You are on page 1of 98

Presentation

to
Analysts

May 7, 2013

No of main slides: 85 Time: 30 minutes

Contents

General Overview

1-21

Financial Overview

22-

Business Overview

57-104

5 billion  Health. Chemicals. Education. Engineering  Group sales US$1. Culture 1|85 .Lalbhai Group  Commenced manufacturing activities in 1908  Textiles.

2|85 Shri Kasturbhai Lalbhai .

Reserve Bank of India .3|85 Founder Director.

Mumbai . Indian Institute of Technology.4|85 Founder Chairman.

Ahmedabad 5|85 .Founder Board Member Indian Institute of Management.

6|85 Founder Director. ICICI .

generate employment.Atul Ltd  Founded in 1947 by Kasturbhai Lalbhai  Manufacturing and marketing of chemicals  Create wealth. be self reliant 7|85 .

A moment of historic significance 8|85 .

Purpose We are a conglomerate committed to significantly enhance value for all our stakeholders by  fostering a spirit of continuous learning and innovation  using science and technology in a responsible way  providing high quality products and services and becoming the most preferred supplier  seeking sustained and dynamic growth and securing long-term success  having people who practice values and high standards of behaviour  taking care of the surrounding environment and  improving the quality of life in the communities we operate in 9|85 .

Eventful 2012-13 Transforming economy and ecology of arid region Inauguration of ARDP facility by Hon’ble Chief Minister of Rajasthan. Shri Ashok Gehlot 10|85 .

Shri Narendra Modi .Eventful 2012-13 Protecting environment 11|85 Inauguration of AR p-C plant by Hon’ble Chief Minister of Gujarat.

Eventful 2012-13 Building partnership 12|85 Inauguration of Rudolf Atul Chemicals Ltd by Padma Vibhushan Dr M. Sharma .M.

Sharma 13|85 .M.Eventful 2012-13 Fostering innovation Inauguration of PI R&D by Padma Vibhushan Dr M.

5 years) Completion of labour settlement-Ankleshwar site (6 years) 14|85 Sep 12 Oct 12 .3’-DDS plant Commissioning of BLR plant Jun 12 Jun 12 Sep 12 Sep 12 Completion of labour settlement-Valsad site (4.4-DCP plant Commissioning of 3.Eventful 2012-13 Commissioning of Anisole plant – phase 1 Commissioning of 2.

Eventful 2012-13 Enhancing capability Information Week Silver EDGE 15|85 IDG CIO 100 .

Eventful 2012-13 Institutionalising processes Shram Ratna Award Government of Gujarat 16|85 HR Leadership Award World HR Congress .

Eventful 2012-13 ` cr KIs Yield RMC Solvent Reduction Quality No 32 49 36 13 Impact 8 7 2 0 Utilities Products from EEW Effluent Reduction Time cycle Batch size Productivity Total 17|85 46 2 19 26 14 11 248 4 1 1 6 1 1 31 .

Revenues Period 1997-2002 CAGR 9% 12% 15% ` cr 1964 2000 2002-2007 2007-2012 1746 1508 1250 998 1159 1168 500 2007-08 18|85 2008-09 2009-10 2010-11 2011-12 2012-13 .

Profit before tax (from operations) Period 1997-2002 CAGR 15% 0% 40% ` cr 200 165 130 95 60 51 2002-2007 2007-2012 187 129 116 80 35 25 2007-08 19|85 2008-09 2009-10 2010-11 2011-12 2012-13 .

351 in 2012 250 0 2000-01 2002-03 2004-05 2006-07 2008-09 2010-11 2012-13 Source : Capitaline 20|85 .06.Share price movement ` 500 CAGR 33% ` 10.000 invested in 2000 has given ` 3.

Industries Served Aerospace Agriculture Automobile Construction Flavour & Fragrance Paint & Coatings Personal Care Pharmaceutical Textile 21|85 .

Financial Performance .

Financials 2012-13 ` cr 12-13 A Sales Operating & other income Total revenue Material consumed Employee benefit expenses 1964 56 2020 1143 128 11-12 A 1746 46 1792 1060 117 Inc | (dec) % CY vs PY 12 22 13 8 9 Other expenses Exchange (gain) | loss EBIDTA EBIDTA % Interest Interest AS-16 PBDT Depreciation PBT before exceptional income Exceptional income PBT PAT RoCE % 483 3 269 14 29 4 233 49 184 5 192 136 21 400 (12) 203 12 31 12 172 44 128 6 122 88 17 21 33 6 35 11 43 (29) 57 55 - 22|85 .

Quarterly sales ` cr 600 550 500 450 404 400 496 447 537 491 444 440 451 350 Q1 2011-12 23|85 Q2 Q3 2012-13 Q4 .

044 600 11% 822 810 840 400 200 939 10% 5% 0 2008-09 2009-10 2010-11 2011-12 2012-13 Average capital employed # # Excluding capital work-in-progress 0% Return on average capital employed % # * * Excluding exceptional income| expenses 24|85 .Return on capital employed ` cr 1200 25% 21% 1000 800 18% 13% 17% 20% 15% 1.

000 2008-09 2009-10 Employees 2010-11 2011-12 2012-13 0.40 2.73 2.42 0.534 2.Turnover per employee 2.46 0.20 2.563 2.60 0.00 2.200 0.20 Turnover per employee 25|85 .800 2.746 2.64 0.600 Headcount ` cr 0.737 1.60 2.400 0.703 1.80 0.

Revenues ` cr 2000 1746 Last 10 years CAGR: 13% 1508 1964 1250 817 578 568 500 682 895 998 1168 1159 Last 5 years CAGR: 15% 26|85 .

Profit Before Tax (from operations) ` cr 195 Last 10 years CAGR: 18% 129 116 187 100 36 5 7 35 51 80 26 Last 5 years CAGR: 40% 19 20 27|85 .

Comparative Profitability ` cr Particulars Sales EBIDTA from operations before exchange diff 09-10 A 1168 152 10-11 A 1508 203 11-12 A 1746 215 12-13 A 1964 266 EBIDTA from operations before exchange diff Exchange difference EBIDTA after exchange diff EBIDTA from operations before exchange diff Non recurring income | (expense) PBT PAT RoCE % 13% (9) 142 12% 80 53 13 13% (9) 194 13% 10 139 96 18 12% (12) 203 12% 6 122 88 17 14% 3 269 14% 5 192 136 21 28|85 .

70 1.60 Interest coverage DSC Current 8.13 2.94 1.3% EPS `45.47 2011-12 0.Ratios Particulars Debt|equity 2012-13 0.92 1.4% 4.70 29|85 .69 `29.

Working Capital Management .

Working Capital NoDs Particulars Inventories Debtors Other current assets Gross Working Capital Current liabilities Net Working Capital Mar 13 56 62 23 141 67 74 Mar 12 58 68 20 146 74 72 Inc | (dec) (2) (6) 3 (5) (7) 2 30|85 .

Working Capital ` cr Particulars Inventories Debtors Other current assets Gross Working Capital Current liabilities Net Working Capital Mar 13 308 361 123 792 363 429 Mar 12 295 368 104 767 375 392 Inc|(Dec) 13 (7) 19 25 (12) 37 31|85 .

Cash Flow and Borrowings .

Cash Flow from Operations ` cr 2012-13 Operating profit * Inventories Trade & other receivables Creditors and other payables Cash generation from operations Tax payments 262 (13) (22) (6) 221 53 2011-12 194 (31) (80) 76 159 38 Net cash flow from operating activities * before WC changes and exchange difference on FCL 168 121 32|85 .

Fund Flow ` cr Sources EBIDTA Increase | (decrease) in borrowing Exchange rate difference Exceptional income Total 2012-13 266 (25) 3 5 249 2011-12 215 60 (12) 7 270 33|85 .

Fund Flow ` cr Uses 2012-13 A 2011-12 A Interest and finance charges (net) Purchase of fixed assets and capital advances Working capital increase Dividend payments Direct taxes 33 104 37 16 56 43 107 18 16 34 Investment in group companies Changes in non-current assets Total 34|85 4 (1) 249 42 19 270 .

Position of borrowings ` cr Mar 11 Mar 12 Mar 13 400 350 Rupee 202 233 262 300 Foreign Currency 113 142 88 250 317 375 350 Total 315 375 350 250 Mar-11 Mar-12 Mar-13 Long-term 156 183 196 200 159 150 100 Mar-11 Long-term 192 183 196 154 Mar-12 Mar-13 Short-term 159 192 154 156 Total 315 375 350 Short-term 35|85 .

23 0.60 0.47 0.00 3.50 500 369 349 400 ` cr 300 2.00 1.92 368 295 315 1.00 0.93 0.50 1.00 2.85 1.50 428 2.56 0.80 1.50 05-06 06-07 07-08 08-09 09-10 10-11 11-12 12-13 375 350 3.60 0.86 0 Debt Debt to equity DSCR 36|85 .28 1.Borrowings 600 4.35 0.94 1.99 0.61 200 100 0.74 0.

7 1.0 6.4 3.Interest to Sales 10.2 2.0 10 8 6 8.5 2.3 3.2 3.4 37|85 % 4 2 0 4.3 3.7 3.4 1.7 00-01 01-02 02-03 03-04 04-05 05-06 06-07 07-08 08-09 09-10 10-11 11-12 12-13 .

Performance and Other Chemicals Aromatics .

38|85 . offering its customers in Personal Care and other chosen industries high quality products and services in a cost effective manner.Purpose AR Division will be a world-class business.

User Industries
 Personal Care  Pharmaceutical  Flavors & Fragrance (F&F)  Dyestuff  Paper

No of Customers 39|85

~350

Key Products
Product Group Market Share (2012-13) p-Cresol 24% China (6) Competition

p-AA

51%

Europe (1), India (1)

p-AAl

65%

India (2)

p-Cd

39%

China (1)

40|85

Financials
` cr

Particulars

2010-11 A

2011-12 A

2012-13 A

Sales

349

469

658

No of people

197

226

234

41|85

Sales ` cr 670 658 485 469 349 300 10-11 11-12 12-13 40% growth over previous year 42|85 .

Way forward .Key Actions  Maintain cost and volume leadership in existing products  Enter into value added downstream products  Explore related opportunities in Personal Care and F&F 43|85 .

Risks  Chinese competition mainly in p-C and p-AA  Non compliance to REACH regulations 44|85 .

Performance and Other Chemicals Bulk Intermediates .

Purpose BI Division will supply bulk chemicals to other Divisions in a cost effective manner and grow in speciality chemicals and intermediates. 45|85 .

User Industries  Tyre and Rubber  Dyestuff  Paper  Pharmaceutical No of Customers 264 46|85 .

China (8) 2% global CSA 14% domestic India (6) Oleum 65%. SO3.Key Products Product Group Market Share (2012-13) Competition Resorcinol 32% domestic Japan (2). Caustic Soda Captive consumption 47|85 . USA (1).

Financials ` cr Particulars 2010-11 A 2011-12 A 2012-13 A Sales 98 108 123 No of people 258 254 241 48|85 .

Sales ` cr 150 123 100 98 108 50 0 10-11 11-12 12-13 15% growth over previous year 49|85 .

Key Actions  Expand Resorcinol capacity  Enter into new intermediates – 3  Introduce products based on Hydrogen 50|85 .Way forward .

Risks  60% of the Division’s business is commodity based and driven by highly uncertain trends  Too many new players making business unviable  Increasing Chinese imports 51|85 .

Performance and Other Chemicals Colors .

It will manufacture in a responsible way and compete in the market place on the basis of service. foods and electronics.Purpose CO Division aims to be a reliable global supplier of colorants required for different facets of human life. personal care. pharmaceutical. Its products will find applications in industries such as textile. packaging. paint and coatings. quality and cost and continuously improve processes so as to deliver better value. 52|85 . paper.

User Industries Product Group Textile dyes Paper dyes HP pigments User Industries Textile Paper Paint and Coatings No of Products 550 No of Customers 1350 2/5 53|85 .

India (1) Reactive dyes Sulphur Black 1.Key Products Product Group Vat dyes Market Share (2012-13) 12% Competition Europe (1).2% 8% Europe (2). China (4).4% Europe (3) 54|85 . India (8-10) Europe(1). China (3) HP pigments 2.

Financials ` cr Particulars 2010-11 A 2011-12 A 2012-13 A Sales 325 342 330 No of people 950 941 885 55|85 .

Sales ` cr 350 325 342 330 300 250 10-11 11-12 12-13 56|85 .

Key Actions  Increase Vat dyes global market share through M Dohmen .Atul group  Capacity expansion of key Vat dyes  Increase Reactive dyes market share with specialities  Business growth through new High Performance Pigments and Digital Printing Inks  Multiply business in Sulphur Black and grow in Denim segment  Expand synergistic business – Textile Chemicals through Rudolf Atul  Reduce fixed cost through restructuring 57|85 .Way forward .

Risks  Reduced demand for niche products  Increased presence of SMEs in specialties on a global level  Limited product portfolio in High Performance Pigments  Minimal exposure to new synergistic business segments 58|85 .

Life Science Chemicals Crop Protection .

Purpose  We. Crop Protection Division. are in the business of servicing the growing needs of food and fiber  We leverage our competency in chemistry and provide farm solutions to create lush yields  We strive for building relationship with farmers across the globe 59|85 .

User Industries User Industry No of products No of customers Exports Brand Bulk Agriculture 59 1945 150 1700 95 CP brands are available across > 25000 retail outlets 60|85 .

4 D group 12% USA (1).Key Products Market Share (2012-13) Product Group Competition 2. India (7) Indoxacarb 7% USA (1). India (1) 61|85 . South America (1). China (3). Europe (1). Australia (1).

Financials ` cr Particulars 2010-11 A 2011-12 A 2012-13 A Sales 306 342 387 No of people 364 391 381 62|85 .

Sales ` cr 400 387 342 325 306 250 10-11 11-12 12-13 13% growth over previous year 63|85 .

Brands 64|85 .

Way forward .Key Actions  Introduce new products coming off patent  Expand herbicide capacity  Expand brand business 65|85 .

Risks  Business is dependent on monsoon | weather and pest attack  Low price competitors from China  Competition from new entrants and low priced suppliers in domestic herbicide business  Patent and data protection – India now is a signatory to IPR  Entry of international generics companies in India  Increased usage of GM crops 66|85 .

Life Science Chemicals Pharmaceuticals and Intermediates .

67|85 .Purpose PI Division will contribute to the wellness of mankind by catering to the growing needs of Pharmaceutical Industry. It will supply pharma intermediates and APIs in a cost effective manner using novel technologies.

Polymers. Aerospace. Electronics.User Industries Product Group Pharmaceutical Intermediate and APIs Phosgenated Chemicals User Industries Pharma Pharma. Crop Protection Pharma. Paper Sulfones No of Products No of Customers 68|85 40 100 . Polymers.

Japan (3). India (3). China (several companies) Phosgenated intermediates <1% China (5). Japan (2) 69|85 . India (1) Sulfones (DDS) 45% China (5). Japan. Europe (4).Key Products Product Group Market Share (2012-13) Competition Pharmaceutical Intermediates and APIs <1% USA. Europe. India. USA (1). Europe (1).

Financials ` cr Particulars 2010-11 A 2011-12 A 2012-13 A Sales 95 106 114 No of people 207 215 231 70|85 .

Sales 120 114 ` cr 106 95 90 10-11 11-12 12-13 10% growth over previous year 71|85 .

 Push sales in Japan & Europe  Growth through custom synthesis and contract manufacturing  Inorganic growth.Debottlenecking & Process Intensification.Key Actions  Sustainable Development approach  Expand capacity.acquisition 72|85 . Phosgenated & Pharmaceutical intermediates  Improve production. Phosgene.Way forward .Sulfones.

Risks  Forex fluctuation (70% exports)  New regulatory requirements in USA (GDUFA) and Europe 73|85 .

Performance and Other Chemicals Polymers .

Furniture. Composites. 74|85 . Paint and Coatings and Civil industries across the world with bonding and coating solutions in a cost effective manner.Purpose PO Division will offer best in class products and services to Automotive. Footwear.

User Industries Product Group Epoxy User Industries Paint & Coatings Civil Power Transmission Wind energy Defence Automotive Aerospace No of Products No of Direct Customers 75|85 300 500 .

User Industries Product Group Brands User Industries Footwear Handicrafts Civil Jewelry Automotives Furniture Engineering Art and Craft No of Brands No of Distributors 76|85 24 565 .

Key Products Product Group Market Share (2012-13) Domestic 18% Competition Epoxy USA (1). China (2). Fareast (3). India (1) Brands 10% India (7) 77|85 .

Financials ` cr Particulars 2010-11 A 2011-12 A 2012-13 A Sales 364 406 386 No of people 245 253 271 78|85 .

Sales ` cr 410 364 406 386 305 200 10-11 11-12 12-13 79|85 .

Brands 80|85 .

Polygrip 81|85 .

WD-40

82|85

Atul-Elkay

83|85

Way forward – Key Actions

 Increase sale of high margin products  Diversify and expand product portfolio  Add new business verticals of strategic importance

 Expand brand business
 Reduce cost and improve working capital cycle  Grow through Inorganic and Organic route

84|85

Risks  Price and margin sensitive business  Growth depends on Infrastructure development  Limited ability to pass the price increases 85|85 .

Thank You .