Grasim Industries Ltd. · NSE:GRASIM
Grasim Industries — Q2 FY2017 Earnings Presentation
32 slides from Grasim Industries's earnings presentation, Oct 28, 2016
Slide 1: Quarterly Performance Review Q2 2016-17
Quarterly Performance Review Quarter 2 : 2016-17 Mumbai, 28th October, 2016 Grasim Industries Limited Building, Consolidating, Growing
Slide 2: Contents
Contents Highlights 3-6 Financial Performance 7-8 Business Performance 9 – 14 Capex Plan 15 - 16 Business Outlook 17 - 18 Glossary VSF : Viscose Staple Fiber, MT : Metric Ton, TPA : Tons Per Annum, YoY: Year on Year Comparison, CY : Current Year, LY : Last Year, YTD : Year to Date, EBITDA
Slide 3: Indian Economy
Indian Economy India’s Q1 GDP growth at 7.1% Although lowest in last five quarters, still highest amongst the large economies Economic growth expected to pick up Good Monsoon to boost rural growth Urban consumption growth likely to accelerate with the implementation of 7th Pay Commission
Slide 4: Highlights – Quarter 2: VSF Business
Highlights – Quarter 2 VSF Business Global VSF prices remain firm Leading Global Player - Steady demand - High capacity utilisation & low inventory level in industry Sales Volume Revenue EBITDA 124K Tons ` 1,740 Cr. ` 371 Cr. Up 9% YoY Up 21% YoY Up 75% YoY ROAvCE 24% 25% 20% 14% 15% 10% 7% 5% FY15
Slide 5: Highlights – Quarter 2: Chemical Business
Highlights – Quarter 2 Chemical Business (Chlor Alkali, Chlorine Derivatives and Epoxy) Industry production level impacted in Q1 due to Largest water shortage, restored to normal level with onset Indian Player of monsoon Caustic Sales Volume Revenue EBITDA 204K Tons ` 920 Cr. ` 213 Cr. Up 8% YoY Up
Slide 6: Highlights – Quarter 2: Cement Business
Highlights – Quarter 2 Cement Business (UltraTech Cement) Market leader Low Cement demand due to widespread monsoon in India - Capacity utilisation for the industry at its lowest level Sales Volume Revenue EBITDA 11.6 Mn. Tons ` 5,772 Cr. ` 1,378 Cr. Up 1% YoY Down 2% YoY Up 16% YoY EBITDA / ton (`)
Slide 7: Financial Performance – Quarter 2
Financial Performance – Quarter 2 Standalone ` Cr. Revenue EBITDA Net Profit 50% 55% 17% 889 2,517 592 2,145 591 382 Q2FY16 Q2FY17 Q2FY16 Q2FY17 Q2FY16 Q2FY17 Consolidated Revenue EBITDA Net Profit 3% 29% 50% 8,387 2,098 846 8,166 1,626 562 Q2FY16 Q2FY17 Q2FY16 Q2FY17 Q2FY16 Q2FY17 Robust Growth in
Slide 8: Robust Financial Ratios
Robust Financial Ratios Standalone Consolidated ` Cr. 3/31/2016 9/30/2016 3/31/2016 9/30/2016 Debt:Equity (x) 0.12 0.05 0.35 0.26 Net Debt: Equity (x) 0.02 - 0.10 0.02 Net Debt / EBITDA 0.13 - 0.53 0.10 ROAvCE (%) 10.9 13.8 (Excluding CWIP) RONW (%) 9.7 11.8 1839 12500 10054 1603 1971 9222 8709 1096
Slide 9: Business Performance
Business Performance VSF Chemical Cement 9
Slide 10: International Fibre Price Trend
International Fibre Price Trend $/ Kg 2.3 2.15 2.1 1.9 1.7 1.72 1.5 1.3 1.1 0.9 0.89 0.7 Mar/15 May/15 Jul/15 Sep/15 Nov/15 Jan/16 Mar/16 May/16 Jul/16 Sep/16 VSF Cotton PSF VSF : Prices remained firm Steady demand, high capacity utilisation and low inventory levels Cotton : Sharp rise in Pric
Slide 11: VSF : Performance
VSF : Performance Revenue ( ` Cr.) EBITDA (` Cr.) Volume continues to remain strong, up 9% YoY EBITDA Margin 21% Operating at full capacity 75% 371 Domestic markets sales up by 19% 15% 21% Strong growth in specialty fiber 1,740 1,437 211 Realisation up 12% YoY Q2FY16 Q2FY17 Q2FY16 Q2FY17
Slide 12: VSF : Volume Drivers
VSF : Volume Drivers Q2FY17 Q2FY16 36% 31% 64% 69% Grey Specialty Grey Specialty Share of specialty fibre increased from 31% to 36% on higher volume Q2 FY17 Q2 FY16 29% 35% 71% 65% Domestic Export Domestic Export Increase in proportion of domestic sales from 65% to 71% on higher volume 12
Slide 13: Chemical : Performance
Chemical : Performance Increase in volume by 8% YoY Revenue ( ` Cr.) EBITDA (` Cr.) 11% EBITDA Margin Additional volume from Ganjam plant which was 26% acquired in Sep. 15 213 920 ECU realisation up by 2% YoY 830 23% 169 20% Sequentially lower with normalised production in Q2 FY16 Q2 FY17 th
Slide 14: Cement : Performance
Cement : Performance Volume up by 1% Revenue (` Cr.) EBITDA (` Cr.) Consistent rains impacted offtake EBITDA Margin (2%) 16% Increasing penetration in rural markets 23% 1,378 Decline in total operational cost by 7% 5,919 5,772 20% Energy cost down by 19% 1,186 Q2FY16 Q2FY17 Q2 FY16 Q2 FY17
Slide 15: Capex
Capex 15
Slide 16: Capex plan
Capex plan (` Cr.) Capex Cash Outflow Capex (Net of CWIP FY17 FY18 spent - as on Onward H1FY17 01-04-16) Standalone Vilayat Caustic Plant Brownfield expansion (144K TPA) 513 VSF : Water supply augmentation & usage reduction, Research & Development, Environment and Other 483 normal capex Chemical cap
Slide 17: Business Outlook & Scheme Update
Business Outlook & Scheme Update VSF VSF Business Business: Business outlook expected to remain stable Limited capacity addition leading to higher operating rates Short term variations likely in utilisation level and pricing Cotton stock expected to decline further in Season 16-17 with consu
Slide 18: Business Outlook & Scheme Update
Business Outlook & Scheme Update Cement Business Expected Cement demand growth drivers : Continuing Government infrastructure spending Good monsoon to augur well for revival of Rural Economy 7th pay commission disbursement Development of Smart Cities will lead to housing demand in T-II and
Slide 19: Thank You
» x | Thank You 19
Slide 20: Annexure - Financials
Grasim Industries Limited Annexure - Financials 20
Slide 21: Annexure
Annexure Consolidated Financial Performance Standalone Financial Performance Balance sheet Revenue & EBITDA Chart VSF Summary Chemical Summary Cement Summary Organisational Structure Plant Locations 21
Slide 22: Consolidated Financial Performance
Consolidated Financial Performance (` Cr.) Quarter 2 % Half Year % 2016-17 2015-16 Change 2016-17 2015-16 Change Net Sales & Op. Income 8,387 8,166 3 17,476 16,532 6 Other Income 312 206 52 512 339 51 EBITDA 2,098 1,626 29 4,312 3,254 33 EBITDA Margin (%) 24.1% 19.4% 24.0% 19.3% Finance Cost 167 188
Slide 23: Standalone Financial Performance
Standalone Financial Performance (` Cr.) Quarter 2 % Half Year % 2016-17 2015-16 Change 2016-17 2015-16 Change Net Sales & Op. Income 2,517 2,145 17 4,944 4,092 21 Other Income 330 231 43 388 266 46 EBITDA 889 591 50 1,475 915 61 EBITDA Margin (%) 31.2% 24.9% 27.7% 21.0% Finance Cost 16 40 (61) 39 8
Slide 24: Balance Sheet
Balance Sheet (` Cr.) Standalone Consolidated 30th Sep'16$$ 31stMar'16$ EQUITY & LIABILITIES 30th Sep'16$$ 31stMar'16$ 16,360 15,556 Net Worth 29,394 27,394 - - Minority Interest 9,158 8,730 875 1,839 Borrowings 10,054 12,500 611 519 Deferred Tax Liability (Net) 3,330 3,044 1,988 1,591 Liabilities &
Slide 25: Revenue Chart
Revenue Chart (` Cr.) Half Year % Quarter 2 % 2016-17 2015-16 Change 2016-17 2015-16 Change 3,394 2,691 26 Viscose Staple Fibre 1,740 1,437 21 1,823 1,605 14 Chemical 920 830 11 41 50 Others 21 25 (315) (254) Eliminations (Inter Segment) (163) (147) 4,944 4,092 21 Standalone Net Revenue 2,517 2,145
Slide 26: EBITDA – Chart
EBITDA – Chart (` Cr.) Half Year % Quarter 2 % 2016-17 2015-16 Change 2016-17 2015-16 Change 693 350 98 Viscose Staple Fibre 371 211 75 445 341 30 Chemical 213 169 26 337 223 Others 305 210 1,475 915 61 Standalone EBITDA 889 591 50 Subsidiaries 3,004 2,486 21 Cement 1,378 1,186 16 7 11 (40) Textiles
Slide 27: Viscose Staple Fibre : Summary
Viscose Staple Fibre : Summary Quarter 2 % Half Year % 2016-17 2015-16 Change 2016-17 2015-16 Change Capacity KTPA 125 125 - 250 250 - Production (in '000s) MT 127 121 5 241 215 12 Sales Volumes (in '000s) MT 124 114 9 245 216 13 Net Revenue ` Cr. 1,740 1,437 21 3,394 2,691 26 EBITDA ` Cr. 371 211 7
Slide 28: Chemical : Summary
Chemical : Summary Quarter 2 % Half Year % 2016-17 2015-16 Change 2016-17 2015-16 Change Capacity KTPA 210 186 13 420 373 13 Production (in '000s) MT 200 185 8 392 353 11 Sales Volumes (in '000s) MT 204 190 8 393 358 10 Net Revenue ` Cr. 920 830 11 1,823 1,605 14 EBITDA ` Cr. 213 169 26 445 341 30 E
Slide 29: Cement : Summary
Cement : Summary Quarter 2 % Half Year 2016-17 2015-16 Change 2016-17 2015-16 Grey Cement Capacity Mn. TPA 17.31 16.51 5 34.63 33.03 Production Mn. MT 11.18 11.45 (2) 24.66 24.30 Cement Sales Volumes $ Mn. MT 11.21 11.44 (2) 24.79 24.31 Clinker Sales Volumes Mn. MT 0.36 0.07 0.55 0.15 White Cement &
Slide 30: Grasim Group Structure
Grasim Group Structure Pulp & Fibre Chemical UltraTech Cement (60.24%) Others VSF VSF JV Pulp Overseas Caustic Epoxy Domestic Overseas 498K TPA China 70K TPA Pulp JVs 840K TPA 51K TPA 3 Mn. TPA, (UAE, Bangladesh, Sri Lanka) Nagda Grey Cement Grasim Nagda Birla Jingwei Harihar AV Group NB 270K TPA Bh
Slide 31: Plant Locations– Grasim & Its subsidiaries
Plant Locations– Grasim & Its subsidiaries Bathinda(G) Jhajjar Bhiwani Panipat Dadri T Kotputli Aligarh Jodhpur Patliputra P T Malanpur Renukoot Shambhupura C Jawad P Katni Sewagram Bharuch Durgapur(G) UltraTech Cement Plants Wanakbori F Jafrabad Vilayat C Rehla Dankuni`(G) F C Nagpur UltraTech Grin
Slide 32: Cautionary Statement
Cautionary Statement Statements in this “Presentation” describing the Company’s objectives, estimates, expectations or predictions may be “forward looking statements” within the meaning of applicable securities laws and regulations. Actual results could differ materially from those expressed or impl