SHYAMMETL

Securing tomorrow with today’s strength Investor Presentation February 2022 Safe Harbor This presentation and the accompanying slides (the “Presentation”), which have been prepared by Shyam Metalics And Energy 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, competition, the company’s ability to successfully implement its strategy, the Company's future levels of growth and expansion, technological implementation, changes and advancements, changes in revenue, income or cashflows, 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 isnot responsible for such third-party statements and projections. All Maps used in the presentation are not to scale. All data, information, and maps are provided "as is" without warranty or any representation of accuracy, timeliness or completeness 2 Key Updates for Q3 & 9M FY22 Strengthening • Launched Salman Khan as Brand Ambassador, new promotion activity underway for Brand the coming quarters • On track to increase the existing integrated installed facility of 5.7 million tons to Update on Capex 11.6 million tons by 2025 • Received “consent to operate” (CTO) from state pollution control board, Odisha & West Bengal for OperationalUpdates additional captive power generation and capacity expansion of sponge iron & steel production • Appointed Growlity Inc. management consultants to carry out comprehensive diagnostic study on ESG fundamentals ESG Update • Installed solar panels to focus on green energy • Quarterly Y-o-Y Growth : Revenue –52% EBITDA – 77 % and PAT – 95% Financial Performance • Nine Months Y-o-Y Growth : Revenue – 91%, EBITDA – 153% and PAT – 183% • The board has recommended second Interim Dividend : Rs 2.25 per share. 2nd Interim Dividend The record date is 21st February 2022. 3 Launched Salman Khan as Brand Ambassador Shyam Metalics And Energy Limited has signed leading Bollywood superstar Salman Khan as the brand ambassador for endorsing its S-E-L TMT rebars “I have gone through the journey of the company and am excited to be part of the brand-building exercise of SEL TMT, with their fast-paced expansion plans and future-ready capabilities” Mr. Salman Khan 4 Updates on Projects commissioned & CTO Status Cost Incurred till Projects Capacity Added Completion Date Status 31st Dec ‘21 Iron Pellets 1.20 MTPA November 2021 Rs. 159 crores CTO Pending Sponge Iron 0.28 MTPA November 2021 Rs. 80 crores CTO Received CTO Received- Sponge Iron 0.44 MTPA December 2021 Rs. 160 crores 0.11 MTPA CTO Received- Long Products 0.20 MTPA November 2021 Rs. 35 crores 0.08 MTPA SMS 0.05 MTPA November 2021 Rs. 13 crores CTO Received Aluminium Foil 0.04 MTPA November 2021 Rs. 300 crores CTO Pending Total Cost Captive Power 40 MW November 2021 Rs. 110 crores CTO Received ~ Rs. 857 crores Plant We have incurred a capex cost of Rs. 1,363 crores till 31st Dec ‘21, accounting to 46% of the total capex envisaged , ie Rs 2,960 crores 5 Commissioned ESG Study In our move towards sustainable growth, ESG framework provides an opportunity to create a systematic approach for tangible outcomes. Growlity Inc. management consultants will carry out comprehensive diagnostic study on SMEL’s ESG fundamentals & compliance status. In Phase 1 of the diagnostic study, Growlity will • Carry out a detail study of SMEL’s process flow at Jamuria & Sambalpur plants. • Map out the current carbon, water & waste footprints at both plants and assess the impact of carbon emissions. • The phase 1 of the exercise will take 4 to 6 months. 6 Installed Solar Panels – Focus on Green Energy We have partnered with Fourth Partner Energy Pvt Ltd, India’s largest Commercial & Industrial Solar Developer The project has been initiated to reduce CO2 emission, and conserve water We also plan to plant 57,500 trees. On a pilot basis, initially based on investment made by 3rd party solar company on SMEL land, currently 0.6 MW is operational out of the planned 4MW 7 Shyam Metalics at a Glance • Leading Integrated Steel and Ferro Alloys Producer in India • 4th Largest Sponge IronPlayer, Leading player in terms of Pellet Capacity • IntegratedMetalProducingCompany • Strategically located plants with Proximity to Mineral Belts, National Highways and • Operates “Ore to Metal” integrated steel plants Ports withCaptiveRailwaySiding Achieving End-To-End Solutions “Ore To Metal” • 91%:TotalIncomeGrowthin9MFY22YoY • 0.06X GrossDebt/Equity asofSept-21 • EBITDA Positive since commencement of • OneofLowestGearingamongstcompetitors operationsin2005 6.24 MTPA Combined Production Capacity • ~79% of power sourced from Captive Power • Promoters with decades of experience in Plants at 2.09 Rs./Kwh3 in 9M FY22, while Grid the Metal Industry along with experienced ~79% of power Powercosts5-7 Rs./Kwh4 ManagementTeam sourced from Captive Optimising the Balance Sheet for Resilience & Flexibility 12,272 Employee Strength CRISIL AA- CRISIL A1+ CARE AA- CARE A1+ (Positive) (Positive) (Positive) (Positive) AA- Long Term Bank Facilities Short Term Bank Facilities Long Term Bank Facilities Short Term Bank Facilities CRISIL Credit Rating 9 Value Propositions 4 5 1 2 3 Logistical Advantage Captive Power for Backward & Forward Flexible & Diversified Strong Brand & & Infrastructure ~81% power Integration with Product Mix Distribution Network Advantage with requirement presence across the Private Railway Sidings Value Chain 8 9 6 7 Capacity Addition to De-Leveraged Sustainable solution - Consistent increase share of Balance Sheet giving Waste used as Performance over High Margin B2C flexibility in growth ‘Productive Inputs’ the last decade Products 10 Integrated operations across the steel value chain Raw Materials Processing End-Products Electricity Coal Coal Washery Washery Rejects (Captive) Char/Flu Gases TMT Bars Rotary Kilns Power Plant Rolling Mills Wire Rod Washing & Sponge Steel melting Shop Billets Pellets Iron Ore Fines Pelettization Plant Iron Angle Structure Channel Rolling Mills Blast Fines Sinter Plant Sinter Pig Iron Beam Furnace Ductile Iron Ductile Pipe Plant Manganese Submerged Arc Manganese Ferro Chrome Ore Furnace Alloys Point of Sale Proposed Expansion 11 Brownfield expansion with… Railway Siding Captive Power Plants Captive Water Reservoir Jamuria Plant Sambalpur Plant We have 1 manufacturing plant located in Sambalpur, Odisha and 1 manufacturing in Jamuria, West Bengal with aggregate installed capacity of 6.24 MTPA comprising of intermediate and final products. Brownfield expansion leading to We also have a small plant in Mangalpur, West Bengal with aggregate installed capacity of 0.1 MTPA Lowest Capex in the Industry These plants also include captive power plants with an aggregate installed capacity of 267 MW 12 …Lowest Capex compared to the Industry • Brownfield capacity expansion expected to increase aggregate installed metal capacity (comprising of intermediate and final products) from 6.24 MTPA currently to 11.60 MTPA and captive power plants Advantages of Brownfield Expansion aggregateinstalledcapacityfrom267MWto357MW.Theseproposedexpansionsareexpectedtobecome operationalbetweenFiscal2022andFiscal2025 • In the process of commissioning an aluminium foil rolling mill at Pakuria in West Bengal with a proposed installed capacity of 0.04 MTPA, which is expected to become operational in Fiscal 2022. The Capex Lower fixed costs due to using already established envisagedfortheprojectisRs.360crores. facilities, infrastructure, and network • Companyhasamplelandavailableforexpansionforthenext5years Capex Iron Pellets (MTPA) 2.4 1.2 3.6 Rs. 160 Crs. Lower staffing and training costs, due to the presence of already-employed workers at the facility Steel Products (MTPA) 3.6 0.5 3.6 7.7 Rs. 2,010 Crs. Ferro Alloys (MTPA) 0.21 0.01 0.22 Rs. 30 Crs. Low cost advantage for expansion of power capacity. Capex incurred: Rs 110 cr for 40 MW, effectively Rs Power (MW) 227 40 90 357 Rs. 400 Crs. 2.75 crvs industry average of 4.5 cr per MW Existing Capacity Addition in Q3 FY22 Future Expansions Capex spread over the next 4 years 13 Diversified & Interchangeable Product Mix Capacity (Million MTPA) FY18 FY19 FY20 FY21 9M FY22 Iron Pellet 0.90 0.90 2.4 2.4 2.4 Sponge Iron 1.01 1.01 1.27 1.39 1.78 s t Billets 0.54 0.63 0.80 0.89 0.94 c u d o r P g TMT, Structural Steel, n 0.25 0.25 0.82 0.82 0.90 i t Wire Rods & Pipes s i x E Ferro Alloys 0.19 0.21 0.21 0.21 0.21 Captive Power (MW) 164 164 227 227 267 Ductile Iron Pipes Proposed capacity of 200,000 TPA s t c u d o Blast Furnace Proposed Capacity of 600,000 TPA r P w e Proposed Capacity of 40,000 TPA. N Aluminium Foil CTO pending On an aggregate basis, the Capacity Utilization is between 90% -95% 14 Increasing share of B2C/Value Added Products Structural Products are hot rolled products of special TMT Bars are high-strength reinforced bars having a forms like rounds, angles, channels & beams tough outer core and soft inner core We not only make structurals of standard dimensions, but also Customized Products for Specific Applications, economically and quickly Finished Steel Products Our products are sold mainly across Eastern, Central ,Northern and 37% Western Regions of India with some penetration in Southern India. Our TMT and structural products are sold under the brand “SEL”. Revenue Contribution in 9M FY22 15 Huge Export Potential 41 42 17 % % % 20 Countries Steel products both upstream and Ferro Chrome Exports to countries like Pellets downstream including Angles, Ferro Manganese and USA, Japan, Korea, Italy, Beams, Billets, Channels, Wire Rods, Silico Manganese Products Nepal, Bangladesh MS Round Coils and Sponge Iron We are preferred suppliers to a few of the large corporations like 19 % Norecom POSCO Intl World Metals TRAXYS North J M Global DMCC Corp & Alloys (FZC) America LLC Resources Export Contribution to Revenues in 9M FY22 % of Products Exported is for 9M FY22 16 Strategically Located - Supported by Infrastructure Strategically located in the mineral rich East Indian region ~800+dealers&distributors stock and sell the finished products across 27 states and 1 Union Raw Material Territory Sources are within 250 kms Kolkata We sell 70% of our products Haldia within the vicinity of 500 Km from Dhamra our plants Paradeep Plant Location • Plants are in close proximity to National Highways 16 &19 Vishakhapatnam Captive Railway Sidings • Sambalpur & Jamuria Plants have captive railway sidings Ports are within 600kms Ports Key Raw Material Source Ironore/Ironorefines MineownerslocatedinOdisha Chromeore LongtermlinkageswithOdishaMiningCorporationLimited,othermineownersandimports Manganeseore MOILLimited,othermineownersandimports Fuel supply agreements entered into with Mahanadi Coalfields Limited, Central Coalfields Limited and South Eastern Coal CoalfieldsLimited 17 Lowest Cost Captive Power • Power consumed by the plants are primarily produced in-house by the captive power 5 Captive Plants Sambhalpur Total Capacity of 158 MW plants • Captive powerplants utilise non fossil fuels such aswaste, rejects, heat and gas generated 3 Captive Plants Jamuria Total Capacity of 94 MW from the operations to produce electricity • Cost of in-house power issignificantly less than grid power which costs INR5-7 Per Unit * 1 Captive Plant Mangalpur Total Capacity of 15 MW Captive Power to Total Power Cost of Per Unit of Captive Power** Captive Power Plant Current Capacity* (MW) Consumed (Rs./KWH) Expansion Plans (MW) 15 90.1% 87.3% 85.2% 90 79.0% 79.0% 2.24 2.16 2.09 2.15 2.1 357 118 94 267 Current Proposed FreshPost Expansion FY18 FY19 FY20 FY21 9M FY22 FY18 FY19 FY20 FY21 9M FY22 Sambalpur Jamuria Mangalpur Capacity Capacity * Source: CRISIL Report; **Average cost of Power from Captive Power Plant = Total cost of power from all Captive Power Plants / Total production units 18 Waste to Value Steam generated used Efficient use of by products: Effluents/Wastes from all Fly ash bricks are in production of Power Washery rejects used in the production activity are utilized in various product created from industrial and then in Ferro Alloys Power Plant verticals to create a set of High Value-added Products wastes Fly ash bricks which are manufactured from various industrial wastes such as fly ash, sand, stone, dust and cement, are used globally nowadays over clay bricks and traditional red bricks Power generated by using flu gases and capturing of heat through waste heat Fly ash bricks are also known for being highly durable, less permeable and environment- recoveryboilers friendly as they are manufactured from waste materials that generate from the combustion ofcoalinthermalpowerplants. 19 Strengthening Brand ‘SEL’ TMT STRUCTURE WIRE RODS TMT are used for the construction of buildings, transmission Towards forward integration, SMEL has set up high towers, industrial sheds, structures, road, dam and in other Structural steel describes hot rolled steel products such quality Wire Rod manufacturing & Wire Drawing facilities various infrastructures as angles, channels and beams. With an array of high- with best available technology and plant & machinery quality Structural products under the brand ‘SEL’, backed SMEL sells the best quality TMT primarily in the states of support by world-class service and its other products, SMEL holds West Bengal, Odisha, Bihar, Jharkhand, Tripura, Sikkim, Since the raw materials are manufactured in-house at its pride of place among the leading steel manufacturers Assam, Arunachal Pradesh, Manipur, Meghalaya, our plant, the company is able to produce high quality of the country and material directly from the DRHP Uttarakhand, Uttar Pradesh, Punjab and Haryana. Our TMT Wire Rod & H.B. Wires in an efficient & cost-effective and structural products are sold under the brand “SEL” manner 20 Capacity Expansion –Share of High Value Products to Increase Break-up of Capacity Expansion (MTPA) 0.2 11.5 Capacity Expansion is on the existing land, will help 0.2 2.0 0.2 0.2 0.0 Company augment revenues, better cost controls, 0.0 increase in profitability 1.1 0.9 2.0 1.1 0.9 0.6 Target completion between FY22 and FY25 2.9 0.6 0.0 1.1 Total Capex Cost aggregating to ~Rs. 2,960 Crs. 1.8 3.6 1.2 Proposed Expansion Capacity expansion focused on increase share of high value products 2.4 Existing Capacity Iron Pellets Sponge Iron Pig Iron Steel Billets TMT, DI Pipes Ferro Alloys Total Structural & Pipes 21 Revenue mix skewed towards Finished Steel Revenue Mix 19% 18% 16% 31% Flexibility to Sell Intermediate Product, use for 17% 23% Captive Consumption 37% 15% 25% 24% 19% 12% 11% 25% 27% 20% 24% 9% 11% 14% 2018 2019 2020 2021 Ferro Alloys TMT, Structural and Pipes Steel Billets Sponge Iron Iron Pellets Make customized products to capitalise on market opportunities Volumes (in lakh tonnes) 31.2 1.7 23.2 5.7 20.8 1.5 16.9 1.5 6.1 8.8 1.6 10.2 Reduced dependency on any particular product 7.8 2.9 1.9 17.7 1.6 9.9 5.8 7.3 2018 2019 2020 2021 Ferro Product Intermediates Finished Steel Iron Pellet 22 Performance Highlights Q3 FY22 Revenue EBITDA PAT 52% 77% 94% Rs. 2,578 y-o-y Rs. 625 y-o-y Rs. 423 y-o-y Crores Crores Crores 9M FY22 Revenue EBITDA PAT 91% 153% 183% Rs. 7,537 y-o-y Rs. 1,937 y-o-y Rs. 1,291 y-o-y Crores Crores Crores Strong Q3 FY22 Performance Revenue from Operations EBITDA Profit After Tax +95% +52% +77% Rs. 2,578 crores Rs. 625 crores Rs. 423 crores Revenue Breakup Volumes (in lakh tonnes) Blended EBITDA per tonne (Rs.) Y-o-Y -5% Y-o-Y Q-o-Q 11.7% 8.3 +40% 21.0% 7.7 0.4 7.4 -12% 17,008 Q-o-Q 0.4 0.4 17.9% 1.8 15,145 -11% 1.8 0.3 2.1 0.6 1.5 10,855 8.3% 0.9 0.5 40.8% 1.5 4.1 4.3 2.8 Ferro Alloys Sponge Iron TMT, Structural and Pipes Iron Pellets Steel Billets Q3 FY21 Q2 FY22 Q3 FY22 Q3 FY21 Q2 FY22 Q3 FY22 Ferro Products Finished Steel Steel Billets Sponge Iron Iron Pellets Blended EBITDA per tonne (Rs.) = EBITDA / Total Steel Volumes 25 Strong 9M FY22 Performance Revenue from Operations EBITDA Profit After Tax +183% +91% +153% Rs. 7,537 crores Rs. 1,937 crores Rs. 1,291 crores Revenue Breakup Volumes (in lakh tonnes) Blended EBITDA per tonne (Rs.) +86% 16.0% 24.0 17,021 20.3% 1.2 21.4 Ferro Products 1.0 5.7 Finished Steel 4.2 1.4 16.7% Steel Billets 1.9 9,152 Sponge Iron 2.3 4.2 36.6% 8.2% Iron Pellets 12.1 11.4 Ferro Alloys Sponge Iron TMT, Structural and Pipes Iron Pellets 9M FY21 9M FY22 9M FY21 9M FY22 Steel Billets Blended EBITDA per tonne (Rs.) = EBITDA / Total Steel Volumes 26 Per Tonne Realizations Ferro Products Finished Steel Steel Billets +102% +71% +32% +37% +30% +45% 1,29,375 1,08,685 48,699 46,986 43,063 42,214 36,871 34,280 33,096 29,093 63,643 63,981 Q3 FY21 Q3 FY22 9M FY21 9M FY22 Q3 FY21 Q3 FY22 9M FY21 9M FY22 Q3 FY21 Q3 FY22 9M FY21 9M FY22 Sponge Iron Iron Pellets +31% +51% +15% +90% 29,652 29,143 10,424 13,112 9,101 22,711 19,318 6,912 Q3 FY21 Q3 FY22 9M FY21 9M FY22 Q3 FY21 Q3 FY22 9M FY21 9M FY22 27 Consolidated Profit & Loss Statement Particulars (Rs. Crs.) Q3 FY22 Q3 FY21 Y-o-Y Q2 FY22 Q-o-Q 9M FY22 9M FY21 Y-o-Y Total Revenue 2,577.8 1,699.6 52% 2,494.3 3% 7,537.2 3,946.6 91% Cost of Material Consumed 1,640.6 1,052.3 1,534.6 4,665.6 2,437.4 Purchase of Stock 2.1 2.8 15.0 24.5 4.6 Change in Inventories -51.5 -30.6 -16.3 -155.7 13.4 Gross Profit 986.6 675.0 46% 961.0 3% 3,002.8 1,491.2 101% Employee Expenses 57.3 52.4 60.0 181.2 124.7 Other Expenses 304.3 269.1 277.0 884.9 600.8 EBITDA 625.0 353.5 77% 624.0 0% 1,936.6 765.7 153% EBITDA Margin (%) 24.2% 20.8% 25.0% 25.7% 19.4% Other Income 16.6 9.4 20.7 45.0 16.3 Depreciation 59.7 77.6 60.6 181.6 220.0 EBIT 581.9 285.2 104% 584.2 0% 1,800.1 561.9 220% Finance Cost 5.7 20.1 4.6 17.0 55.8 Share in Profit/(Loss) of Associate and Joint Venture 0.1 -0.1 0.1 0.2 0.2 Profit beforeTax 576.2 265.0 117% 579.6 -1% 1,783.2 506.2 252% Tax 153.5 48.7 169.3 492.2 49.9 Profit After Tax 422.7 216.3 95% 410.3 3% 1,291.0 456.3 183% PAT Margin (%) 16.4% 12.7% 16.4% 17.1% 11.6% EPS (As per Profit after Tax) 16.5 9.3 16.1 51.9 19.5 28 Strong Debt Profile Gross Debt (Rs. Crs.) Net Debt (Rs. Crs.) 1,050 960 785 448 425 347 656 480 320 -757 Mar-18 Mar-19 Mar-20 Mar-21 Sep-21 Mar-18 Mar-19 Mar-20 Mar-21 Sep-21 Net Debt / Equity Net Debt / EBITDA 0.34 1.51 0.19 0.18 0.12 0.50 0.48 0.31 -0.15 -0.58 Mar-18 Mar-19 Mar-20 Mar-21 Sep-21 Mar-18 Mar-19 Mar-20 Mar-21 Sep-21 29 Strong Balance Sheet – Flexibility of Growth 0.06x Conservatively Leveraged + Gross Debt / Equity Internal Operating Efficiencyled to more than Disciplined Capital Allocation strategy (as of 30thSeptember 2021) 50% reduction in Working capital requirements = Better Return Metrics One of Lowest Gearing amongst competitors* Debt/Equity (x) Working Capital (days) Return ratios (%) Gross Working ROCE 0.22 69 45 +1,970 bps Capital days 45.0% 25.3% 60 0.06 45 Mar-21 Sep-21 Mar-21 Sep-21 31 21 0.07 14 15 +1,090 bps Net ROE 34.1% Mar-21 Sep-21 23.2% Inventory Days Debtor Days Creditor Days -0.15 Mar-21 Sep-21 Mar-21 Sep-21 Strong Balance Sheet to support Capex, Growth and Business Cycles *Crisil Report 30 CSR Initiatives • YearlyEye&MedicalCampforVillagers • FreeAmbulance&DrinkingwaterServicesforvillagers Rural Health • NewHealthCenter&HomeopathyClinic • FREEMedicine&SpectaclesandBloodDonationCamp • FREECoachingCenterforEconomicbackwardSection • ComputerTrainingCenteratDhasnavillage Rural Education • SchoolBagAndCycleDistribution • SHYAM Scholarship for Meritorious students of Economic Backwards • Temples • VillageSanitation Social • TeachersTrainingandRemuneration Infrastructure • VillageHandicrafts–Skilldevelopment Development • SportsFootballCoaching • GauDaan(CareforAnimals) • WomenEmpowerment • RoadsafetyCampaignSAFEDRIVESAFELIFE Social Awareness • SocioEnvironmentalAwareness • DistributionofHelmetsforSafedrive&Savelife 31 Shyam Metalics & Energy Limited Mr. Pankaj Harlalka +91 9830028142 pankaj.harlalka@shyammetalics.com Investor Relations Partners Mr. Rajesh Agrawal +91 9967491495 Rajesh.agrawal@linkintime.co.in Mr. Nachiket Kale Shyam Metalics & Energy Ltd. +91 9920940808 CIN No. : U40101WB2002PLC095491 Nachiket.kale@linkintime.co.in Trinity Tower, 7th Floor, 83, Topsia Road Kolkata – 700046, West Bengal, India