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O Harsha Engineers International Limited HARSHA ENGINEERS Earnings Presentation - Quarter ended June'26
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2 Privileged & Confidential, © 2022, All Rights Reserved. 48 63 153 0 171 78 219 33 40 247 123 38 6 128 195 191 191 191 Disclaimer/ Safe Harbor Cautionary statement regarding forward-looking statements ● This presentation may contain certain forward-looking statements relating to Harsha Engineers International Limited (“HEIL”, or “Company””) and its future business, development and economic performance. These statements include descriptions regarding the intent, belief or current expectations of the Company, its subsidiaries and associates and their respective directors and officers with respect to the results of operations and financial condition of the Company, subsidiary or associate, as the case may be. Such forward-looking statements are not guarantees of future performance and are subject to known and unknown risks, uncertainties and assumptions that are difficult to predict. These risks and uncertainties include, but are not limited to (1) competitive pressures; (2) legislative and regulatory developments; (3) global, macroeconomic and political trends; (4) fluctuations in currency exchange rates and general financial market conditions; (5) delay or inability in obtaining approvals from authorities; (6) technical developments; (7) litigation; (8) adverse publicity and news coverage, which could cause actual development and results to differ materially from the statements made in this presentation. Company assumes no obligation to update or alter forward-looking statements whether as a result of new information, future events or otherwise. Any forward-looking statements and projections made by third parties included in this presentation are not adopted by the Company and the Company is not responsible for such third party statements and projections. ● This presentation has been prepared by the Company based on information and data which the Company considers reliable, but the Company makes no representation or warranty, express or implied, whatsoever, and no reliance shall be placed on, the truth, accuracy, completeness, fairness and reasonableness of the contents of this presentation. This presentation may not be all inclusive and may not contain all of the information that you may consider material. Any liability in respect of the contents of, or any omission from, this presentation is expressly excluded. ● This presentation does not constitute a prospectus, offering circular or offering memorandum or an offer, or a solicitation of any offer, to purchase or sell, any shares and should not be considered as a recommendation that any investor should subscribe for or purchase any of company’s securities in any jurisdiction. Neither this presentation nor any other documentation or information (or any part thereof) delivered or supplied under or in relation to the shares shall be deemed to constitute an offer of or an invitation by or on behalf of company. No part of it should form the basis of or be relied upon in connection with any investment decision or any contract or commitment to purchase or subscribe for any of company’s securities. ● HEIL assumes no responsibility to publicly amend, modify or revise any forward looking statements, on the basis of any subsequent development, information or events, or otherwise. Unless otherwise stated in this document, the information contained herein is based on management information and estimates. The information contained herein is subject to change without notice and past performance is not indicative of future results. HEIL may alter, modify or otherwise change in any manner the content of this presentation, without obligation to notify any person of such revision or changes. ● No person is authorized to give any information or to make any representation not contained in and not consistent with this presentation and, if given or made, such information or representation must not be relied upon as having been authorized by or on behalf of HEIL. ● This presentation and its contents are confidential and should not be distributed, published or reproduced, in whole or in part, or disclosed by recipients directly or indirectly to any other person.
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3 Privileged & Confidential, © 2022, All Rights Reserved. 48 63 153 0 171 78 219 33 40 247 123 38 6 128 195 191 191 191 Index Business Update Company Overview Summary on use of IPO Proceeds Quarter and Year End Highlights
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QUARTER END HIGHLIGHTS
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5 Privileged & Confidential, © 2022, All Rights Reserved. 48 63 153 0 171 78 219 33 40 247 123 38 6 128 195 191 191 191 Financial Highlights - QoQ PAT - Engineering CONSOLIDATEDRevenue - Engineering CONSOLIDATED EBITDA - Engineering CONSOLIDATED 6,526 7,707 6,979 18.7% 20.2% 16.6% 2,000 3,000 4,000 5,000 6,000 7,000 8,000 Q1FY26 Q4FY26 Q1FY27 EBITDA EBITDA % 34,883 38,207 42,108 0 5000 10000 15000 20000 25000 30000 35000 Q1FY26 Q4FY26 Q1FY27 Revenue outside India (%) 60.2%56.9%59.2%^ 3,726 4,269 3,528 10.7% 11.2% 8.4% Q1FY26 Q4FY26 Q1FY27 PAT PAT % EBITDA - Engineering INDIA PAT - Engineering INDIA 3,983 4,663 3,932 15.5% 16.0% 12.7% Q1FY26 Q4FY26 Q1FY27 PAT PAT % Revenue - Engineering INDIA 25,647 29,204 30,996 -4000 1000 6000 11000 16000 21000 26000 Q1FY26 Q4FY26 Q1FY27 Revenue outside India (%)^ 44.7%44.4%^ 42.7% 6,385 7,752 6,950 24.9% 26.5% 22.4% 0 1,000 2,000 3,000 4,000 5,000 6,000 7,000 8,000 9,000 Q1FY26 Q4FY26 Q1FY27 EBITDA EBITDA % ₹ in Lakhs EBITDA = Profit/ (Loss) Before Taxation+ Depreciation and Amortisation + Finance Cost ^ Restated
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6 Privileged & Confidential, © 2022, All Rights Reserved. 48 63 153 0 171 78 219 33 40 247 123 38 6 128 195 191 191 191 Business Update • The consolidated revenue in Q1 FY 2027 has grown by 25.2% on YOY basis, reflecting continued strong Demand trends in India, as well as improving Demand for Industrials in Key markets of Europe and ROW. • Our India Engineering business (HEIL + Advantek) has posted a 21% growth in Q1 FY 2027 on YOY basis. • Compression in EBITDA and PAT margins in Q1 FY 2027 in India Engineering Business is owing to Raw material cost increase by around 6 to 8% during the quarter which will be passed through in subsequent quarters, a Forex loss of around Rs. 4 crores on account of settlement of cash flow hedge of previous quarters and higher cost of indirect materials like oil, packing material etc. by around Rs. 3 crores. • Our WOS Harsha Advantek has reported revenues of Rs. 30 crores in Q1 FY 2027 showing a 7% growth on a QOQ basis. Advantek has reported a slightly lower EBITDA in Q1 FY 2027 resulting into a PAT loss of Rs. 4.3 crores, but on full year basis Advantek is expected to be PAT Positive. • Sales of Bushings stood at Rs. 34 crores in Q1 FY 2027 representing 34.7% growth on YOY basis and are on track in achieving over 30% growth over FY 2026.
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7 Privileged & Confidential, © 2022, All Rights Reserved. 48 63 153 0 171 78 219 33 40 247 123 38 6 128 195 191 191 191 Business Update • Sales of Stampings stood at Rs. 19 crores in Q1 FY 2027 showing a growth of 31% on YOY basis and are on track in achieving over 30% growth over FY 2026. • Although sales of large size cages stood at Rs. 10 crores in Q1 FY 2027 showing a flattish sale on YOY basis, significant offtake in demand is expected to achieve over 30% growth compared to previous year FY 2026. • Harsha Romania’s continued underperformance with negative EBITDA and PAT in Q1 FY 2027, is offset by continued positive performance of Harsha China resulting into a combined net loss of around Rs. 3.3 crores in Q1 FY 2027. The targeted combined net loss of Foreign Subsidiaries on full year basis is in a lower single digit number as against the combined net loss of around Rs.10 crores in FY 2026. • The China Brownfield expansion project implementation is on track and is expected to be commissioned as per schedule in Q3 of FY 2028.
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8 Privileged & Confidential, © 2022, All Rights Reserved. 48 63 153 0 171 78 219 33 40 247 123 38 6 128 195 191 191 191 Consolidated P & L Statement EBITDA = Profit/ (Loss) Before Taxation+ Depreciation and Amortisation + Finance Cost (₹ in Lakhs) Particulars Q1 FY27 Q4 FY26 Q1FY26 FY25-26 REVENUE : Revenue from Operations 45,743 47,391 36,529 1,62,679 Other Income 513 1,045 1,049 3,798 TOTAL REVENUE 46,256 48,436 37,578 1,66,477 Share of Profit of Joint Ventures 3 9 24 53 EXPENSES : Cost of Material Consumed 24,238 26,817 19,682 87,584 Change in Inventories of Finished Goods & Work-in- progress (232) (1,000) (1,002) (2,684) COGS 24,006 25,817 18,680 84,900 Employee Benefits Expenses 5,915 5,374 5,069 21,500 Other Expenses 9,077 8,859 7,237 32,313 EBITDA 7,261 8,395 6,616 27,817 Margin % 15.9% 17.7% 18.1% 17.1% Finance Costs 583 580 257 1,626 Depreciation and Amortization Expense 1,378 1,276 1,053 4,666 PROFIT BEFORE TAXATION 5,300 6,539 5,306 21,525 Tax Expenses 1,562 1,816 1,513 6,005 PROFIT AFTER TAXATION 3,738 4,723 3,793 15,520 PAT Margin% 8.2% 10.0% 10.4% 9.5% Other comprehensive income 648 (234) (475) (745) Total Comprehensive Income 4,386 4,489 3,318 14,775 Basic Earnings per Share - In ₹ 4.11 5.19 4.17 17.05 Diluted Earnings per Share-In ₹ 4.11 5.19 4.17 17.05
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9 Privileged & Confidential, © 2022, All Rights Reserved. 48 63 153 0 171 78 219 33 40 247 123 38 6 128 195 191 191 191 Certain Key Parameters and Break Up EBITDA = Profit/ (Loss) Before Taxation+ Depreciation and Amortisation + Finance Cost Particulars Q1 FY27 Q4 FY26 Q1FY26 FY25-26 Revenue from Operations - Engineering & Others - Consolidated 42,108 38,207 34,883 1,44,356 - Engineering & Others - India 30,996 29,204 25,647 1,08,816 - Solar - EPC and O & M 3,635 9,184 1,646 18,323 EBITDA - Engineering & Others - Consolidated 6,979 7,707 6,526 26,385 - Engineering & Others - India 6,950 7,752 6,385 25,957 - Solar - EPC and O & M 282 688 90 1,432 PAT - Engineering & Others - Consolidated 3,528 4,269 3,726 14,513 - Engineering & Others - India 3,932 4,663 3,983 15,515 - Solar - EPC and O & M 210 454 67 1,007 Other Income - Interest Income 396 380 232 1,206 - Gain / (Loss) on Exchange Rate Fluctuation (647) 323 272 882 - Miscellaneous Income 62 75 57 210 - Gain / (Loss) on Sales of Investment in Subsidary Co. /Associates - - - - - Gain / (Loss) on Sale of Investment (Mutual Fund) 70 208 170 2,179 - Gain / (Loss) on Fair value of Investments (measured at FVTPL) 632 59 318 (679) - Total Other Income 513 1,045 1,049 3,798 (₹ in Lakhs)
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10 Privileged & Confidential, © 2022, All Rights Reserved. 48 63 153 0 171 78 219 33 40 247 123 38 6 128 195 191 191 191 Working Capital – Consolidated – Key Parameters Revenue from operations annualised and used as denominator for No. of days calculation. (₹ in Lakhs) Q1 FY27 Q1 FY26 FY 25-26 1 Inventories a. Raw Material - Amount 10,422 6,392 8,597 No. of Days 21 16 19 b. Semi Finished- Amount 3,385 2,752 3,310 No. of Days 7 7 7 c. Finished - Amount 15,346 12,498 14,642 No. of Days 31 31 33 d. Stores & Spares and Tooling - Amount 13,396 13,282 12,849 No. of Days 27 33 29 2 Receivables - Amount 36,899 32,405 37,796 No. of Days 74 81 85 3 Trade Creditors- Amount 21,052 11,709 19,266 No. of Days 42 29 43 Sr. Particulars
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Company Overview
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12 Privileged & Confidential, © 2022, All Rights Reserved. 48 63 153 0 171 78 219 33 40 247 123 38 6 128 195 191 191 191 Harsha At A Glance Largest manufacturer of precision bearing cages in India* 5 strategically located manufacturing facilities with various warehouses at different locations worldwide – supplying products to over 25 countries across 5 continents Diversifying into complex and specialized precision stamped and bushing components Capability to manufacture bearing cages with diameters between 20mm to 2,000mm with >7,500 products manufactured since incorporation 6.5% of the market share in the global organized bearing brass, steel and polyamide cages market^ Supplies products to each of the top 6 global bearing manufacturers^^ Note : *Largest manufacturer in terms of revenue in organized sector; ^in CY2021 ^^As of 31st March 2022 50-60% of domestic market share China RomaniaIndia Schaffler AG NTN NSK TIMKENSKFJTEKT
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13 Privileged & Confidential, © 2022, All Rights Reserved. 48 63 153 0 171 78 219 33 40 247 123 38 6 128 195 191 191 191 Bearing cages Bearing cages form an important component within Bearings Separate rolling elements, reduce friction & heat generated in bearing Keep the rolling elements evenly spaced optimizing load distribution on the bearing Cages offer high rigidity, strength High heat resistant operating conditions Small portion of total cost of bearing - The global bearing cages is estimated at about 5% of the global bearings market Bearing Cages are critical components requiring highest lead time, technical & tooling expertise Comprehensive solution provider offering diversified suite of precision engineering products with diverse applications ✓ Railways ✓ Industrial machines ✓ Pumps ✓ Compressors ✓ OEMs ✓ Engine applications ✓ Crushers ✓ Steel mills ✓ Thermal turbines ✓ Windmills ✓ Agricultural machines ✓ Automotive parts ✓ Chemical machinery ✓ Utilities ✓ White appliances ✓ Chemical machinery ✓ General industries ✓ Blowout preventers ✓ Extruders ✓ Gearboxes ✓ Offshore drilling ✓ Oil rigs ✓ Traction motors for railways ✓ Railway Seal ✓ AC Compressor Head ✓ Bronze Bushing for Wind Gear Box ✓ Chassis Parts ✓ Engine Drive ✓ Clutch Components ✓ Gear Shifter Assembly Parts Global bearing companies have steadily increased outsourcing manufacture of bearing cages Given the complexity of bearing cages production , customers prefer continuing with reliable vendors for a long period for consistency of quality
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14 Privileged & Confidential, © 2022, All Rights Reserved. 48 63 153 0 171 78 219 33 40 247 123 38 6 128 195 191 191 191 Tool Manufacturing • Comprehensive tooling, testing and measurement infrastructure • Dedicated tool production facilities at Changodar have strengthened HEILs ability to meet customer demands Process Design & automation • Decades of experience – technologically driven manufacturing process enables HEIL to provide solutions in a cost-effective manner • In-house automation has helped to optimize O&M expenses, reduce production cycle time and minimize capex • Indigenously designed vision camera system detects defects that are not possible to detect with naked eye Product Development • Expertise in product development - product development cell and innovation centre Tooling Design • Expertise to design and develop advance tooling inhouse which enables HEIL to manufacture precision products • Engaged with customers to in product development process from design stage Expertise in tooling, design development and automation Full-service capabilities under one roof Product Design Support Tooling Design Tooling Manufacturing Development, Testing & Measurement
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T H A N K YO U R=56 G=87 B=35 R=83 G=128 B=52 R=115 G=140 B=75 R=181 G=210 B=134 R=120 G=155 B=186 R=191 G=191 B=191