Salasar Techno Engineering Limited has informed the Exchange about Investor Presentation
Dated: 31.10.2021
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 Q2-FY22, for your record and further dissemination.
Kindly take the same on record.
Thanking You,
Investor Presentation Q2 FY22
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
its strategy,
Contents
01 | Q2 FY22 Highlights
02 | Company Overview
03 | Industry Opportunities
04 | Growth Strategy
05 | Historical Financial Performance
Q2 FY22 Highlights
Management Comment
Commenting on the result, Mr Shashank Agarwal, Joint Managing Director, Salasar Techno Engineering Ltd. said,
“I am pleased to inform you that the company has delivered a strong performance during the quarter with a revenue of Rs 200.2 Crores and EBITDA of Rs 21.5 Crores which is 10.7% of the revenue. The operations of the company are back to normal post the Covid disruptions, which is reflected in the results. The stellar performance was driven by contribution from each of our business segments along with our approach to diversify and enter newer segments. All our business verticals offer significant headroom for growth and operating leverage as they scale up. Railways’ electrification continues to remain a key growth segment and focus area for us. Further our new vertical of Heavy Steel Structure Division has gained impetus with a steady flow of orders along with increasing our customer base with reputed brands.
“The entire team of Salasar Techno Engineering deserves special acknowledgement for their untiring efforts in contributing towards the Company’s performance as we continue to strive for growth opportunities in the future.”
5
Q2 FY22 consolidated P&L statement
Particulars (INR Cr)
Q2 FY22 Q2 FY21
YoY
Q1 FY22 QoQ H1 FY22 H1 FY21
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%
200.2 160.7 9.4 8.6 178.7 21.5
10.7%
-0.6 5.4 1.8 13.7 3.7 10.0 5.0%
YoY
58.0% 55.6% 37.6% 79.1% 55.4% 82.8%
147.6 119.2 7.5 5.8 132.5 15.0
35.7% 34.8% 25.1% 47.4% 34.8% 43.3%
132.8 102.2 8.3 7.5 118.0 14.7
50.8% 57.2% 12.9% 14.3% 51.4% 45.8%
333.0 262.9 17.8 16.1 296.7 36.3
210.7 169.0 12.9 9.0 190.9 19.8
10.2% 57 bps
11.1% -36 bps
10.9%
9.4%
147 bps
1.2 NA 4.2 29.9% 1.4 28.3% 10.6 29.1% 2.4 50.7% 22.6% 8.2 5.5% -53 bps
2.1 NA 4.7 14.0% 1.8 0.7% 10.3 33.0% 3.0 24.4% 36.4% 7.3 5.5% -52 bps
1.4 10.2 3.5 24.0 6.6 17.4 5.2%
1.8 -18.4% 7.8 31.0% 2.7 28.7% 11.1 116.2% 2.7 143.3% 107.4% 8.4 4.0% 124 bps
• On account of nation-wide lockdown due to COVID 19 pandemic, Q1 FY21 performance was severely impacted • Operations of the Company were impacted on account of Covid related restrictions during the quarter ended 30th June 2021
6
Order book position as on 30th Sep 2021
Particulars
Orders EPC outstanding as on 30th Sep 2021
+ L-1 EPC orders for which LOI awaited
Value
Rs. 560.5 crore
Rs. 110.4 crore
+ Manufacturing orders outstanding under new manufacturing plant as on 30th Sep 2021
Rs. 60.8 crore
+ EPC orders under execution in Salasar Adorus LLP (51% JV) as on 30th Sep 2021
Rs. 235.3 crore
Total
Rs. 967.0 crore
In addition, the company normally has regular monthly orders of telecom towers of approx. Rs 30 to 35 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
13%
4%
83%
20%
7%
73%
H1FY21 Revenue by Segments
H1FY22 Revenue by Segments
8
Company Overview
Diversified product portfolio
50K
Telecom Tower
475KM
Power Transmission lines
217TKM
Railway Track Electrification
* Track Kilometres
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
Transmission Line Towers ▪ Manufacturing and deployment of transmission towers for EPC business, Turnkey
Projects, supplying structures to other EPC contractors
Railway Electrification ▪ Design, supply, erection, testing & commissioning of railway electrification including
normal height OHE, High Rise OHE & TSS Works
Solar Structures ▪ Manufacturing, fabrication and deployment of solar module mounting structures
Utility Poles ▪
Production of custom-made poles of the highest quality equipped with technologies like LED lights, CCTV cameras, pollution sensors, Wi-Fi routers
Heavy Steel Structures ▪
Railway over ridges (ROB), pre engineered building (PEB). power plants, process plants, high-rise building, warehouses, airport hangers, metro stations, etc
10
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
11
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
12
Experienced management team
Mr. Alok Kumar B.Sc from Punjab University, Chandigarh • Wide experience spanning over 4 decades in
trading, manufacturing and fabrication of iron & steel
• Driving force behind groups commitment of timely
delivery with superior quality
Mr. Shashank Agarwal B.E. (Mech.) from MIT, Manipal • First generation entrepreneur with 25+ years of experience. Involved in every aspects of business and has been the driving force in creating the brand and image of Salasar
•
1
2
3
1
1
Chairman & Managing Director
Joint Managing Director
Board of Directors:
Mr. Shalabh Agarwal Director
Ms. Tripti Gupta Director
Mr. Anil Kumar Jain Non-Executive Independent Director
4
5
6
Mr. Mukesh Kumar Garg Non-Executive Independent Director
Mr. Sanjay Chandak Non-Executive Independent Director
Mr. Vijay Kr jain Non-Executive Independent Director
Key Management
Mr. Pramod Kumar Kala Chief Financial Officer
Advisor
Mr. Uttam Prakash Agarwal Advisor to Board
13
Strong client base
Approved vendor for Power Grid Corporation Ltd.
Qualified to bid for rural electrification projects
Qualified by CORE (Central Organization for Railway Electrification)
Telecom Sector
Power Sector
Others/ EPC
14
Industry Opportunities
Industry opportunity - Telecom
Tower
BTS
India is the second largest telecom market in the world with a subscriber base of 1.17 billion
Cumulative industry capex and yearly growth of towers and base stations (BTS) (‘000s)
1,713.0
2,000.1
1,371.9
2,206.1
2,211.6
775.0
439.0
440.4
461.4
500.8
581.1
630.8
Dec'15
Dec'16
Dec'17
Dec'18
Dec'19
Nov'20
Growth drivers for the telecom tower companies
Increase in data consumption led by 4G
Launch of 5G
Tower sharing leading to increase in revenue of telecos
Increasing tele-density in largely untapped rural market
Smart city opportunities
Source - Ministry of Communications, TAIPA, EY analysis
Development of IoT for manufacturing and services sector
Monetization of tower in emerging business streams
Creation of robust digital communication Infrastructure
16
Industry opportunity - Power Transmission
Robust growth outlook driven by strong policy support
India’s electricity consumption can continue to grow at >5% on a low base
At a conservative avg. GDP growth rate of 5% over next decade power demand estimated to rise by 1.6x
Estimated INR 6 - 8 trillion market opportunity in transmission till FY2029
Schemes like UDAY, 24x7 Power for All, Village Electrification etc. strengthening the value chain
Historically generation and transmission investment
% Growth in Generation Capacity (MW)
% Growth in Transmission Capacity (ckt km)
Transmission line capacity (ckt km)
230/220 kV
400 kV
765 kV
HVDC 500/800 kV
64%
51%
24%
12%
22%
17%
26%
15%
26%
22%
FY'92-97
FY'97-02
FY'02-07
FY'07-12
FY'12-17
11
9
126
145
39
16
177
172
69
21
229
204
27
106
291
241
FY14
FY19
FY24E
FY29E
3
7 80 118
FY09
Source – CEA, BOB Power Sector report
17
Industry opportunity – Railway
Growth of railway electrification (Route Km, RKM)
Budget allocation for railway electrification (Rs. crore)
6,960 6,601
6,302
7,542
29,201*
13687
3,396 3,457
2,163
830
1,005 1,206
2150
3038
2004-09
2009-14
2014-19
2019-24 (Planned)
2012-13 2013-14 2014-15 2015-16 2016-17 2017-18 2018-19 2019-20 2020-21 2021-22
* 6,886 RKM already commissioned till Jan’21
Robust growth opportunities for railway track electrification
▪ Mission 100% route electrification ▪ Need for electrification – to eliminate pollution and India’s dependence on imported fuel ▪ Highest ever budget allocation of Rs. 7,542 crore for electrification projects during 2021-22 ▪ ▪
Sub-station capacity to enhance leading for opportunities for transmission & distribution utilities Engineering procurement and construction (EPC) contractors shall have multitude of opportunity in terms of infrastructure creation for railway electrification
Source – indianrailways.gov.in
18
Growth Strategy
Growth strategy
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
20
Historical Financial Performance
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%
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
5.0%
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
4.3%
FY19
654.9
526.0
28.0
27.5
581.5
73.4
11.2%
0.8
16.3
4.6
53.3
20.0
33.3
5.1%
22
Consolidated balance sheet
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
23
Key financial highlights
Sales Volumes (MT)
Revenue (Rs. Crore)
74,993
51,956
55,657
58,619
58,776
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
6.0%
30
4.9%
19
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
Christensen Advisory
Lokesh Pareek- +91-8424955935 Lpareek@ChristensenIR.com Vikash Verma VVerma@ChristensenIR.com