Usha Martin Limited€¦ · • World Steel Association forecast marginal demand growth of 0.5% in...

Usha Martin Limited

Investor Presentation

25th May 2015

Economic Overview

Usha Martin Ltd. Investor Presentation

The global economic growth indicators are moderately

positive, with World GDP Growth projections at 3.5% in

2015.

Emerging economies continues to struggle with structural

problems and volatility.

India GDP growth signals a positive momentum,

registered a growth of 7.4 % in FY’15 against 6.9% in

FY’14.

On Inflation, CAD and trade gap fronts, the trends seem

to have reversed on back of lower crude and commodity

prices, sustainability is key.

Steel demand remain subdued due to muted growth in

underlying key steel sectors, with apparent consumption

rising by only 3.1% to 76.4 MnT.

After prolonged phase of negative growth initial signs of

pick up in capital goods & Auto Segment with MHCV

segment in particular, a major contributor to the alloy

steel demand, is positive.

2013 (A) 2014 (A) 2015 (P) 2016 (P)

World 3.4% 3.4% 3.5% 3.8%

Advanced

Economies

1.4% 1.8% 2.4% 2.4%

USA 2.2% 2.4% 3.1% 3.1%

Euro -0.5% 0.9% 1.5% 1.6%

Developing

Economies

5.0% 4.6% 4.3% 4.7%

Source: World Economic Outlook, IMF

FY 2013

(2nd RE)

FY 2014

(1st RE)

FY 2015

(AE)

Agriculture 1.2% 3.7% 1.1%

Industry &

Infrastructure

2.4% 4.5% 5.9%

Manufacturing 6.2% 5.3% 6.8%

Mining -0.2% 5.4% 2.3%

Services 8.0% 9.1% 10.6%

Overall 5.1% 6.9% 7.4%

GDP Growth Indicators - India

GDP Growth Indicators - Global

Steel Scenario


Global steel demand & outlook

• Global steel demand grows slower

than the global GDP, as a result of

the weakness in the emerging world,

Growth at 0.6% in 2014

• Demand supply balance disturbed by

the confluence of weak demand,

lower raw material prices and rising

exports from china.

• World Steel Association forecast

marginal demand growth of 0.5% in

CY2015

• Restrained Growth outlook for the

global steel industry mainly due to

the deceleration in China

Apparent Steel Use, Finished

Steel Products (2014-16)

Source: World Steel Association Source: World Steel Association

India Steel Scenario

0%

4%

8%

12%

16%

50

55

60

65

70

75

80

Fy'11 Fy'12 Fy'13 Fy'14 Fy'15

Qty

in M

nT

Apparent Finished Steel Consumption

1.1 1.4

1.3

1.9

3.6

1.6 1

.9

2.9

China Japan Korea ROW

FY'14 FY'15

231%

18% 46%

49%

Steel Imports

• Subdued growth in steel demand due

to lacklusture growth in underlying

key steel sectors

• Finished Steel exports down by 8 % in

FY15(YoY).

• Heavy depreciation in Russian Rouble

and oversupply of steel in china,

resulting into uncompetitive domestic

prices, have surged imports by 71%

yoy against consumption growth of

just 3.1% yoy in FY’15.

Trends in Industrial Production


2.9%

1.1%

-0.1%

2.8%

-2.0%

0.0%

2.0%

4.0%

6.0%

FY' 12 FY' 13 FY' 14 FY' 15

-2.0%

3.0%

8.2%

-2.3%

1.3%

4.0%

-0.6% -0.8%

6.1%

1.4%2.2%

8.4%

-4.0%

-2.0%

0.0%

2.0%

4.0%

6.0%

8.0%

10.0%

Mining Manufacturing Electricity

FY' 12 FY' 13 FY' 14 FY' 15

5.5%

-4.0%

-0.6%

4.4%

2.4%

-6.0%

1.6%

2.4%2.1%

-3.6%

3.1%

-2.8%

6.9%6.2%

1.6%

-3.4%

-12.0%

-8.0%

-4.0%

0.0%

4.0%

8.0%

Basic Capital Intermediate Consumer

FY' 12 FY' 13 FY' 14 FY' 15

• Negative growth in mining for the past 3 years, arrested with

marginal growth of 1.4% in the current Fy.

• Manufacturing growth turns positive, indicates revival in business

sentiment

• Capital goods turning back to positive growth after 3 years, is an

early sign of revival in capex cycle & growth

• Consumer goods turning negative for the 2nd consecutive year.

• IIP which was significantly low at 1.1% in FY’13 and slipped tonegative in FY’14 recovered back to marginal level of 2.8% inFY’15.

Trends in Auto Sector


Source: SIAM, Care Ratings

65,629

52,425

41,158

62,414 62,327 62,93360,961

82,332

35,000

45,000

55,000

65,000

75,000

85,000

Q1'FY14 Q2'FY14 Q3'FY14 Q4'FY14 Q1'FY15 Q2'FY15 Q3'FY15 Q4'FY15

M&HCVs

M&HCVs

129,472

116,188 115,578 116,000

102,824

110,825

103,661

111,220

80,000

100,000

120,000

140,000

Q1'FY14 Q2'FY14 Q3'FY14 Q4'FY14 Q1'FY15 Q2'FY15 Q3'FY15 Q4'FY15

LCV

LCV

Receding negative growth rates in auto sector are sign of hopes, but demand off take still missing

Initial signs of MHCV picking up. A key auto segment

where UML markets its steel products is a welcome

positive for the company

-50%

-30%

-10%

10%

30%

50%

70%

Q1'13 Q2'13 Q3'13 Q4'13 Q1'14 Q2'14 Q3'14 Q4'14 Q1'15 Q2'15 Q3'15 Q4'15

LCV M & HCVs Tractors PV

Performance Update

12M & Q4’ 15

Highlights Fy’15


• Excellent Performance Award for 2014 at DP World, won by BWWR, a subsidiary of thecompany in Dubai.

• Ranchi unit received Green Manufacturing Excellence Award in Frost & Sullivan’s Believers

Category.

• Manufacture of first reel of Oceanmax rope weighing 176 MT from new facilities at Usha Martin

UK Ltd, a subsidiary of the company

• Net Turnover up by 12% on consolidated basis and 14.0% on stand alone basis.

• Consolidated EBIDTA margin at 16.5 % and stand alone at 17.3%.

• Achieved highest ever Billet production at 711,000 MT, up by 10% .

• Achieved highest ever Rolled Products, DRI, Hot Metal and Captive Power generation.

• Slide in oil prices resulting in lower ropes demand and sharp depreciation in various currencies

across the world has affected wire rope exports.

• Subdued steel demand, competition with cheaper imports affected operating margins.

Achievement & Awards

Operational Highlights

Production Volume - Consolidated


180,365 MT 124,127 MT 2,942 MT 35,471 MT 21,498 MT

Q o Q

12M o 12M

97,282 MT149,634 MT14,766 MT710,967 MT 554,859 MT

21

%

Q o PQ

2

%

10

%

12

%9

%

10

%

1

%

6

%

11

%

6

%

18

%9

%

13

%5

%

BilletsRolled

ProductsBright Bars

Wires & Strands

Wire Ropes

Production Performance


DRIHot Metal

Coke Pellet

QoPQ

29 %QoPQ

26 %

QoPQ

8 %QoQ

9 %

QoQ

8 %

0

50000

100000

150000

200000

Q4 FY 14 Q3 FY 15 Q4 FY 15

QoQ

5 %

0

25000

50000

75000

100000

Q4 FY 14 Q3 FY 15 Q4 FY 15

0

50000

100000

150000

Q4 FY 14 Q3 FY 15 Q4 FY 15

QoQ

12 %

0

35000

70000

105000

140000

Q4 FY 14 Q3 FY 15 Q4 FY 15

Production Performance


Hot Metal

Coke

Iron Ore

23 %

19 %

27 %

DRI

Coal

4 %

48 %

0

500000

1000000

1500000

2000000

FY 14 FY 15

0

200000

400000

600000

800000

FY 14 FY 15

0

100000

200000

300000

400000

FY 14 FY 15

0

100000

200000

300000

400000

500000

600000

FY 14 FY 15

0

100000

200000

300000

400000

500000

FY 14 FY 15

Financial Performance - Q4 & 12M’15


Stand Alone ConsolidatedFY ‘ 14 FY ‘ 15 FY ‘ 14 FY ‘ 15

Q4 12M Q4 12M Q4 12M Q4 12M

Net Sales 1,009.67 3287.12 982.02 3,746.05 1,252.56 4,073.83 1,171.06 4,561.10

PBDIT 158.92 692.82 130.15 646.38 192.05 799.43 156.93 753.48

PBT (45.37) (36.86) (96.56) (244.01) (22.76) 26.67 (85.13) (186.88)

PAT (30.57) (25.68) (139.79) (292.41) (9.68) 10.70 (130.48) (253.12)

PAT for Q4 & 12M’ FY 15 are after considering charge of Rs 21.75 & Rs 100.16 crs as exceptional items.

Note: The company has provided Rs 11.43 crs and Rs 7.40 crs on account of investments in railway siding at mines and cenvat credit at

Agra business which has now closed down, respectively out of operating profits for Q4 FY 14-15. In addition there are write downs of

Rs 16.43 crs on assets and investments made in de-allocated coal blocks .

Rs in Crs

Revenue Distribution (Value)


By Geographies By Product

India70%

Europe10%

Asia Pacific13%

Middle East4%

America2%

Africa1%

Steel47%

Wire Ropes33%

Wire & Strand14%

Bright Bars2%

Cables & Others4%

Global Footprints


Architecture of Integrated Business


THANK YOU


Disclaimer:

This presentation may contain forward looking information that involves risk and uncertainties. Such projections and forward looking statements reflect various assumptions of

management concerning future performance of the Company, and are subject to significant business, economic, environment, political, legal and competition risks, uncertainties

and contingencies, many of which are unknown and beyond control of the Company and management. Accordingly, there can be no assurance that such projections and forward

looking statements will be realized. The variations may be material. No representation or warranties are made as to the accuracy, completeness or reasonableness of such

assumptions or the projections or forward looking statements based thereon, or with respect to any of the information contained in this presentation. The Company expressly

disclaims any and all liability that may be based on any of the information contained herein, errors herein or omissions thereof.

Usha Martin Limited€¦ · • World Steel Association forecast marginal demand growth of 0.5% in...

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