Paramount Communications Ltd. — Earnings Release 2024

Feb 4, 2024

EARNINGS RELEASE & SHAREHOLDERS’ LETTER

Q3 & 9M FY24 February 03[rd] , 2024

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About Paramount Communications Limited:

• Ø Incorporated in the year 1955, Paramount Communications Limited (“Paramount” or “The Company”) is a prominent player in the India’s wire and cable industry, renowned for manufacturing high-quality products catering to diverse infrastructure segments.

• Ø Operates through 2 state-of-the-art manufacturing facilities situated in Khushkhera, Rajasthan and Dharuhera, Haryana. These facilities hold certifications from various Indian and global agencies, testifying their strict compliance with high quality standards.

• Ø Boasts of an expansive product portfolio that comprises over 25 distinct products and an impressive array of over 2,500 SKUs . This diverse selection serves a wide spectrum of markets, including government, B2B, and B2C segments encompassing industries like Power, Railways, Telecom, Construction, Defence & Space Research, and residential spaces.

• Ø Extensive pre-qualifications credentials and competencies has been instrumental in establishing its nationwide and international presence, notably in USA. Paramount holds the prestigious status of three star export house by the Government of India.

• Ø Over the years, The Company has successfully served 500+ institutional clients, broadened its outreach via a network of 400+ channel partners, encompassing over 250 retail points, and have formed active partnerships with 5,000+ electricians across India. Further, The Company has created direct connections with all these stakeholders through its newly launched “Paramount Parivar” app.

• Ø R&D team comprises of highly skilled and qualified individuals making Paramount an industry trailblazer in India to lay and repair undersea cables, introduce nontoxic lead free house wires, offer an impressive 20 years warranty, and supply Axle Counter cables to Railways.

• Ø Holds most of the prestigious Indian and International accreditations and approvals including BIS, NTPC, PGCIL, EIL, RDSO, TEC, UL-USA, LPCB-UK, and also ISO 9001, ISO 14001, and ISO 45001.

Order Book As At 31[st] December, 2023:

Particulars	Value (Rs. Mn)
Power	₹ 2,688
Railways	₹ 859
Telecom - OFC & PIJF	₹ 77
House Wire	₹ 65
Export sales	₹ 525
EPC projects	₹ 56
Pipe & Others	₹ 165
Total Orders As At 31st December 2023	₹ 4,435
Revenue Mix 9M FY24 & Q3 FY24:

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9M FY24
2.9% [3.4%]
39.8%
28.6%
6.3%
5.8% 13.2%
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Power Cables Railway Cables Telecom Cables Domestic Wires Exports EPC Projects Pipe & Others

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Q3 FY24
1.8% 4.2%
21.6%
44.8%
5.8%
5.0%
16.8%
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Power Cables Railway Cables Telecom Cables Domestic Wires Exports EPC Projects Pipe & Others

Quarterly Consolidated Financial Performance Snapshot:

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Revenue from Operations (Rs. Mn)
3,000.0 2,842.5
2,524.4
2,500.0
2,180.9
2,000.0
1,500.0
1,000.0
500.0
0.0
Q3 FY23 Q2 FY24 Q3 FY24
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EBITDA (Rs. Mn) & EBITDA Margins (%)

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300.0
256.5
9.5%
250.0 232.2
200.0 189.4 9.1% 9.0% 9.0%
150.0 8.5% 8.5%
100.0 8.0%
50.0 7.5%
0.0 7.0%
Q3 FY23 Q2 FY24 Q3 FY24
EBITDA EBITDA margins
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PAT (Rs. Mn) & PAT Margins (%)

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250.0 8.0%
220.2
7.7% 7.8%
200.0 7.7% 7.6%
195.0 7.4%
143.2 7.2%
150.0
7.0%
6.8%
100.0
6.6%
6.5%
6.4%
50.0 6.2%
6.0%
0.0 5.8%
Q3 FY23 Q2 FY24 Q3 FY24
PAT PAT margins
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9M Consolidated Financial Performance Snapshot:

Revenue from Operations (Rs. Mn)

8,000.0 7,472.3 7,000.0 5,943.9 6,000.0 5,000.0 4,000.0 3,000.0 2,000.0 1,000.0 0.0 9M FY23 9M FY24

EBITDA (Rs. Mn) & EBITDA Margins (%)

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800.0 9.5%
673.8
700.0
9.0%
9.0%
600.0
500.0 463.6
8.5%
400.0
8.0%
300.0
200.0
7.7% 7.5%
100.0
0.0 7.0%
9M FY23 9M FY24
EBITDA EBITDA margins
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PAT (Rs. Mn) & PAT Margins (%)

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600.0 560.6 8.0%
7.5%
500.0 7.4%
7.0%
6.5%
400.0
339.7
6.0%
300.0 5.6% 5.5%
5.0%
200.0
4.5%
4.0%
100.0
3.5%
0.0 3.0%
9M FY23 9M FY24
PAT PAT margins
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Consolidated income statement

Particulars (Rs. Mn)	Q3 FY24	Q3 FY23	YoY (%)	Q2 FY24	9M FY24	9M FY23	YoY (%)
Revenue from operations	2,842.5	2,180.9	30.3%	2,524.4	7,472.3	5,943.9	25.7%
Other income	15.8	39.1		18.9	52.0	96.6
Total revenue	2,858.3	2,220.0		2,543.3	7,524.3	6,040.5
Total expenses excluding depreciation, amortization, & finance cost	2,601.8	2,030.6	28.1%	2,311.1	6,850.5	5,576.9	22.8%
EBITDA*	256.5	189.4	35.5%	232.2	673.8	463.6	45.4%
EBITDA Margin %	9.0%	8.5%	50 bps	9.1%	9.0%	7.7%	130 bps
Depreciation & Amortization	24.1	23.5		22.2	68.0	69.8
Finance Cost	11.9	22.7		14.9	44.8	54.1
PBT	220.5	143.2		195.1	561.0	339.7
Tax Expense	0.3	0.0		0.1	0.4	0.0
PAT	220.2	143.2	53.8%	195.0	560.6	339.7	65.0%
PAT Margin %	7.7%	6.5%	130 bps	7.7%	7.4%	5.6%	180 bps
Other Comprehensive Income	0.9	1.5		0.9	2.7	4.4
Total Comprehensive Income	221.1	144.7		195.9	563.3	344.1
Diluted EPS	0.81	0.72		0.86	2.39	1.73

*EBITDA is calculated including Other Income.

Business Update:

• Ø The Company on 29[th] January 2024, approved the allotment of 2,03,74,980 shares at a price of 66.50/- per share, raising a total of Rs. 1,354.94 Mn by way of preferential allotment of equity shares to non-promoter, public category.

• Ø Appointed Mr. Narendra Kumar Goyal as an Independent Director of The Company. Mr. Goyal has extensive experience of 52 years in the field of Telecom and IT sector and is actively involved in policy formulations and development of industrial policies specially related to telecom and IT sector.

• Ø Appointed Mr. Harish Kumar Pal as an Independent Director of The Company. Mr. Pal has extensive experience in the field of finance, banking, business development, and corporate management.

• Ø Approved the grant of 5,40,000 stock options to its employees under the Paramount Communications Limited Stock Incentive Plan 2023 (PCL SIP) and an additional 54,000 options are to be vested simultaneously, on achievement of performance criteria as laid down by the Nomination and remuneration Committee.

Management Commentary:

Commenting on the performance of Q3 FY24, the management team of Paramount said:

• Ø Our Revenue from Operations grew by 30.3% from Rs. 2,180.9 Mn in Q3 FY23 to Rs. 2,842.5 Mn in Q3 FY24 and by 25.7% from Rs. 5,943.9 Mn in 9M FY23 to Rs. 7,472.3 Mn in 9M FY24. This growth was led by robust demand of our products and efficient execution of our order book reflecting the strength and resilience of our business.

• Ø Our EBITDA showcased an impressive growth trajectory and increased by 35.5% from Rs. 189.4 Mn in Q3 FY23 to Rs. 256.5 Mn in Q3 FY24 and by 45.4% from Rs. 463.6 Mn in 9M FY23 to Rs. 673.8 Mn in 9M FY24. EBITDA margins increased by 50 bps from 8.5% in Q3 FY23 to 9.0% in Q3 FY24 and by an impressive 130 bps from 7.7% in 9M FY23 to a solid 9.0% in 9M FY24. This was led by increase in scale of operations and efficient cost control measures.

• Ø PAT increased by 53.8% from Rs. 143.2 Mn in Q3 FY23 to Rs. 220.2 Mn in Q3 FY24 and by 65.0% from Rs. 339.7 Mn in 9M FY23 to Rs. 560.6 Mn in 9M FY24. PAT margins increased by 130 bps and by 180 bps to 7.7% in Q3 FY23 and to 7.4% in 9M FY24 respectively.

We are proud to announce that, Paramount had the privilege to contribute to the historic project of building the Ram Temple in Ayodhya. We are honored to have supplied our cables towards this auspicious endeavor, which holds immense cultural and religious significance for the people of India. Our products will play a crucial role in ensuring the seamless supply of electricity to this iconic structure. This contribution underscores our commitment to providing top-notch solutions that meet the most stringent standards of safety, durability, and performance. Our involvement in such a monumental project reaffirms our position as a trusted partner in nation-building initiatives.

Further, we anticipate that our strong performance will remain resilient, underpinned by robust government spending towards nation building reinforced by private capex. The positive trajectory witnessed in the infrastructure, construction, railway, and power (renewable and non-renewable) sectors is driving the demand for wires and cables. At Paramount, our diverse product portfolio, Pan-India presence & global footprint, well established brand, pre-qualifications & approvals from various Indian and international agencies, and high quality standards makes us well-positioned to contribute significantly to these nation-building endeavors. Additionally, our continuously growing order book which currently stands at Rs. 4,435 Mn reflects the confidence of our clients in our capabilities and further strengthens our outlook for sustained growth. The performance of the cables and wires sector has demonstrated resilience over recent quarters and shows strong potential for sustained growth in the foreseeable future.

We are experiencing healthy offtake of our products in our targeted export market and we expect this demand to continue in upcoming quarters.

Further, the introduction of the Paramount Parivar App represents a noteworthy advancement in the company's strategy, focused on bringing together its network of dealers and distributors onto a unified platform. This initiative is designed to streamline the product distribution process, enabling us to better anticipate demand and efficiently plan our production processes.

Moreover, to expand our presence we have successfully raised Rs. 1,354.94 Mn. This capital infusion aims to strengthen our balance sheet, enhance capabilities, and introduce new products to capture emerging opportunities.

Lastly, we hold the utmost confidence that our unwavering commitment to developing quality products and positive reception in the market will continue to propel our growth. This will enable us to meet the rapidly increasing demands from various industries while upholding our dedication to excellence and innovation.

For further information on The Company, please visit: https://paramountcables.com

Disclaimer:

Certain statements in this document may be forward looking statements. Such forward-looking statements are subject to certain risks and uncertainties like government actions, local political or economic developments, technological risks, and many other factors that could cause our actual results to differ materially from those contemplated by the relevant forward-looking statements. Paramount Communications Limited will not be in any way responsible for any action taken based on such statements and undertakes no obligation to publicly update these forward-looking statements to reflect subsequent events or circumstance.

Contact Details:

S.K. Agarwal (CFO)

Krunal Shah/ Naman Maheshwari

Paramount Communications Limited Captive IR Strategic Advisors Pvt. Ltd.

Email: sk.agarwal@paramountcables.com Email: krunal@cap-ir.com / naman@cap-ir.com Contact: +91-1145618800/8900 Contact: +91 93724 67194