April 7, 2023

Clutch Auto LimitedCorporate Overview

“Where there is Wheel…, …

There is a Way!!! ** The Economic Times dated March 22, 2007

Who we are?

• CAL was promoted by Mr. Vijay Krishan Mehta, Technocrat in the year 1971.

• CAL is India’s largest manufacturer and exporter of automotive clutches, with nearly a third of its production being exported, mostly to North America.

• With over three decades of undisputed leadership and with exports rising, CAL is on a fast-growing trajectory. Its Revenues are expected to grow at a CAGR (FY0608) of 46% and Net Profit at a CAGR of 82%.

• Within India, CAL enjoys a predominant position with nearly 60% market share in tractors and commercial vehicles taken together. Its clientele includes Tata Motors, Ashok Leyland, Maruti Udyog, Mahindra & Mahindra, Bajaj Auto, TAFE, Toyota, BEML, Escorts and several State-run undertakings, to name a few.

• For Commercial Vehicles segment, it is a major supplier to reputed manufacturers like Tata Motors, with a 60% market share.

• In Tractors segment, it is a major supplier to almost all manufacturers, with an 80% market share.

Who we are? Cont…

• CAL has a nation-wide network of nearly 350 dealers and 5,000 retailers to cater to the replacement market.

• The company has decided to be a niche player in Low Volume Low Variety High Value-added Heavy Duty and Ag Clutch segment with a sustaining replacement demand and to concentrate on Class 7 & 8 US Truck Clutch Markets.

Shareholding Pattern as on 30.06.2007

• Exports to 40 Countries.• Market Capitalization of 200 Crores.• 988 Full Time Employees• Offices in India, USA • 31 Patents Registered in India & 11 in USA• 17 Trademarks Registered in India & 15 in USA

27%

5%

15%27%

26%

Promoter Mutual Funds / FIs FIIs Corporate Public

Why Now?

• Advantage India

• The industry is poised to jump from exports of US$ 1.8 billion in 2004-05 to US$ 5.9 billion in 2008-09. • Over 20 OEMs have set up their International Purchase Offices (IPOs) in India. This number is expected to

double by the year 2010. India enjoys a cost advantage with regard to castings and forgings. • The manufacturing costs in India are 25 to 30 percent lower than its western counterparts. India's

competitive advantage does not come from costs alone, but from its full service supply capability.

• Government Initiatives

• Automatic approval for foreign equity investment up to 100 per cent for the manufacture of auto components.

• Manufacturing and imports in this sector is free from licensing and approvals. • Reduction in the duty of raw material to 5-7.5 per cent from the earlier 10 per cent. • Setting up of the National Automotive Testing and R&D Infrastructure Project (NATRIP) at a total cost of

US$ 388.5 million for enabling the industry to usher in global standards of vehicular safety, emission and performance standards.

• Finalization of the Automotive Mission Plan (AMP) 2006-2016 for making India a preferred destination for design and manufacture of automobile and automotive components.

• Road Ahead• Exciting times lie ahead for the Indian automotive component industry. Besides the burgeoning demand

from global auto majors, there is also the domestic car industry, which is growing at a spanking rate of over 16 per cent, driven by a rising consumer base.

Market Size – Clutch Plates – World

Source : Emkay, ICICI Direct

• The world clutch market has a few large established players, which cater to almost the entire OE and replacement business.

• OEMs have hived off their clutch/brake lining business for economic reasons and have been increasingly switching over to outsourcing from the niche and cost-effective ancillary suppliers.

• Globally, the market potential is in excess of $3bn annually with a stable replacement demand due to the wear and tear of clutches.

Indian Auto Ancillary Sector

The Indian auto component industry is likely to almost double to US$ 18.7 billion by 2009 and reach about US$ 40 billion by 2014.

Economic Survey 2006-07 saysThe turnover of the auto component sector has grown from US$ 3.1 billion to US$ 10.0 billion between 1997-98 and 2005-06. In 2005-06, the sector's exports grew by 28 per cent to reach US$ 1.8 billion

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Indian Clutch Industry – Competition & Share

• Domestic clutch industry is estimated to have grown at a 3 year CAGR of over 20%, with annual sales estimated at Rs 7.5bn.

• The industry consists of 5-6 large players, of which three control the market with a market share of ~ 60%.

• The domestic auto industry contributes 85% of the sales (OE market 25%, replacement market 60%), while exports account for the balance 15%.

• The approval of a clutch by an OE is a lengthy process and it goes through a rigorous testing period. The acceptability of a product by an OE automatically creates a bigger replacement market for that particular product.

• The replacement market of the auto clutch segment has a significant market share of over 60% and yields higher margins for manufacturers.

• However, the after sales market also includes competition from low cost imports and unorganized players for certain products.

Value Proposition

• Leader in Domestic Heavy Duty Clutch Market

• Company is Gaining Global Footprint, Pioneer Inc gives CAL the right base and access across the US

• New client addition on the anvil. Another round of fresh orders from Fleet Pride in the offing, Maiden International OE orders to boost International Business

• New JVs and collaborations to boost the share of exports from 30% currently to over 40% in FY09

• Focus on Patenting products

• Productivity on rise.

• Cost Efficient through backward integration, Backward integration to help CAL control key inputs efficiently

• Strengthening Balance Sheet

• Strong long term OE relationship with leaders like Tata Motors, Ashok Leyland, M&M etc. Capacity expansion by leading OE shall boost business

• Business prospects and profitability to grow from the Haridwar plant which offers proximity to various key clients

• Growing share of passenger cars, UVs and LCVs to de risk its product portfolio in the long term

• Innovative Products helped successful penetration in the US heavy-duty clutch market

Target Focus

• Focus on Patenting Products in USA.

• Increase Market Share in India.

• 10% Heave Duty Market Share in USA & European Market.

• Acquisition of Few Auto Ancillary Companies in India and One Marketing Company in Europe.

Products

• Clutch Disc Assemblies,

• Clutch Cover Assemblies,

• Heavy Duty Clutches,

• Clutch Components & Brake Linings,

• Diaphragm Springs,

• Powder Metallurgy based Friction Discs (Cerametallic & Metallic Discs), and

• Hardened Cera-metallic Discs (for Armoured Vehicles, Tanks & Off Highway Vehicles)

Clients

• Tata Motors Ltd. (Daimler Benz),

• Ashok Leyland Ltd. (Iveco),

• Eicher Motors (Mitsubishi),

• Bajaj Tempo Ltd.,

• JCB Ltd., and Mahindra & Mahindra (Automotive Division)

• Bajaj Auto Ltd.,

• Bajaj Tempo Ltd., and

• Scooters India Ltd.

Maruti Suzuki, and Hindustan Motors

• Mahindra & Mahindra / Mahindra Gujarat Tractors Ltd.

• Tractors & Farm Equipments Ltd. (TAFE)

• Case New Holland Tractors Ltd.

• Eicher Tractors Ltd.

• Escorts Tractors

• Farmtrac Tractors

• Punjab Tractors Ltd.

• International Tractors Ltd. (Renault)

• HMT Tractors (Zetor)

• John Deere, and Indo Farm

Bharat Earth Movers Ltd. (BEML) - Komatsu

Growth Facts

Founder & Management Team

Core leadership team with average experience of 10 years

K S Bhatnagar| ChairmanRole: Strategy

V K Mehta| Vice Chairman & Managing DirectorRole: Strategy and Planning, Administration

Anuj Mehta| Executive DirectorRole: Commercial Operations, Process & Planning

Jayant Banerjee| President - TechnologyRole: Plant Operations, Raw Material Arrangement

S B Kumar| General ManagerRole: OEM Sales, Plant Maintenance

Navin Jain| Company SecretaryRole: Finance & Secretarial

Y R Malik| Senior Manager - SystemsRole: Plant Safety

Management Profile

Projected Financials

Financial Plan

• Net Sales increasing at a CAGR of 40%

• PAT Increasing at a CAGR of 60%

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New Delhi

Sundeep Sehgalssehgal@incrediblecapital.in cell: +919810005572www.incrediblecapital.in

Offices:

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