GAYAPROJNSE23 November 2019

Gayatri Projects Limited has informed the Exchange regarding Investor Presentation on Q2 FY-2020 Results.

Gayatri Projects Limited

Date r 23'd Novemberr 2019

(ù G^y TRt

To, The General Manager, The Department of Corporate Relations, The Bombay Stock Exchange Limited, 25th Floor, Phiroz Jeejeebhoy Towers, Dalal Street, Mumbai- 4O0 O01.

To, The Secretary, National Stock Exchange of India Ltd, sth Floor, Exchange Plaza, Plot No.C/1, G Block, Bandra Kurla Complex, Bandra (East)' Mumbai -400 051.

Dear Sir/Madam,

Sub: Presentation on Q2 FY-2020 Results to Analysts and Market Reg.., ::1'.:::::l:.::::.:::l:1:.:::::::l¡¡¡¡¡..r¡.¡...¡¡¡¡..¡..¡¡r¡¡¡...¡..¡¡.... With reference to above subject, please find enclosed earnings presentation to Analysts and Market

on results for the Q2 FY-2020,

For your information and necessary dissemination please,

Thanking you,

Yours truly, FoT GAYATRI PROJECTS LIMITED

(cs r.v. LAKSHMT) Company Secretary and Compliance Officer Membership No. L76O7

Regd. & Corp. Office : Gayatri Projects Limited, 81, 6-3-1090, TSR Towers Raj Bhavan Road, Somajiguda, Hyderabad S0O 082. T.S CIN : 199999TG 1 989PLC0572B9

T +91 40 2331 0330 I 4284 I 4296 E gplhyd@gayatri.co.in F +91 40 2339 8435

www.gayatri.co.in

Gayatri Projects Limited

Earnings Presentation Q2FY20

Disclaimer

The material that follows is a Presentation of general background information about the Company’s activities as at the date of the Presentation. It is information given in summary form and does not purport to be complete and it cannot be guaranteed that such information is true and accurate. This Presentation does not constitute a prospectus, offering circular or offering memorandum or an offer, or a solicitation of any offer, to purchase or sell, any shares and should not be considered as a recommendation that any investor should subscribe for or purchase any of the Company’s equity shares.

This Presentation includes statements that are, or may be deemed to be, “forward-looking statements”. These forward-looking statements can be identified by the use of forward-looking terminology, including the terms “believes”, “estimates”, “anticipates”, “projects”, “predicts”, “aims”, “foresees”, “plans”, “expects”, “intends”, “may”, “will”, “seeks” or “should” or, in each case, their negative or other variations or comparable terminology, or by discussions of strategy, plans, aims, objectives, goals, future events or intentions. These forward-looking statements include all matters that are not historical facts. They appear in a number of places throughout this Presentation and include statements regarding the Company’s intentions, beliefs or current expectations concerning, amongst other things, its results or operations, financial condition, liquidity, prospects, growth, strategies and the industry in which the Company operates. By their nature, forward- looking statements involve risks and uncertainties because they relate to events and depend on circumstances that may or may not occur in the future. Forward-looking statements are not guarantees of future performance including those relating to general business plans and strategy of the Company, its future outlook and growth prospects, and future developments in its businesses and its competitive and regulatory environment. Neither the Company, nor its Directors, Promoter & Promoter Group, affiliates or other advisors or representatives nor any of its or their parent or subsidiary undertakings or any such person’s officers or employees gives any assurance that the assumptions underlying such forward-looking statements are free from errors nor do any of them accept any responsibility for the future accuracy of the forward-looking statements contained in this Presentation or the actual occurrence of the forecasted developments. Forward-looking statements speak only as of the date of this presentation. As a result, the Company expressly disclaims any obligations or undertaking to release any update or revisions to any forward-looking statements in this presentation as a result of any change in expectations or any change in events, conditions, assumptions or circumstances on which these forward-looking statements are based. No representation, warranty or undertaking, express or implied, is made or assurance given that such statements, views, projections or forecasts, if any, are correct or that the objectives of the Company will be achieved. The Company actual results of operations, financial condition and liquidity, and the development of the sector it operates in, may differ materially from those suggested by the forward-looking statements contained in this Presentation. In addition, even if the Company’s results of operations, financial condition and liquidity, and the development of the industry in which the Company operates, are consistent with the forward-looking statements contained in this Presentation, those results or developments may not be indicative of results or developments in subsequent periods.

The Company, as such, makes no representation or warranty, express or implied, as to, and does not accept any responsibility or liability with respect to, the fairness, accuracy, completeness or correctness of any information or opinions contained herein. The information contained in this Presentation, unless otherwise specified is only current as of the date of this Presentation. None of the Company, its Directors, Promoter and Promoter Group or affiliates, nor any of its or their respective employees, advisors or representatives or any other person accepts any responsibility or liability whatsoever, whether arising in tort, contract or otherwise, for any errors, omission or inaccuracies in such information or opinions or for any loss, cost or damage suffered or incurred however arising, directly or indirectly, from any use of its documents or its contents or otherwise in connection with this Presentation. The Company assumes no responsibility to publicly amend, modify or revise any forward looking statements, on the basis of any subsequent development, information or events, or otherwise. This presentation has been prepared based on the information available in the public domain and internal management information and estimates. The information contained herein is subject to change without notice. Past performance is not indicative of future results.

Agenda

Corporate Action to provide Liquidity Boost

Q2FY20 Highlights & Guidance

Q2FY20 Financial Highlights & Top Work Order Status

Slide No. 7 - 10

Slide No. 4

Slide No. 5 - 6

Order Book Diversification

Slide No. 11

Key Investment Highlights

Appendix – Core Business Highlights

Slide No. 12-14

Slide No. 15 onwards onwards

Corporate Action to provide Liquidity Boost

Monetisation of stake in Power Asset

• Monetisation of c.5.9% stake in the Sembcorp Energy “India” Ltd (“SEIL”) at an advanced stage;

closure by December 2019

• Process has been started for taking the necessary shareholders approval

Monetisation of Awards and Claims

• GPL has won awards, by different arbitrators/courts, a total of INR 10 Bn+ awards, towards

disputed receivables from its EPC clients

• Post recent clarification by GOI; the Company has started engaging with banks and the Central Government agencies for monetising these awards - 50%+ of these awards are from central government agencies. The company can monetise 75% of awards through submission of bank guarantees

• In addition, GPL has a net exposure to outstanding claims of INR 9+ Bn in different arbitral

tribunals/courts.

•

The company is experiencing delayed payments from State Govts which resulted in delay in its own interest payment obligations; Expecting all accounts to be regularised by end December 2019.

Q2FY20 Highlights

Execution impacted due to prolonged monsoon

Order pick- up slow

Debt Repayments

• Road EPC activities significantly impacted because of elongated monsoon

affecting the progress of multiple large projects.

• Heavy rains in Assam & Haryana resulted in damage to the road surface for roads which were in defect liability period and required re-carpeting at significant cost

• Rains continued well into October; hence execution to pick up materially

from Q4FY20

• Slow offtake in NHAI road project; tendering expected to pick up from

Q4FY20

• Expect to win significant orders from a strong irrigation bid pipeline in MP

and Karnataka.

• Avoiding aggressive bidding in Road projects as order backlog strong at 4x

book-to-bill

• Paid INR 1.7 billion of long term loan • Paid INR 1.1 billion of interest costs • Experiencing delayed payments from State Govts resulting in delayed in its

own interest payment obligations; Care Ratings downgraded to D. Expecting all accounts to be regularised by end December 2019.

FY20: Revised Guidance

FY20 Guidance (INR Mn)

Order Inflow

Revenues

EBITDA Margin

PAT

INR 50-60 billion

5%-10% Growth

15%+

5%-10%

Execution delays due to excessive rainfalls have impacted the full year guidance

Q2FY20 – Financial Performance

Revenue (INR Mn)

EBITDA (INR Mn) & EBITDA Margin

Key Highlights

6,113

6,977

16.0%

14.2%

981

994

Q2FY19

Q2FY20

Q2FY19

Q2FY20

PBT (INR Mn)

PAT (INR Mn)

185

203

158

Q2FY19

Q2FY20

Q2FY19

Q2FY20

o Severe extended rains affected operations across some of our largest projects resulting significant revenue attrition.

o The company, booked a large claim awarded to it during

the period.

o Also company took this opportunity to clean-up on

followings accounts:

o Historical disputed GST claims (contracts from pre- GST era) worth Rs. 50cr were reversed during the quarter.

o Very heavy rains resulted in damage to road surface in two projects (Assam & Haryana) which were in defect liability period (DLP) – and significant expenses were incurred in resurfacing. Rs. 40cr extra was spent during the quarter on this a/c.

o In addition, expected credit loss of Rs.19cr had to be booked during the quarter, resulting in additional hit on EBITDA.

Q2FY20 Snapshot

INR Mn

Revenue

Expenses

EBITDA

EBITDA Margin

Depreciation

Finance Cost

Other Income

PBT

PBT Margin

Tax Expense

PAT

PAT Margin

Basic EPS

Q2FY20

Q2FY19

YoY(%)

6,977

5,983

994

14.2%

195

630

185

2.7%

105

1.1%

0.43

14%

17%

19%

-6%

17%

-61%

6,113

5,133

981

16.0%

164

670

158

2.6%

(45)

203

3.3%

0.66

-35%

H1FY20

16,818

14,296

2,522

15.0%

387

1,273

893

5.3%

265

628

3.7%

3.36

H1FY19

YoY(%)

17%

20%

19%

-2%

13%

212%

-11%

14,341

11,943

2,398

16.7%

325

1,297

792

5.5%

707

4.9%

3.49

-4%

Top Work Orders – Status Update

Project Name

Location

Contract Value (INR Cr)

Balance work as on 01.10.2019 (INR Cr)

Mobilized on Site

Revenue Booking Start

Purvanchal Expressway Package 1

Purvanchal Expressway Package 2

Ghaghra Bridge to Varanasi Package 2

Ghaghra Bridge to Varanasi Package 3

Sultanpur - Varanasi Package 1

Sultanpur - Varanasi Package 2

Eastern UP

Varanasi, UP

1,483

12,76

741

558

986

806

Angul - Sambalpur Road work

Angul, Odisha

1,255

Cuttack - Angul PKG 1

Cuttack - Angul PKG 2

Rajamunda - Barkote

Bihar Road (Patna - Gaya)

BSRDC Package 5

BSRDC Package 6

BSRDC Package 7

Jammu Ring Road

*expected completion delayed due to excessive rainfall

Cuttack

Barkote, Orissa

Patna, Bihar

Kadirganj, Bihar

583

529

394

971

126

127

151

1,307

1,084

207

118

401

298

945

487

441

384

528

126

134

Yes

INR Crores

Expected Completion of Project End of Q & Year

Q3 22

Q4 20 *

Q3 22

Q1 21

Q3 22

Q4 21

Q3 19

Q3 17

Q3 18

Q3 19

Q1 20

Q4 17

Q1 20

Jammu

1,339

1,095

Q1 19

Q2 23

Top Work Orders – Status Update

Project Name

Location

Contract Value (INR Cr)

Balance work as on 01.10.2019 (INR Cr)

Mobilized on Site

Revenue Booking Start

INR Crores

Expected Completion of Project End of Q & Year

Nagpur - Mumbai Expressway

6 lane tunnel at Khambataki Ghat

Dimapur - Kohima Package 3

Hyderabad Elevated Corridor

Andhra Pradesh / Tamilnadu border

Shirdi

Satara

Nagaland

Hyderabad

Chittoor, AP

Kempwad Lift Irrigation Scheme (INR 1,363.5 Cr)

Karnataka

Chintalapudi PKG 1

Chintalapudi PKG 2

Kaleswaram Project (INR 1,482.75 Cr.)

PLIS Package 18 (MEIL - HES JV)

Iqubalgarh to Vadodara : 4744

TOP WORK ORDERS

PROPORTION OF TOTAL ORDER BOOK

Pattisema, AP

Jangannagudem

Siddipeta

Jadcherla

Vadodara

1,312

1,241

493

340

425

306

990

989

683

600

700

425

488

173

374

155

589

771

514

600

700

375

18,588

13,634

91%

Yes

Q1 20

Q2 20

Q4 16

Q1 20

Q1 19

Q2 18

Q3 19

Q1 20

Q2 22

Q4 22

Q3 20

Q2 21

Q3 21

Q4 20

Q2 21

Q1 23

Awaiting for Appointed Date Expecting Q3 22

Yes

Q4 18

Q1 22

Growing Order Book : Current Book to Bill of 4x

Growing and De-Risked Order Book (INR Bn)

Geographical Diversification

GPL’s Growth in EPC order book over the last 5 years

129

132

163

149

Gujarat 3%

Jharkhand 2%

Others 3%

Karnataka 4%

Bihar 6%

Uttar Pradesh 23%

FY15

FY16

FY17

FY18

FY19

H1FY20

Segmental Diversification

70%

23%

Jammu 7%

Maharashtra 12%

0.5%

0.1%

ROAD

IRRIGATION

MINING

RAILWAY WATER GRID

LAND DEVELOPMENT

Andhra Pradesh 12%

Telangana 12%

Odisha 16%

Key Investment Highlights

Strong presence in high growth construction sector

Healthy and diversified pure EPC un-executed order book with good revenue growth visibility

Highly efficient operations with strong execution capabilities

Balance-sheet improvement on track for industry leading metrics in next 3 years

Significant value unlocking through business restructuring

Significant Deleveraging Despite Continued Strong Revenue Growth

Net Debt/Equity (x)

Net Debt (INR Mn)

2.4

2.1

2.5

16,337

17,399

18,612

17,016

15,443

15,466

1.5

1.2

1.1

FY15

FY16

FY17

FY18

FY19

H1FY20

FY15

FY16

FY17

FY18

FY19

H1FY20

Debt Maturity Profile (INR MN)

2,090

1,986

2,316

2,139

Working Capital Days

105

680

FY15

FY16

FY17

FY18

FY19

H1FY20

FY20

FY21

FY22

FY23

FY24 & Beyond

Receivable Days

Payable Days

Inventory Days

Net Working Capital

GPL: Amongst India’s leading Asset – Light EPC Companies

 One of India’s leading construction and infrastructure companies with dedicated focus on asset-

light EPC work

 5 decades of experience in execution of major civil works, diversified across geographies &

infrastructure segments

o Pan India operations spread across 19 states o Transportation, Waterworks & Industrial construction projects o Marquee client list: NHAI, KNNL, PWD (Mizoram), MSRDC, BSRDC, CIDCO (Maharashtra) I &

CAD (AP, Telangana) etc.

 Strong Execution track record

Completed more than 6,850 lane km of road construction over the last 25 years Completed ~44 projects aggregating to INR 106 billion+ value in last 5 years Own extensive fleet of more than 2,355 pieces of construction equipment

 Leading technology-led transformation in Indian construction space

o o

Technology-driven efficient execution: IOT, Computer vision, UAVs, cloud-computing Real-time reporting, higher transparency & faster execution using end-to-end digital project management

 High medium term revenue growth visibility driven by large order wins

Order book of INR 149 bn Book-to-Bill of 4x: high growth visibility for next 3-4 years

 Re-focused business on “Asset-Light” Model over last 4 years

o o o

o o

Reduced, restructured, monetized exposure to Asset Development Business Significant improvement in balance-sheet leverage (2.4x to 1.16x in last 4 years), return ratios (FY2019 RoE & RoCE at 17% ) and free cash flow generation (FCF of Rs 1.5 Bn, post interest payment, generated for the first time in last 10 years) On track for mid 20s RoE & RoCE, strong cash-flow generation and D/E below 0.5x in next 2-3 years

Business Segments

Core Business - EPC (Order Book: INR 149 Bn+)

Transportation National and State Highways

Water Works Canals, Dams, supply & Dist.

Mining U/G Mechanised

Railways DFC

Industrial Steel & Power Plants, T&D, Conveyor

Other Civil Site Levelling, Bldg EPC

Asset Development

Power (GEVL) 4,300 MW Power Capacity– Stake in Sembcorp Energy India Ltd. (SEIL)

Highways 4 Annuity + 3 Toll national & state highways

At advance stage of monetisation

Demerged into a separate entity; Listed on BSE & NSE

Appendix

Strategy – Focusing on ‘Asset Light’ EPC segment

Asset light EPC model o Pure EPC company with no asset-heavy

BOT or HAM project work.

across

geographies

and

o Diversified

practice areas o Deleveraging

and monetizing non-core assets to improve visible Return on Capital

balance-sheet

o Focused on cash flow generation

Explore new opportunities in EPC o Further enhance engineering capabilities in order to pursue new EPC contracts

o Enter

specialized

sectors with

low

competition and high margins

o Opportunity

underground includes mining, water supply, lift-irrigation, high speed railways, urban infrastructure, pre- fab buildings etc

Grow presence in core EPC segments o Actively bid for quality projects in core irrigation,

areas of expertise- roads, industrials

o Maintain a healthy book-to-bill ratio o Adhere to geographical cluster approach while bidding for projects to optimize management & equipment utilization and maximize profitability

Focus on driving operational performance & execution efficiency o Integrate best practices from different improve performance and

sectors to project execution

o Utilize advanced technologies, designs, engineering and project management tools in order to increase productivity o Strengthen IT systems and other internal processes to reduce manual intervention

Spotlight on Asset-Light Model

 2012-2015 : GPL numbers depressed due to asset

investments

 2016 onwards: Business restructuring and Shift towards

Asset-Light model

 Core Construction Services business is a high ROCE business;

At the bottom of cycle generated 18.2%

 In line with the Industry practice, Free cash flow from Core

Construction activities was used for funding asset acquisition prior to 2016

Historical ROE and ROCE

ROCE - Core Construction Business

20.2% 19.1%

ROE

ROCE

12.7% 10.8%

13.7%

11.2%

12.5%

7.4%

8.3%

9.0% 7.7%

10.8% 8.9%

3.3%

20.2%

15.2%

17.3% 16.8%

33.6%

23.8% 25.1%

27.2% 27.5%

25.3%

20.2%

18.4%

18.2%

2011 * Core construction business ROCE calculated after deducting investment in power

2016

2015

2012

2013

2014

2018

2017

and road BOT assets from the total capital employed

2019

2011

2012

2013

2014

2015

2016

2017

2018

2019

Strong Execution Capabilities & a Diverse Range of Projects

Projects executed in last 5 years

Segment

Roads Industrial Irrigation Site leveling Dams & reservoirs Railways Total

No. of projects executed

Value of contract (INR Mn)

12 17 10 2 2 1 44

64,587 23,535 10,727 2,382 448 3,845 105,524

Strong BG limits key competitive advantage Company’s existing BG limit provides additional o Company has existing BG limit of INR 44 bn advantage to expand order book & scope for further o Existing BG limit provides ability to maintain order book of growth

over INR 200 bn

o Ability to further increase the BG limits Roads: Peak executed capacity at ~1,000 kms for the year 2007

S M K E N A L

1200

1000

800

720

600

400

200

991

827

680

553

364 362

232

210

652

498

1999 2000 2001 2003 2005 2006 2007 2009 2011 2013 2016

Required Lane Kilometers to be executed (as order)

YEARS

~700 Lane Kms

Capacity to execute

1,100 – 1,200 Lane kms/ year

Profit & Loss

INR Mn

Revenue Expenses

EBITDA EBITDA Margin Depreciation

Finance Cost

Other Income

PBT PBT Margin Tax Expense

PAT PAT Margin

Basic EPS

FY19

34,631 29,182

5,449 15.7% 659

2,513

2,357 6.8% 249

2,107 6.1%

11.3

FY18

29,123 24,446

4,677 16.1% 547

2,394

1,825 6.3% -55

1,881 6.5%

10.6

FY17

21,154 17,919

3,234 15.3% 432

2,014

306

941 4.4% 237

704 3.3%

4.0

All figures in INR Million

Balance Sheet

ASSETS (INR Mn)

H1FY20

FY19

FY18 EQUITY AND LIABILITIES (INR Mn)

H1FY20

FY19

FY18

All figures in INR Million

NON-CURRENT ASSETS (a) Property Plant & Equipment (b) Capital Work in Progress (c) Financial Assets (i) Investments (ii) Loans

CURRENT ASSETS (a) Inventories (b) Financial Assets

(i) Trade receivables (ii) Cash and cash equivalents

(iii) Other Bank Balances (iv) Loans

3,848 5

3,763 5

10,053 3,452

10,088 3,474

3,350 -

10,169 3,563

5,125

3,574

2,930

12,717 725

2,090 2,103 1,293 18,833

13,930 1,265

2,002 1,887 1,447 17,206

11,337 569

1,857 1,703 1,385 12,998

EQUITY (a) Equity Share capital (b) Other Equity

LIABILITIES Non-Current Liabilities (a) Financial Liabilities

(i) Borrowings (ii) Other Financial liabilities

(b) Provisions (c) Deferred Tax Liabilities (net)

Current Liabilities (a) Financial Liabilities

(i) Borrowings (ii) Trade payables (iii) Other Financial Liabilities

(h) Other Current Liabilities (c) Provisions

374 13,521

374 12,922

374 10,856

5,394 14,804 41 19

10,735 11,860 2,479 986 34

7,121 14,962 48 21

9,499 10,508 2,293 858 34

8,032 10,332 52 71

9,591 8,043 2,042 446 21

TOTAL

60,246

58,641

49,861

TOTAL

60,246

58,641

49,861

Board of Directors

T. Indira Reddy

Promoter and Non-Executive Chairperson, over 25 years of experience in the construction industry

T. V. Sandeep Kumar Reddy

Promoter and Managing Director, 20+ years of construction experience

J Brij Mohan Reddy

Executive Vice Chairman, Over 49 years of experience in Heavy Engineering Construction and the harbour engineering industries

Mr Birendra Kumar

Non-Executive and Nominee Director (Bank of Baroda)

Mr. J.N.Karamchetti,

Mr. Ch. Hari Vithal Rao Mr. Ch. Hari Vittal Rao

Non-Executive and Independent Director, rich experience in the field of engineering and steel

Non-Executive and Independent Director, 49 years of experience as a banker and was employed with Bank of Baroda and Naandi Foundation in the past

Ms. Gayathri Ramachandran

IAS (Retd.); has held important positions in the Government of India in the Ministries of Power, Petroleum, Industries, Chemicals & Fertilizers and Civil Aviation.

Mr. K. Jairaj

IAS (Retd.); has held key appointments in the Infrastructure, Energy, Transport and Urgan Development sectors

Management Team - HQ

T Sandeep Reddy  Managing Director  Masters in Construction Engineering & Management

from University of Michigan, USA  20+ years of construction experience

J Brij Mohan Reddy  Executive Vice Chairman  Graduate in Industrial Engineering from Berkeley

University, USA

 50 years of experience in construction and

engineering

P Sreedhar Babu  Chief Finance Officer  Fellow Member of Institute of Chartered

Accountants of India

 18+ years of experience in finance and banking

D Sitaram  President, Business Development  In-charge of evaluating new business units,

identifying suitable Joint-Venture partners, and attending review meetings with clients and regulatory bodies

T Rajiv Reddy  Vice President  In-charge of overall Project Controls & Monitoring,

and head of Mining business unit

 Graduate in Industrial Engineering from University of

Illinois, Urbana-Champaign, USA

Management Team - Projects

K Sesha Reddy  Senior Vice President, Transportation  In-charge of project monitoring and controls  Previously a Project Head at L&T  Masters in Construction management from Birla

Institute of Technology

 32+ years of experience in infrastructure

G Venkateshwar Rao  Senior Vice President, Irrigation  Oversees entire irrigation business unit  Graduate in Civil Engineering  20+ years of experience in irrigation EPC

MV Suresh  Vice President, Roads  Oversees road construction projects  Graduate in Civil Engineering  20+ years of experience in EPC

CH Ramakrishna Rao  Senior Vice President, Roads  Oversees road construction projects  Masters in Construction management from Birla

Institute of Technology

 20+ years of experience in infrastructure

Sudhakar Lolla  Vice President, Mining  Oversees underground mining projects  Masters in Technology and Mining from Indian

School of Mines

 18+ years of experience in mining

Contact Details

V V Chandra Sekhar Gayatri Projects Limited Tel: +91 40 23310330/23314284/4296 Email: vvcs@gayatri.co.in

Sheetal Khanduja Go India Advisors +91 9769364166 sheetal@goindiaadvisors.com

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Gayatri Projects Limited has informed the Exchange regarding Investor Presentation on Q2 FY-2020 Results.

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