Investor Presentation - May 16 [Read-Only] · Investor Presentation May 2016. India’s largest...
Transcript of Investor Presentation - May 16 [Read-Only] · Investor Presentation May 2016. India’s largest...
Investor Presentation
May 2016
India’s
largest
manufacturers of
Industrial
Explosives and
Initiating Systems
World’s Largest
Cartridge
manufacturing
facility at a single
location.
One of the largest
Manufacturing
Facilities of
Detonating Cord
and Cast Boosters
in India
Who we are…A Snapshot !
India’s 1st Private
Player to
manufacture
HMX & HMX
Compounds
India’s 1st Private
Player to
commence
commercial supply
to Defence for
HMX
Largest exporter of
industrial explosive
from India
1983Commenced
business as a Trader
in Explosives
1996Started
production of Cartridge explosives
1998Commencedproduction ofDetonators
2000Started
production of Bulkexplosives
200120052006Initial Public Offer
(IPO)Got listed
Milestones
Included Cast
Booster and PETN
in Product Protfolio
Started Exports.
2007Extended presence
in India by setting New
Bulk Plants
2008-16
Manufacturingunits in Zambia,Nigeria & Turkey
Bulk Plants
Started commercial
supply of HMX &
Propellant for
Defence
Emerged as India’sLargest Explosives
Manufacturer
Exporting to 20 Countries with product used in
40 countries
Bulk explosives
Cartridge Detonators Detonating Cord Cast Boosters
3,01,323 MTPA
Licensed capacity
1,25,000 MTPA
Largest
Licensed capacity
190 Mn. Units 75 Mn. Metres
Licensed capacity
1650 MTPA
Largest
Product Range & Licensed Capacities
Licensed capacityLicensed capacity
Locationalproximity to the
mines
All units located at 50-60 kms
radius from the major mining
regions
Largestcapacity in
India
Largest
cartridge
manufacturing
Facility
at a single
location in the
world
Well poised to
cater to rising
demand from
Indian and
overseas mining
&
Infrastructure
Industries
Largest
Manufacturing
Facility
in India
LargestManufacturing
Facilityin India
Plants State Clients served
4 Maharashtra 1. Western Coalfield Ltd.
2 MP
1. Northern Coalfield Ltd
2. Reliance power (sasan)
3. Jai Prakash Coal
2 Chattisgarh
1. South Eastern Coalfield Ltd.
2. Lafarge, Parsak (Adani
group)
3. Mahanadi Coalfields Ltd
Presence in India
2 Jharkhand
1. Tisco
2. Central Coalfield Ltd,
3. Bharat Coking Coalfield Ltd .
3 Odhisha
1. Mahanadi Coalfield Ltd.
2. Tisco
3. Iron Ore Mines
2 TeleanganaSCCL
1 Rajasthan Hindustan Zinc, Jindal Saw
1 West Bengal Eastern Coalfield Ltd
Raw Material Management
• 70% of the total raw material consumed
• Domestically sourced from Deepak Fertilizers, GNFC, RCF
• Price volatility - rise/fall clause included in rate contract with
customers to a large extent
Key Raw Material – Ammonium Nitrate
• The domestic price is ` 25000/MT
• Total AN demand in India, for explosives, is ` 7 Lakhs MT
against a domestic production of ` 6 Lakhs MT
Key Strengths
Marquee Clientele
5/26/2016
Customer Bifurcation (FY16)
Coal India
26.11%
Non CIL & Inst
19.73%Trade & Others
25.02%
Defence
0.46%
Export &
Overseas
28.68%
Coal India
30.05%
Non CIL & Inst
15.99%
Trade & Others
26.15%
Defence
0.00%
Export &
Overseas
27.80%
FY16 FY15
Particulars FY16 FY15
Coal India 432.91 437.71
Non CIL & Inst 327.19 233.01
Trade & Others 414.84 380.86
Defence 7.70 0.00
Export & Overseas 475.59 404.89
Total 1658.23 1456.47
Rs in Crs
Regulatory Environment
One of the very few
sectors needing
Industrial License &
Clearance from Home
Ministry
License also required
Clearance required
from IB-regarding
safety of location &
antecedents of
Directors
NoC required from
District Magistrate
NoC by District
Magistrate after For underground
(Gasy mines) use License also required
from Chief Controller
of Explosives, GoI
Magistrate after
clearance by Police,
PWD,
Grampanchayat
(Gasy mines) use
permission required
from DGMS
Daily Reporting to
PESO & Local Police
on Production and
Sales
Market Dynamics
• Size of the market ~ Rs 6500 Cr.
• Historical growth 7-8% p.a. (last 10 years)
• Future growth expected 12% p.a.
• Annual Explosive consumption of ` 9 Lakh MT in FY15
• Highly concentrated market with about
GLOBAL OVERVIEW DOMESTIC OVERVIEW
Major players
India is 8th largest & fastest growing market globally
• Highly concentrated market with about 30 manufacturers in the industry
Major players
Solar Industries India Limited is the market leader in the country
Our Growth will come from…
Defence Sector
4.
2. 1.
Overseas
Market
3.
Renewed
demand from
Housing and
Infrastructure
revival
2.
Enhanced
demand from
coal mining
1. Market
Domestic Dynamics
• Main drivers for explosives demand
1) Mining 2) Infrastructure development
• Mining Industry is the major consumer of explosives. It accounts of 90% of total explosives
• Coal Industry consumes 70% of total demand
• CIL have planned to increase production from present 537 Mill. Tons in FY16 to 924 Mill. Tons by 2020.
• SCCL have planned to raise production from 60 Mill. Tons in FY16 to 74 Mill. Tons by 2020.
• Iron Ore and Limestone expected to increase at 8 – 10% p.a. in same period.
• CIL issues tender with reverse Auction with price escalation clause quarterly basis based on movement in prices of AN, Diesel and Labor index.
• MMDR Amendments bill and Coal Mines (Special provision) bill are likely to open up mining sector in a big way.
Global Reach & Presence
Facility :
Capacity of 5000 MT
of Cartridge & 10000
Mt of Bulk & Nonel
Zambia
Facility :
Capacity of 10000
MT of Cartridge &
5000 MT of Bulk.
Nigeria
Facility :
Capacity of 40000 MT of
ANFO, 5000 MT of
Cartridge & Nonel
Turkey
Facility :
Planning for
Capacity of 25000
MT Bulk Explosive
South Africa
Mt of Bulk & Nonel
Assembly.
• Our Holding - 65%
5000 MT of Bulk.
• Our Holding - 55%
Cartridge & Nonel
Assembly Plant
• Our Holding - 74.50%
MT Bulk Explosive
• Our Holding-74%
Defence- Indeed a large opportunity
• The industry is poised for exponential growth
over the next decade driven by substantial
growth such as need for an overhaul of
defence equipment, inadequate defence
equipment inventories in key areas, a
sustainable GDP growth rate and a largely
hostile geo-political environment
• The sector has also witnessed a significant
governmental policy shift which eventually led
to increased participation of private sector
players in this sector- DPP, FDI policy, the tax
framework, the industrial licensing policy andframework, the industrial licensing policy and
the foreign trade policy
• India is the largest defence equipment
importer in the world- The private sector is
expected to capitalize on the R&D and
technical capabilities of the DPSUs and
global OEMs to meet demand
• It is estimated that Indian Government’s
annual capex on defence is expected to grow
to USD 36Bn by 2024, growing at a CAGR of
9.4%, clearly envisaging the immense
opportunity in the sector
Specialty Chemicals for Defence Sector
Following orders have been received :
Product Customer
Value (Rs
Crs)
HMX & HMX Compound OFK-Jabalpur/DRDL-Hyd/TBRL 14.62
Propellant for Akash, Pyro
Technique, Igniters/
Warheads Filling etc
BDL – Hyd, DGOS - New Delhi, OFK,
DRDL, ARDE, HEMRL, TBRL
58.19
Warheads Filling etc
Total 72.81
Our Journey in Numbers
+23.06%
CAGR723 cr
1031 cr1213 cr 1216 cr
1456 cr
1658 cr
0
200
400
600
800
1000
1200
1400
1600
1800Revenue
169 cr
+20.16%
CA9R
0
FY06 FY11 FY12 FY13 FY14 FY15 FY16
130086161033
190091175764
221638
271171
0
50000
100000
150000
200000
250000
300000
FY06 FY11 FY12 FY13 FY14 FY15 FY16
Volume
44652
+20.3%
CAGR
Our Journey in Numbers
148 cr
195 cr 210 cr232 cr
262 cr
310 cr
0
50
100
150
200
250
300
350
FY06 FY11 FY12 FY13 FY14 FY15 FY16
EBITDA
40 cr
147 cr166 cr
150
200 PAT
+21.57%
CAGR
+20.25%
CAGR
76 cr
101 cr116 cr 118 cr
147 cr
0
50
100
150
FY06 FY11 FY12 FY13 FY14 FY15 FY16
22 cr
4458
65 6681
92
0
20
40
60
80
100
FY06 FY11 FY12 FY13 FY14 FY15 FY16
EPS
13
Details of Borrowings
Rs. In Crs.
Particulars FY16 FY15 FY14
Short Term Borrowing (A) 190.96 165.00 272.21
Long Term Borrowing (B) 134.03 155.30 151.72
Total debt (A+B) 324.99 320.30 423.93
Share Capital 18.10 18.10 18.10Share Capital 18.10 18.10 18.10
Reserves & Surplus 849.47 757.78 643.48
Total Equity 867.57 775.88 661.58
Cash Balance & FD & Short
Term Investment 67.38 66.90 147.77
Net Debt 257.61 253.40 276.16
Net Debt Equity Ratio 0.30 0.33 0.42
Capex Done 135.51 119.47 160.22
Financials – P&L 5 years
(Rs in crs) FY11 FY12 FY13 FY14 FY15 FY16
Gross
Income 723.83 1030.68 1213.32 1216.5 1456.47 1658.23
Excise Duty 43.41 64.12 93.39 90.82 110.96 125.39
Net Income 680.42 966.56 1119.93 1125.68 1345.51 1532.84
Material
Consumed 372.43 560.78 650.07 590.81 768.71 874.08
Other Costs 185.62 235.75 281.75 339.16 329.16 366.55Other Costs 185.62 235.75 281.75 339.16 329.16 366.55
Other
Income 25.59 24.65 16 18.43 14.29 17.67
EBIDTA 147.96 194.68 197 214.14 261.92 309.88
PAT 75.59 101.2 116 118.44 147.41 166.14
Material
Consumed
% 54.74% 58.02% 58.05% 52.48% 57.13% 57.02%
EBIDTA % 21.75% 20.14% 17.64% 19.02% 19.47% 20.22%
PAT % 11.11% 10.47% 11.29% 11.50% 10.96% 10.84%
EPS
(Annualised
in Rs) 43.64 58.42 65.47 65.44 81.45 91.80
Financials – B/S
Rs in Crs FY11 FY12 FY13 FY14 FY15 FY16
Gross Block 270.29 386.35 436.77 575.40 667.36 880.98
Cash & Bank Balance 59.63 63.01 92.19 133.01 37.20 37.04
Net Worth 316.04 404.6 572.70 661.57 775.88 867.57
Loan Funds 138.67 283.26 344.52 442.75 328.48 346.47
Capital Employed 397.27 621.67 868.29 1048.63 1063.86 1170Capital Employed 397.27 621.67 868.29 1048.63 1063.86 1170
Gross Debt Equity Ratio 0.44 0.70 0.60 0.67 0.41 0.40
Inventory Days 58 84 76 94 78 68
Debtors Days 48 49 47 55 48 58
ROCE 35.44 29.26 22.23 18.34 21.66 23.68
RONW 24.35 25.01 20.31 17.9 19.00 19.15
Working Capital Days 87 102 132 144 105 93
Book Value 172 224 316 366 431 479
FY16 Financials
Consolidated YOY Comparison Margins
Rs in Crs. FY16 FY15 Change FY16 FY15 % Change
Gross Sales 1658.23 1456.47 13.85
Net Sales 1532.84 1345.51 13.92
EBIDTA 309.89 261.92 18.31 20.22 19.47 0.75
Interest/ Fin 20.70 17.85 15.97 1.35 1.33 0.02Interest/ Fin 20.70 17.85 15.97 1.35 1.33 0.02
Depreciation 32.82 31.45 4.36 2.14 2.34 -0.20
Exceptional 0.00 10.00 -100.00 0.00 0.74 -0.74
PBT 256.37 202.62 26.53 16.73 15.06 1.67
Tax 76.39 46.28 65.06 29.80 22.84 6.96
MI 13.84 8.93 54.98 0.90 0.66 0.24
PAT after MI 166.14 147.41 12.71 10.84 10.96 -0.12
Shareholding (as on March 31, 2016)
72.98%
18.23%
3.14%
1.05% 0.42% 4.18%
Promoters
Mutual
Funds
Public
FII
Corporate
Others
Mutual Fund HDFC Fund (6.0648), SBI (5.9848), Kotak Fund (1.4976),DSP Rock (1.4273), Tata
Fund (1.0778), Birla Sun life (0.8527), Kotak Fund ( 0.6169)
FII Kotak Global Funds (0.8824), Nomura Singapore Ltd ( 0.1106), Fidility Investment
Trust & Emerging Market Fund (0.0304), Aperios Emerging Connectivity Master
Fund Limited (0.6266)
Other Bodies Corporate Edelweiss Securities Limited (0.0565), Shah Investors Home Ltd ( 0.0304), IDBI
Federal Life Insurance Co. Ltd ( 0.0293), Bharti AXA Life Insurance Company Ltd (
0.0196) , ), Unilazer Venture Pvt Ltd (0.0101)
Others ICICI Prudential Life Insurance (2.6650),