Pennar Industries Ltd. — Investor Presentation 2021

Nov 11, 2021

PENNAR INDUSTRIES LIMITED

Q2 INVESTOR PRESENTATION NOVEMBER 2021

Disclaimer

This presentation and the accompanying slides (the “Presentation”) have been prepared by Pennar Industries Limited (“Pennar” or the “Company”) solely for information purposes and do not constitute an offer to sell or, recommendation or solicitation of an offer to subscribe for or purchase any securities and nothing contained herein shall form the basis of any contract or commitment whatsoever.

The information contained in this Presentation should be considered in the context of the circumstances prevailing at the time and has not been, and will not be, updated to reflect material developments which may occur after the date of the Presentation. The information set out herein may be subject to updating, completion, revision, verification and amendment and such information may change materially. This presentation is based on the economic, regulatory, market and other conditions as in effect on the date hereof. It should be understood that subsequent developments may affect the information contained in this presentation, which neither the Company nor its affiliates, advisors or representatives are under an obligation to update, revise or affirm.

You acknowledge and agree that the Company and/or its affiliated companies and/or their respective employees and/or agents have no responsibility or liability (express or implied) whatsoever and howsoever arising (including, without limitation for any claim, proceedings, action, suits, losses, expenses, damages or costs) which may be brought against or suffered by any person as a result of acting in reliance upon the whole or any part of the contents of this Presentation and neither the Company, its affiliated companies nor their respective employees or agents accepts any liability for any error, omission or misstatement, negligent or otherwise, in this Presentation and any liability in respect of the Presentation or any inaccuracy therein or omission therefrom which might otherwise arise is hereby expressly disclaimed.

Certain statements contained in this Presentation may be statements of the Company’s beliefs, plans and expectations about the future and other forward looking statements that are based on management’s current expectations or beliefs as well as a number of assumptions about the Company’s operations and factors beyond the Company’s control or third party sources and involve known and unknown risks and uncertainties that could cause actual results to differ materially from those contemplated by the relevant forward looking statements. Forward looking statements contained in this Presentation regarding past trends or activities should not be taken as a representation that such trends or activities will continue in the future. There is no obligation to update or revise any forward looking statements, whether as a result of new information, future events or otherwise. You should not place undue reliance on forward looking statements, which speak only as of the date of this Presentation.

• Results Update

• Covid Update

• Diversified Engineering Company With End-To-End Capabilities

 Segmental Revenue

 Q2FY22 Business Highlights segment wise

• Order Book

• Financial Highlights

• Robust Manufacturing Facilities & Strong Sales Network

• Shareholding Structure

Results Update

Particulars (Rs. in Mn)	Q2 FY22	Q2 FY21	YoY%	H1 FY22	H1 FY21	YoY%
Revenue From Operations (Net ofTaxes)	5,517	3,904	41.3%	10,400	5,566	86.8%
Other Income	30	23	34.7%	56	50	11.0%
Total Income	5,547	3,927	41.3%	10,456	5,616	86.2%
COGS	3,494	2,304	51.6%	6,512	3,315	96.4%
Gross Profit	2,053	1,623	26.5%	3,943	2,301	71.4%
Gross Margin %	37.0%	41.3%	-431 bps	37.7%	41.0%	-326 bps
Employee Expenses	542	342	58.2%	946	654	44.7%
Other Expenses	1,077	954	12.9%	2,162	1,453	48.8%
EBITDA	435	327	33.1%	836	194	330.8%
EBITDA Margin %	7.8%	8.3%	-48 bps	8.0%	3.5%	454 bps
Depreciation	128	122	4.8%	255	243	5.2%
Finance Cost	197	198	-0.6%	380	396	-4.0%
PBT	110	7	1544.8%	201	-444	-145.1%
Tax expense	29	1	2790.0%	56	-110	-150.9%
PAT Before MI	81	6	1326.3%	145	-335	-143.2%
PAT Margin %	1.5%	0.1%	132 bps	1.4%	-6.0%	734 bps

Covid Update

• The company has opened all its manufacturing units, offices across India.

• All the covid protocols are followed to ensure safety of our employees, customers, vendors

• and all other stakeholders.

• As an organization we are 95%+ fully vaccinated

• We aim to achieve 100% of our employees by December end.

• We are conducting various health camps for all of our employees.

Engineering Products

• Wide range of customised engineering products catering to diverse sectors

• Strong designing & manufacturing capabilities

Engineering Projects

• Leading player in Pre-Engineered Buildings, Solar EPC, Designing & Engineering Services with presence in USA

• Water Treatment Solutions (EPC + O&M), Water Treatment Chemicals & Fuel Additives

Engineering Services

Emerging Leader in Structural Engineering Services, BIM (Building Information Modelling), Plant-Product Engineering Services, Industrial Automation, Digital Consultancy (IoT) & Value Added Solutions

Extensive Product & Service Offerings

Diversified Engineering Company With End-To-End Capabilities

Wide Spectrum of Engineered Products & Customised Turnkey Engineering Solutions Across Diverse Industries

Strong Pedigree & 36+ 1,500+ 1,000+ 7 2,500+ Engineering Years of Engineered CustomersAcross Manufacturing Employee Excellence Products Industries Base experience Plants Engineered Products * Engineering Solutions • Leading player in Pre-Engineered Buildings, Solar EPC, Extensive Product • Wide range of customised engineering Designing & Engineering Services with presence inUSA & Service Offerings • products catering to diverse sectors Water Treatment Solutions (EPC + O&M), • Water Treatment Chemicals & FuelAdditives • Strong designing & manufacturing capabilities Exposure to High Automobiles Construction & PreWhite Goods Railways Solar (MMS & Growth Sectors Infrastructure Engineered PV) Subsidiaries Ascent Buildings Enertech Pennar Defense and PennarGMBH Pennar GlobalInc Engineering Systems PrivateLtd Pennar Global Metals Prominent Clientele From DiverseSectors**

Note: * includes Steel Products BU, Tubes BU, Industrial Components BU, Railways BU, ** includes PEBS Pennar, Pennar Enviro, Pennar Global subsidiaries

Segmental Revenue

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FY 2021
FY 2020 Services HY 2022
Services
40, 2%
Services
35, 1%
Projects 18, 2%
681,
Project
Projects 38%
s 337,
870,
31%
36%
Product Produc
s 1535, ts 735,
63% Product 67%
s 1091,
60%
Products Projects Services Products Projects Services Products Projects Services
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Products Projects Services

Products Q2-FY22 Highlights

• Industrial Components

 Hydraulics

• The revenue for the half year under the Products has increased from Rs.421.30 Crs to RS.599.96 Crs up by 42%

• Solar Panels

• Aerospace Machined Components

• Automotive/ Manufacturing Engineering

• Steel Products and Profiles

The company is in the final stage of setting up Body in white manufacturing plant in Chennai, excepted to start the commercial production in Q4.

• The company is in talks to acquire Engineering and precision company based out of France.

• Railway Sub Assemblies

 Precision Tubes

Projects Q2-FY22 Highlights

Projects include

• Pre Engineered Buildings

• Water Treatment

• Solar Structures

• The revenue for projects increased from Rs.258.58Crs in HY21 to 423.18Crs in HY22 up by 64%

• Step down subsidiary Ascent Building, USA has started its commercial production and became profitable.

• The orderbook in the PEB division has started increasing.

Engineering Services Q2-FY22 Highlights

• Structural Engineering Services

• The revenue for Services decreased from Rs.19.50Crs in

  • HY21 to 16.89Crs in HY22 down by 13%

• BIM( Building Information Modelling)

• We have added 5 new customers in this division

• We added few customers from Norway & Italy, there by

• Plant-Product Engineering Services

• diversifying into new geography's.

• Industrial Automation

• Digital Consultancy(IOT) & Value added Solutions

• Our revenues from BIM & Plant engineering services has seen a double digit growth.

• Further to this we are planning to add new addressable

market for this business

Order Book

• Current order book position:-

o Major PEBS Division order received from Lodha group, Matrix structures, Indo space.

o Major Enviro Division order received from Ambuja

o Major Railways Division order received from ICF & MCF

Order Book

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1300
350
3650
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PEBS Enviro Railways
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In RsMn

Financial Highlights

FY15-16 Figures are as per the I-GAAP, FY17-21 Figures are as per IND-AS

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Total Revenues EBITDA & EBITDA Margin PAT Before MI & PAT Margin
12.2%
11.5% 11.2% 5.0%
21599 21,268
4.4%
18143 9.3% 8.9%
3.8%
15496 15,440 7.2%
13101 1742 2218 1999 1,894 9053.1% 2.5%
1513 667
1,115 582 585 534
28
0.2%
FY'16 FY'17 FY'18 FY'19# FY'20 FY'21 FY'16 FY'17 FY'18 FY'19# FY'20 FY'21
FY'16 FY'17 FY'18 FY'19# FY'20 FY'21
Return Ratios Leverage Analysis
26.0% 5995 6564 6041 6677 7009 6967 0.72
21.0% 0.59 5033
18.4% 18.0% 15.0% 16.7% 0.43 29650.45 0.45 3538 33460.50 32680.47
9.7% 9.0% 10.0% 7.6% 9.5% 2573
0.4%
FY'16 FY'17 FY'18 FY'19# FY'20 FY'21 FY'16 FY'17 FY'18 FY'19# FY'20 FY'21
ROE ROCE
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6564 6677 7009 6967
5995 6041 0.72
0.59 5033
0.50 0.47
0.43 29650.45 0.45 3538 33460.50 32680.47
2573
FY'16 FY'17 FY'18 FY'19# FY'20 FY'21
Equity Net Debt Net Debt/Equity
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• adjusted to exclude exceptional and non-recurring items

Post Merger

ROE = PAT / Avg. (Equity + MI), ROCE = EBIT / Avg. Capital Employed (Total Debt + Equity + MI)

Robust Manufacturing Facilities & Strong Sales Network

	Velchal Patancheru Chennai Sales Network Presence Manufacturing Plants Tarapur Isnapur Mallarpur		Location Products
			Patancheru, Andhra Pradesh	Press Components, Profiles, ESP / Building Products, Sheet Piles / Solar, Railway Components, CRSS, Fabrication
			Chennai, TamilNadu	Coaches, Auto Profiles, Components / Hydraulics, Building Products, Body in white goods
			Isnapur, AndhraPradesh	CRSS, ERW / CDW Tubes, Profiles, Solar
INDIA USA
			Velchal, Telangana	Strip Galvanizing, Hot Dip Galvanizing, Pre engineered building systems
			Tarapur, Maharashtra	Solar, Building Products, Auto Profiles, ESP
			Sadashivpet, Telangana	Pre-Engineered Building Systems, Steel structures and Photo voltaic Module
			Mallapur, Hyderabad	Fuel Additives, Water Treatment Chemicals & Solutions

Shareholding Structure

Shareholding Pattern – As on 30[th] Sept2021

37.69% 62.14% 0.17% PROMOTERS INSTITUTIONS PUBLIC

Source:BSE

Thanking You