HLE Glascoat Ltd

- The company raised Rs. 100 Crores through preferential allotment of ordinary shares and warrants to Malabar India Fund Limited and Malabar Value Fund Scheme, both foreign portfolio investors. - This equity infusion is aimed at capacity building, operational efficiencies, and maintaining a strong financial cushion. - Rs. 35 Crores is planned for investment related to H L Equipment (including acquisition of 19% stake and capex at Silvassa plant). - No new debt is planned; currently, aggregate debt is about Rs. 70-75 Crores. - Excess cash flows will be utilized to reduce interest cost, and the company is not keeping money idle at any point. - The company is focused on a de-risked financial structure with no plans to flood excess liquidity, implying controlled and need-based capital raising.

- Aggregate capex of approximately Rs. 50 Crores approved across three manufacturing hubs: - Expansion project at Anand (Glass Lined Equipment Business) - Construction of additional Manufacturing Bay at Maroli (Filtration and Drying Equipment Business) - New manufacturing facility and infrastructure at Silvassa for Filtration and Drying Equipment (approx. Rs. 20 Crores) - Plan to grow the Silvassa hub by acquiring up to 99% stake in H L Equipment (partnership with 80% held previously) - Capex expected to lead to efficient operations with a revenue generation potential of 2.5 to 4 times the capex - Fresh investment of up to Rs. 35 Crores in H L Equipment (includes Rs. 20 Crores for Silvassa plant capex and Rs. 25-30 Crores for acquisition of 19% stake) - Capital raised Rs. 100 Crores via preferential allotment for growth and financial de-risking - Capex and investments are phased and need-based to maintain efficiency and avoid idle funds

- The company expects robust growth in both Glass Lined Equipment (GLE) and Filtration & Drying (ANFD) segments, driven by expanding domestic chemical, pharma, agrochemical, dyes, and pigment industries. - Order books are strong with 6-7 months of revenue visibility in both segments. - There is significant untapped potential in small and medium-sized companies adopting sophisticated equipment, especially in the filtration and drying business. - Exports currently contribute less than 5% but present a large growth opportunity. - Continuous new product development and after-sales service expansion are key growth drivers. - Capex of around Rs. 50 Crores planned across three plants to support capacity growth. - Expected capex to revenue conversion ranges between 2.5 to 4 times. - Management optimistic about sustained or improving margins and returns driven by efficiency, cost optimization, and operating leverage. - Growth to be supported by domestic market expansion rather than primarily exports over the next 5 years.

- Management is optimistic about future returns on capital employed and return on equity, expecting continued growth based on past consistent improvements. - Growth drivers include business expansion, improved profitability, stronger balance sheet, lower borrowing costs, efficient infrastructure, better procurement through scale, and operating leverage. - The company is in a high growth phase with plans to balance risk and reward, including ongoing product development and market expansion. - Opportunities lie in after-sales services, penetration into small and medium enterprises, and increasing exports (currently less than 5% of revenue). - Order books remain robust with 6-7 months visibility and strong demand across sectors like API Pharma, Specialty Chemicals, and Agrochemicals. - Continuous cost optimization and capacity utilization improvements have led to margin enhancements, likely sustainable near current levels. - Capex of around Rs. 50 Crores across manufacturing hubs is expected to support revenue growth, with capex-to-revenue generation ratio between 2.5x to 4x. - Overall earnings/profit growth is expected to be healthy aligned with industry tailwinds and company initiatives.

- The current order book is in excess of Rs. 225 Crores (Page 9). - The order book for both Filtration Drying and Glass Lined Equipment segments is roughly even and covers approximately 6 to 7 months of revenue (Page 16). - The company has a robust order book despite the COVID-19 impact, with deliveries scheduled stretching 6 to 7 months ahead for both segments (Page 6). - There is strong visibility for the order book, supported by enquiries and sustained demand across API Pharma, Specialty Chemicals, Agrochemicals, Dyes, and Pigments sectors (Pages 6 and 9).