SALASARNSE12 February 2022

Salasar Techno Engineering Limited has informed the Exchange about Investor Presentation

Salasar Techno Engineering Limited

Dated: 12.02.2022

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 Q3-FY22, for your record and further dissemination.

Kindly take the same on record.

Thanking You,

www.salasartechno.com

SALASAR TECHNO ENGINEERING LIMITED

INVESTOR PRESENTATION - Q3 & 9M FY22

FEBRUARY 2022

B u i l d i n g a S t r o n g e r F u t u r e

DISCLAIMER

This presentation and the following discussion may contain “forward looking statements” by Salasar Techno Engineering Limited (“Salasar” or the company) that are not historical in nature. These forward looking statements, which may include statements relating to future results of operations, financial condition, business prospects, plans and objectives, are based on the current beliefs, assumptions, expectations, estimates, and projections of the management of Salasar about the business, industry and markets in which Salasar operates.

These statements are not guarantees of future performance, and are subject to known and unknown risks, uncertainties, and other factors, some of which are beyond Salasar’s control and difficult to predict, that could cause actual results, performance or achievements to differ materially from those in the forward looking statements. Such statements are not, and should not be construed, as a representation as to future performance or achievements of Salasar.

It In particular, such statements should not be regarded as a projection of future performance of Salasar. should be noted that the actual performance or achievements of Salasar may vary significantly from such statements.

DISCUSSION SUMMARY

01 Business Overview

02 Q3 FY22 Highlights

03 Competitive Advantage

04 Financial Summary

BUSINESS OVERVIEW Broadening Horizons For Sustainable Growth

SALASAR STORY

Growing Steel Structure Manufacturer & EPC Infrastructure player, providing services across telecom, energy and railways Sector

In the year 2006, Salasar started out as a tower manufacturer with the vision of

transforming the industry. Tower manufacturers rarely provided multiple

solutions under one roof.

Salasar sought to fill this gap by aspiring to become a one-stop shop for India’s

telecom giants by carrying out engineering, designing, procurement,

fabrication, galvanization and EPC under one roof.

Owing to its persistence, expertise, and capability to work wonders with steel,

today Salasar is no longer confined to towers and have expanded its range of

products and services to encompass all the infrastructural needs of a rapidly

developing nation.

QUICK SNAPSHOT

As the country continues its growth trajectory, we stand tall, partnering to bridge the gap in nation’s infrastructure needs with our sustainable and efficient business model

Telecom Towers

Transmission Line Towers

Railway Electrification

Utility Poles

Solar Structures

Heavy Steel Structures

Provide turnkey solutions in building telecom towers, monopoles and smart city solutions backed by engineering designs from Ramboll - a globally recognized telecom infrastructure consultancy, in house IIT certified design team or tailored as per customer designs

Evolved to leverage our expertise to meet the requirements of transmission line tower sector. We manufacture and deploy these towers for the turnkey projects as well as supplying to other EPC contractors

Provide end-to-end solutions from designing the engineering plan to supply, erection, testing and commissioning of railway electrification projects including Overhead Equipment (OHE) and Traction Sub Station (TSS) installations

Custom made poles with multipurpose equipment such as LED lights, CCTV cameras, sensors and wifi routers. These smart poles are easy to install and capable of proving range of services with facility for add ons

For mounting arrays of solar modules used in generating electricity from solar energy. The structures have flexible rotation to adjust the panels for better insolation and efficiency

Railway over Bridges (ROB), pre- engineered building (PEB), power plants, process plants, high-rise building, warehouses, airport hangers, metro stations, etc

NUMBERS THAT DEFINE SALASAR

Our differentiated positioning in the country’s most dynamic sector will accelerate our transition to diversified and agile business to better serve our growing clientele

1,10,000+ MT Annual Production Capacity

50,000+ Telecom Tower Supplies

475+ KM Power Transmission Lines

1,542 Employees as on 31st March, 2021

217 TKM Railway Track Kilometre

25+ Countries Exported

STATE-OF-THE-ART MANUFACTURING FACILITIES

Strong base of operations with technology-driven facilities for efficient steel structure manufacturing and galvanizing

Plant

Unit – I

Unit – II

Unit - III

Total Area 1,50,000+ Sq. yards

Location

Facility

Jindal Nagar, Distt. Hapur, Uttar Pradesh

Khera, Distt. Hapur, Uttar Pradesh

▪

▪ Tower/structure manufacturing ▪ Galvanization (GI) Plant

▪ Tower/structure manufacturing ▪ Galvanization (GI) Plant ▪ New GI Plant installation in process

Installed Capacity ▪

1,00,000 MT of Steel Galvanizing 15,000 MT of SSD

Heavy Steel Structure Division (HSD)

Total Area (Sq. m.)

41,442

Covered Area (Sq.m.)

Uncovered Area (Sq.m)

19,455

21,987

18,811

5,833

12,978

Yes

73,935

34,327

39,608

Raw Materials ▪ Steel Shape and

Section ▪ Zinc (for

Galvanizing) ▪ Nuts and Bolts

Machinery ▪ CNC Machines ▪ Industrial Machinery ▪ Hydra & Cranes

SELECT MARQUEE CLIENTS

Salasar has a strong and diverse client base which has helped us establish ourselves in a leading position in the industry

Telecom Sector

Power Sector

Others/ EPC

Approved vendor for Power Grid Corporation Ltd.

Qualified to bid for rural electrification projects

Qualified by CORE (Central Organization for Railway Electrification)

STRONG & EXPERIENCED LEADERSHIP 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

Chairman & Managing Director

Joint Managing Director

Board of Directors

Mr. Shalabh Agarwal Director

Ms. Tripti Gupta Director

Ms. Garima Dhamija Non-Executive Independent Director

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

Q3 & 9M FY22 HIGHLIGHTS Delivering Consistent Performance

MANAGEMENT COMMENT

Mr Shashank Agarwal, Joint Managing Director, Salasar Techno Engineering Ltd:

“Our persistence, expertise and capability to work wonders with steel has aided us well to deliver a robust

overall performance during the 9M FY22. The company reported a revenue of Rs 507 Crores in 9M FY22 with an

EBITDA of Rs 53 Crores, which is 10.4% of the revenue. PAT for the 9M FY22 was at Rs 24 Crores. The performance

was driven by contribution from each of our business segments along with our approach to diversify and enter

newer segments.

As the country continues its growth trajectory, all our business verticals offer significant headroom for growth

and operating leverage as they scale up. Railways’ electrification and Pre-Fabricated Heavy Steel Structures

continues to remain a key growth segment and focus area for us. We have an overall order book of Rs 1,030

Crores as on date underpinned by robust order inflows from reputed customers at our new growing vertical of

Heavy Steel Structure Division.”

CONSOLIDATED P&L STATEMENT – Q3 & 9M FY22

Q3 FY22

Q3 FY21

Q2 FY22

9M FY22

9M FY21

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%

173.6

132.7

12.2

12.1

157.0

16.6

9.6%

0.3

5.6

1.9

9.6

2.6

7.0

4.0%

174.4

135.2

8.1

13.2

156.5

17.9

10.3%

3.4

4.5

1.4

15.4

3.7

11.7

6.7%

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%

506.6

395.6

30.0

28.1

453.7

52.9

10.4%

1.8

15.7

5.4

33.6

9.2

24.3

4.8%

385.1

304.2

21.1

22.1

347.4

37.7

9.8%

5.1

12.3

4.1

26.5

6.4

20.0

5.2%

•

Operations of the Company were impacted on account of Covid related restrictions during the first quarter of FY21 and FY22

ORDER BOOK POSITION

Particulars

Orders EPC outstanding as on 31st Dec 2021

+ L-1 EPC orders for which LOI awaited

Value

Rs. 695.1 crore

Rs. 95.2 crore

+ Manufacturing orders outstanding under new heavy steel structure plant as on 31st Dec 2021

Rs. 162.5 crore

+ Export order in hand

Total

Rs. 77.0 crore

Rs. 1,029.8 crore

•

In addition, the company normally has regular monthly orders of telecom towers of approx. Rs 30 to 35 Crores

REVENUE COMPOSITION SEGMENT WISE

9M FY22 Revenue by Segments

9M FY21 Revenue by Segments

20%

11%

75%

83%

Manufacturing - Steel Structures and Others

EPC - Power Transmission

EPC - Railway Electrification

Manufacturing - Steel Structures and Others

EPC - Power Transmission

EPC - Railway Electrification

COMPETITIVE ADVANTAGES Unlocking Value, Delivering Results

GROWTH STRATEGY

New business of manufacturing of heavy structures such as ROB, Pre- Engineered Buildings, etc.

Expanding tower designs and leveraging on their tie-ups with Ramboll to provide value to the clients

Tapping industry opportunities by expanding product portfolio and optimal utilization of existing capacity

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

STRUCTURED PLANT EXPANSION TO CATER HIGH INDUSTRY DEMAND

Expanding product portfolio with optimal utilization of existing capacity

Location

Facility

Unit III, Khera, Distt. Hapur, Uttar Pradesh

Bhilai, Chhattisgarh

Heavy Steel Structure Division (HSD)

New Galvanization Plant

Heavy Steel Structure Division (HSD)– II

Annual Capacity

15,000 MT

96,000 MT of Steel Galvanizing

25,000 MT

Project Cost

Rs 20 Crore

Rs 50 Crore

Rs 40 Crore

Status

Commissioned in March 2021

Expected Commissioning – Sep. 2022

Land Identified and contracted; Expected Commissioning – Sep. 2022

Expected Revenue at Full Capacity - Turns (x)

4-5x

--*

4-5x

•

HSD plant, Unit- III: at present the company is having robust order book and the plant is fully booked for manufacturing for next one year for supply of rail/road bridge structures, Plant structures, pre-fabricated building structures, etc.

Largest steel galvanizing plant in Asia post commencement of new Galvinizing Facility at Unit III, Khera, UP

*Post commissioning of the new GI capacity, one of the existing galvanizing plants would serve as a backup in case of an emergency and the new GI Plant will also enable the Company to manufacture monopoles upto 3 Metre Dia used in higher KVA transmission lines

HSD plant –II: Tapping Eastern India via setting up steel fabrication unit at Bhilai, Chhattisgarh

COLLABORATION WITH RAMBOLL, DENMARK

With this international technical tie-up with an industry leader, Salasar is well-positioned to meet the increasing industry demand

Salasar has a long-standing 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.

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. With Ramboll’s

continuous efforts towards innovation, quality, a multidisciplinary

engineering and widely accepted designs, we are definite that we will

ceaselessly grow and offer our customers with superior products and

services.

TELECOM INFRA: HUGE OPPORTUNITY DUE TO INCERASING TELECOM DEMAND

India is the second largest telecom market in the world with a subscriber base of 1.17 billion

Yearly growth of towers and base stations (BTS) (‘000s)

Key Facts and Developments

Tower

BTS

1,371.9

2,000.1

1,713.0

2,206.1

2,211.6

775.0

439.0

440.4

461.4

500.8

581.1

630.8

2015

2016

2017

2018

2019

2020

Key Drivers

▪

Increase in data consumption led by 4G, and the launch of 5G

Tower sharing (leading to increase in revenue of telecos)

Increasing tele-density in largely untapped rural market

Smart city opportunities

Development of IoT for manufacturing and services sectors

Source - Ministry of Communications, TAIPA, EY analysis

•

Leading player in the Telecom Tower manufacturing segment with market share around 50%

The Company sees a lot of opportunities as telecom operators are working their way towards improving their connectivity. Demand for telecom towers in the next 10 years is going to be greater than that in the last 25 years. All the operators are expected to do capex.

As the rollout of 5G begins, exponential growth in demand for telecom towers

the Company expects an

There are about ~6,00,000 towers in India at the moment, with about 8,00,000 points of connectivity. To have a seamless 5G experience across India, at least 10,00,000 more towers are needed and at least 15,00,000 points of connectivity are needed in the next 10 years

Long standing relationships with Telecom giants such as Airtel, Jio, Indus, American Tower, Bharti Infratel

Host of product offerings in the segment which includes Towers, Monopoles, Smart City Solutions and Portable Towers

INCREASED DEMAND FOR POWER TRANSMISSION INFRASTRUCTURE DEVELOPMENT

Robust Growth Outlook Driven By Strong Policy Support

Historical Generation and Transmission Investment

Key Facts and Developments

% Growth in Generation Capacity (MW)

% Growth in Transmission Capacity (ckt km)

24%

12%

22%

17%

26%

15%

51%

26%

64%

22%

FY'92-97

FY'97-02

FY'02-07

FY'07-12

FY'12-17

Key Drivers

▪

Expansion in industrial activity, growing urban & rural population

Increasing per-capita power usage & ambitious projects across the value chain

Highest ever coal production, increase of 74 mn tonnes in 2 years

11,921 ckm of Transmission lines (220 kV and above) and 35,760MVA Transformation capacity has been added during 2020

Source – CEA, BOB Power Sector report

•

Design and Construction of Power Transmission lines of 66kV, 132kV, 220kV & 400 kV

Design and Construction of Grid Sub Stations ranging 66kV, 132kV, 220kV & 400 kV

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

As per the National Infrastructure Pipeline 2019-25, energy sector projects accounted for the highest share (24%) out of the total expected capital expenditure of INR 111 lakh crore

Estimated INR 6-8 trillion market opportunity in transmission till FY2029

ICRA expects an investment of INR 1.8 trillion (INR 1.8 lakh crore) over the five-year period from FY21 (financial year 2020-21) to FY25 in the power transmission segment at an all-India level, driven by evacuation infrastructure for RE projects

RAILWAYS ELECTRIFICATION – ONE OF THE KEY FOCUS AREAS

Government has an ambitious plan to secure infrastructure for 100% electrification of the railway network by 2024

Growth of Railway Electrification (Route Km, RKM)

Key Facts and Developments

* 6,886 RKM already commissioned till Jan’21

29,201*

13687

2150

3038

2004-09

2009-14

2014-19

2019-24 (Planned)

Budget Allocation for Railway Electrification (Rs Crore)

6,302

6,960

6,601

7,542

3,396

3,457

2,163

830

1,005

1,206

2012-13 2013-14 2014-15 2015-16 2016-17 2017-18 2018-19 2019-20 2020-21 2021-22

Source – indianrailways.gov.in

•

Government of India plans to fully electrify the balance 42% network till 2024

Close to 30 billion units of electricity shall be required for railway electrification on annual basis by 2024 leading excellent opportunities for IPPs of conventional power

Overhead line equipment to gain massive opportunities to supply for the equipment like conductors, transformers & insulators etc.

suppliers

Sub-station capacity to enhance leading for opportunities for transmission & distribution utilities

EPC contractors shall have multitude of opportunity in terms of infrastructure creation for railway electrification

Opportunity for rolling stock companies shall be massive, electric locomotives shall gain pace

OEM's shall have greater opportunity coming their way in terms of equipment supplies & order

A FAST-GROWING STEEL STRUCTURE DIVISION

Salasar’s Steel Structure Division caters to refineries, steel plants, power plants and bridges for railways and roadways

Bridges

Buildings

Categories: ▪ Rail or Road Over Bridges

(RoBs)

▪ Open Web Girders ▪ Bow String Bridge ▪ Pedestrian Bridge ▪ Cable Stay Bridge

Categories: ▪ High Rises ▪ Stadiums ▪ Warehouses ▪ Airports & Railway

Stations

▪ Multilevel Car Parks ▪ Hospitals

Heavy & Complex Structures

Categories: ▪ Thermal Power Plants ▪ Steel Plants ▪ Petrochemical Plants ▪ Cement Plants

The HSD plant is fully booked for manufacturing for next one year

▪

Key Strengths

One of the largest installed

capacities in North India

State of the art manufacturing

facility

Easy accessibility to Steel

Proximity to the market

Good quality and on-time

deliveries

Low cost producer and total

solution provider

In home design and development

facility using latest software

FINANCIAL SUMMARY Gaining Strengths

KEY FINANCIAL HIGHLIGHTS

Sales Volume (MT)

74,993

51,956

55,657

58,619

58,776

495

384

Revenue (Rs Crore)

655

526

597

FY17

FY18

FY19

FY20

FY21

FY17

FY18

FY19

FY20

FY21

EBITDA (Rs Crore) / EBITDA Margin (%)

PAT (Rs Crore) / PAT Margin (%)

10.1%

10.9%

11.2%

9.8%

9.6%

12%

10%

4.9%

6.0%

5.1%

5.0%

4.3%

FY17

FY18

FY19

FY20

FY21

FY17

FY18

FY19

FY20

FY21

KEY FINANCIAL RATIOS

ROCE (%)

ROE (%)

24%

23%

19%

15%

22%

23%

19%

11%

12%

FY17

FY18

FY19

FY20

FY21

FY17

FY18

FY19

FY20

FY21

Debt to Equity (x)

0.7

0.8

RoCE – EBIT/ Average Capital Employed, ROE – Profit/Average Shareholders Funds, D/E – Average Debt/ Average Equity

FY17

FY18

FY19

FY20

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%

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%

CONSOLIDATED BALANCE SHEET

Particulars (INR Cr)

Mar-21

Mar-20

Mar-19

Particulars (INR Cr)

Mar-21

Mar-20

Mar-19

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

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

13.3

176.2

189.5

4.8

5.1

9.9

1.3

21.1

58.3

56.7

145.3

0.1

0.3

0.8

261.5

472.1

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

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

77.3

8.2

85.5

117.9

2.1

217.2

11.7

10.5

27.2

386.6

472.1

Thank You

Salasar Techno Engineering

Christensen Advisory, India

Pramod Kala, CFO pramod.kala@salasartechno.com

Vikash Verma I Rohit Anand vverma@christensenir.com I ranand@christensenir.com

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