Aether Industries Limited — Interim / Quarterly Report 2024

Jul 26, 2023

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July 26, 2023

Ref. No.: AIL/SE/51/2023-24

To,

BSE Limited Phiroze Jeejeebhoy Towers, Dalal Street, Fort, Mumbai-400001, MH. Scrip Code: 543534

National Stock Exchange of India Limited Exchange Plaza, Bandra Kurla Complex, Bandra (E), Mumbai-400051, MH.

Symbol: AETHER

Dear Madam / Sir,

Subject: Presentation on Financial Results

In accordance with Regulation 30 of the SEBI (Listing Obligation and Disclosure Requirements) Regulations, 2015, the presentation on Financial Results of First Quarter ended on June 30, 2023, is enclosed herewith.

We request you to kindly take the information on your records.

Thank you.

For Aether Industries Limited

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Chitrarth Rajan Parghi Company Secretary & Compliance Officer Mem. No.: F12563

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Encl.: As attached

CHITRARTH RAJAN PARGHI

Digitally signed by CHITRARTH RAJAN PARGHI Date: 2023.07.26 14:05:44 +05'30'

Page 1 of 1

Aether Industries Limited

Registered Office: Plot No. 8203, GIDC Sachin, Surat-394230, Gujarat, India. Phone: +91-261-6603000 || Email: info@aether.co.in || Web: www.aether.co.in II CIN: L24100GJ2013PLC073434 Factory: Plot No. 8203, Beside Shakti Distillery, Near Rajkamal Chokdi, Road No. 8, Sachin GIDC, Sachin, Surat-394230, Gujarat, India.

• 2024

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July 26, 2023
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AETHER.NS | 543534

WHY AETHER?

The True Story

[8 x 8] Matrix of chemistry/ technology competencies developed in-house, from scratch, which caters to various segments of chemical industry

Rich Infrastructure

Extensively expanded R&D, pilot plant, and manufacturing (2 new greenfield projects, 1 brownfield project all fully DCS automated) capabilities

R&D Driven Approach

Specialised R&D team comprising 262 highly qualified people including 130 scientists (with PhDs or M. Sc. / B. Sc. degrees) and 132 engineers (JUNE-23) Experienced Team

Career Technocrat promoter group, expert global technology and business development team, average age of 940+ staff is 31 years (JUNE-23)

Growth Engines

Successfully launched 3 business models in 5 years into commercialisation: 1. Large scale manufacturing 2. CRAMS 3. Contract / Exclusive manufacturing Marquee Customers

290+ multinational, global, regional and local companies across industry spectrum, spread over 22 countries

1st Time In India

Most of our advanced intermediates and specialty chemicals manufactured for the first time in India

Fastest Growing

We are one of the fastest growing specialty chemical companies in India, growing at a CAGR of nearly 44% between Fiscal 2018 and Fiscal 2023

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HIGHLIGHTS

QIP

Successfully launched the QIP of Rs. 7,500 MM, wherein 36 qualified institutional buyers have invested in the future of Aether New Customers

We have started business with 11 new customers during the quarter across all business models Site 3++ Expansion Ground digging work in progress, along with application for various regulatory approvals Site 4 Expansion

Old structure breaking work and ground digging work started. Ordering of the equipment and machineries on-going Site 5 Expansion Wall fencing work in progress, along with application for various regulatory approvals

Pilot Plant Expansion

Initiated the expansion work for new Pilot Plant at the land which was procured on long-lease. Ordering of the machines on-going.

Team Members

More than 57 new team members joined Aether in Q1 FY24 across all departments Customer Audits

Successfully concluded 8 customer audits and certification audits in Q4 FY23 LOI with US based oil field company

LOI signed with US based oil field company for contract manufacturing of its 4 products Saudi Aramco

Entered into license agreement for long term contract with Saudi Aramco for Converge Polyols.

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QUALIFIED INSTITUTIONAL PLACEMENT

QIP Successfully completed OF RS. 7,500 MM

With Investments from Marquee Investors, believing in Aether’s story and future plans Overall support from | The Promoters, the Board of Directors & Aetherians

Special Thanks to Lead Managers | HDFC IB Team and Investec / SBI Caps IB Team Lawyers | JSA, Trilegal and Dentons Industry Specialist | F&S Auditors | Birju S. Shah & Associates

OBJECTS OF THE ISSUE	(INRMM)
Funding Capex at Site - 3	1,830
FundingCapex at Site - 5	3,300
FundingWorkingCapital	450
General Corporate Purposes	1,705

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SITE 3++

Production of 3 to 5 Products on the commercialisation of the project

Located diagonally to the current Manufacturing opposite Facility 2 in GIDC, Sachin, Surat, Gujarat, India

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July 2023 project initiation

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Additional 3500 MT

capacities approximately per annum will be added on commercialisation of the project

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SITE 4

Dedicated to CEM on the commercialisation of the project

Located within 200 meters of the current Manufacturing Facility 2 in GIDC, Sachin, Surat, Gujarat, India

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July 2023 project initiation

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Aether Speciality Chemicals Limited 100% wholly owned subsidiary

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SITE 5

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S5 - Panoli
21° 32' 19.302" N, 73° 0' 11.34" E
For future expansions
Acquired land in auction
Plot nos. 14 & 15, Panoli GIDC, Gujarat
125,000 sq. mtrs. / 31 acres (approximate)
12 times the land bank of the current land
Easy proximity to NH8
54 Kms drive from current locations in Surat
Wall fencing work started from May 2023
Project work to initiate from August 2023
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EXPANSION OF WORLD’S LARGEST PILOT PLANT

• As of May. 2023

• 56 reactors ⎸ SS-316, GLR, Hast-C, Ti / PFA coated ⎸ 500 to 6000 L ⎸ full vac. to 30 bar ⎸ -20 to 300 ℃

• 10 batch / cont. distillation columns ⎸ SS-316, GLR, Hast-C ⎸ full vac. to 10 bar ⎸ 150 to 800 mm diam. ⎸ 24-100 stages Wiped film evaporator / dryer ⎸ SS-316, Hast-C ⎸ 1, 2, 5 m2

• 25 filters / dryers ⎸ SS-316, ETFE coated ⎸ Centrifuges (24-48”) ⎸ ANFD (2-5 KL) ⎸ RVPD ⎸ VTD ⎸ Drum flaker Total pilot plant equipment : 204

OIL FIELD COMPANY | ARAMCO

Oil Field

Company

Aether Industries Limited, signed a Letter of Intent (LoI) with one of the top 3 leading global Oil Field Services companies based in USA towards the finalization of a strategic supplier and contract manufacturing partnership.

The LoI specifies 4 strategic products of the new customer that will be contract manufactured by Aether as the first set of products in this new partnership. The individual volumes of these 4 products is also specified in the LoI, and totals to 1,325 MT per month (i.e. ~ 16 KTA or 16,000 MT per year). These products will be supplied to the global energy and oil and gas locations of the customer, including a significant supply within India.

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Aether Industries Limited has inked a license agreement with Saudi Aramco Technologies Company, Saudi Arabia, for the commercialization of the sustainable Converge polyols technology.

The agreement formally initiates Aether’s activities towards the manufacturing and commercialization at Aether of the Converge polyols technology and product series, the manufacturing process for which has been previously jointly developed and validated at pre-commercial scale by Aramco and Aether. The agreement also captures the next set of important milestones.

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SNAPSHOT
Q-o-Q
Q-o-Q is comparison of Q1 FY24 with Q4 FY23 (INR MM)
Revenue EBITDA PAT
Q1FY24 1,638 474 302
11% 21% 20%
Q4FY23
1,844 602 376
Y-o-Y
Y-o-Y is comparison of Q1 FY24 with Q1 FY23
Q1FY24 1,638 474 302
1% 2% 1%
Q1FY23 1,662 486 306
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BUSINESS SEGMENTS

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(INR MM)
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63% 16% 20%

Large Scale Manufacturing

Advanced intermediates and speciality chemicals with application across the industry spectrum Contract Research and Manufacturing Services - CRAMS Contract research, scale-up services, technology development, low volume high value contract manufacturing Contract / Exclusive Manufacturing Manufacture under contractual supply agreements with MNCs

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FY21 3,249
FY22 3,955
FY23 3,357
Q1FY24 1,020
FY21 359
FY22 479
FY23 817
251
Q1FY24
FY21 872
FY22 1,402
FY23 2,234
Q1FY24 318
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AETHER TODAY
REVENUE FROM OPERATIONS INR MM
20.0% Agro
CAGR 44%
6,511
5,970
4,538
By Application 5.5% Multiple
57.8%
3,038
Pharma
6.0% Photography
2,033
1,611
5.6% Material Science
1,092
3.5% Coatings
1.5% Oil & Gas
FY18 FY19 FY20 FY21 FY22 FY23 Q1FY24 0.1% Others
EBITDA% 30.4
29.3
28.9 Q1FY24
25.3
24.4 24.3
21.7
64.4%
63.3%
FY18 FY19 FY20 FY21 FY22 FY23 Q1FY24
Large scale Domestic
manufacturing 19.8%
By Business By Region
19.5 Contract
PAT% 18.2 18.4
Export [#]
manufacturing
15.7
13.2 35.6%
11.5
15.6%
7.1
1.37%
# includes deemed exports and SEZ Sales
FY18 FY19 FY20 FY21 FY22 FY23 Q1FY24
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RESEARCH AND DEVELOPMENT

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R&D has been critical to success and a differentiating factor vis-à-vis competitors
Experts at helm of R&D / CRAMS Consistently rising R&D expenditure
MARCH-23 JUNE-23
7.6%
7.5%
6.6%
233 262
Highly qualified employees, Highly qualified employees,
including including
4.3%
4.0%
2.6%
501 125
111 130
393
Scientists with Scientists with
193
PhD / M. Sc and B. Sc PhD / M. Sc and B. Sc
121
53
122 132
Engineers Engineers FY19 FY20 FY21 FY22 FY23 Q1FY24
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QIP FUND UTILISATION

1. 2. 3. 4.

					(INR MM)
	Objects of issue	Amount as per	*Amount	%	Amount Pending
		the Offer	Withdrawn from	Amount	to be withdrawn
		Document (A)	Monitoring	Withdrawn (C)	from Monitoring
			Bank (B)		Bank (D = A - B)
	Funding capital expenditure requirements for the proposed	1,830	0	0.00%	1,830
	Greenfeld Project - Site 3++
	Funding capital expenditure requirements for the proposed	3,300	0	0.00%	3,300
	Greenfeld Project - Site 5 (frst phase)
	Working Capital requirements	450	0	0.00%	450
	General Corporate Purposes	1,705	0	0.00%	1,705
	Total	7,285	0	0.00%	7,285

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• As on June 2023, no funds were utilised and are parked in FD with banks

FINANCIAL RESULTS FOR Q1 FY24

				INR MM
Particulars	Q1FY24	Q4FY23	Q1FY23	FY23
	Unaudited	Audited	Unaudited	Audited
Revenue from operations	1,611	1,838	1,600	6,511
Other income	26	6	62	165
Total income	1,637	1,844	1,662	6,676
Cost of goods sold #	769	871	830	3,173
Employee benefts expense	85	90	72	345
Other expenses	309	281	274	1,130
EBITDA	474	602	486	2,028
Depreciation & amortization expense	92	69	45	232
EBIT	382	533	441	1,796
Finance cost	12	12	29	51
Proft before tax	370	521	412	1,745
Tax expenses (Current + Deferred)	68	146	106	441
Proft after tax	302	375	306	1,304

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Cost of goods sold = Cost of materials consumed in operation and incidental cost + Changes in inventories of finished goods and work-in-progress

CORE COMPETENCIES

Chemistry

Grignards and Organolithiations Ethylene Oxide Chemistry - Tandem Grignard / Ethylene Oxide Isobutylene Chemistry Hydrogenation - Asymmetric Hydrogenation Matrix Heterogeneous Catalysis Exothermic Chemistry 8x8 Cross Coupling Chemistry Olefin Metathesis / Polymerisation

Chemistry

Systems

Technology

Technology

Continuous Reaction Batch Reaction High Pressure Reaction Fixed Bed Reaction Cryogenic Reaction High Vacuum Distillation Wiped Film Distillation Process Automation

Systems

SAP Multiple Certifications (DCS) Automation

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Sweet Spot

PRODUCT SELECTION

Core competencies of chemistry, technology and systems No active manufacturer in India, made for 1[st] time in India Minimum 4 step sequences of manufacturing and infrastructure oriented Generate adequate revenue at maturity Market leading position at product maturity

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Product selection leading to differentiated portfolio

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KEY PILLARS

Ashwin Desai Founding Promoter, Managing Director

Rohan Desai Promoter, Whole Time Director

• Bachelor of Chemical Engineering from Institute of Chemical Technology (UDCT, 1974)

• Distinguished Alumni Award by UDCT (2010)

• Prior to Aether, Founder / Chairman / MD of Anupam Rasayan (India) Limited (till 2013)

• Spearheading the continuous (flow) technology core competency

• Aether’s visionary, multiple decades of experience in speciality chemicals

• Bachelor of Commerce from VNSG University of Commerce, Surat

• Prior to Aether, Director at Anupam Rasayan (India) Limited (till 2013)

• Handles commercial portfolio including sales, finance, strategic procurement, human resources and systems

• Extensive experience in speciality chemicals

Dr. Aman Desai Promoter, Whole Time Director

Purnima Desai Promoter, Whole Time Director

• Bachelor of Chemical Technology - ICT (UDCT, 2005), PhD in Organic Chemistry from Michigan State University (USA, 2010)

• Prior to Aether, project leader in Process Development group in Core R&D HQ of The Dow Chemical Company (USA, 2010-2012)

• Co-author of 25 publications, 4 patents in USA and published worldwide

• Distinguished Alumni Award by UDCT (2018)

• 10+ years of experience in speciality chemicals

• Bachelor of Commerce from University of Delhi (1975)

• Prior to Aether, Director at Anupam Rasayan (India) Limited (till 2013)

• Leads overall finance and accounting operations

• Multiple decades of experience in speciality chemicals

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EXPERIENCED BOARD

Kamalvijay Tulsian Chairman, Non-Executive Director Decades of experience in Textile and Chemical Industry

Ishita Manjrekar Non-Executive Director Experience in Chemical Industry

Jeevan Lal Nagori Non-Executive Independent Director Experience 34 years in Chemical Industries Arun Kanodiya Non-Executive Independent Director 15+ years of experience in Chartered Accountancy and Finance

Leja Hattiangadi Non-Executive Independent Director Decades of experience in Engineering Contracting / Chemical Industry

Jitendra Vakharia

Non-Executive Independent Director Decades of experience in Chemical and Textile Industry

Dr. Amol Kulkarni

Non-Executive Independent Director Experience 34 years as a Scientist

Rajkumar Borana Non-Executive Independent Director Extensive experience in Textile Industry

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BUSINESS DEVELOPMENT LEADERS | SMP AND KMP

Dr. James Ringer

(Americas)

• Bachelor’s Science (Purdue Univ. USA) and PhD Organic Chemistry (Univ. Wisconsin, USA)

• 30 years at The Dow Chemical Company (and subsidiaries) at various positions - Leader R&D Director

• Co-inventor on 22 USA patents, published worldwide

• Bachelor’s Science and Master’s Chem. Engg., Univ. of Pittsburgh (USA)

• Decades of experience in Chemical Industry

• Previously at the Dow Chemical Company (USA)

Dr. Norbert Flüggen (Europe)

• Diploma Physics and Doctorate of Natural Sciences (PhD), Univ. Hannover (Germany)

• Decades of experience in Chemical Industry

• Previously at ALTANA AG (Germany)

• B. Comm. (Mumbai University), FCA (ICAI)

• Previously at Ala Metals LLC

  • (Dubai)

• 25+ years of experience

• Awarded as CA-CFO for Emerging Corporates

• Co-inventor of 7 USA patents, published worldwide

Raymond Roach

(Americas)

Faiz Nagariya Chief Financial Officer

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ADDITION IN LEADERSHIP TEAM

• PhD Organic Chemistry – University of Rochester • >20 years Eastman Kodak – Worldwide Director of Process Development & Manufacturing

• 7 years Senior VP Novomer, Inc.; CO2 Polyol Technology acquired by Saudi Aramco 2016 • 7 years with Saudi Aramco; President & CEO Aramco Performance Materials

Dr. Ron Valente Business Development Leader (Specialty Polyols)

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SELECT MARQUEE CUSTOMER BASE | DOMESTIC AND GLOBAL

Pharmaceutical Agrochemical

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Oil and Gas Textiles High performance photography Material Science Coatings | Other Sectors TOSOH FineChem

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QEHS

Health and Safety

• Undertaking hazard and operability studies before commencing commercial production of new products

• Dedicated team of safety personnel

• Mobile application for safety and emergencies

• Modern fire-fighting and safety systems

• DCS automation system to control safety systems and processes

• Combined fire hydrant water reserve of over 2,000 m3 capacity

• Occupational Health and Safety Hazard Prevention

• Health and Safety Permits

• Emergency Prevention, Preparedness, and Response

• Working and Living Conditions

• Training and Communication

ISO 9001

for Quality

ISO 45001 for Occupational Safety

ISO 14001

of workforce as Environment Team ISO 27001 of Information Security Management

INDIAN GMP

for Manufacturing

UN GLOBAL COMPACT

Annual Corporate Member

SILVER ECOVADIS MEDAL

among the top 25 percent of companies

15%

of which

6.03% 4.12% 5.50%* is workforce as is workforce as is workforce as QC/QA/ADL Safety Environment Team Team Team

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• as on June 30, 2023

QEHS

Quality

High standards of quality for products

To cover To ensure Manufacturing Consistent Quality Supply Chain Efficacy Product Delivery Safety of Products In Q1 FY24 8 8 Times, our facilities have Customers or their been audited by external auditors

Environment

Vibrant infrastructure installed for environment and sustainability efforts

• 100 KLPD in-house zero liquid discharge (ZLD) plant

• Triple stage multiple effect evaporator (MEE)

• Mechanical vapour recompression (MVR) plant

• Agitated thin film evaporator (ATFE)

• Reverse osmosis (RO) plant

• Soil biotechnology (SBT) platform with ozonation

• Employing cleaner chemistries, semi-continuous or continuous reaction technologies, and automation in the process

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ENVIRONMENTAL SOCIAL GOVERNANCE

Environmental

• Adoption of the green chemistries or more accurately sustainable chemistry since inception.

• Principles of energy saving and conservation, atom economy

• 4R strategy (reduce / recover / recycle / reuse)

• Undertaking hazard and operability studies.

Social

• Focused on:

• Education

• Life Saving measures

• Medical Aid / Support

• Total spent of Rs. 12.13 MM towards CSR in Q1 of FY24 (44% already deployed out of the total budget of CSR for FY24)

Governance

• Technically sound and extensively experienced Board members

• Transparency and accountability at each level

• Adequate corporate governance helps:

• Improved capital flow

• Risk mitigation

• Reputation boost

• Effective decision making

• focus on compliance

• Higher staff retention

• Limitation of conflicts of interests

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Certain statements and opinions with respect to the anticipated future performance of the company in the presentation (“forward - looking statements”), which reflect various assumptions concerning the strategies, objectives and anticipated results may or may not prove to be correct. Such forward -looking statements involve a number of risks, uncertainties and assumptions which could cause actual results or events to differ materially from those expressed or implied by the forward - looking statements. These include, among other factors, changes in economic, political, regulatory, business or other market conditions. Such forward - looking-statements only speak as at the date the presentation is provided to the recipient and the company is not under any obligation to update or revise such forward -looking statements to reflect new events or circumstances. No representation or warranty (whether express or implied) is given in respect of any information in this presentation or that this presentation is suitable for the recipient’s purposes. The delivery of this presentation does not imply that the information herein is correct as at any time subsequent to the date hereof and the company has no obligation whatsoever to update any of the information or the conclusions contained herein or to correct any inaccuracies which may become apparent subsequent to the date hereof.

All rights reserved. Aether and the Aether logo are trademarks of Aether Industries Limited, registered in India

Registered Office - 8203, Road No. 08, GIDC Industrial Estate, Sachin - 394230, Surat, Gujarat, India | Board Line: +91-261-6603000 | Email ID: info@aether.co.in | Website: www.aether.co.in Mr. Chitrarth Parghi - CS and Compliance Officer | Direct No : +91 (261) - 6603360 | Email: chitrarth@aether.co.in