#1Tube Investments of India Limited Investor Presentation November 2019 INDIA murugappa#2Index murugappȧ 7 Table of Contents Page No Corporate Overview Company Businesses Engineering Metal formed products. Cycles and Accessories Gears and Gear Products - Shanthi Gears Limited 4 12 24 44 55 2#3Murugappa Group and Philosophy Net Sales FY 2018-19 Chola Others 2% MS 12% CIFCL 19% CUMI 7% EID Parry 9% Coroman del 36% EBITDA FY 2018-19 Others Chola M$% CUMI 9% EID Parry 4% 6% Company Name Chola Enter a better life Market Capitalisation Description murugappa Cholamandalam Investment and Finance Company Limited is a Non INR 2,40,652 mn Banking Finance Company and one of the leading financial provider (USD$ 3,405 mn) for vehicle finance, business finance, home loans stock broking & distribution of financial products INR 72,135 mn (USD$ 1021 mn) INDIA TII 15% CIFCL 36% CFHL Coromandel INR 91,952 mn Tube Investments of India Limited offers wide range of engineering products such as Steel Tubes, Chains, car door frames, etc. apart from Fitness equipment and Cycles Cholamandalam Financial Holdings Limited holds investments in (USD$ 1,301 mn) financial services business INR 121,528 mn Coromandel International Limited is the leading phosphatic fertilizer (USD$ 1,719 mn) company in India PARRYS INR 29,160 mn (USD$ 413 mn) CUMI INR 56,879 mn (USD$ 805 mn) Chola MS Unlisted GENERAL INSURANCE EID Parry (India) Limited offers wide range of agro products such as sugar, microalgal health supplements and bio products Carborandum Universal Limited is a pioneer in coated and bonded industrial abrasives, super refractories, electro mineral and ceramics. The Company currently has presence in Australia, South Africa, Russia, Canada and Middle East Cholamandalam MS General Insurance Company Limited is a JV of Murugappa Group with Mitsui Sumitomo Insurance Group of Japan Note: Market data as on 30th Sep 2019. Source: NSE Sensex and Conversion Rate of 1 USD = Rs.70.69 as on 30th Sep 2019 Source: RBI Coroman del 29% TII 12% PARRY AGRO Parry infra PARRY MMorgan POIA KADAMANE COROMANOR ENGINEERING Ambadi sedis Shanthi Gears Tayfur wide The fundamental principle of economic activity is that no man you transact with will lose; then you shall not. 3 - Arthashastra#4Corporate Overview Manufacturing Businesses • • Engineering Segment (Tubes, Value Added Cold Rolled Strips, & Tubular Components) Metal Formed Products (Chains. for Automobile sector & Industrial applications, Doorframes & Channels for Passenger Cars) • Cycles and Accessories (Bicycles & Fitness Products) •Gears and Gears Products (Investment in Shanthi Gears Limited - Industrial Gears) . Key Financials - TII Standalone murugappa Rs. Cr. Particulars H118-19 H1 19-20 Revenue from Operations 2,721 2,365 PBIT (Before Exceptional Item) PBT (Before Exceptional Item) PAT 193 235 164 218 111 179 Key Financials - TII Consolidated Particulars H118-19 H1 19-20 Revenue from Operations 2,969 2,632 PBIT (Before Exceptional Item) 219 254 18 Manufacturing Plants and Suppliers to all major automotive OEMS or Tier 2/3 Suppliers PBT (Before Exceptional Item) 187 237 PAT 129 172 4#5TII (Standalone) Businesses Engineering Metal Formed Products PRECISION VALUE ADDED SHEET METAL FORMED COMPONENTS POWER TRANSMISSION CHAINS AND FINE BLANKED COMPONENTS Tubes, Large Chains for Automobile sector and Industrial applications, ERW & CDW Diameter Tubes, Value Added Cold Rolled Strips and Tubular Components Largest Supplier of Precision Steel Tubes (CDW) Doorframes, Channels for Passenger Cars, Fine blanked components and Railway coaches. • murugappa Cycles and Accessories TRUSESPECTED RESPECTED BSA ASTEMLES Bicycles, fitness products and accessories Leader in Chains and Fine blanked components Preferred supplier for roll-formed Our Brands command a leadership position in India door frames 5#6Business Highlights H1 2019-20 murugappa Revenue de-grown by 13% PBT before exceptional items at Rs. 218 Cr., grown 33%. grown by improved to 9.7% from 6.4% PBT margin ROCE stands at 22% as against 19% in PY H1 Cumulative free cash flow of Rs. 154 Cr. being 86% f PAT • Net debt reduction by Rs. 224 Cr., from Rs. 513 Cr. in Mar-19 to Rs. 289 Cr. in Sep-19 • Debt equity ratio improved to 0.3 from 0.4 in Mar-19. Debt/EBITDA improved to 0.8 in Sep- 19 from 1.0 in Mar-19 • TII received consideration of Rs. 45 Cr. on tendering Shanthi Gears shares under buy-back offer TII made net gain of Rs. 57 Cr. on sale of treasury shares. The Company has availed the benefit of lower tax rate @ 22% 6#7TII Shareholding Pattern – Sep'19 - Others 16.80% DII 22.96% FII 12.33% Promoter & Promoter Group 47.91% murugappa G 7#8Key Financials H1 2019-20 Standalone murugappȧ Rs. Cr. Consolidated Particulars Net Sales FY 18-19 H1 18-19 H1 19-20 FY 18-19 H1 18-19 H1 19-20 4,983 2,574 2,239 5,463 2,822 2,506 Growth % -13.0% -11.2% PBT before exceptional items 371 164 218 375 187 237 % to Sales 7.4% 6.4% 9.7% 6.9% 6.6% 9.4% Exceptional Items (9) 3 19 3 3 PBT after exceptional items 362 167 237 378 190 237 Tax 119 55 58 127 61 65 PAT 244 111 179 251 129 172 8#9Performance Trends Net Sales 4,983 4,335 3,925 murugappȧ PBT (before exceptional) 371 ד Rs. Cr. 218 218 202 2,574 164 2,239 16-17 17-18 18-19 H1 18-19 H1 19-20 14% 14% ROCE 21% 22% 19% 16-17 17-18 18-19 H118-19 H1 19-20 Free Cash Flow 109 95 208 59 154 16-17 17-18 18-19 H1 18-19 H1 19-20 16-17 17-18 18-19 H1 18-19 H1 19-20 9#10Performance Trends Basic EPS (FV Re. 1) (not annualised) 13.0 8.5 7.3 Capex 216 9.5 172 152 6.0 ד murugappȧ Rs. Cr. 106 88 16-17 17-18 18-19 H1 18-19 H1 19-20 16-17 17-18 18-19 H1 18-19 H1 19-20 Net Debt Equity 0.6 0.56 0.5 0.4 0.2 Net Debt/EBITDA 1.9 2.0 1.3 1.0 www wwwww 0.5 16-17 17-18 18-19 H118-19 H1 19-20 16-17 17-18 18-19 H1 18-19 H1 19-20 10#11Businesses Engineering Metal Formed Products PRECISION VALUE ADDED SHEET METAL FORMED COMPONENTS Cycles and Accessories TESTED TRUSTED & RESPECTED POWER TRANSMISSION CHAINS AND FINE BLANKED COMPONENTS Gears and Gear Products Stand BSA HERCULES BSA & Hercules bicycles are proud to be your chosen Superbrands BSA BSA LADYBIRDS MACH ROADSTERS ROADSTERS www.bates.com ROPOSTERS ROOSTERS RYDERS aro murugappȧ#12Engineering (Tubes and Strips) murugappa Leader in CDW tubes in the Automotive industry 12#13Two Wheeler Application Shock Absorber Tube Seat Assembly Swing Arm Handle Bar Tube Main Frame murugappa Front Fork Tube Two-Wheeler production in India de-grown by 13% in H1 19-20 G 13#14Four Wheeler Application Anti-roll bar Gas-filled strut Cross-member Drive shaft Side impact protection Camshaft Axle shaft murugappa Belt tensioner Instrument panel frame Steering column Power steering Corrugated tube (steering column) system 39999 Transverse control arm Engine mount Vibration damper Balancing shaft Engine Shock absorber (rubberised metal) Passenger Vehicle production in India de-grown by 16% in H1 19-20 14#15Off Road Vehicle Application Rollover Protection Structure (ROPS) Hydraulic -Cylinder Rollover Protection Structure (ROPS) murugappa G King Pin Front Axle Hollow Drive Shaft 15#16Business Drivers ■ Precision Steel Tubes (CDW) largely used in Automobile applications of Two Wheelers/ Passenger Cars and Commercial Vehicles for applications like Front Forks, Side impact beams, steering columns etc. ☐ ■ CDW tubes also used in Hydraulic Cylinders and Off-Road Vehicles. Range and adherence to tolerance are the key factors Variety of products due to new models introduced by all auto makers ■ Customer preference to Value added products competitiveness through internal ■ Cost efficiencies murugappa Business Mix H1 19-20 Non Auto 26% Auto 74% Gear Shift Lever Rear Axle for Commercial Vehicle Steering shafts 16#17Key Success Factors CDW Tube Market leader in High Quality & Safety critical CDW Tubes for 2W and 4W applications Multi Location • Only manufacturer with plants at 5 different locations closer to customers Gearing for Non-Auto CRSS Large-dia plant provides tubes for hydraulic cylinders, Off-Road applications, import substitution • Import substitution program is continuously on murugappȧ Planes Могилецких Regional Offic CF Agants Exports Continued focus on improving exports 17#18Major Customers Serviced MS MARUTI SUZUKI H HYUNDAI ΤΑΤΑ F JOHN DEERE Mahindra 2 Wheelers GM H HONDA ΤΟΥΟΤΑ P PIAGGIO PIAGGIO VEHICLES PVT. LTD. ROYAL ENFIELD Cummins murugappa 7 Ashok Leyland NISSAN LEYLAND DEERE D RENAULT NISSAN JOINT VENTURE COMPANY W sona GM TVS Mahindra SWARAJ mazda TAFE CNH קר THERMAX EASTERN Case New Holland Sabros BorgWarner श्रीs SODECIA THE FREE ENERGY COMPANY VISOKA DEWAS HYDROQUIP PVT. LTD. B Lucas-TVS Limited BOSCH PARRYS KING CRAFT SS COMSTAR e endurance IFB Rane LUK INDIA Thermal Energy systems TIM Forming Salcidha Sunar E and Cng Co. Pvt L VIRTEX ENGINEERS EE AAB ☑ IN THAI SUMMIT HEEL RECL Rajshree Sugars & Chemicals Limited * Valeo LUK India Amalgamations Group AQUA GROUP 18#19Awards and Recognitions Teams from TPI participated in the SGA competition held by ABK AOTS in Aug'19 and won awards for quality improvement w.r.t. reducing surface defect rejection in tubular front forks CMA ACA ACMA AC ACMA ACMA A AC AfQ Improv so QIT 20 t Tea murugappa Teams from TPI participated in the Zonal SMED Competition conducted by Automotive Component Manufacturers Association of India (ACMA) in Aug'19 and won award for reduced changeover time in tube mills .9#20G Awards and Recognitions murugappa Teams from TPI participated in QCFI Convention in Sep'19 and won several awards 20 20#21murugappȧ G Business Highlights Drop in Tubes and Strips volume due to slowdown of auto industry In spite of the drop in revenue due to difficult market conditions, profitability is maintained at the same level due to cost efficiencies and prudent revenue management Current focus is on operational efficiency improvement 000 000 000 000 21 21#22Key Financials Rs. Cr Particulars 18-19 H1 18-19 H1 19-20 Growth % Net Sales 2,676 1,382 1,127 -18.4% PBIT 254 130 130 0.3% % to Net Sales 9.5% 9.4% 11.5% Particulars 31-03-2019 30-09-2018 30-09-2019 Net Fixed Assets 530 533 570 Net Working Capital 157 168 146 Capital Employed 687 702 717 Capital Expenditure 84 44 63 murugappa 22#23Key Financial Trends Net Sales 2,676 PBIT (before exceptional) 254 2,131 1,742 175 146 1,382 1.127 16-17 17-18 18-19 H118-19 H1 19-20 murugappa 130 130 16-17 17-18 18-19 HT 18-19H1 19-20 ROCE 37% 37% 36% 26% 23% III Rs. Cr. 16-17 17-18 18-19 H1 18-19 H1 19-20 23#24Metal Formed Products (Chains, Fine Blanking, Doorframes and Railways) PRECISION VALUE ADDED SHEET METAL FORMED COMPONENTS, RAILWAY COACHES POWER TRANSMISSION CHAINS AND FINE BLANKED COMPONENTS Precision Value added Components murugappȧ 24#25Product Profile murugappȧ Metal formed products division cater to both automotive and non-automotive segments as below: Business Mix ■ Automotive: Two Wheeler drive chains, timing. chains and Sprockets for Auto-OEMs and After Market Fine Blanked parts and door frames for Passenger cars Railways 11% Non Auto 21% ■ Non-Automotive: Industrial Chains for the domestic market and exports ▪ Railway Coaches sections for Passenger Auto 67% G 25#26Industry Automotive Sector H1 19-20: ☐ Two-Wheeler production de-grown by 13% ■ Scooters -16% ■ Motor Cycles : -10% Passenger Vehicles production also de-grown by 16% Commercial Vehicles production registered a de-growth of 27% Non-Automotive Sector: ■ Non-Automotive segment is driven by GDP growth and Production trend ■ New Product Industrial development, Application Engineering and Import Substitution drive growth murugappȧ 26#27murugappa G Business Drivers Auto OEM, Fine Blanked Products, Industrial Chains and Roll Formed Products • Adequate Capacity Good push in the service Quality, Consistency and reliability • Cost Competitiveness • Factories located closer to customer locations New Product Development and Application Engineering and Import Substitution Capability. Auto Aftermarket • Leveraging brand presence. Reach and Availability Exports • Distributors for Standard Roller Chains • Price Competitiveness • Business Development with OEMs for specific programs. Growth is flat due to global recession. 27#28Auto Chains – Industry and Customers Industry Segments Two Wheeler Manufacturers (OEMs) Spare Parts Market - Auto Chains and Sprockets for Motor Cycles Key Customers: Hero BAJAJ Distinctly Ahead HONDA TVS TVS MOTOR COMPANY murugappa YAMAHA SUZUKI 28#29Auto Chain Products Drive Chain KIT murugappa CAM Chain After market brand DIAMOND DIAMOND DIAMOND LEGEND NEW IMPROVED BULLET KIT G DIAMOND 29 29#30Fine Blanking - Industry and Customers Industry Segments Two Wheeler - Motor Cycles and Scooters OEMs Four Wheeler - Passenger and Commercial Vehicle OEMs and Tier-1 Companies Industrial Applications. 4W OEMS MARUTI SUZUKI US brose Technik für Automobile Count NISSAN Hero F FORCE MOTORS 2W OEMS BAJAS AUTO LIMITED HONDA TVS 4W Tier - I LEAR CORPORATION murugappȧ BEHR Customers Autoliv PHA Valeo Best Koki Industrial YAMAHA SUZUKI Way of Life! ④BOSCH IN A AREVA LMW G 30#31Fine Blanking Products Engine Parts Motor Cycle Scooter 121 murugappȧ Transmission Parts Engine and Transmission Parts Seat Parts Braking System Parts Seat Belt and Door Parts Steering Parts Transmission Parts Engine Parts Hood Parts 31#32Roll Formed - Industry and Customers Industry Segments murugappȧ Four Wheelers - Passenger Car and Commercial Vehicle OEMs and Tier-I Companies Two Wheelers OEMs and Tier-I Companies Indian Railways Coach Factories - HYUNDAI ISUZU COMSTAR CONSTAR AUTOMOTIVE TECHNOLOGIES PRIVATE LTD. TOYOTA MARUTI SUZUKI NISSAN TATA MOTORS W Mahindra KIA RENAULT YAMAHA Revs Your Heart ROYAL ENFIELD Lucas-TVS Limited Cummins ALSTOM PIAGGIO GM ASHOK LEYLAND BOSCH NISSAN 32 32#33Roll Formed - Products Four Wheelers Car Door Frames Two Wheelers 2W - Mudguard Side Impact Beams Motor Casings murugappa 〃 7 Divisional Channels Cowl Cross Beam Railways 33#34Industrial Chains - Industry and Customers Industry Segments Construction Equipment Manufacturers Material Handling ( Fork Lifts ) Agricultural Equipment Manufacturers Cement and Power Key Customers KNORR BREMSE iwis wir bewegen die welt murugappȧ बी एच ई एल BHEL bea TECHNOLOGIES Conveyer Manufacturers Food Processing Multi-level Car Parking MCF MITSUBISHI CATERPILLAR FORKLIFT AMERICA INC. Atlas Copco Godrej sedist 34#35Industrial Chains - Products ODD A murugappa 88 Power Transmission and Conveying Chains Agricultural Chains I DD Engineering Class Chains G 35#36Key Success Factors Segment Leader Market leader in Drive and Cam chains in Auto OEM segment Leader in Domestic Industrial Chains Preferred supplier for Roll formed Door Frames Significant player in Fine Blanking Components Multi Location Strategically located plants close to leading OEMS for JIT supplies Total of 11 Manufacturing Plants (5 Chain Plants and 6 Metal Forming Plants) and also warehouses to service Auto After Market and IC requirements Brand Equity Strong brand equity - "Diamond and Rombo" brands murugappa G 36#37Metal formed - Key Success Factors murugappa Quality PPM maintained lesser than customer target Technology World Class High Speed Presses and Tools for Fine blanking, Chains and Motor casings. G Customers Catering to major 2W OEMs and Tier 1 Auto customers Industrial Chain OEMs in Domestic and Exports Large dealership network in Auto and Industrial Chains 37 32#38Metal formed - Industrial Chains murugappȧ Market Connect Initiatives IC Dealers' Meet – Drive 2019 DIAMOND JAI SHAKTI TRADING COMPANY PRE TIDC INDIA DIAMOND AMOND DIAMOND JAI SHAKTI TRADING COMPANY PRE TIDC INDIA Kisan Mela - Ludhiana Industrial Summit 38 2019 - Haridwar#39Metal formed - Awards and Recognition CIRCLE FORUM OF INDIA ENNAI CHAPTER QUALITY CIRCLE FOR CHENNAI CHAT OCFI CHENNAI CHAPTER 4th Con Mainte Un ber 2019 FIND 44 W 1975 tion for e Personnel Heroes) 2nd Team from Industrial Chains recognised by ABK-AOTS/ QCFI- CCQCC DIA murugappa QUALITY CIRCLE FOR OF INDIA CHENNA CHAI IR TION OCFI CHE Theme Ou CHAPT ncepts Septe CONVENTION Hookthrough" Sathy Of echnology SINCE 1975 Competition for the Personnel from Purchase, Marketing, Sales, Finance, Stores, S ty, Admin, Logistics ganised By: OTS DOS 9th June 2019 FABK & AC Che ITS 39#40murugappa G Metal formed - Awards and Recognition MARUTI SUZUKI CERTIFICATE OF APPRECIATION Presented to Tube Investments of India Limited in recognition of their superior performance in the field of Improvement in Quality Performance in the year 2018-19 Received award from MSIL for improvement in quality performance 29 July, 2019 Kanchi Aukas Managing Ductor & CEO Maruti Suzuki India Limited Award received from Alstom for new product development ALSTOM Supplier Ramp-Up Meeting-2019 40 40#41Business Highlights Focus on operational efficiency and quality improvements in auto chains Doorframe supplies to new projects commenced Obtained new orders for Railways ■ Taken new initiatives under TQM Sale of Rotogro rotavators commenced by Agri division and focus on market ramp up Production Chains of Silent rotogro LONGER LIFE NIGH STRENGTH PRECISION PIONER & OUTER TE SEANINGLESS B-J CRESS GROW MORE ROTOGRO COATED SEPT SADY SHOE QUAD SASSY murugappa G ப்பை EWASTE STE 41#42Key Financials Rs. Cr Particulars 18-19 H1 18-19 H1 19-20 Growth % Net Sales 1,286 613 690 12.5% PBIT 123 57 74 30.3% % to Net Sales 9.6% 9.3% 10.7% Particulars 31-03-2019 30-09-2018 30-09-2019 Net Fixed Assets 336 296 339 Net Working Capital 114 122 123 Capital Employed 450 418 462 Capital Expenditure 78 37 31 murugappa 42#43Key Financial Trends 1,095 996 Net sales 1,286 PBIT (before exceptional) 123 murugappȧ Rs. Cr. 102 88 690 613 74 57 16-17 17-18 18-19 H118-19 H1 19-20 16-17 17-18 18-19 H1 18-19 H1 19-20 ROCE 32% 26% 27% 27% 24% 16-17 17-18 18-19 H1 18-19 H1 19-20 43#44Cycles and Accessories BSA HERCULES LADYBIRD LADYBIRD murugappȧ G ROADED MACH CITY montra Pioneers in Promoting Cycling... not just cycles 44#45Industry Overall Trade market has de-grown by Trade Sales murugappa G 20% in H1 19-20 Standard In trade sales, the share of standard. bicycles continues to come down. In H1 19-20, volume of standard cycles dropped by 20% in the industry. TI volumes dropped slower than the industry and we have registered market share gain of 2%. Specials The Specials market volume has also dropped by 20% in H1 19-20 TI volumes dropped by 18% in H1 and we have registered market share growth of 2%. 150% 100% 63% 72% 50% 37% 28% 0% Industry TII Standards ■Specials Trade Market Share - Atlas 7% Avon 12% Others 19% TII 28% Hero 35% Based on volumes of AICMA members (Source: AICMA Data) 45#46Business Drivers Value Cost SALE) SALE Cost competitiveness in Standard bicycles and entry level mass bicycles Product differentiation, Branding and Superior Service are key to success in premium bicycles Rapid increase in internet penetration throwing up new channels and opportunities BRAND Rising aspiration towards cycling in Urban India murugappȧ Retail presence enhances customer connect and market share Brand positioned as high quality can charge premium 46#47Our Brands BSA CHAMP HERCULES (MTB) TURBODRIVE HERCULES TOPGEAR HERCULES (MTB) Coned BSA LADYBIRD MACH CITY HERCULES JR. ROADSTERS BSA LADYBIRD montra HERCULES MACH CITY HERCULES ROADEO HERCULES ROADSTERS murugappa ROADED & TRAIL ☑ TRACK&TRAIL CYCLES AND MORE 47#48Key Success Factors Pioneering New Product Development Innovation and differentiation in segments through integrated headlights, anti – slip chain etc. • 53 new models launched - murugappa ঠ Promoting cycling as a lifestyle choice • Adoption of cycling as a life-style choice. Building a cycling community on-ground with Track & Trail stores Leading conversations about cycles and cycling in media Wide-spread network • Network of 8500 dealers across the country Expansion of this format to brands increase BSA HERCULES network and retail the reach of our Vismer Stref BSA HERCULES LADYBIRD ROADEO MACH CITY montra 48#49Key Success Factors • Market penetration of premium brands Roadeo and Montra in multi brand stores Premium Cycle • Representing International Group (PCG) brands like Cannondale, Bianchi, Schwinn, Ridley • Focus on product and technical training to grow secondary business of premium bicycles. murugappa Pioneer in Retail Formats • Retail leadership through its exclusive format of Track and Trail • · Track & Trail Urban new stores in CY: 7 Total Track & Trail Stores as on date: 225 • Focus for 2019-20 is on learning and development for the retail chain • Re-introduced "Hercules BSA Zone", a shop in shop retail concept BSA HERCULES नेशनल ट्रेडर्स WITORIAL TEADERS BSA HERCULES LADYBIRD ROADEO MACH CITY montra 49#50Renewed Retail Experience - Track and Trail TRACK TRAIL BIKING AND BEYOND cannondale mongoose GT SCHWINN Bianchi THACK&TRAIL murugappȧ Continuously expanding Track and Trail retail experience into more towns 50 50#51Promoting Cycling K&T BSC PHOTOGRAPHY G Track and Trail Published by Sandra D'Souza (7) 10 September at 17:34 We've made our mark in the cycling world! A 12-medal win on day 1 at the Asia Track Cup makes India the top scorer. More power to our champions and a big congratulations to each of the cyclists! #Asia TrackCup2019 "** TRACK TRAIL статиски Teachers are like pillion riders who never leave our side. TI SPORTS 10 QS Indian O SPORTSTAR THEHINDU.COM Asia Track Cup 2019: Indians shine on Day One Indians win 12 medals in the cycling competition, including four gold #HappyTeachersDay NGUN murugappa BSA BICYCIES get us bubbling With excitement! ( TRACK&TRAIL "P montra FONDU montra CYCLOBE Grar FOND &TRAIL Gran FOND an ONDO etx RA Latexc ACK&TRAIL 史 RACK TRAIL RACING D th N ADRASCALS F G mont CYCLOBEY mont 51#52Business Highlights Gained overall Market Share by 2% YTD Sep'19 Implemented Fixed production plan (Toyota Planning System) at Ambattur plant which has helped in better throughput & effective Inventory management Warehouse consolidation initiative is being carried out Building for the future. 。 Digitization Initiatives - Bizom, Tally implementation to penetrate secondary sales. Implementation of WMS system MACH CITY murugappa New stories to share. 52 52#53Key Financials murugappȧ Rs. Cr Particulars 18-19 H1 18-19 H1 19-20 Growth % Net Sales 1,232 687 504 -26.7% PBIT 11 12 18 46.1% % to Net Sales 0.9% 1.8% 3.6% Particulars 31-03-2019 30-09-2018 30-09-2019 Net Fixed Assets 134 139 135 Net Working Capital 56 103 35 Capital Employed 190 242 171 Capital Expenditure 6 4 1 53#54Key Financial Trends Net sales 1,332 1,294 1,232 687 504 36 PBIT (before exceptional) murugappa Rs. Cr. 18 11 12 0 16-17 17-18 18-19 H118-19 H1 19-20 16-17 17-18 18-19 H118-19H1 19-20 12% ROCE 21% 10% 6% 0% 16-17 17-18 18-19 H1 18-19 H1 19-20 54#55Gears & Gear Products Shanthi Gears murugappa Shanthi Gears (SGL) - Strong Brand in Industrial Gears G 55#56murugappa Business Overview . • . • . • Began operations in 1969 at Coimbatore Acquired by TII in 2012 High Margin Business Leader in custom-made gears & loose gears -70% of revenues come from customized products Fully integrated operations with in- house R&D team SGL Shareholding Pattern - Sep '19 FII 3.14% DII 5.06% Others 21.33% Promoter (TII) 70.47% Design capabilities and engineering Foundry, Fabrication and forging unit Comprehensive Heat treatment facilities Tool room for manufacturing hobs, cutters •Gears and Pinions Key Products •Gear boxes •Geared motors •Gear assemblies •Worm Spares •Service & Repair 56#57Integrated Gear Box Manufacturing Facility murugappa In-House Heat Treatment Shop (Case carburising & Gas Nitriding) State - of the Art Gear Manufacturing facility Shanthi Gears In-House Foundry (CI & SG Iron) for Casing In-House Fabricated Shop with CNC Gas cutting along with Stress Relieving Furnace In House Non- Ferrous Casing facility for PB & Al Br G 57 40#58Gear and Gear Boxes murugappa Spur/ Helical Pinion Shaft Gear Internal Gear Worm and Wheel Straight Bevel Spiral Bevel Worm Gearboxes- Adaptable Worm Gearboxes- Standard Worm Gearboxes- Special Helical Gearboxes Bevel Helical Gearboxes 58#59Key Customers 7 murugappa बी एच ई एल DAVID BROWN DB BHARAT FORGE KALYANI GE BOMBARDIER &ε BHEL Atlas Copco VOITH KONECRANES CATERPILLARⓇ Lifting Businesses™ TEREX DEMAG PSG PackSys Global ΤΑΤΑ ELGI Clean Energy® हि एलि HAL A TATA STEEL AREVA Propel your dreams IR भारतीय SIEMENS BALDOR A MEMBER OF THE ABD GROUP RIETR Holcimmins + INDIAN RAILWAYS uniGear une société du groupe DAVID BROWN a DAVID BROWN Company 59#60Business Highlights Q2 Sales of Rs. 70 Cr. being 21% growth over PY; H1 Sales of Rs. 141 Cr. Service Business order significantly compared to PY book grown In roads for High Speed Gears in Turbine application Ramp-up in Helical segment murugappa G 60 60#61Key Financials Rs. Cr Particulars 18-19 H118-19 H1 19-20 Growth % Net Revenue 243 121 143 17.6% PBT 42 22 25 9.1% % to Net Revenue 17.5% 18.5% 17.2% PAT 33 18 18 1.8% % to Net Revenue 13.7% 14.4% 12.5% Particulars 31-03-2019 30-09-2018 30-09-2019 Net Fixed Assets 59 59 56 Net Working Capital 112 89 100 Investments 127 182 80 Capital Employed 297 330 236 Capital Expenditure 12 8 2 murugappa 61#62Key Financial Trends Net Revenue 243 214 184 33 33 29 143 121 PBT 43 ד murugappȧ Rs. Cr. 25 22 16-17 17-18 18-19 H1 18-19 H1 19-20 16-17 17-18 18-19 H1 18-19 H1 19-20 ROCE 14% 14% 11% 9% 21% 16-17 17-18 18-19 H1 18-19 H1 19-20 62 62#63Corporate Office: Tube Investments of India Ltd. "Dare House", 234 N S C Bose Road, Chennai 600 001, India. +91 44 4217 7770 +91 44 4211 0404 [email protected] murugappa 7 -Disclaimer--- This presentation contains forward-looking statements which may be identified by their use of words like “plans,” “expects,” “will,” "anticipates," "believes,” “intends,” “projects,” “estimates” or other words of similar meaning. All statements that address expectations or projections about the future, including, but not limited to, statements about the strategy for growth, product development, market position, expenditures, and financial results, are forward-looking statements. Forward-looking statements are based on certain assumptions and expectations of future events. The companies referred to in this presentation cannot guarantee that these assumptions and expectations are accurate or will be realized. The actual results, performance or achievements, could thus differ materially from those projected in any such forward-looking statements. These companies assume no responsibility to publicly amend, modify or revise any forward looking statements, on the basis of any subsequent developments, information or events, or otherwise. 63