Dynamic Cables Limited — Interim / Quarterly Report 2023

May 23, 2023

Naina Digitally signed by Naina Gupta Date: 2023.05.23 Gupta 19:39:43 +05'30'

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Soaring to New Heights

 Revenue up 19% YoY

 Margin Overhang Behind Us

 ROCE of 22.5%

May 23, 2023, Jaipur: Dynamic Cables Limited (DCL), today announced its result for Q4FY23 and full year ended March 31,2023.

Financial Performance: (Rs. Crs)

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----- Start of picture text ----- Particulars Q4FY23 Q3FY23 Q2FY23 Q1FY23 FY23 FY22Operating Revenue 178.5 158.8 173.4 158.0 668.6 563.6Operating Ebitda 19.0 14.7 14.8 14.2 62.8 59.8Operating Ebitda % 10.6% 9.3% 8.6% 9.0% 9.4% 10.6%Finance Cost 4.9 4.0 4.0 3.4 16.2 13.0Depreciation 2.1 2.1 1.9 1.8 7.9 8.1Other Income 1.2 0.5 1.0 0.5 3.1 2.7PBT 13.1 9.1 9.9 9.6 41.7 41.5Income Tax 3.1 2.5 2.7 2.4 10.7 10.6PAT 10.0 6.6 7.2 7.2 31.0 30.9----- End of picture text -----

Commenting on the results, Mr. Ashish Mangal, Managing Director of Dynamic Cables Limited commented: We are delighted to report that we have concluded financial year 2023 on strong foothold. In the year we created new milestones and delivered highest ever revenue year after year. Achieving this growth despite a high base and volatile commodity pricing environment demonstrates the demand environment that exists in the industry and the Dynamic team's ability to grow on this opportunity. While, the sharp volatility in input cost due to global uncertainties and higher cost inventory have affected the margins in first half of the year, Dynamic Cables was able to mitigate the challenge in second half by additional focus on input cost management taking margins back to normalcy. During the year, we have stepped up our product development initiatives. In addition to growing the Railway Signaling segment we are working on few other new age products like covered conductors and EV cables, to fuel the future growth. We believe going forward these products will help us in expanding topline and will drive growth in margins, early green shoots of the same are also visible.

On the micro level front, we are seeing a healthy growth in capital expenditure by government and private sector driven by robust increase in per capita power consumption in India which is still far below the developed economies. Focus on rural electrification, improving T&D infrastructure, capex spending on railway infrastructure and export market traction will significantly boost the demand in mid to long term which augurs well for the company. We remained committed to our goals to increase our efforts to maximize operational efficiencies, across the board to cater current and future growth, further consolidate our position in mid-tier cable supplier segment and grow profitably.

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Financial Highlights:

Q4FY23:

• Revenue growth was at 12.4% QoQ and 3.4% YoY

• Debtors outstanding as on 31[st] March 2023 was Rs. 206.13[1] crs (Normalized debtors Rs 180.85)

• Normalized receivable days (calculated on trailing 6 months gross sales) remained at ~ 83days

• Order book stands at Rs 331 Crores

FY23

• Revenue growth was at 18.6% as compared to FY22

• ROCE and ROE for the year was 22.3% and 17.5% respectively

• Cash Flow from Operations decreased to Rs. 27.4 crores (Normalized CFO Rs 52.7 Crs) in FY23 as compared to Rs 63.9 Crs in FY22 (Refer Footnote1 below)

• Credit Rating Outlook improved from Crisil BBB+ (Stable) to Crisil BBB+ (Positive)

• Finance cost was 25% of EBITDA up from 22% of EBITDA, due to higher interest rates scenario, endeavor to rationalize it in coming years with improvement in credit rating & increase in margins

 Dividend

Company has recommended a final dividend of 5% of face value. i.e, ₹ 0.50/- per share, subject to shareholders approval

 Borrowing:

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----- Start of picture text ----- Particulars (Rs. In Crs) 31 [st] Mar 2023 30 [th] Sept 2022 31 [st] Mar 2022Term Loans from Banks/FIs 15.6 19.3 23.4Other Loans 3.5 11.4 8.5Working Capital Loans* 63.1 60.9 44.8Total On-balance sheet Debt 82.2 91.6 76.6LC Creditors (Off- balance sheet) 81.3 65.3 62.5Total Borrowing* 163.5 156.9 139.1----- End of picture text -----

*Refer Footnote1 below

Awards & Accolades

Dynamic Cables received Pride of India Award, 2023 , which is a testimony of our hard work and commitment towards building our brand .

We were also featured in premium Cables industry magazine Wire & Cable India (WCI) in its Sep-Oct edition

Outlook:

• Despite global headwinds, India’s economy remained resilient and is setting up the stage for its continued economic outperformance in CY 2023

1 The increase in debtors is owing to an exceptional delay in a payment of Rs. 25.28 Crs scheduled in March, but was received in month of April

Adjusting for this exceptional receivable amount normalized debtors outstanding as on 31[st] March is Rs 180.85 and normalized cash flow from operations for the financial year 2022-23 is Rs 52.7 Crs

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• The government of India through its budgetary allocation, various policy initiatives and reforms like Gati Shakti National Plan, Revamped Distribution Sector Scheme (RDSS), Soubhagya Yojana continued its fiscal support which augurs well for the cable industry

• Private capex has improved, supported by government measures, such as PLI scheme and optimum capacity utilization on the back of robust domestic demand.

• India is emerging as the fastest-growing major economy in the world. And due to its very strong infrastructure pipeline and focus by central government and state governments on infrastructure, especially railways, metro railways, urban railway systems, highways and the large buildings on hospitals and other infrastructure, we expect a very strong momentum in the cable demand in the coming years.

• Also seeing revival of demand from the manufacturing sector. We expect that manufacturing sector, and the private capex will show a very strong demand, especially from the steel, oil and gas, petrochemicals, cement, and miscellaneous industries. The government emphasis on PLI schemes will definitely boost the investments in the manufacturing sectors.

• Demand environment continued to remain encouraging on the back of increasing investments in energy intensive industries, such as iron steel, aluminum, cement, fertilizers and refineries. The government emphasis on the infrastructure development projects, which includes highways, energy, railways and metro constructions, roads, ports and airports and apart from Greenfield, the modernization of the existing infrastructure projects Structural demand for higher and more efficient, T&D infrastructure, to improve the cost distribution capabilities of the power distribution company is leading to increased demand of wires and cables

• Going forward, our new product portfolio, including railway signaling cables, MVCC and high voltage cables and focus on export market is expected to contribute meaningfully in our sales growth.

• We believe that various new segments such as electric vehicles, exports, railway electrification, import substitution, etc. will evolve as sizeable business opportunities for the company.

About Dynamic Cables Ltd.:

Dynamic Cables Ltd. is manufacturer of power infra cables that includes LT, HT, EHVC, Power control & instrumentation cables, flexible & industrial cables, solar cables and railway signaling cables. It supplies cables to Government Discoms, Private Distribution companies, Private EPC contractors, industrial and Export clients. Company has 3 manufacturing plants are situated at Jaipur and Reengus. Business operations are managed through corporate office in Jaipur and 5 regional sales offices across India.

Disclaimer:

Certain statements in this press release may be forward-looking statements and/or based on management’s current expectations and beliefs concerning future developments and their potential effects upon Dynamic Cables. The forward-looking statements are not a guarantee of future performance and involve risks and uncertainties and there are important factors that could cause actual results to differ, possibly materially, from expectations reflected in such forward-looking statements. Dynamic Cables does not intend, and is under no obligation, to update any forwardlooking statement contained in this press release.