RAIN INDUSTRIES - INVESTOR PRESENTATION - AUG 2018

RAIN INDUSTRIES

INVESTOR PRESENTATION

AUG 2018

·       Rain Industries Limited (RAIN) is a leading vertically integrated producer of carbon, cement and chemical products. 

·       RAIN has manufacturing facilities in eight countries across three continents.

·       RAIN’s subsidiary companies – Rain Carbon Inc. (RCI) and Rain Cements Limited (RCL) . 

·       RCI is a global leader and innovator in the production of crucial raw materials for aluminum (including calcined petroleum coke (CPC) and coal tar pitch (CTP)), graphite, carbon black, refractory, titanium dioxide and a host of other products. 

·       RCI has a production capacity of 2.1 million tons per year of calcined petroleum coke CPC and a total distillation capacity of 1.5 million tons per year for CTP. 

·       RAIN acquired RÜTGERS during 2013, and integrated the business into the RCI subsidiary. RÜTGERS is Europe’s leading manufacturer of chemical raw materials derived from coal tar, a unique by-product resulting from the coking of hard coal.

·       RCL produces high-quality “Priya Cement”. RCL operates two cement plants with a combined cement production capacity of 4.0 million tons per year.

·       A highly committed and motivated workforce comprising of over 2,400 professionals are available.

·       KEY BUSINESS STRENGTHS

·       3 business verticals (Carbon, Cement and Advanced Materials) Global presence with 2.1 million tons p.a. calcination capacity, 1.0 million tons p.a. CPC blending capacity, 1.35 million tons p.a. coal tar distillation capacity, 0.65 million tons advanced materials capacity and 4.0 million tons p.a. cement capacity

·       Transforming by-products of oil and steel industries into high-value carbon products

·       Long standing relationships with raw material suppliers and end customers

·       Leading R&D function drives continuous innovation

·       Diversified geographical footprint with advantaged freight and logistic network

·       Facilities with overall 125 MW co-generated energy

·       Refinancing at lower interest rate

·       International management team

·       Strategy shift from low margin products to favourable product mix

1. FINANCILS :

RAIN IND	Jun '18	Mar '18	Dec '17	Sep '17	Jun '17	YOY	QOQ
Net Sales	3,803.25	3,306.20	3,144.79	3,050.81	2,637.12	44.22	15.03
Con.Net P/L	294.81	265.71	318.38	245.65	151.53	94.56	10.95
Equity	67.27	67.27	67.27	67.27	67.27	0	0
Diluted EPS	8.76	7.47	9.13	7.3	4.51	94.24	17.27
MP	190
PE	6
VOLUME	4,00,000
FV	RS.2
	1 week	2 week	1 month	3 month	6 month	9 month	1 year
Price	205.15	208.15	193.1	238.25	381	340.2	139.4
Gain / Loss	-5.53%	-6.89%	0.36%	-18.66%	-49.13%	-43.03%	39.02%

·       Consolidated revenue increased due to (i) increase in sales volumes (ii) realizations & (iii) favorable impact from depreciation of Indian Rupee against the Euro and the US Dollar.

·       Although markets are challenging, margins are being maintained due to cost optimisation and improved capacity utilisations.

·       Adjusted EBITDA increased by 46.5% in Q2 CY18 TO Rs.6.85 billions from Rs.4.68 billions in Q2 CY 17.

·       CARBON BUSINESS PERFORMANCE – Q2

·       Carbon revenue increased due to (i) increased volumes of CPC and OCP & (ii) improved realizations across all carbon products & (iii) favorable impact from depreciation of Indian Rupee against the Euro and US Dollar.

·       Adjusted EBITDA from Carbon business in Q2 CY18 is 5.5 billion as against 2.9 billion in Q2 CY17.

·       ADVANCED MATERIALS BUSINESS PERFORMANCE Q2

·       Increase in revenue is led by appreciation of Euro and US Dollar against Indian Rupee. 

·       Increased quotations from Engineered Products offset with decreased volumes in Petro Chemical Intermediates.

·       Adjusted EBITDA from Advanced Materials business in Q2 CY18 is 1.2 bln as against 1.5 bln in Q2 CY17.

·       Performance of Advanced Materials business impacted due to higher raw material quotations

·       CEMENT PERFORMANCE – Q2 CT 18 : Revenue from Cement business decreased by 16.4%  due to (i) decrease in realisations by 18.8% in Q2 CY18 compared to Q2 CY17, partly offset with 2.9% increase in volumes.

·       Adjusted EBITDA from Cement business in Q2 CY18 is 0.1 billion as against 0.2 billion in Q2 CY17.

·       Performance of Cement business impacted due to higher operating cost and lower cement clinker ratio.

·      CONSOLIDATED DEBT : Net Debt increased from US$999 Mlns in Dec 17 to $1007 Mlns in June 18

INDUSTRY UPDATE

·       LME price realigned to bearish pattern after reversal of rally unleashed by US sanctions. Higher premiums benefited US smelters.

·       ALCOA,USA restarted 2 of its 3 curtailed plotlines . Century restarted 1.

·       Other restarts or ramp-ups of other curtailed capacities is delayed due to skilled labor availability issues and technical constraints.

·       Disruptions in bauxite mining in Brazil, US sanctions and levy of tariff on imports by US resulted in lower aluminum production during Q2.

·       Targeting the aluminium supply deficit, Chinese aluminum producers are lobbying for removal of export tax in China.

·       Softer market conditions limited price increase of GPC and CPC in Q2 and expected to continue in near future.

·       To control Pollution, hon’ble supreme court has ordered ban on import and use of Pet Coke as fuel on 26 July, 2018.

·       MARPOL 2020

·       In 2020, Global sulphur limits for marine bunker fuel will be lowered from the current 3.5% to 0.5% affecting fuel demand from the shipping Industry.

·       There is uncertainty over the level of compliance from shipping companies and if they do switch, which alternative fuels they use. They could continue using high sulphur grades and install scrubbers, which remove the sulphur from exhaust gases.

·       The enactment of MARPOL will put existing quatities and qualities of calcinable GREEN PETROLEUM COKE(GPC) production at risk of decreasing quantities