Q1 FY13 Investor Presentation
Disclaimer Some of the statements in this presentation that are not historical facts are forward looking statements. These forward-looking statements include our financial and growth projections as well as statements concerning our plans, strategies, intentions and beliefs concerning our business and the markets in which we operate. These statements are based on information currently available to us, and we assume no obligation to update these statements as circumstances change. There are risks and uncertainties that could cause actual events to differ materially from these forward-looking statements. These risks include, but are not limited to, the level of market demand for our services, the highly-competitive market for the types of services that we offer, market conditions that could cause our customers to reduce their spending for our services, our ability to create, acquire and build new businesses and to grow our existing businesses, our ability to attract and retain qualified personnel, currency fluctuations and market conditions in India and elsewhere around the world, and other risks not specifically mentioned herein but those that are common to industry. Further, this presentation may make references to reports and publications available in the public domain. Shriram EPC Ltd. makes no representation as to their accuracy or that the company subscribes to those views / findings.
Contents Strengths 5 Business Overview 6 About SEPC Subsidiaries and JVs 7 Strategic Partners 8 Track Record 9 Opportunity 10 1 SJCL 13 Q1 FY13 Financial Performance 15 Financial & Operating Highlights Abridged P&L 16 Q1 FY13 Financial Overview 17 Operational Highlights 18 2 SJCL – Strategy 19 Milestones 21 Corporate Overview Shareholding Structure 22 3 Projects Executed 23
Section 1: About SEPC
Strengths Through its subsidiaries and JVs, SEPC Extensive experience in process and offers high value solutions in niche metallurgy, construction of power Diversified segments including cooling towers, plants, water sanitation and waste Business pipe rehabilitation, and wind turbine water treatment, and mineral Model manufacturing processing/material handling Opportunity Extensive Knowledge and Outlook Management is well respected and Growing industry requirements has extensive knowledge in each of increasing the need for EPC work, What the business’s core competencies. particularly in process plants and distinguishes SEPC has a well established track metallurgy. Demand for power record. Blackstone Group also serves SEPC? increasing, particularly from RE. as an in-house R&D team, which Urbanization creating an urgent need provides high profile engineering for water sanitation which will grow the solutions municipal services vertical. The Company is enjoying its highest ever order book position, buoyed by Shriram EPC has formed High Strategic healthy growth in the strategic partnerships Partnerships process and metallurgy Visibility with engineering majors space, renewable energy all over the world in segment, and municipal each of its core areas services business.
Business Overview Shriram EPC Leading provider of integrated EPC solutions for renewable energy, process and Process and Municipal Mineral metallurgy plants, and Power Plants Metallurgy Services Processing municipal services Significant project experience, Water Ore Steel Plants Biomass Treatment Beneficiation established track record, pan- Plants Plants India presence, international forays into Zambia, France, Coal Thermal Gasification and Australia Sewage Mineral Process Treatment Plants Plants Strong order book, consistently Gas Cleaning Solar Plants growing year on year since Mine Development Pipe Rehab FY2006 Cement Wind Diverse business model – Plants strategic focus in multiple core areas distinguishes the Company from the rest of the Process Based Plants pack Material Handling
Group Companies Shriram EPC Group Leitwind Shriram Blackstone Hamon Shriram Orient Green Shriram SEPL Manufacturing Group Cottrell Pvt. Ltd. Power Ltd. Composites Ltd. Manufactures Main design arm of Design, Creating, owning Manufacturer of • • • • • SEPC WEGs and Wind construction and and operating GRP pipes, fittings High value design Turbines • erection of new renewable energy and tanks and engineering cooling assets in India and services towers overseas Primarily Wind • farms and Biomass plants
Strategic Partners Our Technology Partners Leitwind To manufacture and market MW class Wind Turbines Hamon Group EPC solutions for cooling towers in INDIA Envirotherm Coal gasification Perco Exclusive use of their trademark pipe bursting technology Technical partnerships help SEPC provide the best in-class solutions for demands in the EPC space.
Track Record (Consol. figures) Revenues Consolidated Revenues of 1,862 2,000 ` 1,862 Cr. in FY 2012 1,670 CAGR 53% 1,800 1,600 1,370 1,400 1,200 1,007 ` Crore CAGR of 53% for the period 1,000 FY2006 – FY2012 703 800 600 301 400 146 200 - FY06 FY07 FY08 FY09 FY10 FY11 FY12 PAT Consolidated PAT of ` 42 Cr. in FY 2012 CAGR 35% 54 60 48 44 50 42 35 40 ` Crore CAGR of 35% for the period 30 FY2006 – FY2012 13 20 7 10 - FY06 FY07 FY08 FY09 FY10 FY11 FY12 FY11 figure after adjusting for Exceptional Item
Opportunity Immense opportunity for players in the EPC spaces The EPC market opportunity is still largely interdependent on the fortunes of the infrastructure sector. Huge investments have been planned in ports, railways, roads and bridges, irrigation, power, and water supply and sanitation. Assuming the share of con- struction investment at approximately 50 %, this indicates an opportunity for EPC players of ~ ` 16 trillion . 26,830 Process and Metallurgy Strong long term demand from the steel • industry to drive the iron ore industry through current headwinds 8,242 6,020 5,023 Key drivers • 1,999 1,765 1,098 Increasing consumption rates 420 Rapid Urbanisation 2009-10 (Apr-Mar) 2010-11 (Apr-Mar) 2011-12 (Apr-Feb) Cumulative Inflow Urgent upgradation of infrastructure (April'00 - Feb'12) Steady growth of the construction Rs. in crore $in million sector Metallurgical sector has attracted USD billion • in cumulative inflows from Apr 2000 – Feb 2012 2009-10 2010-11 2011-12 Cumulative Inflow accounting for ~4% of total FDI inflow. This is set to increase on the back of growing (Apr-Mar) (Apr-Mar) (Apr- Feb) (April'00 - Feb'12) interest in the Indian EPC market. ` in crore 1,999 5,023 8,242 26,830 • Source for table and graph: DIPP $ in million 420 1,098 1,765 6,020
Opportunity Municipal Services % of Population with Access to Sanitation 56.9% 56.9% 58.0% The percentage of urban population in India 55.2% 56.0% has been increasing at a tremendous pace. 54.0% 53.6% 53.1% 56.0% 54.0% And over a period of 20 years, that 52.0% percentage of population with access to 52.0% 50.0% sanitation has only risen by 7 percentage 49.0% 50.0% points. Government investment in the sector 48.0% is expected to rise up to USD 26 billion by 46.0% end 2012. 44.0% Source: World Bank (Graph), Eleventh Five Year Plan 1990 1995 2000 2005 2010 India South Asia Renewable Energy As power demand continues to increase, but Total Installed Wind Capacity challenges to thermal power remain RE is 3500.0 expected to fulfill opportunities: 3000.0 Mandatory minimum RE requirement for 2500.0 • SEBs likely to increase demand for wind 2000.0 turbines and biomass plants 1500.0 1000.0 SEPC has begun its foray into the Solar • 500.0 Power vertical, an industry which is 0.0 expected to add 20,000 MW by 2020 SEPC is well-placed to meet the demands • of the RE EPC market. Source: Global Wind Energy Council •
Opportunity Group Companies Cooling towers help to decrease power • plants’ operational costs. Demand from power plant manufactures for cooling towers is expected to increase going forward. SEPL Composites can develop pipes of • different diameters and flexibilities, allowing the Company to meet the custom requirements of client specifications. Reputation, track record, and industry demand are likely to increase client base in the near future. SEPC’s focus in metallurgical and process plants, municipal services, cooling towers, pipe rehabilitation, and renewable energy EPC is expected to provide abundant opportunities for profitable growth. Apart from growing existing verticals and client relationships, the Company has forayed into new verticals (i.e. Solar) and expanded operations internationally (Zambia, France, Australia) to add greater value to operations.
Sree Jayajothi Cement Ltd About SJCL Outstanding of ` 352 Cr Located in Andhra Pradesh • SEPC SJCL Operating Plant with capacity of 3.2 • MTPA Captive limestone reserves Converted • ` 94 Cr into - ` 19% Equity Near term objectives SEPC + group entities have acquired • majority control – 68% (19% + 49%) 49% Assigned Stake in Infuse working capital and increase ` 258 Cr • SJCL operating capacity from around 30% currently to > 60% in one year. Spark Environmental Technology ltd Strategy To raise additional equity to strengthen • company. Over the long term offload stake to a strategic partner at a premium to realise value unlocking
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