#1SUDARSHAN Investor Presentation H1 FY23#2SAFE HARBOR STATEMENT . This presentation may contain statements which reflect Management's current views and estimates and could be construed as forward-looking statements These forward-looking statements involve a number of risks, uncertainties and other factors that could cause actual results to differ materially from those suggested by the forward-looking statements These risks and uncertainties include, but are not limited to our exposure to changes in general economic conditions, market, Foreign currency and other risks, changes in government policies/regulations, tax regimes as also technological changes The company assumes no responsibility to publicly amend, modify or revise any forward-looking statements, on the basis of subsequent development, information or events or otherwise 2 SUDARSHAN#3COMPANY OVERVIEW SUDARSHAN#4Our Company at Glance We are a leading world-class color solutions provider with a focus on exceptional and sustainable results SUD-15A- SUDARSHAN 16 CONSOLIDATED REVENUES ~$295 Mn (FY22) INFRASTRUCTURE 2 Manufacturing plants in Mahad & Roha and a dedicated R&D center in the outskirts of Pune PEOPLE 50+ sales team 60+ channel partners 2,000+ global workforce BUSINESS FOCUS Pigment Focus. Don't compete with customers GEOGRAPHIC REACH Largest pigment producer in India. Exports to 85+ countries 4 SUDARSHAN#5Our Global Presence We Export to 85+ countries with 50+ sales members GLOBAL HEAD OFFICE NORTH AMERICA Sudarshan Chemical Industries Limited Sudarshan North Americas Inc. CHINA EUROPE Sudarshan (Shanghai) Trading Co Ltd. MEXICO Sudarshan Europe B.V. JAPAN Sudarshan Mexico S. de R.L de CV. Sudarshan Japan K.K 5 SUDARSHAN#6A journey towards a leading world class color solutions provider Domestic Revenue Cr Exports Revenue Cr 204% EBITDA * Cr 220% A EBITDA % 2,201 275 1,438 1,206 192 781 724 995 86 11.8% 13.3% 12.5% 481 657 (45%) 243 (46%) (34%) FY11 FY18 FY22 FY11 FY18 FY22 Earnings per Share 6.1 11.1 207% 18.8 Gross Block Cr 255% 1,235 348 599 Consistent performance with Sales and Operating profit growing at a CAGR of 11% despite exiting some of the businesses FY11 FY22 Pigment, Agro Chemical, A pure play Pigment Masterbatch businesses focus Amongst top 20 pigment 3rd largest pigment player Domestic market share ~ estimate @ 30% R&D lab: India Organic and Inorganic pigments with revenues largely from Azo and Phthalo pigments Renewable energy: 0% producer globally Domestic market share ~ estimate @ 35% R&D labs: India & Germany Development & strong growth of High Performance and Cosmetics product range Renewable energy: ~30% FY11 FY18 FY22 FY11 FY18 FY22 Revenue includes Revenue from Operations and Other operating income | EBITDA as percent to Total Income from operations (excluding other income) | EPS is calculated excluding profit/loss from exceptional and extraordinary items | Gross block excluding CWIP at end of period SUDARSHAN 6#7Pigments Application - a global $8.6bn market opportunity We are uniquely placed to offer a comprehensive range high performance and speciality pigments COATINGS PLASTICS INKS COSMETICS High performance and special effect for the coating industry Our key focus area with targeted significant growth in the automotive and decorative segments A pallete with a wide spectrum of colors and performance for plastic applications Leadership position in plastics segment in multiple geographies; attributed to our detailed know-how of the industry General purpose and high performance pigments for inks Focus on niche applications in the ink industry with necessary expertise in offset and liquid ink segments Effect pigments for cosmetics & personal care applications An important growth area for Sudarshan; we continue building capabilities in end application 7 SUDARSHAN#8Pigment Industry View Geo-political risk continues China Zero Covid policy impacting overall demand Supply chain constraints resulted in commodity inflation cycle Tightening monetary policies by major central banks leading to demand contraction across major economies Sharp increase in energy costs continues SUDARSHAN 8#9Investing for growth of our Pigment business Capex plan: 750 Cr Put to use: 620 Cr Capex incurred Projects under implementation at 110 Cr Capex overall revenue potential estimated at ~ 1,500 Cr at full capacity ramp up over three years Capex to be incurred To invest 20 Cr SUDARSHAN#10Quarterly Performance#11Quarterly Performance Highlights - Consolidated Financials Income from Operations (In Cr) 498 554 528 +6% EBITDA* (In Cr & Margin%) 53 43 41 10.6% 8.1% 7.5% 23 PAT (In Cr & Margin%) I.. 4.6% 1.3% 0.9% Q2 FY23 Q2 FY22 Q1 FY23 Q2 FY23 Q2 FY22 Q1 FY23 Q2 FY23 Q2 FY22 Q1 FY23 * EBITDA as percent to Total Income from operations (excluding other income) 11 SUDARSHAN#12Quarterly Performance Highlights - Key Ratios Current Ratio Cash conversion cycle 114 1.1 1.1 1.1 105 108 Q2 FY22 Q1 FY23 Q2 FY23 Net Debt to Equity Ratio Debt Cr 1.0 1.0 1.2 768 866 926 Q2 FY22 Q1 FY23 Q2 FY23 Earnings per Share 3.3 1.0 0.7 Net Debt to EBITDA 3.8 3.4 Q2 FY22 Q1 FY23 Q2 FY23 2.7 Q2 FY22 Q1 FY23 Q2 FY23 Q2 FY22 Q1 FY23 Q2 FY23 EPS is not annualised 12 SUDARSHAN#13Quarterly Performance Highlights - Pigment Business Income from Operations (In Cr) Gross margin % EBITDA* (In Cr & Margin%) 526 476 448 +6% Q2 FY22 Q1 FY23 Q2 FY23 43.5% 40.3% 38.8% 50 44 39 11.2% 8.3% 8.2% Q2 FY22 Q1 FY23 Q2 FY23 Q2 FY22 Q1 FY23 Q2 FY23 Subdued demand across geographies and segments resulting in volume and pricing pressure Impact due to coal cost escalation continues * EBITDA as percent to Total Income from operations (excluding other income) 13 SUDARSHAN#14Quarterly Performance Highlights - Pigment Business Domestic Revenue Cr 239 Export Revenue Cr 269 235 -2% 209 Mix % 53% 51% 49% Q2 FY22 Specialty Revenue Cr 302 Q1 FY23 Q2 FY23 258 242 +16% 47% 49% 51% Q2 FY22 Non-Specialty Revenue Cr 352 331 +10% 146 Mix % 67% 67% 69% Q2 FY22 Q1 FY23 Q2 FY23 India demand has been softer in plastic segments Export demand subdued due to geo-political scenario and tightening monetary policy Revenue includes Revenue from Operations and Other operating income of Pigment business 14 Q1 FY23 Q2 FY23 174 145 -1% 33% 33% 31% Q2 FY22 Q1 FY23 Q2 FY23 SUDARSHAN#15Half Yearly Performance#16Half Yearly Performance Highlights - Consolidated Financials Income from Operations (In * Cr) EBITDA* (In Cr & Margin%) PAT (In Cr & Margin%) 972 1,229 1,083 +11% 115 160 13.0% 11.8% 84 ± 49 81 7.8% 6.6% 12 5.0% H1 FY22 H2 FY22 H1 FY23 H1 FY22 H2 FY22 H1 FY23 H1 FY22 H2 FY22 * EBITDA as percent to Total Income from operations (excluding other income) 16 1.1% H1 FY23 SUDARSHAN#17Half Yearly Performance Highlights - Pigment Business Income from Operations (In Cr) Gross margin % EBITDA* (In Cr & Margin%) 901 1,118 1,002 +11% H1 FY22 H2 FY22 H1 FY23 45.3% 41.3% 39.6% 116 153 83 13.7% 12.9% 8.3% H1 FY22 H2 FY22 H1 FY23 H1 FY22 H2 FY22 H1 FY23 Subdued demand across geographies and segments resulting in volume and pricing pressure Impact due to coal cost escalation continues * EBITDA as percent to Total Income from operations (excluding other income) 17 SUDARSHAN#18Half Yearly Performance Highlights - Pigment Business Domestic Revenue Cr 592 503 441 +14% Mix % 49% 53% 50% H1 FY22 H2 FY22 H1 FY23 Export Revenue Cr 526 499 460 +8% 51% 47% 50% H1 FY22 Specialty Revenue Cr 763 683 620 +10% 281 Mix % 69% 68% 68% H1 FY22 H2 FY22 H1 FY23 H2 FY22 H1 FY23 Non-Specialty Revenue Cr 356 319 +14% 31% 32% 32% H1 FY22 H2 FY22 H1 FY23 Buying decisions deferment by domestic customers continues due to volatility in overall prices Export demand is subdued due to geo-political scenario and tightening monetary policy Revenue includes Revenue from Operations and Other operating income of Pigment business 18 SUDARSHAN#19Business Outlook#20Business Outlook - FY23 and beyond Capex program to drive future growth and bring in EBITDA improvement Gradual sales ramp-up of new Capex's expected to drive growth New businesses to move into plant commissioning and sales ramp up phase Commencing execution of cost improvement and value chain integration projects Business mix change to continue Expanding product portfolio to build globally competitive and comprehensive range Deeper penetration in select International geographies Efficiency and continuous improvement • focus Building one of the most efficient chemical complexes in India and globally, with strong focus on EHS and sustainability • Focus on controlling net working capital and inventories to optimize cash conversion cycle Focus to improve Return on Capital Employed will continue as a key initiative 20 20 SUDARSHAN#21ABOUT SUDARSHAN#22Our Vision, Mission & Values Our growth is fueled by an immense drive to be a leading player in our field MISSION World class Global Color Solution provider with an innovative and vibrant culture VISION VALUES To be amongst the top three pigment players in the world Seva (Service), Courage, Commitment and Passion, Respect, Trust 22 22 SUDARSHAN#23Our Journey Evolution of Sudarshan from a local player to a global player is result of a well crafted strategy Establishing the Business 1952 - 1989 Efforts largely domestic with limited portfolio range Next leap in Technology 1989 - 2006 Building technical capabilities & infrastructure Going Global 2006 - 2018 Scaled up infrastructure to world class standards Manufacturing plant in Mahad for Pthalos & Effect Pigments Manufacturing plant in Pune Inception of Sudarshan Net revenue at INR 1,000 Cr FY14 State of art technology centre at Sutarwadi Listed on NSE Footprints in Europe & USA Listed on BSE Net revenue at INR 400 Cr FY06 Manufacturing plant in Roha 23 Improved portfolio with HPPS and Effects for Cosmetics SUDARSHAN#24Our Governance Structure - Board Of Directors Mr. Pradeep Rathi (Chairman) Mr. Rajesh Rathi (Managing Director) Mr. Ashish Vij (Whole Time Director) Mr. D. N. Damania (Non-Executive, Independent Director) Mr. S. Padmanabhan (Non-Executive, Independent Director) Mrs. Shubhalakshmi A. Panse (Non-Executive, Independent Director) Mr. Naresh T. Raisinghani (Non-Executive, Independent Director) Mr. Sanjay K. Asher (Non-Executive, Independent Director) Mr. Anuj N. Rathi (Non-Executive, Non-Independent Director) Mrs. Rati F. Forbes (Non-Executive, Independent Director) Dr. Deepak Parikh (Non-Executive, Independent Director) 24 24 SUDARSHAN#25Our Products Portfolio Organic Pigments Azo Phthalos HPPS Dispersions Coloured material made of organic compound with pigment properties. Commonly used for Coatings, plastics, Inks & Textile applications Inorganic Pigments Chromes Cadmiums Iron Oxides Made up of mineral compounds. Are mainly oxides, sulphides of one or more than one metals. Used for plastics and industrial coatings I Effect Pigments Mica base for industrial and cosmetics Pigments with mica base and coated with oxides to give shimmer and glow. Mainly used in plastics, automotive coatings, cosmetics applications 25 SUDARSHAN#26The Pigment Approval Cycle Approval cycle for pigment sales varies across products and Sudarshan Chemicals is well placed in this regard COATINGS TE PLASTICS INKS COSMETICS Coatings remains a prominent focus area with Automotive and Decorative being the key segments Automotive: 1 to 5 years Decorative: 6 months to 1 Market leaders in multiple geographies offering wider spectrum of colours and pigment grades. Plastics: 3 to 6 months Focus on niche applications like liquid inks to build competency and strong market share Proven track record with significant growth for Sudarshan's progress Inks: ~1 month Cosmetics: 1 to 2 years year 26 SUDARSHAN#27Our Technical Capability PEOPLE . 100+ Scientists & Technical resources • Global experts' panel for competency enhancement Analytical & Application Lab experts INFRASTRUCTURE • • • • Dedicated site for R&D with investments > USD 10Mn State of art equipment for characterization and composition analysis Ability to handle crystal modification & surface treatments Ability to ensure reproducibility in end application PROCESS • Stage Gate Process . DOE approach to solutions SUDARSHAN 27#28Our Infrastructure SCIL is focused on building capabilities across research, development & technical service. Manufacturing Site: Roha Built in 1973; 1100+ trained team members. Products Manufactured: AZO, HPP, Effect Pigments, Dispersions Manufacturing Site: Mahad Built in 1993; 500+ trained team members. Products Manufactured: B&G, HPP, Effect Pigments SUDARSHAN Our Manufacturing Plants with Modern Water Treatment Facility and Certified by BSC and having won Sword of Honour for Safety 28 SUDARSHAN#29Global Pigments Market Overview Global Colour Pigment Market* - Relevant to Sudarshan Inorganic 3.0 Effect 0.6 ($bn) Organic 5.0 * Excludes Black, White and Metallic Pigments. Based on internal Pigment industry study and various market research reports 29 。 Our estimate of the Global Colour Pigments Market is ~$ 10B, market opportunities open to Sudarshan are ~$ 8.6B. • Global Organic Pigment market is expected to grow at ~3% CAGR over the next 5 years. • India is set for strong, sustainable growth in pigment manufacturing with substantial export opportunities. • Sudarshan is well placed to expand market share for all its applications. • We expect this strong growth to come from our coatings, inks, plastics and cosmetics segments. SUDARSHAN#30Our Pillars Of Growth We believe Growth will come from a focused approach to broaden product portfolio and renewed application focus • Product Portfolio Enhance Product Portfolio across 01 02 03 • . • Organic (especially HPPs and Inks) • Inorganic HPPS Effect Pigments Solvent Dyes Application Focus • Continued focus on decorative coatings and plastics . Additional focus on automotive coatings, industrial effects & cosmetics Geographic Presence Expand global footprint to newer geographies, and gain market shares in US, EU and China 30 SUDARSHAN#31Building Capabilities We focus on building capabilities across functions to achieve our vision 想 STRENGTHEN R&D Faster launch of new and innovative products, faster turnaround time on technical issues. MANUFACTURING & OPERATIONS EXCELLENCE COMMERCIAL EXCELLENCE Lean & Six Sigma, Capex expansion, strengthening supply chain Improving reach, channel management and customer experience ENVIRONMENT SUSTAINABILITY Best in class safety practices, continued efforts towards sustainable energy sources such as solar, windmill etc. 31 SUDARSHAN#32Our Competitive Advantage We achieve excellent product and process reliability Product Consistency & Process Control 800+ tests 4000+ specifications Reliable technical information Reliable Service Laboratories certified by the National Accreditation Board for Testing & Calibration Laboratories Recognized for operational excellence in Supply Chain Management Our Certifications ISO 9001 Oliver Wight Class ISO 17025:2001 Six Sigma A Certificate 32 Environment & Occupational Health Ensure safety of our plant operatives ISO 14001 OHSAS 18001 British Safety Council 5 Star Rating Sword of Honour SUDARSHAN#33Empowering our society and safeguarding our environment "SUDHA" (Sudarshan's Holistic Aspiration) Women Empowerment Our EHS initiatives 1,000+ women 8+ villages Livelihood initiatives through Paper Bags making projects, Stitching Projects Health and Community Development 20 Asha Workers (Health Workers) working in 22 villages Distribution of water purifiers to 38+ rural schools Clean and safe drinking water facilities to 38+ rural schools Sanitary Napkins Vending machines in 4 Girls schools Education The J. M. Rathi High School provides education to over 2,000 students Providing education to 376 children in Pune Slum area Digitalization of 28 rural schools Environment Waste Management - Working with 4,000+ families and 9 villages Effluent Treatment Our state of the art effluent treatment facilities and the standards of operation are recognized throughout the region as most stringent Co-Gen Facility (Steam & power co-generation plant) Estimated CO2 emission reduction approx. 480,000 Kg/Day Suspended Particulate matter less than 50mg/Nm3 Uninterrupted power supply to process consistent quality of product High efficiency will result in less fuel consumption Wealth Out of Waste Reduction in green house gases due to installation of Anaerobic Hybrid Reactor Installed both primary and secondary sludge where secondary sludge is used in cogen plant as a fuel Sudarshan Received Global CSR Award 2020 in Platinum Category for an outstanding achievement in implementing CSR Programme for strengthening core business with Social Commitment 33 SUDARSHAN#34Shareholder Information Share Information (as at 30th September 2022) NSE Ticker SUDARSCHEM Promoters FIls and FPIS BSE Ticker 506655 Mutual Funds Others Market Cap (mn) 28,768 Shareholding Pattern (as at 30th September 2022) 35.82% 4.15% 12.04% 47.99% % free-float 64.18% SUDARSHAN NIFTY 500 Free-float market cap 18,463 Shares Outstanding 69,227,250 3M ADTV (Shares) 144,194 3M ADTV (mn) 64.7 Industry Specialty Chemicals Oct-01-2021 Nov-01-2021 Dec-01-2021 Jan-01-2022 Feb-01-2022 Mar-01-2022 Apr-01-2022 May-01-2022 Jun-01-2022 Jul-01-2022 Aug-01-2022 Sep-01-2022 34 -1.2% -36.0% SUDARSHAN#35Awards And Accolades महात्मा पुरस्कार बापू को अमित सचदेवाद्वारा समर्पित MAHATMA Dedicated to Amit Sachd AW October 1 20 the s Brands of Maharashtra Mahatma Awards 2021 in CSR Excellence Global Clean Village Award - Energy & Environment foundation RL Golden Peacock HR Excellence Award 2018 GOLDEN PEACOCK A W A R D Winner HR Excellence 2018 Global CSR Award 2020 Platinum Category HR Excellence Award 2018 1st in Chemicals & Fertilizer Sector The Dyistas Mannfection ANNUAL GENERAL M C AWARDS PRESENTATION Global Waste Met Award 2018 - Gold Category DMAI Award for Energy Conservation Initiative 2017-18 35 Global HR Excellence Award 2017 AOUND FOR TALENT MANAGEMENT SUDARSHAN CHEMICAL 'Dream Company to Work For' in Chemical Sector World HRD Congress 2017 SUDARSHAN#36THANK YOU Investor Relations at Sudarshan: Mr. Mandar M. Velankar +91 20 6828 1200 [email protected] CIN: L24119PN1951PLC008409 www.sudarshan.com Sudarshan Chemical Industries Limited 162 Wellesley Road, Pune, Maharashtra - 411001 growing together... • Spiritually fulfilling Socially just • Environmentally sustainable 36 SUDARSHAN