Hindusthan National Glass & Industries Ltd.

(HNGIL)

CORPORATE
PRESENTATION

July, 2010
1
Disclaimer
The Corporate Presentation (the “Presentation”) is based on management estimates and is being provided to you (herein referred to as
the “Recipient”) only for information purposes. The sole purpose of this Presentation is to provide preliminary information on the
business activities of the Company, in order to assist the recipient in understanding the Company. This Presentation does not purport
to be all inclusive or necessarily include all information that a prospective investor may desire in evaluating the Company. The
Company expressly disclaims any and all liability for any errors and/or omissions, representations or warranties, expressed or implied
as contained in this document.

This Presentation contains certain forward looking statements which are based on certain assumptions of future events over which the
Company exercises no control. Hence this involves number of risks and uncertainties which could cause the actual results to differ
materially from those that may be projected or implied by these forward looking statements. Such risks and uncertainties include, but
are not limited to: our ability to manage growth, competition, attracting and retaining skilled professionals, time and cost overruns,
regulatory approvals, market risks, domestic and international economic conditions, changes in laws governing the Company including
the tax regimes and exchange control regulations.

The Company does not undertake to update any forward looking statements that may be made from time to time by or on behalf of the
Company. This Presentation may not be photocopied, reproduced or distributed to others at any time without prior consent of the
Company. Upon request, the Recipient will promptly return all material received from the Company without retaining any copies
thereof.

In furnishing this Presentation, the Company do not make any obligation to provide the Recipient with access to any additional
information on the Company or its subsidiaries. This Presentation should not be deemed an indication of the state of affairs of the
company nor shall it constitute an indication that there has been no change in the business or state of affairs of the Company since the
date of publication of this Presentation.

Any clarifications / queries as well as any future communication regarding the Company should be addressed to the Company. “This
presentation does not constitute a prospectus, offering circular or offering memorandum or an offer, invitation, or a solicitation of any
offer, to purchase or sell or subscribe, any shares of the Company and should not be considered or construed in any manner
whatsoever as a recommendation that any person should subscribe for or purchase any of the Company’s shares.”

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Presentation Outline
PRESENTATION OUTLINE
 HNGIL Background
◊ About HNGIL
◊ Inorganic Growth, Growth story, Pan-India Presence
◊ Board of Directors
◊ In – house group synergies
◊ Shareholding Pattern

 Product offerings, Industry and Customer Outlook

 Expansion plans

 Expanding EBIDTA Margins

 Financial Highlights

 Financial Projections
 HNGIL’s ratings & rankings

 HNGIL – Strategic Moves

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About HNGIL
 Deep roots in Glass Industry for over 60 years.

 Growth from a small furnace of 30 TPD in 1952 to over 2800 TPD

currently. Present capacity over one million tonnes per annum.

 Continuous up gradation of technology by re-deployment of internal

accruals ensuring continually improved quality parameters.

 Market leaders (65% appx.) in Indian Glass Container Market.

 Strong Financials.

 Backward integration by way of having 100% Subsidiary – Glass

Equipment (India) Ltd., manufacturing Glass Bottle making equipments
and spares. HNGIL also has its own foundry, Mould shop and Bottle
printing division, giving substantial cost benefits.

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About HNGIL
 Due to capital intensive nature of the industry, high entry
barriers to new entrants.

 HNGIL’s Gross Fixed Assets in excess of Rs 16 bn as at 31st

March,2010

 Consolidation through acquisitions over last 8 years has helped

improve margins.

 Strong sustained relationship with customers and suppliers.

 Operating efficiencies and Quality comparable with the world

standards.

 Vast managerial pool

 Phenomenal Growth in Revenue & Margins over the years (FY

2007 to 2010) - Sales CAGR at 25% and PAT CAGR at 280%.

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Pioneering Vision

“To create a world-class glass

manufacturing plant that pursues

Quality, Cost Reduction, and

Productivity Improvement measures

in a truly holistic manner, leading to

Customers’, Shareholders’, Employees’

and Suppliers’ Satisfaction; this

integrated effort will result in the

Company becoming an Industry

Benchmark and a role model for

systems, processes and results.”

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 INORGANIC GROWTH

 During last 9 years, HNGIL has made following 3 acquisitions of loss

making or sick and closed Companies/ industrial undertakings and
successfully turned them around within a short span of time :-

1. January 2002 – Acquired Owens Brockway India Ltd. - having

Plants at Puducherry and Rishikesh with a capacity of 700 TPD.
Name of the company was changed to Ace Glass Containers Ltd..

2. October 2005 – Acquired loss making Unit of L&T Nashik, having

a capacity of 350 TPD.

3. October 2007 – Acquired the Assets of Haryana Sheet Glass’s

Neemrana Unit, revamped the plant and started commercial
production in record time – by March 2008

The Journey continues …………., there are several exciting business

opportunities both in India and abroad as of today.

 Today, all these acquired units contribute to wealth creation for the
Company and its stakeholders

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Growth – Organic & Inorganic
Expanded

Acquisition of 2825 TPD

Assets of Neemrana
Plant – Capacity

Together constituted Ace

2585 TPD
Glass Containers Capacity at
L&T plant 2435 TPD
acquisition –
Capacity at
2150 TPD
Growth

Capacity at
1800 TPD
post Owens’
Expanded acquisition
Capacity to
Installed 1100 TPD
Capacity of
30 TPD

1952 2000-01 2001-02 2005-06 2006-07 2007-08 Present

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Pan – India presence

Location Capacity (TPD) Furnaces

Rishra 805 3
Delhi

Bahadurgarh 655 3

Kolkata Neemrana 180 1

Rishikesh 425 2

Nashik 390 1

Mumbai
Puducherry 370 1
Hyderabad

Total 2825 11
Bengaluru

Chennai

Plant Locations
Marketing Office

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Board of Directors

Mr. Chandra Kumar Somany, Chairman

Mr. Sanjay Somany, Managing Director Mr. Mukul Somany, Joint Managing Director

DIRECTORS

▪ Mr. Kishore Bhimani ▪ Mr. Sujit Bhattacharya ▪ Mr. Ratna Kumar Daga
▪ Mr. Dipankar Chatterji ▪ Mr. Shree Kumar Bangur ▪ Dr. Indrajit Kr. Saha
▪ Mr. Ram Raj Soni

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In-House Group Synergies
 Glass Equipment (India) Ltd.
◊ A 100% subsidiary of HNGIL located at Bahadurgarh, produces world class Equipments and Spares
for production and handling of Glass Bottles at much lower cost and meets bulk of the
requirements of HNGIL.

 HNG Float Glass Ltd.

◊ Greenfield Float Glass Plant set up at Halol, Gujarat at a cost of Rs 600 crores (Debt Rs. 350 crores
and Equity Rs. 250 crores), has commenced production in a record time of 21 months and
products manufactured by the company have been very well received in the market. Within a short
span of 3 months, the plant has achieved Global benchmarks in production efficiency.
Contemplating setting up a second Float line (1050 TPD) in the same location.
◊ Also capable of manufacturing Glass to meet the needs of Auto sector.
◊ Also Planning a wider range to meet the Market demand for value added products.

HNG FLOAT

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Shareholding Pattern

% Shareholding
Particular
(as in June, 2010)

Promoters 69.98

Public Shareholding 30.02

Insurance Companies 0.37

Bodies Corporate 3.14

FIIs 7.27

Individuals & Others* 19.24

*Includes 16.76% held as treasury shares in the Company

Note: Total shares 873.39 lacs of face value Rs. 2 each, fully paid up

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Product offerings, Industry &
Customer Outlook

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Wide variety of products

 HNGIL Produces more than 15 million bottles per day

 Ranging from 5 ml to 3200 ml

 High quality – ISO 9001/2000

 Multifarious industries:
◊ Liquor & Beer
◊ Pharmaceuticals
◊ Beverages
◊ Processed Foods
◊ Cosmetics etc.

 Our Competitors in India – Piramal Glass, Hindusthan

Sanitaryware, Vitrum Glass, Haldyn Glass

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Revenue Mix

Segment-wise Color-wise Region-wise

Amber Flint Green East North South West

5%
15% 16% 20%

22%

42%
80%

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 HNGIL – Growth Trajectory
Segment Net Sales (Rs. in crores)
CAGR
FY07 FY08 FY09 FY10

IMFL 327 503 679 645 25%

Beer 58 117 149 188 47%

Food 89 130 189 187 28%

Soft Drinks 29 39 50 104 52%

Pharmaceuticals 145 162 179 166 5%

Others 52 59 68 76 13%

700 1009 1314 1367 25%

Total

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 Liquor
 Indian IMFL market is pegged at around Rs.200 bn (US $4.5 bn)

 In terms of volumes, 236 million cases

 CAGR of 15% over last 5 years, expected to grow at least at the

same rate

 Market Growth rate of 12-13% per annum

Growth Drivers of the Liquor Industry:
 Low per capita consumption: India 1.83 liters, whereas global
average is 3.1 liters
 Demographics is going to change from 48% (2001) to 54% in
2011 comprising of youth and middle aged population.
 In Indian demographics, nearly 485m people are at the drinking
age and another 100m is likely to be added over the next 5
years. Considering HNGIL’s market share of 60%,
total glass market supply is pegged at 95
 Increasing deregulation by state governments. million cases. Thus, HNGIL has huge
 Cultural change is adding consumption. potential to capture re-used bottles market

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 Beer
Figures in million cases
 In terms of volumes, 191 million cases or 14.9 hectoliters HNG Supply Industry Volumes

 Double digit growth rate of 14-15%

 CAGR over last 3 years has been around 18-20%
191
174
Growth Drivers of the Beer Industry: 157
 Lowest per capita consumption: India 1.3 liters,
whereas global average is 24 liters
 India has predominantly a warm/hot climate
 The beer-drinkers in the country are much younger
than the average beer-drinkers elsewhere in the
19 20 21
world.
 Increasing exposure to beer and wine drinking,
2007-08 2008-09 2009-10
mainly due to media and consumer mobility.
Considering HNGIL’s market share of 75%,
total glass market supply is pegged at
28 million cases only.

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 Food
Figures in MT - HNGIL
 The Indian food market is estimated to total about Rs. 8,400 bln.
according to the ‘Indian Food Report 2008’ published by Research
and Markets.
100625
 Processed food market is pegged at Rs. 3,200 bln or US $70 billions
 Industry has grown at 13.7% in only 4 years and is expected to
grow at a rate of 10% in next 5 years

66040
Growth Drivers of the Food Industry:
 Increasing health consciousness - with a move away from
traditional unpackaged formats to packaged, branded goods
 Changes in lifestyles of urban and rural middle class
 More women are entering the workplace, leaving less time for
them to prepare traditional home-made foods
 Increased salary levels of the huge middle income group
providing higher levels of disposable income FY07 FY10

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 Soft Drinks
 The Indian soft drink market is worth about Rs. 60 bln per annum. Figures in MT - HNGIL

 Indian soft drink market is growing @7- 8% per annum

51852

Growth Drivers of the Soft Drinks Industry:

 The per capita consumption of soft drinks:

- India’s consumption amongst the lowest in the world – 5 bottles

19731

per annum.

 Humid climate conditions

FY07 FY10

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 Pharmaceuticals
Figures in MT - HNGIL
 India's pharmaceutical industry is now the third largest in the
world in terms of volume and 14th in terms of value. The Indian 95009

pharmaceutical market is likely to touch US$ 50 billion by 2020

 Indian market now is worth around Rs. 570 bln or US $12.3 billion
 The industry is typically growing at around 1.5-1.6 times the
country's gross domestic product (GDP) growth.
 Industry is growing with CAGR of 12-15% as against a global
average of 4-7% during 2008-2013 (as per IMS)
83460

Growth Drivers of the Pharma Industry:

 The Indian middle class, with its increasing purchasing
potential, is expected to become a major buyer segment.
 Expansion of healthcare facilities in the rural and far-flung
areas has enhanced accessibility. FY07 FY10

 Increasing penetration of customized insurance plans would Glass Bottle market has experienced
a de-growth of 5% CAGR due to
drive affordability, influencing the consumption of medical penetration of PET Bottles
and healthcare products.
 The rise in chronic diseases

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 Global Packaging Scenario

 The consumer market dominates the global packaging industry. It accounts for an estimated
70% of sales, with industrial applications taking the remaining 30% share.

 Average annual growth rate of global packaging industry is around 3.5% and the value is
expected to reach US $ 597 billion by 2014.

 Long-term growth in global packaging can be found in emerging markets and developing
countries of Asia-pacific, Middle East, Central and Eastern Europe.

 There is a strong correlation between general economic development and packaging. General
economic growth (which typically correlates well with packaging growth) over the past 10 years
have been on average as follows --
World: 3-4 % Europe: 2-3 % Asia: 6-7 %
The economic growth figures points at a strong packaging market in large parts of Asia.

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 Indian Packaging Scenario

 The market volume of the Indian packaging industry amounts to about Rs. 77,570 crores
(US $16.7 billion) and has constantly grown by approximately 15 percent year on year.
 The pace of growth will accelerate to between 20 percent over the next five years.
 The present share of about 6-7% of Glass Packaging in the total Indian Packaging industry
offers huge opportunities on account of health, hygiene and environment
 India constitutes a mere 3% of global packaging Industry, while population constitutes 16%
of global.
 The large growing middle class, liberalization and organized retail sector are the catalysts to
growth in packaging.
 Indian companies are now placing increasing emphasis on attractive and hygienic packaging.
This promises enormous potential for Glass container Industry in the future.

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 Trends in Glass Packaging Industry in India

 Industry growth rate has been around 7 to 8 % per annum

 The growth of organized retail has acted as catalyst for glass

packaging industry

 Industry has succeeded in making light weight glass bottles, glass

bottles of fancy shapes, frosted finish, etc.

 Spirits & Beer has been fastest growing segment in terms of glass
consumption

 Exports of food applications have also been a growing

segment of late, as plastic packaging is coming under
environmental related sensitivities in several advanced
market.

 Organized retail boom.

 Increase in disposable income and customer aspiration.

 Increase in middle class population.

 Increase in working women population.

 Rapid urbanization.

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Expansion plans

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 Ramp-up in capacity

 HNGIL has planned a capital expenditure of Rs. 896

Crores to further increase production capacity and
rebuilds within next two years.
◊ Greenfield plant in AP : at 490 Crs. (650 TPD)
(Land has been already allotted to HNGIL , Project
commencement date expected is July’10 and targeted
project completion date is Mar’12)

◊ New Furnace in Nashik : 115 Crs. ( 100 TPD)

◊ Maintenance Capex : 300 Crs. ( 120 TPD)

 HNGIL is also looking for further acquisitions in this

space, both nationally and internationally and would
be guided by the “ value buy” proposition, as in the
past.

Note : HNGIL capacity is planned to reach 3700

TPD in next 2 years from present 2825 TPD

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Expanding EBIDTA Margins

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 Key Reasons for Improving Margins
 Switchover to natural gas in manufacturing process, by replacing Furnace Oil and LPG across all 6 plants.

Bahadurgarh Already in place

Neemrana Expected by July,2010
Nashik Expected by March,2011
Rishikesh, Puducherry , Expected by June,2012
Rishra

 World class designing and mould manufacturing facility in the Company, with own Foundry. JV formed
with OMCO, which will further improvise on this head.

 Economies of scale in procurement of Raw Materials/Consumables

 Light weighting, while producing stronger bottles – Mutual benefit to customers and HNGIL

 HNGIL introduced NNPB (Narrow neck press & blow technology) for the first time in India, HNGIL is
exploring further strengthening of this technology.

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 Key Reasons for Improving Margins

 Shrink film required for packaging is manufactured by ourselves. This part is continuously increasing for
the share of captive.

 Sand Mining – Bankura, Sand benefication plant for Rishra unit, exploring opportunities for other plants
as well. Assurance of long term supplies, economy and better quality

 Further increase in our own fleet of transportation – ensuring both economy and in time delivery.

 Waste heat recovery projects already initiated.

 Further rationalization of unskilled manpower through automation.

 EBITDA margin should be in the range of 28 to 30% on above measures implementation.

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Financial Highlights

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Financial Performance – P&L

All values in Rs. million

Particulars FY08 FY09 FY10

Net Revenue 10213 13110 13599

EBITDA 2147 2359 3163

EBITDA Margin 21% 18%$ 23%

PAT 1207 1077** 1552

PAT Margin 12% 8% 11%

EPS (Rs.) 18.36 12.34 17.77

$ dip in EBIDTA margin was due to unprecedented global crude prices and whereas only a partial passing of costs to customers
was done and that too, with a time-lag.

**Reasons for dip in PAT amount was, apart from Power cost as above, Forex derivative and other translation loss, otherwise
PAT margin was 11 %. Recessionary economic conditions prevailed in FY09.

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Financial Performance – Balance Sheet
All values in Rs. million

Particulars FY08 FY09 FY10

Net Fixed Assets 8923 9885 11437
Investments 1146 1046 1471
Net Working Capital 2935 3912 3874
13004 14843 16782
Met by :
Net Worth 8636 9352 10428
Secured Loans 2874 4152 5486
Unsecured Loans 1313 921 171
Provisions 181 418 697
13004 14843 16782

 Key Highlights
- DE Ratio is 0.54 in FY 2010
- Book Value per share FY 2010 is Rs 119
- ROCE in FY 2010 is 20.23%
- Debt/EBIDTA in FY 2010 is only 1.8 times

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Financial Projections

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Financial Projections

HNGIL All values in Rs. million

Particulars FY11 FY12 FY13 FY14 FY15

EBITDA 3840 4758 6486 8549 9718
EPS (Rs.) 27.24 24.36 30.68 44.58 54.05

HNGFL ( Associate Company) All values in Rs. million

Particulars FY11 FY12 FY13 FY14 FY15

EBITDA 832 1408 1689 1856 2012

HNGFL = HNG Float Glass Limited, where Company owns Equity Stake

DISCLAIMER :“The projections disclosed above are merely indicative in nature and are purely based on management’s beliefs, opinions and estimates
as of the date of this Presentation and no obligation is assumed to update such forward looking statements if these beliefs, opinions and estimates should
change or to reflect other future developments. These projections are based on certain assumptions of future events over which the Company exercises no
control. Hence this involves number of risks and uncertainties which could cause the actual results to differ materially from those that may be projected or
implied.”

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HNGIL’s Rating & Ranking
 CRISIL Rating ( As on May ’10)
◊ On “Fundamental” side 4/5 means “Superior Fundamentals”
◊ On “Valuation” Side 5/5 means “Strong upside”

 Business Standard Ranking ( Out of 1000 top listed corporates, as on Feb ’10)
◊ In terms of Revenue – 299th
◊ On Operating Profit Quantum – 265th
◊ On Net Profit Quantum – 253rd

 The latest long term credit rating of the Company is AA

and it is PR1(+) for short term, both from CARE.

 Certifications : ISO 9001:2000 and also accredited with

HACCP .

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“HNGIL – Strategic Moves”

 Synergistic diversification by setting up of Rs.600 Crores Float glass project at Halol near
Vadodara in Gujarat

 Formed a JV with Omco, Belgium for designing and manufacturing of Moulds and Moulds
accessories.

 Greenfield Plant at Naidupeta, Andhra Pradesh – for manufacturing both Container glass and
Float Glass already initiated and the site is supposed to be one of the largest single location
glass manufacturing site in the World.

 Technology tie-up with Global majors also in place to further boost our technological deliveries.

 Aggressive growth plans through acquisitions – Both in India and Overseas.

 Continued initiative on Capital cost reduction through 100 % Engineering Subsidiary - GEIL

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Hindusthan National Glass & Industries Ltd. (HNGIL)

THANK
YOU
For any queries/to obtain more info, please
write at investor.relations@hngil.com

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