Presentation to Analysts

May 15, 2012

Main slides 18

Lalbhai Group

Commenced manufacturing activities in 1908

Textiles, Chemicals, Engineering

Group revenue ` 7000 cr

Culture, Education, Empowerment, Health, Infrastructure

1|18

Shri Kasturbhai Lalbhai

Founder Director, Reserve Bank of India

Founder Chairman, IIT, Mumbai

Founder Board Member, IIM, Ahmedabad

Shri Kasturbhai Lalbhai with 1st President of India Dr Rajendra Prasad

Shri Kasturbhai Lalbhai with the Prime Minister Shrimati Indira Gandhi

Atul Ltd

Founded in 1947 by Kasturbhai Lalbhai

Manufacturing and marketing of chemicals

Create wealth, generate employment, be self reliant

6|18

Purpose
We are a conglomerate committed to significantly enhance value for all our stakeholders by fostering a spirit of continuous learning and innovation using science and technology in a responsible way providing high quality products and services and becoming the most preferred supplier seeking sustained and dynamic growth and securing long-term success

having people who practice values and high standards of behaviour

taking care of the surrounding environment and improving the quality of life in the communities we operate in.

7|18

A moment of historic significance

9|18

Industries Served

Aerospace

Agriculture

Automobile

Construction

Cosmetics

Defence 10|18

Industries Served

Flavour & Fragrance

Food & Nutrition

Paint & Coatings

Personal Care

Pharmaceutical

Textile 11|18

Revenues
` cr 1810 5 years CAGR 14% 1807

1554

1305 1196 1033 925 800 2006-07 2007-08 2008-09

1204

2009-10

2010-11

2011-12 12|18

Profit before tax

(from operations) ` cr 5 years CAGR 36% 130 129 116

80
75 51

26 20 2006-07

27 2007-08 2008-09 2009-10 2010-11 2011-12 13|18

Key Initiatives (Growth)

Projects commissioned | under implementation

1
2 3 4 5 6 7 8 9 10 1

AR-1
BI-1 CP-1 PI-1 PI-2 PI-3 PO-1 PO-2 PI-4 PI-5 DPD Atul Bioscience Atul Bioscience

Acquisition Joint Ventures

1
2

Rudolf Atul Chemicals

Atul Elkay Polymers

Investment ` 130 cr

14|18

Inauguration of ARDP lab by Honorable Chief Minister of Rajasthan, Shri Ashok Gehlot

15|18

Inauguration of p-C plant by Honorable Chief Minister of Gujarat, Shri Narendra Modi 16|18

Service to Society

17|18

Key Initiatives
(Service to Society)
AIVE Dharampur Valsad District Trades:16 Students|year: 1100

ITIs
Sagbara Narmada District Trades:7 Students|year: 230 Khergam Navsari District Trades:4 Students|year:90 18|18

Financial Performance

Main slides 15

Revenues
` cr

1810
Last 5 years CAGR: 14% 1554

1807

1205 1033 925 837 710 619 600 604

1196

1204

Last 10 years CAGR: 12%

02-03 03-04 04-05 05-06 06-07 07-08 08-09 09-10 10-11 11-12

1|15

Profit Before Tax

(from operations) ` cr 135 Last 5 years CAGR: 36% 129 116

80
70 Last 10 years CAGR: 18% 35 26 20 19 7 51

36

5
02-03 03-04 04-05 05-06 06-07 07-08 08-09 09-10 10-11 11-12

2|15

Quarterly Sales
460

452

453 449

407 403 380

388

391

326 300 Q1 Q2 Q3 Q4 3|15

Divisional Sales Analysis

` cr
600 500 400 469 406 350 346 326 352 303 364

300
200 100 0

72

106 70

95

11-12

10-11 11-12 10-11 11-12 10-11 11-12 10-11 11-12 10-11 11-12 10-11

AR 34%

BI 3%

CO 6% Domestic

CP 16%

PI 12%

PO 12%

Export

4|15

9|24

Leverage ratio
Particulars 2011-12 2010-11

Debt | equity

0.59

0.57

Interest (coverage before forex adjustment)

6.52

7.72

Interest coverage

4.70

7.72

DSC

1.81

1.92 5|15

Key ratio
% Particulars Contribution EBIDTA Interest to sales (before forex adjustment) Interest to sales (after forex adjustment) Current RoCE EPS ` 2011-12 26 12 1.76 2.40 1.28 17 29.70 2010-11 27 14 1.70 1.70 1.27 18 30.34 6|15

Comparative Profitability
` cr
Particulars Sales EBIDTA from operations before forex Non recurring income | (expense) 2008-09 A 1159 167 (5) 2009-10 A 1168 152 2010-11 A 1508 203 10 2011-12 A 1761 215 6

EBIDTA before exchange difference

EBIDTA before exchange difference % Exchange difference EBIDTA after exchange difference EBIDTA after exchange difference % PBT after exchange difference PAT

162
14 (44) 118 10 46 36

152
13 (9) 143 12 80 53

213
14 (9) 204 13 139 96

221
13 (24) 197 11 122 88

RoCE %

11

13

18

17

7|15

Factors Affecting Profitability

` cr Sales 2010-11 2011-12 Increase Positive factors Sales volume Selling price Total positive factors Negative factors Raw material price Rupee depreciation Repairs & maintenance Salaries Others Total negative factors 1508 1761 253 68 185 253 PBIDT Before exchange 203 215 12 18 185 203 130 17 5 15 24 191 8|15

Fixed Cost
` cr

Particulars
Salaries and wages Repairs and maintenance Interest Depreciation Others Total

2011-12
117 69 31 44 74 335*

2010-11
102 64 26 39 64 295*

Inc|(Dec)
15 5 5 5 10 52

% to sales

19

20 ` 9 cr in 10-11 excluded 9|15

* ` 24 cr forex loss in 11-12 and

Working Capital Management

Working Capital
NoDs

Particulars Inventories Debtors Other current assets Gross Working Capital

Mar 12 59 69 22 150

Mar 11 60 64 27 151

Mar 10 59 75 30 164

Current liabilities
Net Working Capital

75
75

75
76

83
81

10|15

Working Capital
` cr Particulars Inventories Debtors Other current assets Gross Working Capital Current liabilities Net Working Capital Mar 12 293 368 113 774 373 401 Mar 11 261 300 116 677 325 352 Inc|(Dec) 32 68 (3) 97 48 49

11|15

Cash Flow and Borrowings

Cash Flow from Operations

` cr 2011-12 Operating profit * Inventories Trade & other receivables Creditors and other payables Cash generation from operations Tax payments Net cash flow from operating activities 193 (32) (77) 75 159 38 121 2010-11 187 (51) (58) 26 104 45 59

* before WC changes and exchange difference on FCL 12|15

Position of Borrowings
Mar 11 Rupee Foreign Currency Total Long-term Working Capital Total 204 113 317 156 161 317 Jun 11 221 126 347 169 178 347 Sep 11 282 154 436 155 281 436 Dec 11 250 169 419 204 215 419 Mar 12 233 142 375
300 281 450

` cr

325
317 347

436

419 375

200

Mar/11 Jun/11 Sep/11 Dec/11 Mar/12

183 192

250 200 150 178 169

215 161 156 204

192 183

155

375

100

Mar/11

Jun/11

Sep/11

Dec/11

Mar/12

13|15

18|22

Borrowings
500
428

3 2.5 2
1.81

400

369 349

368

375 317 1.92

300

295

` cr

1.28

1.5
1.23 0.99 0.80 1.35

200
0.93

%
0.61
0.58 0.59

1
0.5 0

100
0.60

0.74

0.86

0 05-06 06-07
Debt

07-08

08-09

09-10

10-11
DSCR

11-12

Debt to equity

14|15

Interest to Sales
10.0

10

8.0 6.4

6
4.2 3.7

3.4

3.3

3.3

3.5 2.2 1.7 1.8

0 00-01 01-02 02-03 03-04 04-05 05-06 06-07 07-08 08-09 09-10 10-11 11-12

15|15

Thank You

Performance and Other Chemicals Aromatics

Main slides 7

Purpose

AR Division will be a world-class business, offering its customers in Personal Care and other chosen industries high quality products and services in a cost effective manner.

1|7

User Industries
Personal Care Pharmaceutical Flavors & Fragrance (F&F) Dyestuff Paper

No of Customers

~400 2|7

Key Products
Product Group p-Cresol p-AA Market Share (2011-12) 35% 65% China (6) Europe (1), India (1) Competition

p-AAl p-Cd

40% 30%

India (2) China (1)

3|7

Financials
` cr

Particulars

2009-10 A

2010-11 A 349

2011-12 A 469

Sales

278

No of people

197

197

226

4|7

Sales
` cr 470 469

349

278
270 09-10 10-11 11-12

34% growth over previous year 5|7

Way forward - Key Actions

Maintain cost and volume leadership in existing products

Enter into value added downstream products

Explore related opportunities in Personal Care and F&F

6|7

Risks

Chinese competition mainly in p-C and p-AA

Non compliance to REACH regulations

7|7

Performance and Other Chemicals Bulk Intermediates

Main slides 7

Purpose

BI Division will supply bulk chemicals to other Divisions in a

cost effective manner and grow in speciality chemicals and intermediates.

1|7

User Industries
Tyre and Rubber Dyestuff Paper Pharmaceutical

No of Customers

227

2|7

Key Products
Product Group Resorcinol Market Share (2011-12) 43% domestic Competition Japan (2), USA (1), China (8)

3% global

CSA

16% domestic

India (3)

Oleum 65%, SO3, Caustic Soda

Captive consumption
3|7

Financials
` cr

Particulars

2009-10

2010-11

2011-12

Sales

97

98

107

No of people

269

258

254

4|7

Sales
` cr 110 107

100

97

98

90 09-10 10-11 11-12

5|7

Way forward - Key Actions

Expand Resorcinol capacity Enter into new intermediates 3 Introduce products based on Hydrogen

6|7

Risks

60% of the Divisions business is commodity based and driven by

highly uncertain trends Too many new players making business unviable Increasing Chinese imports

7|7

Performance and Other Chemicals

Colors

Main slides 7

Purpose
CO Division aims to be a reliable global supplier of Its as and colorants required for different facets of human life. products textile, will find applications personal in industries paper, such paint

pharmaceutical,

care,

coatings, packaging, foods and electronics.

It will manufacture in a responsible way and compete in the market place on the basis of service, quality and cost and continuously improve processes so as to deliver better value.

1|7

User Industries

Product Group

User Industries

Textile dyes
Paper dyes HP pigments

Textile
Paper Paint and Coatings

No of Products
No of Customers

550
1350
2|7

Key Products
Market Share Product Group (2011-12) Vat dyes Reactive dyes Sulphur Black HP pigments 13% 1.5% 8% 2.5% Competition Europe (1), China (4), India (1)

Europe (2), India (810)

Europe(1), China (3) Europe (3)

3|7

Financials
` cr

Particulars

2009-10 A

2010-11 A 325 950

2011-12 A 347 941

Sales No of people

287 995

4|7

Sales
` cr 380

347

330

325

287

280
09-10 10-11 11-12

7% growth over previous year

5|7

Way forward - Key Actions

Increase Vat dyes global market share through M Dohmen-Atul

Enterprise
Increase Reactive dyes market share with continuous and poly-

functional range
Introduce new High Performance Pigments for business growth Expand business in Sulphur Black and grow in Denim segment Explore new synergistic business opportunities Reduce fixed cost through restructuring

6|7

Risks

Reduced demand for niche products

Increased presence of MEs in specialties on a global level

Limited product portfolio in High Performance Pigments

Minimal exposure to new synergistic business segments

7|7

Life Science Chemicals Crop Protection

Main slides 8

Purpose

We, Crop Protection Division, are in the business of servicing the growing needs of food and fiber
We leverage our competency in chemistry and provide farm solutions to create lush yields We strive for building relationship with farmers across the globe

1|8

User Industries
User industry No of products No of customers Exports Brand Bulk Agriculture 63 1555 160 1300 95

CP brands are available across 15000 retail outlets

2|8

Key Products
Market Share (2011-12)

Product Group

Competition USA(1), Australia(1), South America(1), Europe(1), China(5), India(3)

2,4 D group

12%

Indoxacarb

7%

USA(1), India(1)

3|8

Financials
` cr

Particulars

2009-10

2010-11

2011-12

Sales

245

306

352

No of people

353

364

387

1/5 4|8

Sales
` cr
400

352

306 300

245

200 2009-10 2010-11 2011-12

15% growth over previous year

5|8

Brands

6|8

Way forward - Key Actions

Expand herbicide capacity Expand brand business Introduce new products coming off patent Increase contract manufacturing through strategic alliance

7|8

Risk
Business is dependent on monsoon weather and pest attack Fluctuation in commodity prices Low price competitors from China with equal| better quality Competition from new entrants and low priced suppliers in

domestic herbicide business

Entry of international generics companies in India Increased usage of GM crops Dependence on China for key intermediates ` volatility

8|8

Life Science Chemicals Pharma & Intermediates

Main slides 7

Purpose

PI Division will contribute to the wellness of mankind by catering to the growing needs of Pharmaceutical Industry. It will supply

pharma

intermediates

and

APIs

in

cost

effective manner using novel technologies.

1|7

User Industries
Product Group Pharmaceutical Intermediate and APIs Phosgenated Chemicals User Industries Pharma Pharma, Polymers, Crop Protection Pharma, Aerospace, Electronics, Polymers, Paper
40 100 2|7

Sulfones
No of Products No of Customers

Key Products
Product Group

Market Share (2011-12)

Competition

Pharmaceutical Intermediates and APIs Phosgenated intermediates

<1%

USA, Japan, Europe, India, China (several companies) China (5), Europe (5), Japan (3), USA (1), India (1) China (5), India (3), Europe (2), Japan (2) 1/5
3|7

<1%

Sulfones

50%

Financials
` cr

Particulars

2009-10 A

2010-11 A 95

2011-12 A 106

Sales

66

No of people

215

218

213

4|7

Sales
110

` cr
106

95

85

66
60 09-10 10-11 11-12

12% growth over previous year

5|7

Way forward - Key Actions

Expand capacity for sulfones and launch new sulfones

developed in-house
Introduce at least 6 new intermediates and APIs every year Expand capacities for Pharmaceutical & Phosgenated

intermediates and APIs (GMP facility)

Growth through custom synthesis and contract manufacturing Improve productivity through process intensification and

novel technologies

6|7

Risks

` volatility (75% exports)

Stricter regulatory requirements for EU/ USA

7|7

Performance and Other Chemicals Polymers

Main slides 11

Purpose

PO Division will offer best in class products and services to Automotive, Composites, Footwear, Furniture, Paint & Coatings and Civil industries across the world with bonding and coating

solutions in a cost effective manner.

1|11

User Industries
Product Group Epoxy User Industries Paint & Coatings Civil Power Transmission Wind energy Defense Automotive Aerospace
No of Products No of Direct Customers 219 458 2|11

User Industries
Product Group Brands User Industries Footwear Handicrafts Civil Jewelry Automotives Furniture Engineering Art and Craft
10 475 3|11

No of Brands No of Distributors

Key Products
Market Share (2011-12) Domestic

Product Group

Competition

Epoxy

20%

USA (1), Fareast (2), Europe (2), India (1)

Brands

15%

India (7)

4|11

Financials
` cr

Particulars

2009-10

2010-11

2011-12

Sales

221

364

407

No of people

243

245

268

5|11

Sales
` cr 420 364 407

320

220

221 09-10 10-11 11-12

11% growth over previous year

6|11

Way forward Key Actions

Increase sale of high margin products Diversify and expand product portfolio Add new business verticals of strategic importance Expand brand business Reduce cost and improve working capital cycle Grow through Inorganic and Organic route

7|11

Risk

Price and margin sensitive business

Growth depends on Infrastructure sector

Limited ability to pass the input cost increases

8|11

Atul Elkay JV
Established in 1962 at Istanbul, Turkey Specialty chemicals for Stone Care Industry Manufacturing in Istanbul

Over 30 products
Exports to over 10 countries

9|11

Atul Elkay JV
Atul currently operates in this segment Segment offers high margins Existing manpower will be deployed for the new business

Leverage current manufacturing facility, sales

infrastructure & staff Product range Mostly an import substitute Growing market and sustainable demand Attractive export potential 10|11

Stone Processors

Construction Sites

Applications

Airports / Malls

Heritage Bldgs

Homes

11|11

Thank You