Venus Pipes & Tubes Limited has informed the Exchange about Investor Presentation
Date: December 18,2023
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
Sub: Investor Presentation
With reference to above captioned subject, please find attached 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
Presentation December 2023
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
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Vision, Strategies and the Opportunities (1/2)
Our Vision
Making ourselves as first reference and preference in stainless steel pipes and tubes manufacturer
&
To be a leading manufacturer and provider for demanding and challenging applications for stainless steel pipes and tubes
Multi-fold Growth in Capacities
Welded Pipes Capacity Increase
Seamless Pipes Capacity Increase
5.0x
24,000
4.5x
9,600
4,800
2,100
Our Focus
FY19
FY24
FY27
FY19
FY24
FY27
Total Current Capacity
Continuous capacity addition plans
4.8x
33,600
6,900
FY19
FY23
FY27
❖ To develop high grade of Pipes and Tubes for catering to industries with stringent regulations such as Food processing and Pharma
❖ Focus on value added products which will drive
margin expansion
❖ Expanding our presence across India and bolstering international
our export capabilities to penetrate markets
❖ Anticipating demand outlook and simultaneously increasing our capacities to cater to market needs
Capacity Expansion
•
Looking at the robust demand, the company in August announced to add further 4,800 MTPA capacity for seamless pipes out of which 2,400 MTPA capacity is operational
• With this, the total capacity for Seamless Pipes will increase to 14,400 MTPA
•
•
In 2023, company increased capacities for Welded Pipes from 8,400 MTPA to 24,000 MTPA and Seamless Pipes from 3,600 MTPA to 9,600 MTPA
Additionally, the company did backward integration of Seamless Pipes by installing capacities to manufacture 9,600 MTPA of Mother Hollow Pipes on May 2023
3
Vision, Strategies and the Opportunities (2/2)
Increasing Geographical Presence
•
•
•
•
Participating conferences for Brand Building
fairs
in
and
Exceeding the quality expectations with timely delivery
Increasing Capacities
Increasing capacities for Stainless Steel Pipes and Tubes based on demand outlook
Achieving economies of scale with margin expansion
•
•
•
•
Expansion of Market Share
Increasing Product SKUs
to Providing quality products customers with all necessary quality certifications
Diversifying clients across sectors
•
Increasing our outreach by adding clients in sectors such as Oil and Gas, Pharma, Food processing, Power Effluent Lines & Railways
Technological Advancement
Acid Regeneration Plant to slash acid usage, boosting margins
tech
strength ensures In-house efficient optimal operations, resource utilization for enhanced efficiency
Digitalization
• We prioritize the enhancement of IT automation
infrastructure capabilities throughout value chain
and
•
Establish digital ecosystem caters stakeholders
the needs of all
to
that its
We at Venus anticipate a meteoric rise, harnessing the boundless opportunities before us through a symphony of strategic maneuvers. With the perfect blend of tactics, we're set to embark on a journey of unprecedented growth
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Quality, Efficiencies & ESG Goals (1/2)
Calendar Years
Certifications & Accreditations
2016
2017
2017
2018
2018
2022
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
Our company received approval of Bureau of Indian Standard (BIS) for Stainless steel Seamless and Welded Pipes and Tubes
IBR Certificate
TUV – AD 200 Merkblatt W0
ISO Certificate
BIS Certification for Seamless Pipes
BIS Certification for Welded Pipes
Venus has received an array of quality certifications, affirming our unwavering commitment to delivering products of the highest standards. This recognition underscores our dedication to quality and customer satisfaction
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Quality, Efficiencies & ESG Goals (2/2)
Acid Regeneration Plant
•
In line with our commitment to technological advancement, our proposition involves the implementation of an Acid Regeneration Plant (ARP)
• Aims to significantly decrease the usage of acid within our manufacturing process
• This will ultimately be leading to enhanced operating margins
• By reducing the usage of raw acids and chemicals in the neutralization plant, we can minimize the environmental impact
associated with their production and disposal
Solar Panels Installation
• We plan to install 1.3 MW of Solar Power at our facility
• We are committed to sustainable practices, reducing the carbon footprint and embracing eco-friendly energy solutions
•
It not only positions Venus as a responsible corporate entity but also promises long-term cost savings through reduced dependence on conventional power sources
LED Lighting Installation
• We have installed more than 700 LED lights at our manufacturing plant
• This enhances visibility and creating an energy-efficient work environment
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Strategies & Opportunities in Europe Market (1/2)
•
•
•
•
Venus Pipes & Tubes started exporting to European Union in the year 2017
The company has witnessed multi-fold growth on account of strong brand building
Export Sales has grown at 49% CAGR from Rs 4.0 Cr in FY17 to Rs 29.8 Cr in FY23 and for H1FY24, exports sales stood at Rs 36.2 Cr – 131% higher than H1FY23
The demand for Seamless Pipes and Tubes is higher in the European region
• With our expansion and capability to produce larger Dia Seamless pipes, the
doors are open for higher penetration in Europe across sectors
•
Backward Integration with piercing line for Seamless Pipes & Tubes will increase the acceptance of our products
Venus Pipes & Tubes Presence across Europe
Despite our relatively short operating history, we have successfully built a solid reputation in the European Market
We continue to look forward to build dynamic partnerships with dealers to elevate the Venus brand to unprecedented heights, amplifying our footprint across the European landscape
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Strategies & Opportunities in Europe Market (2/2)
1
Crisis in Europe
2
Brand Building
3
Robust Demand
❖ Geopolitical Tensions
❖ High Energy Prices
❖ High-Cost Labor
❖ Significant Challenges for local manufacturers
❖ Participation in Fairs
❖ Quality at par with European
standards
❖ Increasing collaboration with
distributors, retailers
❖ Robust demand for Heat
Exchanger tubes on back of energy crises
❖ Strong order book on the back
of capex revival
4
Quality Offerings
5
Strong Dealership Network
❖ All necessary certifications in
place
❖ Focus on a high value products by catering to specialized needs and delivering exceptional customer service
❖ Broad European dealership network ensures availability
❖ Further deepen the network
and forge stronger relationships
Increase in Capacity
Backward Integration
Strong Dealership Network
Growth in Europe
8
Tapping the US Market
Brief on US Markets
Strategies for Growth
• US is among the largest steel importers in the world
•
•
The demand for Welded pipes is higher in the US
Steel pipes & tubes in US are predominantly utilized in the Oil & Gas, Chemicals and renewable energy industries
• US primarily imports Pipes and Tubes from South Korea, Mexico and Canada
Opportunities for Venus Pipes & Tubes
Brand Building
Quality Products
Infrastructure Boom :
Renewable Energy Expansion
Local Partnerships
Oil and Gas Sector
Water Management Projects
Leveraging Experience
On our mission to make Venus a global brand, we plan take our offerings and mark our presence in the US across sectors
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Domestic Growth drivers and Brand Building (1/2)
Robust Demand Outlook
•
•
•
•
•
Stainless steel pipes and tubes are witnessing an escalating demand as industries worldwide prioritize corrosion resistance, durability, and versatility in various applications such as Engineering, Chemicals, Oil & Gas, Food Processing
Capacities to develop higher Dia pipes will help in increasing penetration across India
On the back of, revival of capex cycle in India, higher demand for our products is anticipated
Robust demand envisaged going forward for our products across End User Industries. As industries expand and modernize, there's a corresponding need for durable and high-performance materials, further fueling the demand for stainless steel
Government schemes such as PLI will fuel the growth
Policies Driving Growth
Venus Pipes & Tubes Dhaneti, Bhuj
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)
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Domestic Growth drivers and Brand Building (2/2)
Government Support & Initiatives
Key Growth Drivers
• Compulsion of BIS certification benefitting organized players like Venus give
clients added comfort on quality standards
•
Imposition of Anti Dumping Duties on Stainless steel Seamless pipes & tubes from China for 5 years up to 3,801 USD/MT
• Exports incentive of 1% to drive further exports
Brand Building
Effective brand building for Venus Pipes and Tubes involves a holistic approach that encompasses product quality, marketing, customer relationships, and a commitment to innovation and social responsibility. At Venus, we intend to focus on following key areas to build a strong brand pan India and the world –
• Focusing on Quality Assurance : Consistently delivering high-quality products, establishing trust and reliability among consumers and industry stakeholders
• Participation
in Market Fairs : Actively participating
industry events, conferences, and seeking certifications or awards to garner recognition and establish Venus as a leader in the pipes and tubes sector
in
1
2
3
4
5
Geographical Expansion Increasing penetration in North and South India
Diversifying Presence across sectors Diversify client base across sectors such as Oil and Gas, Pharma, Food processing, Power, Effluent Lines & Railways
Backward Integration Backward Integration for Seamless Pipes will not only boost margins but also enhance quality of our offerings
Market share from unorganized players
Gain market share from unorganized players by offering quality products
Approvals from Large Clients Continuous new approvals are being received from large clients, specially in the Oil & Gas sector which is a testimony of quality of our products
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Financial Strength & Growth (1/2)
Revenue (in ₹ Cr)
EBITDA (in ₹ Cr)
+365%
309
552
387
371
178
119
+733%
49
35
69
62
8
12
4
4
PAT (in ₹ Cr)
+1097%
32
24
44
38
FY19
FY20
FY21
FY22
FY23 H1FY24
FY19
FY20
FY21
FY22
FY23 H1FY24
FY19
FY20
FY21
FY22
FY23 H1FY24
67% of FY23 Revenue achieved in H1FY24
90% of FY23 EBITDA achieved in H1FY24
85% of FY23 PAT achieved in H1FY24
✓ Revenue witnessed a growth of 365% from Rs 119 Cr in FY19 to Rs 552 Cr in FY23 with gross margins touching 19.5%
✓ EBITDA Margins grew by 550 bps from 7.0% in FY19 to 12.5% in FY23
✓ Revenues for H1FY24 stood at Rs 371 Cr with EBITDA margins standing at 16.8%
✓ PAT stood at Rs 44 Cr in FY23 with PAT margins standing at 8%
✓ Improving demand environment and order visibility, we are optimistic of growth momentum to sustain going forward
✓ Increased capacities and increasing utilization will drive the revenues and margins going forward
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Financial Strength & Growth (2/2)
ROE
59%
Debt / Equity Ratio
2.6
2.4
ROCE
61%
31%
25%
25%
21%
30%
30%
35%
31%
0.9
0.5
0.3
FY19
FY20
FY21
FY22
FY23^
FY19
FY20
FY21
FY22
FY23
FY19
FY20
FY21
FY22
FY23*
Growth Journey
• Venus has a strong history of growth, reflecting effective strategies and a forward-looking vision that anticipates market demand and hence have an
advantage over competition
• We have consistently outperformed the market and industry growth, showcasing our ability to excel and set the pace in a market dominated by unorganized
players
• With strong financial capabilities, we are confident of gaining substantial market share demonstrating a strong position and paving the way for continued
growth and influence
^ Excluding Rs. 107.9 crores raised via IPO for Capacity expansions * Excluding CWIP of 121.6 crores from Total Capital Employed
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Thank You
Venus Pipes & Tubes Limited
CIN: L74140GJ2015PLC082306 Mr. Kunal Bubna ( Chief Financial Officer ) cs@venuspipes.com
Strategic Growth Advisors Private Limited
CIN: U74140MH2010PTC204285 Mr. Sagar Shroff / Mr. Ayush Haria sagar.shroff@sgapl.net / ayush.haria@sgapl.net +91 98205 19303 / +91 98204 62966
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