Tilaknagar Industries Ltd — Investor Presentation 2021

Sep 2, 2021

CIN: L15420PN1933PLC133303

Registered Office: P.O. Tilaknagar, Tal. Shrirampur, Dist. Ahmednagar, Maharashtra-413 720 Corporate Office: 3rd Floor, Industrial Assurance Building, Churchgate, Mumbai, Maharashtra-400 020 Email: investor@tilind.com, Website: www.tilind.com, Phone: +91 22 22831716/18, Fax: +91 22 22046904

September 2, 2021

BSE Limited	National Stock Exchange of India Ltd
The Corporate Relationship Dept,	Exchange Plaza,
1st Floor, Phiroze Jeejeebhoy Towers,	Bandra-Kurla Complex,
Dalal Street,	Bandra (East),
Mumbai-400 001.	Mumbai-400 051.
Scrip Code : 507205	Scrip Code : TI

Dear Sir/s,

Sub: Investor Presentation

Pursuant to Regulation 30 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (the "Listing Regulations"), please find enclosed herewith the Investor Presentation.

The same is available on our website www.tilind.com.

We request you to take the above information on record.

Thanking you,

Yours faithfully, For Tilaknagar Industries Limited

Amit Dahanukar Chairman & Managing Director (DIN: 00305636) AMIT DAHANUKAR Digitally signed by AMIT DAHANUKAR Date: 2021.09.02 13:24:33 +05'30'

Tilaknagar Industries Ltd.

Investor Presentation September 2021

Meet the Passionate Experts

From our founding years, our story is one of obsession with customer delight.

Created by Babasaheb Dahanukar in 1933, Tilaknagar is the culmination of years of experience and knowledge coming together to create the ultimate liquor experience.

We channel this passion into a clear purpose

To deliver rich experiences for consumers by blending decades of experience with continuous innovation.

TILAKNAGAR AT A GLANCE

About the Company

Largest premium brandy manufacturer in India with presence across all segments of IMFL

Manufacturing units across 11 states Owned: 4 units Tie-up: 12 units

Share of Brandy as %

Volumes (in cases) sold

Share of sales to South India as % of total volumes

Sales through:

• State corporations
• Distributors
• Direct Sales

* All data is for FY21

We sell millions of cases across India

MANSION HOUSE

• Mansion House is a millionaire brand (more than 4.4 mn cases sold in FY21)
• Mansion House is the highest selling premium brandy in India
• Manufactured across all units
• A brand with a high brand loyalty driving repeat purchases

COURRIER NAPOLEON

• Super premium brandy
• Fast approaching millionaire brand status (0.6 mn cases sold in FY21)

Brandy & South India – Playing to our strengths

Market leadership in the 2nd largest IMFL segment in the largest alcohol consuming region of India

BRANDY CONSUMPTION MOVING TOWARDS BRAND LOYALTY AND PREMIUMIZATION

Brandy and South India have both seen an increasing trend in volume sales for the Company Brandy volume share: 82% (FY17) vs. 92% (FY21) South India volume share: 79% (FY17) vs. 86% (FY21)

8

India's undisputed Brandy king

Our manufacturing and consumption footprint

ROADMAP AND TEAM

Our journey

At the cusp of a turnaround

12

Business Strategic Roadmap

• Drive market leadership in brandy - Mansion House sells more than 4 mn cases annually
• Brandy presence across premium price-points – MHB, CNB Green, CNB Blue, CNB Gold

• Further growth in existing markets
• Expansion in fast-growing new markets across India
• Bottling arrangements to drive growth

• Impact of operating leverage
• Strengthen balance sheet
• Debt reduced from Rs. 1,252 crs as of Mar-19 to Rs. 627 crs as of Mar-21 (a)(b)

(a) Debt adjusted for EARC balance debt of Rs. 145 crs which would be waived off in FY24 on following the repayment schedule

(b) Debt adjusted for EARC balance debt of Rs. 34 crs which has been converted to equity in Apr-21

14

Experienced and energized team at the helm

Amit Dahanukar, Chairman & Managing Director

45 years of age, he has over 20 years of industry experience CMD since 2006, he graduated in electrical engineering with a masters degree in engineering management from Stanford University, U.S.A

Ajit Sirsat, Chief Financial Officer

• Has over 26 years of experience in Finance and Accounts across industries
• He is a Chartered Accountant and Cost & Management Accountant

Varadarajan Srinivasaraghavan, General Manager – Manufacturing

• Has over 25 years of industry experience
• He is a B. Tech (Mechanical) and looks at overall manufacturing and procurement at corporate level

Ameya Deshpande, Head – Corporate Development & Strategy

Has been an Investment Banker with Deutsche Bank and BNP Paribas and was also cofounder of a food-travel start-up called Authenticook

15

He has recently joined the Company in July 2021

FINANCIALS

Debt restructuring update

1,252 crs 627 crs Mar-19 Mar-21 336 28 81 182 EARC Term Loan Cash Credit Other Debt Trade Deposits (Unsecured) EARC debt is at 9% p.a. EARC balance debt of Rs. 145 crs will be waived off on satisfactory repayment 70% of EARC Term Loan is repayable after 2 years Debt as of 31-Mar-21 (a)(b) (a) Debt adjusted for EARC balance debt of Rs. 145 crs which would be waived off in FY24 on following the repayment schedule

(b) Debt adjusted for EARC balance debt of Rs. 34 crs which has been converted to equity in Apr-21

Settlements reached with nearly all lenders	EARC debt repayment schedule
LenderFull settlementachieved
SBI
Bank of India
IDBI Bank
Standard Chartered Bank
DCBBank

(Rs. Crs)	< 1 yr	1 –2 yrs	2 –3 yrs
EARC Trust SC233	5.60	6.80	15.68
EARC Trust SC241	28.00	34.00	188.97
EARC Trust SC269	11.20	13.60	32.38
Total	44.80	54.40	237.02

Improving business fundamentals

Premiumisation strategy to enhance margins and cash flows

Focus on margins and cashflows

Most of write-offs impacting EBITDA have been undertaken

2,934 3,417 3,006 2,714 51% 52% 46% 49% FY18 FY19 FY20 FY21

EBITDA (Rs. Mn) and EBITDA Margin (%) Finance Cost (Rs. Mn) and as % of Net Revenues

Rs. Mn

* Net revenue is pertaining to IMFL sales only and excludes revenues from sale of spirits and packing material

Revenues for FY21 predominantly impacted due to fall in volumes on account of Covid-19 lockdown Strong close to the year H2 FY20 vs. H2 FY21: 3.16 mn vs. 3.41 mn cases 8% volume growth Y-o-Y – higher than industry growth

Financial Summary – Income Statement

(Rs. Mn)	FY18	FY19	FY20	FY21
Gross Revenue	12,916	15,255	14,835	14,184
Less: Excise Duty	7,138	8,642	8,306	8,696
Net Revenue	5,778	6,613	6,528	5,488
Gross Profit	2,934	3,417	3,006	2,714
Gross Margin %	51%	52%	46%	49%
Employee Costs	220	333	296	252
As% of Net Revenue	3.8%	5.0%	4.5%	4.6%
Other Expenses	2,686	2,522	3,230	1,921
As % of Net Revenue	46%	38%	49%	35%
EBITDA	29	561	-519	541
EBITDA Margin %	0%	8%	-8%	10%
Depreciation &Amortisation	373	367	330	331
Finance Costs	1,519	1,842	1,289	710
PAT	-1,511	-1,595	2,697	-384
PAT Margin %	-25%	-24%	40%	-7%

Q1 FY22 Result Update

Management commentary on Q1 FY22 results

From the desk of Mr. Amit Dahanukar, Chairman & Managing Director

• While the last couple of years were invested in restructuring our debt, the next couple of years will be invested towards building the business to a scale which enables us to generate cash-flows which will help us in reinvesting for growth as well as comfortably servicing and reducing our debt
• A favourable product-geography mix has enabled us to increase our gross margins from 44.4% in Q4 FY21 to 56% in Q1 FY22; also leading to higher NSRs
• EBITDA saw a 128% increase in Q1 FY22 compared to Q4 FY21 on the back of higher NSRs and operating leverage
• EBITDA margins stood at 17% for Q1 FY22 compared to 10% for FY21
• We achieved a positive PAT for the first time in many years and expect the upward trend in profitability to continue
• Finance costs were down 20% in Q1 FY22 compared to Q4 FY21 due to reduction in debt levels
• We have been servicing the Edelweiss ARC debt on-time and have also reached one-time settlements with all of our other lenders
• While business was impacted starting 2nd week of April, we have been seeing significant improvement in volumes from mid-June onwards

Q1 FY22 Volumes

Approaching normal levels of business; July and August touches more than 6 lacs cases

Q1 FY22 vs. Q4 FY21 – On the path to complete recovery

Q1 FY22 vs. Q1 FY21 – 82% growth Y-o-Y

Strong Q1 FY22 performance…

…Despite impact of state-level lockdowns across the country; significant margin expansion compared to a normal like-to-like quarter i.e. Q1 FY20

	Q1 FY22	Q1 FY21	Y-o-Ygrowth %	Q1 FY20	Q1 FY22 vsQ1 FY20growth %	Q4 FY21	Q-o-Qgrowth %
Volumes (in lacs):
Brandy volumes	10.4	5.4	91%	12.1	-14%	15.8	-34%
Others	0.7	0.5	27%	1.5	-54%	1.4	-51%
Total volumes	11.1	6.0	86%	13.6	-18%	17.2	-36%
Financialperformance (Rs. Mn):
Revenuefrom operations	1,353.0	563.8	140%	1,350.6	0.2%	1,923.4	-30%
Gross profit	759.5	319.0	138%	649.0	17%	854.3	-11%
Gross margin(%)	56.1%	56.6%	-44 bps	48.1%	808 bps	44.4%	1,171 bps
EBITDA	233.7	24.7	846%	161.6	45%	102.4	128%
EBITDA margin (%)	17.3%	4.4%	1,289 bps	12.0%	531 bps	5.3%	1,195 bps
EBIT	151.8	-58.4	NM	79.3	91%	21.3	611%
Finance Costs	150.1	172.4	-13%	462.2	-68%	187.1	-20%
Profit / (Loss)after tax	3.7	-228	NM	-369.6	NM	-90.2	NM

This presentation may include statements which may constitute forward-looking statements including, but without limitation, statements relating to the implementation of strategic initiatives, and other statements relating to Tilaknagar Industries' future business developments and economic performance. Forward looking statements are based on certain assumptions and expectations of future events. The Company cannot guarantee that these assumptions and expectations are accurate or will be realized. The actual results, performance or achievements, could thus differ materially from those projected in any such forward-looking statements.

The information and opinions contained in this presentation are current. The Company undertakes no obligation to update or revise any information or the opinions expressed in this presentation as a result of new information, future events or otherwise. Any opinions or information expressed in this presentation are subject to change without notice.

For further information, please contact: Ameya Deshpande Head – Corporate Development & Strategy Email: adeshpande@tilind.com