SALASARNSE9 August 2022

Salasar Techno Engineering Limited has informed the Exchange about Investor Presentation

Salasar Techno Engineering Limited

Date: August 09th 2022

Listing Department, The National Stock Exchange of India, Exchange Plaza, C-1 Bandra Krla Complex, Bandra (E), Mumbai- 400051, NSE Symbol: SALASAR

Department of Corporate Services, The BSE Limited, Phiroze Jeejeebhoy Towers, Dalal Street, Mumbai- 400001, BSE Scrip Code: 540642

Sub: - Investor Presentation

Dear Sir/Madam

Please find attached herewith Investor Presentation of the Company w.r.t. Financial Results of the Company for Q1 FY23, for your record and further dissemination.

Kindly take the same on record. Thanking You,

Thanking you,

Yours faithfully For Salasar Techno Engineering limited,

Rahul Rastogi Company Secretary & Compliance Officer ACS No. 30320

CIN No. - L23201DL2001PLC174076

Unit 1- Khasra 265, 281-283, Parsaun-Dasna, Jindal Nagar, Distt. Hapur-201313 Unit 2- Khasra 1184, 1185, Khera, Pilkhuwa, Tehsil Dhaulana, Distt. Hapur-245304

Unit 3- Khasra 686/6, Khera, Pilkhuwa, Tehsil Dhaulana, Distt. Hapur-245304 Office- KL-46, Kavi Nagar, Ghaziabad-201002 Regd. Office- E-20, South Extension 1, New Delhi-110049

+91 8938802180, 7351991000 +91 120 6546670 Fax: +91 11 45823834

towers@salasartechno.com marketing@salasartechno.com

www.salasartechno.com

SALASAR TECHNO ENGINEERING LIMITED

INVESTOR PRESENTATION – Q1 FY23

August 2022

A S e a s o n e d , E x p e r t , D e p e n d a b l e a n d A g i l e I n f r a s t r u c t u r e E n a b l e r

DISCLAIMER

This presentation and the following discussion may contain “forward looking statements” by Salasar Techno Engineering Limited (“Salasar” or the company) that are not historical in nature. These forward looking statements, which may include statements relating to future results of operations, financial condition, business prospects, plans and objectives, are based on the current beliefs, assumptions, expectations, estimates, and projections of the management of Salasar about the business, industry and markets in which Salasar operates.

These statements are not guarantees of future performance, and are subject to known and unknown risks, uncertainties, and other factors, some of which are beyond Salasar’s control and difficult to predict, that could cause actual results, performance or achievements to differ materially from those in the forward looking statements. Such statements are not, and should not be construed, as a representation as to future performance or achievements of Salasar.

In particular, such statements should not be regarded as a projection of future performance of Salasar. It should be noted that the actual performance or achievements of Salasar may vary significantly from such statements.

DISCUSSION SUMMARY

01 Business Overview

02 Q1 FY23 Highlights

03 Competitive Advantage

04 Financial Summary

BUSINESS OVERVIEW Broadening Horizons For Sustainable Growth

Salasar At Glance

Salasar is one of the leading companies in India, providing customized steel structures and EPC solutions to diverse range of industries including telecom, power, railways and others

1,15,000 MT Annual Production Capacity

50,000+ Telecom Tower Supplies

600+ Clients and customers served

400+ TKM Railway Track Kilometre

568+ KM Power Transmission Lines

25+ Countries Exported

SALASAR JOURNEY

Started as tower manufacturing company; currently provides whole range of steel infrastructure solutions to its clients

Incorporated In the year 2006, Salasar started out as a tower

manufacturer company with the vision of transforming the industry

by providing multiple solutions under one roof.

Salasar sought to fill this gap by aspiring to become a one-stop

shop for India’s telecom giants by carrying out engineering,

designing, procurement, fabrication, galvanization and EPC under

one roof.

Owing to its persistence, expertise, and capability to work

wonders with steel, today Salasar is no longer confined to towers

and have expanded its range of products and services to encompass

75%

all the infrastructural needs of a rapidly developing nation.

Revenue by Segments – FY22 *

18%

77%

Manufacturing - Steel Structures and Others EPC - Power Transmission

EPC - Railway Electrification

Revenue by Segments – Q1FY23 *

17%

Manufacturing - Steel Structures and Others EPC - Power Transmission

EPC - Railway Electrification

* Based on standalone numbers

STATE-OF-THE-ART MANUFACTURING FACILITIES

Strong base of operations with technology-driven facilities for efficient steel structure manufacturing and galvanizing

Unit – I

Unit – II

Unit - III

Jindal Nagar, Distt. Hapur, Uttar Pradesh

Khera, Distt. Hapur, Uttar Pradesh

Plant

Location

Tower/structure manufacturing and Galvanization (GI)

Heavy Steel Structure Division (HSD) (MT)

Total Area (Sq. yards)

Covered Area (Sq.m.)

Uncovered Area (Sq.m)

Machinery  CNC Machines  Industrial Machinery  Hydra & Cranes

41,442

19,455

21,987

Overall - 1,00,000 MT

18,811

5,833

12,978

Having robust order book; plant is HSD plant at Unit- III: fully booked for next one year for manufacturing rail/road bridge pre-fabricated building structures, etc.

structures,

Plant

15,000 MT*

81,526

34,327

47,199

Raw Materials  Steel Shape and Section  Zinc (for Galvanizing)  Nuts and Bolts

* Expected 4-5x Revenue at Full Capacity

STRONG & EXPERIENCED LEADERSHIP TEAM

Board of Directors

Mr. Alok Kumar B.Sc from Punjab University, Chandigarh

• Wide experience spanning over 4

decades in trading, manufacturing and fabrication of iron & steel

• Driving force behind groups

commitment of timely delivery with superior quality

Mr. Shalabh Agarwal Director

Ms. Tripti Gupta Director

Ms. Garima Dhamija Non-Executive Independent Director

Mr. Mukesh Kumar Garg Non-Executive Independent Director

Mr. Sanjay Chandak Non-Executive Independent Director

Mr. Vijay Kr jain Non-Executive Independent Director

Chairman & Managing Director

Mr. Shashank Agarwal B.E. (Mech.) from MIT, Manipal

• First generation entrepreneur

with 25+ years of experience

• Involved in every aspects of

business and has been the driving force in creating the brand and image of Salasar

Joint Managing Director

Key Management

Mr. Pramod Kumar Kala Chief Financial Officer

Q1 FY23 HIGHLIGHTS Delivering Consistent Performance

MANAGEMENT COMMENT

Mr Shashank Agarwal, Joint Managing Director, Salasar Techno Engineering Ltd:

“The performance for the quarter was very encouraging as we have

reported 59% revenue growth YoY mainly driven by our steel structure

business. However, the profitability was kept under check due to the

increase in raw material cost. As the government is focusing on

building a strong infrastructure, we anticipate the momentum to

continue with better margins as the key raw material prices are

softening up and higher contribution from export business. In the

telecom space, with the bidding process completed under 5G spectrum,

we expect to gain some good orders

from the leading telecom

operators, as we hold a leading share of ~50% under telecom tower

solutions.”

CONSOLIDATED P&L STATEMENT – Q1 FY23

Particulars (INR Cr)

Q1 FY23

Q1 FY22

Net Sales

Cost of Goods Sold

Employee Cost

Other Indirect Expenses

Total Expenditure

EBITDA

EBITDA Margin%

Other Income

Interest

Depreciation

Profit Before Tax

Provision for Tax

Profit After Tax

PAT Margin%

210.7

176.2

10.1

7.5

193.8

16.9

8.0%

0.6

5.8

1.9

9.8

2.5

7.3

3.5%

132.8

102.2

8.3

7.5

118.0

14.7

11.1%

2.1

4.7

1.8

10.3

3.0

7.3

5.5%

YoY

58.6%

72.4%

20.5%

0.8%

64.2%

14.6%

(309 bps)

(71.7%)

21.6%

6.1%

(4.5%)

(14.7%)

(0.4%)

Q4 FY22

212.3

175.3

10.0

11.0

196.2

16.0

7.6%

0.4

6.1

1.7

8.7

1.6

7.1

QoQ

(0.8%)

0.5%

1.0%

(31.4%)

(1.3%)

5.3%

46 bps

33.0%

(5.2%)

9.2%

13.3%

62.8%

2.6%

(206 bps)

3.4%

11 bps

ORDER BOOK POSITION

Particulars

Orders EPC outstanding as on 30th June 2022

Value

Rs. 809 crore

+ L-1 EPC orders for which LOI awaited

Rs. 89 crore

+ Manufacturing orders outstanding under new heavy steel structure plant as on 30th June 2022

Rs. 233 crore

+ Export order in hand

Rs. 62 crore

Total

Rs. 1,193 crore

•

In addition, the company normally has regular monthly orders of telecom towers of approx. Rs 30 to 35 Crores

GROWTH STRATEGY Unlocking Value, Delivering Results

GROWTH STRATEGY

Offering 360-degree solution to diverse industries; Adding innovative products regularly like camouflaged towers, monopoles, etc. to provide for the evolving infrastructural needs of the society

Expanding tower designs and leveraging on their tie-ups with Ramboll to provide value to the clients

Diverse client mix having strong reputation in their respective industries

Business backed up by the strong triggers in major industries including Telecommunication, Power and Railways and in Export division

Capacity expansion; Post that Salasar will have the largest GI plant in Asia; and it is also expanding presence in Southern & Eastern India through its new heavy steel structure capacities

OFFERING 360-DEGREE SOLUTIONS TO CLIENTS

Providing whole range of services including Engineering, Strengthening, Designing, Procurement, Fabrication, Galvanization and Repair & Maintenance services along with entire EPC works to its clients

Business Verticals

Telecommunication Power Renewables

Poles Smart City

Product Offering

Telecommunication Towers & monopoles Cell on wheels & Skid base Towers Transmission lines towers & Monopoles Substation Structures Railways Overhead Electrification Structures Solar Module Mounting Solution Solar Trees

Smart City Poles Poles & High Masts Camouflaging Solutions Mounts & Cable Trays Customized Galvanized & Non – Galvanized Structures Cold Formed Structures Wind Mill Towers

FORAY INTO FAST GROWING STEEL STRUCTURE DIVISION

New Heavy Steel Structure Division enables Salasar to cater to growing demand of high-end infrastructure for refineries, steel plants, power plants, rail and roadways

Bridges

Buildings

Heavy & Complex Structures

Categories:

 Rail or Road Over Bridges  Open Web Girders  Bow String Bridge  Pedestrian Bridge  Cable Stay Bridge

 High Rises  Stadiums  Warehouses  Airports & Railway Stations  Multilevel Car Parks  Hospitals

 Thermal Power Plants  Steel Plants  Petrochemical Plants  Cement Plants

COLLABORATION WITH RAMBOLL, DENMARK

Strong tie-up with Industry Leader “RAMBOLL” helping Salasar to deliver superior quality products as compared to its peers

Salasar has a long-standing technical tie-up with Ramboll

(Denmark) to manufacture lighter and lower costing tower

structures and high mast poles. Their designs reduce the cost

by 20% compared to conventional angular towers.

Ramboll Telecom is a world leader in designing telecom and

high mast Poles. With the experience of designing towers for

last sixty years, their designs are time tested and proven

for performance. With Ramboll’s continuous efforts towards

innovation,

quality,

multidisciplinary

engineering

and

widely

accepted

designs,

are

definite

that

will

ceaselessly

grow

and

offer

our

customers

with

superior

products and services.

SELECT MARQUEE CLIENTS

Salasar has a strong and diverse client base which has helped us establish ourselves in a leading position in the industry

Telecom Sector Telecom Sector

Power Sector

Others/ EPC

Approved vendor for Power Grid Corporation Ltd.

Qualified to bid for rural electrification projects

Qualified by CORE (Central Organization for Railway Electrification)

BACKED BY STRONG TRIGGERS IN MAJOR INDUSTRIES (1)

India is the second largest telecom market in the world with a subscriber base of

Yearly growth of towers and base stations (BTS) (‘000s)

1.17 billion

Tower

BTS

1,372

2,000

1,713

2,206

2,256

2,313

775

439

440

461

501

581

638

698

2015

2016

2017

2018

2019

2020

2021

Key Drivers



Increase in data consumption led by 4G, and the launch of 5G

Tower sharing (leading to increase in revenue of telecos)

Increasing tele-density in largely untapped rural market

Smart city opportunities

Source - Ministry of Communications, TAIPA, EY analysis 

Development of IoT for manufacturing and services sectors

•

Key Facts and Developments

Leading player in the Telecom Tower manufacturing segment with market share around 50%

The Company sees a lot of opportunities as telecom operators are working their way towards improving their connectivity. Demand for telecom towers in the next 10 years is going to be greater than that in the last 25 years. All the operators are expected to do capex.

As the rollout of 5G begins, the Company expects an exponential growth in demand for telecom towers

There are about ~6,00,000 towers in India at the moment, with about 8,00,000 points of connectivity. To have a seamless 5G experience across India, at least 10,00,000 more towers are needed and at least 15,00,000 points of connectivity are needed in the next 10 years

Long standing relationships with Telecom giants such as Bharti Infratel

American

Airtel,

Tower,

Indus,

Jio,

Host of product offerings in the segment which includes Towers, Monopoles, Smart City Solutions and Portable Towers

BACKED BY STRONG TRIGGERS IN MAJOR INDUSTRIES (2)

Increased Demand For Power Transmission Infrastructure Development

Supported By Strong Policy Support

Historical Generation and Transmission Investment

Key Facts and Developments

% Growth in Generation Capacity (MW)

% Growth in Transmission Capacity (ckt km)

48%

24%

30%

22%

26%

29%

51%

31%

64%

43%

22%

24%

FY'92-97

FY'97-02

FY'02-07

FY'07-12

FY'12-17

FY'17-22

Key Drivers



Expansion in industrial activity, growing urban & rural population

Increasing per-capita power usage & ambitious projects across the value chain

Highest ever coal production, increase of 74 mn tonnes in 2 years

 Source – CEA report and other industry sources

14,895 ckm of Transmission lines (220 kV and above) and 37,200MVA Transformation capacity has been added as on March 2022

•

Design and Construction of Power Transmission lines of 66kV, 132kV, 220kV & 400 kV

Design and Construction of Grid Sub Stations ranging 66kV, 132kV, 220kV & 400 kV

India’s electricity consumption can continue to grow at >5% on a low base

At a conservative avg. GDP growth rate of 5% over next decade power demand estimated to rise by 1.6x

As per the National Infrastructure Pipeline 2019-25, energy sector projects accounted for the highest share capital total out expenditure of INR 111 lakh crore

expected

(24%)

the

Estimated INR 6-8 trillion market opportunity in transmission till FY2029

ICRA expects an investment of INR 1.8 trillion (INR 1.8 lakh crore) over the five-year period from FY21 (financial power transmission segment at an all-India level, driven by evacuation infrastructure for RE projects

2020-21)

FY25

year

the

BACKED BY STRONG TRIGGERS IN MAJOR INDUSTRIES (3)

Government has an ambitious plan to secure infrastructure for 100%

electrification of the railway network by 2024

Growth of Railway Electrification (Route Km, RKM)

* 6,886 RKM already commissioned till Jan’21

29,201*

13,687

2,150

3,038

2004-09

2009-14

2014-19

2019-24 (Planned)

Budget Allocation for Railway Electrification (Rs Crore)

6,302

6,960

6,601

7,542

3,396

3,457

2,163

830

1,005

1,206

2012-13 2013-14 2014-15 2015-16 2016-17 2017-18 2018-19 2019-20 2020-21 2021-22

Source – indianrailways.gov.in

•

Key Facts and Developments

Government of India plans to fully electrify the balance 42% network till 2024

Close to 30 billion units of electricity shall be required for railway electrification on annual basis by 2024 leading excellent opportunities for IPPs of conventional power

Overhead line equipment suppliers to gain massive opportunities like conductors, transformers & insulators etc.

equipment

supply

for

the

Sub-station opportunities utilities

capacity for

enhance

transmission

leading

for distribution

EPC contractors shall have multitude of opportunity in terms of infrastructure creation for railway electrification

Opportunity for rolling stock companies shall be massive, electric locomotives shall gain pace

OEM's shall have greater opportunity coming their way in terms of equipment supplies & order

STRUCTURED PLANT EXPANSION TO CATER HIGH INDUSTRY DEMAND

Expanding product portfolio with optimal utilization of existing capacity

Location

Unit III, Khera, Distt. Hapur, Uttar Pradesh

Bhilai, Chhattisgarh

Facility

New Galvanization Plant

Heavy Steel Structure Division (HSD)– II

Annual Capacity

96,000 MT

Project Cost

Rs 50 Crore

25,000 MT

Rs 60 Crore

Status

Expected Commissioning – December 2022

Land Identified and contracted; Expected Commissioning – December 2022

•

Post commencement of new Galvanizing Facility, it will become the Largest steel galvanizing plant in Asia

* Post commissioning of new GI capacity, one of the existing GI plant would serve as a backup in case of an emergency and the new GI Plant will also enable Salasar to manufacture monopoles upto 3 Metre Diameter used in higher KVA transmission lines which fetches better margins

HSD plant –II (Bhilai Chhattisgarh): Tapping Southern & Eastern India via setting up steel fabrication unit at Bhilai, Chhattisgarh

* Expected 4-5x Revenue at Full Capacity

FINANCIAL SUMMARY Gaining Strengths

KEY FINANCIAL HIGHLIGHTS

Sales Volume (MT)

74,993

55,657

58,619

58,776

51,829

495

Revenue (Rs Crore)

655

526

597

719

FY18

FY19

FY20

FY21

FY22

FY18

FY19

FY20

FY21

FY22

EBITDA (Rs Crore) / EBITDA Margin (%)

PAT (Rs Crore) / PAT Margin (%)

10.9%

11.2%

9.8%

9.6%

12%

10%

6.0%

5.1%

5.0%

4.4%

4.3%

FY18

FY19

FY20

FY21

FY22

FY18

FY19

FY20

FY21

FY22

KEY FINANCIAL RATIOS

ROCE (%)

ROE (%)

23%

15%

19%

16%

23%

19%

11%

12%

11%

FY18

FY19

FY20

FY21

FY22

FY18

FY19

FY20

FY21

FY22

Debt to Equity (x)

0.8

0.9

0.7

RoCE – EBIT/ Average Capital Employed, ROE – Profit/Average Shareholders Funds, D/E – Average Debt/ Average Equity

FY18

FY19

FY20

FY21

FY22

CONSOLIDATED P&L STATEMENT

Particulars (INR Cr)

Domestic

Exports

Net Sales

Cost of Goods Sold

Employee Cost

Other Indirect Expenses

Total Expenditure

EBITDA

EBITDA Margin%

Other Income

Interest

Depreciation

Profit Before Tax

Provision for Tax

Profit After Tax

PAT Margin%

FY22

643.3

75.6

718.9

570.8

40.0

39.1

649.9

68.9

9.6%

2.2

21.8

7.1

42.3

10.8

31.5

4.4%

FY21

561.1

35.5

596.6

473.0

30.9

35.7

539.6

57.0

9.6%

10.2

17.6

5.6

43.9

14.0

29.9

5.0%

FY20

498.5

27.8

526.3

415.1

31.0

28.3

474.5

51.8

9.8%

1.7

20.6

5.0

27.9

5.6

22.4

4.3%

CONSOLIDATED BALANCE SHEET

Particulars (INR Cr)

Mar-22

Mar-21

Mar-20

Particulars (INR Cr)

Mar-22

Mar-21

Mar-20

EQUITY & LIABILITY

Share Capital

Other Equity

Non- Controlling Interest

Shareholder's Funds

Non-Current Liabilities:

Secured Loans

Deferred Tax Assets / Liabilities

Other Long Term Liabilities

Long Term Provisions

Total Non-Current Liabilities

Current Liabilities:

Trade Payables

Other Current Liabilities

28.6

253.4

0.3

282.3

43.3

5.0

0.1

3.3

51.8

50.8

92.1

Short Term Borrowings

205.2

Short Term Provisions

Other Financial Liabilities Current Tax Liabilities (Net) Total Current Liabilities

0.3

0.0

14.3

238.4

0.3

253.0

33.9

5.0

0.1

3.1

42.1

31.3

60.7

162.6

0.4

1.8

1.5

Total Liabilities

682.6

553.4

348.5

258.3

ASSETS

Non-Current Assets:

Net Block

124.9

112.4

Capital Work in Progress

Intangible Assets

Other Non Current Assets

Total Non-Current Assets

Current Assets:

Inventories

Current Investments

Sundry Debtors

Cash and Bank

Other Financial Assets

Other Current Assets

Current Tax assets (Net)

Total Current Assets

Total Assets

5.5

1.3

33.6

165.3

152.4

0.1

292.7

10.5

25.3

35.2

1.1

517.3

682.6

0.1

0.3

15.4

128.1

120.0

10.2

240.1

5.2

14.7

35.1

425.3

553.4

13.3

193.9

207.1

5.2

3.1

0.1

2.3

10.7

21.4

54.2

159.1

0.3

0.6

235.7

453.5

91.1

0.3

14.2

105.6

93.5

1.4

214.1

10.6

11.8

16.3

1.6

349.3

453.5

Thank You

Salasar Techno Engineering

Ernst & Young LLP

Pramod Kala, CFO pramod.kala@salasartechno.com

Vikash Verma I Rohit Anand Vikash.verma1@in.ey.com I Rohit.anand4@in.ey.com

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