R.P.P. Infra Projects Limited has informed the Exchange regarding Investor Presentation
RPP INFRA PROJECTS LTD RPP INFRA PROJECTS LTD
CORPORATE PRESENTATION | Q3 FY19
Disclaimer
This presentation contains forward-looking statements which may be identified by their use of words like “plans,” “expects,” “will,” “anticipates,” “believes,” “intends,” “projects,” “estimates” or other words of similar meaning. All statements that address expectations or projections about the future, including, but not for growth, product development, market position, expenditures, and financial results, are forward-looking statements.
statements about
the strategy
limited to,
Forward-looking statements are based on certain assumptions and expectations of future events. The company referred to in this presentation cannot guarantee that these assumptions and expectations are accurate or will be realized. The actual results, performance or achievements, could thus differ materially accurate or will be realized. The actual results, performance or achievements, could thus differ materially from those projected in any such forward-looking statements. These company assume no responsibility to revise any forward looking statements, on the basis of any subsequent publicly amend, modify or developments, information or events, or otherwise.
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Agenda
1
2
3 3
4
Introduction to the Company
Slides 4-6
Q3FY19 Review & Future Guidance
Slides 7-14
Industry Overview Industry Overview
Slides 15-20 Slides 15-20
Appendix – Company Overview
Slides 21-30
A Pure Play Niche EPC Company
Order Book (Dec’18) – INR 15,556.7 Mn
(cid:1) Strong presence in the fast-growing micro-markets of
South India
Buildings Total 17.85%
(cid:1) Currently spreading its footprints in Maharashtra and
MP for geographical diversification
Water Management Total 36.54%
(cid:1) Diversified in Bridges, in Bridges, Management, Irrigation and Power projects
in Highways, Roads & Water Water
presence Civil Civil
Construction Construction
(cid:1) Focus on small government projects with superior
project execution skills
(cid:1) Short tenure projects provide strong revenue visibility
Infrastructure Total 45.60%
Orders won in Q3 FY19 : 2,085 Mn Orders won after Q3 FY19: 3,880 Mn
4
A Fast Growing Company…
Revenue (INR Mn)
EBITDA (INR Mn)
649
PAT (INR Mn)
4,991
296
3,672
3,147
399 399
358
351
483
454
2,600
2,403
2,659
228
193 193
136
115
103
FY13
FY14
FY15
FY16
FY17
FY18
FY13
FY14
FY15
FY16
FY17
FY18
FY13
FY14
FY15
FY16
FY17
FY18
*calculated on a consolidated results
Adjusted PAT excluding one time tax expense of Rs. 17.96 crores to resolve pending IT disputes from FY10 to FY16
5
…With a Strong Balance Sheet, Creating Superior Shareholder Value
Return on Equity (%)
10
9
10
11
6
Net Debt to Equity (x)
13
0.7
0.6
0.5
0.3
0.3
0.3
FY13 FY13
FY14 FY14
FY15 FY15
FY16 FY16
FY17 FY17
FY18 FY18
FY13 FY13
FY14 FY14
FY15 FY15
FY16 FY16
FY17 FY17
FY18 FY18
Net cash from operations (INR Mn)
OCF/EBITDA
704.9
0.82
0.77
0.82
370.5
374.3
0.49
0.55
176.9
191.4
-16.8
-0.04
FY13
FY14
FY15
FY16
FY17
FY18
2013
2014
2015
2016
2017
2018
*calculated on a consolidated results
6
Q3FY19: Stable Performance Amid Tight Liquidity
Operational Highlights
o
o
Flattish revenues & minor increase in operating expenses led by tight working capital scenario
This tightening liquidity led to slightly lower EBITDA & marginal slightly lower EBITDA & marginal dip in EBITDA margins
o Order inflows continued
strengthening in Q3FY19 (at INR 2.7 billion) as well as after Q3FY19 (at INR 3.8 billion)
o Order Book as on Q3 FY19 – INR
15.5 billion
o Won new orders in the water
management, roads & highways
Revenue (INR Mn)
1,370
1,343
Q3FY18
Q3FY19
EBITDA (INR Mn) & EBITDA Margin (%)
13.2%
12.2%
181
164
o Revenue up 29% YoY due to strong execution
o EBITDA up 25% o EBITDA up 25%
Q3FY18
o PAT up 38% YoY
Q3FY19
Reported PAT (INR Mn)
72
-93 Q3FY1 8
Q3FY1 9
7
H1FY19 – Balance Sheet Strength Intact
17%
Adj Return on Equity (%)
0.3x
Net Debt to Equity (x)
82 Days
14 Days
75 Days
Receivable Days
Inventory Days
Payable Days
*Above data is calculated on TTM basis
8
Q3FY19 & 9MFY19 At a Glance
INR Mn
Q3FY19
Q3FY18 % Change (YoY)
9M FY19
9M FY18 % Change (YoY)
Revenues
1,343
1,370
-2%
3,740
3,574
EBITDA
EBITDA Margin
Finance Cost
Reported PAT
Reported EPS (INR)
164
181
-10%
471
480
12.2%
13.2%
-
12.6%
13.4%
62
72
3.2
38
-93
-4.1
63%
-
-
160
229
10.1
139
50
2.2
5%
-2%
-
15%
354%
-
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Business Review
ROADS
(cid:1) Current Order Book – INR 7,630.4 Mn (cid:1) Embedded EBITDA margins of 12-14%
WATER MANAGEMENT
(cid:1) Current Order Book – INR 4,404 Mn (cid:1) Embedded EBITDA margins of 15-18%
BUILDINGS
(cid:1) Current Order Book – INR 3,522.3 Mn (cid:1) Embedded EBITDA margins of 10-12%
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Q3 FY19 & After Q3 FY19 – Strong Order Inflows
Name
Amount
Segment
State
Post Q3FY19 Wins
BHEL, Chennai
INR 629 Mn
Buildings
Tamilnadu
Tiruppur City Municipal Corporation
INR 1,947 Mn
Water Management
Tamilnadu
BHEL, Chennai BHEL, Chennai
INR 402 Mn INR 402 Mn
Buildings Buildings
Tamilnadu Tamilnadu
Thoothukudi Smart City
INR 180 Mn
Water Management
Tamilnadu
Gujarat Water Supply Board – 40% share
INR 405 Mn
Water Management
Gujarat
Gujarat Water Supply Board – 40% share
INR 317 Mn
Water Management
Gujarat
Government of Jharkhand
INR 527 Mn
Water Management
Jharkhand
Tamilnadu Water Supply and Drainage Board INR 1,558 Mn
Water Management
Tamilnadu
Q3FY19 Wins
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Orderbook Growth Trajectory (INR Mn)
100% Govt Order Book
Order Book Break up
Telangana 1%
Andhra Pradesh 1%
Bangladesh 6%
Jharkhand 3%
15,000
14,566
15,557
11,750
7,860
7,250
INR 6.5 Bn New Order Wins in H2FY19 so far far
Tamil Nadu 37%
10 States of Operations
3 Countries of Operations
Srilanka 3%
FY16
FY17
FY18 Q1FY19 Q2FY19 Q3FY19
Karnataka 8%
Kerala 9%
Madhya Pradesh 1%
Maharashtra 31%
12
Future Outlook & Guidance
Revenue Guidance
FY2018 Actual
FY2019
FY2020
INR Mn
4,991
5,300-5,500
6,500-7,000
13
Key Investment Highlights
Growing Order Book
• c.2x in 3 years
Short duration projects
• 3.02x Book to Bill ratio
Strong revenue visibility
• 87% of projects to be completed in 18-24 months period
Superior Revenue Growth
• 15-20% for next 2 years
De-risked Business Profile
• 100% Government orders
Healthy Balance Sheet
• Lower net debt on books
14
Industry Overview Industry Overview
15
Construction industry in India: Compelling growth drivers
o Growing economy and increasing urbanization along with favorable policy bodes well for construction sector in the
country
o Big boost in infrastructure spending expected over next few years
Roads
Completion of the remaining length of the NHDP program
New projects such as Bharat Mala, Pradhan Mantri Gram Sadak Yojana Sadak Yojana
Four-laning of national highways
Upgradation of state highways to national highways
Urban Infra
Schemes such as Swach Bharat, smart cities, green mode of transport
Mass rapid transit, metro train, water supply & sanitation projects
Irrigation and River Linking
More than 50% of cultivated land in India is still not irrigated
Govt’s aggressive river linking targets provides huge opportunity
(1) Source: CRISIL
NHAI awarding (1)
Kms
3,018
4,349 4,337
5,280
6,278
6,500
FY15
FY16
FY17 FY18P FY19P FY20P
Structural positive changes in sector
Streamlined & ease in process for obtaining environmental / green clearance approval driving faster execution
Government’s approval of new arbitration guidelines to help in speedy resolution of pending claims, improving cash flows
Source: GOI websites
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Rural Infra: A Strong Government Focus
UNION BUDGET: ALLOCATION TO INFRASTRUCTURE SECTOR
5.97
3.96 3.96
2.51
2.21
1.81
FY15
FY16
FY17
FY18
FY19
17
Significant Upcoming Growth in Roads
Key Govt Priority
Sector dev’ment
Growing demand
Policy support
USD 100 billion allotted for infrastructure in India
Length of national highways to reach 200,000 kms
Production of PVs, CVs, 3 & 2 wheelers reached 26 million
Standardized process for tolling & bidding
GoI plans to invest USD 22.4 billion towards road infra in North-East India during 2018-2020
Roads and Highways industry projected to exhibit CAGR of 36.2% during 2016-2025
Almost half of the 1,531 projects awarded in India until March 2018 were related to roads
India saw USD 24.67 billion FDI inflows between April 2000 – December 2017 for construction development
National Highways as % of Total Road Network
11.7%
13.0%
15.0%
6.3%
1.7%
India
1.8%
China
Brazil
UK
South Korea
Japan
Source: GOI websites
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Bharatmala: Stepping Stone Towards New India
Components of BharatMala Road Programme
Length (KM)
Outlay (INR Bn)
Economic Corridor Development
Inter-Corridor and feeder roads
National corridor efficiency improvements
Border and International Connectivity Roads
Coastal & port connectivity roads
Expressways
Total
Balance road works under NHDP
TOTAL
9,000
6,000
5,000
2,000
2,000
800
24,800
10,000
1,200
800
1,000
250
200
400
3,850
1,500
5,350
(cid:1) Corridor-based approach
(cid:1) INR 3.8 tn of new projects out of
INR 6.9 tn of overall spends
(cid:1) 20% share or Rs 1 tn ordering
opportunity for PPP projects
(cid:1) DPR or detailed project report for 19,500 kms is underway currently
(cid:1) NHAI & MORTH would now have final say on most PPP projects (excluding BOT Toll requiring VGF) up to INR 20 bn and EPC projects (limit of INR 10 bn for non-NHAI projects)
Source: GOI websites 19
The Irrigation Opportunity
India accounts for ~17% of the total world’s population but only 4% of the world’s fresh water resources: FICCI Micro Irrigation is amongst priority areas – exclusive fund being set up in NABARD
Drip Irrigation coverage
Sprinkler Irrigation coverage
Theoretical potential for micro irrigation in India
3.37 MHA
4.36 MHA
69.5 MHA
Key Scheme: Prime Minister Krishi Sinchai Yojna- Har Khet ko Pani Budgetary allocation of INR 26 billion in Union Budget 2018-2019 Budgetary allocation of INR 26 billion in Union Budget 2018-2019
Untapped Potential
61.8 MHA
Union Budget 2018-2019: Opportunity Size
(cid:1) PM Krishi Sinchai Yojna – INR 26 billion for 96 irrigation
deprived districts
(cid:1) Scope of Long Term Irrigation Fund (LTIF) in NABARD
expanded
Source: India Agri Stat; Ministry of Agriculture, Government of India; National Mission on Micro Irrigation Impact study for Govt of India, 2014 20
Appendix – Business Highlights Appendix – Business Highlights
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De-Risked Business Model
Max Project Duration: 24 mths
Short Duration Duration Projects
Low Ticket Projects Projects
Max Project Size < INR 250 Crores
Superior Profitability
EBITDA Margins: 13%-14%
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Improving Geographical Diversification
FY14 Order Book – INR 5,360 mn
Order Book (Dec’18) – INR 15,556.7 Mn
Telangana 1%
Andhra Pradesh 1%
Bangladesh 5%
Gujarat 4%
Uttar Pradesh 9%
Maharashtr a 6% 6%
Karnataka 12%
Tamil Nadu 46%
Tamil Nadu 73%
Jharkhand 3%
Karnataka Karnataka 5%
Kerala 7%
Madhya Pradesh 1%
Srilanka 2%
Maharashtra 26%
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High Revenue Visibility
Project Duration
Project Duration by Sector
5-10 mths 2%
16-24 mths 87%
Book to bill ratio: 4.8x
11-15 11-15 mths 11%
39%
25% 25%
23%
2%
8%
3%
5-10 Mths
11-15 Mths
16-24 Mths
Building
Infra Water Mgmt
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Efficient Operations
Large Talent Pool
Captive equipment
Strategic Subcontracting
Accurate Project Modelling
Small Ticket Size
Enhance Liquidity Liquidity
Stringent Onsite Operations Operations Control
Raise Milestone Bills Faster
Accelerate Project Completion
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Key Marquee Projects
Power Projects & Civil Work
•Sub Station at KPTCL, Karnataka •Udupi Project, Karnataka •Apgenco Project, Andhra Pradesh •Pykara Project, Tamil •Pykara Project, Tamil Nadu •Chemplast Project, Tamil Nadu
Infrastructure
Industries
Water & Irrigation
Buildings
•Atomic Energy, Kalpakkam •Storm water drains to Chennai Corporation •Truck Parking Yard at Manjampakkam, Che nnai •TNRSP Road works, Tamil Nadu •Scientific Warehouse with PEB, Coimbatore, Ta njore, etc.
•BHEL – Tirchy, Chennai •MRPL, Bangalore •MSEZ, Mangalore •Neyveli Lignite Corporation, Tamil Nadu •Textile •Textile Park, Kamarapalyam •Circulating water system & fire protection system for Neyveli Lignite Corporation
•Construction for contour canal for 49.3 kms at Udumalpet •CWSS to 312 Habs at Eddapaddy rural areas in Salem, Tamil Nadu •Second Vaigai water •Second Vaigai water supply schemes at Madurai •Construction of surplus regulator across Valpar River, Tamil Nadu •CWSS to 175 rural habitation in Dindigul district •Canal Lining project at Karnataka Neeravari Nigam Limited
•1000 units of homes for IDPs in Sri Lanka •Auditorium at Chennai Corporation •Ampa Center One in Nelson Manickam Road, Chennai •Anna Institute of •Anna Institute of Management, Chenn ai •Paddy market complex •Auditorium & Zonal Office for Chennai Corporations •Housing units for Karnataka Police •Kendra Vidyalaya School at Madurai •NIT campus at Trichy
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Talent Driven Organization
Mr. P. Arulsundaram Chairman & MD
(cid:2) Started RPP Infra in 1988 (cid:2) Civil Engineer by qualification (cid:2) Practical experience of more than 23 years in construction industry (cid:2) Trustee in Erode District Builder’s Association Engineering College
Mrs. A. Nithya Mrs. A. Nithya Wholetime Director & CFO
(cid:2) Masters in Business Administration (Finance) & Software Appl (cid:2) Masters in Business Administration (Finance) & Software Appl (cid:2) Additional Qualifications – Liaison with Bankers and Financiers (cid:2) Vast experience in accounting & finance, legal, FX, HR, corporate
governance
Mr. P. Muralithasan Director
(cid:2) Civil Engineer by qualification (cid:2) Executed several marquee projects for RPP Infra
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Board of Directors
Mr. K. Ravi Independent Director
(cid:2) Bachelors Degree from National Institute of Technology, Fellow of Institution of Engineers & Certified Maintenance Professional
(cid:2) Has over 43 years of experience in the construction industry
Mr. P.R. Sundarajan Independent Director Independent Director
(cid:2) Bachelors Degree from National Institute of Technology (cid:2) Masters degree in Structural Engineering (cid:2) Has over 36 years of experience in the construction industry (cid:2) Has over 36 years of experience in the construction industry
Mr. K. Rangasamy Independent Director
(cid:2) Holds a Masters degree in Agricultural Science (cid:2) Qualified Member of Indian Institute of Bankers (cid:2) Has over 36 years of experience in the banking industry
Mr. Vijay Agarwal Independent Director
(cid:2) Fellow of Chartered Accountants of India (cid:2) Involved in NPOs, Urban & Education (cid:2) Several years of experience in Tax Advisory Services
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P&L TABLE
INCOME STATEMENT (INR Mn) Revenue Expenses EBITDA EBITDA Margin Depreciation Finance Cost Other Income PBT PBT Margin Tax Expense PAT PAT Margin
H1 FY19 2,397 2,090 307 13% 23 97 53 240 10% 83 157 7%
FY18 4,991 4,342 649 13% 68 193 64 452 9% 156 296 6%
FY17 3,663 3,180 483 13% 51 168 40 305 8% 77 228 6%
Y-o-Y% 36% 37% 34%
33% 15% 60% 48%
103% 30%
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B/S TABLE
Assets Non-Current assets Property, plant and equipment Capital work in progress Other Intangible assets
Financial assets Investments
Long Term Loans & Advances Deferred Tax Asset Other Non-Current Assets
Current assets Inventories Financial assets
Trade Receivables Cash and Cash equivalents Short Term Loans & Adavances Others
Other Curent Assets Current Tax Assets (net)
H1 FY 19
FY 18
FY 17
Equity and Liabilities
H1 FY 19
FY 18
FY 17
424 - -
-
7
22 19
208 - 1,267 850 706 1,734 597 -
302 2 1
-
7
22 18
177 - 1,057 793 395 1,463 819 -
Equity Equity Share Capital Other Equity Total equity Non-current liabilities Financial liabilities Borrowings Other Financial Liabilties Provisions
Current liabilities Financial Liabilities Borrowings
Trade payables Other current financial liabilities
Other Current Liabilities Short Term Provisions Current Tax Liabilities (Net)
284 40 0
-
10
12 5
40
- 2,234 402 238 852 463 -
226 1,788 2,014
907 9 7
- - 635 1,168 391 483 47 172
226 1,645 1,871
118 -
7
- - 628 973 943 415 12 89
226 1,524 1,750
168 20 6
- - 577 1,394 437 149 1 80
TOTAL
5,833
5,056
4,581
TOTAL
5,833
5,056
4,581
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Thank You & Contact Us
Sheetal Khanduja Go India Advisors +91 9769364166 sheetal@goindiaadvisors.com
Tanya Khosla Go India Advisors +91 9769387813 tanya@goindiaadvisors.com
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