CENTURY

Textiles and Industries

Limited
REGD. OFFICE : "CENTURY BHAVAN", DR. ANNIE BESANT ROAD, WORL!, MUMBAI-400 030. INDIA.
TEL.: +91-22-2495 7000 FAX: + 91-22-2430 9491, + 91-22-2436 1980
E-Mail: [email protected] Website: www.centurytextind.com
CIN-L 17120MH 1897PLC000163

OUR REF. : SHjXIIj2021 14th May 2021

Corporate Relationship Department Listing Department

BSE Limited National Stock Exchange ofIndia Limited
1s t Floor, Phiroze Jeejeebhoy Towers "Exchange Plaza" 5th floor,
Dalal Street, Fort, Bandra-Kurla Complex
Mumbai-400 001 Bandra (East), Mumbai-400 05lo
Scrip Code: 500040 Scrip Code: CENTURYTEX

Dear Sir j Madam,

Sub: Q4 FY 2020-21 Earnings Conference Call Transcript of Century Textiles and Industries
Limited ('the Company')

With reference to the above subject, please find attached the Q4 FY 2020-21 Earning Conference
Call transcript of the Company regarding the Earnings call held over video conferencing on 07 th
May, 2021 to discuss Q4 FY 2020-21 earnings.

This for your information and record.

Thanking you,

Yours faithfully

For CENTURY TEXTILES AND INDUSTRIES LIMITED

ATUL K. KEDIA
Company Secretary

End: As above.

B K BIRLA GROUP OF COMPANIES

 Century Textiles and Industries Limited
Q4 FY 2021 Earnings Conference Call
May 07, 2021

Moderator: Ladies and Gentlemen, good day and welcome to the Century Textiles and Industries
Limited Q4 and FY 2021 Earnings Conference Call. As a reminder, all participant lines will
be in the listen-only mode. And there will be an opportunity for you to ask questions after
the presentation concludes. If you wish to download the presentation participants are
requested to click on the sharing tab on the left panel of your screen. Click on the
presentation to download.

I now hand the conference, over to Mr. Anuj Sonpal -- CEO, Valorem Advisors. Thank you
and over to you, sir!

Anuj Sonpal: Thank you, Stanford. Good morning, everybody, and a warm welcome to you all. My name
is Anuj Sonpal from Valorem Advisors. We represent the Investor Relations of Century
Textiles and Industries Limited.

On behalf of the Company, I would like to thank you all for participating in the Company’s
earnings conference call for the fourth quarter and financial year ended 2021.

Before we begin, as mandatory, I would like to mention a short cautionary statement. Some
of the statements made in today’s earnings concall may be forward-looking in nature. Such
forward-looking statements are subject to risks and uncertainties which could cause actual
results to differ from those anticipated. Such statements are based on management’s
beliefs as well as assumptions made by and information currently available to
management. Audiences are cautioned not to place any undue reliance on these forward-
looking statements in making any investment decisions. The purpose of today’s earnings
call is purely to educate and bring awareness about the Company’s fundamental business
and financial quarter under review.

Now I would like to introduce you to the management participating with us in today’s
earnings conference call and before I give it over to them for opening remarks. We have
with us Mr. J. C. Laddha -- Managing Director; Mr. R. K. Dalmia -- Senior President, Century
Textiles and Whole-Time Director; Mr. J. P. Narain -- CEO, Century Pulp & Paper; Mr. K. T.
Jithendran -- CEO, Birla Estates; and Mr. Snehal Shah -- Chief Financial Officer; and Mr.
Nilay Rathi -- Senior Vice President of Commercial.

Now, without any further delay, I request Mr. Laddha to start with his opening remarks.
Thank you and over to you, sir!

Page 1 of 21
J. C. Laddha: Good morning, Anuj. Very good morning, once again. It is my pleasure to welcome you all
to the earnings conference call for the fourth quarter and full year of the financial year
ended 2020-2021. Firstly, I hope that you and your family members are healthy and
keeping safe in this pandemic environment.

Let me first take you through the performance of our company on a consolidated basis. The
net sales for quarter four were Rs. 820 crores, which was 6.5% growth from last year’s
quarter four. EBITDA was Rs. 80 crores, which translates to an EBITDA margin of 9.8%,
and the net loss for the quarter stood at Rs. 5 crores. For FY 2021 the net sales were Rs.
2,567 crores. EBITDA was Rs. 285 crores, which translates to EBITDA margins of above
11% and there was a net loss of about Rs. 15 crores.

As we all know, FY 2021 has been a particularly difficult period for the business
environment due to the COVID-19 pandemic. The fourth quarter marked a change in
business sentiment as unlock measures gathered steam and rollout of vaccine got
imminent. I am happy to report that in the fourth quarter operations across all three
business verticals returned to normalcy.

I would also like to highlight that the company is committed to the wellbeing of all the
stakeholders and has undertaken various initiatives under ESG (Environment Social and
Governance) Framework, during the year. Businesses have worked on deploying facility
environmental modules and facility social labor model for management of raw materials,
energy saving, water conservation, emission control, etc.

Further, CTIL has engaged services and expertise of M Power Foundation for the mental
wellbeing of our employees and their families, especially in the current pandemic period.
CTIL also has a strong governance framework thereby, adhering to all the compliances in
letter and spirit.

Now, let me take you through some of the key highlights across our three business
verticals. Starting with a Real Estate division, talking about the financial performance
during the quarter for this segment, lease income from the commercial project stood at Rs.
35 crores; EBITDA loss in the Real Estate business for the quarter was Rs. 1 crore. For the
year as a whole, for FY 2021 on a consolidated basis, lease income from the commercial
projects stood at Rs. 142 crore, it was a marginal decline of 3% year-on-year. EBITDA for
the year was Rs. 31 crores with an EBITDA margin of about 22%.

The Real Estate sector continued to gain momentum in quarter four of FY 2021 after a
strong performance in the festive season in Q3 FY 2021, with top developers reporting
improvement in their sales. The industry is witnessing a continuous shift in preference
towards branded developers from customers, along with consolidation, as landowners and
smaller developers seek to partner with reputed developers.

Page 2 of 21
While our two commercial assets, Birla Aurora and Birla Centurion continued to generate
stable rentals, we registered strong sales performance across all our three launched
projects, that is Birla Vanya at Kalyan, Birla Alokya at Bengaluru, and Birla Navya at
Gurugram on the back of the healthy demand in the residential real estate segment. We
sold residential inventory worth Rs. 334 crores in the fourth quarter and total sales in FY
2021 stood at Rs. 621 crores. I am happy to report that Birla Navya, Gurugram crossed
sales of Rs. 500 crores and the project also received the iconic sustainable township in
Gurugram Award from Hindustan Times in the quarter. We achieved the milestone of
cumulatively selling 1 million square feet of inventory, which is worth more than Rs. 1,000
crores in a span of less than two years.

The buoyant consumer sentiment, renewed appreciation for the need for own spaces and
the trust in the Birla brand will hold us in good faith as we accelerate our growth plans.

Moving on to the Pulp & Paper segment for the fourth quarter of financial year 2021, the
sales from this segment stood at Rs. 556 crores. EBITDA for this segment was Rs. 80 crores
with EBITDA margin of about 14%. For the FY 2021 as a whole, consolidated revenues
from the Pulp & Paper segment stood at Rs. 1,774 crores, EBITDA for the year was Rs. 221
crores with EBITDA margin of about 12.5%.

The demand for the segment picked up in the quarter with the anticipation of higher paper
consumption on account of the re-opening of schools, offices, etc. an indication of the
Indian and global economy returning to normalcy. This resulted in quarter four FY 2021
performing significantly better than the previous quarters of FY 2021. Sales volume grew
by 15.7% in Q4 FY 2021 as compared to Q3 of FY 2021 and 4.6% compared to Q4 FY 2020.

The capacity utilization during the quarter was 100%. During Q4 demand for lower GSM
non-copier paper improved due to offline examinations proposed to be conducted by CBSE
and State Education Boards. This increase in demand also increased raw material prices.
Copier demand also picked up due to the reopening of offices, judiciary, as well as schools
in some parts of the country. Copier purchases were made by the traders in the market
with an intent to build up channel inventory levels. Consumption of tissue also saw an
uptake due to the reopening of major consumption centers like cinemas, restaurants, etc.

However, export business got negatively impacted due to disruptions in supply chain and
logistics services, which primarily increased freight charges and created scarcity in
container availability. Order flow for packaging board increased from pharma sector as
compared to the previous quarter, the OPD services in the country re-opened and demand
from FMCG sector was also positive.

Other products under this segment, that is wedding cards, book covers, cup bottoms and
cup tops also saw a slight improvement for the first time during the financial year. In the

Page 3 of 21
 international market, there was a sharp increase in the softwood pulp prices in this
quarter. As a result, paper manufacturing costs went up.

Finally, I am happy to report that the new tissue plant has been commissioned in March
2021, which is having a capacity of 36,000 metric tonnes per year and this means that our
tissue manufacturing capacity is gone up by 100%. Now we have a total tissue
manufacturing capacity of 72,000 metric tonnes per annum. This will help in driving good
sales growth in FY 2022. Although the medium-term to long-term outlook for the Indian
paper industry remains strong, the second wave of the muted COVID-19 virus can affect
demand in the domestic as well as global market.

Now let us move on to the Textile division. I would like to request Mr. R. K. Dalmia, who is
a Senior President of Century Textiles and the Whole-Time Director of the Company to give
the key performance highlights. Over to you, Mr. Dalmia.

R. K. Dalmia: Thank you Mr. Laddha. Good morning, ladies and gentlemen. And welcome you all to this
earning conference call at the company. Talking about the financial performance for the
quarter, which cannot be compared to the previous years due to ongoing pandemic; our
sales stood at Rs. 200 crores with a loss of Rs. 9 crores. And full-year revenue for the Textile
segment stood for Rs. 582 crores, with a loss of the year standing at Rs. 48 crores.

I am happy to inform that overall business environment and production across India
return to the normalcy driven by healthy demand in retail, domestic and international
market. Supply was lower than demand causing inventory to decrease and subsequently
increase in order booking. We witnessed strong demand in U. S. for home linen, which led
full capacity utilization to this quarter four.

The apparel business order booking was also good throughout the quarter leading to
100% capacity utilization. However, a sharp increase in yarn prices led to margin
pressures. The demand momentum is expected to continue as one export customer has
started shifting their order from China to India. However, the global market outlook is still
not clear because of the new virus strain of Corona worldwide.

Apparel fabric product demand is gradually picking up. However, this proportionally
including raw material prices mainly yarn cannot be fully passed on the fabric customer.
Hence, margin is under pressure. Our current product mix is now more focused on
sustainability, having innovative finishes to cater to the market once domestic and
international market re-open in full swing.

Now, I hand over the call back to Mr. J. C. Laddha.

J. C. Laddha: Thank you, Mr. Dalmia. To conclude, as we see surge in the COVID-19 cases due to the
second wave, our top most priority is the safety of our employees and stakeholders. We
can only hope that the situation improves sooner than expected and the vaccination drive

Page 4 of 21
 gives some respite. It is difficult to predict the gravity of the impact on businesses and
sectors today. But we can only hope and pray for the best.

With that, we can now open the floor for the question-and answer-session. Thank you very
much.

Moderator: Thank you very much, sir. We will now begin the question-and answer-session. While we
check the line for Mr. Sameer Dalal, we take the next question from the line of Vijay
Subramaniam from TrustLine Holdings. Please go ahead. Mr. Subramaniam, you will have
to unmute your line and go ahead with your question. We cannot hear you.

Vijay Subramaniam: This is Vijay from TrustLine Holding. My question is regarding this, you have increased the
capacity of tissue paper from 36,000 tonnes to 72,000 tonnes. Now, is the demand enough
that you will be able to fully utilize this capacity or it picks gradually over a period of time?
I also like to know, how is the tissue paper prices? And do you see any structurally good
things happening over there and also about some color on the import trends.

J. P. Narain: Hi, Vijay. Morning, this is the J. P. Narain. In terms of tissue machine loading, I think we
have got an order book for next two months. And in this case, I think we are exporting 50%
of our total production. And we do not see any issues specially that tissue loading of this
machine, because this market, especially in Virgin grade is growing at the rate of 15%.

And with the awareness, the personal consumption, especially the consumption in home
sector has gone up during this pandemic. And we are anticipating that this demand will
jump further in future, because away-from-home is a little dormant right now. Still, the
order book is good. Once the away from home segment is open the demand will be further
bullish.

On tissue prices right now, the international pulp prices are very high, soft wood prices are
in the range of $1,000 per tonne. So till time international prices of pulp will be higher, the
manufacturing cost in the other countries will be very high for the tissue. And it will give a
good leeway for us to export the tissue at a higher realization. For future outlook for the
tissue, we are quite optimistic that the future outlook of the tissue, especially in this
country as well as in the international market will be very good. So we do not see any
loading issue on this machine. And we are anticipating that next four months to five months
we will be able to load this machine 100%.

Vijay Subramaniam: Excellent. Thank you for that. Can you give some outlook on the pricing? How is the pricing
of the tissue paper?

J. P. Narain: Right now, the pricing of tissue is very attractive. We are on the EBITDA margin of in the
range of 24% to 25%. And it is in the range of above the Rs. 70,000 per tonne right now. So
it is going good because it is proportional to the softwood pulp prices because in tissue
manufacturing, a lot of hard wood as well as softwood is being used.

Page 5 of 21
Moderator: Thank you. We take the next question from the line of Venkat Samala from Tata Asset
Management. Please go ahead.

Venkat Samala: Start by helping me understand, how the capacity utilization levels across the different
segments are at this point in time and have you been impacted to an extent by the second
wave regulatory norms, whatever restrictions could be imposed by the local or state
authorities at this point in time?

J. P. Narain: First question that the capacity utilization in all three segment, I think tissue we are
operating at 100%. Old the machine at 100% and new machine at 70%, so putting together
in the range of somewhere 75%. Especially, the packaging segment we are operating at
100%. Regarding the writing, printing it is slight slow, but there is no restriction from the
regulatory authorities because packaging as well as the tissue comes under Essential
Commodity Act.

Venkat Samala: Right. Sir, what would be the blended asset utilization level for about the Pulp & Paper
business?

J. P. Narain: Last quarter we have achieved 100% capacity utilization.

Venkat Samala: Right. So, it is slightly off now as I understand, because of pulp and writing paper?

J. P. Narain: This quarter we are anticipating somewhere around 85% to 90%. Whatever the drop we
are anticipating that will be there in writing and printing paper.

Venkat Samala: Understood. Sure. And across the other segments, sir?

J. P. Narain: They will be full, tissue and packaging that we will issue 100%.

Venkat Samala: Right. No, I mean, Textiles and Real Estate impact now because of the restriction?

J. P. Narain: Real Estate, I will request Mr. K. T. to pitch in and Mr. Dalmia is there for textile.

R. K. Dalmia: Yes, in Textiles also, in quarter four, we have run with full capacity, order position was
good. We are overbooked, but in apparel and home textiles is already booked because the
U. S. market. Because of work-from-home culture has created a good demand for the home
textile. But due to this second wave of COVID now, the lockdown in the country and
particularly in big markets, so now they are delaying some orders and they are holding
some order. So this will put restrictions on that capacity, because we cannot create the
stock. And secondly, the color breakup etc. all will wait so, we cannot go ahead for that.
Otherwise, overall textile market demands are good and hope after this second wave
demand will again pick up because of inventory in the market are almost bullish because
no new order there picking during the first quarter. Overall demand is good.

Page 6 of 21
Venkat Samala: Right. Sure.

K. T. Jithendran: Good morning, Venkat. About the Real Estate, of course, the demand is going to get
impacted because of the April lockdown. Lockdown started with Maharashtra moves on to
Karnataka, then Delhi, now Haryana, so it has created an impact. In the overall sentiment,
also people are not at this point of time looking at buying real estate, they are just hoping
that with the proliferation of vaccines, etc., this short-term crisis will remain short-term. It
will not become to too long. And we are hoping that the good times will come back. Last
quarter was exceptional, we did more than 100%-110% increase in our sales compared to
Q3. And I am hoping that once this major situation right now improves a bit the demand
will come back into the market.

Venkat Samala: Sure, sir. We are hoping for the same. So just with respect to execution. Is there any impact
because of workforce migration as such on the ground…

K. T. Jithendran: Yeah. So largely couple of things because of some kind of experience of the last time some
workforce has quit the sites. Some people have come back or we have been able to
replenish. Overall, I would say there has been about a 20% - 22% reduction in manpower.
But largely, our manpower are in place, work is going on. Again, Venkat, if this situation
prolongs then it will have an impact. As of now we have contained it. But we are keeping
our fingers crossed.

Venkat Samala: Understood. Right. While we are talking about Real Estate segment, just wanted to
understand how is the launch pipeline at this point in time? I know, things can be a little
fluid, but as things stand now, how is the launch pipeline like in FY 2022?

K. T. Jithendran: Yeah. So the launch pipeline, we are hoping that we will be able to do all of our planed
launches this year, nevertheless, they will get delayed. We were supposed to launch Kalyan
Phase Two, sometime in May, of course this will not happen, it is not the right time to
launch it, we will hopefully launched it in Q2. Bangalore, Magadi Road again, hopefully in
Q2, Worli as of now we are still on track for Q3. The second phase of NCR we are again on
track for a September, October launch, provided the sentiments remain robust. And this is
a product plan that we have as of now.

Venkat Samala: Understood, sure. And sir, we have not added any projects in the year gone by, fiscal year
gone by. So any outlook with respect to that? I mean, how is the pipeline shaping up there?

K. T. Jithendran: So, Venkat, we are aggressively looking at adding projects in this financial year? We will be
adding, yeah. We are looking at it. Hopefully, before the next quarter, we will able to share
some information.

Venkat Samala: Right. So, should we hope for some project addition to come through by the next quarter?

Page 7 of 21
K. T. Jithendran: We are hoping, yeah. Again, we are doing due diligence, some of the projects. But the things
have got slowed down a bit. So the situation could impact a little bit. But I am hopeful that
we will be able to add some projects there by the time we meet again for the next quarterly
call.

Venkat Samala: Right. Sure. Okay. And as things stand as of now, how should we think about the project
additions in FY 2022 versus say FY 2020, which was more like a normalized year, right?

K. T. Jithendran: Yeah. So I am hopeful that we should add at least another two projects or three projects,
three projects at least.

Venkat Samala: Okay. Sure. So related to some numbers, what are the constructions spent in a FY 2021,
construction plus approval?

K. T. Jithendran: Yeah. So I do not have that number off hand. So, we will have to circle back to you, offline
we can give that number to you.

Venkat Samala: Okay. And one last question. This is about the textile business. So just wanted to
understand how much integrated are we? And to what extent do we have exposure to
increase in the yarn prices?

R. K. Dalmia: We are fully integrated, we have the spinning, then we have our own weaving, and then
chemical processing, and stitching also at the home textiles. And the yarn prices has also
affected us, the yarn prices have increased by 40%. But it is very difficult to pass an entire
increase in particular, in two months - three months. So 25% we could pass on. But still
15% remain there, which we will pass on hopefully by next quarter.

Venkat Samala: Sure. No. But I am just trying to understand, if you are fully backward integrated, why are
we facing margin pressures? Because then, the large part of the input would be cotton,
right, rather than yarn?

R. K. Dalmia: Yes. The yarn capacity we have around 60%, and have specialized yarn like 100 count and
all. We are manufacturing inside. But other yarn we purchase from outside. Spinning we
can meet our production after weaving around 60%.

Venkat Samala: Okay. So our vertical integration is around 60% level, right?

R. K. Dalmia: 60% on spinning and 60 70% on looms. In processes we have 100% capacity. So we have
our own entirely. But we are outsourcing yarn as well as fabric also grey fabric and the…..

Venkat Samala: Right. So, quarter-on-quarter we witnessed…

R. K. Dalmia: Yes. And further to add, the cotton prices has also increased and now with our demands
more of organic cotton and demand in Egyptian there prices of cotton has increased

Page 8 of 21
 considerably. Even organic cotton are into supply and there is huge premium on this
organic cotton. Of all the businesses, the customer wants in USA on in organic cotton, even
in India also, which has also put a lot of pressure on the margin.

Venkat Samala: Right. So how should we expect this quarter margin I mean Q-o-Q because Q4 versus Q3
margins have dipped, right? So how should we think about margins in the recent quarter
and maybe Q2 as well? Because I think, slowly as the new contracts will be coming for
renewal you will gradually passing on the cost increases, right? So, I am just trying to
understand how would Q1 and Q2 margins look like?

R. K. Dalmia: Q1 margin, if this continue second wave and markets continue to under lockdown, quarter
one of this financial year will also affected to some extent, but if markets are not in Q2, we
hope by June everything should be normal and the second wave is also subsiding. So, we
hope this lockdown will also not be there. So we hope a good demand, because pipeline is
already empty. So there is a good demand and price increase will be also there.

Venkat Samala: Right. So should we expect by this yearend or maybe H2 of this fiscal year, is the impact of
a second wave surprise and obviously, there is no third wave. So should we return to
normal margins that we witnessed in say I mean, in H1 of a FY 2020?

R. K. Dalmia: Yes. I am expected but better than that, after this, because the demand will be there. Then
we will be able to increase the prices also.

Snehal Shah: Venkat, Snehal here. Circling back to the question you asked, you know our project
development costs last year, which consists significantly of the construction cost was
around Rs. 188 crores and our collections were Rs. 154 crores.

Venkat Samala: Right. Does this include any approval costs etc. that we will incur?

Snehal Shah: Yeah, the project development cost would include some of the approval cost. If you want I
can give you a break-up out of this Rs. 188 crores, but I can only say, a significant part
would be the construction costs.

Venkat Samala: Right. And what is the expected approval cost which is to be incurred for Worli, sir, I mean,
pre-launch?

Snehal Shah: Pre-launch roughly, I think it would be around Rs. 400 odd crores. K. T., am I right?

K. T. Jithendran: Yeah. So, pre-launch, yeah, there will be a lot of construction premium, etc. So we are
expecting Rs. 470 crores thereabout about Rs. 500 crores.

Venkat Samala: Right. And large part of that would be spent in FY 2022, only, right?

K. T. Jithendran: Yeah, this all fully will be spend in FY 2022.

Page 9 of 21
Moderator: Thank you. The next question is from Sameer Dalal from Natverlal & Sons. He has posted a
text which say, on the Textile business. He says, I would like to ask a question on the Textile
business.Okay, you can ask the question for me. I want to understand why the sales in
Textile business is down? And the rest is incomplete? So yeah, the question is, why the
sales in Textile businesses down?

R. K. Dalmia: In the last financial year, the sales were down in the Textile business, because of this
lockdown, and factory was also closed since 22nd, March, 2020. And we have opened in
the second week of May, when the government has given the permission to run the factory.
But worker shortage and all, we could not reach the entire production capacity. And even
the market was also not opened up. The demand was less and that is why, our revenue
turnover was less, during the last year. This year, we are hopeful that we will achieve better
turnover and we will reach on the original turnover of the previous year even the better
on. Is it okay or?

Moderator: Right, thank you, sir. The next question is again, a text question, which is from Rajesh
Ranganathan. The question is, what is the reason for the lower EBITDA and EBITDA margin
in Q4 compared to Q3 despite strong sequential growth and sales?

R. K. Dalmia: You are talking in Textiles or?

Snehal Shah: No, sir. I think he is talking in total. So Mr. Ranganathan, I think, you are right in looking at
our numbers, we were Rs. 109 crores in Q3. But Rs. 109 crores in Q3 included a one-time
credit of an income tax refund interest of about Rs. 33 crores. So, if you reduce that, then
we are more or less in line with the current EBITDA of Q4. I hope that helps. So roughly,
you can say we are almost online Rs. 109 crores minus Rs. 33 crores. So we are somewhere
around Rs. 76 crores against current EBITDA of about Rs. 80 crores

Moderator: Thank you. We take the next question from Nagraj Chandrasekar from Laburnum. Please
go ahead.

Nagraj Chandrasekar: I have a few questions on Paper and Textiles. Just on Paper, I see, compared to last year
our NSR is still like Rs. 51 - Rs. 52 rupees a kilo. Just want to understand what segments
have been hit most in April and May? And by when do we see this NSR going up? And also,
as I heard, we heard about ITC Bhadrachalam having to divert a lot of its oxygen in the
pumping plant towards the production of medical oxygen, is this also hitting a lot of paper
suppliers in the country including investors? And what is that sort of main for paper
industry capacity utilization going forward?

J. P. Narain: Hi, Chandrasekar, good morning. Our NSR, out of our three segments I think tissue and
packaging were doing really good. But the drop was there in the writing, printing, and the
drop was in the range of somewhere around 20%. And in quarter four, all three segments
has touched the pre-COVID level and with the appearance of COVID wave two, we are
anticipating further drop-in writing, printing paper whereas packaging and the tissue will

Page 10 of 21
 perform on a strong foundation. So this time, the scenario will be different because the last
time, there was a huge fear and all the consumption center were completely close. This
time that situation is not there, packaging is doing great, tissue is going fairly well. And the
impact is being seen on the writing, printing paper. So I am not anticipating that kind of
drop in this time, especially on the whole business. In terms of oxygen shortage, the
industrial oxygen for us has been also stopped by the government. But that is not affecting
in a bigger way to all the paper mills because there is a substitute for that. You are using
the oxygen for bleaching, so you can see using more chemical like hydrogen peroxide to
bleach the pulp and reach on the same whiteness. So it is not affecting the production. Yes,
it is affecting the slight manufacturing cost.

Nagraj Chandrasekar: Understood. So that is the increase in input costs that you were mentioning, because I think
the cost otherwise on board would not have gone up for us that much except for the
softwood that we import, but not so much in writing and printing, maybe the coal cost
would have gone up because of the increase in the auction coal prices. So just want to get
a sense of what the average cost per kilo was very broadly in 4Q 2020, 4Q 2021 and what
it is sort of right now in the paper industry?

J. P. Narain: Yes the raw material cost specifically has gone up specifically for the chemical segment and
chemical consumption contributes somewhere around 12% of the total cost of the paper
conversion. Fuel cost is also in the range of 10% to 11% and fuel cost has also gone up, the
coal cost has also gone up with 2% to 3% then those who are using imported softwood as
well as the imported hardwood to customize, you can say the paper properties that has
gone phenomenally up. Softwood prices have gone up by 40% and hardwood prices have
gone up by 30%, but the usage is very less that is being used only in the packaging. But I
can say there will be input price hike will be in the range of 4% to 5%.

Nagraj Chandrasekar: But the ability for us to raise pricing at keep this 14% margin at 90% utilization is not in
doubt it is just the demand has to be there in terms of volumes and has to come back in
printing and writing paper that should get as close to 20%?

J. P. Narain: Yeah that should be because right now if the COVID second wave will stay for a longer time
then it will be affecting the demand of writing printing paper otherwise if it gets subside
well in time then the demand will be very high because the new education policy is getting
ruled out. So, all the books will be printed newly across the country. So, writing printing
demand will be very high once that demand will come on to the market.

Nagraj Chandrasekar: Sir, one question on the textile segment just you mentioned the increase in the yarn prices
we just want to get a sense and we are not fully backward integrated, but you said 60%
backward integrated, so just want to understand what was the yarn to cotton spread
maybe on a per kilo basis in the middle and upper count setting which is in third quarter
21, fourth quarter 21 and what is it right now that spread?

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R. K. Dalmia: Cotton is around 60% in the fabrics and remaining 40% is the other cost, but that depends
again the quality-to-quality sometime it is 50% and sometimes 60% or 65% to 70%, that
depends and the overall demand last financial year because of this COVID it was not there.
For this year if the situation improve they will get a full demand that we believe pipeline
and stock with the buyers are empty. So that is we are looking good quarter after second
or after first half.

Nagraj Chandrasekar: And sir also cotton prices and cotton production if you have a view on cotton prices this
year, last year was a recurred crop, what are you seeing this year for India?

R. K. Dalmia: Last year cotton crop was good and cotton prices were almost stable some increases were
there, but the major problem in cotton now everywhere the demand is organic cotton and
which is not grown in India for that much quantity and demand is huge. I tell you the
premium suppose a cotton particular cotton of 29 mm is 42,000 per candy and then on
premium for organic cotton is 24,000. So that cotton becomes 42 to 24,000 so that is the
problem and that is putting lot of pressure. Secondly, for our whole textile business and
for our apparel business buyers are also asking for imported cotton like Pima which is from
US and Egyptian cotton from Egypt their prices have gone up considerably. So, as far as
prices of current cotton season which will start from October I believe the cotton prices
should remain stable, but we have to keep a watch on organic cotton and international
prices particularly of Pima and Giza which is from US and Egypt

Moderator: We take the question from the line of Giriraj Daga from K M Visaria Family Trust. Please go
ahead.

Giriraj Daga: So my first question is related to our real estate division, you mentioned 188 crore project
development cost which includes construction this is for FY21?

K. T. Jithendran: Yeah that is correct.

Giriraj Daga: And what was the last year number?

K. T. Jithendran: This is last year’s number.

Giriraj Daga: Last year I mean FY19-20?

K. T. Jithendran: We do not have that number immediately; we will come back to you on that Giriraj.

Giriraj Daga: What will be the construction cost and development cost next year FY22?

K. T. Jithendran: Yeah we will have to come back to you on this detail figures. We are looking almost 1,100
crores of cash outflow in terms of construction cost and approval cost for the coming year.

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Giriraj Daga: If you can include these numbers in the PPT since many of the other companies do that in
terms of construction cost and development that include in the PPT if I can do it from next
quarter that would be really helpful? My second query is related to cash collection so last
two year we had seen a good amount of booking in terms of almost close to 1,000 crores,
but when we obviously look at collection it is relatively muted so far as you know 250 crore
in two year when can we see this collection picking up will it be in FY22 or FY23?

K. T. Jithendran: So we are expecting about close to 400 crores of collections in FY22.

Giriraj Daga: And FY23 can you say?

K. T. Jithendran: Yeah FY23 should be close to about I mean we are not giving forward looking statement at
this point of time. So depending on the launches etcetera we will come back to you on that
as of now the forward looking statement I do not know can be given these cost, but
depending on how many launches happened this year we will figure that out.

Giriraj Daga: Just my last question on the textile and the paper side textile first have you seen the worst
of the spread in the Quarter 4 or it can hit in the Quarter 1 also?

R. K. Dalmia: It is too early to say how long this lockdown will continue that we have to watch that will
depend on that.

Giriraj Daga: I am actually looking at the spread like the cotton prices finished price minus yarn price,
so I agree that problem would be low we will be making more money, but has the spread
hit in the bottom or spread might also compress further in Quarter 1?

R. K. Dalmia: In Quarter 1 we will have a hit, but hopefully in Quarter second we will be able to get a
better price and we will be able to recover it.

Giriraj Daga: Last thing on the paper side like if I had to look at on FY20 to FY22, do you think we can be
able to reach FY20 performance in paper in terms of volume side of it or that looks difficult
as of now?

J. P. Narain: If the COVID second wave will get subside within next two to three months definitely we
will meet that volume, but if get prolonged then there will be impact on writing printing
paper.

Moderator: Thank you. The next question is from the line of Sanjeev Mohta from B&K Securities. Please
go ahead.

Sanjeev Mohta: I have two, three questions one was a clarification this was regarding your tissue paper so
you said that we will go to 72,000 tons this year and I guess second half we are talking
about 100% product utilization there, so shall we assume that the prices remained where

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 they are, should we assume that for the entire 72 K we can do the similar EBITDA margin
and we are doing now?

J. P. Narain: Not exactly because right now that international pulp prices are on the higher side, but we
are anticipating that it should get stabilize somewhere around $750 right now it is selling
somewhere $1000 so the tissue prices are based on that. If the international pulp prices
will fall by $200 proportionally the tissue prices will also come down. So, what we are
anticipating it will be somewhere in the range of Rs. 63,000 to 65,000 per ton. Right now
it is at a higher price so that will be the stabilization bench for the tissue prices.

Sanjeev Mohta: Margins 24% what you are saying currently can come down to what 21%?

J. P. Narain: EBITDA margin will stabilize in the range of 21%, 22% right now it is 24%, 25% it should
stabilize on 21%, 22%.

Sanjeev Mohta: Second thing on the real estate side so we did have multiple drop last year what are you
seeing on the selection right now and are there any renegotiations coming up or are you
actually seeing some renegotiation is happening on the lease rental?

K. T. Jithendran: Sanjeev can you explain your question again if you do not mind.

Sanjeev Mohta: The question was that whether there is a renegotiation of lease rentals it come down
slightly, so the question was largely on that?

K. T. Jithendran: This is sort of a rhetorical question, totally depends on how this current lockdown
prolongs, how the whole thing unfolds as of now I do not see that, but we cannot rule it
out. I would suppose to think that we are have settle down that negotiation agreement last
year and I am hoping that there will not be any more such agreements, but totally depends
on how the business environment unfolds. So, I am really putting a finger on that.

Sanjeev Mohta: You are supposed to have one of your group companies as the lease was getting over, has
that been renewed?

K. T. Jithendran: No, we had Vodafone which was having 5 floors in Birla Centurion they have reduced it to
3 floors. We have renewed the lease for the 3 floors, 2 floors they have vacated that
happened in last quarter itself, that happened at the end of December. All other leases have
been renewed including a Vodafone for 3 floors, 2 floors of course they have vacated.

Sanjeev Mohta: And last question on debt side so what is the peak debt that we are expecting so roughly
we have bought down the debt, but this year what is the peak debt that we think will
happen and second is there a debt to EBITDA that you want to go more than that?

Snehal Shah: I will just give you kind of a ballpark figure considering, what I will do is I will probably
give you little aggressive targets of our real estate business for the next two years and I

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 will give you some sort of pessimistic number for our manufacturing businesses free cash
flows. So, right now debt is around 1,000 crores roughly and in the next two years there is
an aggressive plan in the real estate business where probably because some is the carry
forward of the last year which we could not do because of the pandemic. So, all put together
we are looking at roughly around 2,500 crores spent in the real estate business in the next
two years that is this year as and FY22 and FY23. So, this 2,500 minus I am taking a
pessimistic view of about 500 crores coming from the manufacturing business. So, we will
probably require about 2,000 crores additional debt to be raised and that is the peak debt
that I am expecting you can expect about 3,000 crores peak debt by the end of FY23 and
post that there will be significant cash flows coming from the real estate business as well
as the other business. So, our debt will keep on reducing. Now this question of EBITDA is a
little difficult one for me to answer because of a very simple reason is that I am not
recognizing the EBITDA of the real estate business every year. It will only be recognized in
the year in which the projects are completed. So, there will be significant jumps and dips
from the EBITDA debt-to-EBITDA margin and even considering that roughly at the peak
debt with the current EBITDA estimation I would probably be around level of 5 which
would be my peak. I hope that helps you.

Moderator: Thank you. We take the next question from the line of Pratibh Agarwal from ITI Mutual
Fund. Please go ahead.

Pratibh Agarwal: Couple of questions I have been answered, but I have few things to further ask what is in
paper division so like you mentioned that if the education policy gets rolled out then the
demand could be back for the writing and printing paper, but in case that takes a little bit
of more time and if we take a scenario where the lockdown is like lefted, so what is the
possibility of FY20 volumes coming back, so why I am asking is that just to understand that
many of the functions have started happening online, so is there any major impact on the
volumes of paper due to that?

J. P. Narain: Yes you are right Mr. Agarwal that once this institution, judiciary and the offices will not
happen that the writing and printing paper will get affected, but it is not that it will affect
in a bigger way. Our total volume reduction max can go up to 10% because what we are
anticipating we are anticipating somewhere a 20% drop in writing, printing paper whereas
tissue and the packing segment will drive aggressively. So, on a whole if I take I can
maximum drop of 20%. So, we are in the range of 80% to 85% of our volume compliance
what we have projected right now.

Pratibh Agarwal: Like if it goes above regarding capacity I am trying to ask if thing fall out for the positive,
so how much capacity increase can we take above of 4.5 lakh ton that we have as of now?

J. P. Narain: Right now our new capacity is 4.8 lakh tons because there is an additional of 36,000 tons
of issuing and beyond that I think it is hardly 1% or 2%, but beyond that it cannot be
stretched.

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Pratibh Agarwal: So that is why I was trying to ask in case everything falls out to be positive and education
policy comes up writing and paper for volume demand goes up, so how much that can be
catered from a capacity, is it sufficient?

J. P. Narain: Quite obviously during that time the demand of writing printing will be very high because
the entire country is changing the entire the complete syllabus. So, all publisher has to
reprints up old syllabus will not work with the new policies. So, during that time demand
will be quite higher. So, what we can cater whatever the maximum capacity we have and
with the slight change in the production we can increase by 5% to 10% but not beyond
that.

Pratibh Agarwal: And sir one little final details that I am trying to ask in your packing divisions number so
that in your presentations your volume numbers as well as revenue numbers are given so
if I work out the realization so it is coming out to be 3%, 4% drop for the Q4 YoY and I have
been reading in some news articles that the packing paper cost because of ecommerce and
pharma are going up, so I am trying to bridge the gap between these two sets of
information if you can just throw some light upon that?

J. P. Narain: You are absolutely right because you are seeing the Q4 and during Q4 what happened we
have got a certain commitment with our converters and those commitment has been
locked during the leaner time in Q3. So, we have got some rate contract which needs to be
fulfilled because once there will be a price increase it takes some time to negotiate with
the customer and to take the new price and we need to fulfill the old commitments and old
contacts at old prices. So, those have impacted in Q4 and it has now started giving the result
in end of Q4 and Q1 of FY22.

Pratibh Agarwal: So, going ahead with new contracts is there possibility of a bigger hike because this
ecommerce and pharma all these things are driving the demand for packaging paper quite
a lot?

J. P. Narain: We had already taken that and it is showing the result now in Q1 and onward. So, that had
that hike has already come it has already taken now.

Pratibh Agarwal: And just last clarification on the number of 500 crores approval cost for Worli, so just
trying to understand that 400 crores is only approval cost and does not include any other
element in that?

K. T. Jithendran: Yeah so that is largely the approval cost the premium cost it is about 470 crores which is
largely the premium cost will be paying there will be other cost also.

Moderator: Thank you. We take the next question from the line of Venkat Samala from Tata Asset
Management. Please go ahead.

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Venkat Samala: Sir, with respect to paper and pulp segment just wanted to understand now that we expect
obviously assuming the pandemic is not really prolonged, FY22 volumes to be similar to
FY20, so when do we expect margins to normalize by I mean 20% mark when do we expect
that to hit that range?

J. P. Narain: Venkat we have already touched the pre COVID level and now with the COVID waves 2 it
is slightly started affecting on writing printing paper. So, let us see how long it will stay,
but I am not seeing any tissue as well as packaging. So, they will be at FY20 level.

Venkat Samala: My question was with respect to margins I understand that with respect to the volumes
the guidance is fairly good and your capacity utilization is also good, but I am just trying to
understand when would that translate to normalization of margins?

J. P. Narain: I am answering on those lines only that margins especially in packaging and tissue has
come to the Pre COVID level which were there in FY22. Writing printing paper we are
struggling because the environment is fluctuating very fast and once the prices have gone
up for a quarter or so and it has again started dropping. So, till the time this environment
is not getting stabilized we cannot predict anything especially on writing printing, but in
tissue and packaging we are good.

Venkat Samala: So as I understand the packaging and tissue paper margins and demand both has sort of
normalized, but the impact on margins is because of the sluggish demand on the writing
and printing segment and as and when that normalizes you expect that margins to also
normalize?

J. P. Narain: Yes.

Venkat Samala: So sir you did mention that you expect peak debt to go up around 3,000 odd crores this
seems to be meaningfully higher than 2,000 to 2,200 crores that you stated before is it
because I am not really considering the impact of the collections here because we are just
looking at the slow from the manufacturing against the outflow which is construction and
of approval expenses?

Snehal Shah: In the beginning of answering that question I said I took a very aggressive target of our real
estate business and I took a very pessimistic target of our other businesses cash flows. So,
from that perspective I gave you I mean these are all kind of as I said not real numbers, but
kind of expected numbers they can be here and there by almost 500 crores. What has
happened from the earlier thing which I was telling you because the entire spent of last
year has now I have actually put them in the next two years. So that has kind of added up
the whole thing which should have normally kind of spread across the year or something
like that. So, earlier I was talking about three years and now I am talking about just two
years.

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Venkat Samala: And what would be that quantum sir I mean which is sort of push forward from FY21 to
22?

Snehal Shah: Roughly would be say around 500 odd crores. Mainly it is related to Worli because Worli
got delayed because of the pandemic and we are not getting any approval etcetera and
BMC for MCGM were completely working on the pandemic, there was not much activity on
that.

Venkat Samala: So I mean more realistic I know this looks to be more like a very pessimistic case, but
against the construction spent of 2,500 crores we are manufacturing business in flow of
500 crores and 400 crores annually from a collection would this be more like a realistic
scenario?

Snehal Shah: So, when I gave you the number for requirement of real estate of about 2,500 crores this
was after considering the realizations collections, this is net off everything collections
during those two years.

Venkat Samala: And does this also include some of the possible project that intend to sign on in this current
year?

Snehal Shah: Yes, I have also included about 300 odd crores spend on some new projects two, three
projects which we might do during those three years. These are all ballpark number as you
say I am just giving you guidance.

Venkat Samala: And project now for the Kalyan project, that we have executed it to some level, so whenever
it hits the P&L what can we expect the EBITDA margin for that particular project to be?

Snehal Shah: As far as EBITDA margins are concerned I think probably we will be somewhere between
30% to 40% margins and IRR we are looking at a threshold of 20% plus.

K. T. Jithendran: So roughly about 25% to 40% margins is what EBITDA margins we are looking at
depending on various projects.

Venkat Samala: And for Kalyan, it should be 30-40% because that is your own land you expectation?

K. T. Jithendran: Yeah.

Venkat Samala: And our collection from that particular project making up for the constructions spend for
that particular project I mean is it sort of a self-financing project now?

K. T. Jithendran: More or less it is you may require very little of construction finance largely because of the
strong response and all market so far we have been largely funding it from our customer
receipts. Our total construction finance that we have taken so far is only about 30 crores
the rest is all been funded by customer receipts.

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Venkat Samala: So 30 crores is across all the three projects is it?

K. T. Jithendran: That is correct of course the deposits and upfront payments we are taking from CTIL is
funding that. I am largely talking about.

Snehal Shah: Just to add of the 2,000 crores that I am going to raise almost 1,000 is about the
construction finance which will be raised by Birla Estate Private Limited.

Venkat Samala: And we expect the interest cost to be between 7, 7.5 even for that I mean for the
construction cost that we intent to do?

Snehal Shah: I mean quite honestly yes we are getting good rates, so I mean I would say given the current
market scenario we should be in that range, but of course things might change and
tomorrow RBI decides somewhere else then we might feel a little bit of pressure, but I
would assume that roughly the borrowing rates between the parent company that is CTIL
and the construction finance that the subsidiary gets is not more than 30 to 40 basis points.

Venkat Samala: And one last question how is the reception to the Bangalore project I know the other
projects have done exceptionally well, so one possible if it could be it is slightly dragging
behind the other two project so anything that you would like to mention about it?

K. T. Jithendran: I do not think so Venkat I think you are mistaken that project was also equally done in fact
in this month also we did very well it is the highest selling project this month, in the month
of April. So, of course the ticket size is much higher it is 2 crores, 2.5 so it is done very well.

Venkat Samala: So the reason I am asking that is other projects are close to completely sold?

K. T. Jithendran: Yeah, but that is because of their location their demand their very prime location is on the
outskirt, but as far as amount spend etcetera this has been very good, much beyond our
expectation.

Venkat Samala: And the margins which is expected here since it is not like an outright this thing so what
margins can we expect here?

K. T. Jithendran: So, Bangalore yeah we are expecting about 30% margins there.

Snehal Shah: And since we are on a subject I think I just saw on the chat box question by Nitin so Nitin I
think I mentioned about 2,000 crores to be raised and you can roughly assume 50-50 over
the next two years I mean I cannot exactly give you the numbers, but it is more or less you
can put it as 1,000 crores in one year and 1,000 crores is next year. It all depends on how
our plans pan out.

Moderator: Thank you. The next question is from the line of Himanshu Jhaveri from Dhruv Jain
Associates. Please go ahead.

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Himanshu Jhaveri: I just want to ask on the Worli project land have healthy margin over there they are going
to have healthy margins over there, but I was just looking at like kind of plans for the future
growth because if you want to be in the top three or five developers in the country then we
also have to add a lot of projects all over Pan India in the top four markets since the last
one or two years I think we have been pretty slow in adding the projects in the JV model
or the outright purchase so any news you like to share and company like Godrej and all
added 50 million in the last two, three years so is it a strategy to go on very high margins
and just be slow in the addition of BDs, can you just share your views please?

K. T. Jithendran: As I mentioned Himanshu last year we are little circumspect in terms of how we were not
clear how this pandemic will unfold so were holding our horses to see how the market
would react, how the entire sentiment real estate so were more circumspect, but now that
having seen that and we are seen how the real estate market has bounced back I think they
are all gungho ho now and we are looking for the right deal of course we are not going
hammer and tongs going up to every other deal, but we are looking at good profitable deals
with good partners, good profile of our JV partners we are looking in for all the four
markets which we have chosen and we are in the lookout for the right deal and I am quite
hopeful that we should be making a reasonably strong addition to our portfolio in this
financial year. I was saying we also realize that is very pertinent and important from the
point of view of being amongst the top developers in India we are pretty aware of that and
we are going to take steps towards that direction.

Himanshu Jhaveri: And one more question regarding the Worli project, are we on track for October, November
launch? We are seeing only 30 lakh sqft before we were projecting 50 lakhs square feet
there. This is the residential, there is another commercial or the total potential is only 30
lakh square feet.

K. T. Jithendran: We had sold anywhere between 40 to 50 lakh square feet what we are talking about 30
lakh is the residential part of it, commercial is another 10 lakh and 30 lakh is also it could
go up as of now it is an estimated 30 lakh it could go up to maybe 30, 35 lakh also, but as I
told you this is on the first FSI for this mill land they are still under abeyance and we have
gone for stricter of the two rules and as a basis today what we have in hand is about 30
lakh it could go up and this is only the residential part of it and on the launch tracker we
are as of now on track, the April this much there has been no movement in April. So, we
are in line for MOEF clearance we are in line for the IOD, etc. We are hoping all that
approvals and all in place by September, October and then we should be hoping for a good
launch in the end of Q3. So, if the situation improve from here and everything goes we are
well on track for the timely launch.

Moderator: Ladies and gentlemen that was the last question. I now hand the conference over to Mr. J C
Laddha from Century Textiles and Industries Limited for closing comments.

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J C Laddha: First of all thank you Anuj for organizing stimulating discussions. There were very
insightful questions, and we are confident that this current year should be very good. In
fact we feel that the lockdown impacted largely in the previous year and the second wave
perhaps will be contained by the efforts of everybody and we see after Q1 things should
become normal and thank you very much once again and we are confident all the business
during FY22 will do very well. Please take care and stay safe. Thank you very much.

Moderator: Thank you very much. Ladies and gentlemen on behalf of Century Textiles and Industries
Limited that concludes this conference. We thank you all for joining us and you may now
disconnect your lines.

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