#1WELSPUN INDIA HOME TEXTILES INVESTOR PRESENTATION July 2018 Owned Brands SPACES Christy spun tilt threads with a soul Licenses CHAMPIONSHI WIMBLEDON Minions DISNEY ROYAL ASCOT CITY D Innovations nano core HYGRO COTTON Hollow com comforter Anti-allegen comfort is here FIFA WORLD CUP RUSSIA 2018 AUTHENTIC WEL-TRAK FIBER 1#2DISCLAIMER WELSPUN INDIA HOME TEXTILES The information contained in this presentation is provided by Welspun India Limited (the "Company"), although care has been taken to ensure that the information in this presentation is accurate, and that the opinions expressed are fair and reasonable, the information is subject to change without notice, its accuracy, fairness or completeness is not guaranteed and has not been independently verified and no express or implied warranty is made thereto. You must make your own assessment of the relevance, accuracy and adequacy of the information contained in this presentation and must make such independent investigation as you may consider necessary or appropriate for such purpose. Neither the Company nor any of its directors assume any responsibility or liability for, the accuracy or completeness of, or any errors or omissions in, any information or opinions contained herein. Neither the Company nor any of its directors, officers, employees or affiliates nor any other person accepts any liability (in negligence, or otherwise) whatsoever for any loss howsoever arising from any use of this presentation or its contents or otherwise arising in connection therewith. The statements contained in this document speak only as at the date as of which they are made, and the Company expressly disclaims any obligation or undertaking to supplement, amend or disseminate any updates or revisions to any statements contained herein to reflect any change in events, conditions or circumstances on which any such statements are based. By preparing this presentation, none of the Company, its management, and their respective advisers undertakes any obligation to provide the recipient with access to any additional information or to update this presentation or any additional information or to correct any inaccuracies in any such information which may become apparent. This document is for informational purposes and does not constitute or form part of a prospectus, a statement in lieu of a prospectus, an offering circular, offering memorandum, an advertisement, and should not be construed as an offer to sell or issue or the solicitation of an offer or an offer document to buy or acquire or sell securities of the Company or any of its subsidiaries or affiliates under the Companies Act, 2013, the Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) Regulations, 2009, both as amended, or any applicable law in India or as an inducement to enter into investment activity. No part of this document should be considered as a recommendation that any investor should subscribe to or purchase securities of the Company or any of its subsidiaries or affiliates and should not form the basis of, or be relied on in connection with, any contract or commitment or investment decision whatsoever. This document is not financial, legal, tax, investment or other product advice. This presentation contains statements of future expectations and other forward-looking statements which involve risks and uncertainties. These statements include descriptions regarding the intent, belief or current expectations of the Company or its officers with respect to the consolidated results of operations and financial condition, and future events and plans of the Company. These statements can be recognized by the use of words such as "expects," "plans," "will," "estimates," or words of similar meaning. Such forward-looking statements are not guarantees of future performance and actual results, performances or events may differ from those in the forward-looking statements as a result of various factors and assumptions. You are cautioned not to place undue reliance on these forward looking statements, which are based on the current view of the management of the Company on future events. No assurance can be given that future events will occur, or that assumptions are correct. The Company does not assume any responsibility to amend, modify or revise any forward-looking statements, on the basis of any subsequent developments, information or events, or otherwise. Any reference herein to "the Company" shall mean Welspun India Limited, together with its consolidated subsidiaries. 2#3INTRODUCTION TO WELSPUN GROUP WELSPUN INDIA HOME TEXTILES WELSPUN INDIA HOME TEXTILES Global Leader in Home Textiles WELSPUN CORP PIPES AND PLATES Global Leader in Large Diameter Pipes WELSPUN GROUP LEADING TOMORROW TOGETHER Group Revenue US$ 2.3 Billion Asset Base US$ 2.7 Billion WELSPUN ENTERPRISES INFRASTRUCTURE AND ENERGY Infrastructure Investments in Oil & Gas Employees 25,000+ 3#4WELSPUN INDIA HOME TEXTILES AGENDA 1. Welspun India: An Introduction 2. Industry Overview 3. Welspun India: Key Differentiators 4. Key Strategic Initiatives 5. Welspun 2.0 & Way Forward#5WELSPUN INDIA: AN INTRODUCTION WELSPUN INDIA HOME TEXTILES LO 5#6WELSPUN INDIA: OVERVIEW Largest Home Textiles Company Globally(1) With presence in Bed, Bath & Flooring Ranked #1 among Home Textile Suppliers to USA by Home & Textiles Today magazine 5 Times in Last 6 Years Presence in 50+ Countries Trusted and Preferred Suppliers to 17 of Top 30 Global Retail Giants 30 Unique innovations 37% Sales: Innovative Products (3) 17% Sales: Branded Products (3) Every 5th Towel Every 10th Sheet sold in the US is made by Welspun (2) 3E's of Corporate Social Value Education, Environment & Health, Empowerment Note: (1) Based on consolidated revenues from Home Textiles segment. (2) Based on OTEXA CY2017 data. (3) FY18 Figures WELSPUN INDIA HOME TEXTILES 6#7KEY MILESTONES Revenues (Rs. Bn) CAGR 14% (2008-18) 32 WELSPUN INDIA HOME TEXTILES 53 61 k- 16 FY Began Operations 1985 4.5 1.3 1995 2005 2008 2012 2015 2018 FY 1985 1993 1995 2005 2006 2008 2010 2012 2014 2015 2016 2017 2018 Entry into Rugs Began the journey in Textiles Set up Anjar, Gujarat facility Entry into bedsheets Ranked No.1 Home Embarked upon Textile exporter to the US Capacity Expansion & Vertical Integration Set up Vapi, Gujarat facility for Towels Acquired Christy - most prestigious brand of towels in the UK Established industry defining, patented traceability solution: Wel-Trak Launched: shopwelspun.com &.in Brand, SPUN globally 'Hygro' branding campaign in the US Commissioned India's largest Spinning facility under one roof Foray into: Flooring Solutions Smart Textiles Increasing footprint in Middle East, Japan, Australia, EU 7#8WELSPUN INDIA HOME TEXTILES SHAREHOLDING AND TRADING SNAPSHOT Shareholding Pattern March 31, 2018 June 30, 2018 6.2% 9.2% 0.6% 15.6% Market Statistics 68.5% 0.6% 15.9% Promoter Flls Mutual Funds Banks and Insurance Cos 8.0% 7.0% 68.5% Public As on June 30, 2018 INR USD Price per share 54.30 0.79 No of Shares outstanding (Mn) 1,005 1,005 Market Capitalization (Mn) 54,572 797 Daily Average Trading Volumes (Q1FY19) No of shares in Mn 2.27 2.27 Daily Average Trading Value (Q1FY19) (Mn) 134 1.96 Source: BSE & NSE#9INDUSTRY OVERVIEW WELSPUN INDIA HOME TEXTILES 9#10ASIAN DOMINANCE IN HOME TEXTILES Textiles & Apparel US$ 748 bn WELSPUN INDIA HOME TEXTILES India 5% China 35% India 6% Textiles US$ 292 bn China 37% India 11% Home Textiles US$ 45 bn China 35% Source: WTO-2016 data, Texprocil, OTEXA 10 110#11WELSPUN INDIA HOME TEXTILES GLOBAL MARKET OPPORTUNITY Global Home Textile Market (USD Bn) Market Composition 136 45 2015 CAGR 8.3% 203 67 52 2020E US 33% Wholesale Level Retail Level Row 33% Europe 33% US Home Textile Market (2016) (USD Bn) OTHER NON- COTTON PRODUCTS, $5.0 OTHER COTTON PRODUCTS, $3.0 COTTON PILLOWCASES, $0.4 COTTON SHEETS, $1.5 US Home Textile Market valued at c.$15 bn COTTON TOWELS, $1.6 COTTON BEDSPREADS, $0.9 MMF FLOOR COVERINGS, $3.0 ✓ US and Europe are the major end markets comprising a third each of the home textile market Indian Players have concentrated in US because: - US is a large and homogenous market making it a more attractive market to target first While US is a level playing field, Europe provides preferential tariff rates to some competing countries Strong Presence of India Source: OTEXA, Industry Reports ■Next Opportunity for India 11#12WELSPUN INDIA HOME TEXTILES INDIA- LARGEST PLAYER IN US MARKET Market Share in US Towel Market 8 percentage pts 38% 40% 39% 38% 30% 26% 23% 24% 25% 22% 22% 23% 22% 24% 21% 19% 15% 15% 16% 16% CY2009 CY2015 CY2016 CY2017 YTD CY2018 India China Pakistan ROW Market Share in US Sheet Market 48% 49% 50% 51% India continues to dominate the US Towel Market 24 percentage pts 29% 27% 26% 23% 21% 20% 21% 18% 17% 16% 13% 15% 14% 15% 14% 11% CY2009 Source: OTEXA, May 2018 Update CY2015 CY2016 CY2017 YTD CY2018 | India China Pakistan ROW More than half of the US Sheet Market is served by India 12#13WELSPUN INDIA HOME TEXTILES FACTORS CONTRIBUTING INDIA'S COMPETITIVE ADVANTAGE 1. Largest Producer of Cotton 2 Favourable Socio-Economic Factors 3 Competitive Costs 4 Strong Political Leadership with Supportive Policies Strong Domestic Market 5 Potential 6 DOO Global Manufacturing Scale 13#14WELSPUN INDIA: KEY DIFFERENTIATORS WELSPUN INDIA HOME TEXTILES 14#15WELSPUN INDIA HOME TEXTILES WELSPUN INDIA: BELLWETHER IN HOME TEXTILES 7 60 8 Consistent focus on free cash flow Experienced Board and Management with Proven Track Record Sustainability at the Core of the Business 1 Leading Market Player with a Wide Product Range 2 Vertically Integrated Presence with Significant Capabilities WELSPUN INDIA 3 HOME TEXTILES Global Distribution Network with Marquee Clients 5 Track Record of Innovation 4 Diversified Brand Portfolio 15#16WELSPUN INDIA HOME TEXTILES 1 LEADING MARKET PLAYER WITH A WIDE PRODUCT RANGE Towels, Bath Robe S Widest product range in the Home Textiles segment Sheets, TOB, Basic & Fashion Bedding A differentiated End-to-end Solutions Provider in Home Textiles Carpets, Rugs, flooring solutions Uniquely positioned for cross-selling due to Customer reach, Competitive manufacturing, Global delivery model Higher wallet share due to multi-product portfolio Strong track record of customer satisfaction and repeat business from them; 80% revenue from replenishment 16#171 LEADING MARKET PLAYER WELSPUN INDIA HOME TEXTILES Ranked No.1 supplier to the US 5 times in last 6 years by Home & Textiles Today magazine Every 5th towel sold in US is made by Welspun Every 10th sheet sold in US is made by Welspun 15% 19% CY13 CY17 Welspun's Market Share in US Towels Market 41% 50% 7% CY13 10% CY17 Welspun's Market Share in US Sheets Market 21% 16% CY13 CY17 CY13 CY17 Welspun's Share in India's exports to US - Towels Welspun's Share in India's exports to US - Sheets Source: OTEXA 17#18WELSPUN INDIA HOME TEXTILES 2 VERTICALLY INTEGRATED PRESENCE WITH SIGNIFICANT CAPABILITIES India Supply Advantage Vertically Integrated Facilities Across Manufacturing Chain Cotton Spinning Weaving Processing Captive Power Cutting & Sewing Logistics Current integration of about 70% in Spinning and Weaving ✓ Captive power generation (through thermal power plant) ✓ Welspun India's backward integration have helped improve margins, better quality control and timely delivery Growing Capabilities Towels ('000 MT) 45 55 Bed Linens ('Mn mtrs) 90 80 72 72 60 50 55 59 60 FY14 FY15 FY16 FY17 FY18 FY18 Effective Utilisation: Towels 80% Rugs & Carpets ('Mn sq. mtrs) Sheets 80% 90 90 Rugs : 65% 88 6 10 10 10 FY14 FY15 FY16 FY17 FY18 FY14 FY15 FY16 FY17 FY18 Investment of around Rs. 9 bn planned in FY19; Rs. 700 mn done in Q1FY19 ✓ Majority of the investment towards flooring solutions project 18#19WELSPUN INDIA HOME TEXTILES 3 GLOBAL DISTRIBUTION NETWORK WITH MARQUEE CLIENTS ASDA Ruchan Carrefour (DEBENHAMS HOUSE OF FRASER SINCE 1849 BED BATH & COSTCO BEYOND JCPenney KOHL'S *macy's Walmart expect great things HOME DEPOT Warehouses Manufacturing Facility Corp HQ/Marketing Offices Country Served JYSK John Lewis KKaufland RUSTA Sainsbury's TESCO SHOPPERS STOP lifestyle @home HomeTown Ab ghar banana THE NECA HOME STORE Delivery and Reach in Over 50 Countries 19#204 DIVERSIFIED BRAND PORTFOLIO WELSPUN INDIA HOME TEXTILES Spectrum of Welspun Brands: Continue to Evolve Premium & Luxury Innovation Sustainability & Empowerment Technology > SPACES Christy I I THE CHAMPION ONSHIPS WIMBLEDON ENGLAND nano core HYGRO COTTON Helow core comfort is here Anti-allergen comfort is here AUTHENTIC. WEL-TRAK FIBER spun threads with a soul tilt SpinTales Coveted Licenses DISNEY MINIONS ROYAL ASCOT CITY FC B Branded Products Contribution to Sales at 17% in FY18 FIFA WORLD CUP RUSSIA 2018 20 20#21WELSPUN INDIA HOME TEXTILES 5 TRACK RECORD OF INNOVATION Increasing Share of Innovative Products • 37% of Sales from Innovative Products • 30 unique inventions filed globally HYGRO COTTON Hollow core comfort is here nano core Anti-allergen comfort is here" • 34% 30% 36% 37% Contributes more than $175 Mn of Sales annually Good traction in hospitality & domestic market FY15 FY16 FY17 FY18 The two segments (innovative & branded) together account for more than 45% of revenue • Received Asthma and Allergy Free Certification for bedding products in US post stringent testing Global Collaboration on Innovation 100 001 Top Universities Technology Partners Industry Associations HYGRO Cotton before washing after 3 washings Regulates temperature for individual comfort 21#226 SUSTAINABILITY: FOCUS ON THE 3Es 容 • Quality Education Project Adult Literacy Education for women Education 3Es of Corporate Social Value Environment & Health Empowerment 엠 ⚫ Health Camps & Mobile Medical Vans Natural/recycled products • 320K trees planted Rain water harvesting • Vocational Training for women and youth • Employability WELSPUN INDIA HOME TEXTILES Empowerment Vocation Centers: 10 centers including SPUN -1200+ women engaged; 2.29 mn products developed till date Welspun Foundation for Health & Knowledge: Financial assistance to women from sports; vision to benefit 20,000+ women • • Education Welspun Vidya Mandir at Anjar: quality education to 1,600 students with 75 Teachers Quality Education Project at 41 government schools in Anjar reaches out to 10,000+ students. • Digital software installed in 20 schools benefiting 4,600 students. Targeting 500 schools; 1 lakh students Environment & Health Planted around 10,000 saplings in 25 villages of Anjar WELSPUN VIDYAMANDER Let noble thoughts come to us from every side • Mobile Health Vans: 19 villages with 40,000 villagers benefitted . Built over 5,000 sanitation blocks in Vapi and Anjar • Project Navchetna initiated to curb malnutrition in total 15 villages 22#23WELSPUN INDIA HOME TEXTILES 6 INCLUSIVE GROWTH: IMPLEMENTING SMART VILLAGES E-Connectivity Wi-fi enabled villages with CCTV coverage Complete E-governance PA system with speakers Comprehensive CMS for Panchayat Office photo • Essential Infrastructure Well-constructed roads with kerbstones Welspun Smart Village • • Drainage and sewage disposal systems Mobile library Education • Smart centres • CCTV enabled premises • • Vocation training in secondary schools Bio gas for cooking midday meals in school kitchen FRIST . • Environment Green cover in all public land Segregation and organized disposal of garbage 100% LED solar street lighting Swachh Bharat Abhiyan awareness Empowerment Upgraded CSR and skill development centres E-enabled milk banks Vocational training in skills like IT and sering 100% enrolment of adults under Government schemes 23#246 SUSTAINABILITY IN EVERYTHING THAT WE DO 0 WELSPUN INDIA HOME TEXTILES STP Installed with a Capacity to Process 30 MN Liters Per Day; currently saving 6,500 million Liters of Water annually 85% Water Recovered From STP Used at Plant 10,000+ Youth Trained via Welspun's Skill Development Program 1,200+ Women Engaged Across 10 Vocational Centers B Annual saving of 9 mn kWh of Energy SA 8000 Certified Operations for Socially Responsible Practices 24 24#25WELSPUN INDIA HOME TEXTILES 7 EXPERIENCED BOARD & MANAGEMENT WITH PROVEN TRACK RECORD B.K.Goenka, Chairman Board of Directors Amongst India's most dynamic businessmen • Ranked amongst India's Most Powerful CEO by Economic Times Emerging Company of the Year Award in 2008 • Arun Todarwal, Independent Director, Audit Committee Chairman • ° 20+ years of experience in Finance, Audit, Taxation and Quality Management. Member of ICAI, practicing since 1981 Ram Gopal Sharma, Independent Director 40+ years experience in the field of life insurance, mutual funds, finance, training and development. Pradeep Poddar, Independent Director Technocrat & Corporate Leader with 30+ years of experience in consumer products industry and vast experience in brand building Arvind Singhal, Independent Director ° MBA from University of California, founded Technopak, India's leading management & operations consulting firm with focus on Textiles, Retail, Healthcare etc Padma Betai, Nominee Director ⚫ CFO of IDBI Bank with nearly 20 years covering areas like Treasury, Retail Banking, Corporate Advisory Services & Domestic Resources Management Team Rajesh Mandawewala, Managing Director In-charge of textile business; instrumental in growing reach over 50 countries 25+ years of experience in industries varying from Textiles to SAW pipes. ⚫ He is a Qualified chartered accountant Dipali Goenka, CEO & Joint Managing Director Driving force behind textile business, successfully led development of two brands SPACES and Welhome Graduate in Psychology & completed Management Programm from Harvard Altaf Jiwani, CFO (Welspun India) • 25+ years experience in corporate finance roles across diverse industries. • Worked with RPG Group for 19years. Last role as CFO, Phillips Carbon Black Julie McKenzie, CEO (Welspun USA) 35+ years of domestic and international experience in sales, merchandising, sourcing and licencing in the retail industry. • Has been previously associated with Nickelodeon, Wal-Mart among others Leigh Taylor, CEO & President (Welspun UK) • 30+ years of international experience across consumer products industry. • Turnaround specialist with expertise in innovation & product development Manjari Upadhye, CEO (Domestic Retail Business) ° 17+ years of experience across the consumer products industry Significant contribution in brand building for FMCG companies Mukesh Savlani, CEO (Welspun Flooring) Home-grown CEO with 17+ years experience in various roles at Welspun ° Engineering graduate; Leadership Program from Harvard 25#26✓ WELSPUN INDIA HOME TEXTILES 7 AWARDS & ACCOLADES - TESTIMONY TO EXCELLENCE Dipali Goenka Featured at #16 in Asia's Top 50 Power Businesswomen (2016) Forbes Asia's 50 Power Businesswoman Platinum Award Water Stewardship (2018) APEX INDIA FOUNDATION RECOGNISING EXCELLENCE SPREADING AWARENESS STP Water Recycle & Reuse Digital/Social Media Campaign of the Year Christy (2018) N Prolific North Social Media Marketing Services Award "Spaces" (2018) amazon Top-3 in Product-Wise Sustainability scores (2017) Walmart Winner of 1 Platinum, 3 Gold & 1 Silver Trophies (2017) TEXPROCIL THE COTTON TEXTILES EXPORT PROMOTION COUNCIL Marketing Sustainability Highest Exports and many more.... 26#278 CONTINUED FOCUS ON FREE CASH FLOW Rs. in Millions 4,000 2,000 795 714 239 (2,000) (4,000) (6,000) WELSPUN INDIA HOME TEXTILES 3,770 2,405 859 785 907 786 FY14 FY15 FY16 FY17 FY18 -6,217 FCF Dividend (8,000) FCF positive for four consecutive years 27#28Rs. million Rs. million 2,248 8 TREND OF FINANCIAL PERFORMANCE Total Income CAGR 11% 67,211 60,143 61,318 54,924 44,772 36,965 15,778 Rs. miilion 6,438 EBITDA WELSPUN INDIA HOME TEXTILES CAGR 13% 16,831 16,639 10,253 13,691 12,046 FY13 FY14 FY15 FY16 FY17 FY18 Q1FY19 FY13 FY14 FY15 FY16 FY17 FY18 Q1FY19 Net Profit CAGR 11% 4,195 5,398 7,365 6,979 ill 3,850 1,272 FY13 FY14 FY15 FY16 FY17 FY18 Q1FY19 Net Profit & Cash Profit FY17 figures adjusted for exceptional item CAGR is based on FY13-FY18 Rs. million Cash Profit CAGR 18% 9,017 6,237 4,178 13,779 12,074 9,413 2,441 FY13 FY14 FY15 FY16 FY17 FY18 Q1FY19 28 3,251#29WELSPUN INDIA HOME TEXTILES KEY STRATEGIC INITIATIVES 29 29#30WELSPUN INDIA HOME TEXTILES WELSPUN'S PATENTED GLOBAL COTTON INTEGRITY PROCESS AUTHENTIC WEL-TRAK™ £40 DEDICATED SUPPLIERS OF COTTON FIBER Welspun's patented Wel-Trak™ process, supplemented by scientific traceability from Oritain TM ' is now the most comprehensive end-to-end fiber tracking process. ORITAIN 0000000 GINNING SPINNING WEAVING FINISHING CUT & SEW PACK & SHIP RETAIL CHEMICAL FINGER PRINTING AUTHENTIC WEL-TRAK FIBER ORITAIN SEAL OF AUTHENTICITY OF ORIGIN - Verifies fiber from the origin and at every stage of production - Ensures rigorous process control of fiber's physical parameters - Authenticates cotton from dedicated sources - Assures independent third party testing - Allows consumers to track fiber in product back to the farm where it was produced CHEMICAL FINGER PRINTING Visit Wel-Trak.com 30#31WELSPUN INDIA HOME TEXTILES SMARTSOURCING: ASSET LIGHT FUTURE GROWTH SYNERGISTIC BENEFITS Assured Supply Lower transportation costs Lower inventory Lower Interest cost Recycling of packaging Collaboration with Suppliers for Lead Time Reduction via Exclusive Set-up of Welspun Ancillary Units Already Established Ancillaries Spinning Trims Packaging materials 31#32WELSPUN INDIA HOME TEXTILES Mobile Big Data F.....> <..... Social Media <.....> Customer <.....> <.....>> F.....> Online ° Physical Store Omni-Channel Support to Top Global Retailers via Product Development, Warehousing, Pick and Pack, Drop-Ship and Analytics O CRM SCM Analytics for Our Customers lil Integrate Analyze Visualize 32 32#33WELSPUN 2.0 & WAY FORWARD WELSPUN INDIA HOME TEXTILES 33#34WELSPUN INDIA HOME TEXTILES WELSPUN INDIA: VISION 2022 WELSPUN 20 1 Innovation & Patents Revenue $2bn + + ◉ + + 2 Brands Net Debt NIL 3 New Markets 4 5 New Channels New Products Innovative / Branded Revenue Share 50% Women Employees 20% Share of Domestic Revenue 20% 34#351 INNOVATION & PATENTS TECHNOLOGY WELSPUN INDIA HOME TEXTILES Transcends to HOME TEXTILES with tilt SpinTales Creating interactive experiences through seamless integration of smart technology with home textiles Patented augmented reality home décor 55 35#36WELSPUN INDIA HOME TEXTILES 2 BRANDS: CHRISTY Christy Brand Reinvigorated & Launched Globally Christy ENGLAND 1850 CHRISTY Est.1850 Christy ENGLAND 2008 2013 2017 A 150-Year Old Legacy.. 'Living Redefined' Reinvigorated the Christy Brand, which has dominant presence in UK Introduced the brand in US, China and Middle East; witnessed healthy growth ✓ Coveted Associations like Wimbledon, Rugby World Cup and Royal Ascot Christy ENGLAND Christy Junior AW17 shop the whole collection Living Redefined with Victoria Pendleton ROYAL ASCOT ASCOT 36#37WELSPUN INDIA HOME TEXTILES 2 BRANDS: SPACES Focus on tapping Domestic Market potential India - one of the fastest growing economies in the world with huge potential for increasing organized market 'Spaces' was recently recognized as a best brand in home category by Myntra. Also, received Amazon Marketing Services Award for Spaces Presence in 200+ shop-in-shops SPACES Ab ghar banana bene amart @home® THE MEGA BOME STORE SHOPPERS STOP START SOMETHING NEW Licenses for Domestic Market: WIMBLEDON THE CHAMPIONSHIPS lifestyle Home Town Minions the Disney MANCHESTER CITY The Next Growth Engine Redesigned Brand Strategy ✓ Use of 360 degree marketing approach by increasing customer touch points including social media, POS, in-store, PR news, TV, outdoor, radio, customer service. Revisited Spaces brand campaign SPACES SPACES VEESPON WHAT'S YOUR BEDSHEET'S SUPERPOWER? SLEEP HAPPY SPACES SPACES HygroCotton at adjusts its 20 temperature. 37#38WELSPUN INDIA HOME TEXTILES 3 NEW MARKETS Composition of Sales (FY18) Indian Urban Home Textile market is expected to grow from INR 257bn in 2016 to INR 438bn by 2021 (i.e. CAGR of 11.25%) Government's Policy on 'Housing for all by 2022' to boost domestic consumption Implementation of GST to accelerate move towards organised sector India: 6-7% Presence in Japan, the Middle East, Australia, Russia and South Africa ROW: 9-10% Future Strategy Welspun India to focus on increasing presence in subscale / new markets • Non-US business is likely to account for larger share of incremental revenue going forward Europe: 17-18% Presence in Europe is limited because: Pakistan, Turkey, Egypt and Bangladesh have preferential tariff rates from EU, exempting them from import duties Welspun's focus on EU has been more recent, mainly through its innovative products United States: 66-68% Continue to gain market share in the US Home Textile market and grow its US business in the medium - long term 38#39WELSPUN INDIA HOME TEXTILES • • 4 NEW CHANNELS: E-COMMERCE In key developed markets, E-commerce constitutes 10-15% in Home Textiles. Expected to reach ~25% by FY23 Key Ecommerce Platforms Welspun approach to tap the Ecommerce opportunity Key Ecommerce players increasing share of private labels to capture more value, cater to increased volumes and to have better control Focus on being a preferred sourcing partner for these key ecommerce platforms' private labels • · Big-Box Retailers' Websites Strong relations with existing big-box retailers Selling through online channels of these retailers Omni Channel support to retailers on Product Development, Warehousing, Pick and Pack, Drop-Ship and Analytics • Warehouses in US, UK, Germany and India • • Own Website • More than 10% sales of Christy in UK is own website/exclusive online • Establishing own brands' presence across key markets • Focus on capturing value on the Company's own portal Shopwelspun Exclusive Online D2C Players Home Textile startups penetrating D2C channels • Looking at significant minority stake in select ventures as a strategic investor • Partnering to create brands and tap D2C channels Welspun sees Omni-channel as an opportunity 39#404 NEW CHANNELS: HOSPITALITY Opportunity Welspun only constitutes ~3% of total US hospitality market WELSPUN INDIA HOME TEXTILES - The US hospitality market is c. $1.5bn (i.e. for towels and sheets) - Welspun currently earns c. $50mn from this category indicating huge growth potential High potential global wellness economy of about $3.7 trillion - Welspun has partnered with Stay Well to tap global wellness potential STAY WELL - Stay Well infuses wellness into hotel rooms with features and programs to maximise the guest experience and minimise the impact that travel has on the human body Strategy Focus on domestic as well as international markets Tied up with leading hotel chains and wellness centers 40 40#41WELSPUN INDIA HOME TEXTILES 5 NEW PRODUCTS: FLOORING SOLUTIONS Carpet Tiles Wide range of Flooring products Broadloom Carpets & Area Rugs Artificial Grass Welspun Flooring: Fully integrated and independent flooring vertical - Aim to become a one-stop flooring solutions provider for domestic and international markets - Facility to be now located in Telangana vs. earlier planned in Gujarat - Expected investment is ~Rs. 11 billion - Capacity of 27 million sq. metres p.a - Commercial production expected to start during Q3FY20 41#425 NEW PRODUCTS 1 Untapped Opportunity in Bedding • • • Large untapped opportunity in basic bedding, comforters and quilts Currently, China dominates the market; India is gradually making inroads Contributed ~3% of sales in FY18 2 • Technical/Advanced Textiles Products for specialized use in healthcare, fire departments, aerospace, defense, automobile, railways and other utilities. These products include specialized features such as fire retardants, stain resistant, anti-bacterial, PET resistant, and soil resistance, among others. Contributed 2% of sales in FY18 3 Smart Textiles WELSPUN INDIA HOME TEXTILES Welspun's "Welicate" Spunlace exhibites exceptionally soft hand feel and is perfect for delicate touch. Our new offering with customized fabric construction also gives supirior functional properties. Welicate Spunlace for Delicate touch KEY ADVANTAGES Extremely Soft with Smooth Appearance Better Opacity & Improved Cover Factor Greater Water Holding Capacity Lower Elongation Improves Processability & Usability High Cleaning Efficiency & Low Line VISUAL COMPARISON 40% HIGHER TENSILE STRENGTH NORMAL WELICATE MICROSCOPIC COMPARISON 15% REDUCED WATER ABSORBENCY TIME NORMAL WELICATE APPLICATIONS BABY CAFE WIPES PERSONAL CARE WIFES HOUSEHOLD WIPES MEDICAL WIFES Email: [email protected] Web: www.welspunindia.com WELSPUN INDIA ADVANCED TEXTILES tilt Creating interactive experiences through seamless integration of smart technology with home textiles SpinTales 42#43RAISING THE BAR Differentiation Strategy: Innovation, Branding & Sustainability Industry Defining Traceability Solution AUTHENTIC WEL-TRAK FIBER WELSPUN INDIA HOME TEXTILES Focus on Domestic Market New Product Lines New channels MOVING TOWARDS VISION 2022 Hr Volatile raw material costs Rising energy costs Volatile Rupee 3 43#44THANK YOU For further details, please contact: Altaf Jiwani Director (Finance) & CFO - Welspun India Limited Email: altaf [email protected] Harish Venkateswaran AVP Group Finance and Strategy Email: [email protected] W WELSPUN INDIA HOME TEXTILES 44#45APPENDIX WELSPUN INDIA HOME TEXTILES 45 45#46KEY HIGHLIGHTS- Q1 FY19 WELSPUN INDIA HOME TEXTILES Special Edition Wimbledon Towel sold out at stores in 1 hour and online in 4 hours in UK 'Spaces' brand grows 18% YoY Christy's E-commerce revenue more than doubles YoY Commissioned all-women multi-operation unit at Anjar EBITDA Margin at 20.6% Net Debt/Equity at 1.08x Net Debt/EBITDA at 2.22x 46#47FINANCIAL PERFORMANCE - Q1 FY19 WELSPUN INDIA HOME TEXTILES (Rs. Million) Change Change Particulars Q1FY19 Q1FY18 Q4FY18 YOY QoQ Total income 15,778 15,526 1.6% 15,349 2.8% EBITDA 3,251 3,374 -3.7% 2,922 11.3% EBITDA Margin 20.6% 21.7% -113 bps 19.0% 157 bps Finance Cost 342 356 -3.9% 381 -10.1% Depreciation 1,059 1,183 -10.5% 1,301 -18.6% PBT 1,850 1,835 0.8% 1,241 49.1% PAT (Before Minority Interest) 1,328 1,286 3.3% 899 47.8% PAT (After Minority Interest) 1,272 1,243 2.4% 866 46.9% PAT Margin 8.1% 8.0% 6 bps 5.6% 242 bps Cash Profit* 2,441 2,425 0.7% 2,325 5.0% EPS** (Rs.) 1.27 1.24 2.4% 0.86 46.9% * Cash Profit = PBDT less Current Tax ** EPS not annualised 47#48FINANCIAL PERFORMANCE TREND WELSPUN INDIA HOME TEXTILES (Rs. Million) Particulars Total income Growth % EBITDA EBITDA Margin Depreciation FY15 FY16 FY17 FY18 Q1FY19 54,924 60,143 67,211 61,318 15,778 22.7% 9.5% 11.8% -8.8% 1.6% 13,691 16,831 16,639 12,046 3,251 24.9% 28.0% 24.8% 19.6% 20.6% 3,329 3,718 5,054 5,042 1,059 Finance cost 2,829 2,368 1,583 1,408 342 PBT 7,533 10,745 10,003 5,597 1,850 Exceptional (Loss) (4,648) PAT (Before Minority Interest) 5,443 7,491 3,624 3,982 1,328 PAT (After Minority Interest) 5,398 7,365 3,576 3,850 1,272 Cash Profit* 9,095 12,074 13,779 9,413 2,441 5.4 7.3 3.6 3.8 1.3 EPS** (Rs.) * Cash Profit = PBDT before exceptions less Current Tax ** * Adjusted for stock split 48#49BALANCE SHEET TREND WELSPUN INDIA HOME TEXTILES (Rs. Million) Particulars 31-Mar-15 31-Mar-16 31-Mar-17 31-Mar-18 30-Jun-18 Net Worth 14,732 19,700 23,971 26,057 26,599 Short Term Loans 13,936 13,533 11,721 12,580 12,500 Long Term Loans 20,864 18,945 21,393 20,228 19,434 Gross Debt 34,800 32,478 33,114 32,807 31,934 Cash & Cash Equiv. 4,321 1,388 2,725 2,538 3,094 Net Debt 30,479 31,090 30,389 30,269 28,840 Average Capital Employed# 47,619 53,331 58,189 62,111 62,662 Net Fixed Assets (incl CWIP) 26,049 33,508 35,713 33,641 33,275 Net Current Assets* 17,630 16,845 20,114 23,734 22,715 Total Assets 58,960 65,491 73,283 72,249 73,808 # Capital Employed = Net worth + Gross Debt + Other Long Term Liabilities * Net Current Assets does not include Cash & Cash Equivalents 49#50FINANCIAL RATIO TREND Solvency ratios Return Operational ratios ratios WELSPUN INDIA HOME TEXTILES FY15 FY16 FY17 FY18 Q1FY19 Net debt/Equity Net debt/EBITDA 2.07 1.58 1.27 1.16 1.08 2.23 1.85 1.83 2.51 2.22 EBIT/Interest 3.66 5.54 7.32 4.98 6.40 Current Ratio 1.12 1.15 1.41 1.42 1.34 Fixed Asset turnover 2.04 1.77 1.86 1.80 1.86 Total Asset turnover 0.90 0.90 0.91 0.84 0.84 Inventory days 76 68 70 79 73 Debtor days 40 52 53 56 62 Payable days 30 41 41 39 42 Cash conversion cycle 86 79 82 96 94 ROE 41.8% 42.8% 29.6% 15.4% 19.3% ROCE (pre-tax) 21.8% 24.6% 19.3% 11.3% 14.0% Continuous Improvement in Net Debt/Equity 1. ROCE = EBIT / Average Capital Employed; ROE = Net Profit / Average Net worth 2. Total asset turnover = Sales/ (Fixed assets + Gross current assets) 3. FY17 Return Ratios figures adjusted for Exceptional item 50#51WELSPUN INDIA HOME TEXTILES DIVIDEND POLICY ◉ ◉ Clear, defined Dividend Distribution policy 25% of standalone PAT to be the total payout (incl. dividend tax) Consistent track record of dividend distribution Standalone Dividend tax Payout Period DPS EPS per share Percentage FY15 5.09 1.05 0.21 25% FY16 5.99 1.30 0.26 26% FY17 3.05 0.65 0.13 26% FY18 3.03 0.65 0.13 26% 51