Venus Pipes & Tubes Limited has informed the Exchange about Investor Presentation
Date: 09/11/2022
To,
Listing Department Department of Corporate Services National Stock Exchange of India Limited BSE Limited Exchange Plaza, C-1, G Block, Phiroze Jeejeebhoy Towers, Bandra Kurla Complex, Dalal Street, Bandra (East), Mumbai – 400 051 Mumbai – 400 001 Symbol: VENUSPIPES Scrip Code: 543528
ISIN- INE0JA001018
Dear Sir/Madam,
Sub: Q2 FY23 Investor Presentation
With reference to above captioned subject, please find attached Q2 FY23 Investor Presentation.
The Presentation will be uploaded on the company’s website at www.venuspipes.com
Request you to kindly take the same on record.
Thanking You,
For Venus Pipes & Tubes Limited
CS Pavan Kumar Jain Company Secretary and Compliance Officer Membership No. A66752
VENUS PIPES & TUBES LIMITED
Investor Presentation November 2022
Safe Harbour
This presentation and the accompanying slides (the “Presentation”), which have been prepared by Venus Pipes & Tubes 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.
All Maps used in the presentation are not to scale. All data, information, and maps are provided "as is" without warranty or any representation of accuracy, timeliness or completeness
2
Q2 & H1 FY23 FINANCIAL & OPERATIONAL HIGHLIGHTS
Update for Q2FY23
Highlights
Capex: Cost & Source of funding
• Placed order for procuring bigger diameter Tube Mill to manufacture stainless
steel welded pipes
• The new welded pipe production line will increase the existing welded pipes range to maximum 20” (508mm) diameter and thickness up to SCH80s with a capacity of 700 mt per month
• Proposed capex of Rs. 50 Crores which will include tube mill along with entire finishing infrastructure i.e. Annealing furnace, Pickling and Passivation setup, high end testing etc. to support the tube mill process
• Mentioned Capex will be funded through a mix of Debt (Term loan) & internal
accruals
• Venus will be among the very few manufacturers in India and the world to
have tube mill capacity of manufacturing this size
Demand Scenario & Rationale
• The company proposed to start the commercial production by end of Q1FY24
Capacity post expansion
• Keeping the current demand for our products in the market and being the only manufacturer in India to manufacture Welded pipe from tube mill up to 20 inch will give an edge and will help to capture more market in this segment
• Robust demand envisaged going forward for our products across End User
• Welded pipe current capacity of the company is 700 MT currently (upto 8 inch)
Industries
•
In addition to above
o 600 MT capacity increase from IPO proceeds (upto 48 inch)
• On the back of, Revival of capex cycle in India, higher demand for our products
is anticipated
o 700 MT capacity expansion from the proposed Tube Mill (upto 20 inch)
Financial Highlights
• Taking the Total Capacity for welded pipes to ~2,000 MT.
• Apart from this, the additional 500 MT (on existing capacity of 300 MT) for
seamless pipes is on track.
• So, Total Welded (2000 MT/month) and Seamless (800 MT/month) capacity
post planned capex will be 2800 MT/month.
• Company level Gross Margin & EBIDTA expected
During the quarter, we became the first Indian company to receive Bureau of Indian Standards (BIS) approval for stainless steel seamless and welded pipes and tubes.
4
Geographical Revenue Split – Q2 & H1FY23
Direct Domestic Sales (in Rs cr)
Export Sales (in Rs cr)
+138%
148.1
+136%
85.3
36.1
62.2
+23%
15.7
12.8
Exports impacted due to geo political reasons.
-80%
8.0
1.6
Q2FY22
Q2FY23
H1FY22
H1FY23
Q2FY22
Q2FY23
H1FY22
H1FY23
40.4%
50.7% Q2FY22
8.9%
31.3%
Q2FY23
1.3%
67.5%
36.5%
H1FY22
56.0%
7.5%
31.8%
6.5%
H1FY23
61.7%
Direct Domestic
Export
Stockist/Traders
✓ Direct Domestic sales (to brands) have shown 136% growth YoY in Q2FY23.
due
✓ A slowdown in exports in the impact by quarter international inflationary environment and Europe’s energy crisis.
to
✓ The share of stockist sales have reduced by 20% on half yearly basis.
✓ This aligns with our strategy of reducing the share of this low margin sales channel.
✓ When comparing H1FY23 with H1FY22, export share minimally reduced – from 7.5% in H1FY22 to 6.5% in H1FY23.
✓ Hence impact is due to external
factors and is not long-term.
5
State wise Revenue Split – Q2 & H1FY23
8.4%
4.3%
23.6%
28.7%
7.5%
5.4%
22.7%
35.2%
Q2FY22
53.3%
34.0%
Q2FY23
12.9%
H1FY22
31.0%
56.1%
9.5%
H1FY23
34.8%
32.6%
Gujarat
Maharashtra
Telengana
Others
✓ Following the strategy to diversify across states, our share from top revenue generating state of Maharashtra and Telangana has increased significantly
with the latter’s share being doubled.
✓ While until last year, we were selling majority in Gujarat, now our focus is shifting to other states as well. This is with the motive to create Venus a known
brand and setting up relations with different companies across the country.
✓ At the same time, the share of other states is up by 3x from last year, giving us bigger market to play and hence less risk.
6
Product Revenue Split – Q2 & H1FY23
Seamless Sales (in Rs cr)
Welded Sales (in Rs cr)
+73%
87.6
+39%
136.7
+29%
42.8
33.3
50.7
+47%
98.7
76.4
52.1
Q2FY22
Q2FY23
H1FY22
H1FY23
Q2FY22
Q2FY23
H1FY22
H1FY23
4.6%
37.2%
Q2FY22
5.7%
33.9%
Q2FY23
58.2%
60.4%
12.4%
29.7%
H1FY22
57.9%
6.5%
36.5%
H1FY23
57.0%
✓ Sales for seamless pipes up by 73% in H1FY23 from H1 last year.
✓ This
segment has 2-3% more margins than other categories and we aim for it to contribute the most to our revenue.
✓ Welded Pipes sale also showed growth in one year by 39% on half- yearly basis and 47% from Q2FY22 to Q2FY23.
✓ Share of seamless in total revenue increased and welded which forms at majority elevated levels.
remained
share,
Seamless
Welded
Others
7
Key Financials – Q2FY23
Revenue (in ₹ Cr)
EBITDA (in ₹ Cr)
PAT (in ₹ Cr)
+41%
240.0
+41%
170.5
126.4
89.5
+16%
15.5
13.4
+32%
30.0
22.7
+26%
19.5
15.5
+17%
10.3
8.8
Q2FY22
Q2FY23
H1FY22
H1FY23
Q2FY22 Q2FY23
H1FY22
H1FY23
Q2FY22
Q2FY23
H1FY22
H1FY23
Gross Profit Margin
+75 bps
+219 bps
EBITDA Margin
PAT Margin
19.1%
19.9%
17.9%
20.1%
15.0%
12.3%
13.3%
12.5%
-270 bps
- 81 bps
-168 bps
-96 bps
9.8%
9.1%
8.1%
8.1%
Q2FY22 Q2FY23
H1FY22
H1FY23
Q2FY22
Q2FY23
H1FY22
H1FY23
Q2FY22 Q2FY23
H1FY22
H1FY23
✓ Revenue for Q2FY23 stood at Rs. 126 crs as compared to Rs. 89.5 crs in Q2FY22, a growth of 41%
✓ Revenue for H1FY23 stood at Rs. 240 crs as compared to Rs. 170.5 crs in H1FY22, a growth of 41%
✓ EBIDTA for Q2FY23 stood at Rs. 15.5 crs, an increase of 16% on Y-o-Y basis. The same for H1 grew by 32%.
✓ PAT for the quarter was up by 17% YoY and grew 26% on half- yearly basis.
8
Profit & Loss – Q2 & H1FY23
Profit and Loss (in ₹ Cr)
Q2FY23
Q2FY22
Revenue from Operations
Cost of Goods Sold
Gross Profit
Gross Profit Margins (%)
Employee Cost
Other Expenses
EBITDA
EBITDA Margins (%)
Depreciation
Other Income
EBIT
Finance Cost
Profit before Tax
Tax
Profit After Tax
PAT Margins (%)
126.4
101.3
25.1
19.9%
2.3
7.3
15.5
12.3%
0.5
1.0
16.0
2.1
13.9
3.6
10.3
8.1%
89.5
72.4
17.1
19.1%
1.40
2.30
13.4
15.0%
0.4
0.1
13.1
1.4
11.7
2.9
8.8
9.8%
YoY
41.2%
46.8%
15.7%
22.1%
18.8%
17.0%
Q1FY23
113.6
90.5
23.1
20.3%
2.3
6.4
14.4
12.7%
0.4
0.6
14.6
2.5
12.1
3.0
9.1
8.0%
QoQ
11.3%
8.7%
7.6%
9.6%
14.9%
13.2%
H1FY23
H1FY22
240.0
191.8
48.2
20.1%
4.6
13.6
30.0
12.5%
0.8
1.5
30.7
4.6
26.1
6.6
19.5
8.1%
170.5
140.0
30.5
17.9%
2.5
5.3
22.7
13.3%
0.7
1.3
23.3
2.6
20.7
5.2
15.5
9.1%
YoY
40.8%
58.0%
32.2%
31.8%
26.1%
25.8%
9
Balance Sheet
Assets (in ₹ Cr)
Non - Current Assets
Property Plant & Equipments
CWIP
Intangible assets
Other Financial Assets
Other Non - Current Assets (Net)
Current Assets
Inventories
Financial Assets
(i)Investments
(ii)Trade receivables
(ii)Cash and cash equivalents
(iii)Bank balances other than cash and cash equivalents
Other Financial Assets
Other Current Assets
Total Assets
Sep-22
March-22
Equity & Liabilities (in ₹ Cr)
63.7
31.8
28.9
0.2
2.8
353.1
137.9
2.1
68.3
4.7
64.9
0.1
75.1
416.8
30.4
21.3
7.4
0.1
1.6
217.5
93.5
1.4
73.5
-
7.3
0.7
41.1
247.9
Total Equity
Share Capital
Reserves & Surplus
Non-Current Liabilities
Financial Liabilities
(i) Borrowings
(ii) Lease Liabilities
Provisions
Deferred Tax Liabilities
Current Liabilities
Financial Liabilities
(i) Borrowings
(ii) Trade Payables
(iii) Lease
(iii) Other Financial Liabilities
Other Current Liabilities
Current tax liabilities (net)
Provisions Total Equity & Liabilities
Sep-22
298.5
20.3
278.2
6.7
5.1
0.2
0.4
1.0
March-22
128.5
15.2
113.3
15.5
14.3
0.2
0.3
0.7
111.6
103.9
47.7
50.7
0.1
0.5
5.6
7.0
0.0
49.4
38.5
0.1
0.2
5.5
10.2
0.0
416.8
247.9
10
Cashflow Statement
Particulars (in ₹ Cr)
Net Profit Before Tax
Adjustments for: Non - Cash Items / Other Investment or Financial Items
Operating profit before working capital changes
Changes in working capital
Cash generated from Operations
Direct taxes paid (net of refund)
Net Cash from Operating Activities
Net Cash from Investing Activities
Net Cash from Financing Activities
Net Decrease in Cash and Cash equivalents
Add: Cash & Cash equivalents at the beginning of the period
Cash & Cash equivalents at the end of the period
H1 FY23
26.1
3.2
29.3
(32.5)
(3.2)
(9.6)
(12.8)
31.6
(14.2)
4.6
0.0
4.6
FY22
42.9
5.6
48.5
(97.4)
(49.0)
(11.0)
(60.0)
34.1
25.8
(0.1)
0.1
0.0
11
Management Commentary
Arun Kothari Managing Director
Commenting on the Q2 & H1FY23 performance of the company Mr. Arun Kothari, Managing Director for Venus Pipes & Tubes Limited Said,
“Despite challenging external environment, we are proud to report robust growth in this quarter. Our revenues for Q2FY23 have grown by 41% on Y-o-Y basis.
Not only our product categories have shown robust growth w.r.t sales & volumes, but we have also taken significant step towards achieving our aim of diversifying geographically and across our sales channel. Our sales to direct domestic consumers have increased by 136% on a Y-o-Y basis and now contributes ~62% of total revenues for H1FY23.
Exports sales were impacted during the quarter on account of geo-political tensions and inflationary environment, especially in the European market. We believe that this is temporary in nature and exports sales should start picking up post FY23.
Even after such volatile environment we are progressing with high spirits towards our goal of reaching out to as many sectors as we can and maintaining diversity across our products, clients and geographies.
With revival of capex cycle in India leading to robust demand for our products across End User Industries, the planned capacity expansion will give us an edge and will help to capture more market share.”
12
Venus Pipes & Tubes Limited
105%
PAT CAGR from FY19 to FY22
Making ourselves as first reference and preference in stainless steel pipes and tubes manufacturer
Vision
Diversified
End-user Industries
Mission
To provide quality and flawless for dealing with customer / supplier and distributors.
service
58
Clientele base out of Fortune 500 Companies in India
Exports to more than
20+ Countries
Total installed capacity of 12,000 MT p.a. & capacity expansion plans up to 33,600 MT p.a. along with Backward Integration of 9,600 MT p.a.
Working with the highest ethical in all standards aspects of our activities
Core Values
Manufacturer and Exporter of Stainless Steel Tubes & Pipes in India
13
Product Portfolio & Applications
Products manufactured are as per the International Standards to cater both Domestic & International markets
Stainless Steel High Precision and Heat Exchanger Tubes
Stainless Steel Hydraulic and Instrumentation Tubes
Stainless Steel Seamless Pipes
Stainless Steel Welded Pipes
Stainless Steel Box Pipes
• Heat Exchangers • Pressure Vessels • Chemical and Fertilizer
• Marine Equipment’s • Refinery and Petrochemical • Process Industry
• Dairy/Pharmaceutical
industry
• Nuclear Power Generation • Automotive
• Aerospace
• Nuclear & Thermal Power
generation • Oil and Gas • Process Industries
• Chemical and Fertilizer • Nuclear Power • Food & Beverage Processing
• Automotive • Aerospace • Medical and Pharmaceutical
Applications
• Onshore and Offshore Oil and Gas Production, Exploration and Transport
•
(OCTG – Oil Country Tubular Goods)
• Chemical & Petrochemical
• Energy and Power • Mechanical and Plant
Engineering
• Marine Equipment’s
• Pulp & Paper • Pharmaceutical Industry
• Chemical & Petrochemical • Gas Industry • Power Generation
• Mechanical and Plant
Engineering
• Marine Equipment’s • Pulp & Paper
• Pharmaceutical Industry
• Multiple industries especially
for industries having structural fittings like • Factories • Warehouses
• Temporary structures
14
Multiple End User Industry
e s U d n E d e
i f i s r e v D
i
Chemical
Engineering
Fertilisers
Pharmaceutical
Power
Food Processing
Paper
Oil & Gas
Aerospace
15
State of the Art Infrastructure…
Strategically located Manufacturing facility at Dhaneti (Kutch) within proximity of Kandla & Mudra ports for enabling imports and exports
Facility on a land admeasuring 82,962 Sq. Mt.
Surplus land of 60,562 Sq. Mt. available for proposed capacity expansion/integration
Total installed capacity of 12,000 MT per annum with approximate utilization of 91 %+
16
…with Stringent Quality Inspection & Testing
Rigorous testing system for our products to Ensure Finest Quality is delivered for our products
Tensile Test
Hydro-static Test
Hardness Test
Eddy Current Test
Quality Tests
IGC Test
Air under Water Test
s t s e T e v i t c u r t s e D
Reverse-bend Test
Flattening, Flaring & Flange Test
Spectro Test
Borescopic Test
N o n - D e s t r u c t i v e T e s t s
17
Marquee Clientele
18
New Customers in FY22
We got the privilege to add more feathers in our cap in FY22 by acquiring clients from varied sectors
▪
▪
▪
Toyo Engineering India Private Ltd - Toyo Engineering India P Ltd, one of the leading EPC consultants for Oil & gas worldwide, has enlisted us as an approved vendor which will further help us to get orders from giants like BPCL, HPCL, IOCL & also in their other major EPC works
Tecnimont Pvt Ltd - We also got approval from Tecnimont, a leader in large scale EPC contract
Technip India Ltd – Enlisted by Technip India Ltd which is a leading engineering & technology company.
▪ Osmetal Steel Solutions (German) - On the basis of previous trial order delivered in June-21, we got our largest ever heat exchanger U-tube order from German Client Osmetal in FY22, one of largest traders in Europe for heat exchanger tube segment.
▪
▪
▪
▪
Chemical: Asian Paint, Hikal Ltd, Navin fluorine, Gujarat Alkalies & Chemical Ltd (GACL)
Paper Industry: Tamil Nadu Paper ltd, JK Paper ltd,
Sugar Industry & Distillery: Rana Group, Dalmia Bharat Sugar
Engineering: ISGEC heavy engineering Ltd, Tata projects (ISRO project)
▪ Oil & Gas: Mangalore Refinery & Petrochemical
Ltd,
(subsidiary of ONGC)
▪
Pharma : Ami Lifesciences Pvt ltd, Nectar Lifesciences ltd.
▪ Dairy : Kaira District Co-operative (Amul)
▪
Export Client : ABG Intermediates (Thailand), Scope Metal (Isreal), Matinox (Spain), Voss (Spain & Germany).
19
19
Awards & Certifications
Calendar Years
Certifications & Accreditations
2016
2017
2017
2018
2018
Our manufacturing facilities at Dhaneti have been accredited with management system standards certificate for compliance with ISO 9001: 2015, ISO 14001:2015 requirements
Our Company has been verified and recognized as material manufacturer according to AD 2000 - Merkblatt W0 by The TÜV NORD Systems GmbH & Co. KG.
Our Company has been certified as quality-assurance system related to the material by The TÜV NORD Systems GmbH & Co. KG.
Our Company has received approval for manufacturing of Carbon Steel, Alloy Steel, Stainless Steel Welded & Seamless Pipes up to 400 mm NB / Tubes up to 101.60 mm O.D. & U-Tubes under inspection of Indian Boiler Regulations – 1950 from the Office of the Director of Boiler, Gujarat.
Our manufacturing facilities at Dhaneti have been accredited with management system standards certificate for compliance with ISO 45001: 2018
ISO Certificate
IBR Certificate
TUV – AD 200 Merkblatt W0
20
Experienced Board of Directors
Jayantiram M Choudhary
Chairman and Non-Ex Director
Arun Kothari Managing Director
Megharam S Choudhary
Whole Time Director
Dhruv M Patel
Whole Time Director
Associated with the Company since its incorporation. Over ten years of experience in the steel industry and four years as director of Accuracy Shipping Limited
Associated with the Company since 2021 as a Director. A qualified Chartered Accountant and holds a bachelor’s degree in commerce from Rajasthan University
Associated with our Company since its incorporation. Over 15 years of experience in the stainless steel welded pipes and tubes industry.
Associated with the Company since 2015. Holds a bachelor’s degree in engineering from University of Pune and a master’s degree in technology from CEPT University.
Kailash Nath Bhandari
Independent Director
Pranay Ashok Surana
Independent Director
Komal Lokesh Khadaria
Independent Director
Shyam Agarwal
Independent Director
Bachelor’s degree in law from Jodhpur University and has over 18 years of experience in the insurance sector. On the Board of Hindalco Industries Limited as an independent director
Master’s in engineering from the Indian Institute of Technology, Bombay.Founder of Flyrobe and has been featured on the coveted Forbes 30 under 30 in the Asia list (2017) and in the India list (2019).
Member of Institute of Companies Secretaries of India (“ICSI”) and holds a bachelor’s degree in commerce. Holding nine years of experience and has held the position of Chairperson of Surat Chapter of ICSI
Doctorate in law from University of Rajasthan and has over fifteen years of experience. A member of the quality review board of the ICAI, New Delhi; and Chairman and independent director of ICMAI Registered Valuers Organization, New Delhi.
21
Strong Management Team
Jayantiram M Choudhary
Chairman and Non-Ex Director
Arun Kothari Managing Director
Associated with the Company since its incorporation. Over ten years of experience in the steel industry and four years as director of Accuracy Shipping Limited
Associated with the Company since 2021 as a Director. A qualified Chartered Accountant and holds a bachelor’s degree in commerce from Rajasthan University
Megharam S Choudhary
Whole Time Director
Associated with our Company since its incorporation. Over 15 years of experience in the stainless steel welded pipes and tubes industry.
Dhruv M Patel
Whole Time Director
Associated with the Company since 2015. Holds a bachelor’s degree in engineering from University of Pune and a master’s degree in technology from CEPT University.
Pavan Kumar Jain Company Secretary and Compliance Officer
Associated with us as manager (finance and accounts) since August 2020. A qualified company secretary holding three (3) years of experience in finance, accounting and secretarial work
Kumar Shishir C Sinha President (Marketing)
With our Company since March 01, 2021. Holds a degree of bachelors in arts from Magadh University and has over 30 years of experience in the stainless- steel pipes and tubes.
Kunal Bubna President (Finance & Accounts)
Associated with the Company since July 2021. Is a fellow member of the Institute of Chartered Accountants of India and the ICSI with fourteen (14) years of experience.
Bharat Kumar Prajapati Production Head
With our Company since September 2020. Has a diploma in mechanical engineering from the Technical Examination Board, Gujarat and twenty (20) years of experience in pipe industry.
Om Prakash Mishra Vice President (Operations)
With our Company since December 2021. He holds a degree of bachelors in engineering from University of North Bengal and 23 years of experience in manufacturing industry.
Delivering Value to Stakeholders
May 2022
✓ Listing of Venus Pipes & Tubes Limited
✓ Listing done on BSE & NSE
✓ Fresh Issue of Equity shares aggregating to ₹ 165.4
Cr.
✓ Objects of the Issue :
1. Financing the project cost towards
• Capacity expansion
• Technological upgradation
• Cost optimization of our operations & support to the
manufacturing facility and
• Backward integration for manufacturing of hollow
pipes
2. Long-term working capital requirements
✓ On 21st October 2021, we had made private
placement of ₹ 59.443 Cr.
23
INDUSTRY OUTLOOK
Industry Outlook
✓ The Indian stainless-steel sector is the 2nd largest producer (till 2020) and consumer in the world and has a total manufacturing capacity of more
than 5 Mn tons of stainless steel annually
✓ India’s per capital stainless steel consumption has increased from 1.2 Kg in 2010 to 2.5 Kg in 2019, however its consumption is
comparatively lower compared to world average of 6 Kg per capita
Global Stainless Steel & Pipes Industry (USD bn)
Steel Pipe & Tube Consumption in India (Mn Tons)
+4%
41
32
5.0
5.2
4.2
4.3
5.5
5.3
6.7
6.3
5.9
5.4
6.2
5.6
CY2019
CY2025
2016-17
2017-18
2018-19
2019-20
2020-21
FY2022 E
Production
Consumption
Source: Industry reports
Industry Growth Drivers
Industry Growth Drivers
✓ Significant demand for Pipes & Tubes specifically from industry like chemical , pharma, engineering etc.
✓ In value terms, the size of Chemical industry is currently estimated at USD 178 Bn which is slate to grow to USD 300 Bn by 2025, growing annually by 9% per annum
✓ During FY 2021-30, the annual turnover in Indian Pharmaceutical Industry is expected to grow by a CAGR of 10%, to reach INR 7,840 Bn
Sector specific schemes by Government as below shall act as an aid in generating demand for steel pipes & tubes in India
✓ Chemicals
▪ Chemicals Promotion and Development Scheme (CPDS): ▪ Petroleum, Chemicals, and Petrochemical Investment Regions (PCPIR)
✓ Oil & Gas
▪ Hydrocarbons Exploration Licensing Policy (HELP)
✓ Pharmaceutical
▪ Scheme for Development of Pharmaceutical Industry ▪ Schemes to improve bulk drug production in India
Policies Driving Growth
Major Policies in Steel & Steel Pipes& Tubes Sector
Demand Generation from Government Initiatives
✓ Strengthening the raw material supply chain
✓ Stainless steel pipes notified under Steel Quality Control Order
✓ Anti-Dumping Duty
✓ Domestically manufactured iron and steel products policy (DMISP)
✓ Duty Reduction Structure
✓ Production Linked Incentives (PLI) Scheme The government has announced INR 1.97 Tn to be spent in the next 5 years for PLI schemes in 13 Sectors
✓ Atmanirbhar Bharat Packages
✓ National Manufacturing Policy
✓ National Infrastructure Pipeline (NIP)
Source: Industry reports
STRATEGIES TO SUPPORT GROWTH
Capacity Expansion & Backward Integration
Capacity Expansion for Finished Products (MTPA)
Pursuing Capacity Expansion….
3.7x Capacity Expansion
6,900
4,800
2,100 FY19
9,300
7,200
2,100 FY20
10,800
10,800
7,200
3,600
FY21
7,200
3,600
FY22
33,600
24,000
9,600
FY23E
To Cater to increasing demand in the Domestic & Export Markets
Particulars
Seamless
Welded
Current
Post Expansion
Size (mm)
Capacity
Size (mm)
Capacity
6 – 114.3
3,600 MTPA
6 – 168.3
9,600 MTPA
6 – 219.3
8,400 MTPA
6 – 1,219.2
24,000 MTPA
Mother Hollow
NA
0
NA
9,600 MTPA
3x
….alongside Backward Integration
• Backward integration strategy of setting up a piercing line for manufacturing of
hollow pipes
• With the piercing plant, will be able to produce hollow pipes from SS round bar
Increase in Capacity
Increase in Market Share
Backward Integration
Improving Margins
Cost Optimization
Increase in Profitability
28
Geographical Expansion
Exports in More than 20+ Countries
FY22
10.5%
₹ 40.4 crs
4.8%
₹ 14.7 crs
3.4%
₹ 6.0 Crs
FY20
Leverage our Existing Relationship to Deepen our Presence in Export Markets
Contribution from Export Revenue
29
Improving Efficiency & Brand Positioning
Productivity & Efficiency Enhancement
Creating Brand for “VENUS” thereby increasing the contribution from direct sales for higher realizations
Install acid regeneration plant for lower consumption of acids to improve operating margins and better plant productivity
Significant Environmental and Economic advantages shall follow from reduced usage of raw acids
Enterprise Resource Planning (“ERP ) to be introduced for efficient control over our manufacturing process & productivity
International Standards
Trade Fares
Exhibitions
Digital Marketing
Customer Centric
Various Brand Building Activities
30
HISTORICAL FINANCIAL & OPERATIONAL HIGHLIGHTS
Product Category Split
Revenue (in ₹ Cr)
Volume (in MTS)
221
+40%
125
139
81
4,222
+26%
8,506
7,146
7,412
FY19
FY20
FY21
FY22
FY19
FY20
FY21
FY22
119
+53%
96
+41%
3,122
3,079
33
33
1,099
1,102
FY19
FY20
FY21
FY22
FY19
FY20
FY21
FY22
d e d e W
l
l
s s e m a e S
✓ Revenue and Volumes have
grown our across tremendously segments in a short span of just 4 years
both
✓ Volume growth for Welded has been at a CAGR of 26% and for Seamless the volume growth was 41% CAGR between FY19-FY22
✓ We attribute this uptick in our exports to our in-house quality control team of 27 personnel, who make sure we comply with international quality standards
32
Direct Sales Split
Direct Domestic Sales Spilt
3.4%
5.3%
2.9%
FY21
49.7%
38.8%
6.8%
3.6%
4.3%
FY20
44.6%
40.6%
30.7%
1.1%
1.1%
7.4%
FY22
59.7%
✓ Revenue contribution from Other industries has increased from 4.3% in FY20 to 7.4% in FY22
✓ Revenue dependency from chemical industry has reduced from 44.6% in FY20 to 30.7% in FY22
✓ Due to the capex cycle revival
in India, the share of Engineering has increased from 40.6% in FY20 to 59.7% in FY22
Chemicals
Engineering
Fertilizers
Pharma
Others
33
Sales Split across Geography
40.4%
FY20
56.3%
FY21
57.9%
3.4%
37.4%
4.8%
43.8%
FY22
45.8%
10.5%
Direct Domestic
Export
Stockist/Traders
9.1%
3.6% 0.9%
16.7%
FY20
5.2%
7.7%
1.0%
19.5%
FY21
9.4%
4.5%
3.4%
FY22
52.5%
69.6%
66.7%
30.2%
y h p a r g o e G
e u n e v e r e s i w e t a t S
Gujarat
Maharashtra
Telangana
Tamil Nadu
Others
✓ Revenue contribution from exports have increased from 3.4% in FY20 to 10.5% in FY22
✓ Direct domestic sales to end consumers have increased from 37.4% in FY21 to 45.8% in FY22
✓ Revenue contribution from Stockist/Traders has reduced from 56.3% in FY20 to 43.8% in FY22
✓ Revenue contribution from Other States increased by 3x between FY20 to FY22 aligning with goal of expanding across domestic market
✓ Revenue from states like Maharashtra and Tamil Nadu went up significantly giving us better access across regions
34
Key Historical Financials
Revenue (in ₹ Cr)
EBITDA (in ₹ Cr)
PAT (in ₹ Cr)
+48%
387
309
178
119
49
+81%
35
+105%
32
24
8
12
4
4
FY19
FY20
FY21
FY22
FY19
FY20
FY21
FY22
FY19
FY20
FY21
FY22
Gross Profit Margin
EBITDA Margin
PAT Margin
18.6%
15.5%
14.4%
11.7%
12.7%
11.2%
7.6%
8.2%
7.0%
6.5%
3.1%
2.3%
FY19
FY20
FY21
FY22
FY19
FY20
FY21
FY22
FY19
FY20
FY21
FY22
35
Profit & Loss
Profit and Loss (in ₹ Cr)
Revenue from Operations
Cost of Goods Sold
Gross Profit
Gross Profit Margins (%)
Employee Cost
Other Expenses
EBITDA
EBITDA Margins (%)
Depreciation
Other Income
EBIT
Finance Cost
Share in Profit/(loss) in JV and Associates
Profit before Tax
Tax
Profit After Tax
PAT Margins (%)
FY22
386.9
315.0
71.9
18.6%
6.2
16.4
49.3
12.7%
1.4
2.1
49.9
7.1
0.0
42.9
11.2
31.7
8.2%
FY21
309.3
261.5
47.9
15.5%
3.2
9.9
34.8
11.2%
1.0
2.7
36.5
5.6
0.0
31.0
7.32
23.6
7.6%
FY20
177.8
157.0
20.8
11.7%
2.7
6.5
11.6
6.5%
2.1
1.5
11.0
4.6
0.0
6.5
2.4
4.1
FY19
118.8
101.6
17.1
14.4%
2.5
6.3
8.3
7.0%
2.0
1.8
8.1
3.1
0.0
4.9
1.3
3.7
2.3%
3.1%
CAGR
61%
415 bps
81%
574 bps
84%
105%
105%
510 bps
36
Balance Sheet
Assets (in ₹ Cr)
Non - Current Assets
Property Plant & Equipments
CWIP
Intangible assets
Other Financial Assets
Other Non - Current Assets (Net)
Current Assets
Inventories
Financial Assets
(i)Investments
(i)Trade receivables
(ii)Cash and cash equivalents
(iii)Bank balances other than cash and cash equivalents
Other Financial Assets
Mar-22 Mar-21 Mar-20 Mar-19
Equity & Liabilities (in ₹ Cr)
Mar-22 Mar-21 Mar-20 Mar-19
30.4
21.3
7.4
0.1
1.7
20.9
19.5
0.1
1.3
217.5
116.6
93.5
44.2
17.5
12.2
3.2
0.1
2.0
89.7
44.3
10.0
9.8
0.3
69.1
36.2
1.4
73.5
0.0
7.3
0.7
45.1
30.7
21.6
0.1
4.4
2.6
0.4
5.0
0.0
9.3
0.3
1.5
1.1
8.4
Total Equity
Share Capital
Reserves & Surplus
Non-Current Liabilities
Financial Liabilities
(i) Borrowings
(ii) Lease Liabilities
Provisions
Deferred Tax Liabilities
Current Liabilities
Financial Liabilities
(i) Borrowings
(ii) Trade Payables
(iii) Lease
(iii) Other Financial Liabilities
Other Current Liabilities
Current tax liabilities (net)
Provisions
128.5
15.2
113.3
15.6
39.9
8.7
31.2
19.5
16.3
8.7
7.5
20.1
12.2
8.7
3.4
14.6
14.3
18.5
18.6
14.4
0.2
0.3
0.7
0.3
0.2
0.4
0.4
0.2
0.9
103.7
78.2
70.9
54.4
33.5
0.0
0.2
5.5
10.2
0.0
19.0
42.4
0.1
0.1
6.2
10.3
0.0
24.0
41.3
0.1
0.0
3.1
2.4
0.0
0.1
0.2
52.3
15.0
32.5
0.1
2.9
1.9
0.0
Other Current Assets
41.1
20.4
Total Assets
247.9
137.5
107.2
79.1
Total Equity & Liabilities
247.8
137.5
107.2
79.1
37
Cashflow Statement
Particulars (in ₹ Cr)
Net Profit Before Tax
Adjustments for: Non -Cash Items / Other Investment or Financial Items
Operating profit before working capital changes
Changes in working capital
Cash generated from Operations
Direct taxes paid (net of refund)
Net Cash from Operating Activities
Net Cash from Investing Activities
Net Cash from Financing Activities
Net Decrease in Cash and Cash equivalents
Add: Cash & Cash equivalents at the beginning of the period
Cash & Cash equivalents at the end of the period
FY22
42.9
5.6
48.5
-97.4
-49.0
11.0
-60.0
34.1
25.8
0.0
0.1
0.0
FY21
31.0
5.1
36.1
-24.0
12.1
0.7
11.3
-2.4
-9.2
-0.3
0.4
0.1
FY20
6.5
4.1
10.6
-7.1
3.5
1.1
2.4
-12.4
10.0
0.1
0.3
0.4
FY19
4.9
2.6
7.6
-12.9
-5.4
1.3
-6.7
-1.4
7.7
-0.3
0.6
0.3
38
Key Ratios
ROE*
Debt / Equity Ratio
ROCE*
59%
44%
2.6
2.4
61%
57%
31%
25%
30%
30%
0.9
0.5
FY19
FY20
FY21
FY22
FY19
FY20
FY21
FY22
FY19
FY20
FY21
FY22
*The company had made Private Placement on 21st October 2021 of ₹ 59.443 cr
39
Key Takeaways
Capacity Expansion
Proposing to expand our existing manufacturing capacity for welded pipes/tubes and seamless pipes/tubes for manufacturing higher diameter pipes/tubes.
Geographical Expansion
We intend to leverage our existing relationships to further deepen our presence in the international market, particularly in the European Union.
Brand Value
We intend to make consistent efforts to strengthen our brand “Venus” and enhance our brand visibility for attaining parity with our industry peers.
01
03
05
02
04
Backward Integration We plan to set up a piercing line for manufacturing of hollow pipes with the capacity of 800 MT per month, as our backward integration strategy. With the piercing plant, we will be able to produce hollow pipes from SS round bar.
Better Efficiency We are proposing to install an acid regeneration plant (“ARP”) where the consumption of acid in our manufacturing process shall be reduced substantially, and we believe that the same shall help us in improving our operating margins.
40
Thank You
Venus Pipes & Tubes Limited
CIN: L74140GJ2015PLC082306 Mr. Kunal Bubna (President – Accounts & Finance) cs@venuspipes.com
Strategic Growth Advisors Private Limited
CIN: U74140MH2010PTC204285 Mr. Sagar Shroff / Ms. Saloni Soni sagar.shroff@sgapl.net / saloni.soni@sgapl.net +91 98205 19303 / +91 95832 74018
41