Indag Rubber Ltd. — Investor Presentation 2022

Feb 28, 2022

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February 28, 2022

BSE Limited (Company code-1321) Phiroze Jeejeebhoy Towers, (Scrip code-509162) Dalal Street, Mumbai-400001

Sub: Investor Presentation – Q3 & 9M FY22.

Dear Sir,

Enclosed please find the Investor Presentation of Q3 & 9M FY22, for the information of the investors and public at large.

Thanking you.

Yours faithfully,

For Indag Rubber Limited

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Company Secretary

Investor Presentation – Q3 & 9M FY22 February 2022

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Safe Harbor

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This presentation and the accompanying slides (the “Presentation”), which have been prepared by Indag Rubber Limited (the “Company”), have been prepared solely for information purposes and do 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 forwardlooking 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.

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Q3 & 9M FY22 FINANCIAL HIGHLIGHTS

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CEO’s Message

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Commenting on the result:

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Mr. Vijay Shrinivas CEO & Whole Time Director, Indag Rubber Ltd.

“With the normalization in business environment post the 2nd wave of covid, we have started seeing gradual recovery in demand in the auto industry. Large scale vaccination drive in India progressed well and touched 1.5 billion shots by January 2022. Demand momentum has sustained following Q2, which has led to a total income of Rs.49.6 crores in Q3 FY22.

All tyre companies have faced inflationary trends in raw material prices. We were no exception to this and increased prices of raw materials led to pressure on our margins and profitability during Q3 FY22. We have been able to pass on price increase partially with the prevailing market situation and we expect to pass through in the coming quarter as well. We are continuously working towards controlling costs and improving our efficiencies.

The slowdown in transport segment was present on back of cash pressure faced by truck and fleet owners due to the end of moratorium of loans. Economic unlocking, pick up in construction activities, government’s thrust towards Infrastructure development and increasing demand for e-commerce and last-mile delivery should support CV demand going forward.

We are cautiously optimistic on the outlook of the tyre industry and expect there will be steady momentum in demand with the expected economic activity and the diminishing effect of the pandemic. With our unique range of products, varied tread design patterns, pan India distribution network and advanced technical solutions package, we are well poised to provide economical and sustainable tyre solutions to fleet owners.“

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Q3 & 9M FY22 Financial Highlights

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Revenue EBITDA Profit After Tax
53.6 9.8
49.6
46.2
31.7
3.7 1.9
1.9
0.3
Q3FY21 Q1FY22 Q2FY22 Q3FY22 -0.3
-0.8
Q3FY21 Q1FY22 Q2FY22 Q3FY22
-3.3
Q3 FY21 Q1 FY22 Q2 FY22 Q3 FY22
Revenue EBITDA Profit After Tax
128.0 127.5 17.2 1.5
1.1
5.2
9MFY21 9MFY22 9MFY21 9MFY22 9MFY21 9MFY22
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✓ Demand has gradually started picking up post Q1 FY22 onwards with normalization of economic activities ✓ Inflationary trend in Raw Material prices have impacted margins and profitability

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(Rs. In Crs.)

• Includes Other Income ; On Consolidated Basis

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Consolidated Financials – Q3 & 9M FY22

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Particulars (Rs. In Crs.) Q3 FY22 Q3 FY21 Q2 FY22 9M FY22 9M FY21
Revenue from Operations 45.9 52.6 45.5 122.7 124.1
Other Income 3.6 1.0 0.8 4.8 3.9
Total Revenue (incl Other Income) 49.6 53.6 46.2 127.5 128.0
Total Raw Material 34.4 30.9 32.5 88.3 77.8
Gross Profit 15.2 22.7 13.7 39.2 50.1
Gross Profit (%) 30.7% 42.3% 29.7% 30.7% 39.2%
Employee Expenses 5.0 5.4 5.0 15.4 15.4
Other Expenses 6.5 7.4 6.8 18.6 17.5
EBITDA 3.7 9.8 1.9 5.2 17.2
EBITDA (%) 7.4% 18.3% 4.1% 4.1% 13.5%
Depreciation 1.6 0.9 0.8 3.2 2.5
EBIT 2.1 8.9 1.1 2.1 14.8
EBIT (%) 4.3% 16.7% 2.3% 1.6% 11.5%
Finance Cost 0.0 0.1 0.0 0.1 0.2
Share of loss of joint venture 0.0 0.2 0.3 0.5 0.4
Profit before exceptional items and tax 2.1 8.7 0.8 1.5 14.2
Exceptional Items 0.0 13.2 0.0 0.0 13.2
Profit before Tax 2.1 -4.6 0.8 1.5 0.9
Tax 0.2 -1.2 0.5 0.3 0.2
Profit/loss after tax from continuing operations 1.9 -3.4 0.3 1.2 0.8
Discontinued operations
Profit before tax 0.0 0.2 0.0 0.3 0.4
Current tax expense 0.0 0.0 0.0 0.0 0.1
Profit after Tax 1.9 -3.3 0.3 1.5 1.1
PAT % 3.8% -6.1% 0.7% 1.1% 0.9%
EPS 0.71 -1.30 0.18 0.51 0.29
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• Exceptional Item of Rs 13.24 cr as the Company opted for the Himachal Pradesh {Legacy Cases Resolution) Scheme, 2019 on January 21, 2021 for settlement of Entry Tax matter of earlier years which was pending decision before Honorable High Court of Himachal Pradesh.

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Consistent Dividend Pay-out

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Dividend
Pay-Out 15% 17% 19% 19% 20% 29% 40% 59% 47% 247%
12.6
12.2
10.7
9.5
8.4
8.0
6.0
5.1
4.1
2.4 2.4 2.4 2.4 2.4 2.4 2.4
2.0
1.6
1.2
1.0
FY12 FY13 FY14 FY15 FY16 FY17 FY18 FY19 FY20 FY21
EPS DPS
The Board has declared Interim Dividend for the Financial Year 2021-2022 of Rs. 0.90/- per equity
share of Rs. 2/- each (45 % of FV)
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Adjusted EPS & DPS for the split

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Key Updates

SUN-AMP Solar India Pvt. Ltd.

• The Board has considered and approved to initiate the process of voluntary winding up of SUN-AMP Solar India Pvt. Ltd. for consideration of Rs.4.49 crores

• Since it is a non-material subsidiary, it will not impact consolidated financials of the Company materially

MRO Facility at Bhiwadi, Rajasthan

• MRO Facility commissioned from 1[st] September 2021 and income from the same has been accounted for in the quarter

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Exit from JV – SUN Mobility EV Infra Pvt. Ltd

• The Company transferred equity shares to Joint Venture Partner and the preference shares were redeemed by call option in October 2021

• Money has been received, and gain of Rs.626.67 lakhs on standalone and Rs.745.97 lakhs on a consolidated basis has been shown in other comprehensive income for the quarter and nine months ended 31[st] December, 2021

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ABOUT THE COMPANY

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About the Company

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VISION & MISSION

To be No.1 company in every market served, by offering best- inclass tyre Retreading products and services through largest network of trained Channel partners committed to offer most reliable, economical and sustainable tyre solutions for commercial transport industry.

VALUES

• Excellence

• Customer Satisfaction

• • Commitment

• Social Responsiveness

• • Creativity

• Openness and Diversity

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Our Journey

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Focused Management

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Mr. Nand Khemka Chairman & Managing Director

Mr. Vijay Shrinivas CEO & Whole Time Director

• M.S. in Foreign Trade & MBA in Production Management from Columbia University, New York, U.S.A.

• With the company since 2018. He was last working with Arvind Ltd. as Chief Sales & Marketing Officer. Prior to that, he was with E I DuPont India Pvt Ltd, Bharat Shell Ltd and Larsen & Toubro Ltd in various operating and leadership roles

• Over 40 years of experience in

• promoting and running successfully various organizations

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Mr. Uday Khemka Director

• Son of Mr. Nand Khemka having more than 24 years of Investment Banking & Entrepreneurial experience in Emerging markets

• Vice-Chairman of the SUN Group of companies

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Mr. Shiv Khemka Director

• Vice-Chairman of SUN Group, founded in the early 90’s

• Educated at Eton College, Brown University, and the Lauder program at The Wharton School, University of Pennsylvania

• MBA in International Business from Indian Institute of Foreign Trade, New Delhi ,with 21 years of experience

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Focused Management

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Ms. Bindu Saxena Non-Executive Director (Independent)

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Mr. Raj Kumar Agrawal Non-Executive Director (Independent)

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Mr. P R Khanna

Non-Executive Director (Independent)

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Mr. Anil Bhardwaj G.M.(Accounts) & CFO

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Mr. Harjiv Singh Non-Executive Director (Independent)

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Mrs. Manali D Bijlani Company Secretary

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State of the Art Manufacturing Facility

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State of the art manufacturing unit Located at Nalagarh Industrial Estate in Himachal Pradesh - Advanced Technology in terms of machinery and equipment - Indag Training centre to impart high quality of training

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Our Presence

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Our Products

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PRECURED TREAD UN-VULCANIZED UNIVERSAL SPRAY TYRE RETREADING
RUBBER RUBBER STRIP GUM CEMENT ENVELOPES
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• Capacity of 20,000 MT p.a.

• Servicing different vehicle

• types M&HCVs, LCVs, Passenger vehicles and Off-road vehicles

• Capacity of 1,800MT p.a.

• Strong bonding between casing and tread

• Shortest curing time

• Capacity of 1,800 KL p.a. with availability of 3 variants

• Provides protection to tyre buffed surface from oxidation

• Heat resistive compound

• Lowest cost per cure envelopes

• Longer retreaded life

• Specialized patterns for varied road applications such as

• High retreading productivity

• Good cured bonding between casing and cushion

• highways, hills, mining, offroad

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Ensuring Quality & Reliability to Fleet Operators

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INDAG CONSULTANCY SERVICES

It cannot be more that is a emphasized retreading highly technical and the best process requires quality retreading materials and an impeccable retreading process. Untrained and ill equipped small and fragmented retreaders are the biggest threat to the evolving and growing Retreading Industry in India.

We have designed INDAG Consultancy Services to help our retread partners win this battle. We extend the following training and services under this program -

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RETREADING RETREADING
PROCESS MACHINERY TROUBLESHOOTING
CONSULTANCY CONSULTANCY
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Voice of the Customers

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ABOUT THE RETREADING INDUSTRY

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What is Retreading?

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INDAG PIONEERED COLD RETREADING IN INDIA

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RETREADING SAVES MONEY RETREAD SAVES ENVIRONMENT
Retreading is a green and sustainable
alternative to new tyres. It is a technical
process of high precision and
craftsmanship used to rejuvenate an old
worn-out tyre into a renewed one.
Retreading means
replacing the tread of the tyre,
instead of buying a completely new tyre.
A tyre casing is designed for multiple
retreading.
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Why Retreading?

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[One third of the price of a new tyre with life nearly the same ]
Saves Money
as New tyre
1
Durable Safety
Appropriate tread can last nearly the
6 2 Tested to same stringent
same as a new tyre
performance criteria as a new tyre
Benefits of
Retreading
Low Cost Production
Environment Friendly
5 3 In retread tyre only 25% Natural
Requires ~31 Litres of crude oil to rubber is used whereas; in new tyre,
produce a retread as opposed to 88 around 80% of Natural rubber is
Litres of oil to manufacture a new tyre required
4
Extends the life of used tyres thus saving even more energy, CO2 and
Recycle
raw materials with each product cycle
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Opportunities – Future of Retreading

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Improved Road Infrastructure

• More distance travelled in lesser time

• Higher tonnage vehicles with more tyres

• • Less Downtime & longer tread life

• Less Damage to vehicles & tyres

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GST & Favorable Regulatory guidelines

• Fewer stopovers at check posts due to E-waybills

• Less overloading due to increasing regulations

• • End of Tyre life norms and labelling norms.

• Elimination of smaller, unorganized players and formalization of value chains

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Growing Environmental consciousness

• Retreading prevents landfill waste and pollution caused due to incineration of discarded tyres

• Retreading promotes sustainability and reusability, providing lesser carbon footprint

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Increasing Radialization Trend

• Truck and Bus tyre segment has reached a radialization of 51% and growing continuously.

• • Radial tyres are structurally stronger and supports multiple retread

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Inclination to Electric Vehicles

• While IC engines will become redundant over time, tyres will not!

• Emerging tyre designs focussed on Electric Vehicles

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For further information, please contact

Company :

Investor Relations Advisors :

Indag Rubber Ltd CIN: L74899DL1978PLC009038 Mr. Anil Bhardwaj, G.M.(Accounts) & CFO anil@indagrubber.com www.indagrubber.com

Strategic Growth Advisors Pvt. Ltd. CIN: U74140MH2010PTC204285 Mr. Rahul Agarwal / Ms. Khushbu Shah rahul.agarwal@sgapl.net / khushbu.shah@sgapl.net +91 9821438864/ +91 9820601181 www.sgapl.net

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