Press Release 10 Nov 2021

Suprajit Engineering Limited, Bengaluru.

PRESS RELEASE

November 10, 2021.

RESULTS AND BUSINESS UPDATE FOR THE QUARTER AND

HALF YEAR ENDED SEPTEMBER 30, 2021.

RESULTS UPDATE:

			(Rs. in Million)
Consolidated unaudited results for the quarter ended:
PARTICULARS	Q2 SEP 2021	Q2 SEP 2020	Growth
Amount	%	Amount	%
OPERATING REVENUE (Net of	4,936.7		4,431.4		11.4%
taxes)
EBIDTA (Operational)	800.6	16.2%	734.8	16.6%	8.9%
Standalone unaudited results for the quarter ended:
PARTICULARS	Q2 SEP 2021	Q2 SEP 2020	Growth
Amount	%	Amount	%
OPERATING REVENUE (Net of	3,547.8		3,117.2		13.8%
taxes)
EBIDTA (Operational)	723.4	20.4%	580.0	18.6%	24.7%
Phoenix Lamps Division (Including Trifa & Luxlite) for the quarter ended:
PARTICULARS	Q2 SEP 2021	Q2 SEP 2020	Growth
Amount	%	Amount	%
OPERATING REVENUE (Net of taxes)	925.4		921.7		0.4%
EBIDTA (Operational)	89.2	9.6%	136.3	14.8%	(34.5%)

Suprajit Engineering Limited Non-automotive (SENA) Division (including India and Wescon US) for the quarter ended:

PARTICULARS	Q2 SEP 2021	Q2 SEP 2020	Growth
Amount	%	Amount	%
OPERATING REVENUE (Net of taxes)	1,010.7		786.2		28.5%
EBIDTA (Operational)	115.1	11.4%	108.7	13.8%	5.8%

Suprajit Engineering Limited - Automotive Cable division (including Suprajit Automotive and Suprajit Europe) for the quarter ended:

PARTICULARS	Q2 SEP 2021	Q2 SEP 2020	Growth
Amount	%	Amount	%
OPERATING REVENUE (Net of taxes)	3,000.7		2,723.6		10.2%
EBIDTA (Operational)	596.3	19.9%	489.8	18.0%	21.7%

Above Operational EBITDA information are without considering all non-operational income, forex gain / loss.

: 1 :

Consolidated unaudited results for the half year ended:
PARTICULARS	SEPTEMBER 2021	SEPTEMBER 2020	Growth
Amount	%	Amount	%
OPERATING REVENUE (Net of	8,552.9		6,206.1		37.8%
taxes)
EBIDTA (Operational)	1,292.8	15.1%	686.5	11.1%	88.3%
Standalone unaudited results for the half year ended:
PARTICULARS	SEPTEMBER 2021	SEPTEMBER 2020	Growth
Amount	%	Amount	%
OPERATING REVENUE (Net of	5,638.5		3,992.0		41.2%
taxes)
EBIDTA (Operational)	1,042.6	18.5%	502.4	12.6%	107.5%
Phoenix Lamps Division (Including Trifa & Luxlite) for the half year ended:
PARTICULARS	SEPTEMBER 2021	SEPTEMBER 2020	Growth
Amount	%	Amount	%
OPERATING REVENUE (Net of taxes)	1,535.3		1,259.0		21.9%
EBIDTA (Operational)	127.9	8.3%	80.1	6.4%	59.7%

Suprajit Engineering Limited Non-automotive (SENA) Division (including India and Wescon US) for the half year ended:

PARTICULARS	SEPTEMBER 2021	SEPTEMBER 2020	Growth
Amount	%	Amount	%
OPERATING REVENUE (Net of taxes)	2,048.2		1,419.1		44.3%
EBIDTA (Operational)	276.7	13.5%	148.9	10.5%	85.8%

Suprajit Engineering Limited - Automotive Cable division (including Suprajit Automotive and Suprajit Europe) for the half year ended:

PARTICULARS	SEPTEMBER 2021	SEPTEMBER 2020	Growth
Amount	%	Amount	%
OPERATING REVENUE (Net of taxes)	4,969.4		3,528.1		40.9%
EBIDTA (Operational)	888.2	17.9%	457.5	13.0%	94.1%

Above Operational EBITDA information are without considering all non-operational income, forex gain / loss.

Group debt level (Rs. in Million):

DEBT LEVEL (Group)	Sep-21	Mar-21
Long Term	495	923
Short Term	2,669	2,354
TOTAL	3,164	3,277

: 2 :

OPERATIONS:

Demand - Supply Constraints and Covid-19:

1. The chip shortage, both in India and worldwide, outweighed the disruption caused by the pandemic during this quarter.

1. Production disruptions, both planned and unplanned, at various OEMs in India and elsewhere in the world, caused significant reduction in business volumes. This chip shortage is expected to continue its disruption during the rest of this year.

1. Covid-19pandemic had lesser impact during the quarter with vaccination drive gathering good pace across the world and India, in particular.

1. Covid vaccination coverage across the Suprajit group of companies has been at significantly higher levels, thereby creating better operating environment within the group.

1. The other major disruptions relating to supply chain constraints, port congestion, container shortages and significant material cost increases have had an abnormal impact on the margins.

1. Q2 performance has been satisfactory despite these factors.
2. • 3 :

BUSINESS & FINANCIAL UPDATE:
Highlights of the Results :
						(Rs. In million)
		Q2 Sep	Q2 Sep		HY Sep	HY Sep
	Standalone:	21-22	20-21	Growth	21-22	20-21	Growth
	Operating Revenue	3,547.8	3,117.2	13.8%	5,638.5	3,992.0	41.2%
	Operating EBIDTA	723.4	580.0	24.7%	1,042.6	502.4	107.5%
	Consolidated:
	Operating Revenue	4,936.7	4,431.4	11.4%	8,552.9	6,206.1	37.8%
	Operating EBIDTA	800.6	734.8	8.9%	1,292.8	686.5	88.3%

o The overall H1 performance has been satisfactory, despite headwinds, with improvements in operational revenue and EBIDTA.

1. The results for the first half had certain one-off impacts relating to Wescon paycheck protection program, reversal of provision for Mutual Funds, expenses, certain price increase impacts relating to previous period, etc.

1. Pricing pressure was felt in the Phoenix Lamps Division (PLD), wherein abnormal material cost increases had to be partially absorbed by the Company, in certain segments.

1. The planned expansion at Narsapura, near Bangalore, as well as PLD will be completed before end of this financial year.

1. The festival season sales, which is critical for the automotive business, has been muted in the passenger and 2 wheeler sectors, due to chip shortage and low offtake in certain 2 wheeler segments.

The Group Companies:

1. Suprajit Automotive (SAL) and Suprajit Europe (SEU) together had a good quarterly sales growth with improved margins.

1. SENA sales performance had a good improvement for the quarter and the margins have been stable for the half year.

1. Businesses at Trifa and Luxlite continue to be challenging as informed in the previous quarterly update. Management critically reviewed the provisions related to Luxlite, and have fully written down the investment value of Rs. 484.79 million in Luxlite. A provision for impairment of Rs. 127.25 million towards goodwill is also made.

1. The consolidated results of the company show healthy topline growth and stable margins.
2. • 4 :

COMMENTARY ON THE CURRENT QUARTER AND BALANCE YEAR :

1. The chip shortage is expected to continue throughout this quarter and the year and will have disruptions both planned and unplanned at the customers end. This is expected to have certain impact on the business during the second half of the year.

1. The continued challenges of high material prices, port congestion and container costs, shipment delays, etc., will also have an impact on the margins for the balance year.

1. The festival season has clocked below normal offtake of vehicles across the segments.

1. Company is taking every step to minimize the headwinds and expected to have a reasonable quarter and the balance year going forward, in line with its guidelines.

1. Company is planning an additional capex of about Rs. 125 crores for various new projects in hand, for the next 18 months. A groundbreaking ceremony for a new plant (≈140,000
   SFT ) for a comprehensive aftermarket facility at Bommsandra Indl. Area was conducted during the quarter.

ACQUISITION OF LIGHT DUTY CABLE (LDC) UNIT OF KONGSBERG AUTOMOTIVE :

1. As notified earlier, the Company has signed a Definitive Share and Asset Purchase Agreement and Technical Support Agreement (TSA) with Kongsberg, to acquire LDC business unit. The Management believes that this is a transformational transaction in the coming years, in line with its overall strategy of `Derisk and grow profitably' and to emerge as a global leader in the control cables business.

1. The transaction is expected to close by end of February 2022. On completion, Suprajit's overall cable capacity will be 400 million / year with manufacturing footprints in China, Hungary and Mexico along with tech centre in Detroit.

1. In addition, LDC will also have engineering / business development support from multiple countries for customers. This will make Suprajit a truly a global leader in this business.

1. Electro-MechanicalActuators (EMA) will be a good complementary fit into Company's product portfolio. EMA will be a key new technology for Indian customers.

1. Company will use a portion of the cash available and take some debt, ensuring optimal capital allocation to complete this transaction.
2. • 5 :