Titan Industries Limited

Investor Relations
To
Create Shareholder Value

Equicorp
January 2003
 Contents
• Wealth Creation Test
• Valuation Paradox
• What is Investor Relations and Why
• Titan’s Strengths and Perceptions
• Benefits of Investor Relations
• Why Equicorp

Equicorp
January 2003
 Wealth Creation Test
• Are you satisfied with your company’s market
capitalisation during good and bad times?

• How proactive investor relations can help get

right valuation?

• Which is the most competent agency to help

create sustainable long-term shareholder value?

Equicorp
January 2003
 The Valuation Paradox
At any time in the market, a small clutch of
stocks “continue to remain cheap in spite of
appearing cheap”

Because they have remained cheap for years,

many are often doomed to stay cheap (helped in a
fair measure by non-proactive Investor Relations)

Equicorp
January 2003
 What is Investor Relations
Investor Relations involves dissemination of
valuable information continually to the financial
community and thereby create a sustainable
shareholder value
• Communication - to help analyse and form a
fundamental view about the strengths and
prospects of the company
• Building relationships - through quality and
timeliness of the information and ability to
deliver on the promises

Equicorp
January 2003
 Why Investor Relations
• Create and sustain investor confidence by proactive
dissemination of information
• Institutionalisation of investor profile demands greater
disclosures and transparency in operations and
communication
• Gain valuable insights from investor feedback
• Strategic management of expectations / perceptions
• Better crisis management with lower stock volatility
• Value creation helps in fund raising, acquisitions, ESOP,
etc
Performance and Perception are key to long-
term wealth creation
Equicorp
January 2003
Watches and Jewellery Industries
• Watch industry witnessed major transformation since import
liberalisation in 1999
• Rising share of organised players; high excise duty
• Retailing of watches undergoing significant change
• India is world’s largest consumer of gold; major use in
jewellery
• Largely unorganised sector
• Inadequate statutory controls leading to unethical practices
• In capital market, most small / mid-size companies are
painted with the same brush
• Confused behavior reinforced by often aired views to dump
small / mid-size companies for large ones
• Large companies offer predictability and sustainability….. We
believe select mid-size companies offer Opportunities!

Equicorp
January 2003
 Titan Industries
Strengths : Yes…But known to investors ?
• Strong promoters – Tata group
• Established track record
• Pioneer and leader in organised watches and jewellery
industries
• Strong brand equity and national marketing network
• Balanced product portfolio
• Strengths in precision engineering
• Significant business restructuring
• Major exports opportunity

Highlight the differentiators!

Equicorp
January 2003
 Titan Industries
Capital Market Perceptions
• Medium size with low profitability for many years
• Low growth watch business with rising threat from MNCs
• High cost fully integrated business set-up
• Unsuccessful European operations – huge losses
• Buyer behaviour tilted towards local jewellers
• Limited range and high cost of jewellery
• Volatile gold prices
• Very high debt-equity ratio; financial restructuring pending for
past few years
• Low visibility in capital market
• Passive Investor Relations
Improve perceptions!

Equicorp
January 2003
 Titan Industries
Benefits of Investor Relations

• Higher market capitalisation improves corporate

perception
• Critical size through strategic alliances, joint
ventures and company acquisitions
• Ease in raising equity finance and global visibility
• Employee retention through effective ESOP
• Long-term relations with institutional investors and
analysts
• Wealth creation for all the stakeholders

Equicorp
January 2003
 Equicorp
Equicorp brings companies and investors together to
create long-term value for all the stakeholders
• Passion for value and results
• Core team with 15 years of capital market experience
• Knowledge of various businesses / sectors
• Focus on technology and branded businesses
• Understanding of investor psychology, decision making
process and information requirements
• Relationship with institutional investors and analysts
• Market intelligence
• Personalised attention
We Commit……..We Deliver
Equicorp
January 2003
 Competitive Analysis
Equicorp IR Agency PR Agency Brokers Co.

Orientation Long-term Med-term Short-term Short/Med Long

Passion for Strong Moderate Moderate Moderate Strong

Value/Results

Cap Market Long Short / Nil Short / Nil Long Short

Experience
Knowledge Good Average Below Avg. Average Excellent

Relations Excellent Average Below Avg. Average Average

Cost Lowest High High High Highest

Equicorp
January 2003
 Equicorp…Approach

• Understand your business

• Analyse current perceptions
• Collaborate on desired positioning
• Innovate customised solution
• Implement Investor Relations program
• Evaluate performance

Equicorp
January 2003
 Equicorp…Services
• Investor Updates on:
- Quarterly results
- Expansion
- New product launches
- Sales and marketing initiatives
- Business and financial restructuring initiatives
- Strategic alliance / Joint venture
- Other material events

Equicorp
January 2003
 Equicorp…Services
• Analysts / Fund Managers Meets:
- Preparation of analysts presentation
- One-to-one meetings
- Focused group
- Annual meet
- Feedback and follow-up
- Generation of research reports

Equicorp
January 2003
 Equicorp…Services
• Shareholder analysis and targeting - continuous
identification of most compatible and stable long-term
investors
• Contents of annual report
• AGM
• Web strategy
• Peer group benchmarking – business and stock
performance
• Advice on media coverage

Equicorp brings culture of wealth creation,

not just investor relations

Equicorp
January 2003
 Multiplier Effect

Market Capitalisation is a function of

• Earnings Per Share : Steady growth, a

function of business strategy
&
• P/E Ratio : Multiple growth possible, a
function of effective Investor Relations

Equicorp
January 2003
Thank You

Equicorp
January 2003