Trident : Q3FY22Industry Outlook & Earnings FAQs

Trident Limited Q3 FY 2021-22

"Industry Outlook & Earnings Frequently Asked Questions"

18th January 2022

Disclaimer: - Certain statements that are made or discussed may be forward looking statements. Such forward-looking statements are subject to certain risks and uncertainties like government actions, local political or economic developments, technological risks, and many other factors that could cause our actual results to differ materially from those contemplated by the relevant forward-looking statements. Trident Limited will not be in any way responsible for any action taken based on such statements and discussions and undertakes no obligation to publicly update these forward-looking statements to reflect subsequent events or circumstances.

1 | TRIDENT LTD Q2 FY22| INDUSTRY OUTLOOK AND FAQS

Business Performance & Outlook:

We will be providing you with the latest updates on the financial results, industry outlook, and further discuss about the business and way forward, in the form of questionnaire with possible answers that will be an assistance to the queries of stakeholders. This information has been accumulated by taking inputs from the senior management, associated respective business leaders with the ownership of their business performance thereby articulating feasible insights and financials of the company in pragmatic data points.

We remain committed and transparent towards our stakeholders and always maintain high corporate governance.

In case of any further queries, please feel free to get in touch with Investor Relations team.

"Success is when preparation and opportunity meet" - Bobby Unser

Textile industry has observed significant rebound and growth in the domestic as well as global market after the outbreak of COVID-19. The sector has utilized the opportunity in best possible manner which can be validated by the increase in business and exports. Textile exports up by 31% in FY22 which is nearly about US$ 30 bn as compared to US$ 21 bn in FY21. The textile ministry mentioned the sector has maintained trade surplus with exports higher than imports. With lifting of lockdowns, the company has worked in direction to serve its stakeholders and will continue to strive growth in future. Issues such as rising freights charges due to shortage of containers, cotton prices and possibly another wave might impact the sector margins. Although, the government has various schemes initiated for the sector along with low cotton prices domestically, better lead time and China+1 strategy has brought focused into Indian market globally. The importers have started looking for different suppliers after US passed its law related to imports from Xinjiang region which accounts for 20% of globally produced cotton which has helped Indian suppliers to come into picture. We see far more opportunities for Indian Textile sector in times to come. We as a conglomerate with far vision and deep values, we make life prosper by overcoming all challenges.

The revenues of past quarter showed tremendous growth in home textile products because of vigorous demand and normalcy which continues and recorded highest ever revenue in Q3 FY22. Bath Linen Segment registered capacity utilization of 69% with growth of 3% Q-o-Q and Bed Linen operated at 99%. The top line has resulted prospects for the company as the reported growth of 54% on Y-o-Y basis and the EBITDA margin at 20.7% for Q2 FY22.

Paper segment has shown better sign for the company as an outcome of improvement in the situation of schools and offices resulting in increased demand. We have offered different type of papers and on the path to venture into use of paper products in different sectors. As of now, the revenue for paper segment has grown approx. 38% Y-o-Y basis and EBIT margin is 23.1% for Q3 FY22.

2 | TRIDENT LTD Q2 FY22| INDUSTRY OUTLOOK AND FAQS

Performance Overview:

Production Overview:

It takes lot of courage, efforts, and dedication of all the stakeholders, to have efficient production process in such times. We, as a Trident family, have overcome multiple challenges during COVID-19 and stayed committed to deliver to our clients. We have been robust and adaptive when it comes to be associated to technical advancements happening around the world. Further, as part of our Vision 2025, we are planning to implement such digitalisation in the firm that helps us to be vigilant and compete in the industry.

A brief snapshot of the production for Q3 FY22 with comparable analysis is mentioned below:

Monthly Production Data

Division	UoM	Oct-21	Nov-21	Dec-21
Bath Linen	MT	5,382	4,902	5,284

Bed Linen	Mn. Meters	3.79	3.37	3.65
Paper	MT	13,365	12,962	13,039

3 | TRIDENT LTD Q2 FY22| INDUSTRY OUTLOOK AND FAQS

Financial Overview:

Comment on financial performance for the quarter ended 31st December 2021:

• Net Revenue in Q3 2022 stood at INR 19,611 millioncompared to INR 12,949 Mn in Q3 2021
• • Home textile segment sustained the demand momentum in Q3 FY22 with Bath and Bed Linen Segment registering revenue growth of 34% and 26% on Y-o-Ybasisrespectively.
  • Sheeting segment registered ~ 99% capacity utilizationduring the quarter
  • Exports contributed to be robust with 71.5% contribution to total revenue for the quarter
  • Paper business reached capacity utilization of 91%during the quarter
• EBITDA for quarter stood at INR 4,063 Mnwhich translates into 20.7% EBITDA margin
• Profit after tax for the Q3 2022 stood at INR 2,091 Mn
• Net Debt increased as on 31st December 2021 to reach level of INR 14,849 Mn, as against debt of INR 10,454 Mn as on 30th September 2021 mainly due to procurement of cotton during the procurement season; Net Debt to Equity ratio stood at 0.41x and Net Debt to EBITDA ratio is 0.91x.

Coming to segment wise performance:

Textile Segment:

• Revenue for segment stood at INR 17,059 Mn in Q3 FY22 vis-à-vis INR 11,078 Mn in Q3 FY21
• EBIT for the segment improved to INR 2,871 Mn in Q3 FY22 vis-à-vis INR 1,445 Mn in Q3 2021

Paper and Chemicals Segment:

• Revenue for the period stood at INR 2,520 Mn in Q3 FY22 vis-à-vis INR 1,824 Mn in Q3 FY21
• EBIT for the segment during Q3 FY22 stood at INR 581 MN vis-à-vis INR 389 Mn in Q3 FY21

4 | TRIDENT LTD Q2 FY22| INDUSTRY OUTLOOK AND FAQS

Industry Outlook

Disclaimer: The current industry outlook reflects the progress of the last few quarters. The third wave could be a major concern along with for the industry in the times to come.

Textile & Apparel Industry

The industry has rebounded well in FY22* considering the demand and needs of customers after the covid outbreak. The sector has shown positive signs with the support of various government initiatives and robust demand globally. The main concern that might impact the stability is the third wave which is itself unpredictable in nature along with supply chain constraints. Overall, Indian textile & apparel sector is expected to do well in future globally. As per various published reports, the domestic industry is expected to be valued at US$ 220 Bn with CAGR growth of 10%-12% by 2025-26.

Textile & Apparel Industry accounted for 2% of GDP, 13% to industrial production, 12% to exports of India as well as 5% of global trade in the industry. Schemes such as Integrated Textile Parks, TUFS and Mega Integrated Textile Region & Apparel scheme is going to play huge role in coming future.

Home Textiles

USA and Europe are the major importers of home textiles products globally. It is observed that the sales have rebounded better in this quarter motivating us to further excel and work towards our stakeholder's interest. This has resulted in strong demand for the on-going and next quarter as well. Additionally, increased awareness on health, hygiene and working from home across the world, is the growth driver for home textile products as home décor is the new 'global favourite'.

Huge demand has also resulted in excessive pressure on the logistics, as exporters are facing shortage of containers to ship the products, which has also led logistic costs to rise in the contemporary times. However, the sector is expected to perform well with the government's support in terms of extension of ROSCTL benefits till March 2024. This is expected to provide stability and ensure competitiveness of Indian products in the foreign markets.

As a market leader of sleep solutions, we have developed bedsheets with thermal regulation, better wicking, and temperature control properties. Another area of focus in our product offerings has been our paramount focus on sustainability. We have developed products using re-cycled polyester, hemp fabric, natural dyes and more. Further, the paper industry is progressing as with opening of educational institutions. We hope to continue the same performance for future.

5 | TRIDENT LTD Q2 FY22| INDUSTRY OUTLOOK AND FAQS