Announcement under Regulation 30 (LODR)-Investor Presentation

DCW Limited is submitting the presentation to be made to investors and analysts for the first quarter ended June 30, 2022,

about 1 month ago

INVESTOR PRESENTATION

Tweet

Sentiments detected

Positive 36
  • - Expanded, diversified and modernized its operations with a diversified range of products for supply to customers in both, domestic and international markets since then.

  • o Sahupuram, Tamil Nadu o Dhrangadhra, Gujarat Our Vision: ✓ To Innovate & to Integrate ✓ Emphasis on the 4R's – Reduce, Reuse, Recycle & Recover ✓ Enhance stakeholder value

  • We are India’s leading niche specialty chemicals ✓ Diversify in synergistic businesses ✓ To be a responsible social citizen manufacturer.

  • We are an industry pioneer with a strong Our Mission: presence in the Chlor-Alkali, Synthetic Rutile and PVC ✓ It is our endeavour to become a chemical powerhouse by growing in a globally competitive business segments, with a successful record of innovation market with a focus on the environment and community by optimizing use of all available and in pioneering new products and processes.

  • Niche, Diversified Product Mix Moving Up The Value Chain ✓ Diversified product mix of Commodity, Intermediate and Specialty Chemicals ✓ Increasing the contribution from high value, high margin Specialty Chemicals Segments ✓ Sole manufacturer of C-PVC in India ✓ Revenue contribution from the Specialty Chemicals ✓ Worlds largest commercial scale SIOP plant for Red Segment improved from ~0.6% in FY16 to ~13.2% in FY22.

  • No Major Capex Required For Additional Growth Self-Sufficiency ✓ Significant capex in specialty chemical segment over Investing ✓ Cogen power plant with an installed capacity of 58 MW last 5 years to boost revenue ✓

  • No significant fresh capex needed for the next phase in DCW + 12 MW DG sets for backup at Sahupuram facility ensures cost-effective, uninterrupted power supply of growth in the Specialty Chemicals Segment ✓ Major raw materials like Salt, Liquid Chlorine, Hydrogen, ✓ Capacity restoration already in process for the Hydrochloric Acid, Leach Liquor etc are sourced in-house.

  • ✓ Recent anti-dumping duty (ADD) on imports of C-PVC from China and South Korea has helped to improve the realisations and margins for C-PVC.

  • Well Established Commodity Chemicals Player Transition Towards Specialty Chemicals & Self- Sufficiency 2016

  • like PVC, CPVC, Construction sector under long term Caustic Soda are will aid consistent arrangements ▪ Increasing Capacity based on wide user demand for based industries Company’s product.

  • from cheap exports in form of Anti dumping initiatives to give duties and safeguard - Raised INR 4,100 Mn desired throughput through NCDs and Long Term Value duties.

  • Under his leadership, the capacity of Soda Ash Plant at Dhrangadhra increased from 65,000 TPA to •

  • He was also opportunities for diversification and growth of Company closely involved in the implementation of the C-PVC and specifically in the Soda Ash business.

  • FY20 FY21 FY22 Given DCW is the sole manufacturer of C-PVC in India, it provides significant visibility for demand and capacity utilisation.

  • This has resulted into improvement in demand and average realisation 12,913 11,472 significantly.

  • With favourable market dynamics, PVC is expected to drive the next leg of growth in commodity chemicals PVC Business Overview

  • Industry Dynamics - The surge in the demand for pipes in the irrigation sector, building sector, and construction sector has been the major demand driver for FY20 FY21 FY22 the India PVC market.

  • Furthermore, the increased focus of the Government on rural water Production (in MT) & Capacity Utilisation (%) management and agriculture irrigation has supported the demand growth for PVC in India.

  • Recent demand-supply scenario and price trend indicates a positive 105% momentum for PVC segment going forward 75% 88% 94,706 67,771 79,264

  • Company posted healthy ~10.1% EBIT Margin & ~86% utilisation as of FY22 despite industry headwinds Caustic Soda Business Overview

  • 55,730 62,845 72,035 - With the major markets in the US, Western Europe, and Japan being mature and only growing slowly, China and India are driving the growth in demand for caustic soda.

  • Long term steady performance for key operating matrices - production and capacity utilisation

  • Revenue (INR Million) - DCW’s soda ash plant is situated at Dhrangadhra, Gujarat - Company’s soda ash business witnessed robust growth over the last 2024.0 five years owing to robust demand.

  • 1983 - Company has witnessed robust 90%+ capacity utilisation over last 5 years 1787 - Key client industries: fertilisers, detergent, glass, dyestuffs, petrochemicals

  • - Rising application of soda ash in dyes, detergents, fertilisers, and 95% colouring agents is anticipated to drive the next leg of growth for soda ash.

  • 1,02,885 - India already has the advantage in terms of production of Soda Ash, owing to the abundance of raw material for the production of Soda ash.

  • Speciality Chemicals Revenue up by 48% YoY EBITDA up by 108% YoY EBITDA contribution 24%

  • Soda Ash Picks up the SIOP Revenue up 118% Net Debt: Equity at 0.55 momentum and YoY in FY22 versus 0.73 as revenue up by 113% on FY21 YoY

  • Chemicals Revenue CPVC and SIOP remains Caustic Soda division up by 61% YoY consistent contributor revenue up by 55% YoY 25

  • Better capacity utilisations and an encouraging demand scenario.

  • has led to robust performance for this division.

  • Favourabledemand scenario, coupled with the Company’s strategic decisions of tying up with clients , led to strong performance of Caustic Soda division in Q4 FY22.

  • 2,672 2,899 -7.8% 2,959 -9.7% 11,472 With a clear shortfall in domestic supply of C-PVC, the Company has been able to tactfully garner the optimum benefits of this market imbalance.

  • Consistent efforts have led to a positive turnaround of this division.

  • The SIOP’s plant capacity utilization have been improving consistently.

  • * exceptional gain of INR 147.3 Mn on account of profit on sale of land 34

Negative 3
  • Revenue (INR Million) - Pioneer of Caustic Soda manufacturing in India - DCW’s caustic soda plant is situated at Sahupuram, Tamil Nadu 6702.0 - Plant location in the proximity of salt deposits makes raw material 4675 availability easier 3557 - Company has taken cautious approach in production in recent times due to sharp fall in Caustic Soda prices - Key client industries: Paper, alumina, soap and detergents, petroleum products, and chemical production, water treatment, food, textiles, FY20 FY21 FY22 metal processing, mining, glass making Production (in MT) & Capacity Utilisation (%) Industry Dynamics 65% 75% - Key growth drivers for the Caustic soda market are its use in the 58% production of alumina, the pulp and paper, and industry and the textile industry.

  • FY22 Production (in MT) 26,270 24,196 8.6% 26,349 -0.3% 90,697 Capacity Utilization (%) 97% 90% 700 bps 98% (100 bps) 84% Revenue for Q4FY22 stood at INR 671.4 Mn, compared to INR 448.9.0 Mn in Q4FY21; Global Soda Ash market is witnessing tight demand and supply.

  • However, cost pressures kept margins underpressure.

Mentioned Phrases & Organizations

Important keywords detected (20+)

pvc (48)
soda (46)
ash (28)
chemicals (27)
capacity (27)
caustic (24)
plant (21)
siop (21)
soda ash (21)
caustic soda (21)
dcw (17)
demand (17)
sahupuram (16)
tpa (16)
bps (16)
india (15)
margin (15)
million (15)
inr million (15)
current (14)

Organizations identified (10+)

DCW (6)
SIOP (5)
Hydrochloric Acid (3)
DCW Limited (2)
Specialty Chemicals (2)
Caustic Soda (2)
Rockwood Pigments (2)
SIOP SIOP (2)
DCW Scrip Code (1)
DCW LIMITED (1)

Tables extracted (10)

Intermediate ChemicalCapacity (TPA)Application
Liquid Chlorine36,000Captive Consumption - C-PVC
Hydrochloric Acid90,000Captive Consumption – Synthetic Rutile
Trichloroethylene7,200Sold in open market
Ferric Chloride6,000Captive Consumption – SIOP
Utox1,800Sold in open market
Sodium Bicarbonate21,000Sold in open market
Ammonium Bicarbonate5,000Sold in open market
Revenue Breakdown -By Segments (INR Million)
Segments Q1FY23 Q1FY22 YoY% Q4FY22 QoQ%FY22
PVC Caustic Soda Soda Ash C-PVC SIOP 3,191.9 2,563.8 867.4 588.3 410.9 2,466.0 1,654.1 407.1 433.9 188.3 29.4% 55.0% 113.1% 35.6% 118.2% 3,464.6 1,907.0 671.4 626.1 379.0 -7.9% 34.4% 29.2% -6.0% 8.4%12,433.6 6,701.5 2,024.3 2,152.7 1,075.3
Revenue from Operations* 7,686.5 5,205.1 47.7% 7,072.3 8.7%24,547.4
EBITDA Breakdown - By Segments (INR Million)
Segments Q1FY23 Q1FY22 YoY% Q4FY22 QoQ%FY22
PVC Caustic Soda Soda Ash C-PVC SIOP -62.7 754.6 192.3 173.7 125.4 91.3 249.1 11.0 164.3 30.4 NA 203.0% NA 5.7% 312.7% 432.3 267.1 3.1 195.0 89.7 182.6% NA NA -10.9% 39.8%1,631.4 680.1 (13.4) 698.4 184.3
Particulars (INR Million)Q1FY23Q1FY22YoY %Q4FY22QnQ (%)FY22
Net Revenue from Operations7,686.55205.047.7%7,072.38.7%24,547.4
Other Income22.822.41.8%13.272.7%61.0
Total Income7709.35227.447.5%7085.58.8%24608.4
COGS4055.43235.825.3%3897.64.0%14213.6
Gross Profit3653.91991.683.5%3187.914.6%10394.8
Gross Margin (%)47.5%38.3%920 bps45.1%240 bps42.3%
Employee Expenses442.2355.024.6%409.48.0%1,563.8
Other Expenses734.3415.476.8%645.513.8%2,137.7
Power & fuel1237.5625.397.9%1,131.89.3%3,383.9
EBITDA1239.9595.9108.1%1001.223.8%3309.4
EBITDA Margin (%)16.1%11.4%470 bps14.2%190 bps13.5%
Finance Costs255.9308.7-17.1%258.0-0.8%1,130.7
Depreciation222.2219.21.4%221.40.4%885.3
PBT761.868.01020.3%521.846.0%1293.4
Exceptional Items*147.3139.05.9%0.0NA139.1
Taxes321.473.3338.5%44.2627.1%357.4
Reported PAT587.7133.7339.6%477.623.1%1075.1
PAT Margin (%)7.6%2.6%500 bps6.8%80 bps4.4%
Earnings Per Share (EPS) - Basic2.240.511.834.12

Features are experimental.