United Drilling Tools Limited has informed the Exchange about Investor Presentation

UNITED DRILLING TOOLS LTD. CIN : L29199DL1985PLC015796 OIL DRILLING EQUIPMENT MANUFACTURING AND SERVICES Phones: +91-0120-4842400 : 4221777 Please Reply to Head Office Fax No.. -91-0120-2462675 A-22, Phase-Il, Noida-201305 USE PREFEX FOR CALLING - Ole Gautam Budh Nagar, From out side Country -91-120 ttar Pradesh, India From out side State -0120 E-mail : ENQUIRY@UDTLTD.COM From New Delhi -0120 Website : WWW.UDTLTD.COM 26/05/2022 UDT/SEC/ 2022-23 / BSE-17-NSE-17- To Listing Compliance Department Department of Corporate Service National Stock Exchange of India Ltd. BSE Limited Exchange Plaza, C-1 Block-G, Phiroze Jeejeebhoy Towers, Bandra Kurla Complex, Bandra (E), Dalal Street, Mumbai- 400001 Mumbai - 400051 Security ID - 522014 Security ID - UNIDT Sub: 04 FY22 & FY22 updated Investor Presentation Dear Sir / Madam, Pursuant to Regulation 30 of SEB] (LODR) Regulations, 2015, we wish to inform that the management of the company is submitting hereby Investor Presentation related to overall performance of the company up to end of March 31, 2022-— _ The Investor Representation is self-explanatory. This is for your reference and record. Thanking you, Yours faithfully For United Drilling Tools Ltd. aveen Bhatnagar Company Secretary M. No. F-6079 Regd. Office : 139A, First Floor, Antriksh Bhawan, 22 Kasturba Gandhi Marg, New Delhi.110.004A global manufacturer of high- quality, precision-engineered products in Upstream Oil & Gas Exploration

FY22 Investor Presentation

Discussion Summary

1. Quarter Performance

2. Company Overview

3.Competitive advantage

4. Market Opportunity

5. Business Strategy and Outlook

6. Future Business Strategies

Disclaimer

This document has been prepared for information purposes only and is not an offer or invitation or recommendation to buy or sell any securities of United Drilling Tools Limited (“UDT”, "Company“), nor shall part, or all, of this document form the basis of, or be relied on in connection with, any contract or investment decision in relation to any securities of the Company.

This document is strictly confidential and may not be copied, published, distributed or transmitted to any person, in whole or in part, by any medium or in any form for any purpose. The information in this document is being provided by the Company and is subject to change without notice. The Company relies on information obtained from sources believed to be reliable but does not guarantee its accuracy or completeness.

This document contains statements about future events and expectations that are forward-looking statements. These statements typically contain words such as "expects" and "anticipates" and words of similar import. Any statement in this document that is not a statement of historical fact is a forward looking statement that involves known and unknown risks, uncertainties and other factors which may cause our actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. None of the future projections, expectations, estimates or prospects in this document should be taken as forecasts or promises nor should they be taken as implying any indication, assurance or guarantee that the assumptions on which such future projections, expectations, estimates or prospects have been prepared are correct or exhaustive or, in the case of the assumptions, fully stated in the document. The Company assumes no obligations to update the forward-looking statements contained herein to reflect actual results, changes in assumptions or changes in factors affecting these statements.

You acknowledge that you will be solely responsible for your own assessment of the market and the market position of the Company and that you will conduct your own analysis and be solely responsible for forming your own view of the potential future performance of the business of the Company.

Annual Performance Highlights

FY22 – Performance Highlights (Standalone)

Net Income

Rs 166.42 Cr.

13.59% YoY

EBITDA

Rs 75.15 Cr.

Order Book

75.99% YoY

Rs 100 Cr(Approx.)

Profit Before Tax (PBT)

Profit After Tax (PAT)

Rs 71.64 Cr.

83.22% YoY

Rs 50.36 Cr.

54% YoY

Final Dividend 6% (Rs 0.60 / share)

Total Dividend 21% (Rs 2.10 / share)

Key Developments in Q4FY22 Development of new product line

Development of new product line side pocket mandrels, swift connectors and Lynx connectors are under process

which have demand in India and overseas market.

Design Patent in U.K.

We have received design patent registration in U .K. for multi start casing pipe connectors, metal to metal seal

casing pipe connectors and weight set casing pipe connectors. The registration is valid for a period of 5 years.

Foray into international markets – Egypt, Libya and Vietnam

We have appointed marketing representatives in Egypt, Libya and Vietnam to promote our products and expand our

market base in these countries.

New Port based manufacturing unit at Mundra, Gujarat

Local approval for new coming up project in Gujarat near Mundra port arranged.

Registration of Land has already been done.

Construction started at site.

Financial Statement (Standalone)

( Rs Crore)

Q4FY22

Q3FY22

Q4FY21

YoY%

FY22

FY21

YoY%

Net Income

40.06

46.14

47.38

-15.45%

166.42

146.50

13.59%

EBITDA

12.16

19.95

5.95

104.71%

75.15

42.70

75.99%

EBITDA Margin (%)

30.35

43.24

12.56

45.16

29

PBT

PAT

11.13

19.19

8.11

13.04

PAT Margin (%)

20.24

28.26

EPS

4.00

6.42

5.03

4.17

8.80

2.06

121.27%

71.64

39.10

83.22%

94.48%

50.36

32.70

54.00%

30.26

22

94.17%

24.80

16.09

54.13%

Annual Performance Scorecard (Standalone)

Profit & Loss Statement

Particulars

Revenue from Operations

Total Expenses

EBITDA

EBITDA Margin (%)

Depreciation

Finance Cost

PBT

PBT %

Tax

PAT

PAT Margin %

(Figures in Rs Crore)

FY2018

73.91

56.19

17.70

24

2.69

1.25

13.80

18.67

1.05

12.7

17

FY2019

157.13

127.96

29.2

19

2.87

1.01

25.30

16.10

0.57

24.70

16

FY2020

1,14.47

58.71

56

49

2.70

0.51

52.80

46.00

7.54

45.20

39

FY2021

1,46.50

1,03.81

42.70

29

2.68

0.88

39.10

26.68

6.44

32.70

22

FY2022

166.42

94.78

75.15

45.16

2.69

0.82

71.64

43.05

21.29

50.36

30.26

Company Overview

Company Overview

Our Journey of Evolution over Three-and-a-half Decades

Commenced operations, with head-quarter in New Delhi

 Received first ISO certification for our

products

 API Certification approval  Developed and commenced manufacturing

of a new product line of Connectors

 Accomplished a significant milestone of getting our

products patented

 Commenced operations at the newly set-up

manufacturing units • NSEZ (Noida Special Economic Zone) at Noida for

production of winch in 2013

• KSEZ (Kandla Special Economic Zone) at Kutch,

Gujarat for production of Casing Pipe and Connectors in 2014

 Achieved sales of Rs 1,000 million  Made first exports of Connectors to United Kingdom

1985

1990-2000

2001-2005

2006-2010

2011-2015

2016-2020

 Develop and commenced manufacturing

 Developed and commenced

of: • Stabilizers (1992) • Gas Lift Valve (GLV) and Winch (1995) • Truck Mounted Winch

 Successfully awarded contracts from

Government companies

 Augmented export of GLV to United States since 1996; Further tapping opportunities in the global market

manufacturing of Large OD Casing Pipe  Established a new unit at Uttar Pradesh for

production of stabilizers

 Developing

company’s Products • Lynx Connector • Swift connector • Side Pocket Mandrels  Commenced exporting our products across geographies

Company overview

Manufacturing Proficiencies

Manufacturing

Infrastructure

Intellectual Capital

 4 State-of-the-Art and Tech-

focused Manufacturing Facilities Spread across 10,88,000 sq. ft.

  Manufacturing locations in

Gujarat and Noida

 To manufacture standard

 350-strong workforce of:

precision equipment of proven test designs to API license and ISO standards

 Expertise to maintain the

precision of 1/1000th of an inch with specialised CNC machines

• Quality Control Engineers • Design Engineers • R&D Engineers • After-Sales Service Personnel

Company Overview World-Class Infrastructure

Machine-shop-with CNC Lathes Vertical Lathe and Machining Centre

Latest Quality Control System, Equipment and Gauges

Assembly and Fabrication Shop

Drilling Machines, Cylindrical Grinders, Milling Machines

Research and Development System and Testing System

Company Overview

Product Usage as per Type of Wells

Crude Oil & Gas Wells

Onshore/Offshore Wells

Exploratory Wells*

Production Wells*

Marginal Wells*

Casing Pipe with Connectors

Stabilizers

Gas Lift Valves with Mandrels

Winches

Casing Pipe with Connectors

Stabilizers

Gas Lift Valves with Mandrels

Winches

Gas Lift Valves with Mandrels

Winches

Note – * denotes where our products are used.

Company overview

Fortifying Industry Position through a Comprehensive Product Offering

CASING PIPE WITH CONNECTORS

Product function: During drilling of oil and gas wells, steel pipes are set inside the drilled well. This is called casing and it helps protect and support the well stream. Generally, casings are fabricated in sections, or joints usually ~40 feet long and screwed together to form longer lengths of casing. One joint is connected with the other with the help of casing elevators.

Product benefit:  

Prevents wall of well from caving in Consumable and requirement to be generated year-on-year

Company overview

Fortifying Industry Position through a Comprehensive Product Offering

Product function: UDT Fast make-up, high performance connectors are manufactured as per highest international quality standards. These are designed for use in offshore and onshore duly welded with Casing Pipes. These are used where rig costs and environmental conditions dictate a need for fast connector make-up, combined with superior performance.

CONNECTORS

Product benefit:  Simple to use  Saves cost by reducing make up time of casing pipe while running casing pipe in oil well.

Company overview

Fortifying Industry Position through a Comprehensive Product Offering

WIRELINE WINCHES

Product function: Wireline winch is self-contained and tough enough for most oilfields. It is widely applied across the oil & gas industry for various purposes including well intervention and reservoir evaluation. Equipped with line speed, depth and tension measurement system in addition to fast jarring action of the reel unit, which can insert and retrieve the flow control devices/ gas lift valves from the side pocket mandrel at any depth in the oil well with high accuracy. UDTL manufactures four different types of wireline winches – Slim-split, Fly-line, Truckline and Landline.

Product benefit:  Used inserting and retrieving flow control devices from side pocket mandrel  Used to lift gas equipment 

Capital item and requirement is generated year-on-year due to wear and tear of units and replacing of old units

Company overview

Fortifying Industry Position through a Comprehensive Product Offering

GAS LIFT EQUIPMENT

Product function: Generally fitted on a mandrel installed in production tubing, gas lifting equipment aid in lifting gas utilising artificial method. It is installed as a part of tubing string. Gas lift equipment consists of gas lift mandrels and flow control devices. It also includes conventional mandrels and side pocket mandrels, whereas flow control devices include gas lift valve, orifice valve and dummy valves.

Product benefit:  Used in artificial lifting of oil when natural pressure of gas pushing oil up on surface is less  Utilises this artificial method, whereby a pressurized gas, produced by a nearby well, is

injected continuously or intermittently into the production tubing to lift fluids Consumable item and requirement is generated on year-on-year basis



Company overview

Fortifying Industry Position through a Comprehensive Product Offering

Product function: Stabilizer is one of the components of drill string elements, generally placed near bit or at the top of the drill string. In the drill string assembly, the drill bit is the lowest component used to drill the well hole. The function of the stabiliser is to smoothen the hole made by drill bit. UDT offers two types of stabilizers – integral blade stabilizer and replaceable sleeve stabilizer, with different hard facing options to suit different drilling conditions and surfaces.

STABILISER

Product benefit:  Help maintain drilling trajectory whether drilling straight, horizontal, or directional wells 

Consumable and requirement is generated year-on-year

Company Overview

API Quality Licenses related to products

Engaged in responsible and eco-friendly manufacturing practices and enhancing workplace safety

Quality Certifications -  5 Product licenses (API 19G1, API 19G2, API 5CT,

API 7-1 & API 5L)

Company Overview

Key Certifications

Engaged in responsible and eco-friendly manufacturing practices and enhancing workplace safety

Quality Certifications -  ISO 9001:2008  ISO 14001:2015  OHSAS 18001:2007

Company Overview

Endorsed by Indian Marquee Brands

Enduring and deep engagement with Indian renowned Oil Companies

Company Overview

Endorsed by Global Marquee Brands

Enduring relationships and deep engagement with globally-renowned Oil Companies

Competitive Advantages

Competitive Advantages - Propelling Growth

Our Value Proposition

#Yearly requirement

the requirement of our As products are based on the number of wells, it results in regular requirement from Oil exploration and production companies every year for new wells and also for existing wells.

#Growing overseas opportunity We are aggressively scouting for opportunities in the international market, since the collaboration with the US company ended in October 2019, which restricted us to enter the overseas market.

#Competitive pricing

#Continuous research

Continuous research & development enhances our quality of existing products and new product lines which increases business opportunities.

Our products are cheaper by 15% to 25% vis-à-vis those of overseas players. We have been successful in past to win against them in ICB tenders in India and know the pricing mechanism. This is primarily owing to cheap labour, lower overhead cost and being a part of the MSME sector.

Competitive Advantages - Propelling Growth

High-Entry Barriers First Mover Advantage – Our Key Market Edge

• Setting up a new manufacturing facility, getting API certificates, arranging site visits by officials, placing trial orders and to get successful run of products is a definite pre-requisite for a new player to foray into the market.

• These factors result in high-entry barriers and make it extremely time-consuming, tedious and difficult for any new company or player to engage in manufacturing of these Hi-Tech products.

• Products being highly critical in nature, it requires 5-7 years for

approval to become a supplier to Oil PSUs.

United Drilling Tools has experienced a long learning curve in an industry with stringent eligibility criteria and limited competition.

Competitive Advantages - Propelling Growth

R & D – A Key Area of Focus with Maximising the Technology Quotient

R&D, Precision Engineering and Patented Product is a key focus area for United Drilling Tools Continuous thrust on improving technology and expanding offerings We are a modern, technology-driven drilling equipment and tools manufacturing company.

 Backed by a prudent team of engineers and quality control team, we leverage our technology prowess and R&D capabilities to branch into the manufacturing of different types of drilling tools, while modernising the existing product line.

 Technology is at the centre of our manufacturing, while being driven by continuous

innovation and prudent diversification.

 We follow technology-focussed manufacturing, with a constant focus on getting the best technologically advanced operational facilities, equipped with state-of-the- art technology and equipment.

 Our sustained investments in technology and R&D enables the introduction of new products, such as UDT Swift and UDT Lynx Connector, Side Pocket Mandrel and Wire line GLV.

The Company has technology patents for Connectors and Winches in India and has applied for patents in international markets as well.

Competitive Advantages - Propelling Growth

Our Business Model  Key revenue streams (product mix)  What’s driving margins

19.00%

3.00%

10.00%

What’s driving profitability? 1. Higher-margin products

Casing Pipes

Wireline Winches

22-23%

24-26%

Increasing Profit Margins -

From 9 % in 2014 to 25-30%

currently approx.

68.00%

2. Domain expertise

Casing Pipe & Connectors

Gas Lifting Valves & Mandrels

Stabilisers

Wireline Winches

Note: This is a broad approximate sales mix, not specific to any year

The Company’s Chairman & Managing Director, Pramod Kumar Gupta, has completed his Master’s degree in Industrial Engineers from United States and has a rich experience of 35 years in Oil Drilling equipment, which includes 8 years of rigorous experience in the United States.

Market Opportunity

Market Opportunity

Increasing Production and Growing Demand of Crude Oil & Gas in India

India is the 3rd Largest Energy Consumer globally

India produces only 17% of its total requirement for Crude Oil & Gas

Demand for Energy to rise 3-fold by 2035 to 1,516 million tonnes

Indian Government promoting Oil Extraction

Serving India's growing demand for oil

Investment of Rs 25 billion expected in exploration and production by 2022

Market Opportunity

Recent decisions from Oil Ministry – Boosting the Oil & Gas Industry

Oil Drilling Oil drilling equipment and tools to require 50% local content in first year, 60% in next two years and 70% in the next two years for getting purchase preference.

Local Content Preference

State-run firms to implement policy where participation of local companies increases across the value chain and Government reserved Tenders of up to Rs 200 Crores for Indian companies. .

Purchase Preference

Manufacturers meeting local content targets with quoted price will get purchase preference from 15% to 20%

Specialised Services For specialised drilling, required local content pegged at 10% for the first year, 15% in next two years and 20% in the next two years.

Market Opportunity Production of Crude Oil & Gas Worldwide

 A total of 115700 no. of wells amounting to appx 54 Bn USD to be drilled in the next 2-3 years with an estimation of 10% increase per year These are proposed mainly for drilling in next 2-3 years in the countries like USA, MIDDLE EAST, SOUTH AMERICA, SOUTH EAST ASIA AND AFRICA. (Source - Rystad Energy Journal, dated 23.03.2021)

Global Market Size of Our High Tech Products :-



Casing Pipes and Connectors – Rs 5,000 crore approx

 Winches – Rs 2,000 crore approx

 Gas Lift Valves – Rs 1,000 crore approx



Stabilisers – Rs 1,000 crore approx

0.155082695214781402.631.37107.534.420.0145000.67SOUTH AMERICAPRODUCTION OF ITEMSCRUDE PRODUCTION(In Million Barrels) NATURAL GAS PRODUCTION (In Million Cubic Ft.)Total Number of Active Rigs11.323.89SUB CONTINENT USAMIDDLE EASTCENTRAL ASIASOUTH EAST ASIANORTH AFRICAFuture Business Strategies

Future Business Strategies

Steadily marching towards a sustainable tomorrow

India Business

Strategy

 Diversifying product range 

Changing sale of product mix

Outcome

FY2023 Projections  Revenues to expand by 30% to 40%

 Growing order book by increasing global outreach

 Confirmed orders of Rs 100 Cr. in hand 

Submitted bids for Rs 300 Cr.; Anticipating strong conversion of these bids into orders to an extent of nearly 50 % to 60% .



Significant ability to scale higher

 Capacity utilisation at 50-60% presents high opportunity to ramp up manufacturing

Strategic Growth Enablers to strengthen India Presence

Increasing wallet share with customers

Expanding capacities

Focusing on new technologies

Future Business Strategies

Key Priorities to strengthen Global Presence

Rs 9,000 Crore Global Market Size from countries like Middle East, United States, South America and South East Asia

Global Industry expected to grow at 8-10% CAGR over the next 3-5 years

new Added customers such as Baker Hughes, Halliburton, Schlumberger, Afamia and Tatveer the F.Y. 2021-22.

Group in

Approved Vendor Status with major Oil Field Drilling Companies and Oil Service Providers - Cairn India, Focus Energy, Quippo Oil & Gas, Baker Hughes, Hallibutron, Schlumberger, Superior Energy, Qatar Petroleum and HOEC

Hired Marketing Representatives in Dubai, Vietnam, UAE, Oman, United States and Indonesia

Future Business Strategies

Steadily marching towards a sustainable tomorrow

International Business

Strategic Growth Enablers to strengthen Global Presence

Increasing registrations in international markets

Adding footprint in South East Asia, Middle East and Africa

Scaling capacities of all product lines

Future Business Strategies Propelling Growth Joint Ventures and Technical Collaborations

Aiming at strategic acquisition of companies engaged in manufacturing of inputs to:

Increase product range via new product developments or merger and acquisitions

Enhance technology and R & D department to match our products with international quality

Reduce cost of production

Enhance revenue and profit margin

Future Business Strategies

A Perfect Investment Case

Business perspective:  Delivered industry leading performance by executing long-term growth strategy  Widened portfolio from one principal product in 1992 to 5 key product lines and 20 sub-products  Expanded international presence to sustain growth momentum   Having patents for Connectors and Winches in India and in process of applying in various other countries.  Quality certifications like API & ISO which are in continuation from the past 20 years  Only Indian manufacturer with record of supply of high-margin of Wireline winches, stabilizers, and Large

Strong governance structure with regular audits and safety checks

OD Multi-start Connectors for the last 35 years

Strategic and prudent deployment of funds leading to healthy ROCE

Financial perspective:   Doubled capacity out of own investment funds  A Debt-free company; Generated Rs 143.52 crore in Cash Profit over the last five years  External rating (2021) - A3+ for short term and BBB for Long Term  Paying Dividends on an annual basis for the past several years

THANK YOU

For More Information, Please Contact:

Mr. Mukesh Mehta

Chief Financial Officer

139A, Antriksh Bhawan, First floor, 22 Kasturba Gandhi Marg, New Delhi – 110 001.

Telephone: +91-120-4221777; Fax: +91-120-2462675

E-Mail ID: compsect@udtltd.com

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