Techno Electric & Engineering Company Limited · NSE:TECHNOE
Techno Electric & Engineering — Q3 FY2020 Earnings Presentation
44 slides from Techno Electric & Engineering's earnings presentation, February 2020
Slide 1: Investor Presentation Quarter Ended December 31, 2019
AN INVESTOR PRESENTATION Quarter Ended December 31, 2019
Slide 2: Corporate Overview, Business Segment Review, Financial Review
» Corporate Overview 03 » Business Segment Review 17 » Financial Review 38
Slide 3: Corporate Overview
orate Overview
Slide 4: Powering Value Creation
POWERING VALUE CREATION Techno Electric & Engineering Company Limited (TEECL) is among India’s largest in power-infrastructure companies. It is one of the most attractive proxies of India’s power sector, headquartered in Kolkata. 35+ Years 350+ Projects 25+ Years 500 Professionals of rich experience
Slide 5: Progressing with Confidence
PROGRESSING WITH CONFIDENCE » EPC » Generation » Design to Commissioning » Asset Ownership » Transmission Handover to » Operations and » Distribution Maintenance Maintenance Operation » Industrial Management * TEECL is divesting its renewable energy assets to concentrate more on its core businesses
Slide 6: Progressing with Confidence - Key Milestones
PROGRESSING WITH CONFIDENCE - (Contd.) KEY MILESTONES 1980 2009 2010 Launched EPC Entered renewable Initiated transmission services energy generation Asset Ownership COMPANY OVERVIEW BUSINESS SEGMENT REVIEW FINANCIAL REVIEW
Slide 7: Advancing with Experience and Expertise: EPC
ADVANCING WITH EXPERIENCE AND EXPERTISE » Transmission & Distribution » Advanced Metering Infrastructure (Smart Metering) » Balance of plant » Captive waste heat recovery and upto 200 MW of conventional power plant on turnkey basis » Flue Gas Desulfurization Plant » Solutions for power-intensive ind
Slide 8: Advancing with Experience and Expertise: Transmission Assets
ADVANCING WITH EXPERIENCE AND EXPERTISE » Build Own Operate and Transfer (BOOT) » Build Own Operate and Maintain (BOOM) » Provide annuity income » Capital intensive » Modest ROE » Stable multi-year income/cash flow » In-house EPC business » O&M revenues COMPANY OVERVIEW BUSINESS SEGMENT REVIEW FINAN
Slide 9: Advancing with Experience and Expertise: Green Power
ADVANCING WITH EXPERIENCE AND EXPERTISE » Capital-intensive » Modest IRR » Multi-year stable income/cash flows » Green Power contributes 11% of total revenues and 27% of total EBIDTA of FY19 COMPANY OVERVIEW BUSINESS SEGMENT REVIEW FINANCIAL REVIEW
Slide 10: Engineering That Is Different
ENGINEERING THAT IS DIFFERENT Design, Build, Finance, Operate 49% and Transfer a 400 kV/ 1,500 MVA Transmission Network in Haryana capable of transferring 2,430 MW 26% Build a Transmission network of 400 kV; 253 km transmission line and Substations of 400/220 kV (No. Bays : 8/6) at Kohima, Nagaland
Slide 11: Once a Customer, Always a Customer
ONCE A CUSTOMER, ALWAYS A CUSTOMER TEECL primarily serves CPSUs, state-run utilities The Company follows the operating philosophy of and private sector customers (captive power plant and power distribution system for power intensive industries). Over the years, it » Helped build 50% of India’s natio
Slide 12: Growing Recognition
GROWING RECOGNITION Certificate of appreciation from Best player in 765 KV AIS IEI Industry Excellence Meritorious Performance in JBVNL for 100% electrification in Substation Construction in Award, 2016 Power Sector in 2011-12 by Dhanbad in 2018 India in 2018’ by PGCIL Ministry of Power Awarded Cert
Slide 13: Capable Leadership
CAPABLE LEADERSHIP Qualification » Postgraduate in Management (IIM, Ahmedabad) » Honours graduate in Industrial Engineering Experience » Merchant banker with National Grindlays Bank » Management consultant deputed to BHEL Association with TEECL » Grew TEECL into prominent Indian EPC company in power
Slide 14: Leveraging Opportunities
LEVERAGING OPPORTUNITIES Policies to influence the power industry Investment roadmap of industry » 450 GW total generation capacity target by » ₹ 2,600 billion total transmission sector investments, of which ₹ 1,600 billion in 2022 400 KV and ₹ 1,000 billion in 220 KV » 280 GW total capacity in dema
Slide 15: Utilising Corporate Strength
UTILISING CORPORATE STRENGTH Consistent Ability to embrace Efficient working Rich terrain upgradation to challenges capital management understanding industry-next technology On-time project Cost-effectiveness Partnership with Robust vendor completion large international eco-system manufacturers COMP
Slide 16: Utilising Corporate Strength (Contd.)
UTILISING CORPORATE STRENGTH - (Contd.) Constantly improving Quicker project Recorded low gearing, focus on customer- completion than industry high credit rating, centricity and standards low-cost debt contractual obligations. Delivered most EPC and Management of customer Zero Penalty Record Transmi
Slide 17: EPC
EPC Transmission Asset Ownership Green Power
Slide 18: Delivering Consistently
DELIVERING CONSISTENTLY 43% ₹ 2,500+ million ROCE of EPC as on annual cash surplus 31 March, 2019 ₹ 24,614 million 10% size of order book as on CAGR of EPC revenues 31 December, 2019 over last 4 year 24 months 89% revenue visibility Revenue of the total business from EPC as on 31 March, 2019 COMPANY
Slide 19: Major Domains of Operations
MAJOR DOMAINS OF OPERATIONS » Turnkey solutions to captive power EHV substations » Power distribution systems to power plants intensive industries » EHV substations up to 765 kV (AIS/GIS) » Balance of Plant » Offsite piping systems » STATCOM installation up to 250 MVaR » Oil handling plant process i
Slide 20: Operating Philosophies
OPERATING PHILOSOPHIES » Well-planned projects executed in sync with cash flow and contractual obligations » Focus on PAT/retained cash (not size of order book) » Conservative project management approach » Cash rich; low gearing; income mix (lumpy and annuity) » Zero penalty record; » Marginal worki
Slide 21: EPC Order Book as on 31st December, 2019
EPC ORDER BOOK AS ON 31st December, 2019 Name of the client Amount in mn 21.83% REC Power 5,373.9 ₹ 3,203 million Distribution Co. Ltd ( JKPDD) Generation 17.61% PGCIL 4,335.7 12.63% Damodar Valley 3,109.2 Corporation Total - 10.01% Rampur Sambhal 2,463.4 Transco Ltd., Rampur ₹ 15,087 million 100 (i
Slide 22: EPC Financials Over the Years
EPC FINANCIALS OVER THE YEARS Revenue (₹ in mn) EBITDA (₹ in mn) FY 18-19 8791.51 FY 18-19 1537.97 FY 17-18 11,733.70 FY 17-18 1,832.87 FY 16-17 12,109.45 FY 16-17 1,812.37 FY 15-16 10,142.75 FY 15-16 1,449.40 FY 14-15 6,680.90 FY 14-15 938.30 FY 13-14 5,705.10 FY 13-14 601.60 PAT (₹ in mn) FY 18-19
Slide 23: Promising Future Owing To (Contd.)
PROMISING FUTURE OWING TO (Contd.) Working to rapidly establish its stated goal of pan-India universal electricity access, the government of India is enabling Smart Grids which can offer affordability and other benefits to consumers. The first step towards realizing Smart Grids is the implementation
Slide 24: Promising Future: Trans-border Projects
PROMISING FUTURE OWING TO (Contd.) Bagged two trans-border projects » UGANDA Design, supply and erection of 160 km 132 Kv double circuit Mbarara - Nkendao transmission line and associated substations worth $18 mn crores » AFGHANISTAN The Afghanistan Breshna Sherkat (DABS), Kabul, Afghanistan for des
Slide 25: Promising Future: Flue Gas Desulfurization
PROMISING FUTURE OWING TO (Contd.) Pursuant to Government of India, Gazette notification of 7th December, 2015 all Thermal Power Plants need to limit their sulphur emission. » We have received contract of FGD for 500 MW (1 x 500 MW) Bokaro thermal power project of DVC for Rs 3190 million » Firm plan
Slide 26: Transmission Asset Ownership
EPC Transmission Asset Ownership Green Power
Slide 27: Building Partnerships Across Various PPP Projects
BUILDING PARTNERSHIPS ACROSS VARIOUS PPP PROJECTS Jhajjar KT – Haryana » Implementing agency Jhajjar KT Transco Pvt. Ltd. (SPV) 51:49 JV of Kalpataru Power Transmission Ltd. and Techno Electric JV commissioned 400 kV transmission network project (March 2012) Kohima – Nagaland » Implementing agency K
Slide 28: Project Details: Haryana
PROJECT DETAILS » Project commissioned in record 15 months Haryana » 400 kV transmission system comprises Double Circuit Quad Moose Line » Extending from Jharli to Kabulpur, Rohtak (35 KM) » Extending from Kabulpur to Dipalpur, Sonepat (64 KM) » Two substations of 400/220 kV of 24 bays each at Rohta
Slide 29: Project Details: Nagaland
PROJECT DETAILS (Contd.) » Build, Own, Operate and Maintain (BOOM) transmission network. Nagaland » Designing, constructing, erecting, completing and commissioning responsibility » Financial closure has been achieved; expected date of commissioning in May, 2020 » 400 kV transmission system » Transmi
Slide 30: Project Details: Punjab
PROJECT DETAILS (Contd.) » Build, Own, Operate and Maintain (BOOM) transmission network Punjab » Designing, constructing, erecting, completing and commissioning responsibility » Financial closure achieved at competitive rates; commissioned in June, 2016 » 1,000 MVA evacuation capacity, comprises of:
Slide 31: Creating Value for TEECL
CREATING VALUE FOR TEECL Jhajjar KT – Haryana Patran – Punjab Kohima – Nagaland » ₹ 4,440 million project (debt » ₹ 2,000 million project with Debt » ₹ 13,000 million project with Debt and equity) Equity ratio of 3 Equity ratio of 3 » ₹ 2,760 million debt and combined » ₹ 1,750 million to TEECL EPC
Slide 32: Encouraging Scope
ENCOURAGING SCOPE » Leverage EPC knowledge as transmission asset complements EPC » Enhance valuation and profitable encashment opportunities with long-term annuity incomes » Generate operations and maintenance revenues » Improve scale and stability with asset ownership » Reduce requirement to bid ag
Slide 33: Promising Future Owing To
PROMISING FUTURE OWING TO Government has a target of implementation of 150 GW of renewal energy capacity by 2022 out of which bids for 50 GW has been done, bidding process for next 50 GW is in process and the last 50 GW should happen by June 2020. The finance minister announced, ₹ 220 billion to be
Slide 34: Green Power
EPC Transmission Asset Ownership Green Power
Slide 35: Ensuring Sustainability
ENSURING SUSTAINABILITY Key highlights of the segment » Sold 44.45 MW of wind power assets at an effective valuation of ₹ 2,150 million during the Q1 FY 2016 » Sold 33 MW of wind energy assets at an effective valuation of ₹ 1,650 million in January 2017 » Exited the assets at the same price at which
Slide 36: Current Asset Overview
CURRENT ASSET OVERVIEW Simran Wind Project Limited Capacity 18 MW 111.90 MW Date of Acquisition/ During 2009-10 March 31, 2011 - February 24, 2012 Commissioning Location Karnataka Tamil Nadu (111.90 MW) Capacity 12 turbines x 1.5 MW each 48 turbines x 1.5 MW each; 19 turbines x 2.1 MW each PLF 18% -
Slide 37: Divesting Green Energy Assets
DIVESTING GREEN ENERGY ASSETS Revenue (₹ in mn) EBITDA (₹ in mn) PAT (₹ in mn) FY 18-19 1094.92 FY 18-19 954.12 FY 18-19 467.00 FY 17-18 1,241.85 FY 17-18 1,106.15 FY 17-18 682.05 FY 16-17 1,457.73 FY 16-17 1,312.99 FY 16-17 777.31 FY 15-16 829.30 FY 15-16 764.43 FY 15-16 393.20 FY 14-15 1,258.10 FY
Slide 38: Financial Review
@...: Review
Slide 39: Analysing Quarter-on-Quarter Financials – Q3FY20
ANALYSING QUARTER-ON-QUARTER FINANCIALS – Q3FY20 Revenue EBITDA (₹ in mn) (₹ in mn) 2608.40 550.2 2694.21 623.0 EBITDA Margin Other income (%) (₹ in mn) 21.1 121.6 23.1 139.8 Profit after tax Interest Cost (₹ in mn) (₹ in mn) 320.4 20.4 306.6 13.9 Q3FY20 Q3FY19 COMPANY OVERVIEW BUSINESS SEGMENT REVI
Slide 40: Analysing Half Yearly Financials – 9MFY20
ANALYSING HALF YEARLY FINANCIALS – 9MFY20 Revenue EBITDA (₹ in mn) (₹ in mn) 7620.9 2456.6 8010.3 2526.8 EBITDA Margin Other income (%) (₹ in mn) 32.20 359.4 31.50 370.6 Profit after tax Interest Cost (₹ in mn) (₹ in mn) 1735.2 48.6 1507.5 94.9 9M FY20 9M FY19 COMPANY OVERVIEW BUSINESS SEGMENT REVIE
Slide 41: Analysing Half Yearly Segment Result – 9MFY20
ANALYSING HALF YEARLY SEGMENT RESULT – 9MFY20 Revenue (₹ in mn) Revenue (₹ in mn) 6656.1 964.7 7071.1 939.2 EBIT (₹ in mn) EBIT (₹ in mn) 1253.3 843.9 1319.4 836.8 EBIT Margin (%) EBIT Margin (%) 18.83 87.48 18.66 89.10 9M FY20 9M FY19 9M FY20 9M FY19 1. Revenue from Energy Operation for the nine mo
Slide 42: Annual Financials
ANNUAL FINANCIALS Revenue EBIT (₹ in mn) (₹ in mn) EPC EPC 8,791.51 1,516.63 11,733.70 1,807.65 Energy Energy 1,094.92 557.23 1,209.90 709.81 PAT Other Income (₹ in mn) (₹ in mn) PAT Other Income (Normal) 1931.60 591.70 2,048.53 369.60 Other Income (One time) 111.90 0.00 1. Other One- time represent
Slide 43: Annual Financials - Balance Sheet
ANNUAL FINANCIALS - (Contd.) Balance Sheet 2018 2019 SOURCES OF FUNDS Shareholders’ funds 12,318 14,262 Minority interest --- --- Loan funds 224 --- Deferred tax liabilities 1,130 1,222 Other liabilities and provisions 359 643 Total 14,031 16,127 APPLICATION OF FUNDS Net fixed assets 5,879 5,527 Inv
Slide 44: Corporate Office: 1B Park Plaza, Kolkata
TECHNO ELECTRIC & ENGINEERING COMPANY LIMITED Corporate Office: 1B Park Plaza, 71 Park Street, Kolkata 700 016
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