating efficiencies 12 Company adopted Indian Accounting Standards (Ind AS) from 01 April 2017. Figures for the previous quarters are also Ind AS compliant.

Consolidated Balance Sheet Highlights – H1 FY18 As at 30 th Sep-17 As at 31 st Mar-17 As at 30 th Sep-17 As at 31 st Mar-17 Particulars ( Rs. Cr ) Particulars ( Rs. Cr ) Shareholder’s Funds 164.75 147.44 Non-current assets 49.18 48.17 Share capital 13.44 13.44 Fixed assets 45.83 39.96 Reserves & Surplus 151.32 134.01 Deferred tax assets 0.00 0.00 Non-current liabilities 31.12 31.00 Non-current Investments 0.00 0.00 Long term borrowings 0.00 0.00 Long-term loans & advances 3.35 5.45 Deferred Tax liabilities 0.71 0.58 Other non-current assets 0.00 2.76 Other non current financial 30.00 30.00 Current assets 458.89 426.67 liabilities 0.41 0.42 Current investments 0.05 0.05 Long-Term Provisions Current liabilities 312.19 296.40 Inventories 71.43 72.02 Short Term Borrowings 133.07 121.02 Trade receivables 255.09 262.62 Trade Payables 146.08 148.35 Cash & Cash equivalents 63.51 52.45 Other current financial 6.51 7.38 Loans, current 8.37 0.00 liabilities Other Current Financial Assets 3.28 3.84 Other Current liabilities 22.02 16.77 Other Current Assets 57.16 35.69 Short-term provisions 4.51 2.88 Total Equities & Liabilities 508.07 474.84 Total Assets 508.07 474.84 13

Consolidated P&L Highlights – Q2FY18 v/s Q2FY17 30.5% 97.7% Revenue EBTIDA Rs. 529.2 cr Rs.15.4 cr 138.9% 194.7% PAT EPS Rs 9.0 cr Rs. 6.69 v/s Rs 2.80 in Q2FY17 14