Pennar Industries Ltd. — Investor Presentation 2021

Feb 13, 2021

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PENNAR INDUSTRIES LIMITED

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Disclaimer
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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.

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❖ Q3 & 9M FY21 Highlights ❖ Company Overview

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Q3 & 9M FY21: Consolidated Profit & Loss Statement
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Particulars (Rs. in Mn)	Q3 FY21	Q3 FY20	YoY%	9M FY21	9M FY20	YoY%
Revenue From Operations (Net of Taxes)	4,119	5,374	-23%	9,685	16,552	-41.5%
Other Income	47	35	31%	97	157	-38.4%
Total Income	4,166	5,409	-23%	9,782	16,709	-41.5%
COGS	2,477	3,227	-23%	5,792	9,928	-41.7%
Gross Profit	1,689	2,182	-23%	3,990	6,781	-41.2%
Gross Margin %	40.5%	40.3%	21 bps	40.8%	40.6%	21 bps
Employee Expenses	376	454	-17%	1,030	1,306	-21.1%
Other Expenses	938	1,227	-24%	2,391	3,891	-38.5%
EBITDA	375	501	-25%	569	1,584	-64.1%
EBITDA Margin %	9.0%	9.3%	-26 bps	5.8%	9.5%	-366 bps
Depreciation	121	114	7%	364	313	16.3%
Finance Cost	220	226	-3%	615	652	-5.5%
PBT	34	162	-79%	-410	619	-166.2%
Tax expense	7	39	-81%	-102	95	-207.4%
PAT Before MI	27	123	-78%	-307	524	-158.7%
PAT Margin %	0.7%	2.3%	-163 bps	-3.1%	3.1%	-628 bps

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Key Business Updates
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• Robust order book position as on 1[st] February 2021

• PEBS Division - Rs. 4,340Mn

• Enviro Division- Rs. 460Mn

• Railways division – Rs. 2,000Mn

• Setting up a Body in White(BIW) plant in Chennai to cater the automobile industry. The first phase of commercial production likely to start in the month of March’21

• Pennar Global Metals, a wholly owned subsidiary of Pennar Global Inc has increased its market share in distribution of tubes and other products in US.

• Ascent Buildings LLC, a wholly owned subsidiary of Pennar Global Inc. is setting up a manufacturing plant in the USA to manufacture and sell metal buildings and building components. Commercial production is expected to start in the first quarter of 2021-22.

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❖ Q3 & 9M FY21 Highlights ❖ Company Overview

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Diversified Engineering Company With End-To-End Capabilities
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Wide Spectrum of Engineered Products & Customised Turnkey Engineering Solutions Across Diverse Industries

Strong Pedigree 35+ 1,500+ 1,000+ 8 2,500+ & Engineering Years of Engineered Customers Across Manufacturing Employee Excellence Experience Products Industries Plants Base Engineered Products * Engineering Solutions Extensive Product • Wide range of customised engineering products • Leading player in Pre-Engineered Buildings, Solar EPC, Designing & Engineering Services with presence in USA & Service Offerings** catering to diverse sectors

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

Extensive Product & Service Offerings

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

• Strong designing & manufacturing capabilities

Exposure to High Growth Sectors Subsidiaries Prominent Clientele From Diverse Sectors

Construction & General Automobiles White Goods Railways Solar Infrastructure Engineering One Works BIM Enertech Pennar Defense and Pennar GMBH Pennar Global Inc Technologies Engineering Systems Private Limited

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

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In Rs Mn

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Strong Track Record: Consistent Growth & Improving Profitability
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FY14-16 Figures are as per the I-GAAP, FY17-19 Figures are as per IND-AS

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Total Revenues EBITDA & EBITDA Margin PAT Before MI & PAT Margin
CAGR: 14.9% CAGR: 9.3% CAGR: 12%
21,599 21,268 11.6% 11.2% 12.2% 4.4% 3.8% 5.0% 3.1% 2.5%
9.3% 8.9% 905
18,143
15,496 2,218
13,101 1,513 1,742 1,999 1,894 582 585 667 534
FY16 FY17 FY18 * FY19# FY20 FY16 FY17 FY18 * FY19# FY20 FY16 FY17 FY18 * FY19# FY20
Return Ratios Leverage Analysis
0.59
0.43 0.45 0.50 0.47
26%
21%
18.4% 18% 15% 17% 5,995 6,564 6,041 6,677 7,009
9.7% 10%
9% 7.6% 2,573 2,965 3,538 3,346 3,268
FY16 FY17 FY18 * FY19# FY20 FY16 FY17 FY18 FY19# FY20
ROE % ROCE% Equity Net Debt Net Debt/Equity
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• Post Merger

• adjusted to exclude exceptional and non-recurring items

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

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Robust Manufacturing Facilities & Strong Sales Network
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Sales Network Presence
Manufacturing Plants
Tarapur Velchal
Isnapur
Mallarpur Patancheru
Chennai
USA
INDIA
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Location	Products
Patancheru, Andhra Pradesh	Press Components, Profiles, ESP / Building Products, Sheet Piles / Solar, Railway Components, CRSS, Fabrication
Chennai, Tamil Nadu	Coaches, Auto Profiles, Components / Hydraulics, Building Products, Body in white goods
Isnapur, Andhra Pradesh	CRSS, ERW / CDW Tubes, Profiles, Solar
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

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Board of Directors
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Nrupender Rao Executive Chairman

Aditya N. Rao Vice Chairman, Managing Director

P. V. Rao K Lavanya Kumar Joint Managing Executive Director Director

	Name	Designation		Description
	Eric James Brown	Non-Executive Director	• •	President and CEO of Pennar Global, Inc. 30+ years of experience
	Chandrasekhar Sripada	Non-Executive Independent Director	• •	40+ years corporate career in HRM across Public, Private and Multi-National Companies MBA, MA & PhD
	B Kamalaker Rao	Non-Executive Independent Director	• •	Serving as Director on Boards of several Government and Public Sector Undertakings Distinguished member of the AP Legislative Council and a Senior Spokesperson for his political party
			•	Member of the Prime Ministers Council on Skill Development and has served on the Planning Commission
	Manish Sabharwal	Non-Executive Independent Director		steering committee on labour and employment for the Eleventh five year plan (2007-12)
			•	He is a member of the CII coregroupon labour reforms
	Varun Chawla	Non-Executive Independent Director	• •	9+ years of Investment Banking experience He was one of the founders of myguesthouse.com, acquired by Make My Trip.
	Bharati Jacob	Non-Executive Independent Director	• •	Extensive experience in venture investing, marketing and financial services. Masters degrees from The Wharton School of University Pennsylvania and XLRI Jamshedpur

Independent Directors

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Shareholding Structure
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Shareholding Pattern – As on 31[SR] December 2020

Key Shareholders – As on 31[st ] December 2020

FPI

37.69% 46.07% 16.24% Promoters Institutions Public

Saif India IV FI Holdings Limited	8.54%
Franklin India Smaller Companies Fund	5.97%

Source: BSE

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Thanking You

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Thank You

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