#1SUDARSHAN Investor Presentation Q4 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-15 SUDARSHAN 16 CONSOLIDATED REVENUES ~$287Mn (FY23) 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 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 218% EBITDA Cr 146% Exports Revenue Cr 2,302 275 2,201 1,438 1,206 1,260 192 211 781 724 86 995 481 657 (45%) 1,042 (45%) 243 (46%) (34%) FY11 FY18 FY22 FY23 FY11 FY18 FY 22 FY23 Earnings per Share 6.1 FY11 11.1 FY18 18.8 FY22 Gross Block Cr 6.5 599 348 FY23 FY11 FY18 368% 1,629 1,235 FY 22 FY23 A consistent performance with Sales growing at a CAGR of 10% and Operating profit growing at a CAGR of 8% despite exiting some of the businesses. FY23 has been an exceptional year for the Pigment Industry due to subdued demand, unprecedented pressure on RM, energy and logistics cost as a result of geo-political scenarios, higher inflation and rising interest cost. FY11 Pigment, Agro Chemical, Masterbatch businesses Amongst top 20 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% FY23 A pure play Pigment focus 3rd largest pigment producer globally Domestic market share ~ estimate @ 35% R&D labs: Dedicated R&D Lab Development & strong growth of High Performance and Cosmetics product range Renewable energy: ~30% 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 . Tightening monetary policies by major central banks leading to demand contraction across major economies Stabilization of RM prices and continuing high energy costs in Europe Europe: Persistent geopolitical pressure resulting in higher energy cost resulting in flat demand; long-term opportunities for Indian exporters USA: Due to higher inflation, demand has slowed down China: Imposed Anti Dumping on Phthalocyanine pigments Emergence of India as a strong player in global chemical industry 8 SUDARSHAN#9Quarterly Performance#10Quarterly Performance Highlights - Consolidated Financials Income from Operations (In Cr) EBITDA* (In Cr & Margin %) PAT (In Cr & Margin%) 627 528 691 +10% 86 13.7% 42 85 45 7.9% 12.3% 7.1% 33 4.7% 1 Q4 FY22 Q3 FY23 Q4 FY23 Q4 FY22 Q3 FY23 Q4 FY23 Q4 FY22 Q3 FY23 Q4 FY23 * EBITDA as percent to Total Income from operations (excluding other income) 10 SUDARSHAN#11Quarterly Performance Highlights - Key Ratios Current Ratio Cash conversion cycle 1.1 1.1 1.1 96 Q4 FY22 Q3 FY23 Q4 FY23 Net Debt to Equity Ratio Debt Cr 1.0 112 74 Q4 FY22 Q3 FY23 Q4 FY23 Net Debt to EBITDA 1.2 1.0 2.9 793 946 797 Earnings per Share 6.5 0.1 4.7 Q4 FY22 Q3 FY23 Q4 FY23 4.5 3.8 Q4 FY22 Q3 FY23 Q4 FY23 Q4 FY22 Q3 FY23 Q4 FY23 11 SUDARSHAN#12Quarterly Performance Highlights - Pigment Business Income from Operations (In Cr) Gross margin % EBITDA* (In Cr & Margin %) 558 483 594 41.5% 41.0% 76 40.0% +6% Q4 FY22 Q3 FY23 Q4 FY23 Q4 FY22 Q3 FY23 Q4 FY23 13.7% 38 73 12.3% 7.8% Q4 FY22 Q3 FY23 Q4 FY23 ➤ Subdued demand across geographies and segments resulted in volume and pricing pressure in the first three quarters Strong performance in Q4'FY23 on demand revival * EBITDA as percent to Total Income from operations (excluding other income) 12 SUDARSHAN#13Quarterly Performance Highlights - Pigment Business Domestic Revenue Cr 286 301 +5% 251 Mix % 51% 52% 51% Q4 FY22 Specialty Revenue Cr 388 Q3 FY23 Q4 FY23 Export Revenue Cr 272 293 +8% 232 49% 48% 49% Q4 FY22 Non-Specialty Revenue Cr 412 +6% 171 340 Mix % 69% 70% 69% Q4 FY22 Q3 FY23 Q4 FY23 Q3 FY23 Q4 FY23 181 +6% 143 31% 30% 31% Q4 FY22 Q3 FY23 ➤ Overall demand in domestic and export markets was subdued in the first three quarters. Strong demand revival seen in Q4 FY23. Revenue includes Revenue from Operations and Other operating income of Pigment business 13 Q4 FY23 SUDARSHAN#14Annual Performance#15Annual Performance Highlights - Consolidated Financials Income from Operations (In Cr) EBITDA (In Cr & Margin %) +10% 2,302 2,201 1,864 1,708 1,593 FY19 FY20 FY21 FY22 FY23 204 246 +1% 288 275 211 81 PAT (In Cr & Margin%) 109 -14% 140 130 15.4% 14.4% 12.8% 12.5% 7.5% 45 9.2% 6.4% 5.9% 5.1% FY19 FY20 FY21 FY22 FY23 1.9% FY19 FY20 FY21 FY22 FY23 Financial results include results of the wholly owned subsidiary RIECO Industries Limited which was earlier classified under 'discontinued operations'. | Previous quarter / year figures have been regrouped wherever necessary to meet current period's classification. | * EBITDA as percent to Total Income from operations (excluding other income) | PAT is excluding profit/loss from exceptional and extraordinary items 15 SUDARSHAN#16Financial Highlights Earnings per Share Return on Capital Employed Gross Block Cr 1,629 Cash conversion cycle Working capital % to Income from Operations 14.8% 15.9% 15.3% 113 1,235 93 96 20.2 11.5% 86 18.8 932 863 74 15.7 641 11.7 6.1% 6.5 28% 23% 24% 25% 20% FY19 FY20 FY21 FY22 FY23 FY19 FY20 FY21 FY22 FY23 FY19 FY20 FY21 FY22 FY23 FY19 FY20 FY21 FY22 FY23 Debt to Equity Ratio Debt Cr Debt to EBITDA 1.0 1.0 0.8 0.8 0.6 2.9 2.0 2.1 1.8 Current Ratio 3.8 1.3 1.2 1.2 1.1 1.1 ➤ Sudarshan has invested for growth in last three years to transform its product portfolio All the capex projects commissioned Extraordinary year for Pigment Industry due to Subdued demand, inflationary pressure on costs resulted drop in profitability and 363 491 598 793 797 FY19 FY20 FY21 FY22 FY23 FY19 FY20 FY21 FY22 FY23 FY19 FY20 FY21 FY22 FY23 related ratios EPS is calculated excluding profit/loss from exceptional and extraordinary items | ROCE calculated as per requirements of Schedule III disclosure 16 SUDARSHAN#17Annual Performance Highlights - Pigment Business Income from Operations (In Cr) Gross margin % +9% 2,079 43.4% 2,020 42.8% 43.1% 41.8% 1,753 40.2% 1,590 1,477 FY19 FY20 FY21 FY22 FY23 FY19 FY20 FY21 FY22 FY23 EBITDA* (In Cr & Margin %) 234 211 -2% 281 269 194 16.0% 14.3% 14.7% 13.3% 9.3% FY19 FY20 FY21 FY22 FY23 Inflationary cost pressures in RM and limited ability of pass through due to lower demand impacted Gross Margin for the year. * EBITDA as percent to Total Income from operations (excluding other income) 17 SUDARSHAN#18Pigment Business: Overseas geographies continue to have steady growth Domestic Revenue Cr +9% 856 806 756 +2% 1,033 1,055 Export Revenue Cr +9% 987 897 783 721 +4% 1,024 Mix % 51% 51% 49% 51% 51% 49% 49% 51% 49% 49% FY19 FY20 FY21 FY22 FY23 FY19 FY20 FY21 FY22 FY23 ➤ With the investment in infrastructure and sales force in the international geographies, share of exports will continue to grow. Export business achieved milestone crossing annual revenue mark of 1,000 Cr ➤ A strong focus on product quality and supply chain management practices continues to serve demand opportunities in both the markets. Revenue includes Revenue from Operations and Other operating income of Pigment business 18 SUDARSHAN#19Pigment Business: Shift towards Specialty to continue Specialty Revenue Cr +9% 1,383 1,204 1,109 1,005 +4% 1,435 Non-Specialty Revenue Cr +8% 637 549 471 481 +1% 644 Mix % 68% 70% 69% 68% 69% 32% 30% 31% 32% 31% FY19 FY20 FY21 FY22 FY23 FY19 FY20 FY21 FY22 FY23 Focus on growing our Specialty pigments portfolio will shift revenue mix favourably. Revenue includes Revenue from Operations and Other operating income of Pigment business 19 SUDARSHAN#20Business Outlook#21Business Outlook - FY24 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 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 safety and ESG 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 21 SUDARSHAN#22ABOUT SUDARSHAN#23Our 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 23 SUDARSHAN#24Our 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 Listed on BSE Net revenue at INR 400 Cr FY06 Manufacturing plant in Roha 24 Improved portfolio with HPPS and Effects for Cosmetics SUDARSHAN#25Our 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) 25 SUDARSHAN#26Our 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 26 SUDARSHAN#27The Pigment Approval Cycle Approval cycle for pigment sales varies across products and Sudarshan Chemicals is well placed in this regard COATINGS PLASTICS INKS 10 COSMETICS Coatings remains a prominent focus area with Automotive and Decorative being the key segments Market leaders in multiple geographies offering wider spectrum of colours and pigment grades. Focus on niche applications like liquid inks to build competency and strong market share Proven track record with significant growth for Sudarshan's progress Automotive: 1 to 5 years Decorative: 6 months to 1 Plastics: 3 to 6 months year 27 Inks: ~1 month Cosmetics: 1 to 2 years SUDARSHAN#28Our 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 28#29Our 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 5 Our Manufacturing Plants with Modern Water Treatment Facility and Certified by BSC and having won Sword of Honour for Safety 29 SUDARSHAN#30Global 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 30 50 o 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#31Our 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) Inorganic HPPS 01 02 03 • 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 31 SUDARSHAN#32Building Capabilities We focus on building capabilities across functions to achieve our vision (1) 退 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. 32 SUDARSHAN#33Our 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 33 Environment & Occupational Health Ensure safety of our plant operatives ISO 14001 OHSAS 18001 British Safety Council 5 Star Rating Sword of Honour SUDARSHAN#34Empowering 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 34 SUDARSHAN#35Shareholder Information Share Information (as at 31st March 2023) Shareholding Pattern (as at 31st March 2023) Promoters NSE Ticker SUDARSCHEM Flls and FPIS BSE Ticker 506655 Mutual Funds Others 35.82% 3.12% 12.29% 48.77% Market Cap (mn) 27,213 % free-float 64.18% SUDARSHAN NIFTY 500 Free-float market cap 17,465 Shares Outstanding 69,227,250 3M ADTV (Shares) 166,003 3M ADTV (mn) 64.6 Industry Specialty Chemicals Apr-01-2022 May-01-2022 Jun-01-2022 Jul-01-2022 Aug-01-2022 Sep-01-2022 Oct-01-2022 Nov-01-2022 Dec-01-2022 Jan-01-2023 Feb-01-2023 Mar-01-2023 35 -3.5% -26.8% SUDARSHAN#36Awards And Accolades महात्मा पुरस्कार mga amba MAATMA Dedicated t Amit Sachd AW October 1 20 the Brands of Maharashtra Mahatma Awards 2021 in CSR Excellence Global CSR Award 2020 Platinum Category Global Clean Village Award - Energy & Environment foundation ANNUAL GENERAL M C AWARDS PRESENTATION Global Waste Met Award 2018 - Gold Category DMAI Award for Energy Conservation Initiative 2017-18 36 Golden Peacock HR Excellence Award 2018 GOLDEN PEACOCK W Winner R D S HR Excellence 2018 HR Excellence Award 2018 1st in Chemicals & Fertilizer Sector Global HR Excellence 200 'Dream Company to Work For' in Chemical Sector World HRD Congress 2017 SUDARSHAN#37THANK YOU Investor Relations at Sudarshan: Mr. Mandar M. Velankar +91 20 6828 1200 [email protected] CIN: L24119PN1951PLC008409 www.sudarshan.com Sudarshan Chemical Industries Limited 7th Floor, Eleven West Panchshil, Survey No. 25, Near PAN Card Club Road, Baner, Pune - 411 045, Maharashtra, India 37 growing together... Spiritually fulfilling • Socially just · Environmentally sustainable SUDARSHAN