Welspun Enterprises Ltd. · NSE:WELENT
Welspun Enterprises — Q2 FY22 Earnings Presentation
50 slides from Welspun Enterprises's earnings presentation, Oct 29, 2021
Slide 1: Regulation 30 filing cover letter
vv WELSPUN ENTERPRISES INFRASTRUCTURE AND ENERGY WEL /SEC/2021 October 29, 2021 To, BSE Limited National Stock Exchange of India Limited 1st Floor, Rotunda Bldg, Exchange Plaza, C-1, Block-G, Dalal Street, Fort, Mumbai - 400 001. Scrip Code: 532553 Bandra Kurla Complex, Bandra (East), Mumbai - 400 0
Slide 2: An Infra Player with a Difference
An Infra Player with a Difference WELSPUN ENTERPRISES LIMITED OCTOBER 2021
Slide 3: Safe Harbor
Safe The information contained in this presentation is provided by Welspun Enterprises Limited (the “Company”). Although care has been taken to ensure that the information in this presentation is accurate, and that the opinions expressed are fair and reasonable, the information is subject to change
Slide 4: Key investment highlights
Key investment highlights Welspun Group Sunrise Infra Hybrid Annuity Welspun Asset Light comes with vast Sector Model (HAM) Enterprises Model experience of ~ ₹111 trillion capital Opportunity ▪ Focused as a ▪ Focused on ▪ Nurturing businesses expenditure in developer with Execution ▪ Win-win model ▪
Slide 5: Welspun Group
Welspun Group Comes with vast experience of • Nurturing businesses • Executing marquee projects • Investing & timely value unlocking Welspun Group overview 05
Slide 6: Welspun Group overview
Welspun USD 2.7 Bn USD 1.0 Bn 9 26,000+ Manufacturing Group Group Revenue Group Assets Workforce Net Fixed Assets Facilities in India, USA, and Saudi Arabia overview Global leader in Home Amongst world’s Robust portfolio of Integrated Grade-A Textiles largest Line-Pipe Roads & Water Infra Warehousin
Slide 7: Sunrise Infra Sector
Sunrise Infra Sector ~ ₹111 trillion capital expenditure in infrastructure sector during FY20-25 as per NIP report Road sector to get strong thrust from 07 government Potential under buy & turnaround strategy 09 Water sector – key focus area for 10 government
Slide 8: Road sector - Strong thrust from government
Road sector Sector wise break up of Capex of ₹111 trillion in NIP Sector wise share in the NIP for Road sector - Strong during FY20-25 (IN %) (IN %) 18% thrust from 24% 18% 17% 39% PRIVATE 25% CENTRE of projected government infrastructure ROADS URBAN investment is in the ENERGY Roads sector 08% 07%
Slide 9: Road sector - Strong thrust from government
Road Vision 2025 sector- for Roads Development Higher penetration of Significantly higher Last-mile connectivity - of 60,000 km of advanced technology share of the private improved access to all Strong NH - 2,500 km of sector in NH remote areas after the Expressways, 9,000 km completion of of Econom
Slide 10: Potential under buy & turnaround strategy
Potential Welspun Enterprises’ Turnaround Record – 4 projects till date under buy & 1) Gagalheri-Saharanpur- 3) Chikhali-Tarsod 4) Mukarba Chowk – Panipat turnaround Yamunanagar (GSY) (Package-IIA) Toll Roads Limited 2) Chutmalpur-Ganeshpur & strategy Roorkee-Chutmalpur- Gagalheri (CGRG) Several pro
Slide 11: Water sector - Additional key focus area for government
Water sector- Urban Water & Sanitation - Additional key focus area for ₹ 3.3 trillion government Will be spent in building Water Infrastructure ₹12.6 trillion capital expenditure Households with piped-water to be spent in building Water supply in rural areas Government’s Infrastructure Mission: (₹ T
Slide 12: Hybrid Annuity Model (HAM) Opportunity
Hybrid Annuity Model (HAM) Opportunity • Win-win model for government & developer • Around 1/3rd of road awards happening through HAM NHAI Hybrid Annuity Model (HAM) introduced in 2016 12
Slide 13: NHAI Hybrid Annuity Model (HAM) introduced in 2016
NHAI Hybrid ….to overcome BOT issues including Annuity Land Acquisition Change of scope Traffic changes Toll Risk Financing Model ….thus, now NHAI awarding more projects under HAM and pure EPC. (HAM) introduced HAM advantageous to both Developer & Authority in 2016… NHAI as a partner providing 12-15
Slide 14: Welspun Enterprises
Welspun Enterprises • Robust order book provides strong visibility • Diversification into Water segment derisks business model • Demonstrated operational excellence • Financial strength Robust road portfolio 14 Strong platform set for future growth 15 ₹25 bn worth orders pouring into EPC water segme
Slide 15: Robust road portfolio and financial strength
Robust road Financial Strength portfolio: Robust order book provides Among very Strong Banking ₹ 145+ billion, strong visibility Few Infra Developers Relationship ~800 km with…. ₹ 78 Bn# With credit rating: Ensures early financial Long term AA- closure at optimal Short term A1+ rates Operational Exc
Slide 16: Strong platform set for future growth
Strong Continuously building Current order book at platform Road and water portfolio through bid / buy strategy ~₹78 billion (excluding GST) set for for profitable growth future As on September 2021 growth (IN %) 32 30 68 WATER EPC EPC of HAM (NHAI) ROAD 3 EPC of HAM (PWD) 26 Other Road EPC 9 32 EPC
Slide 17: ₹25 Bn worth orders pouring into EPC water segment
₹25 Bn worth order under execution Lead Partner in Joint Venture Empanelled by the UP State Execution of EPC Projects of with Kaveri Infraprojects Limited, Water and Sanitation Mission, 2,544 villages for the Project of Hyderabad 70 : 30 Namami Gange and Rural Water Survey, Design, Preparation of in
Slide 18: Operating leverage to improve margins
Operating Revenues and Operating EBITDA (₹ Mn) 08 leverage to 12.10% 12.20% 12.40% FY21 revenue contributed by improve 9.50% 8 Road projects 17,600 17,394 margins 14,102 48% 9,972 5 years Revenue CAGR 2105 2151 1742 951 2,916 -5.60% Operations -162 impacted FY17 FY18 FY19 FY20 FY21 FY 21 operations
Slide 19: With undivided focus on shareholder value creation
With Shareholding Pattern Market Statistics undivided (as on 30th September 2021) As on Sep 30, 2021 INR Price per share 103.0 focus on (Face value ₹ 10 per share) No of Shares outstanding (Mn) – (Q4FY21) 148.9 shareholder Market Capitalization (Mn) 15,410 value creation Creating Shareholder value S
Slide 20: Through an experienced Board and Management
Through an Board of Directors experienced B. K. Goenka CHAIRMAN Rajesh Mandawewala GROUP MD Sandeep Garg MANAGING Dipali Goenka NON-EXECUTIVE Board and DIRECTOR & CEO DIRECTOR ▪ Amongst India’s most ▪ Qualified Chartered dynamic businessmen; Accountant; Played an ▪ Harvard Graduate with ▪ Graduate i
Slide 21: Management Team
Through an Management Team experienced Sandeep Garg MANAGING Sanjay K Sultania CHIEF FINANCIAL Ajay Hans CHIEF EXECUTIVE Yogen Lal HEAD- WATER Asim Chakraborty CHIEF OPERATING Board and DIRECTOR & CEO OFFICER OFFICER (ROADS BUSINESS OFFICER- COO & WATER) (SPL. PROJECTS) ▪ A Chartered Accountant Civi
Slide 22: Asset Light Model
Asset Light Model • Focused on Execution Excellence • Minimal Plant & Machinery • Low Working Capital • Continuous asset value unlocking • High RoCE, Low Leverage One of its kind asset light model 22 Creating value through a profound strategy 23 Delhi Meerut E-way validating our differentiated strat
Slide 23: One of its kind asset light model
One of De-risked execution model its kind Focus mainly on HAM Undertakes only High Value Added Activities Value unlocking from assets asset light during Execution model ▪ Leverages balance sheet ▪ Construction completely ▪ Continuous unlocking of strength & financial closure outsourced. Project capi
Slide 24: Creating value through a profound strategy
Creating value Bid for Achieve early Award construction Project through differentiated projects/ Buy financial closure ▪ Strong Balance to best suited sub-contractor Management Consultancy a profound distressed Sheet ▪ Reduce execution ▪ Rigorous monitoring projects ▪ Reduced finance risk ▪ Achieve
Slide 25: Delhi Meerut E-way validating our differentiated strategy
Delhi Meerut Laying of foundation stone Inauguration of completed project E-way: Validating our differentiated strategy Project Under the Aegis of Prime Minister of India India’s FIRST 14-Lane India’s FIRST Green India’s FIRST COMPLETED HAM Expressway Expressway project – 332 Days ahead of Shri Nare
Slide 26: Letter of appreciation by Prime Minister
Letter of appreciation by Prime Minister of India Shri Narendra Modi WELSPUN ENTERPRISES LIMITED 25
Slide 27: Letter of appreciation by Honorable Parliamentarian
Letter of appreciation by Honorable Parliamentarian WELSPUN ENTERPRISES LIMITED 26
Slide 28: Appreciation by Shri Nitin Gadkari, Union Minister
Appreciation by Shri Nitin Gadkari, Union Minister WELSPUN ENTERPRISES LIMITED 27
Slide 29: Building much more than an expressway
Building Vertical garden developed along the entire bridge much more 40,000+ Trees than an transplanted and retained existing trees expressway 3,230 Solar Beautification Panels Initiatives Electrification through solar power of Wall art & replicas of famous monuments 1,050 kWp WELSPUN ENTERPRISES LI
Slide 30: Welspun Enterprises CSR initiatives
CSR EDUCATION ENVIRONMENT EMPOWERMENT initiatives Our social mission is enshrined within the 3Es i.e. Education, Empowerment and Environment & Health Project Gyankunj Project Model Village Welspun Super Sports Women To enhance the teaching & learning To create a sustainable rural To identify and sup
Slide 31: Financials
Financials Income Statement - Standalone 31 Balance Sheet Snapshot - Standalone 32 Key highlights 33 Way forward 34
Slide 32: Income statement - standalone
Income statement - standalone Particulars (₹ Crore) Q2 FY22 Q2 FY21 YoY % Q1 FY22 QoQ % H1FY22 H1FY21 YoY% Revenue from Operations 280.0 324.2 (13.6%) 344.2 (18.6%) 624.2 498.3 25.3% Other Income 8.4 10.1 (16.1%) 9.4 (10.4%) 17.9 19.7 (9.2%) Total Income 288.4 334.3 (13.7%) 353.6 (18.4%) 642.1 518.0
Slide 33: Balance sheet snapshot - standalone
Balance sheet snapshot - standalone Balance Sheet Snapshot (₹ crore) 30th Sept 2021 30th June 2021 Net worth 1,834 1,840 Gross Debt 500 566 - Long Term Debt 485 476 - Short Term Debt 15 90 Cash & Cash Equivalents# 343 95 Net Debt / (Cash) 157 471 Other Long-Term Liabilities 37 31 Mobilisation advanc
Slide 34: Key Highlights
Key Highlights Well Positioned to Benefit Unique Position with Strong Strong Order book providing from India’s Economic Growth Financials to tap Infra visibility for next couple of & Development Opportunities years Asset light business model in Demonstrated Operational Focus on Sustainable and Infra
Slide 35: Way forward
Way forward Continue approach of prudent Selectively evaluating EPC, Apart from NHAI, WEL is also bid/buy strategy to strengthen BOT (Toll) projects and evaluating road HAM projects Road and Water portfolio secondary acquisition of State and Municipal opportunities agencies Divest/securitise complet
Slide 36: Thank You
Thank You For further details please contact CORPORATE OFFICE WELSPUN ENTERPRISES LIMITED Welspun House, 5th Floor, Kamala Mills Compound, Senapati Bapat Marg, Lower Parel, Mumbai - 400 013, India. OCTOBER 2021
Slide 37: Appendix
APPENDIX Welspun Enterprises infrastructure portfolio 37 1. HAM: Delhi-Meerut expressway package 1 38 2. HAM: Gagalheri- Saharanpur- Yamunanagar 39 3. HAM: Chutmalpur - Ganeshpur & Roorkee-Chutmalpur - Gagalheri 40 4. HAM: Aunta - Simaria (Ganga Bridge with Approach Roads) 41 5. HAM: Chikhali-tarsod
Slide 38: Infrastructure Portfolio
Infrastructure Portfolio Robust portfolio Project Name Type Contract Authority Status Type / Client of 11 infrastructure Delhi-Meerut Expressway (Pkg 1) Road HAM NHAI Completed; 6th Annuity Received projects in roads Gagalheri-Saharanpur-Yamunanagar Road HAM NHAI 1st annuity received and water Chutm
Slide 39: HAM: Delhi-Meerut Expressway Package 1
HAM Project details Delhi-Meerut Project Length (Kms) Award Date 8.716 Km Jan 2016 expressway package 1 Financial Closure Achieved Appointed Date 28th Nov 2016 Scheduled Construction Period 30 months COD Date 28th June 2018 SCOPE 14 Lane expressway: Six-laning Concession Period after COD 15 Years of
Slide 40: HAM: Gagalheri-Saharanpur-Yamunanagar
HAM Project details Gagalheri- Project Length (Kms) Acquisition Date 51.5 Km Jan 2018 Saharanpur- Financial Closure Achieved Yamunanagar Appointed Date PCOD 26th Jan 2018 31st Oct 2020 Concession Period after COD 15 Years SCOPE 4-Laning of Gagalheri- Saharanpur-Yamunanagar section of NH-73 in UP / H
Slide 41: HAM: Chutmalpur-Ganeshpur & Roorkee-Chutmalpur-Gagalheri
HAM Project details Chutmalpur-Ganeshpur Project Length (Kms) Acquisition Date 53.3 Km Jan 2018 & Roorkee-Chutmalpur- Financial Closure Achieved Gagalheri Appointed Date PCOD 28th Feb 2018 05th Aug 2020 Concession Period after COD 15 Years SCOPE 4-Laning of Chutmalpur- Ganeshpur section of NH-72A &
Slide 42: HAM: Aunta-Simaria
HAM Project details Aunta-Simaria Project Length (Kms) Acquisition Date 08.15 Km Aug 2018 (Ganga Bridge with Financial Closure Achieved Approach Roads) Appointed Date Scheduled Construction Period 30th Aug 2018 42 Months Concession Period after COD 15 Years SCOPE Six- Laning from Aunta-Simaria (Gang
Slide 43: HAM: Chikhali-Tarsod
HAM Project details Chikhali-Tarsod Project Length (Kms) Acquisition Date 62.7 Km Jan 2018 Financial Closure Achieved Appointed Date 16th Jan 2019 PCOD 25th Aug 2021 Concession Period after COD 15 Years SCOPE 4-laning of Chikhali – Tarsod (Package-IIA) section of NH-6 from km 360.0 to km 422.7 in Ma
Slide 44: HAM: Package no. AM 2
HAM Project details Package no. AM 2 Project Length (Kms) Award Date 352.15 Km Nov 2018 Financial Closure Achieved SCOPE Upgradation of Roads in Appointed Date 28th May 2019 Maharashtra State or Two Laning Scheduled Construction Period 24 Months Road/ Two Laning Road with paved shoulder under MRIP C
Slide 45: Sattanathapuram - Nagapattinam
BOT Project details Sattanathapuram - Project Length (Kms) Award Date 55.755 Km July 2018 Nagapattinam Financial Closure Achieved Appointed Date 5th Oct 2020 Scheduled Construction Period 24 months Concession Period after COD 15 Years SCOPE 4 laning of Sattanathapuram to Nagapattinam (Design Ch Km 1
Slide 46: BOT: Mukarba Chowk - Panipat
BOT Project details Mukarba Chowk – Project Length (Kms) Acquisition Date (Harmonious 71.1 Km Panipat 8th June 2020 substitution) Financial Closure Achieved Scheduled Construction Period 15 months from substitution Commencement of Tolling Q3FY22E SCOPE 6 to 8 laning from Mukarba Concession End Date
Slide 47: EPC: Varanasi Aurangabad NH2 Project
EPC Project details Varanasi Aurangabad Project Length (Kms) Construction Period 136* 24 Months NH2 Project Commencement Date 30th Sep 2021 * Current scope-136 Km ;additional scope of 44 km is under discussion SCOPE Six laning of Varanasi – Aurangabad section of NH-2 from Major Structures km 786.00
Slide 48: EPC: UP State Water and Sanitation Mission
EPC Project details UP State Water and Project Scope Water Supply to Villages Sanitation Mission LOA Date Contract Execution Date 13-Jan-21 17-Mar-21 Scheduled Construction Period 21 Months Commercial Operational Date 29-Oct-23 SCOPE Est aggregate contract value ₹ 25,000 Mn Rural Water Supply projec
Slide 49: Other BOT projects summary
Other BOT projects Sector Project Name Location External Debt on books COD Concession End summary Highways Himmatnagar Bypass Gujarat (March-21) - Apr-06 Aug-20 Experience & Water Supply Dewas Water* MP 473 Apr-19* Jun-37 expertise of successfully Total 473 operating water project and 500+ kms of ro
Slide 50: Investment in Oil & Gas blocks: potential value accretion
Investment Block Name Location AWEL WEL Status in Oil & Gas Stake Effective Stake MB-OSN-2005/2 Mumbai 100% 35% AWEL drilled a well and had hydrocarbon blocks: Offshore discovery- potential GIIP 514 BCF (billion cubic feet) of gas . Further data evaluation studies have been completed. Resource and P