Corporate Presentation March 2010 Disclaimer INTEGRATED TEXTILE - - PowerPoint PPT Presentation

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Corporate Presentation March 2010 Disclaimer INTEGRATED TEXTILE - - PowerPoint PPT Presentation

INTEGRATED TEXTILE SOLUTIONS INTEGRATED TEXTILE SOLUTIONS Corporate Presentation March 2010 Disclaimer INTEGRATED TEXTILE SOLUTIONS The information and opinions contained in this presentation are current, if not stated otherwise, as of


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INTEGRATED TEXTILE SOLUTIONS

INTEGRATED TEXTILE SOLUTIONS

Corporate Presentation

March 2010

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INTEGRATED TEXTILE SOLUTIONS

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Disclaimer

  • The information and opinions contained in this presentation are current, if not stated
  • therwise, as of the date of this presentation. We undertake no obligation to update or

revise any information or the opinions expressed in this presentation as a result of new information, future events or otherwise.

  • This presentation contains certain forward looking statements concerning Alok Industries

Limited (“Company”) and its subsidiaries' future business prospects and business profitability, which are subject to a number of risks and uncertainties and the actual results could materially differ from those in such forward looking statements. The risks and uncertainties relating to these statements include, but are not limited to, risks and uncertainties, regarding fluctuations in earnings,

  • ur

ability to manage growth, competition (both domestic and international), economic growth in India and globally, our ability to manage our international operations, government policies, fiscal deficits, regulations, etc. The Company does not undertake to make any announcement in case any of these forward looking statements become materially incorrect in future or update any forward looking statements made from time to time by or on behalf of the Company. No part of this presentation shall be reproduced, copied, forwarded to any third party either in print of in electronic form without prior express consent of the Company.

  • This presentation does not constitute an offer or solicitation of an offer to purchase or

subscribe for any securities in any jurisdiction including India and the United States. No part of this presentation should form the basis of or be relied upon in connection with any investment decision or any contract or commitment to purchase or subscribe for any

  • securities. None of our Company‟s securities may be offered or sold in the United States,

without registration under the U.S. Securities Act of 1933, as amended, or pursuant to an exemption from registration therefrom.

  • This presentation is confidential and may not be copied or disseminated, in whole or in

part, and in any manner. No person is authorized to give any information or to make any representation not contained in or inconsistent with this presentation and, if given or made, such information or representation must not be relied upon as having been authorized by us.

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INTEGRATED TEXTILE SOLUTIONS

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  • Sales
  • f

Rs. 2,976.93 crores (US$ 620.2 mn.) and PAT of Rs. 188.37 crores (US$ 39.2 mn.) in FY 2009

  • Export
  • f

Rs. 1,054.50 crores (US$ 219.7 mn.) in FY 2009

  • Consistent

dividend paying company for 17 years

  • CAGR of about 28% in

Sales and 40% in EBIDTA

  • ver the past 3 years

Alok Overview

  • Vertically

Integrated Textile Company both in cotton and polyester

1US$ - Rs. 48.00

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INTEGRATED TEXTILE SOLUTIONS

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Alok Industries Ltd – TMIntegrated Textile Solutions

INTEGRATED TEXTILE SOLUTIONS

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Segment Target Customer Share of Business HY September 2009 (Provisional) Share of Business 2009 (Audited) Share of Business 2008 (Audited) COTTON & COTTON YARN

  • Captive Consumption
  • Export to traders, manufacturing units,

weavers 110.66 (US$ 23.05 mn.) (6.28%) 111.10 (US$ 23.15 mn.) (3.73%) 294.05 (US$ 61.26 mn.) (14%) APPAREL FABRICS (Woven & Knits)

  • Garment exporters in India /

converter countries

  • Domestic garment manufacturers,

retailers and traders 756.85 (US$ 157.68 mn.) (42.95%) 1,609.56 (US$ 335.33 mn.) (54.06%) 894.80 (US$ 186.42 mn.) (41%) HOME TEXTILES (Sheet sets, comforters, Terry Towels, etc)

  • Export to Overseas retailers and

brands

  • Domestic Sales through Alok H&A

312.09 (US$ 65.02 mn.) (17.72%) 498.54 (US$ 103.86 mn.) (16.75%) 389.00 (US$ 81.04 mn.) (18%) GARMENTS (Woven & Knits)

  • Export to Overseas retailers and

brands

  • Domestic Sales through Alok H&A

72.98 (US$ 15.20 mn.) (4.14%) 138.58 (US$ 28.87 mn.) (4.66%) 99.56 (US$ 20.74 mn.) (5%) POLYESTER YARN (POY & Texturised Yarn)

  • Domestic power loom weavers
  • Direct exports

508.49 (US$ 105.94 mn.) (28.88%) 619.15 (US$ 128.99 mn.) (20.80%) 493.00 (US$ 102.71 mn.) (22%) Total 1,761.07 (US$ 366.89 mn.) (100%) 2,976.93 (US$ 620.19 mn.) (100%) 2,170.41 (US$ 452.17 mn.) (100%)

Segment Wise Revenue

  • Rs. in Crores

1US$ - Rs. 48.00

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Alok’s Advantage

  • Timely expansions resulting in first mover advantage
  • Exports increased from about Rs. 642 crores (US$ 133.75 mn.) in 2007 to

about 1,050 crores (US$ 218.75 mn.) in 2009 at a CAGR of 28%

  • Preferred Vendor status for several brands / retailers
  • Capacities in design and manufacturing and with quality control practices,

makes sourcing cost effective and efficient for our customers

  • Economies of

scale coupled with low interest cost giving competitive advantage

  • Forward and backward Integration will have positive impact on our margins
  • Wide range of products offered across different market segments
  • Product development and designing strength
  • State of the art infrastructure with modern machines

1US$ - Rs. 48.00

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INTEGRATED TEXTILE SOLUTIONS

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Global Sized Capacities

Divisions Units Current Capacities Capacities under Implementation Capacities Post Expansion SPINNING Tons (Spindles) 58,500 (300,096) 17,960 (111,744) 76,460 (411,840) HOME TEXTILES Processing

  • mn. Mtrs

82.50

  • 82.50

Weaving

  • mn. Mtrs

68.00

  • 68.00

Terry Towels Tons 6,700

  • 6,700

APPAREL FABRICS Processing Woven

  • mn. Mtrs

105.0 16.80 121.8 Weaving

  • mn. Mtrs

93.00

  • 93.0

Knits Tons 18,200

  • 18,200

GARMENTS

  • mn. Pcs.

22.0

  • 22.0

POLYESTER YARN Tons (Machines) 114,000 (92) 56,000 (48) 170,000 (140) POY Tons 182,500 146,000 328,500 FDY Tons

  • 65,700

65,700

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INTEGRATED TEXTILE SOLUTIONS

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Special Finishes Stain Guard Flame Retardant Anti Static Water Repellent Soil Release Infra Red Finish 3X Dry Insect Repellent Brushed Fabric High Visibility Anti Bacterial Finish Aroma Finish User Industry Defense Fire Brigades Aviation Oil Refineries Hospitality Petrol Pumps Construction & Infrastructure Welding Industry Health Care Coal Mines Industrial Research

Product Development – Speciality Fabrics

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  • Global retailers and brands increasingly prefer „fair trade‟ and organic cotton,

since it:

  • Promotes eco-friendly textile products
  • Addresses global warming concerns
  • Tie up with an NGO
  • Entered into agreement for complete supply chain and product development

solution

Organic Cotton Initiatives

International Brands

INTEGRATED TEXTILE SOLUTIONS

NGO

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INTEGRATED TEXTILE SOLUTIONS

  • ISO Certifications

The company is now accredited with Integrated Management System (IMS). There are 4 certificates under this system:

  • 1. ISO 9001: 2000 – Quality Management System
  • 2. ISO 14001:2004 – Environmental Management System
  • 3. OHSAS 18001: 2007 – Occupational Health & Safety

Assessment System

  • 4. SA 8000: 2008 – Social Accountability

Certifications

  • ECO-Certification

Alok is the first Indian Textile company to have been awarded all three certifications for its eco-friendly products as under:  EU Flower – the eco-certificate from European Union  KRAV certification for organic products  SWAN certification – a Nordic eco-labelling certification

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Financial Analysis

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General Information – Alok Industries Ltd.

1US$ - Rs. 48.00

Present Equity

  • Rs. 605.69 crores (about US$ 126.18 mn.) (605.69 million shares)

Listed at BSE and NSE Market Price

  • Rs. 23.60 as on March 02, 2010

Market Capitalization

  • Rs. 1,429 crores

52 weeks High / Low High: Rs.29.50 Low: Rs. 11.32 Plant Locations Vapi, Silvassa, Navi Mumbai and Bhiwandi Directors 12 directors (4 Executive Directors) Employees 19,000 + Particulars

  • No. of Shares

% Holding Promoters & Promoter Group 222,906,351 36.80% Mutual Funds/Insurance Companies/Venture Capital Funds/Banks 58,874,581 9.72% Foreign Institutional Investor 151,989,816 25.09% OCB‟s & Indian Public 171,927,282 28.38% Total 605,698,030 100.00%

Share Holding Pattern as on February 2010

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INTEGRATED TEXTILE SOLUTIONS

  • Rs. in Crores

Historical Financials

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Particulars

  • Sept. 30, 2009

(Provisional) 2009 (Audited) 2008 (Audited) 2007 (Audited) Profitability Sales 1,761.07 2,976.93 2,170.41 1,824.68 Operating EBITDA 507.13 803.75 547.75 410.96 Operating PAT 89.01 217.04 167.73 135.18 Cash Profit 252.01 542.65 329.69 258.22 Basic EPS (Rs.) 1.92 8.81 11.40 9.70 Balance Sheet

  • Sept. 30, 2009

(Provisional) 2009 (Audited) 2008 (Audited) 2007 (Audited) Tangible Networth 2,155.54 1,755.06 1,431.34 1,024.44 Net Debt 6,353.51 6,251.41 4,093.57 2,551.46 Net Fixed Assets 6,420.80 5,983.87 3,891.30 2,583.80 Current Assets 3,069.97 2,685.93 3,377.53 1,992.66 Net Debt / Equity 2.56 3.03 2.86 2.49 Current Ratio 1.71 1.36 1.49 1.42

  • Rs. In Crores
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1824.68 2170.41 2976.93

500 1000 1500 2000 2500 3000 3500 2006-07 2007-08 2008-09

  • Rs. in Crores

Sales

CAGR 28 %

410.96 547.75 803.75

100 200 300 400 500 600 700 800 900 2006-07 2007-08 2008-09

  • Rs. in Crores

EBIDTA CAGR 40 % 135.18 167.73 217.04

50 100 150 200 250 2006-07 2007-08 2008-09

  • Rs. in Crores

PAT CAGR 27 % 1024.44 1431.34 1755.06

200 400 600 800 1000 1200 1400 1600 1800 2000 2006-07 2007-08 2008-09

  • Rs. in Crores

Networth CAGR 31 %

Historical Financials

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INTEGRATED TEXTILE SOLUTIONS

EBITDA Enhancement through Integration and Optimizations

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Particulars Amount (Rs. Per Kg) Raw Material Cost Raw Cotton Cost 73.00 Add: Additional Cotton consumed ( 0.33%) 24.00 Sub-Total 97.00 Less: Waste Realized 12.00 Total Raw Material Cost (a) 85.00 Conversion Cost

  • Spinning (Conversion from Cotton to Cotton yarn)

32.00

  • Weaving (Conversion from Cotton yarn to Fabric) (1 kg = 4 mtrs)

32.00

  • Processing (for processing and Finishing of fabrics)

50.00 Total Conversion Cost (b) 114.00 Sub – Total (a+b) 199.00 Add: Wastage about 5% 10.00 Total Cost 209.00 Average Selling Price (Rs. 82.50 per mtrs X 4 mtrs) 330.00 Contribution 121.00 Contribution as a % of Sales 36.7%

From Cotton to Finished Fabric*

16 * Management Representation

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Particulars Amount (Rs. per garment) Raw Material Cost Fabric Cost 82.50 Add: Additional Fabric Coat (1.6 mtrs. per garment) 49.50 Total Raw Material Cost (a) 132.00 Conversion Cost

  • Accessories

30.00

  • Labour

70.00 Total Conversion Cost (b) 100.00 Sub – Total (a+b) 232.00 Add: Wastage @ 2% 5.00 Total Cost 237.00 Average Selling Price ( USD 5.8 per garment) 270.00 Contribution 33.00 Contribution as a % of Sales 12.2%

From Finished Fabric to Garment*

17 * Management Representation

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Particulars DTY (Rs. /Kg) POY (Rs. /Kg) Raw Material Cost PTA/MEG Cost 49.00 49.00 Conversion Cost

  • From PTA/MEG to POY

6.00 6.00 Sub – Total 55.00 55.00 Conversion Cost

  • From POY to DTY

9.00

  • Total Cost

64.00 55.00 Average Selling Price 81.00 69.00 Contribution 17.00 14.00 Contribution as a % of Sales 21% 20.3%

From PTA to DTY*

18 * Management Representation

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Textile Industry Synopsis

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2007

  • Global trade in textiles and clothing increased to US$ 583 bn from US$ 342 bn.

in 2001 - CAGR of 9% 2015

  • Global trade expected to grow to US$ 805 bn from US$ 583 bn in 2007 - CAGR
  • f 4.12%

Source: - WTO

Top Exporters Amount US$ BN. % Europe 183.99 31.56% China 176.17 30.22% Turkey 22.73 3.90% India 19.10 3.28% United States 16.68 2.86% Others 164.33 28.18% Total 583.00 100.00%

USD bn.

Global Textile Trade –Vision 2015

Expected Growth World Trade

219 238 260 300 311 345 390 505 200 400 600 800 1000 2006 2007 2010 2015 Textile Apparel

530 583 650 805

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Snapshot

  • Second largest producer of cotton yarn in the world
  • Second largest employer in India (after agriculture) – Direct Employment

to 38 mn. People

  • Constitute 26% of India‟s Manufacturing Sector
  • Constitutes 17% of India‟s total exports earnings
  • Contributes 14% to Industrial production
  • Contributes 6% to GDP

Indian Textile Industry

Advantage

  • Growing Domestic Market – Growing @18% since last 5 years
  • Cost Advantage – Labour cost is about USD 0.70/hr against USD 20/hr
  • Skilled Labour Availability – High Literacy Rate
  • Raw Material Availability – Second largest producer of cotton
  • Integrated Set up – Covers entire textile value chain
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Particulars Domestic Export Total Textiles 12.00 12.00 24.00 Apparels 33.00 10.00 43.00 Total 45.00 22.00 67.00

Source: Ministry of Textiles – India/Technopack

USD bn.

Size – 2009 (E) Indian Textile Industry

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INTEGRATED TEXTILE SOLUTIONS

Holding Structure and Subsidiaries

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Present Status

  • The Company‟s cash & carry operations have now been transferred from

Alok Retail (India) Limited to cash and carry company “Alok H&A Limited”, a 100% subsidiary of the company

  • Stores offer products in home textiles, mens wear, womens wear, kids

wear and accessories like ties, handkerchiefs, cuff lings etc.

  • 154 Dealership as on date on dealership basis
  • Private Equity tied up with Asiabridge Fund I, LLC for growth of the venture

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Alok H&A Limited

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Overseas Retail - Grabal Alok (UK) Ltd

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  • Alok Group presently has a stake of 90.4% in Grabal Alok (UK) Ltd. (Alok

Industries International Ltd. 41.7% and 48.7% by Grabal Alok International Ltd.)

  • Currently, the chain comprises of 215 stores and employ about 2,500 people
  • The stores offer a value proposition for quality apparel for women, men, and
  • children. They also sell accessories (artificial jewellery, shoes, leather bags,

toys etc. ), which complement the apparel range

  • Turnover of about GBP 91 million as on March 2009
  • The company has been able to reduce its total cost from GBP 62 mn. in 2007-

08 to GBP 57 mn. in 2008-09 and further expected to be about GBP 48 mn in 2009-10

  • Gross Sales grew by 6.45% to GBP 51.01 mn. during April – Sept 2009

compared to GBP 47.9 mn. in corresponding period of previous year with cash profits of GBP 0.01 mn. compared to a loss of GBP 10.06 mn. during April – Sept 2008

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  • Alok holds 79.62% stake in Mileta, a Czech based manufacturing

company through its wholly own subsidiary Alok Industries International limited

  • Derived benefits from Mileta‟s technology skills in yarn-dyed fabrics and

hemming: results in higher per-unit realizations and new product lines

  • Extensive marketing network in Europe, Russia and Africa: a gateway

for Alok products

  • Brands like Mileta, Erba, Cottonova, Wall Street and Lord Nelson:

available for introduction in the domestic market

Overseas Textile Manufacturing - Mileta International

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Alok Realtors Pvt. Ltd. Peninsula Business Park, Lower Parel, Mumbai Ashford Royale Premium Residential Complex, Nahur, Mumbai

  • 641,589 sq ft of office premises with 600 car

parks

  • Total project cost Rs. 1,225 crores; Funded by

Equity of Rs. 525 crores and Debt of Rs. 700 crores

  • Possession – December 2010
  • Ashford Investment & Trading Company Pvt.

Ltd and Alok Infrastructure Pvt. Ltd. jointly propose (50:50) to develop an residential complex on a 7 acre plot at Nahur

  • Proposed saleable area of 1.1 mn Sq. ft.
  • Total project cost is estimated to be about Rs.

450 crores; Funded by Equity of Rs. 150 crores and Debt of Rs. 300 crores

  • Possession – March 2012
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Corporate Social Responsibility (CSR)

CSR is an integral part of Alok - some of the CSR initiatives includes:

  • Employment to tribal women on weaving looms and garment/made up stitching

machines after intensive training and orientation

  • Proposal to set up a 50 bed hospital at Silvassa with a portion set aside for

charitable purpose

  • Proposal to set up a CBSE Board School at Silvassa
  • Best in class ETP system for primary, secondary and tertiary treatment of
  • effluents. Reverse Osmosis plant to optimize water conservation
  • “Green Zones” around our facilities and planting of saplings to conserve

ecological balance

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INTEGRATED TEXTILE SOLUTIONS

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Product and Plant Gallery

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Silvassa Plant

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Spinning Unit

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Weaving Unit

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Quilting Unit

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Knitting Unit

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POY Unit

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Vapi Plant

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Knit Processing Unit

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Apparel Processing Unit

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…Products - Home Textiles – Sheet Sets, Quilts, Comforters, Blankets, Bed in a bag

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…Products - Home Textiles –Towels

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…Products – Apparel Fabrics

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…Products – Knitted Fabrics

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…Products – Dyed & Polyester Yarn

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…Products – Garments

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Alok Industries Limited

Peninsula Towers, Peninsula Corporate Park, Ganpatrao Kadam Marg, Lower Parel, Mumbai – 400 013. Tel. +91 (22) 24966200 / 500, Fax: +91 (22) 2493 6078 E-mail: info@alokind.com

Website: www.alokind.com

Thank you

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