Shalimar Paints Ltd. — Investor Presentation 2023

Feb 16, 2023

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February 16, 2023

BSE Limited Corporate Relationship Department, 1st Floor, New Trading Ring, Rotunda Building, P.J. Towers, Dalal Street, Fort, Mumbai - 400 001 BSE Scrip Code: 509874

National Stock Exchange of India Ltd Exchange Plaza, 5[th] Floor, Plot No. C/1, G- Block Bandra Kurla Complex, Bandra (E), Mumbai – 400051 NSE Symbol : SHALPAINTS

Sub: Intimation pursuant to Regulation 30 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 – Revised Investors presentation

Dear Sir/Madam,

Pursuant to Regulation 30 of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015, we are enclosing herewith a copy of the revised presentation on the financial results of the Company for the quarter and nine months ended December 31, 2022. The same is also being uploaded on the website of the Company www.shalimarpaints.com.

You are requested to kindly take the above information on record.

Thanking you,

Yours faithfully,

For Shalimar Paints Limited

SHIKHA Digitally signed by SHIKHA RASTOGI RASTOGI Date: 2023.02.16 14:15:20 +05'30' Shikha Rastogi

Company Secretary

Encl.: as above

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Shalimar Paints Limited

Investor Presentation February 2023

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Safe Harbour

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This presentation and the accompanying slides (the “Presentation”), which have been prepared by Shalimar Paints 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 whatsoever. 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 cashflows, 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.

All Maps used in the Presentation are not to scale. All data, information and maps are provided "as is" without warranty or any representation of accuracy, timeliness or completeness.

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1902

Vision

Mission

Two Britishers A.N. Turner and A.N. Wright - set up Colour & Varnish Company in Howrah, West Bengal. It is the first paint manufacturing plant in the South East Asia

To persevere and excel as one of the premier paint companies of the country, a leader in product innovation and customer satisfaction. We intend to build long term value relationships with all our shareholders, customers, employees and suppliers.

To maximise shareholder value by engaging and growing our employees, delivering innovative and superior quality product to every customer segment, building strong human engagement with our dealers & vendors

Our Key Projects

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INDIA’S ICONIC STRUCTURES CONTINUE TO USE SHALIMAR PAINTS

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The Vidyasagar Setu

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The Salt Lake Stadium The Chenab Bridge
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Company Overview

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120+ years of
69,000+ KL 3 30+
establishment
Production Per annum Manufacturing facilities Depots
India’s Oldest Brand
3000+ 1
500+
Dealers network across R&D center for paint
Employee strength
the country innovations
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Our Product Offerings

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• Decorative Paints Industrial Paints Construction Chemicals

• • An extensive range of decorative and • Pioneers in Industrial coatings - • Major products are admixtures, curing protective paint products for interior and Introduced notable firsts in high compounds and mould release agent performance coatings such as high-

• exterior segments build zinc coatings, radiation resistant • Dealing in chemicals suitable for

• • Our portfolio spans across product categories coatings for nuclear power plants, readymix concrete, infrastructure and and price points catering to a wide variety of polyurethane paint for fighter aircraft building projects consumers and railway coaches

• • Eco friendly emulsion products certified by • One of the largest Indian players in Griha Council high-performance Protective Coatings

• • Low VOC products that is certified by National • Significant presence in General Test House (NTH) Industrial (Product Finish) and Packaging coatings

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Performance Snapshot

New Product Launches during the year 2022-23

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Expert Painter Program Performance

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77% 83% 57% 22% 2.2X
Growth Growth More Growth Growth
total registered New Painters in Avg Monthly in Per Painter
Active Painters
painters enrolled Point scanning Offtake
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Average Points Scanned increased from 35 Lacs to 43 Lacs in Q3 with all other KPIs showing positive growth

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9MFY23 : New Dealer performance

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12%
1080 29.96 CR
CONTRIBUTION
NEW DEALERS SALE TO NET SALE
428 14.45 4.54
334
318 10.90
2.54
4.61 1.38
Q1FY23 Q2FY23 Q3FY23 Q1FY23 Q2FY23 Q3FY23 Q1FY23 Q2FY23 Q3FY23
New Dealer Additions Sales (in Crores) from new dealers Yield per dealer (in lacs)
Rs. In Crs Rs. In Crs
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Marketing Initiatives

MARKETING SUPPORT

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• Schemes & Festival at Dealer stores

• Brand Signage & OOH Support

• Shade Tools & NPD Launch

• Painter Mega Meets & Painter Trainings

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Painter Schemes DBT On Tinted Products

2X Loyalty Points for Painters

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Top 50-100 Store

Shalimar Exclusive Store

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Dedicated Marketing Budget focussed on CS Dealers

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Decorative Paint Performance

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Historical Decorative Paint performance : Y-o-Y Value growth (in Cr) every quarter
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91% 23% 23% 39%
Gross
Revenue 84 87 90 261
Rs. In Crs
71 73
188
44
Q1FY22 Q1FY23 Q2FY22 Q2FY23 Q3FY22 Q3FY23 9MFY22 9MFY23
Volume 23% -2% 1% 6%
(KL)’000 6.675 7.360 7.182 7.009 7.098 20.955
19.779
5.410
Q1FY22 Q1FY23 Q2FY22 Q2FY23 Q3FY22 Q3FY23 9MFY22 9MFY23
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Industrial Performance

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Historical Industrial performance : Y-o-Y Value growth (in Cr) every quarter
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44% 47% 39% 45%
Gross
Revenue 39 47 50 136
Rs. In Crs
36
27 32 94
Q1FY22 Q1FY23 Q2FY22 Q2FY23 Q3FY22 Q3FY23 9MFY22 9MFY23
Volume 23% 31% 29% 27%
(KL)’000
2.595 3.052 3.069 8.716
2.118
2.334 2.386 6.838
Q1FY22 Q1FY23 Q2FY22 Q2FY23 Q3FY22 Q3FY23 9MFY22 9MFY23
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Decorative Paints: Strategy Going Ahead

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Focus on areas having significant presence

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Focus on smaller Tier 3 & 4 towns and rural area

Focus on deploying Premium emulsion machines in the market

Service improvementspecially supply

Expert Program

Focus on research & development of newer products

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Progress over last a year

 Cost Reduction:

• Cost saving due to optimization of water & solventbased paints

• Margin improvement plan is in place

• No extra material addition

 New Product Development:

• Newer products developed & formulations released to plants

 Vendor Development:

• Newer Raw material evaluated and approved

 Quality Upgradation:

• Quality of the formulations were improved

 Moving towards manufacturing excellence:

• Installation of new pipelines for eliminating flexible hose

• Improvement in the storage facility

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Positive outcome on financial performance

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Rs. In Crs
+33.8%
129.1
110.7
96.5
Q3FY22 Q2FY23 Q3FY23
REVENUE
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Improvement in Net Revenue

• Net Revenue growth of 34% v/s last year largely contributed by 36% growth in Industrial Segment and 12% in Decorative Segment

• Increase in the dealer network and number of depots across the country

• Increase in the number of tinting machines

• Brand Alliance with Aap ka Painter

• Focus on water-based products and increase of products in the water based umbrella

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0.4
-3.4
-3.6
Q3FY22 Q2FY23 Q3FY23
EBITDA
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• Launch of new products in waterproofing range

Improvement in EBITDA

• EBITDA is positive in the current quarter as against last year largely due to

• Reduction in input cost by 2.5%

• Procurement through reverse mechanism which has reduced material as well as freight cost

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Cost Trend

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76.0% 75.2% 73.5% 21.2
19.3
18.1
% to Net Sales Q3FY22 Q2FY23 Q3FY23 Rs. In Crs Q3FY22 Q2FY23 Q3FY23
13.6 6.1
12.8
11.0
4.1
3.6
Q3FY22 Q2FY23 Q3FY23 Q3FY22 Q2FY23 Q3FY23
Rs. In Crs Rs. In Crs
COGS
OTHER EXPENSE
INTEREST
EMPLOYEE COST
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360[o ] growth strategy: started yielding results

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Rs. In Crs EBITDA (Rs. Crs)
0.4
EBITDA
-3.5 -3.6
Q3 FY22 Q2 FY23 Q3 FY23
Inventory and
debtor days
Other Exp. (% to Revenue)
28.1%
Optimizing 19.2% 19.7%
Operating 17.6%
Efficiencies
FY20 FY21 FY22 9MFY23
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Inventory and
Debtors
(No. of days)
74 72 71
67
63 64
Q3FY22 Q2FY23 Q3FY23
Inventory Debtors
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Consolidated Profit & Loss Statement Q3 FY23

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Particulars (Rs. Crs) Q3FY23 Q3FY22 Q2FY23
Revenue from Operations 129.1 96.5 110.7
Other Income 1.0 2.6 1.2
Total Revenue 130.1 99.0 111.8
Cost of Materials Consumed 95.3 69.9 69.7
Purchase of Traded Goods 5.6 3.9 6.7
Changes in Inventories of Finished Goods and Work
-6.0 -0.5 6.9
in Progress
Gross Profit 35.2 25.7 28.5
GP % 27.0% 25.9% 25.5%
Employee Benefits Expense 13.6 11.0 12.8
Other Expenses 21.2 18.1 19.3
EBITDA 0.4 -3.5 -3.6
Depreciation and Amortisation Expense 3.0 3.4 3.1
EBIT -2.6 -6.8 -6.7
Finance Costs 3.6 6.1 4.1
- - -
Exceptional Items
PBT -6.2 -12.9 -10.8
- - -
Total Tax Expense
Profit for the year -6.2 -12.9 -10.8
EPS -0.86 -2.37 -1.49
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 Revenue:

• Company has reported revenue growth of 34% from previous year which is Q3FY22.

• During this quarter company has grown by 12% in Decorative segment and 36% in Industrial Segment on gross revenue from last year same quarter i.e., Q3 FY23.

• Company has onboarded 1080 new dealers and deployed more than 250 tinting machines during the year which has also contributed in the positive growth in the revenue.

• Company has also experienced a healthy change in mix of water based products and in specific emulsions portfolio

 Raw material cost :

• In the current quarter, the prices of key raw material has been stable which has resulted in the gross margins improvement by 2.5% from Q3FY22 and 1.8% from Q2FY23.

• As against previous quarter, there is a reduction in all the key raw materials by 15-20%

• Company is continuously working on improving its product mix within the segments, which will eventually help to reduce the raw material costs of the company.

• New formulations by R&D has helped the reduction in cost for 3 major categories of water-based paints

 Other Expenditure :

• Company has maintained the fixed cost at previous year level. However, in terms of percentage to sales, the fixed cost is lower by 3% on YoY scale.

 Finance Cost :

• During the quarter, finance cost has been reduced by Rs. 2.5 Crs as against last year mainly due to reduction in the borrowings.

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Thank You
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Company :

Investor Relations Advisors :

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Shalimar Paints Limited

CIN: L24222HR1902PLC065611

Mr. Mohit Kumar Donter – Chief Financial Officer

mohit.donter@shalimarpaints.com

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Orient Capital (a division of Link Group) Ms. Rasika Sawant: +91 95944 57518 rasika.sawant@linkintime.co.in

www.shalimarpaints.com