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Mandhana Industries Limited Corporate Presentation 2011

Mandhana Industries Limited is a multi-divisional, multi-geographical textile and garment player with a presence across India and over 25 other countries. It has experienced strong growth over the past 5 years with a revenue CAGR of 36.54% and profit CAGR of 36.14%. The company manufactures textiles and garments through various processes along the value chain.

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Multi-Divisional Multi-Geographical Integrated & Diversified Textile & Garment Player Mandhana Industries Limited CorporatePresentation September2011
Safe Harbour This presentation may include statements which may constitute forward-looking statements. All statements that address expectations or projections about the future, including, but not limited to, statements about the strategy for growth, business 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 company cannot guarantee that these assumptions and expectations are accurate or will be realised. The actual results, performance or achievements, could thus differ materially from those projected in any such forward-looking statements. The company assumes no responsibility to publicly amend, modify or revise any forward-looking statements, on the basis of any subsequent developments, information or events, or otherwise. While every effort is made to ensure that this presentation conforms with all applicable legal requirements, the company does not warrant that it is complete, comprehensive or accurate, or commit to its being updated. No part of the information provided herein is to be construed as a solicitation to make any financial investment and is provided for information only. Any person/ party intending to provide finance / invest in the shares/businesses of the Company shall do so after seeking their own professional advice and after carrying out their own due diligence procedure to ensure that they are making an informed decision. In no event shall the company be liable for any damages whatsoever, whether direct, incidental, indirect, consequential or special damages of any kind or including, without limitation, those resulting from loss of profit, loss of contracts, goodwill, data, information, income, expected savings or business relationships arising out of or in connection with the use of this presentation.
What’s ahead?
Section 1 Corporate Overview
Mandhana Industries Limited (MIL) 5 at a Glance… Multi-divisional, Multi-geographical textile company Presence across India and more than 25 other countries Strong topline growth at a 5-year CAGR of 36.54% Robust bottomline growth at a 5-year CAGR of 36.14% Net Turnover (in ` Cr.) PAT (in ` Cr.) 838.29 625.79 66.75 463.25 43.4 406.94 35.3 36.56 241.21 19.43 2006-07 2007-08 2008-09 2009-10 2010-11 2006-07 2007-08 2008-09 2009-10 2010-11 Manufacturing of Textile and Garments with state-of-the-art infrastructure Activities include Designing, Yarn Dyeing, Weaving, Processing, Dyeing and Corporate Overview Garment Manufacturing Phenomenal Growth since inception due to our ability to delight customers through consistent innovation Focus on gaining greater visibility and traction on enhanced branding, retailing and social outreach programmes through exclusive tie-ups Employee Strength of around 5,000 MIL Corporate Presentation, September 2011
6 18%* MIL Divisions * Textiles Garments * As per FY 2010-11 audited financials 82% Textile Segment Garment Segment 2010-11 Revenue Growth: 40% 2010-11 Revenue Growth: 12% Products: Greige and finished fabrics incl. cotton textiles, yarn dyed Products: Readymade woven garments including shirts, ladies fabrics, embroidered, embellished and blended cotton fabrics including tops, dresses, skirts, kids wear and sportswear cotton blends with nylon, lycra, viscose, mélange etc. Exports: 95% garments are exported to more than 25 countries Imports: We import fabrics also Division Turnover (in ` Cr.) Division Turnover (in ` Cr.) Corporate Overview 350 1050 900 692.59 200 154.57 145.7 494.23 129.49 308.68 2008-09 2009-10 2010-11 2011-12(E) 2012-13(P) 2008-09 2009-10 2010-11 2011-12(E) 2012-13(P) CAGR 35.81% CAGR 22.67% MIL Corporate Presentation, September 2011
Our presence 7 across the value Yarn Dyeing (Process) Weaving Dyeing (Process) Greige Fabric Printing Processing Activity Surface Ornamentation Finished Fabrics Stitching (Activity) Embellishments & Washing Corporate Overview MIL Corporate Presentation, September 2011
The MIL 8 story of Evolution… 1984 Incorporation of 1994 Began the processing 1998 Commenced 2002 Set-up weaving 2003 Established a Mandhana unit with a capacity of garment unit at Tarapur garment unit at Industries Limited 10,00,000 mtrs p.m. exports with a capacity of Bengaluru to 5,00,000 mtrs p.m. produce 1,20,000 garments p.m. 2008 Set-up one 2006 Established new garment 2005 ◙ Set-up ‘Mandhana Europe’- 2004 Tarapur-Augmented more units at Bengaluru and liaison office in Paris. weaving capacities and garment unit Mumbai to manufacture ◙ Set-up a new yarn dyeing plant processing capacities at Bengaluru additional 1,30,000 and weaving plant at Tarapur with 2,00,000 mtrs to roll out garments p.m. with capacities of 1,50,000 kgs p.m. and 7,00,000 additional p.m. and 8,00,000 mtrs p.m. mtrs p.m. respectively 50,000 pieces respectively p.m. Corporate Overview 2009 ◙ Commenced CDR/CBR 2010 Floated an 2011 ◙ Tie up with ‘Being Human’ – 2012 ◙ Tarapur & Baramati processing with printing- IPO to raise Retail Brand owned by Salman garment units to 26,00,000 mtrs p.m. ` 107.90 Cr. Khan begin commercial ◙ Installed an additional ◙ Doubled the weaving capacity operation capacity of 1,00,000 kgs from 15,00,000 mtrs p.m. to ◙ Apparel retail brand per month in the Yarn 30,00,000 mtrs p.m. “Being Human” to Dyeing unit be launched MIL Corporate Presentation, September 2011
MIL’s 9 Exports Corporate Overview Italy, Czech Republic, France, Switzerland, The Netherlands, United Kingdom, Greece, Spain, Finland, Hungary, Turkey, Russia, Poland, Germany, Malaysia, Mexico, USA, Australia, Saudi Arabia, Israel, Singapore, Indonesia, Romania, Chile and Hong Kong. MIL Corporate Presentation, September 2011
Diversified 10 Domestic and International customer base DomesticClientele Allen Solly, Louis Phillipe, Van Heusen , Pantaloons, Indian Terrain, Pepe Jeans, Wills, Lilliput ,Shoppers Stop, Mufti InternationalClientele Jeans and High-Street Wear J.C. Rags, Colin’s, Bensherman, Killah, Pepe jeans, Energie, Scotch & Soda, FCUK, Miss Sixty, River Island, Tommy Hilfiger, Denim Rifle, Bonobo, Cache cache, Benetton Sports and surf Wear Corporate Overview Quicksilver, Aigle, Rip Curl, Roxy Oxbow Catalogue Bonprix, LA-Redoute, Otto Premium Luxury Brands Max Mara, D&G, Iceberg, Emporic Armani Corporate Brands Switcher MIL Corporate Presentation, September 2011
Section 2 MIL’s Vigour
12 Strengths ◙ Vertically integrated operations and proven execution capabilities ◙ Technological, marketing & designing capabilities ◙ In-house style lab and textile studio ◙ Quickest turnaround time ◙ Diversified domestic and international customer base having strong relationships with global retailers and top fashion brands ◙ Wide product basket ◙ A blend of youth & experienced personnel MIL’s Vigour ◙ Excellent financial track record with highest realisations compared to peers MIL Corporate Presentation, September 2011
13 Quality Assurance ISO 9001 (Management ET System) Oeko - Tex (Using environment- friendly chemicals) Flo - Cert (Fair Trade) Gots (Organic cotton production) Control Union (Eco-friendly products) ◙ Globally benchmarked superior quality assurance using Statistical Quality Control (SQC) techniques ◙ Industrial engineering through skill evaluation, time management, planning, execution MIL’s Vigour ◙ Quality Control through process flow, functions, controls, traceability, testing and auditing ◙ Quality Assurance through 2.5 AQL System, management of people, defining roles, process planning, product information ◙ Accreditations MIL Corporate Presentation, September 2011
Experienced 14 Management Team Mr. Purshottam C. Mandhana, Chairman & Managing Director ◙ Founder of MIL ◙ A Visionary and an entrepreneur with proficiency in every sphere of textiles ◙ An administrator par excellence with more than three decades of industry experience Mr. Biharlal C. Mandhana, Executive Director ◙ Co-Founder of MIL ◙ Insight into human resources and logistics ◙ Exhaustive sourcing capabilities and ability to perceive opportunities and threats ◙ More than three decades of industry experience MIL’s Vigour Mr. Manish B. Mandhana, Jt. Managing Director ◙ Driving constant modernisation and progress ◙ Close to two decades of industry experience ◙ Perfectionist and an aggressive marketer MIL Corporate Presentation, September 2011
Experienced 15 Management Team Mr. Ghyanendra Nath Mr. Khurshid M. Mr. Robin Mr. Sanjay Asher, Non- Bajpai, Non-Executive and Thanawala, Non-Executive and Cornelieus, Non-Executive Executive Director Independent Director Independent Director and Independent Director ◙ Solicitor & Partner in Crawford ◙ Ex-Chairman of SEBI and LIC ◙ Responsible for the establishment ◙ CEO, Switcher SA (Founder) Bayley& Co. and management of textile mills in enjoying 80% of market ◙ Invitee by the Government of ◙ Ex-Non-Executive Chairman Kenya and Indonesia in the recognition in Switzerland India in the committee formed of NSE, SHCIL, LIC Housing capacity of Managing Finance Co. Ltd. ◙ Winner of ‘International by the Department of Director, 1965-1984 Disinvestment ◙ Ex-Director of Corporate Conscience Award GIC, ICICI, UTI, India ◙ Director of Textile 2003’ by SAI (Society ◙ Committee Member in respect International Insurance Ltd. Consultancy, Management and Accountability to Indo US Financial Institutions agency companies in East International), New York Reforms & Expansion Projects ◙ Visiting Professor at Africa, Switzerland, Singapore and Middlesex University, London India 1965-1984 MIL’s Vigour ◙ Conferred the ‘Outstanding ◙ Managing Director, Barmag India Contribution to Development Pvt. Ltd., Sales and Service of of Finance’ Award by the Textile Machinery for the chemical Honourable Prime Minister and natural fibre, 1985-1996 Shri Manmohan Singh ◙ Managing Director, Oerlikon Textile India Pvt. Ltd. MIL Corporate Presentation, September 2011
16 Achievements ◙ Tarapur and Baramati projects conferred with ‘MEGA PROJECT’ status-June 2011 ◙ ‘Outstanding Exporter of the year’ award for FY 2008-09 at the International Trade Awards ◙ Awarded the ‘NIRYAT SHREE’ Gold Trophy by the Federation of Indian Exporters Organisation (FIEO) for remarkable growth in exports - FY 2003-04 ◙ Awarded the ‘NIRYAT SHREE’ certificate of excellence for remarkable growth in exports - FY 2004-05 and FY 2008-09 ◙ Conferred the ‘UDYOG RATNA’ award for excellence in productivity, quality, innovation and management by the Institute of Economic Studies, Delhi (IES) - 2007 ◙ Obtained the SA 8000 Certification for Social Accountability in Business Practice - 2006 ◙ Runner Up at the ‘International Textile Awards’ ◙ Nominated as one of the top 3 contenders in the textile and MIL’s Vigour apparel category of the ‘Emerging India Awards’ - 2007 MIL Corporate Presentation, September 2011
Section 3 Future Endeavours
18 Future Roadmap Post Expansion Capacities Yarn Dyeing - 3 Mn kgs p.a. ◙ Foray into apparel retail through Being Human, a brand promoted by the renowned Bollywood actor, Salman Khan Weaving - 36 Mn mtrs p.a. Future Endeavours ◙ Planning 500 sales points for Being Human by 2013 ◙ Over USD 50 Mn investment plan underway for expansion projects Fabric Processing - 51.6 Mn mtrs ◙ Projecting a turnover of ` 1,400 Cr. by 2013 ◙ ‘Dress Shirt’ manufacturing unit at Baramati under SITP (Scheme for Integrated Textile Garmenting - 9 Mn pieces Park) by the Ministry of Textiles MIL Corporate Presentation, September 2011
Focusing 19 on scale We have emerged as a niche player in the Indian Textile industry through vertical integration. Expansion of the weaving facility Location: Plot No. C-2, MIDC, Tarapur, Maharashtra Capacity: Expanded the capacities from 18 Mn mtrs p.a. to 36 Mn mtrs p.a. during the year Stage: Commenced commercial operations on 22nd March, 2011 Setting up Garment Manufacturing Plant 1. Location: Plot No. E-132, MIDC, Tarapur, Maharashtra 2. Location: Baramati Hi-tech Textile Park Capacity: Expand to 7 Mn pieces p.a. from 3.6 Mn Features: Project under SITP Future Endeavours pieces p.a. Total Capital Expenditure - estimated at ` 95 Cr. Completion: Final stage of machinery selection, order Commercial operation expected to begin from placement & installation March, 2012 Status: Expected to begin commercial operations Proposed Capacity: 3 Mn pieces p.a. from October, 2011 Status: Land Acquisition completed Factory building construction has already commenced MIL Corporate Presentation, September 2011
Widening 20 the Human Angle ◙ A tentative Capital investment of around ` 60 Cr. ◙ Deal for 9 years and 3 months ◙ Deal focus on the branding, retailing and various promotional activities ◙ Plans to roll-out total 500 selling points over next two years through a mix of flagship stores, SIS (Store-in-stores) and franchise formats Positioning Target Customers Geographic Focus Price Mix ‘Fashion with a Heart’ ◙ Households with an income ◙ Sept’2011- Oct’2012 Premium pricing range of ` 10 Lacs + ◙ 2-3 EBOs (Exclusive Brand ◙ Consumers will be in the Outlets) COCO (Company age group of 20-35 years in owned Company Future Endeavours SEC (Socio-Economic Class) Operated), each in Mumbai & A 1 & 2 categories Delhi ◙ 1-2 EBO’s (COCO) in the rest of 7 Top cities in India ◙ Company to foresee opportunities at Tier 2 & 3 cities via franchising MIL Corporate Presentation, September 2011
21 Product Mix Casual clothing with primary focus on Tees & Denims with casual shirts, casual bottoms and accessories A slightly higher concentration on Men’s wear as the market is bigger and less complicated than Women’s wear ◙ Men’s to make up 60% of product portfolio majorly due to Men’s market making up a large part of organized apparel chain ◙ Women’s will initially start with 40% product profile which is higher than most competitors Future Endeavours MIL Corporate Presentation, September 2011
22 Product Categories Break-Up 50-60% Core range, another 20-25% Fashion and rest Festive and Occasion based collection Men’s Product Mix Women’s Product Mix 10% 15% 20% 45% 20% 50% Future Endeavours 25% 15% Tees Shirts Denims Trousers Tees Tops & Dresses Denims Trousers & Capris MIL Corporate Presentation, September 2011
23 Enhancing Consumer Brand Experience Stage I Pre-Launch Creating brand awareness and consumer involvement Stage II Launch Generate footfalls and conversions from an active consideration for the product to regular consumption Future Endeavours Stage III Build Brand recall and repeat visits through relationship building and spreading awareness through word-of-mouth MIL Corporate Presentation, September 2011
24 Marketing Activities across different stages ◙ Social media marketing ◙ Offline PR activities involving Salman Khan for fund raising (Fashion, Films & Sports) ◙ Outdoor hoardings and print campaign Future Endeavours ◙ Radio ads ◙ Viral marketing and other below-the-line activities along with Being Human Foundation ◙ Product placement in movies ◙ In–store communication, promotions and offers and gift vouchers ◙ Brand development through traditional media ◙ Co-promotion activities with other like-minded organisations like CRY and Smile Foundation help gain a fan following MIL Corporate Presentation, September 2011
25 Business Strategy Geographic expansion Strengthening apparel Expand geographic Improve operational design and product reach efficiency ◙ Enhance garment manufacturing capacity to tap overseas market development processes ◙ Explore opportunities in ◙ Identify separate cost centres so ◙ Innovating designs & samples countries where there is as to monitor major costs ◙ Reap maximum benefit from for fabrics & garments demand for value added textile government incentives such as ◙ Controlling raw material costs supported by in-house design products Technological Upgradation Fund through bulk purchases and Scheme (TUFS), increase in duty studio cum sampling unit ◙ Tap domestic opportunities, sub- negotiations with suppliers drawback / Duty Entitlement geographic penetration and ◙ Constant upgradation of design Pass Book Scheme (DEPB) and product/ market diversification ◙ Controlling consumption and reduction in bank interest rate studios - human resources and to mitigate market risk and wastage through effective on working capital loan technology supervision on the shop floor Future Endeavours widen growth prospects ◙ Diversification into women’s ◙ Explore and tap the hi-end wear in a planned manner readymade garment segment which will help to maintain higher sales realisation MIL Corporate Presentation, September 2011
Section 4 Financial Performance
27 Financial Performance Net Turnover, (in ` Cr.) 1,400 (Strong topline growth EBITDA, (in ` Cr.) 280 EBITDA Margin, (%) due to higher 1,100 productivity, aggressive 20.3 190 20 838.29 marketing and also higher realisations on 147.38 19.02 625.79 127.04 463.25 both finished fabrics and 18 87.96 17.58 garments) 2008-09 2009-10 2010-11 2011-12(E) 2012-13(P) 2008-09 2009-10 2010-11 2011-12(E) 2012-13(P) 2008-09 2009-10 2010-11 2011-12(E) 2012-13(P) CAGR 31.85% CAGR 33.57% PAT, (in ` Cr.) (Growth due Efficient management of Textiles and Garments, (in ` Cr.) (36.38% Y-o-Y Net Profit Margin, (%) FOREX exposures) Growth in Domestic Sales) 8.5 120 (23.99% Y-o-Y 7.89 7.96 8 Financial Performance 1,050 Growth in 6.94 90 900 Exports) 66.75 692.59 43.4 494.23 Textiles 36.56 350 308.68 200 Garments 154.57 130.06 145.7 2008-09 2009-10 2010-11 2011-12(E) 2012-13(P) 2008-09 2009-10 2010-11 2011-12(E) 2012-13(P) 2008-09 2009-10 2010-11 2011-12(E) 2012-13(P) CAGR 34.60% CAGR Textiles 35.81% Garments 22.67% MIL Corporate Presentation, September 2011
28 Financial Performance & Key Highlights EPS* (` ) (Diluted) 36.25 * On fully diluted equity of ` 33.1 Cr. Debt Equity Ratio 1.63 82.09% 27.19 1.55 Net Worth increment from ` 193.34 21 1.06 1 0.9 Cr. to ` 352.06 Cr. 13.12 11.04 2008-09 2009-10 2010-11 2011-12(E) 2012-13(P) 2008-09 2009-10 2010-11 2011-12(E) 2012-13(P) CAGR 34.61% 24.48% Return on Net Worth (RONW) Fixed Assets (in ` Cr.) Average Realisation per piece (in ` Cr.) 800 Garment Financial Performance 450 700 425 377 388.38 411.64 Fabric 573.39 425.72 360.3 143.27 125 140 116 97.81 2008-09 2009-10 CAGR 22.07% 2010-11 2011-12(E) 2012-13(P) 2008-09 2009-10 2010-11 2011-12(E) 2012-13(P) 21.30% CAGR Textiles 4.52% Garments 4.81% Return on Capital Employed (ROCE) MIL Corporate Presentation, September 2011
Section 5 Industry Overview
30 Textile Industry Indian textile industry Indian textile and apparel Global textile and apparel industry industry 14% of the industrial production ◙ Surged from USD 46 Bn in 2005 to ◙ Surged from USD 355 Bn in 2000 to USD 4% of the country’s GDP USD 70 Bn in 2009 612 Bn in 2008; USD 510 Bn in 2009 12% of total exports ◙ Slated to reach USD 134 Bn by 2015 ◙ Slated to reach USD 800 Bn by 2015 and and USD 220 Bn by 2020 USD 1,000 Bn by 2020 17% of export earnings 35 Mn people are directly employed in (In USD Bn) (In USD Bn) Textile the industry Domestic 220 1000 Apparel Exports Industry Overview Total 800 2nd largest employer after the primary Total 134 612 80 586 agriculture industry 529 510 650 70 78 45 355 500 46 309 346 362 310 23 26 140 16 89 198 350 30 47 52 240 250 200 300 157 220 2005 2009 2010(E) 2015(E) 2020(E) 2000 2006 2007 2008 2009 2015(E) 2020(E) CAGR 11% CAGR 5% Source: Technopak Research Report, Sep 2010 Source: Technopak Research Report, Sep 2010 MIL Corporate Presentation, September 2011
SCOT Analysis 31 of the Textile and Apparel Strengths Challenges Industry ◙ Abundance of natural and ◙ Fashion sensitive market Threats Opportunities man-made fibres ◙ High indirect costs ◙ India being one of the largest producers of fibres ◙ Low-cost labour ◙ Fairly competitive market ◙ New Product Developments ◙ Presence of many ◙ Increased brand consciousness unorganised players Industry Overview ◙ Gradual shift to ready-to-wear garments ◙ Government impetus for the industry MIL Corporate Presentation, September 2011
Section 6 Operations and Welfare
33 Offices and facilities Offices ◙ Mumbai, Tarapur, Bengaluru, Chennai, Delhi, Paris, London (coming soon) ◙ Liaison office in Paris under the name ‘Mandhana Europe’ Operations and Welfare Facilities ◙ Four textile manufacturing facilities at MIDC, Tarapur for yarn dyeing, weaving and fabric processing ◙ Five garment manufacturing facilities at Bengaluru MIL Corporate Presentation, September 2011
34 Employee Social value creation accountability ◙ Health and safety compliance ◙ Swiss based NGO ISCOM has certified us for Social Code of Conduct ◙ Grievance committee ◙ Women empowerment ◙ Opportunities for the disabled ◙ Effluent treatment of plants in all our ◙ Free canteen facilities facilities ◙ Crèche facilities ◙ Creating unbiased employment opportunities ◙ Performance driven incentive schemes ◙ Product DNA traceability ◙ Committee for prevention of sexual abuse ◙ Close association with social Operations and Welfare organisations working for the ◙ Recreation facilities underprivileged and people affected by natural calamities ◙ Skill upgradation through ongoing training ◙ Promoting organic cotton products ◙ Commitment to Corporate Governance MIL Corporate Presentation, September 2011
THANK YOU Corporate Office Mandhana Industries Limited 205-214, Peninsula Centre, Dr. S. S. Rao Road, Mumbai – 400 012. India. www.mandhana.com

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Mandhana Industries Limited Corporate Presentation 2011

  • 1.
    Multi-Divisional Multi-Geographical Integrated & Diversified Textile& Garment Player Mandhana Industries Limited CorporatePresentation September2011
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    Safe Harbour This presentationmay include statements which may constitute forward-looking statements. All statements that address expectations or projections about the future, including, but not limited to, statements about the strategy for growth, business 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 company cannot guarantee that these assumptions and expectations are accurate or will be realised. The actual results, performance or achievements, could thus differ materially from those projected in any such forward-looking statements. The company assumes no responsibility to publicly amend, modify or revise any forward-looking statements, on the basis of any subsequent developments, information or events, or otherwise. While every effort is made to ensure that this presentation conforms with all applicable legal requirements, the company does not warrant that it is complete, comprehensive or accurate, or commit to its being updated. No part of the information provided herein is to be construed as a solicitation to make any financial investment and is provided for information only. Any person/ party intending to provide finance / invest in the shares/businesses of the Company shall do so after seeking their own professional advice and after carrying out their own due diligence procedure to ensure that they are making an informed decision. In no event shall the company be liable for any damages whatsoever, whether direct, incidental, indirect, consequential or special damages of any kind or including, without limitation, those resulting from loss of profit, loss of contracts, goodwill, data, information, income, expected savings or business relationships arising out of or in connection with the use of this presentation.
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    Mandhana Industries Limited(MIL) 5 at a Glance… Multi-divisional, Multi-geographical textile company Presence across India and more than 25 other countries Strong topline growth at a 5-year CAGR of 36.54% Robust bottomline growth at a 5-year CAGR of 36.14% Net Turnover (in ` Cr.) PAT (in ` Cr.) 838.29 625.79 66.75 463.25 43.4 406.94 35.3 36.56 241.21 19.43 2006-07 2007-08 2008-09 2009-10 2010-11 2006-07 2007-08 2008-09 2009-10 2010-11 Manufacturing of Textile and Garments with state-of-the-art infrastructure Activities include Designing, Yarn Dyeing, Weaving, Processing, Dyeing and Corporate Overview Garment Manufacturing Phenomenal Growth since inception due to our ability to delight customers through consistent innovation Focus on gaining greater visibility and traction on enhanced branding, retailing and social outreach programmes through exclusive tie-ups Employee Strength of around 5,000 MIL Corporate Presentation, September 2011
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    6 18%* MIL Divisions * Textiles Garments * As per FY 2010-11 audited financials 82% Textile Segment Garment Segment 2010-11 Revenue Growth: 40% 2010-11 Revenue Growth: 12% Products: Greige and finished fabrics incl. cotton textiles, yarn dyed Products: Readymade woven garments including shirts, ladies fabrics, embroidered, embellished and blended cotton fabrics including tops, dresses, skirts, kids wear and sportswear cotton blends with nylon, lycra, viscose, mélange etc. Exports: 95% garments are exported to more than 25 countries Imports: We import fabrics also Division Turnover (in ` Cr.) Division Turnover (in ` Cr.) Corporate Overview 350 1050 900 692.59 200 154.57 145.7 494.23 129.49 308.68 2008-09 2009-10 2010-11 2011-12(E) 2012-13(P) 2008-09 2009-10 2010-11 2011-12(E) 2012-13(P) CAGR 35.81% CAGR 22.67% MIL Corporate Presentation, September 2011
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    Our presence 7 across the value Yarn Dyeing (Process) Weaving Dyeing (Process) Greige Fabric Printing Processing Activity Surface Ornamentation Finished Fabrics Stitching (Activity) Embellishments & Washing Corporate Overview MIL Corporate Presentation, September 2011
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    The MIL 8 story of Evolution… 1984 Incorporation of 1994 Began the processing 1998 Commenced 2002 Set-up weaving 2003 Established a Mandhana unit with a capacity of garment unit at Tarapur garment unit at Industries Limited 10,00,000 mtrs p.m. exports with a capacity of Bengaluru to 5,00,000 mtrs p.m. produce 1,20,000 garments p.m. 2008 Set-up one 2006 Established new garment 2005 ◙ Set-up ‘Mandhana Europe’- 2004 Tarapur-Augmented more units at Bengaluru and liaison office in Paris. weaving capacities and garment unit Mumbai to manufacture ◙ Set-up a new yarn dyeing plant processing capacities at Bengaluru additional 1,30,000 and weaving plant at Tarapur with 2,00,000 mtrs to roll out garments p.m. with capacities of 1,50,000 kgs p.m. and 7,00,000 additional p.m. and 8,00,000 mtrs p.m. mtrs p.m. respectively 50,000 pieces respectively p.m. Corporate Overview 2009 ◙ Commenced CDR/CBR 2010 Floated an 2011 ◙ Tie up with ‘Being Human’ – 2012 ◙ Tarapur & Baramati processing with printing- IPO to raise Retail Brand owned by Salman garment units to 26,00,000 mtrs p.m. ` 107.90 Cr. Khan begin commercial ◙ Installed an additional ◙ Doubled the weaving capacity operation capacity of 1,00,000 kgs from 15,00,000 mtrs p.m. to ◙ Apparel retail brand per month in the Yarn 30,00,000 mtrs p.m. “Being Human” to Dyeing unit be launched MIL Corporate Presentation, September 2011
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    MIL’s 9 Exports Corporate Overview Italy, Czech Republic, France, Switzerland, The Netherlands, United Kingdom, Greece, Spain, Finland, Hungary, Turkey, Russia, Poland, Germany, Malaysia, Mexico, USA, Australia, Saudi Arabia, Israel, Singapore, Indonesia, Romania, Chile and Hong Kong. MIL Corporate Presentation, September 2011
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    Diversified 10 Domestic and International customer base DomesticClientele Allen Solly, Louis Phillipe, Van Heusen , Pantaloons, Indian Terrain, Pepe Jeans, Wills, Lilliput ,Shoppers Stop, Mufti InternationalClientele Jeans and High-Street Wear J.C. Rags, Colin’s, Bensherman, Killah, Pepe jeans, Energie, Scotch & Soda, FCUK, Miss Sixty, River Island, Tommy Hilfiger, Denim Rifle, Bonobo, Cache cache, Benetton Sports and surf Wear Corporate Overview Quicksilver, Aigle, Rip Curl, Roxy Oxbow Catalogue Bonprix, LA-Redoute, Otto Premium Luxury Brands Max Mara, D&G, Iceberg, Emporic Armani Corporate Brands Switcher MIL Corporate Presentation, September 2011
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    12 Strengths ◙ Vertically integrated operations and proven execution capabilities ◙ Technological, marketing & designing capabilities ◙ In-house style lab and textile studio ◙ Quickest turnaround time ◙ Diversified domestic and international customer base having strong relationships with global retailers and top fashion brands ◙ Wide product basket ◙ A blend of youth & experienced personnel MIL’s Vigour ◙ Excellent financial track record with highest realisations compared to peers MIL Corporate Presentation, September 2011
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    13 Quality Assurance ISO 9001 (Management ET System) Oeko - Tex (Using environment- friendly chemicals) Flo - Cert (Fair Trade) Gots (Organic cotton production) Control Union (Eco-friendly products) ◙ Globally benchmarked superior quality assurance using Statistical Quality Control (SQC) techniques ◙ Industrial engineering through skill evaluation, time management, planning, execution MIL’s Vigour ◙ Quality Control through process flow, functions, controls, traceability, testing and auditing ◙ Quality Assurance through 2.5 AQL System, management of people, defining roles, process planning, product information ◙ Accreditations MIL Corporate Presentation, September 2011
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    Experienced 14 Management Team Mr. Purshottam C. Mandhana, Chairman & Managing Director ◙ Founder of MIL ◙ A Visionary and an entrepreneur with proficiency in every sphere of textiles ◙ An administrator par excellence with more than three decades of industry experience Mr. Biharlal C. Mandhana, Executive Director ◙ Co-Founder of MIL ◙ Insight into human resources and logistics ◙ Exhaustive sourcing capabilities and ability to perceive opportunities and threats ◙ More than three decades of industry experience MIL’s Vigour Mr. Manish B. Mandhana, Jt. Managing Director ◙ Driving constant modernisation and progress ◙ Close to two decades of industry experience ◙ Perfectionist and an aggressive marketer MIL Corporate Presentation, September 2011
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    Experienced 15 Management Team Mr. Ghyanendra Nath Mr. Khurshid M. Mr. Robin Mr. Sanjay Asher, Non- Bajpai, Non-Executive and Thanawala, Non-Executive and Cornelieus, Non-Executive Executive Director Independent Director Independent Director and Independent Director ◙ Solicitor & Partner in Crawford ◙ Ex-Chairman of SEBI and LIC ◙ Responsible for the establishment ◙ CEO, Switcher SA (Founder) Bayley& Co. and management of textile mills in enjoying 80% of market ◙ Invitee by the Government of ◙ Ex-Non-Executive Chairman Kenya and Indonesia in the recognition in Switzerland India in the committee formed of NSE, SHCIL, LIC Housing capacity of Managing Finance Co. Ltd. ◙ Winner of ‘International by the Department of Director, 1965-1984 Disinvestment ◙ Ex-Director of Corporate Conscience Award GIC, ICICI, UTI, India ◙ Director of Textile 2003’ by SAI (Society ◙ Committee Member in respect International Insurance Ltd. Consultancy, Management and Accountability to Indo US Financial Institutions agency companies in East International), New York Reforms & Expansion Projects ◙ Visiting Professor at Africa, Switzerland, Singapore and Middlesex University, London India 1965-1984 MIL’s Vigour ◙ Conferred the ‘Outstanding ◙ Managing Director, Barmag India Contribution to Development Pvt. Ltd., Sales and Service of of Finance’ Award by the Textile Machinery for the chemical Honourable Prime Minister and natural fibre, 1985-1996 Shri Manmohan Singh ◙ Managing Director, Oerlikon Textile India Pvt. Ltd. MIL Corporate Presentation, September 2011
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    16 Achievements ◙ Tarapur and Baramati projects conferred with ‘MEGA PROJECT’ status-June 2011 ◙ ‘Outstanding Exporter of the year’ award for FY 2008-09 at the International Trade Awards ◙ Awarded the ‘NIRYAT SHREE’ Gold Trophy by the Federation of Indian Exporters Organisation (FIEO) for remarkable growth in exports - FY 2003-04 ◙ Awarded the ‘NIRYAT SHREE’ certificate of excellence for remarkable growth in exports - FY 2004-05 and FY 2008-09 ◙ Conferred the ‘UDYOG RATNA’ award for excellence in productivity, quality, innovation and management by the Institute of Economic Studies, Delhi (IES) - 2007 ◙ Obtained the SA 8000 Certification for Social Accountability in Business Practice - 2006 ◙ Runner Up at the ‘International Textile Awards’ ◙ Nominated as one of the top 3 contenders in the textile and MIL’s Vigour apparel category of the ‘Emerging India Awards’ - 2007 MIL Corporate Presentation, September 2011
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    18 Future Roadmap Post Expansion Capacities Yarn Dyeing - 3 Mn kgs p.a. ◙ Foray into apparel retail through Being Human, a brand promoted by the renowned Bollywood actor, Salman Khan Weaving - 36 Mn mtrs p.a. Future Endeavours ◙ Planning 500 sales points for Being Human by 2013 ◙ Over USD 50 Mn investment plan underway for expansion projects Fabric Processing - 51.6 Mn mtrs ◙ Projecting a turnover of ` 1,400 Cr. by 2013 ◙ ‘Dress Shirt’ manufacturing unit at Baramati under SITP (Scheme for Integrated Textile Garmenting - 9 Mn pieces Park) by the Ministry of Textiles MIL Corporate Presentation, September 2011
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    Focusing 19 on scale We have emerged as a niche player in the Indian Textile industry through vertical integration. Expansion of the weaving facility Location: Plot No. C-2, MIDC, Tarapur, Maharashtra Capacity: Expanded the capacities from 18 Mn mtrs p.a. to 36 Mn mtrs p.a. during the year Stage: Commenced commercial operations on 22nd March, 2011 Setting up Garment Manufacturing Plant 1. Location: Plot No. E-132, MIDC, Tarapur, Maharashtra 2. Location: Baramati Hi-tech Textile Park Capacity: Expand to 7 Mn pieces p.a. from 3.6 Mn Features: Project under SITP Future Endeavours pieces p.a. Total Capital Expenditure - estimated at ` 95 Cr. Completion: Final stage of machinery selection, order Commercial operation expected to begin from placement & installation March, 2012 Status: Expected to begin commercial operations Proposed Capacity: 3 Mn pieces p.a. from October, 2011 Status: Land Acquisition completed Factory building construction has already commenced MIL Corporate Presentation, September 2011
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    Widening 20 the Human Angle ◙ A tentative Capital investment of around ` 60 Cr. ◙ Deal for 9 years and 3 months ◙ Deal focus on the branding, retailing and various promotional activities ◙ Plans to roll-out total 500 selling points over next two years through a mix of flagship stores, SIS (Store-in-stores) and franchise formats Positioning Target Customers Geographic Focus Price Mix ‘Fashion with a Heart’ ◙ Households with an income ◙ Sept’2011- Oct’2012 Premium pricing range of ` 10 Lacs + ◙ 2-3 EBOs (Exclusive Brand ◙ Consumers will be in the Outlets) COCO (Company age group of 20-35 years in owned Company Future Endeavours SEC (Socio-Economic Class) Operated), each in Mumbai & A 1 & 2 categories Delhi ◙ 1-2 EBO’s (COCO) in the rest of 7 Top cities in India ◙ Company to foresee opportunities at Tier 2 & 3 cities via franchising MIL Corporate Presentation, September 2011
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    21 Product Mix Casual clothing with primary focus on Tees & Denims with casual shirts, casual bottoms and accessories A slightly higher concentration on Men’s wear as the market is bigger and less complicated than Women’s wear ◙ Men’s to make up 60% of product portfolio majorly due to Men’s market making up a large part of organized apparel chain ◙ Women’s will initially start with 40% product profile which is higher than most competitors Future Endeavours MIL Corporate Presentation, September 2011
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    22 Product Categories Break-Up 50-60% Core range, another 20-25% Fashion and rest Festive and Occasion based collection Men’s Product Mix Women’s Product Mix 10% 15% 20% 45% 20% 50% Future Endeavours 25% 15% Tees Shirts Denims Trousers Tees Tops & Dresses Denims Trousers & Capris MIL Corporate Presentation, September 2011
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    23 Enhancing Consumer Brand Experience Stage I Pre-Launch Creating brand awareness and consumer involvement Stage II Launch Generate footfalls and conversions from an active consideration for the product to regular consumption Future Endeavours Stage III Build Brand recall and repeat visits through relationship building and spreading awareness through word-of-mouth MIL Corporate Presentation, September 2011
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    24 Marketing Activities across different stages ◙ Social media marketing ◙ Offline PR activities involving Salman Khan for fund raising (Fashion, Films & Sports) ◙ Outdoor hoardings and print campaign Future Endeavours ◙ Radio ads ◙ Viral marketing and other below-the-line activities along with Being Human Foundation ◙ Product placement in movies ◙ In–store communication, promotions and offers and gift vouchers ◙ Brand development through traditional media ◙ Co-promotion activities with other like-minded organisations like CRY and Smile Foundation help gain a fan following MIL Corporate Presentation, September 2011
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    25 Business Strategy Geographic expansion Strengthening apparel Expand geographic Improve operational design and product reach efficiency ◙ Enhance garment manufacturing capacity to tap overseas market development processes ◙ Explore opportunities in ◙ Identify separate cost centres so ◙ Innovating designs & samples countries where there is as to monitor major costs ◙ Reap maximum benefit from for fabrics & garments demand for value added textile government incentives such as ◙ Controlling raw material costs supported by in-house design products Technological Upgradation Fund through bulk purchases and Scheme (TUFS), increase in duty studio cum sampling unit ◙ Tap domestic opportunities, sub- negotiations with suppliers drawback / Duty Entitlement geographic penetration and ◙ Constant upgradation of design Pass Book Scheme (DEPB) and product/ market diversification ◙ Controlling consumption and reduction in bank interest rate studios - human resources and to mitigate market risk and wastage through effective on working capital loan technology supervision on the shop floor Future Endeavours widen growth prospects ◙ Diversification into women’s ◙ Explore and tap the hi-end wear in a planned manner readymade garment segment which will help to maintain higher sales realisation MIL Corporate Presentation, September 2011
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    27 Financial Performance Net Turnover, (in` Cr.) 1,400 (Strong topline growth EBITDA, (in ` Cr.) 280 EBITDA Margin, (%) due to higher 1,100 productivity, aggressive 20.3 190 20 838.29 marketing and also higher realisations on 147.38 19.02 625.79 127.04 463.25 both finished fabrics and 18 87.96 17.58 garments) 2008-09 2009-10 2010-11 2011-12(E) 2012-13(P) 2008-09 2009-10 2010-11 2011-12(E) 2012-13(P) 2008-09 2009-10 2010-11 2011-12(E) 2012-13(P) CAGR 31.85% CAGR 33.57% PAT, (in ` Cr.) (Growth due Efficient management of Textiles and Garments, (in ` Cr.) (36.38% Y-o-Y Net Profit Margin, (%) FOREX exposures) Growth in Domestic Sales) 8.5 120 (23.99% Y-o-Y 7.89 7.96 8 Financial Performance 1,050 Growth in 6.94 90 900 Exports) 66.75 692.59 43.4 494.23 Textiles 36.56 350 308.68 200 Garments 154.57 130.06 145.7 2008-09 2009-10 2010-11 2011-12(E) 2012-13(P) 2008-09 2009-10 2010-11 2011-12(E) 2012-13(P) 2008-09 2009-10 2010-11 2011-12(E) 2012-13(P) CAGR 34.60% CAGR Textiles 35.81% Garments 22.67% MIL Corporate Presentation, September 2011
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    28 Financial Performance & KeyHighlights EPS* (` ) (Diluted) 36.25 * On fully diluted equity of ` 33.1 Cr. Debt Equity Ratio 1.63 82.09% 27.19 1.55 Net Worth increment from ` 193.34 21 1.06 1 0.9 Cr. to ` 352.06 Cr. 13.12 11.04 2008-09 2009-10 2010-11 2011-12(E) 2012-13(P) 2008-09 2009-10 2010-11 2011-12(E) 2012-13(P) CAGR 34.61% 24.48% Return on Net Worth (RONW) Fixed Assets (in ` Cr.) Average Realisation per piece (in ` Cr.) 800 Garment Financial Performance 450 700 425 377 388.38 411.64 Fabric 573.39 425.72 360.3 143.27 125 140 116 97.81 2008-09 2009-10 CAGR 22.07% 2010-11 2011-12(E) 2012-13(P) 2008-09 2009-10 2010-11 2011-12(E) 2012-13(P) 21.30% CAGR Textiles 4.52% Garments 4.81% Return on Capital Employed (ROCE) MIL Corporate Presentation, September 2011
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    30 Textile Industry Indian textile industry Indian textile and apparel Global textile and apparel industry industry 14% of the industrial production ◙ Surged from USD 46 Bn in 2005 to ◙ Surged from USD 355 Bn in 2000 to USD 4% of the country’s GDP USD 70 Bn in 2009 612 Bn in 2008; USD 510 Bn in 2009 12% of total exports ◙ Slated to reach USD 134 Bn by 2015 ◙ Slated to reach USD 800 Bn by 2015 and and USD 220 Bn by 2020 USD 1,000 Bn by 2020 17% of export earnings 35 Mn people are directly employed in (In USD Bn) (In USD Bn) Textile the industry Domestic 220 1000 Apparel Exports Industry Overview Total 800 2nd largest employer after the primary Total 134 612 80 586 agriculture industry 529 510 650 70 78 45 355 500 46 309 346 362 310 23 26 140 16 89 198 350 30 47 52 240 250 200 300 157 220 2005 2009 2010(E) 2015(E) 2020(E) 2000 2006 2007 2008 2009 2015(E) 2020(E) CAGR 11% CAGR 5% Source: Technopak Research Report, Sep 2010 Source: Technopak Research Report, Sep 2010 MIL Corporate Presentation, September 2011
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    SCOT Analysis 31 of the Textile and Apparel Strengths Challenges Industry ◙ Abundance of natural and ◙ Fashion sensitive market Threats Opportunities man-made fibres ◙ High indirect costs ◙ India being one of the largest producers of fibres ◙ Low-cost labour ◙ Fairly competitive market ◙ New Product Developments ◙ Presence of many ◙ Increased brand consciousness unorganised players Industry Overview ◙ Gradual shift to ready-to-wear garments ◙ Government impetus for the industry MIL Corporate Presentation, September 2011
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    33 Offices and facilities Offices ◙ Mumbai, Tarapur, Bengaluru, Chennai, Delhi, Paris, London (coming soon) ◙ Liaison office in Paris under the name ‘Mandhana Europe’ Operations and Welfare Facilities ◙ Four textile manufacturing facilities at MIDC, Tarapur for yarn dyeing, weaving and fabric processing ◙ Five garment manufacturing facilities at Bengaluru MIL Corporate Presentation, September 2011
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    34 Employee Social value creation accountability ◙ Health and safety compliance ◙ Swiss based NGO ISCOM has certified us for Social Code of Conduct ◙ Grievance committee ◙ Women empowerment ◙ Opportunities for the disabled ◙ Effluent treatment of plants in all our ◙ Free canteen facilities facilities ◙ Crèche facilities ◙ Creating unbiased employment opportunities ◙ Performance driven incentive schemes ◙ Product DNA traceability ◙ Committee for prevention of sexual abuse ◙ Close association with social Operations and Welfare organisations working for the ◙ Recreation facilities underprivileged and people affected by natural calamities ◙ Skill upgradation through ongoing training ◙ Promoting organic cotton products ◙ Commitment to Corporate Governance MIL Corporate Presentation, September 2011
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    THANK YOU Corporate Office Mandhana IndustriesLimited 205-214, Peninsula Centre, Dr. S. S. Rao Road, Mumbai – 400 012. India. www.mandhana.com