Salasar Techno Engineering Limited has informed the Exchange about Investor Presentation
Dated: 01.06.2021
To,
The Manager – Listing National Stock Exchange of India Ltd. Exchange Plaza, BandraKurla Complex Bandra East Mumbai – 400051 Symbol – SALASAR
The Secretary Corporate Relationship Dept. BSE Limited P.J.Tower, Dalal Street, Mumbai – 400001 Scrip Code: 540642
Sub: - Investor Presentation
Dear Sir/Madam
Please find attached herewith Investor Presentation of the Company w.r.t. Financial Results of the Company for Q4&FY21, for your record and further dissemination.
Kindly take the same on record.
Thanking You,
Yours Sincerely
Investor Presentation Q4 & FY21
Disclaimer
This presentation and the accompanying slides (the “Presentation”), which have been prepared by Salasar Techno Engineering 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, technological competition, 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.
the Company’s future levels of growth and expansion,
the company’s ability to successfully implement
strategy,
its
Contents
01 | Q4 & FY21 Highlights
02 | Company Overview
03 | Industry Opportunities
04 | Growth Strategy
05 | Historical Financial Performance
Q4 & FY21 Highlights
Q4 & FY21 consolidated P&L statement
Particulars (INR Cr)
Net Sales
Cost of Goods Sold
Employee Cost
Other Indirect Expenses
Total Expenditure
EBITDA
EBITDA Margin%
Other Income
Interest
Depreciation
Profit Before Tax
Provision for Tax
Profit After Tax
PAT Margin%
Q4FY21
Q4FY20
211.5
168.8
9.8
13.6
192.3
19.2
9.1%
5.0
5.4
1.5
17.4
7.5
9.9
4.7%
108.6
80.7
9.8
8.4
99.0
9.6
8.9%
0.9
4.6
1.3
4.7
0.9
3.7
3.4%
YoY
95%
100%
26 bps
274%
163%
121 bps
FY21
596.6
473.0
30.9
35.7
539.6
57.0
9.6%
10.2
17.6
5.6
43.9
14.0
29.9
FY20
526.3
415.1
31.0
28.3
474.5
51.8
9.8%
1.7
20.6
5.0
27.9
5.6
22.4
5.0%
4.3%
YoY
13%
10%
(29 bps)
57%
34%
76 bps
The board has approved issuance of bonus shares in the ratio 1:1. Declared dividend at Rs. 1.00/- per equity share of face value Rs. 10/- for the financial year
5
Consolidated balance sheet as on 31st Mar’21
Particulars (INR Cr)
EQUITY & LIABILITY Share Capital Other Equity
Non- Controlling Interest Shareholder's Funds Non-Current Liabilities: Secured Loans Deferred Tax Assets / Liabilities Other Long Term Liabilities Long Term Provisions
Total Non-Current Liabilities Current Liabilities: Trade Payables Other Current Liabilities Short Term Borrowings Short Term Provisions Other Financial Liabilities Current Tax Liabilities (Net)
Total Current Liabilities Total Liabilities
Mar-21
Mar-20
14.3 238.4 0.3
253.0
33.9 5.0 0.1 3.1
42.1
31.3 60.7 162.6 0.4 1.8 1.5
258.3 553.4
13.3 193.9
- 207.1
5.2 3.1 0.1 2.3
10.7
21.4 54.2 159.1 0.3
0.6 - 235.7 453.5
Particulars (INR Cr)
ASSETS
Non-Current Assets:
Net Block
Capital Work in Progress
Intangible Assets
Other Non Current Assets
Total Non-Current Assets
Current Assets:
Inventories
Current Investments
Sundry Debtors
Cash and Bank
Other Financial Assets
Other Current Assets
Current Tax assets (Net)
Total Current Assets
Total Assets
Mar-21
Mar-20
112.4
0.1
0.3
15.4
128.1
120.0
10.2
240.1
5.2
14.7
35.1
-
425.3
553.4
91.1
0.3
-
14.2
105.6
93.5
1.4
214.1
10.6
11.8
16.3
1.6
349.3
453.5
6
Commissioning of new manufacturing unit
Successfully completed planned capex to setup new manufacturing unit for large and heavy steel structures
- Applications: railway over ridges (ROB), pre engineered building (PEB). power plants, process plants, high-rise building,
warehouses, airport hangers, metro stations, etc.
- Capacity: Installed capacity of 15,000 metric tons per annum, one of the largest in northern India
- Capex: Incurred ~Rs 20 Cr funded through issue of convertible warrants and internal accruals
-
Timeline: The new unit has been commissioned in the last week of March 2021 and is expected to generate ~ Rs. 100 crore
revenue to the topline annually from next year onwards
- Orders Received: As on date company has already secured orders under this vertical to supply 8,400 metric tons of fabricated
structures worth Rs. 70 Crore
7
Key developments during the year
Export foray - Entered into 2-year supply agreement with American Tower Corporation (ATC)
-
For supply of towers in African countries like South Africa, Kenya, Uganda, Nigeria and Ghana
- During FY20-21 executed orders worth Rs 27 Crores under this agreement to supply telecom towers to different African countries
-
Benefits in increasing international presence and increase in export contribution
New opportunities - Incorporated Salasar Adrous LLP, a joint venture with Adrous Advisors Pvt. Ltd.
-
-
To undertake infra related works such as track laying for railways and tramways etc.
Secured first order from Texmaco Rail and Engineering Ltd. worth Rs 252 cr for Bangalore Metro Corporation ltd for design,
supply, installation, testing & commissioning of ballastless track of standard gauge
8
Highlights of key orders secured during the year
1
Secured 6 tenders from Prasar Bharti
- Scope: Design, supply, erection, testing and commissioning of 100M self-supporting lattice steel tower
- Value: Rs 13.45 cr
2
Won EPC order for Railway Electrification at Pratapgarh & Janghai stations of Lucknow division
- Scope: Design, supply, erection, testing and commissioning of 25 KV AC single phase OHE in connection with yard remodeling
- Value: Rs. 10.56 cr
3
Secured order from Delhi Metro Rail Corporation
5
Secured order from Northern Railways Delhi
- Scope: Design, supply, installation, testing and commissioning of 25 KV flexible overhead equipment and SCADA systems - Value: Rs 23.97 cr
-
Scope: Design, supply, erection, testing, commissioning & modification of 132kv DC Tr. line
- Value Rs. 2.85 cr
4
Secured orders from Model Economic Township Ltd.
6
Secured order from Ircon International Ltd., New Delhi
- Scope: Construction of 33 kv overhead circuit line on monopoles
- Value: Rs 10.25 cr
- Scope: Design, manufacture & supply of hot dip galvanized OHE steel masts, portals, SPS, etc.
- Value: Rs 3.63 cr
9
Order book position as on 31st May 2021
Particulars
Orders EPC outstanding as on 31st March 2021
+ Orders EPC received after 31st March till date (LOI received)
+ L-1 EPC orders for which LOI awaited
+ Manufacturing orders received under new manufacturing plant
+ EPC orders under execution in Salasar Adorus LLP (51% JV)
Total
Value
Rs. 262 crore
Rs. 326 crore
Rs. 80 crore
Rs. 70 crore
Rs. 250 crore
Rs. 988 crore
In addition, the company normally has regular monthly orders of telecom towers of approx. Rs 25 to 30 Crores
Segmental revenue breakup
Manufacturing - Steel Structures and Others EPC - Power Transmission EPC - Railway Electrification
Manufacturing - Steel Structures and Others EPC - Power Transmission EPC - Railway Electrification
15%
1%
84%
80%
14%
6%
FY20 Revenue by Segments
FY21 Revenue by Segments
11
Company Overview
Diversified product portfolio
0 1
Transmission Line Towers
Manufacturing and deployment of transmission towers for EPC business, Turnkey Projects, supplying structures to other EPC contractors
0 3
Solar Structures
Manufacturing, fabrication and deployment of solar module mounting structures
0 5
Telecom Towers
Production of towers and monopoles that are designed as per time-tested Ramboll designs, in-house IIT certified designs, or tailored as per customer design
0 2
Railway Electrification
Design, supply, erection, testing & commissioning of railway electrification including normal height OHE, High Rise OHE & TSS Works
0 4
Utility Poles
Production of custom-made poles of the highest quality equipped with technologies like LED lights, CCTV cameras, pollution sensors, Wi-Fi routers
50K
Telecom Towers
475KM
Power Transmission lines
217TKM*
Railway Track electrification
* Track Kilometres
13
Technology driven facilities
3 State-of-art Steel Structure Manufacturing and Galvanising Facilities
1
2
Location: District Hapur (UP) Unit-I, Jindal Nagar Unit-II, Khera, Pilkhuwa Unit-III, Khera, Pilkhuwa
Raw Materials: Steel Shape and Section Zinc (for Galvanising) Nuts and Bolts
3
4
Total Area: 1,50,000 Square yards Installed Capacity: 1,00,000 MT of Steel Galvanizing 15,000 MT of Heavy Structure Division
Machinery: CNC Machines Industrial Machinery Hydra & Cranes
14
Technical Tie-up with Ramboll, Denmark
To manufacture lighter and lower costing tower structures and high mast poles. Their designs reduce the cost by 20% compared to conventional angular towers.
Client Implications: Ramboll Telecom is a world leader in designing telecom and high mast Poles. With the experience of designing towers for last sixty years, their designs are time-tested and proven for performance
15
Experienced management team
Mr. Alok Kumar B.Sc from Punjab University, Chandigarh With experience spanning over 4 decades in trading, manufacturing and fabrication of iron & steel, Mr. Kumar is behind the group's spirit and commitment to deliver products and services of uncompromising quality and integrity
Mr. Shashank Agarwal B.E. (Mech.) from MIT, Manipal With 25+ years of experience, Mr. Agarwal is a first-generation entrepreneur who has been instrumental in building Salasar into one of the leading players in the sector. He is involved in all aspects of business and has been the driving force in creating the brand and image of Salasar
Chairman & Managing Director Mr. Alok Kumar
Joint Managing Director Mr. Shashank Agarwal
Board of Directors:
Key Management:
1
2
3
Shalabh Agarwal Director
Tripti Gupta Director
Anil Kumar Jain Non-Executive and Independent Director
4
5
6
Mukesh Kumar Garg Non-Executive and Independent Director
1
Pramod Kumar Kala Chief Finance Officer
Sanjay Chandak Non-Executive and Independent Director
Advisor:
Vijay Kr jain Non-Executive and Independent Director
1
Uttam Prakash Agarwal Advisor to Board
16
Strong client base
Telecom Sector
Power Sector
Others/EPC
1
2
3
Approved vendor for Power Grid Corporation Ltd.
Qualified to bid for rural electrification projects
Qualified by CORE (Central Organization for Railway Track Electrification)
17
Industry Opportunities
Industry opportunity - Telecom
Mobile and Internet penetration The proportion of unique mobile subscribers to the total population is expected to reach around 63% in 2025 from 58% in
July 2018
With the increase in the mobile phone penetration and reducing data costs in India, it is expected that the current internet
user base that stands at 687 Mn might get doubled in the next 5 years
5G Rollout Plans & 4G Penetration Increase in the 4G penetration to provide 4G access to ~80%* of India’s mobile subscriber base by 2024 5G rollout likely to attract ~USD 30 Bn^ in collective capital expenditures over a period of next 5 years by the top three
telecom operators in India
With the positive outlook of the telecom sector it would be lucrative to move beyond traditional telecom business to wider
digital consumer space like content and mobile banking solutions
Increased Demand for Telecom Tower Infrastructure pan India
Government Initiatives that will provide a boost to the Telecom Infrastructure Segment
The Government of India planned to roll out a new National Telecom Policy 2018 in lieu of rapid technological advancement in the sector over the past few years. The policy intends to attract investments worth USD 100 Bn in the sector by 2022 The Department of Information Technology intends to set up over 1 Mn internet-enabled common service centers across India as per the National e-Governance Plan
*Ericsson Mobility Report November 2018 ^UBS Report
19
Industry opportunity – Power & Railway
Increased demand for power transmission infrastructure development
Power consumption is estimated to reach up to 1,894.7 TW in 2022 Increased infrastructure power development due to increasing inter regional power demand - supply gap
transmission
demand
for
Government Initiatives
The Union Budget 2020-21 has allocated USD 2.27 Bn to the Ministry of Power Additional USD 786.95 Mn to Deen Dayal Upadhyay Gram Jyoti Yojana (DDUGJY) to provide power transmission infrastructure for rural electrification.
Increasing Demand for Electricity
Growth in Renewable Energy
2509
10% CAGR
1252
1697
2020
2022
2027
175GW
87GW
2022
2020
Yearly capacity addition of 15-20GW
Railways Electrification orders are on a rapid growth; aiming to double their capacity
The railways have set a 100% electrification target by the next four years The Government is going to come up with a ‘National Rail Plan’ to enable the country to integrate its rail network and develop a multi-modal transportation network. Current Railway capex for 2020-21 is INR 1.5 Lakh Cr. expected to grow at CAGR of 18% for the next 10 years Electrification of 6,000 Km route is targeted, with wiring of the entire broad gauge network now envisaged for completion by 2023-24
20
Growth Strategy
Growth strategy
1
2
3
4
5
New business of manufacturing of heavy structures such as ROB, PEB, etc.
Tapping industry opportunities by expanding product portfolio and optimal utilization of existing capacity
Expanding tower designs and leveraging on their tie-ups with Ramboll to provide value to the clients
Strong focus on the export market to increase its share in the foreign market. Increasing market share domestically by targeting new customers and expanding relationships with the existing ones.
Innovating and manufacturing differentiated products like camouflaged towers, monopoles, etc. to provide for the evolving infrastructural needs of the society
22
Historical Financial Performance
Key financial highlights
Sales Volumes (MT)
Revenue (Rs. Crore)
51,956
55,657
74,993
58,619
62,069
495
384
655
526
597
FY17
FY18
FY19
FY20
FY21
FY17
FY18
FY19
FY20
FY21
EBITDA (Rs. Crs) / Margin (%)
PAT (Rs. Crs) / Margin (%)
80
60
40
20
0
10.1%
10.9%
11.2%
9.8%
9.6%
39
54
73
52
57
FY17
FY18
FY19
FY20
FY21
12% 10% 8% 6% 4% 2% 0%
40
30
20
10
0
4.9%
19
6.0%
30
5.1%
33
4.3%
22
5.0%
30
7% 6% 5% 4% 3% 2% 1% 0%
FY17
FY18
FY19
FY20
FY21
24
Key financial ratios
RoCE
24%
23%
23%
ROE
22%
23%
19%
19%
15%
11%
12%
FY17
FY18
FY19
FY20
FY21
FY17
FY18
FY19
FY20
FY21
Debt to Equity
0.7
0.7
0.7
0.8
0.8
FY17
FY18
FY19
FY20
FY21
RoCE – EBIT/ Average Capital Employed, ROE – Profit/Average Shareholders Funds, D/E – Average Debt/ Average Equity
25
Thank You
Salasar Techno Eng
Pramod Kala - CFO pramod.kala@salasartechno.com investor.relations@salasartechno.com
Pareto Capital (Investor Relations)
Pooja Dokania pooja.dokania@paretocapital.in Smit Shah smit.shah@paretocapital.in