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February 2016

INVESTOR PRESENTATION

FINOLEX INDUSTRIES LIMITED

Largest backward
integrated pipe and
fittings manufacturer
in India with
250,000 MT p.a.
production capacity

One of the largest PVC


resin manufacturer
in India with
272,000 MT p.a.
production capacity

43 MW power plant
for captive
consumption in
Ratnagiri

Pan India distribution network through wide network of dealers, sub-dealers and retail outlets 16,000+ touch points

Leading brand in
Indian PVC pipe
and fittings

Overview

PVC resin
Plant at
Ratnagiri

PVC resin
storage
section

Storage
tanks
for raw
material

Extruder
lines

Company at a glance

Storage
area for
PVC
fittings

PVC pipe
plant,
Masar,
Gujarat

Company at a glance

Storage
area for
PVC
fittings

Extruders
at the
plant

PVC Pipe Manufacturing Unit


Urse, Pune, Maharashtra

PVC Resin, PVC Pipe Manufacturing Unit &


Captive Power plant at
Ratnagiri, Maharashtra

1,30,000 sq.ft. warehouse facility exclusively for


PVC Fittings at Chinchwad, Pune,
Maharashtra.

Over 600 dealers and 16,000+ retail touch points across the length and breadth of the India

Corporate Office: Chinchwad, Maharashtra


Warehouse : Chinchwad, Maharashtra

PVC Pipe Manufacturing Unit : Masar, Gujarat

Pan India Reach

Margins improvement
initiatives are
underway, however,
raw material prices
movement does
impact operating
margins in PVC resin
segment

Market wise sales are


distributed between
Agriculture (70%) and
Non-agriculture (30%).
Non-agriculture is
mainly construction

Operating under cash-n-carry model

Key cost components EDC, Ethylene and VCM


are key raw materials
for PVC production
mainly imported from
middle east

Key revenue driver


mainly PVC pipes and
fittings segment, with
steadily increasing inhouse consumption of
the PVC resin

Business Model

FIL 250,000 MT p.a.


25% share in organised
market

PVC Pipe Addressable Market

Value chain

CASH-N-CARRY
Cash-n-carry model to keep the balance
sheet light

MARGIN IMPROVEMENT
Increase sales of higher margin products
viz. fittings, column pipes, etc. Scale up
share of fittings in sales mix to over 10%

Key Strategies

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BRANDING
Growing brand and quality consciousness
amongst consumer

CAPACITY EXPANSION
Increase installed capacities of PVC pipes
and fittings by 30,000 MT p.a. till FY17E with
a capex at INR 300 mn p.a

Governments focus on
increasing irrigation in
non rain-fed areas
through
PMKSY
(allocation of INR 500
bn) is expected to
increase demand for
PVC pipes and keep
the industry growth
strong over the next 5
years

Opportunity

Governments
Scheme

At 157.35 mn hectares,
India holds one of the
largest agricultural land
in the world. The
PMKSY
scheme
assumes importance as
less than 50% of
agricultural land in India
is under irrigation

Government policy initiatives Agriculture sector

Measures like unified


agricultural market, INR
8.5 tn target for farm
loans and investment in
rural infrastructure to
benefit the company

Farm Loans

State Govt. declared


drought in Maharashtra
in Oct15. An estimated
INR 1.35 tn will be
needed in the next 5
years to fight the
drought. Maharashtra
State Govt. has started
Jalayukta
Shivar
which covers localised,
smaller, & need-based
water
management
programmes

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Housing for All by 2022


to provide 20 million
houses in urban areas
and 40 million houses in
rural areas, in turn
generate fresh demand
for pipes

Initiatives such as Smart


Cities will increase the
demand
for
the
companys products in
the years to come

Swachh Bharat Mission


(SBM) is flagship
programme of the
government aimed to
stop open defecation
through construction of
individual household
latrines (IHHL), cluster
toilets and community
toilets (especially via
PPP mode)

Atal Mission for


Rejuvenation and
Urban Transformation
(AMRUT) targets 500
cities to raise water
supply, sewerage,
urban transport system

Government policy initiatives Construction and Non Agriculture

Being Indias leading


PVC pipe & Fittings
manufacturer with high
brand recall and
enhanced distribution
reach, Finolex Industries
is well positioned to gain
from the given
opportunities
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Recently commissioned warehouses at Indore (MP), Noida


(UP) and Cuttack (Odisha) have ensured faster delivery and
enhanced distribution reach

FIL is on track in terms of expanding its scale of operations not


only by increasing production capacity, but also by setting up
additional warehouses

Distribution reach

Plants and Warehouses

11

Sponsoring agri awards


on ABP Majha channel

#FlyingWithFinolex twitter campaign

Branding & advertisements exhibitions, events & social media

Advertisement in regional newspapers

12

5,971
1,397
6,997

8,394

5,381
1,896
8,528

10,424

Reserves and surplus

Long term borrowings

Short term borrowings (incl. loans repayable in one year)

Total borrowings

8,795
506

1,274
2,322

854

1,221
3,711

Non current investments

Current investments

*Short term borrowings have reduced due to low inventory level during monsoon.

Capital WIP

Fixed assets (Net block)

7,840

Assets

1,241

FY13

1,241

FY12

Share capital

Equity and liabilities

Balance Sheet (INR mn)

Balance sheet Key indicators

941

1,274

325

9,052

7,134

4,812

2,322

6,656

1,241

FY14

551

1,246

104

8,678

6,371

4,534

1,837

6,633

1,241

FY15

10

301

1,246

70

8,497

3,941

*2,396

1,545

8,497

1,241

H1FY16

21,448
2.10%
3,587
16.72%
2,626
1,902
8.90%
1,361
6.30%

20,998
6.20%
2,313
11.02%
2,168
967
4.60%
752
3.60%

Net Income

Growth in sales (YoY %)

EBIDTA before exceptional items

PAT Margin (%)

PAT

PBT Margin (%)

PBT

EBIDTA after exceptional items

EBIDTA margins before exceptional items (%)

FY13

FY12

Profit & loss account (INR mn)

Profit & Loss Key indicators

6.90%

1,701

9.90%

2,419

3,268

16.17%

3,966

14.40%

24,530

FY14

1.93%

478

3.26%

808

1,896

8.52%

2,111

0.94%

24,761

FY15

9.42%

1,551

13.99%

2,305

2,882

16.01%

2,637

(2.61)

16,473

9MFY16

5.0%

7.0%

9.0%

11.0%

13.0%

15.0%

0.0%

5.0%

10.0%

15.0%

20.0%

25.0%

FY11

11.1%

FY11

10.7%

12.3%

FY12

FY12

FY13

RoCE (%)

FY13

Operating margin (%)

RoE (%)

Key performance indicators

FY14

FY14

8.6%

FY15

FY15

10.4%

11.3%

2.0

2.5

3.0

0.4

0.8

1.2

1.6

FY11

2.2

FY11

1.1

FY13

FY13

Fixed Asset Turnover (x)

FY12

FY12

Net Debt:Equity (x)

FY14

FY14

FY15

2.7

FY15

0.7

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9MFY16

141,071

Q3FY16

9MFY15

128,820

Q3FY15

38,856

9MFY16

165,084

Q3FY16

60,542

9MFY15

145,651

Q3FY15

61,826

Volumes (MT) PVC resin*

9MFY16

16,473

Q3FY16

5,472

9MFY15

16,915

Q3FY15

6,429

Total Revenue (INR Mn)

9MFY16

2,637

Q3FY16

841

9MFY15

1,641

Q3FY15

-89

(before exceptional items)

EBITDA (INR Mn)

9MFY16

1,551

Q3FY16

430

* Including inter segment transfer

# P&F represents Pipes and Fittings

9MFY15

201

Q3FY15

-438

PAT (INR Mn)

Management Comment:
Demand for pipes and fittings continues to be good and we are confident that going forward growth in this segment would be very encouraging.

9MFY16

Q3FY16

42,445

Volumes (MT) P & F #

Q3 & 9MFY16 Results Summary

4,667

522
11.18%
*245
767
126
396

8.49%
141
164
618
13.24%
199
419

8.98%

5,472

841
15.37%
841
127
714

13.05%
35
80
668
12.21%
238
430

7.86%

EBIDTA after exceptional items

Depreciation

EBIT before exceptional items

EBIT margins

Other Income

Finance costs

PBT

Tax

PAT

*Represents benefit by way of electricity duty exemption under package scheme of incentives for earlier periods.

PAT margins

PBT margins

Exceptional gains/(loss)

EBIDTA margin (%)

EBIDTA before exceptional items

Net Sales

Q2FY16

Q3FY16

Particulars (INR mn)

Profit & Loss Account

1,551

9.42%

(438)

754

13.99%

(201)

2,305

402

204

13.71%

2,258

379

2,882

*245

16.01%

2,637

16,473

9MFY16

(639)

287

14

(236)

146

(220)

(131)

(89)

6,429

Q3FY15

1.19%

201

89

1.71%

290

763

153

7.07%

1,196

444

1,345

(296)

9.70%

1,641

16,915

9MFY15

165,084
141,072

12,236
1,040

PVC pipes & fittings

Power

MT

10,297

INR Mn.

9MFY16

42,445

60,542

MT

Q3FY16

PVC resin

Segmental Revenue

Particulars

357

3,611

PVC pipes & fittings

Power

3,567

INR Mn.

PVC resin

Segmental Revenue

Particulars

Operating Highlights

86,736

62,374

Rs./Unit

85,075

58,918

Rs./Unit

822

12,076

9,880

INR Mn.

175

3,480

3,664

INR Mn.

128,820

145,651

MT

9MFY15

11,418

38,856

61,826

MT

Q3FY15

93,743

67,833

Rs./Unit

89,561

59,263

Rs./Unit

26.5%

1.3%

4.2%

Value

9.5%

13.3%

Volume

9.2%

(2.1%)

Volume

Growth Y-o-Y

104.0%

3.8%

(2.0%)

Value

Growth Y-o-Y

-500

500

1000

1500

2000

-89

EBITDA Q3FY15

(INR mn)

1582
73

Cost of Raw Material Employee Benefit exp

EBITDA Bridge Chart

Power and Fuel

260

Other expenses

29

Sales

958

EBITDA Q3FY16

841

PVC/EDC Delta (USD/MT)

Pipes & Fittings


Volumes (MT)

400
Apr-14

500

600

700

20,000

40,000

60,000
58,239

31,644

38,856

56,966 57,967

40,689 42,445

Aug-14

Dec-14

Apr-15

Aug-15

Dec-15

515

Q2'14 Q3'14 Q4'14 Q1'15 Q2'15 Q3'15 Q4'15 Q1'16 Q2'16 Q3'16

29,489

42,974

50,596

Business Scenario

PVC Volumes
(MT)
PVC (USD/MT)

80,134

55,899

27,910

61,826

97,505

63,030
41,512

60,542

Aug-14

Dec-14

Apr-15

Aug-15

Dec-15

760

Q2'14 Q3'14 Q4'14 Q1'15 Q2'15 Q3'15 Q4'15 Q1'16 Q2'16 Q3'16

46,021

71,238

Source: Platts Polymerscan weekly reports

500
Apr-14

700

900

1100

25,000

50,000

75,000

100,000

62
217
790

Other Income

Finance costs

PBT

228
562
4.5

Tax

PAT

EPS

9.41%

151

Depreciation

PBT margins (%)

71

Exceptional items

12.21%

1,025

EBIDTA before exceptional items

EBIDTA margins (%)

8,397

Q4FY14

Net Sales

Particulars (INR mn)

Quarterly Profit & Loss

4.5

502

213

10.79%

715

282

52

149

-165

18.98%

1,258

6,627

Q1FY15

1.1

137

77

5.57%

215

194

86

149

12.21%

471

3,859

Q2FY15

(3.5)

(438)

(201)

(639)

287

14

146

(131)

(89)

6,429

Q3FY15

2.2

277

241

6.59%

517

104

50

143

31

8.71%

683

7,846

Q4FY15

5.7

703

316

16.09%

1,019

158

27

125

20.11%

1,274

6,334

Q1FY16

3.4

419

199

13.24%

618

164

141

126

245

11.18%

522

4667

Q2FY16

3.5

430

238

12.21%

668

80

35

127

15.37%

841

5,472

Q3FY16

7,775

3,393
3,131
1,715

PVC pipes & fittings

Power

Other segments

25.54%

113

8.31%

389

9.24%

494

PVC

Capital employed

% of Revenues

Power

% of Revenues

PVC pipes & fittings

% of Revenues

PVC

Segmental profits

443

4,686

PVC pipes & fittings

Power

5,347

Q4FY14

PVC

Particulars (INR mn)


Segmental revenues

1,381

3,098

3,063

8,480

17.56%

62

9.56%

520

14.42%

597

353

5,438

4,139

Q1FY15

Quarterly segmental Profit & Loss

3,051

2,512

3,899

7,277

2.90%

7.70%

242

6.00%

124

293

3,158

2,076

Q2FY15

3,413

2,650

4,789

7,221

(23.43%)

(41)

7.30%

254

(12.45%)

(456)

175

3,480

3,664

Q3FY15

2,096

2,552

4,649

6,060

29.84%

145

6.60%

321

3.78%

216

486

4,862

5,721

Q4FY15

3,577

2,772

4,302

7,167

21.04%

81

9.65%

492

16.68%

692

385

5,100

4,149

Q1FY16

2,289

2,527

4,337

5,660

14.05%

42

7.91%

297

7.67%

198

299

3,525

2,581

Q2FY16

1,941

2,500

4,730

5,649

17.09%

61

8.72%

315

12.95%

462

357

3,611

3,567

Q3FY16

Internationally
acclaimed Environment
management system
under ISO 14001, in
place at the Ratnagiri
plant.

14001

ISO

Green initiatives by FIL

Achieved the goal of


Zero effluent
discharge at the
Ratnagiri plant

0
Effluent
Discharge
Awarded with
Certificate of Merit
believers Category by
Frost and
Sullivan's Green
Manufacturing
Excellence Award
2014 for
Golap, Ratnagiri plant

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Won Bronze trophy in


the National Safety
Council Awards
Competition 2013 for
the PVC manufacturing
plant at Ratnagiri

Corporate Social Responsibility (CSR)

24

Best Safety Practices Award 2015 by National Safety council Maharashtra Chapter &
Directorate of Industrial Safety & Health, Maharashtra State

Excellence in CSR award by Amity Global School

Indias most Trusted Brand in the category Manufacturing Pipes awarded by Brand Trust
Report 2015

Recognized by Economic Times as Top 100 Brands in the Architecture and


Design Sector.

Accolades and awards

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D-1/10, M.I.D.C. Chinchwad, Pune

www.finolexwater.com

020 2740 8200 | 1-800-2003466

D-1/10, M.I.D.C. Chinchwad, Pune 411 019

sk@finolexind.com

Mr. S. Krishnamoorthy (GM - Accounts & Finance)

FINOLEX INDUSTRIES LIMITED

26

S-Ancial Global Solutions Pvt. Ltd


Contact No.: 022 6143 2368
fil@s-ancial.com

Investor Relations