NOCIL Ltd — Investor Presentation 2019

May 10, 2019

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NOCIL LIMITED

Reg. Office: Mafatlal House, 3[rd] Floor, H.T. Parekh Marg, Backbay Reclamation, Churchgate, Mumbai-400 020, India. Tel.: 91 22 6657 6100, 6636 4062 Fax: 91 22 6636 4060 Website: www.nocil.com CIN: L99999MH1961PLC012003 Email: investorcare@nocil.com

10[th] May 2019

SEC/122B

The Secretary The Bombay Stock Exchange Limited “P.J. Towers” Dalal Street Mumbai-400 001 Scrip Code: 500730	The National Stock Exchange of India Ltd. Exchange Plaza Bandra Kurla Complex, Bandra (East) Mumbai-400 051 Symbol: NOCIL

Dear Sir,

Sub: Investor Presentation

Pursuant to Regulation 30(6) of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements), Regulations, 2015, we enclose herewith Investors Presentation on the Financial Highlights for the Financial Year ended 31[st] March 2019.

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The aforementioned Presentation has been uploaded on the Company’s website viz., www.nocil.com.

We request you to take the above on your records and acknowledge receipt.

Thanking you,

Yours faithfully, For NOCIL Limited

GUPTE Digitally signed by GUPTE VIKAS KASHINATH DN: c=IN, o=Personal, 2.5.4.20=a82eb80e7b1e067a287ce674750089f458bc6a99af0e166cf2078337b262f230, VIKAS KASHINATH postalCode=400101, st=MAHARASHTRA, 2.5.4.45=03410064343234623035613336393036393566656638303361633732366538323165353961653865396266653664393861396238366231633338303939313238396137, serialNumber=781f7a2e291fa674eb6adeb7c19db4c341d405f62a89af3633b7130a70430038, cn=GUPTE VIKAS KASHINATH Date: 2019.05.10 18:30:46 +05'30'

V. K. Gupte Company Secretary

Encl: as above

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The ethics of excellence

Investor Presentation – May 2019

NOCIL LIMITED

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Safe Harbour

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This presentation and the accompanying slides (the “Presentation”), which have been prepared by NOCIL 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 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.

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2

Annual Performance Snapshot

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Revenue from Operations Operating EBITDA Operating PBT
Crossed Maintained Margin of Maintained Margin of
Rs. 1,000 Cr 27%+ 25%+
+11.7%
+10.4%
267
+7.8%
290 239
1,043
263
968
FY18 FY19 FY18 FY19 FY18 FY19
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Board recommended Final dividend of Rs. 2.5 per equity share of FV Rs. 10 each (25% of the FV)

Revenue from operations is net of GST/Excise duty

3

* Operating PBT (PBT - Other Income)

Margin built-up

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Overall Improvement in Margin Profile of the Company

Sustainable Initiatives taken over 5 years

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55%
55%
52% •
Change in Product mix
50%
46%
o Share of specialised applications
42%
o Increased share of export business
35%
•
Technological Improvements
27% 28%
o Continual improvement in yield performance
21%
19% o Introduction of contemporary technologies
16%
•
Operating leverage
10% 18%
17%
14% o Volume maximisation
4%
8% 11%
4% 4% o In-house generation of power at Dahej site
•
FY13 FY14 FY15 FY16 FY17 FY18 FY19 Anti-dumping duty
o Only on 6 products out of 22
EBITDA (%) Value Addition(%) PAT (%)
(Revenue (-) cost of raw materials consumed (-) cost of traded goods (-) change in inventories)/Revenue
4
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Performance Trend

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Revenue from Operations*

Operating EBITDA

Operating PBT**

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Rs. In Crores
+13.4%
1,043 +27.9% 290 +30.1% 267
968
263 239
742
716
159
137
139
121
FY16^ FY17 FY18 FY19 FY16^ FY17 FY18 FY19 FY16^ FY17 FY18 FY19
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• Revenue from operations is net of GST/Excise duty

• ** Operating PBT (PBT - Other Income)

^ IGAAP

5

Improving Operating Performance

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Value Additions*

Operating EBITDA Margins

Operating PBT Margins

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55% 28% 26%
54% 27%
25%
52%
50%
21%
19%
19%
17%
FY16^ FY17 FY18 FY19 FY16^ FY17 FY18 FY19 FY16^ FY17 FY18 FY19
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*(Revenue (-) cost of raw materials consumed (-) cost of traded goods (-) change in inventories)/Revenue

6

Revenue Analysis and Break-up

Revenue Growth Bridge

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Increasing share of Exports

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Rs. In Crores

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1,043
968
FY18 Volume Growth Value Growth FY19
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26%
FY18
74%
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Domestic Exports

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30%
FY19
70%
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Growth in Revenue was contributed by Volume & Value growth:

✓ Volume growth – Sustainable demand

✓ Value growth – Better product mix

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Export business grew by 24%
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7

Business Overview

Company Overview

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• Part of Arvind Mafatlal Group

▪ Expertise in Rubber Chemical Business over 4 decades

• Largest Rubber Chemicals Manufacturer in India

• Long Term Business Relationships with Tyre Majors (Both Domestic & International)

• Awarded Responsible Care Logo by Indian Chemical Council

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Revenue [] EBITDA []
+13 [%] +55 [%]
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• CAGR growth from (FY13-FY19)

Operating PBT[*]

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+44 [%]
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Dividend Payout more than 5 years

~30[%]

9

Management Team

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• Mr. Hrishikesh . A. Mafatlal – Promoter & Chairman

Mr. S. R. Deo – Managing Director

• Executive Chairman and Promoter Director of NOCIL Ltd

• M. Tech. in Chemical Engineering from IIT Kanpur

• B.Com. (Hons.) & has attended the Advanced Management Programme at the Harvard Business School, USA

• Associated with the company for nearly 40 years in various technical capacities

Mr. R. M. Gadgil - President - Marketing

Mr. P. Srinivasan – Chief Financial Officer

• B Tech in Chemical Engineering from IIT Mumbai

• Chartered Accountant with over 30 years of experience

• Associated with the Company in various marketing capacities for nearly 37 years

• Associated with the Company since 2005

• Dr. Chinmoy Nandi - Vice President (Research & Development)

• Post Graduate & Ph.D. in Science

Dr. Narendra Gangal – Vice President (QA, Analytical & Outsourced Research)

• Ph.D. in Analytical Chemistry with 27 years of experience

• Associated with the company for nearly 35 years in various

• Associated with the company since 2007

• R&D capacities

Mr. Rajendra Desai – Vice President (Operations, Corporate HR & Personnel)

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• Chemical Engineer with Diploma in Management Studies

• Associated with the company for nearly 34 years

10

Glimpse of our Plants

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Navi Mumbai Plant

• Set up in 1976

• Located in Trans-Thane Creek industrial area at Navi Mumbai, Thane - Belapur’s industrial zone designated for the chemical Industry, about 40 kms away from Mumbai

• State-of-the-art technology for the manufacture of the entire range of Rubber Chemicals for Tyre & other Rubber Products

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Dahej Plant

• Commenced operations in March 2013

• Located about 45 kms from Bharuch, Gujarat

• Location has synergistic Chemicals & Petrochemicals industry and excellent connectivity with Dahej & Hazira Port

• Fully automated continuous process plant developed completely with in-house technology

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11

Our Value Proposition

01

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Long Term Relationships with Customers over 40 Countries

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03

02

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01 Products & Product Forms

• Wide Range of Rubber Chemical Products

• Varied Product Forms

02 Sales, Marketing & Technical Service

• Market Responsive Approach

• Strong MTS Team to offer Technical Services

03 R & D and Quality Assurance

• Experienced, capable & innovative team of R & D scientists.

• Ultra Modern Laboratories & Pilot Plant Facilities

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• Latest Analytical Instruments

12

Products & their Usage

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ANTI-DEGRADANTS/ ANTI-OXIDANTS

1

▪ These are ingredients in rubber compounds which deter the ageing and inhibit degradation due to oxygen attack of rubber products, thereby enhancing service life

ONE STOP SHOP

2

ACCELERATORS

▪ Increase the speed of vulcanization ▪ Permit vulcanization to proceed at lower temperature & with greater efficiency

With WIDE RANGE to suit

MARKET REQUIREMENTS

OTHER APPLICATIONS

3

▪ Pre vulcanization inhibition, Post vulcanization stabilization, Latex based applications etc.

▪ Improving Thermal Stability of cross links in rubber products

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13

R&D and Total Quality Management

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Research & Technology Development Quality Assurance ▪ NOCIL’s Research Centre at ▪ Quality Management System Navi Mumbai recognized by with a focus on Quality of Ministry of Science and Raw materials, Finished Technology, Govt. of India Products as well as in Process ▪ Key Areas Focussed upon Sample Analysis • Process Development, scale ▪ The Quality Control up, commercial implementation Laboratory operates round • the clock and is equipped Environmental strategies for sustainable growth with the latest Analytical • Research initiatives as per Instruments & Equipment's customers’ perceived needs

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Certifications

▪ ISO 9001:2008 ▪ ISO 14001:2004 ▪ BS OHSAS 18001:2007 ▪ ISO/IEC 17025:2005 ▪ ISO/TS16949:2009 ▪ IATF ▪ NABL ▪ Responsible Care by Indian Chemical Council

14

Technology & Speciality Chemicals – Moving up the curve

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55%
Key Factors
+20% 35%
Value Addition
Continual Technological
Strong position in High-
Improvement in Product value added products FY13 FY19
& Processes
28%
+24%
R&D Capabilities leading Operating
Operating leverage due
to significant reduction in EBITDA
to scaling-up of business 4%
cost of production
FY13 FY19
18%
Favourable Positioning Anti-dumping duty +14%
PAT
4%
FY13 FY19
15
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Rubber Chemicals – Industry Trends

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High Performance Tyres

Stringent Environmental compliance

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Extended life, Automotive & Industrial products will increase rubber processing chemical loadings

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Cost increase in China leading to Better level playing field

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Rising Income Levels

Global Demand[*]

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Increase in Motor vehicle ownership rates, especially in developing nations would need additional consumption of rubber processing chemicals

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For Rubber processing chemicals continue to forecasted to grow around 4% - 5% for next 10 years

*Source : Freedonia Report

16

Future Growth Opportunities

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• Indian tyre industry may grow 7%-9% over the next 5 backed years by

• favourable outlook for the domestic Automotive Industry

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Indian tyre
over the next
Global Market favourable outlook
Automotive Industry
•
Domestic Tyre
committed INR
• Global Tyre Industry have already Continuous Demand
expansion plans
for
committed $10 Bn comprising of:
Rubber Chemicals
▪ 100 Mn tyres comprising of Car/
bus/ truck tyres
Domestic Market
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• Domestic Tyre Industry have already –

• committed INR 150 180 Bn towards expansion plans

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Source - ICRA Source : ATMA - Indian Tyre Industry Report & Tire Business (Aug 18)

17

Positive Demand Forecast

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Global Rubber Consumption (Natural + Synthetic)

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In Lakh tonnes
291.6
7.6
Rubber Chemicals
constitute ~4% of the
9.4 Rubber Consumption
6.6
Every year ~30k
4.6 additional demand for
Rubber chemicals is
7.6 created
255.8
2013 2014 2015 2016 2017 2018 Total
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Source : Rubber Statistical Bulletin, Jan - Mar 2019 edition

18

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CAPEX – Key Growth Driver

• Phase I – Rs. 170 crores ^ Phase II – Total Capex of Rs. 255 crores[^] • For expansion of its production Expansion is expected to give an Asset

• • Phase I (a) - Expansion at Navi facilities for Rubber Chemicals Turnover of 2X at FY18 prices

• Mumbai has been commissioned (including intermediates captively

• and the commercial production have consumed towards manufacture of

• started from Q1 FY18-19 rubber chemicals) at Dahej/Navi Mumbai – (Announced in Dec’17)

• • Phase I (b) – Expansion at Dahej is has been commissioned after • For expansion of its production successful trial runs from Dec’18 facilities for Rubber Chemicals at -

• Dahej/Navi Mumbai - (Announced in Total Capex of Rs. 425 crores Entire project will be funded through Internal

• Jan’18) Accruals

• • The above capex is expected to commence the commercial production by the end of Q3FY20 Capex done to capitalize on growth opportunities… …Further scope of multiple expansion

• 100% Implementation by in-house team possible

100% Implementation by in-house team without any technical collaborations or EPC contract

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^ as per FY18 prices

19

Why NOCIL is a “Supplier of Choice”

Environment Friendly Processes

Non-Chinese Dependable Player

Continuous investments done to adopt various innovative environmental technologies for long-term sustainability

Non-Chinese Dependable & Quality Player with Committed Plans for future growth

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00
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Product Testing & Validation

Wide Range of Product

Approved & registered vendor with the Major Domestic & International Tyre Players offering Technical Support to customers for Rubber Products / Process Development

Presence across the entire range of Rubber chemicals i.e. 22 product basket

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Pipeline of New Generation of Rubber Chemicals

Development of Niche products using innovative technologies & Green chemistry concepts and new generation environmentally sustainable processes for growth

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Entry Barrier

Customers take from 6-18 months to give approval on plant specific basis & same is carried out for various locations globally

20

Profit & Loss Statement

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	Rs. In Crores	Rs. In Crores	Q4 FY19	Q4 FY18	Y-o-Y	FY19	FY18	Y-o-Y
	Net Revenue from Operations *		242	276	-12.4%	1,043	968	7.8%
	Raw Material		111	122		467	441
	_Value Addition _**		131	154	-15.1%	576	527	9.3%
	Value Addition %		54.1%	55.8%		55.2%	54.5%
	Employee Expenses		18	17		68	67
	Other Operating Expenses		54	52		218	197
	Operating EBITDA		59	85	-30.2%	290	263	10.4%
	EBITDA Margin		24.5%	30.7%		27.8%	27.2%
	Depreciation		6	11		23	23
	Other Income		2	3		10	14
	EBIT		55	77	-28.2%	277	254	9.1%
	EBIT Margin		22.8%	27.8%		26.6%	26.3%
	Interest		0	0		1	1
	Profit Before Tax		55	76	-28.2%	277	253	9.3%
	Tax		19	25		93	84
	Net Profit		36	51	-29.8%	184	169	9.2%
	Net Profit Margin		14.8%	18.5%		17.7%	17.4%
		21 Revenue from operations is net of GST/Excise duty_ _*Revenue (-) cost of raw materials consumed (-) cost of traded goods (-) change in inventories

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Balance Sheet

	Particulars (Rs. Crs.)	Particulars (Rs. Crs.)	31-Mar-19	31-Mar-18	31-Mar-18
	ASSETS
	Non-current assets		852	652
	Property,Plant and Equipment		626	499
	Capital work-in-progress		131	39
	Investment Property		0	0
	Intangible Assets		2	3
	Financial Assets
	(i)Investments in Whollyowned subsidiary		25	25
	(ii)Other Investments		22	52
	(iii)Other financial assets		6	4
	Non-current tax assets		5	4
	Other non-current assets		34	25
	Current assets		576	664
	Inventories		170	155
	Financial Assets
	(i)Investments		101	225
	(ii)Trade receivables		232	243
	(iii)Cash and cash equivalents		36	24
	(iv) Bank balances other than cash and cash equivalents		3	4
	(v)Other Financial Assets		0	0
	Other Current Assets		33	13
	TOTAL		1,428	1,316
					22

For further information, please contact: Company : Investor Relations Advisors : NOCIL Ltd. Strategic Growth Advisors Pvt. Ltd. CIN: L99999MH1961PLC012003 CIN: U74140MH2010PTC204285 Mr. P. Srinivasan - CFO Ms. Payal Dave / Ms. Neha Shroff finance@nocil.com payal.dave@sgapl.net / neha.shroff@sgapl.net +91 9819916314 / +91 7738073466 www.nocil.com www.sgapl.net