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Centum Electronics Ltd — Investor Presentation 2020
Nov 18, 2020
61011_rns_2020-11-18_97ff3fe0-12f0-4720-b497-bcbbe20567ca.pdf
Investor Presentation
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Ref: CEL/NSEBSE/IP/18112020 18[th] November, 2020
To,
Listing Department Department of Corporate Services ‐ Listing National Stock Exchange of India Limited BSE Limited Exchange Plaza, P. J. Towers, Bandra Kurla Complex, Dalal Street, Bandra (East), Mumbai – 400 001 Mumbai – 400 051
Re: Scrip Symbol: CENTUM/ Scrip Code: 517544
Dear Sir/ Madam,
Sub: Earnings Presentation
This is to inform you that pursuant to Regulation 30 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (the “Listing Regulations"), read with Part A of Schedule III of the Listing Regulations, we hereby enclose the Earnings Presentation for H1/Q2‐FY21. Kindly take the same on your records.
Pursuant to Regulation 46(2)(o) of the Listing Regulations, the aforesaid Earnings Presentation is also uploaded on the website of the Company i.e. www.centumelectronics.com
Yours faithfully, For Centum Electronics Limited
Digitally signed by NAGARAJ K V NAGARAJ K V Date: 2020.11.18 18:55:09 +05'30'
Nagaraj K V Company Secretary & Compliance Officer
Encl: as above
Centum Electronics Limited
44, KHB Industrial Area, Yelahanka New Town, Bangalore - 560 106, Karnataka, India Tel +91-(0)80-4143-6000 Fax +91-(0)80-4143-6005 www.centumindia.com CIN - L85110KA1993PLC013869
EARNINGS PRESENTATION
H1/Q2-FY21
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Snapshot
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25 years of domain expertise in Global Operations with strong Concept to Commissioning 2,100 Employees
Electronics Design & Manufacturing presence in India, Europe and North capabilities 650 Designers
Solutions America
Flexible Engagement Models Strong Supply Chain Network Strong relationship with marquee Serving segments with Hi-Tech, High
global clients Entry Barriers
Healthy Order Book of Single Source Supplier for ~80% of 75% Revenues from Overseas Strong Corporate Governance
~INR 11,000 Mn manufactured products Customers in Advanced Economies
As on H1-FY21 Not including client forecasts of EMS division & signed LOIs for Transportation products
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Company Overview
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- Founded in 1993, Centum Electronics Limited (Centum) is one of the largest Electronics System Design and Manufacturing (ESDM) companies in India.
FY20 Key Business Segments:
Operational Income (In Mn) and EBITDA
- Engineering R&D (ER&D) Services (38%) – Involves conceptualizing and designing of Electronic Hardware, Embedded Software, FPGA, Analog, Radio Frequency products, etc.
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12% 11% 11%
10%
8%
5%
Operational Revenue
EBITDA
EBITDA Margin
9,304
8,833
7,811
7,032 3,947
4,144 82 4 558 399 1,038 981 400
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-
Competencies across product design and manufacturing of complex and critical products and supplying to marquee customers in the most advanced economies as well as in India.
-
Electronic Manufacturing Services (EMS) (35%) – Services include manufacturing services solutions focused on a High Complexity products in high technology segment
-
Offering entire spectrum of design services and manufacturing of systems, subsystems for mission critical products in Defence, Space, Aerospace, Industrial, Transportation and Medical sectors.
-
Build-To-Specification (27%) – Services include turnkey solutions to take project from conception to mass production quickly and efficiently.
-
World-class design & manufacturing facilities across North America, Europe and India, with cutting edge infrastructure as well as a global supply chain capable of delivering products with high quality and reliability anywhere in the world.
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and reliability anywhere in the world. EBITDA Margin
FY20 Geographical Breakup
FY20 Industry Breakup
North
Defense, Space & Transport & Asia
Aerospace Automotive Industrial & Energy Healthcare America 31
12%
%
Europe
57%
44% 30% 20% 6%
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H1/Q2-FY21 FINANCIAL OVERVIEW
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H1/Q2-FY21 Financial Highli ~~g~~ hts
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Q2-FY21 Standalone Performance:
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Q2-FY21 Consolidated Performance:
-
Operational Income: INR 1,186 Mn
-
Operational EBITDA: INR 216 Mn
-
Operational EBITDA Margin: 18.21%
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- Operational Income: INR 2,051 Mn
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-
Operational EBITDA: INR 218 Mn
-
• Operational EBITDA Margin: 10.63%
-
Net Profit: INR 107 Mn
-
• PAT Margin: 9.02%
-
• Diluted EPS: INR 8.32 per share
-
Net Profit: INR 42 Mn
-
• PAT Margin: 2.05%
-
• Diluted EPS: INR 5.38 per share
H1-FY21 Standalone Performance:
-
Operational Income: INR 2,239 Mn
-
• Operational EBITDA: INR 373 Mn
-
• Operational EBITDA Margin: 16.66%
-
Net Profit: INR 162 Mn
-
• PAT Margin: 7.24%
-
• Diluted EPS: INR 12.53 per share
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H1-FY21 Consolidated Performance:
-
Operational Income: INR 3,947 Mn
-
• Operational EBITDA: INR 400 Mn
-
• Operational EBITDA Margin: 10.13%
-
• Net Profit: INR 33 Mn
-
• PAT Margin: 0.84%
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•
•
•
•
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- Diluted EPS: INR 6.89 per share
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Q2-FY21 Financial Performa ~~n~~ ce & Highlights
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Revenue from Operations (INR Mn)
EBITDA (INR Mn) and EBITDA Margin (%)
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Covid-19 impacted
2,500 250 218 228
consolidated Q2-FY21 2,051 2,058
performance especially in 2,000 1,897 200 11% 181 11% Higher revenues and
Cost productivity
the international ER&D 1,500 150
measures in the
services vertical, however 1,000 100 10% standalone entity helped
revenue increased in EMS
500
50 improve margins QoQ.
vertical which helped
-
0
reduce the overall impact.
Sep-2020 Jun-2020 Sep-2019 Sep-2020 Jun-2020 Sep-2019
EBITDA EBITDA %
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Debt situation
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Cash & Bank Balance Equivalents
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3500 800
Increase in debt was 3000 3,028 700 681
2,721
primarily related to Increase 2500 600 493 Cash Position improved
500 due to cash received
in Covid related loans in 2000
400 from sale of Centum
Centum Adetel Group by 1500
INR 273 Mn and Increase in 1000 300 Adetel’s Energy division
200 to Chauntie Electric,
standalone debt by INR 34 500 100
China.
Mn. 0 0
Mar-2020 Sep-2020 Mar-2020 Sep-2020
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Covid-19 Update
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Ensuring the health and safety of employees and supporting customers are the top priorities during these challenging times
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Employee Health & Safety
-
Govt guidelines like social distancing, sanitizing, health checking, are strictly followed in the workplace
-
Stay at home / Flexible Work from Home policies followed wherever required
-
Supporting local communities with PPE and other resources
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Support customers
-
Continued to work and support
-
customers who were providing essential services even during lock down with Govt approvals
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Factories fully operational
-
Closely monitoring the supply chain to resolve disruptions, if any
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Conserve cash & Cut costs
-
Temporary austerity measures put in place
-
Postponement of Capex till Dec 20
-
High focus on improving inventory and receivables
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H1/Q2-FY21 Operational Hig ~~h~~ lights
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-
The international ER&D services vertical has been impacted due to lower utilisations as a result of the Covid-19 pandemic related issues, especially in the global Aerospace and Automotive sectors.
-
The company is seeing promising green shoots of recovery in the Defence and Transportation sectors and expects a good turn around in H2-FY21.
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-
Acquisition of shares from a management shareholder increased shareholding of Centum Adetel from 54% to 60%.
-
Completed the sale of Centum Adetel’s Energy Division to Chauntie Electric, China for a consideration of EURO 9.8 Mn.
-
Centum awarded by Baker Hughes in “Grow” Category for qualification and rapid production ramp up of critical product to meet customer needs.
-
Some customer push outs and delayed decision making on new project awards in Oil & Gas, Aerospace & Space segments due to COVID.
-
Government of India has approved Space Sector Reforms for greater participation of private sector in space activities, which will present more opportunities in the long run.
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Government of India is also pushing the “Make in India” initiative by proposing a negative list of 101 items that will be manufactured locally.
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Q2-FY21 – Standalone Inco ~~m~~ e Statement
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Q2-FY21 – Standalone Inco m e Statement
Particulars (INR Mn) Q2-FY21 Q2-FY20 Y-o-Y Q1-FY21 Q-o-Q
Operational Income 1,186 1,093 8.5% 1,053 12.6%
Total Expenses 970 921 5.3% 895 8.4%
EBITDA 216 172 25.6% 158 36.7%
EBITDA Margins (%) 18.21% 15.74% 247 Bps 15.00% 321 Bps
Other Income 7 13 (46.2)% 8 (12.5)%
Depreciation 39 31 25.8% 38 2.6%
Finance Cost 41 72 (43.1)% 55 (25.5)%
PBT 143 82 74.4% 73 95.9%
Tax 36 27 33.3% 19 89.5%
PAT 107 55 94.5% 54 98.1%
PAT Margins (%) 9.02% 5.03% 399 Bps 5.13% 389 Bps
Diluted EPS (INR) 8.32 4.26 95.3% 4.21 97.6%
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H1-FY21 – Standalone Inco ~~m~~ e Statement
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H1-FY21 – Standalone Inco m e Statement
Particulars (INR Mn) H1-FY21 H1-FY20 Y-o-Y
Operational Income 2,239 2,344 (4.5)%
Total Expenses 1,866 2,025 (7.9)%
EBITDA 373 319 16.9%
EBITDA Margins (%) 16.66% 13.61% 305 Bps
Other Income 16 25 (36.0)%
Depreciation 77 60 28.3%
Finance Cost 96 128 (25.0)%
PBT 216 156 38.5%
Tax 54 50 8.0%
PAT 162 106 52.8%
PAT Margins (%) 7.24% 4.52% 272 Bps
Diluted EPS (INR) 12.53 8.19 53.0%
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Standalone Balance Sheet
Particulars (INR Mn) FY19 FY20 H1-FY21 Particulars (INR Mn) FY19 FY20 H1-FY21
ASSETS EQUITY AND LIABILITIES
Non-Current Assets 2,039 2,098 2,082 Equity 2,172 2,363 2,494
(a) Property, Plant & Equipment 972 1,116 1,076 Share Capital 129 129 129
(b) Capital Work in progress 71 14 28 Other Equity 2,043 2,234 2,365
36 36 36
(c) Goodwill on Consolidation Non Current Liabilities 294 284 251
(d) Other Intangible Assets 17 54 49 -
(a) Financial Liabilities
(e) Right of use asset - 21 38 (i)Borrowings 238 197 155
(f) Intangible assets under development 30 - 3 - (ii)Other Financial Liabilities - 2 -
(g) Financial Assets (iii) Lease Liabilities - 24 33
(i) Investments 489 489 583
Government Grants 20 16 15
(ii) Long-term Loans and Advances 20 21 21
Net non-current employee defined
(iii) Other financial assets 261 259 174 benefit liabilities 37 45 48
(h) Deferred tax assets (net) 51 28 17
Current Liabilities 4,128 3,714 3,427
(i) Non-current tax assets (net) 34 34 34
(a) Financial Liabilities
(j) Other non-current assets 59 26 23
(i) Borrowings 1,626 1,494 1,570
Current Assets 4,556 4,264 4,090
(ii)Trade Payables 1,063 1,139 898
(a) Inventories 2,251 2,204 2,056
(iii)Other Financial Liabilities 313 271 249
(b) Financial Assets
- - - (iv) Lease Liabilities - 6 12
(i)Investments
(ii)Trade Receivables 1,863 1,700 1,665 (b) Government Grants 5 4 4
959 683 534
(iii)Cash and Cash Equivalents 45 55 38 (c) Other current Liabilities
(iv)Bank balances other than above 118 97 104 (d) Net current employee defined 6 6 6
- - - benefit liabilities
(v) Loans
Provisions 16 35 39
(vi) Others current financial assets 125 77 74
(c) Other Current Assets 154 131 153 Liabilities for current tax (net) 142 77 115
TOTAL ASSETS 6,595 6,362 6,172 TOTAL EQUITY AND LIABILITIES 6,595 6,362 6,172
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Q2-FY21 – Consolidated Inc ~~o~~ me Statement
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Q2-FY21 – Consolidated Inc o me Statement
Particulars (INR Mn) Q2-FY21 Q2-FY20 Y-o-Y Q1-FY21 Q-o-Q
Operational Revenue 2,051 2,058 (0.3)% 1,897 8.1%
Total Expenses 1,833 1,830 0.2% 1,716 6.8%
EBITDA 218 228 (4.4)% 181 20.4%
EBITDA Margin (%) 10.63% 11.08% (45) Bps 9.54% 109 Bps
Other Income 10 69 (85.5)% 27 (63.0)%
Depreciation 103 101 2.0% 108 (4.6)%
Finance Cost 66 96 (31.3)% 79 (16.5)%
Share of profit / (losses) of associates and JV from continuing (3) - NA - NA
operation
PBT 56 100 (44.0)% 21 NA
Tax 14 16 (12.5)% 30 (53.3)%
PAT from continuing operations 42 84 (50.0)% (9) NA
PAT Margin (%) 2.05% 4.08% (203) Bps NA NA
Diluted EPS from continuing operations (INR) 5.38 5.07 6.1% 1.51 NA
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H1-FY21 – Consolidated Inc ~~o~~ me Statement
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H1-FY21 – Consolidated Inc o me Statement
Particulars (INR Mn) H1-FY21 H1-FY20 Y-o-Y
Operational Revenue 3,947 4,274 (7.7)%
Total Expenses 3,547 3,853 (7.9)%
EBITDA 400 421 (5.0)%
EBITDA Margin (%) 10.13% 9.85% 28 Bps
Other Income 37 98 (62.2)%
Depreciation 211 201 5.0%
Finance Cost 145 170 (14.7)%
Share of profit / (losses) of associates and JV from continuing operation (3) - NA
PBT 78 148 (47.3)%
Tax 45 36 25.0%
PAT from continuing operations 33 112 (70.5)%
PAT Margin (%) 0.84% 2.62% (178) Bps
Diluted EPS from continuing operations (INR) 6.89 8.33 (17.3)%
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Consolidated Balance Shee t
Particulars (INR Mn) FY19 FY20 H1-FY21 Particulars (INR Mn) FY19 FY20 H1-FY21
ASSETS EQUITY AND LIABILITIES
(1) Non-current assets 2,981 3,759 3,753 (1) Equity 2,437 2,300 2,302
(a) Property, Plant and Equipment 1,130 1,253 1,200 (a) Equity share capital 129 129 129
(b) Capital work-in-progress 81 14 28 (b) Other equity 2,061 1,923 1,984
(c) Goodwill on consolidation 376 376 376 Equity attributable to equity holders of 2,190 2,051 2,113
the parent
(d) Other Intangible assets 541 479 427 Non-controlling interests 247 248 189
(e) Right of use asset - 457 618 (2) Non-current liabilities 1,137 1,281 1,631
(f) Intangible assets under development 57 101 139 (a) Financial liabilities
(g) Financial assets (i) Borrowings 862 696 949
(i) Investment in joint ventures and (ii) Other non-current financial liabilities - 2 8
100 387 401
associates (iii) Lease Liabilities - 374 499
(ii) Other Investments 21 14 17 (b) Deferred tax liabilities (net) 114 92 81
(iii) Loans 50 61 45 (c) Net non-current employee defined 37 46 50
benefit liabilities
(iv) Other non current financial assets 479 527 423
(d) Provisions 104 54 29
(g) Deferred tax assets (net) 51 30 19 (e) Government Grants 20 16 15
(h) Non-current tax assets (net) 34 34 35 (3) Current liabilities 6,729 7,191 7,055
(i) Other non-current assets 60 27 25 (a) Financial liabilities
(2) Current assets 6,718 7,013 7,235 (i)Borrowings 2,285 2,025 2,079
Inventories 2,369 2,358 2,221 (ii) Trade payables 1,447 1,783 1,455
(b) Financial assets (iii) Other current financial liabilities 1,153 1,666 1,860
(i) Trade receivables 2,743 2,489 2,757 (iv) Lease Liabilities - 103 140
(ii) Cash and cash equivalents 173 136 404 (b) Other current liabilities 1,676 1,468 1,320
(c) Government Grants 4 4 4
(iii) Bank balances other than cash and
119 97 105 (c) Net employee defined benefit
cash equivalents 6 6 6
liabilities
(iv) Loans - 0.3 0.4 (d) Provisions 16 58 73
(v) Other current financial assets 979 1,609 1,342 (e) Liabilities for current tax (net) 142 77 118
(c) Other current assets 335 323 406 (4) Liabilities directly associated with 658 - -
(3) Assets classified as held for disposal 1,262 - - assets classified as held for disposal
Total assets (1+2+3) 10,961 10,772 10,988 Total equity and liabilities (1+2+3+4) 10,961 10,772 10,988
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Historical Standalone Incom ~~e~~ Statement
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Historical Standalone Incom e Statement
Particulars (INR Mn) FY18 FY19 FY20 H1-FY21
Operational Income 3,587 4,987 4,824 2,239
Total Expenses 3,585 4,290 4,111 1,866
EBITDA 2 697 713 373
EBITDA Margins (%) 0.06% 13.98% 14.78% 16.66%
Other Income 76 38 43 16
Depreciation 120 121 132 77
Finance Cost 150 268 277 96
- - -
Exceptional Items 329
PBT (192) 675 347 216
Tax 26 95 97 54
PAT (218) 580 250 162
PAT Margins (%) NA 11.63% 5.18% 7.24%
Diluted EPS (INR) (17.02) 45.00 19.42 12.53
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Historical Consolidated Inco ~~m~~ e Statement
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Historical Consolidated Inco m e Statement
Particulars (INR Mn) FY18 FY19 FY20 H1-FY21
Operational Revenue 7,811 9,304 8,833 3,947
Total Expenses 7,412 8,267 7,852 3,547
EBITDA 399 1,037 981 400
EBITDA Margin (%) 5.11% 11.15% 11.11% 10.13%
Other Income 130 71 153 37
Depreciation 282 278 414 211
Finance Cost 218 349 368 145
Share of profit / (losses) of associates and JV from continuing operation (10) (13) (5) (3)
- - -
Exceptional Item (105)
PBT 19 468 242 78
Tax 10 (3) 74 45
PAT from continuing operations 9 471 168 33
PAT Margin (%) 0.12% 5.06% 1.90% 0.84%
Diluted EPS from continuing operations (INR) (7.32) 30.51 15.74 6.89
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Consolidated Financial High ~~l~~ ights
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Operational Revenue EBITDA & EBITDA Margin (%)
9,304
8,833 1200 14.00%
7,032 7,811 * 11.62% 1000 11.16% 11.11% 12.00%
10.00%
800 7.94%
8.00%
4,144 600
5.11%
1,038 981 6.00%
400
4.00%
558
200 481 399 2.00%
0 0.00%
FY16 FY17 FY18 FY19 FY20 FY16 FY17 FY18 FY19 FY20
EBITDA EBITDA Margin (%)
YOY absolute growth not applicable due to
sale of subsidiary
Net Working Capital Days Debt to Equity
135 135 1.63
113
1.29
100 1.18
1.07
76
0.44
FY16 FY17 FY18 FY19 FY20 FY16 FY17 FY18 FY19 FY20
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PAT & PAT Margin (%)
500 6.23% 7.00%
450
5.31% 6.00%
400 5.06%
350 5.00%
300 4.00%
250
200 1.90% 3.00%
150 374 2.00%
100
50 258 9 471 168 1.00%
0 0.12% 0.00%
FY16 FY17 FY18 FY19 FY20
PAT PAT Margin (%)
PAT from continuing operations
ROCE
14.26%
11.17%
10.14%
11.93%
2.01%
FY16 FY17 FY18 FY19 FY20
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Capital Market Data
Stock Market Performance (as on 30th September, 2020)
20%
10%
0%
-10%
-20%
-30%
-40%
-50%
-60%
Oct-2019 Nov-2019 Dec-2019 Jan-2020 Feb-2020 Mar-2020 Apr-2020 May-2020 Jun-2020 Jul-2020 Aug-2020 Sep-2020
CENTUM Sensex
Shareholding Pattern (as on 30th September, 2020)
Price Data (As on 30 [th] September 2020)
CMP 301.60
52 Week H/L 496.05/180.00
Public
Avg Vol ('000) 11.06 34%
Avg turnover (Mn) 3.64 Promoter
59%
Market Capital (INR Mn) 3,886.05
DII
Total outstanding shares (Mn) 12.88 7%
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Disclaimer
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Centum Electronics Limited
No representation or warranty, express or implied, is made as to, and no reliance should be placed on, the fairness, accuracy, completeness or correctness of the information or opinions contained in this presentation. Such information and opinions are in all events not current after the date of this presentation. Certain statements made in this presentation may not be based on historical information or facts and may be "forward looking statements" based on the currently held beliefs and assumptions of the management of Centum Electronics Limited (“Company” or “Centum”), which are expressed in good faith and in their opinion reasonable, including those relating to the Company’s general business plans and strategy, its future financial condition and growth prospects and future developments in its industry and its competitive and regulatory environment.
Forward-looking statements involve known and unknown risks, uncertainties and other factors, which may cause the actual results, financial condition, performance or achievements of the Company or industry results to differ materially from the results, financial condition, performance or achievements expressed or implied by such forward-looking statements, including future changes or developments in the Company’s business, its competitive environment and political, economic, legal and social conditions. Further, past performance is not necessarily indicative of future results. Given these risks, uncertainties and other factors, viewers of this presentation are cautioned not to place undue reliance on these forward-looking statements. The Company disclaims any obligation to update these forward-looking statements to reflect future events or developments.
This presentation is for general information purposes only, without regard to any specific objectives, financial situations or informational needs of any particular person. This presentation does not constitute an offer or invitation to purchase or subscribe for any securities in any jurisdiction, including the United States. No part of it should form the basis of or be relied upon in connection with any investment decision or any contract or commitment to purchase or subscribe for any securities. None of our securities may be offered or sold in the United States, without registration under the U.S. Securities Act of 1933, as amended, or pursuant to an exemption from registration there from.
This presentation is confidential and may not be copied or disseminated, in whole or in part, and in any manner.
Valorem Advisors Disclaimer:
Valorem Advisors is an Independent Investor Relations Management Service company. This Presentation has been prepared by Valorem Advisors based on information and data which the Company considers reliable, but Valorem Advisors and 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. Valorem Advisors also hereby certifies that the directors or employees of Valorem Advisors do not own any stock in personal or company capacity of the Company under review.
For further information please contact our Investor Relations Representative:
Mr. Anuj Sonpal Valorem Advisors Tel: +91-22-4903-9500 Email: [email protected] Investor Kit Link: http://valoremadvisors.com/centum/
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