Investor Presentation 2 KNR Constructions Limited Disclaimer This - PDF document

AUGUST 2017 KNR Constructions Limited Investor Presentation

2 KNR Constructions Limited Disclaimer This presentation and the accompanying slides (the “Presentation”), which have been prepared by KNR Constructions Limited (the “Company”), have been prepared solely for information purposes and do not constitute any offer, recommendation or invitation to purchase or subscribe for any securities, and shall not form the basis or be relied on in connection with any contract or binding commitment whatsoever. No offering of securities of the Company will be made except by means of a statutory offering document containing detailed information about the Company. 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. Certain matters discussed in this Presentation may contain statements regarding the Company’s market opportunity and business prospects that are individually and collectively forward-looking statements. 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, the performance of the Indian economy and of the economies of various international markets, the performance of the industry in India and world-wide, competition, the company’s ability to successfully implement its strategy, the Company’s future levels of growth and expansion, technological implementation, changes and advancements, changes in revenue, income or cash flows, the Company’s market preferences and its exposure to market risks, as well as other risks. The Company’s actual results, levels of activity, performance or achievements could differ materially and adversely from results expressed in or implied by this Presentation. The Company assumes no obligation to update any forward-looking information contained in this Presentation. 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.

3 KNR Constructions Limited KEY HIGHLIGHTS & RESULT UPDATE

4 KNR Constructions Limited Standalone Financial Highlights Revenue (Rs. Million) * EBITDA (Rs. Million) PAT (Rs. Million) +124% +59% +93% 676 4,808 845 3,032 437 302 Q1 FY17 Q1 FY18 Q1 FY17 Q1 FY18 Q1 FY17 Q1 FY18 * Revenue from operations for the quarter ended 30 th June, 2017 includes Rs. 168 million from the claims received by two Joint Ventures

5 KNR Constructions Limited Standalone Financial Results – Q1FY18 Rs. Million Q1 FY18 Q1 FY17 YoY Net Sales 4,637.4 3,036.4 Other Operating Income * 170.1 -4.7 Total Revenue 4,807.5 3,031.7 59% Operating Expenses 3,440.7 2,172.2 Employees Expenses 148.1 128.7 Other Expenditure 373.5 293.9 EBITDA 845.3 436.9 93% EBITDA margin 17.6% 14.4% Other Income 122.6 58.5 Depreciation 243.8 131.7 Interest 51.9 42.8 PBT 672.2 321.0 109% Tax Current Tax 37.4 15.6 Prior Period Tax -1.7 0.0 Deferred Tax -39.4 3.2 Profit After Tax 675.9 302.1 124% PAT margin 14.1% 10.0% Other Comprehensive Income 1.3 -1.0 Total Comprehensive Income 677.1 301.1 125% * Other Operating Income includes Rs. 168 million from the claims received by two Joint Ventures

6 KNR Constructions Limited Key Updates Signed a share purchase agreement to sell their equity stake in two Road BOT assets • Company along with Patel Engineering Limited (PEL) signed a share purchase agreement to sell entire equity stake in two Road BOT assets viz. Patel KNR Infrastructure Limited and Patel KNR Heavy Infrastructure Limited to an Essel group company • Both the assets are operational annuity based BOT assets awarded by NHAI • The enterprise value of both assets put together for this transaction is ~INR 850 Crores

7 KNR Constructions Limited BUSINESS OVERVIEW

8 KNR Constructions Limited Business Overview One of the leading companies providing Engineering, Procurement and Construction (EPC) services Major Projects in Roads & Highways – one of the fast growing sector Established presence in Irrigation and Urban Water Infrastructure Management VISION 20 years of experience of project execution To develop KNRCL as a Successfully executed more than ~6,000 lane km Road Projects Centre of excellence in the Projects executed across 12 states in India field of Infrastructure. To add more business Portfolio of 4 BOT Projects verticals to the organization in the fields of construction of 778 lane Kms Projects in the state of Telangana, Karnataka, Kerala & Bihar Elevated Metro Rail and 2 Annuity based Projects Completed* & 1 Toll based project completed Railway Projects 1 Toll based Project partially completed Strong EPC Order-book Rs. 33,388 mn as on 30 th June, 2017 comprising of Rs. 28,448 mn in Roads sector, Rs. 4,907 mn in Irrigation and Rs. 33 mn in others * Company along with PEL signed a share purchase agreement to sell entire equity stake in two Road BOT assets to an Essel group company

9 KNR Constructions Limited Transformation 2016 2015 Crossed Revenue of Rs. 10,000 mn 2013 on Standalone 2/4 laning of Basis Madurai – Ramanathapuram 2012 3rd BOT Toll Section of NH-49 project worth in the State of Rs.9,005 mn in Tamil Nadu under Kerala 2010 Early completion NHDP Phase-III of Biggest Road on EPC mode Project – Bijapur worth Rs. 9,371 Hungund Section 2008 Received single mm of Rs. 8,250 mn - biggest work 11 months ahead order value of IPO & Listed of schedule 2007 Rs. 8,250 mn on BSE and from Sadbhav NSE Engineering Ltd 2nd BOT 2006 for project worth construction of Rs.5,920mn in Bijapur 1st BOT Project Telangana Hungund Road 1995 in Karnataka project worth Rs. 4,420 mn; Entry into Incorporated & Urban water Commenced EPC Infrastructure Business with contract in Bangalore

10 KNR Constructions Limited Management Mr. K. Narasimha Reddy – Founder Promoter & Managing Director Over 48 years of experience in the Highway sector Started career in 1968 and engaged in the business of undertaking civil and mechanical contracts Extensive knowledge and experience in multi project planning Scheduling, cost controls in addition to overall construction and multi project management & driving force in taking the company towards greater heights Mr. K. Jalandhar Reddy – Promoter & Executive Director Over 20 years of experience in the Highway and infrastructure sector Started his career with the organisation as a project Manager and was elevated to Executive Director on April 1, 1997 Heads the tendering and bidding activities and is in charge of most of the projects in Southern India

11 KNR Constructions Limited Supported by Professional Team Mr. T.L. Verma Mr. D. Tirupathi Reddy (Vice President - Projects) (GM – Projects) A Bachelor of Engineering (BE) from MITS Gwalior (MP) with Over 24 years of rich experience in various fields of Civil Over 35 years of total experience with ~20 years of experience Engineering in Highway sector Working with the company since 14 years as contract Working with the company since 2006 on various projects specialist and tendering & procurement expert i.e. Bridges and Highways, including construction of Concrete Roads Mr. S Vaikuntanathan Mr. M.V. Venkata Rao (VP - Finance) (Company Secretary) A Fellow Member of the Institute of Chartered Accountants A Fellow Member of the Institute of Company Secretaries of of India with 39 years of experience in the areas of finance, India accountancy and taxation Working with the company since 2007 and has the overall Has the overall responsibility for the finalization of responsibility towards compliance of Rules & Regulations laid corporate accounts, taxation, finance and related jobs down by various authorities

12 KNR Constructions Limited KEY BUSINESS STRENGTHS

1 SIGNIFICANT EXPERIENCE AND STRONG TRACK RECORD IN TIMELY 13 KNR Constructions Limited EXECUTION OF PROJECTS Project Execution Top management’s active involvement at all stages of Project execution o Selection of Major Raw Material o Selection of construction Camp location Faster Decision making to ensure project completion on schedule Received Bonus for completion of construction ahead of schedule Walayar – Vadakkancherry Penchalakona – Yerpedu Narsapur - Siricilla – Siddipet Aswaraopet Bijapur – Hungund Hyderabad - Ramagundam Karimnagar - Kamareddy Hyderabad – Chanda