MANDHANA INDUSTRIES LIMITED

Q1 Results Financial Year 2013-14

CONTENTS

Company Overview Operations Financial Highlights - Q1FY14 - Balance Sheet Segment wise Revenue and Profit Q1 results vis--vis past performance Being Human Growth Drivers Industry Outlook Clientele Management Team

COMPANY OVERVIEW

A multi-divisional textile company spread over multi-geographies Engaged in the manufacturing of textiles and garments with state-ofthe-art infrastructure Strong clientele across India and 25 other countries Vertically Integrated operations and facilities to manufacture a wide variety of value added fabrics and garments Four textile manufacturing facilities at MIDC- Tarapur, for yarn dyeing, weaving, and fabric processing Five garment manufacturing facilities at Bengalaru and 1 at Tarapur 1 garment manufacturing facility under implementation at Baramati Diversified domestic and international customer base In-house style lab and textile studio

OPERATIONS
YARN Dyeing (Processing) WEAVING
Dyeing (Process)

GREIGE FABRIC

PRINTING

PROCESSING ACTIVITY Surface Ornamentation FINISHED FABRICS

STITCHING (Activity) Embellishments & Washing FINISHED GARMENT

FINANCIAL HIGHLIGHTS

HIGHLIGHTS- Q1 FY13-14

(Rs. in Cr.)

Revenue
400.00 300.00 200.00 100.00 Q1FY13 Q1FY14

EBITDA
288.57
60 50 40 30 20 10 0

36% 212.48

20%
41.8 50.23

Q1FY13

Q1FY14

Net Profit
11.00 10.50 10.00 9.50 9.00 8.50 Q1FY13 Q1FY14 3.20

EPS
3.10 3.16 3.00

10.47

10% 9.45

10%
2.85

2.90 2.80 2.70 2.60 Q1FY13 Q1FY14

PROFIT & LOSS ACCOUNT QUARTERLY PERFORMANCE Highlights:

(in Cr.)

For the Quarter Ended

Revenue grew by 36% EBITDA grew by 20% Improvement in Operating and Net Profit margins Net Profit reduced by 10%

Profit & Loss Account Revenue Other Income Total Income Expenditure EBITDA Interest PBDT Depreciation PBT Tax Net Profit EPS OPM % NPM %

30.06.2013 288.57 (6.23) 282.34 (238.35) 50.22 (23.05) 20.94 (7.13) 13.81 (4.36) 9.45 2.85 17.41% 3.28%

30.06.2012 212.48 (1.06) 211.42 (170.68) 41.80 (19.01) 21.73 (6.47) 15.26 (4.79) 10.48 3.16 19.68% 4.93%

% Change

36% 488% 34% 40% 20% 21% -4% 10% -10% -9% -10% -10%

Reasons supporting the change.

Yarn prices at all time high levels. Increase in the Fabric prices realizations

Continuous depreciating trend in rupee

Short term hit in profitability due to MTM provisioning on forwards and other short term foreign currency loans

SEGMENT WISE DISTRIBUTION

For the Quarter Ended (Rs. in crores) 30.06.2013 30.06.2012 (Unaudited) % Change

Particulars

Segment Revenue [a] Textiles [b]Garment Total Less: Inter-segment Revenue Total Revenue Segment Profit / (Loss) Before Tax & Interest [a] Textiles [b] Garment Total Less: Interest Add: Unallocable Income Profit Before Tax Capital Employed [a] Textiles [b]Garment Total

24,758.14 5,042.99 29,801.13 944.60 28,856.53

16,968.85 5,226.32 22,195.17 946.73 21,248.44

46% -4% 34% 0% 36%

3,043.17 1,265.72 4,308.90 2,304.92 2,003.98 (623.19) 1,380.78

2,208.79 1,325.17 3,533.96 1,901.19 1,632.77 (106.18) 1,526.59

38% -4% 22% 21% 23% 487% -10%

73,255.96 18,815.33 92,071.29

69,123.76 15,095.41 84,219.17

6% 25% 9%

KEY RATIOS

Q1 2013-14 EPS Debt/Equity Debt/EBITDA ROE (%) ROCE (%) Current Ratio 2.85 0.91 4.36 8.32 11.82 1.45

Q1 2012-13 3.16 0.97 4.23 10.54 13.08 2.05

Q1 Results vis--vis past performance

Turnover and Segment wise Sales

Sales
288.57
300 250 200 150 100 50 0

(Rs. in crores)

205.04

212.48

Q1FY2012

Q1FY2013

Q1FY2014

300

50.43
250 200 150 100 50 0

44.63

52.26
238.14

Garment Textile

160.71

160.22

Q1FY2012

Q1FY2013

Q1FY2014

EBITDA and Net Profit

EBITDA
60 50 40 30 20 10 0

(Rs. in crores)

50.23 38.70 41.81

Q1FY2012

Q1FY2013

Q1FY2014

Net Profit
15.50
16.00 14.00 12.00 10.00 8.00 6.00 4.00 2.00 0.00

10.48

9.45

Q1FY2012

Q1FY2013

Q1FY2014

EBITDA and Net Profit Margins (%)

EBITDA Margins
20.00% 19.50% 19.00% 18.50% 18.00% 17.50% 17.00%

19.68% 18.87% 17.41%

Q1FY2012

Q1FY2013

Q1FY2014

Net Profit Margins

7.56%
8.00% 6.00% 4.00% 2.00% 0.00%

4.93% 3.28%

Q1FY2012

Q1FY2013

Q1FY2014

Earnings Per Share (Rs.)

(Annualized*)

EPS (Annualised*)
20.00 18.00 16.00 14.00 12.00 10.00 8.00 6.00 4.00 2.00 0.00

18.72 12.66 11.41

Q1FY2012

Q1FY2013

Q1FY2014

Highs & Lows

2011-12 POSITIVES
Tied up with Being Human- a retail brand owned by Salman Khan

2012-13
Being Human apparel launched in the Middle- East & India Retail & Exports contributed Rs. 45 crs to the sales Spike in yarn prices Depreciating rupee value Operational loss for launching BH High competition lead to stagnant fabric prices

Q1-FY13-14
Focus on retail Increase in EBOs, SIS, distribution outlets of BH

NEGATIVES

No respite in high yarn prices Continuous depreciation in rupee value

Highs & Lows .

SUMMARY: Upheaval of Yarn to Retail story Increase in Net realizations Increase in scalability of Being Human operations Bottom line growth at a CAGR of 15% Set up of a garment unit in Baramati Set up of a garment unit at Tarapur with a capacity of 20 lac pieces p.a. Macro economic factors affecting the bottom line, beyond the control

BEING HUMAN story is still on

As on date, the company has 12 EBOs, 1 Franchisee store, 74 SIS stores and around 150 Distributor outlets abroad

Online sales through Myantra.com started from June, 2013

The brand is amongst the top 3 mens apparel brand on the site and in terms of sales achieving monthly sales of approx Rs. 85 lacs

Entered into a distribution tie-up with a South African chain Stuttafords with 25 stores in South Africa

Future Outlook: 40 EBOs, 20 Franchisee stores, 100 SIS stores and 250 distribution outlets by the end of March 2014

ROAD AHEAD GROWTH DRIVERS

Original operating margins shall be restored

Consolidation of Yarn prices Further improvement in realizations of fabric prices

Earnings Growth to improve substantially

Positive EBITDA in Being Human segment by Q2FY 1314

Scale of operations in Being Human increasing in the current fiscal year

Reduction in overall interest cost

Reduction in interest rates by RBI Repayment of term-borrowings

Near Term Outlook

POSITIVE

Market Growth in IndiaTextile & Apparel Sector Trends

By 2025, the Indian domestic apparel consumption is expected to touch US$ 200 billion, surpassing that of several large consumers like Japan, Brazil and Russia. This attractiveness will bring major changes in the manufacturing and retail landscape in India: For international brands and retailers, India will become a high priority market The market opportunity will enable emergence of strong domestic brands which will stand a chance to benefit from their indigenous supply chains and understanding of local trade dynamics Increase in market share -Retailers and brands will have to focus beyond Tier I Indian cities - to smaller cities and towns where larger proportion of Indias population exists

Market Growth in IndiaTextile & Apparel Sector Trends

The price sensitivity will cause brands and retailers to develop low cost
business models in which e-commerce will play a major role. Focus on domestic market over the next decade can bring unparalleled growth , provided the business model of manufacturers is geared to tap the opportunities which will appear in various market segments The key will be to develop a supply chain which can cater to international as well as emerging Indian buyers. Manufacturers will be required to enhance their customer focus through value added services, which may include inventory management, product development and IT enabled tracking As the brands and retailers will grow large within the country, they will look for manufacturers with economies of scale who can cater to large orders timely Strategic tie-ups between such manufacturers and buyers will happen which will enhance stability and efficiency in the overall sector

MANAGEMENT TEAM
Mr. Purushottam C. Mandhana Mr. Biharilal C. Mandhana Mr. Manish B. Mandhana Mr. Ghyanendra Nath Bajpai Mr. Khurshed M. Thanawalla Mr. Dilip G. Karnik Mr. Sanjay Asher Chairman & Managing Director Executive Director Joint Managing Director Non-Executive and Managing Director Non-Executive and Independent Director Non-Executive and Independent Director Non- Executive Director

THANK YOU..