#1SUDARSHAN Investor Presentation Q1 FY22#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 SUDARSHAN 16 SUD-15- CONSOLIDATED REVENUES $250 Mn (FY21) 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 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 Mexico S. de R.L de CV. Sudarshan Europe B.V. JAPAN Sudarshan Japan K.K 5 SUDARSHAN#6A journey towards a leading world class color solutions provider Domestic Revenue Cr Exports Revenue Cr 157% EBITDA Cr 236% EBITDA % 1,864 288 1,438 953 781 724 192 A Consistent performance with Sales growing at a CAGR of 10% and Operating profit by 13% despite exiting some of the businesses 481 657 911 (49%) 86 11.8% 15.4% 13.3% 243 (46%) (34%). FY11 FY18 FY21 FY11 FY18 FY21 player Earnings per Share 234% 20.2 Gross Block Cr 6.1 11.1 348 599 168% 932 FY11 FY21 Pigment, Agro Chemical, A pure play Pigment Masterbatch businesses focus Amongst top 20 pigment 3rd largest pigment 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: 20% FY11 FY18 FY21 FY11 FY18 FY21 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#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 • Covid-19 wave-II impact on India market • Input cost escalation seen across multiple intermediates Industry consolidation trend continued Logistics disruptions continuing leading to cost escalations and tight container availability SUDARSHAN 8#9Quarterly Financials#10Quarterly Performance Highlights - Consolidated Financials Income from Operations (In Cr) EBITDA* (In Cr & Margin%) 577 474 +35% 53 352 الا Q1FY21 Q4FY21 Q1FY22 87 62 2 +17% PAT (In Cr & Margin%) 18 48 26 15.0% 15.2% 8.3% 13.1% 5.2% 5.5% Q1FY21 Q4FY21 Q1FY22 * EBITDA as percent to Total Income from operations (excluding other income) | PAT is excluding profit/loss from exceptional and extraordinary items 10 Q1FY21 Q4FY21 Q1FY22 +43% SUDARSHAN#11Quarterly Performance Highlights - Key Ratios Current Ratio 1.2 1.2 1.2 Q1FY21 Q4FY21 Q1FY22 Cash conversion cycle 102 96 86 Earnings per Share Q1FY21 Q4FY21 Q1FY22 2.6 Debt to Equity Ratio Net debt Cr Net Debt to EBITDA 0.9 0.9 0.8 528 614 720 Q1FY21 Q4FY21 Q1FY22 6.9 3.8 2.4 Q1FY21 Q4FY21 Q1FY22 2.2 2.1 Q1FY21 Q4FY21 Q1FY22 EPS is calculated excluding profit/loss from exceptional and extraordinary items and not annualised 11 SUDARSHAN#12Quarterly Performance Highlights - Pigment Business Income from Operations (In Cr) Gross margin % EBITDA* (In Cr & Margin%) 341 533 453 Q1FY21 Q4FY21 Q1FY22 +33% 43.9% 42.9% 47.1% 54 84 66 +23% 15.7% 15.8% 14.5% Q1FY21 Q4FY21 Q1FY22 Q1FY21 Q4FY21 Q1FY22 Capacity utilisation during Q1FY22 was at ~ 81% of operating capacity ➤ Impact from withdrawal of export incentive scheme (MEIS) on margins at ~ 1% YoY. Details of new scheme RODTEP yet to be released ➤ Intermediates price increase pass through continued through Q1FY22 * EBITDA as percent to Total Income from operations (excluding other income) 12 SUDARSHAN#13Quarterly Performance Highlights - Pigment Business Domestic Revenue Cr 273 203 120 Mix % 35% 51% 45% Q1FY21 Specialty Revenue Cr 240 Q4FY21 Q1FY22 +68% Export Revenue Cr 221 260 250 +13% 65% 49% 55% Q1FY21 Non-Specialty Revenue Cr 363 318 +32% 101 Mix % 70% 68% 70% Q1FY21 Q4FY21 Q1FY22 Q4FY21 Q1FY22 170 135 +33% 30% 32% 30% Q1FY22 Q4FY21 Q1FY22 ➤ The second wave of the pandemic did impact domestic business due to the lockdowns imposed by states at various intervals starting from the month of April and continued restrictions through the quarter Revenue includes Revenue from Operations and Other operating income of Pigment business 13 SUDARSHAN#14Business Outlook#15Business Outlook - FY22 and beyond Capex program to drive future growth and bring in EBITDA improvement Capex projects under commissioning in the areas of existing and new products; 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 15 SUDARSHAN#16ABOUT SUDARSHAN#17Our 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 17 SUDARSHAN#18Our 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 Net revenue at INR 1,000 Cr FY14 State of art technology centre at Sutarwadi Listed on NSE Manufacturing plant in Mahad for Pthalos & Effect Manufacturing plant in Pune Inception of Sudarshan Pigments Footprints in Europe & USA Net revenue at INR 400 Cr Listed on BSE FY06 Manufacturing plant in Roha 18 Improved portfolio with HPPS and Effects for Cosmetics SUDARSHAN#19Our 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) 19 SUDARSHAN#20Our 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 20 20 SUDARSHAN#21The Pigment Approval Cycle Approval cycle for pigment sales varies across products and Sudarshan Chemicals is well placed in this regard COATINGS w PLASTICS INKS 10 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 21 SUDARSHAN#22Our 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 22#23Our 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 甜 Our Manufacturing Plants with Modern Water Treatment Facility and Certified by BSC and having won Sword of Honour for Safety 23 SUDARSHAN#24Global 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 24 О 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. o 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#25Our 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 Organic (especially HPPs and Inks) 01 02 03 . 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 25 SUDARSHAN#26Building Capabilities We focus on building capabilities across functions to achieve our vision $ STRENGTHEN R&D Faster launch of new and innovative products, faster turnaround time on technical issues. MANUFACTURING & OPERATIONS EXCELLENCE Lean & Six Sigma, Capex expansion, strengthening supply chain COMMERCIAL EXCELLENCE 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. 26 SUDARSHAN#27Our Competitive Advantage We achieve excellent product and process reliability Product Consistency & Process Control 800+ tests 4000+ specifications ISO 9001 Six Sigma 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 Oliver Wight Class ISO 17025:2001 A Certificate 27 Environment & Occupational Health Ensure safety of our plant operatives ISO 14001 OHSAS 18001 British Safety Council 5 Star Rating Sword of Honour SUDARSHAN#28Empowering 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 28 SUDARSHAN#29Shareholder Information Share Information (as at 30th June 2021) NSE Ticker SUDARSCHEM Promoters Flls and FPIs BSE Ticker 506655 Mutual Funds Others Market Cap (INR mn) 46,853 60.43% Shareholding Pattern (as at 30th June 2021) 39.57% 8.79% 7.48% 44.16% % free-float Sudarshan has performed in line with broader indices over the last 12 months SUDARSHAN NIFTY 500 MSCI India Small Cap Index Free-float market cap 28,313 Shares Outstanding 6,92,27,250 3M ADTV (Shares) 4,52,456 3M ADTV (INR mn) 302.5 Industry Specialty Chemicals Jul-01-2020 Aug-01-2020 Sep-01-2020 Oct-01-2020 Nov-01-2020 Dec-01-2020 Jan-01-2021 Feb-01-2021 Mar-01-2021 Apr-01-2021 May-01-2021 Jun-01-2021 29 88% 73% 56% SUDARSHAN#30Awards And Accolades MAHT MAHAIMA SUDARSHAN 30/1/2021 Sudarshan Chemical Industries Ltd WINS "Mahatma Awards 2020" in CSR Excellence RI Mahatma Awards 2020 in CSR Excellence Global CSR Award 2020 Platinum Category Global Clean Village Award - Energy & Environment foundation Global WasteMet Award 2018 - Gold Category 30 Golden Peacock HR Excellence Award 2018 GOLDEN PEACOCK A W A R D Winner HR Excellence 2018 S Global HR Excellence HR Excellence Award 2018 1st in Chemicals & Fertilizer Sector 'Dream Company to Work For' in Chemical Sector World HRD Congress 2017 ANNUAL GENERAL M C AWARDS PRESENTATION CSR CSR CSR DMAI Award for Energy Conservation Initiative 2017-18 India CSR Award for CSR Community Initiative 2017-18 SUDARSHAN#31THANK 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 Spiritually fulfilling 31 growing together... · Socially just • Environmentally sustainable SUDARSHAN