Universal Cables Ltd. — Earnings Release 2020

Feb 7, 2020

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Universal Cables Limited Registered Office:

P.O. Birla Vikas, Satna – 485 005 (M.P.) India . Tel: (07672) 414000 F a x: (07672) 257131 E-Mail: headoffice@unistar.co.in website: www.unistar.co.in CIN No. L31300 M P1945PLC001114

Press Release (Q3-2019-20)

7[th] February, 2020

Source: Universal Cables Limited (UCL)

Universal Cables Limited, one of the flagship Companies of the MP Bi r la Group, today (7[th ] February, 2020), announced i ts financial results for the Third Quarter end e d 31[st] December, 2019.

Performance

Universal Cables Limited record e d Standalone Revenue from Operations of 395.55 Crores in the Third Quarter of this fiscal comp a red to 367.00 Crores in the Third Quarter of t h e previous fiscal, registering an increase of 7.78 %. EBIDTA during the Third Quarter of t he year stood at 44.64 Crores as compared to 41.58 Crores in corresponding quarter of the pr e vious year. In the current quarter, the Company p o sted profit before tax (PBT) of 18.10 Crores as compared to 21.01 Crores in the correspond i ng quarter of the previous year. Profit after t a x (PAT) stood at 13.89 Crores in the quarter un d er review as compared to 13.66 Crores in t he corresponding quarter of the previous year.

During the nine months ended 31[st] December 2019, the Company achiev e d Revenue from Operations of 1197.15 Crores, E BIDTA of 139.66 Crores, PBT of 67.41 Crores and PAT of 52.71 Crores.

Business Review

During the 3[rd] Quarter of this fin a ncial year, the general decline in the economi c activity persisted which in effect has led to market contraction, slowdown in the manufacturing sector and a decline in the spending in the infrastruct u ral segments. Nevertheless, within the curren t environment, the Company posted a satisfactory p erformance despite its major dependency on t he infrastructural sector. The Company expects to continue to move forward with an ord e r book of 1022 Crores in hand for execution in th e 4[th] Quarter and beyond.

The Company having deep mark e t penetration relies more on direct sales to its Customers rather than routing sales through dealers and distributors. This has given the Compa n y direct customer access, building a stronger buye r -seller relationship and improved bottom-line. Nevertheless, the Company maintains a lean dealer network and stock points across the country m ainly to meet offthe-shelf delivery requirements o f the Customers.

The phase-wise CAPEX for de- b ottlenecking the capacity has yielded higher e fficiency, energy conservation and reduction in WI P , thereby lowering the cost of production.

The sales of EHV cables which forms the backbone of the EPC business portfolio increased by 26% over the nine months period of the previous financial year. In a similar comparison, the other key products, HV/MV and LV cables have increased by 29% and 36% respectively. This has pushed the overall growth in Revenue from Operation by 19% over the nine months period as compared to the corresponding period of the previous year.

Perspective

The Company views the present economic downturn as a temporary phenomenon and expects improvement in the investment and consumption climate. The Company also views that the market contraction is not a cyclical trend but lies on the structural issues of the economy. With the Government making important structural changes in the economy from time-to-time, the possibility of a prolonged economic depression seems avoidable. The Company feels that considering the National agenda for the overall economic development and growth of the country the business environment should improve.

The Company with its strategic investment in VCV technology for EHV cables is speedily forging ahead in the coveted 400kV emerging market and is expecting to materialise business within this financial year and commercialisation by the ensuing financial year. The Company also foresees a stronger growth in the HV/MV and LV products and it is considering capacity expansion in these product lines. The Company has the history of pioneering new frontier products in the country, in keeping with this tradition, the Company is engaged in the development of HV-DC cables for future mega power transmission projects for which the manufacturing and testing infrastructure has been installed.