#1PUNJAB CHEMICALS AND CROP PROTECTION CIN NO. L24231PB1975PLC047063 Regd. Office & Works LTD. Milestone-18, Ambala-Kalka Road, Village & P.O. Bhankharpur, Derabassi, Distt SAS Nagar, Mohali (Punjab)-140201, INDIA Tele: 01762-280086, 522250, Fax: 01762-280070, E-mail: [email protected], Website: www.punjabchemicals.com Date: 13th August, 2021 By E-filing The Manager Department of Corporate Services Bombay Stock Exchange Limited 1st Floor, New Trading Wing, P.J Towers, Dalal Street Fort MUMBAI-400 001 Scrip Code: 506618 Tel No.: 022-22728073 The Manager Listing Department National Stock Exchange of India Limited Exchange Plaza, Bandra Kurla Complex, Bandra (East) MUMBAI-400 051 Scrip Symbol: PUNJABCHEM Tel No.: 022-26598235/26598458 Sub: Investor Presentation - Financial Overview -Q1 of FY2022 Dear Sir/Madam, Pursuant to Regulation 30 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, we would like to enclose herewith the Investor Presentation of the Company for the first quarter ended 30th June 2021. Kindly take the same on the record and inform all your constituents accordingly. Thanking you, Yours faithfully for PUNJAB CHEMICALS AND CROP PROTECTION LIMITED, Rushing (CS PUNIT K ABROL) SR. V.P. (FINANCE) & SECRETARY Corporate Office: Oberoi Chambers II, 5th Floor, Plot No. 645/646, New link Road, Andheri (W), Mumbai-400053. INDIA. Tele: 91-22-26747900 Fax: 91-22-26736178 Email: miakakamisele ---#2PUNJAB CHEMICALS AND CROP PROTECTION LTD. ISO 9001:2015 & ISO 14001:2015 Certified Company PUNJAB CHEMICALS AND CROP PROTECTION LTD INVESTOR PRESENTATION August 2021 11JM-401#3DISCLAIMER PUNJAB CHEMICALS AND CROP PROTECTION LTD. ISO 9001:2015 & ISO 14001:2015 Certified Company This presentation and the following discussion may contain "forward looking statements" by Punjab Chemicals & Crop Protection Limited ("Punjab Chemicals" or the Company) that are not historical in nature. These forward-looking statements, which may include statements relating to future results of operations, financial condition, business prospects, plans and objectives, are based on the current beliefs, assumptions, expectations, estimates, and projections of the management of the company about the business, industry and markets in which the company operates. These statements are not guarantees of future performance, and are subject to known and unknown risks, uncertainties, and other factors, some of which are beyond the company's control and difficult to predict, that could cause actual results, performance or achievements to differ materially from those in the forward-looking statements. Such statements are not, and should not be construed, as a representation as to future performance or achievements of Punjab Chemicals. In particular, such statements should not be regarded as a projection of future performance of Punjab Chemicals. It should be noted that the actual performance or achievements of the company may vary significantly from such statements.#411JM-401 PUNJAB CHEMICALS AND CROP PROTECTION LTD. ISO 9001:2015 & ISO 14001:2015 Certified Company DISCUSSION SUMMARY Financial Overview - Q1 FY22 Company Overview Business Strategy Performance Track Record#5Q1 FY22 RESULT HIGHLIGHTS RESULTS AT A GLANCE Q1 FY22 Revenue 211 cr, up 59.6% YoY Q1 FY22 EBITDA * 36.9 cr, up 66.7% YoY Q1 FY22 PAT * 24.3 cr, Up 117.1% YoY PUNJAB CHEMICALS AND CROP PROTECTION LTD. ISO 9001:2015 & ISO 14001:2015 Certified Company EBITDA Margin 17.5% PAT Margin 11.5% Generated Cash Profits € 28.2 cr Long-term Client Deals Strong Order Book position: 1,500 cr#6Q1 FY22 FINANCIAL PERFORMANCE YOY COMPARISON (In * cr) REVENUE 132.2 211.0 Q1 FY21 Q1 FY22 EBITDA & EBITDA MARGIN 16.7% 22.1 17.5% 36.9 Q1 FY21 Q1 FY22 GEOGRAPHICAL SPLIT ■International ■Domestic 79.5 103.2 107.8 52.7 Q1 FY21 Q1 FY22 CASH PAT, PAT & PAT MARGIN PAT 8.5% PUNJAB CHEMICALS AND CROP PROTECTION LTD. ISO 9001:2015 & ISO 14001:2015 Certified Company Cash PAT PAT Margin % 11.5% 28.2 24.3 15.0 11.2 Q1 FY21 Q1 FY22#7FY21 FINANCIAL PERFORMANCE YOY COMPARISON (In * cr) REVENUE 549.6 FY20 GEOGRAPHICAL SPLIT ■Domestic ■International 678.2 FY21 EBITDA & EBITDA MARGIN 14.1% 7.7% 95.5 42.4 FY20 FY21 FY20 422.6 343.1 206.5 FY21 PUNJAB CHEMICALS AND CROP PROTECTION LTD. ISO 9001:2015 & ISO 14001:2015 Certified Company 255.6 CASH PAT, PAT & PAT MARGIN PAT Cash PAT PAT Margin % 7.2% 63.9 2.0% 49.1 26.1 10.8 FY20 FY21#8CONSOLIDATED PROFIT & LOSS STATEMENT PUNJAB CHEMICALS AND CROP PROTECTION LTD. ISO 9001:2015 & ISO 14001:2015 Certified Company Particulars (cr.) Q1 FY22 Q1 FY21 YOY % Q4FY21 QoQ % FY21 Operating Revenue 211.0 132.2 59.6% 209.5 0.7% 678.2 COGS 123.6 74.4 66.2% 131.7 -6.1% 405.1 Gross Profit 87.3 57.8 51.1% 77.8 12.2% 273.1 Gross Margins (%) 41.4% 43.7% -234 bps 37.2% 420 bps 40.3% Employee Benefit Expense 19.6 16.2 21.2% 18.3 7.3% 67.7 Other Expenses 30.8 19.5 57.9% 36.3 -15.1% 109.9 EBITDA 36.9 22.1 66.7% 23.3 58.5% 95.5 EBITDA Margin (%) 17.5% 16.7% 75 bps 11.1% 640 bps 14.1% Other Income 3.9 3.8 4.0% 4.1 -5.6% 14.9 Finance Costs 2.4 4.4 -46.1% 2.1 15.0% 13.5 Depreciation 1.2 0.9 29.0% 0.1 1.8 PBT 31.8 14.9 113.6% 17.2 84.8% 69.0 Taxes 7.5 3.7 103.0% 6.7 11.9% 19.9 PAT 24.3 11.2 117.1% 10.5 131.6% 49.1 PAT Margin (%) 11.5% 8.5% 305 bps 5.0% 650 bps 7.2%#9PUNJAB CHEMICALS AND CROP PROTECTION LTD. ISO 9001:2015 & ISO 14001:2015 Certified Company COMPANY OVERVIEW#10COMPANY OVERVIEW PUNJAB CHEMICALS AT A GLANCE PUNJAB CHEMICALS AND CROP PROTECTION LTD. ISO 9001:2015 & ISO 14001:2015 Certified Company About Us • . Established in 1975 Specialising in agrochemicals Expanding aggressively in contract research & manufacturing (CRAMS) Our Vision To become a major Indian player in the fast-growing CRAMS segment and a preferred partner for manufacturing high-tech performance chemicals • • • Financials FY21 Revenue * 678.2 cr FY 21 EBITDA * 95.5 cr, highest in last 10 years 4 yrs Revenue CAGR : 8% 4 yrs PAT CAGR: 30% 4 yrs Debt/Equity down from 1.4 to 0.5 $ • • • • . Our Mission To achieve income and profitability in a sustained manner To meet the customer expectations with products of the right quality and quantity in required time To focus on products and companies which ensure better added value To renew relationship with Indian Formulators and build a stronger base in the Indian market Strategic Initiatives • Since 2016, CRAMS biz has grown manifold Lucrative long-term contracts signed with multiple international players • New product launches & registrations in pipeline, targeting annual sales of 1,500 cr in 3 years • 13.1 cr debt reduction in FY21, decreasing leverage.#11COMPANY OVERVIEW EVOLUTION OF THE COMPANY +1 Diversification- Specialty Chemicals 1983 1975 Foundation PUNJAB CHEMICALS AND CROP PROTECTION LTD. ISO 9001:2015 & ISO 14001:2015 Certified Company Business Model - Contract Manufacturing 2016 Highest EBITDA in 10 years 955 mn 2021 M&A - Alpha Drug Pharma 2003 ㅁㅁㅁ 1995 Diversification- Agrochemicals 2006 Integration under one entity- Punjab Chemicals 2018 Capacity enhancement - Agrochemicals#12MANUFACTURING FACILITIES PUNJAB CHEMICALS AND CROP PROTECTION LTD. ISO 9001:2015 & ISO 14001:2015 Certified Company Location Established Area Capacity Manpower Capacity Utilisation (FY 21) Certifications Derabassi 1975 24.1 acres 29,700 MT 751 80% Lalru 2003 23.5 acres 5,778 MT 456 73% ISO 9001:2015 & ISO 14001:2015; 2 STAR Export House#13MANUFACTURING FACILITIES DERABASSI LALRU PUNJAB CHEMICALS AND CROP PROTECTION LTD. ISO 9001:2015 & ISO 14001:2015 Certified Company Molecules: Metamitron, Metconazole, Diflufinican, Oxalic Acid, Benzoic Acid, Ethofumesate Molecules: Albendazole, Ketosulphone, Drotavarin, Etoricoxib, Trimethoprim, Aminoacetonitrile 6 acres available for future expansion Capacity added in FY21: 3,000 MT 82% 73% 72% 80% 71% 79% 60% 73% 19,914 17,543 17,497 FY19 FY20 Annual Production (MT) 7,022 1,610 1,391 1,402 FY21 Q1FY22 FY19 FY20 FY21 Capacity Utilisation Annual Production (MT) 342 Q1 FY22 Capacity Utilisation#14LEADERSHIP TEAM BOARD OF DIRECTORS • • Mr. Mukesh D. Patel, Chairman Graduate in Chemical Engineering, experience in finance and Corporate management for more than 43 years Associated with the company since 1985 Serving as Non-Executive Independent Director on board of Shilchar Technologies & Banco Products Active roles in - CHEMXIL, Indian Chemical Manufacturer's Association Mr. Vijay Rai, Independent Director BTech, IIT Kharagpur, MD of Rallis India (1988-2000) • Led Rallis India Ltd from a 200 cr turnover to 1,200 cr • • Has been on Board of Greaves Cotton Ltd, Sri Biotech Labs Promoter and Chairman of Akola Chemicals, manufacturer of protein-based nutrients . . • PUNJAB CHEMICALS AND CROP PROTECTION LTD. ISO 9001:2015 & ISO 14001:2015 Certified Company Mr. Shalil Shroff, Managing Director Management Diploma from University of Deopage (USA) Joined in 1992 and Managing Director since 2003 Leads export marketing, general administration, financial liaising, new customer acquisition, developing & launching new products Board Member- Hem-Sil Trading & Manufacturing, SD Agchem (Europe),SSRS Trading & Manufacturing and Scarlett Enterprises . Capt Surjit Singh Chopra (Retd), Independent Director Alumnus of NDA, Khadakvasala, 15 years in Indian Air Force Led as an Air Force Pilot in the 1962, 1965 & 1971 wars . Served as a Pilot in Air India from 1976-2002 • • Flight instructor and ex-member of the Air Crew Examining Board Associated with the Company since 2004 • . Smt. Aruna Bhinge, Independent Director Master of Management Studies, NMIMS & MSc., University of Mumbai 30+ years leadership experience positions in business strategy, marketing, & partnership in the healthcare and agri business sector Also on Board of Laurus Labs Ltd, Mahindra EPC Irrigation Ltd & Mahindra Agri Solutions Ltd • Mr. Sheo Prasad Singh, Independent Director 40 years experience in Commercial and Retail Banking Retired as General Manager of Export-Import Bank from in 2012 Master of Science (Botany), Certificated Associate of the Indian Institute of Bankers (CAIIB), PGDFRM from World Trade Institute, Mumbai, Post Graduate Diploma in Financial Advising (PGDFA)#15KEY MANAGEMENT TEAM • Mr. Avtar Singh, Non-Independent Director BSc.- Punjab University; associated with the company for 40 years, In charge of operations of Agro Chemicals Division and Specialty Chemicals Division Supervises Production, R&D, New Product Development and commercial production of new products Mr. Vinod Gupta, Chief Executive Officer • Chemical Engineer, IIT-B & PGPX, IIM-A • Former CEO of Marine Chemicals Business at • Arclean Chemicals & VVF (India) Ltd More than 20 years of experience with Petrochemicals Division of Reliance Industries PUNJAB CHEMICALS AND CROP PROTECTION LTD. ISO 9001:2015 & ISO 14001:2015 Certified Company • • • Mr S.S. TIWARI, Non-Independent Director MSc, Diploma in Mgmt. 39 years association with the company from STS chemicals era Worked at the operational level, looked after the domestic market of various chemicals and managed production sites • Dr. S. Sriram, Chief Financial Officer PhD in Supply Chain Mgmt; IIM Ahmedabad (Senior Mgmt Developmt Program), Member of Insti. Cost Accountants India Joined Bayer as Business Controller & rose to General Manager 33 years of total experience including 15 years at UPL, starting as a General Manager to CFO Mr. Punit Abrol, Sr VP & CS ⚫ L.L.B., B.Com, F.C.S. & Diploma of Taxation from Punjab University . In 35 years with the company, has handled Finance, Accounts, Legal & Secretarial functions Chairman of Northern India Regional Council of the Institute of Company Secretaries of India in the year 2006#16PUNJAB CHEMICALS AND CROP PROTECTION LTD. ISO 9001:2015 & ISO 14001:2015 Certified Company BUSINESS STRATEGY#17BUSINESS STRATEGY PUNJAB CHEMICALS AND CROP PROTECTION LTD. ISO 9001:2015 & ISO 14001:2015 Certified Company میرا Identify Niche Products Target 50-100 cr revenue per product Target clients - Global Agrochemical leaders Mid-sized companies with specific requirement Partner for Contract Mfg Offer attractive and cost- effective solution Long term engagement favorable for both parties Faster turnaround Modus Operandi Dedicated R&D Team Quick implementation of the Capex based on ROI • Growth Triggers Diversification & expansion into new geographies to expand revenue streams • Expertise in Scaling up : • Product launches in FY22 R&D Pilot → Commercial • Expanding customer base in CRAMS Production#18PUNJAB CHEMICALS AND CROP PROTECTION LTD. ISO 9001:2015 & ISO 14001:2015 Certified Company ADVANTAGE PUNJAB CHEMICALS Punjab Chemicals has the advantage of being a go-to CRAMS provider for both domestic & international agrochemical companies, thus positioned to gain further advantages as the industry expands Low Cost Operator Manufacturing and R&D Capability Developed an efficient cost competitive process over the last decade and are maximising export potential Availability of technically trained manpower (58 research staff), extra production capacity to fulfil incremental demands Consistent Track Record Changing Industry Dynamics Way Forward Historical association with Domestic clients helped expand base to become a preferred partner of choice for MNC clients Global manufacturers are looking to decrease high dependency on China. Poised to benefit from the shift in supply chain Clients fund a portion of capex to expand production. Export revenues help smoothen the seasonality in domestic sales I#19• . • . INDIAN AGROCHEMICALS INDUSTRY OVERVIEW India is the fourth largest producer and the fifth largest exporter of agrochemicals in the world The Indian agrochemicals market (at USD 9.2 bil or ~15% share of the global agrochemicals market worth USD 62.5 bil) is the largest sub-segment of the specialty chemicals industry and posted a 10% CAGR over CY14-19 In 2019 India exported pesticides worth USD 3.4 bil (9.4% of global exports) Production of agrochemicals has grown at a CAGR of ~5% in last 5 years The average per-hectare consumption of agrochemicals in India is about one-tenth of the US and the UK, and one-twentieth of Japan and China. This has a potential to grow multi fold over the next decade India imports over 50% of its agrochemical raw materials. Under the Make In India & Atmanirbhar programs, the aim is to reduce imports by manufacturing more locally The export of agrochemicals in FY20 was valued at around 22,000 crore, accounting for approximately 1% of the total exports. This has a potential to grow to 35,000 crore by 2025 PUNJAB CHEMICALS AND CROP PROTECTION LTD. ISO 9001:2015 & ISO 14001:2015 Certified Company Source: FICCI, PWC#20INDIAN AGROCHEMICALS INDUSTRY OVERVIEW PUNJAB CHEMICALS AND CROP PROTECTION LTD. ISO 9001:2015 & ISO 14001:2015 Certified Company Consumption vs Exports ('000 cr) Segmental Domestic Consumption 2010 2020 36.3% Technical Manufacturers ~125 ~145 35.5% 22,000 20,000 Formulators ~800 ~1000 13.3% 15.0% Domestic Exports Insecticide ■Fungicides Domestic Production of Agrochemicals (in '100 MT) Agrochemicals Export from India (in '100 MT) Distributors 1.5 Lakh 2 Lakh CAGR 4% CAGR 12% 461 410 213 213 220 378 186 188 Technical Grade Pesticide Mfg ~60 ~80 307 285 Capacity Utilisation ~58% ~80% FY 15 FY16 FY17 FY18 FY19 FY15 FY16 FY17 FY18 FY19 Source: FICCI - Indian Specialty Chemicals, PWC#21INDUSTRY OPPORTUNITIES Anticipated Growth 2018 → 2025 $32 bil CAGR ~ $49 bil 6.3% Integrated Pest Management (IPM) ➤ Patent expiry of agrochemical products Substituting China as 100+ agrochemicals to go off-patent till 2023 $3 bil$5 bil Global Agrochemical Hub Opportunity size Biologicals $2.8 bil → $7.1 bil CAGR 14.4% ~ Sales of products while under patent valued at $11 bil FY20 China contributed 49% of India's total pesticide imports, valued at INR 9,096 crore PUNJAB CHEMICALS AND CROP PROTECTION LTD. ISO 9001:2015 & ISO 14001:2015 Certified Company Capitalising on Opportunity Improvements in formulation, ease of use, shelf life and spectrum Established players will likely reformulate the off-patent products and look for production partners Indian companies are witnessing interest from multinational companies as they seek to diversify supply chains from China Protecting against crop loss and increasing yields Feeding the growing global population E 00 Raising demand for sustainably produced food Demand Drivers for Agrochemicals 0: Tracking climate change Source: Deloitte Industry Report#22MAJOR CLIENTELE Long Standing Client Relationships UPL CORTEVA™ agriscience PEPSI ADAMA KRISHAJ BAYER BAYER Coca-Cola PUNJAB CHEMICALS AND CROP PROTECTION LTD. ISO 9001:2015 & ISO 14001:2015 Certified Company Global foray leading to new Clients Daiichi-Sankyo Zydus Cadila NIPPON KAYAKU LAURUS Labs Panda Pacific Pte Ltd KUREHA Target regions for next leg of growth: Latin America, South Asia, European Union#2311JM-401 PUNJAB CHEMICALS AND CROP PROTECTION LTD. ISO 9001:2015 & ISO 14001:2015 Certified Company PERFORMANCE TRACK RECORD#24PAST PERFORMANCE AT A GLANCE 5 YEARS TRACK RECORD (in cr) REVENUE 678.1 642.9 535.9 549.5 495.9 PUNJAB CHEMICALS AND CROP PROTECTION LTD. ISO 9001:2015 & ISO 14001:2015 Certified Company EBITDA EBITDA Margin (%) 14.1% 10.3% 8.4% 7.7% 95.5 2.8% 66.4 41.6 42.4 14.9 FY17 FY18 FY19 FY20 FY21 FY17 FY18 FY19 FY20 FY21 REVENUE SPLIT Domestic ■Export 422.6 411.1 343.1 355.4 296.3 7.2% PAT PAT Margin (%) 3.5% 2.6% 2.0% 49.1 17.2 16.8 10.8 -19.9 231.8 255.6 FY17 FY18 FY19 FY20 FY21 180.5 199.6 206.5 FY17 FY18 FY19 FY20 FY21#25PAST PERFORMANCE AT A GLANCE 5 YEARS TRACK RECORD Leverage Analysis (* cr) 67 62 Working Capital Analysis PUNJAB CHEMICALS AND CROP PROTECTION LTD. ISO 9001:2015 & ISO 14001:2015 Certified Company 60 48 56 42 33 39 30 37 44 12 -72 -135 -101 -114 -92 0.5 -21 2.2 1.6 106 1.0 1.0 151 68 74 98 91 151 117 91 99 75 -48 -29 FY19 Inventory Days FY20 Payable Days FY21 NWC Days Cash Flow (cr) Investing Financing ■Operations FY17 FY18 FY19 FY20 FY21 Debt Equity -Debt/Equity FY17 Receivable Days FY18 Return Ratios 34% 23% 22% 18% 32% 68 62 61 18% 18% 11% 5% -27% 49 32 -4 -14 -13 FY17 FY18 FY19 FY20 FY21 -61 -43 -20 -18 -24 FY17 FY18 FY19 FY20 FY21 ROCE ROE -5 -15#26THANK YOU PUNJAB CHEMICALS AND CROP PROTECTION LTD. ISO 9001:2015 & ISO 14001:2015 Certified Company Dr. S. Sriram Chief Financial Officer [email protected] DICKENSON Vikash Verma/ Nachiket Kale IR Consultant Contact: +91 9664009029/9920940808 [email protected]