Kitex Garments Limited (L18101KL1992PLC006528) P. B. No. 5, - PDF document

Kitex Garments Limited (L18101KL1992PLC006528) P. B. No. 5, Kizhakkambalam, Alwaye, Kochi, Kerala, 683562 Phone: 91 484 4142000, Fax: 91 484 2680604 Em ail: sect@kitexgarm ents.com website: www.kitexgarments.com Ref: KGL/ SE/ 2019-20/ AUG/ 09 August 28, 2019 The Secretary The Secretary BSE Limited National Stock Exchange of India Ltd Corporate Relationship Dept, 1 st Floor, Exchange Plaza, C-1 Block G New Trading Ring, Rotunda Building, Bandra Kurla Complex, P.J. Towers, Dalal Street, Bandra East, Mumbai – 400051, Fort Mumbai – 400001, Maharashtra Maharashtra Scrip Code: 52 12 4 8 Scrip Code: KI TEX Sub: PRESENTATI ONS MADE DURI NG THE 27 TH ANNUAL GENERAL MEETI NG ( ‘AGM’) OF THE COMPANY HELD TODAY Please find enclosed the presentations made during the 27 th AGM of the Company held today for your information and records. This will also be made available on the company’s website viz., www.kitexgarments.com Thanking you, For Kitex Garm ents Lim ited CS. Mithun B Shenoy Company Secretary & Compliance officer Enclosure: As above

KITEX GARMENTS LIMITED 27 th Annual General Meeting 28 th August 2019 Investor Presentation

Disclaimer “forward This presentation and the following discussion may contain looking statements” by Kitex Garments Limited (“Kitex” , “the Company”) . These forward looking statements, which may relate to future results of operations, financial condition, client prospects, business environment, business prospects, plans and strategic objectives, are based on the management’s beliefs, assumptions, expectations, estimates and projections based on current knowledge and available information with regards to the Company, business, industry, sector, markets and clients in relation to which Kitex operates. These statements are not guarantees for future performance and are subject to known and unknown risks, uncertainties and other factors, some of which are beyond the Company’s control and unpredictable. Such factors could cause actual results, performance or achievements to differ materially from those in the forward looking statements. Such statements are not, and should not be construed as a representation of the future performance or achievements of the Company. 2

Highlights of the year EPS Revenue Net Worth ₹ 12.22 ₹ 629 Crores ₹ 591 Crores EBITDA CAPEX Employees ₹ 161 Crores ₹ 28 Crores ₹ 4,326 PAT ROE Capacity ( Infant wear )* ₹ 81 Crores 13.8% ₹ 4.32 Lakhs • * Infant wear 3 • ROE is calculated on closing Equity

Contents P05 1 Result Update P11 2 Company Overview P17 3 Market Overview P21 4 Management Updates 5 P24 Q1 performance FY2020 guidance 4

1 Results Update 5

Your Company has markedly improved its financial performance in FY 19, outpacing the sector Revenue (INR Crores) 629 566 560 548 525 456 321 FY 13 FY 14 FY 15 FY 16 FY 17 FY 18 FY 19 Revenue EBITDA (INR Crores) PAT (INR Crores) 36.4% 120 25.0% 250 34.7% 40.0% 31.5% 19.8% 35.0% 18.8% 100 20.0% 200 16.9% 206 25.6% 30.0% 24.4% 23.8% 80 182 172 20.0% 25.0% 12.6% 12.5% 15.0% 150 161 60 12.9% 20.0% 137 9.2% 112 99 10.0% 100 93 108 15.0% 81 40 70 10.0% 57 5.0% 50 64 20 29 5.0% - 0.0% - 0.0% FY 13 FY 14 FY 15 FY 16 FY 17 FY 18 FY 19 FY 13 FY 14 FY 15 FY 16 FY 17 FY 18 FY 19 EBITDA Margin % PAT Margin %

The Company managed to successfully address key concerns that affected performance in FY 18 Business With Jockey The estimated INR 55 Crores of revenue loss in FY 18 has been arrested and compensated during the current year through increased orders from other existing customers Toys R Us Automation Toys R Us The Company estimates that the The Automation process estimated to bankruptcy of Toys R Us has led to an result in a 15% uptick in efficiency has estimated loss of INR 25 Crore to the been restarted and is progressing as topline in FY 18. Your Company has per a revised timeline with 25% successfully filled this gap in the current completed till date year by sourcing additional orders from existing customers. GST The Company has received USD 1.9mn (17.50% of claims) in March 2019 against claims lodged on this account 7

A well capitalised, debt free Balance Sheet provides opportunities for further growth Capital Employed (INR Crores)  The balance sheet has sufficient room to 591 517 absorb incremental debt to facilitate future - 459 growth 1 376 3  Well capitalised balance sheet provides 291 8 resilience against systemic shocks 591 27 516  TheCompany 456 continues to generate 367 consistent returns on both shareholder’s 264 equity and total capital employed by efficiently utilizing its asset base without infusing additional growth capital FY 15 FY 16 FY 17 FY 18 FY 19 Total equity Long term debt ROCE and ROE (%) Asset Turnover Ratios 3.8 x 27.3% 26.4% 3.3 x 13.6% 13.8% 0.9 x 0.8 x FY 18 FY 19 FY 18 FY 19 Asset Turnover Fixed Asset Turnover Return on Capital Employed Return on Equity 8

History of healthy dividend payments 150% 150% 150% 150% 125% 100% 80% 60% 40% 30% 25% 2008-09 2009-10 2010-11 2011-12 2012-13 2013-14 2014-15 2015-16 2016-17 2017-18 2018-19 Dividend yield on par value * Bonus shares in the ration of 2:5 have been issued in FY 18 9

2 Company Overview: What sets us apart 10

Operational Advantages  Kitex has grown over the years to be Sustainable Operations the second largest infant apparel manufacturer in the word  Optimized consumption of fuel, energy and water:  The largest manufacturer within the  Advanced automated wood fired boiler  Heat recovery and water re-using systems Indian infant wear sector  State-of the art machinery  The Company addresses a niche,  Biological effluent treatment at international standards highly specialised market segment  Treated effluents are re-used by Kitex in toilets and irrigation for internal that endorses a premium on quality, horticulture safety, aesthetics and sustainable  Harvesting of rainwater for use in manufacturing processes practices  Generation of bio-gas from the biological wastes produced. The gas is then used for cooking  High barriers to entry such as  Use of recyclable packaging materials only stringent quality controls over sourcing and production and use of State of the art Technology cutting edge technology limits competition within this segment from low cost manufacturers based in  Operates a vertically integrated manufacturing facility which helps in Bangladesh and Vietnam ensuring quality of products, operational flexibility and optimized operating expenses  A large portion of the infant wear  Fully automatic robotized yarn dyeing market is unorganised , with limited  Advanced Relaxed Open-width (German) Tensionless processing access to latest technology and in-  Digital Light exposing – Screen engraving house R&D and designing facilities.  Automatic mixing & dispensing of dyes, chemicals and printing pastes  Cold Pad batch (German) technology for dyeing fabrics  Modern rotary printing (Austrian) machinery for fabric printing 11

Operational Advantages Product Safety Assurance of product safety with following practices and policies in place:  Purchase of dyes and chemicals from approved list of international suppliers  Strict small parts pull testing at production stage  Stringent broken needle policy  Metal detection scanning for all products before being packed Employee Welfare  Workplace Conditions Assessment (WCA) program - Sustainable and ethical practices for work place people, products and environment  Alignment with Central Government’s skill development programs such as Integrated Skill Development Scheme (ISDS) and Deen Dayal Upadhyaya Grameen Kaushalya Yojana (DDU-GKY)  Furnished and hygienic accommodation for employees  Well equipped and automated canteen facility offering regional cuisines  Specialty medical clinic operating 24x7 Focus on Inclusive Growth  Active involvement in social welfare activities in its locality (Kizhakkambalam) through various initiatives focusing on:  Promotion of sustainable agricultural practices  Food and water security  Improved quality of healthcare and education  Infrastructural development and Housing schemes  Employment  The Company employs a large number of women within its workforce (~51% of total employees are women) helping them attain financial independence and contributing to the national vision of women empowerment 12

Key clients: Long standing, loyal client base. Increased focus on enhancing omnichannel distribution capability Key Brands Serviced Key Retail & Wholesale Clients 13