H.g. Infra Engineering Ltd. · NSE:HGINFRA
H.g. Infra Engineering — Q3 FY19 Earnings Presentation
31 slides from H.g. Infra Engineering's earnings presentation, February 2019
Slide 1: Investor Presentation, Feb 2019
Investor Presentation, Feb 2019 H.G. Infra Engineering Ltd We make people move
Slide 2: Outline
Outline 01 Q3 & 9M FY19 Result Highlights 02 About the Company 03 Key Strengths and Drivers 04 Growth Strategy 05 Financial Highlights
Slide 3: Q3 & 9M FY19 Results Highlights
Q3 & 9M FY19 Results 01 Highlights
Slide 4: Result Highlights Q3FY19
Result Highlights Q3FY19 Robust growth in topline and profitability Revenue EBITDA and EBITDA Margin 15.4% 14.6% 71% 5,505.9 805.9 3,216.1 493.7 Q3FY18 Q3FY19 Q3FY18 Q3FY19 PBT & PBT Margin PAT and PAT Margin 8.7% 9.5% 5.9% 6.4% 523.4 352.5 279.9 189.5 Q3FY18 Q3FY19 Q3FY18 Q3FY19 Financials in Rs mn
Slide 5: Result Highlights 9MFY19
Result Highlights 9MFY19 61% growth in revenue; robust margins Revenue EBITDA and EBITDA Margin 14.6% 14.7% 61% 14,298.6 2,100.0 8,889.5 1,292.8 9MFY18 9MFY19 9MFY18 9MFY19 PBT PAT and PAT Margin 8.2% 9.2% 5.4% 6.1% 1,314.1 868.2 730.9 482.3 9MFY18 9MFY19 9MFY18 9MFY19 Financials in Rs mn 5
Slide 6: Recent Order Wins
Recent Order Wins Total order win of Rs 15,770 mn u Hybrid Annuity Project in the state of Haryana from NHAI ü The scope of work involves four laning of Rewari-Ateli Mandi section of NH-11 ü Valued at Rs 5,800 mn ü Length of the project is 31 km u EPC order in the state of Rajasthan from NHAI ü The
Slide 7: Q3FY19 & 9MFY19 Standalone Profitability Highlights
Q3FY19 & 9MFY19 Standalone Profitability Highlights (Rs mn) Q3FY19 Q3FY18 YoY 9MFY19 9MFY18 YoY Revenue from operations 5,505.9 3,216.1 71.2% 14,298.6 8,889.5 60.8% Cost of material consumed 2,662.0 1,277.6 108.4% 6,917.2 3,742.1 84.8% Contract and site expenses 1,642.2 1,209.0 35.8% 4,222.5 3,229.1
Slide 8: Balance Sheet
Balance Sheet Rs mn Sep’18 Mar’18 Share Capital 651.7 651.7 Reserves 5,232.5 4,756.9 Shareholders' Funds 5,884.2 5,408.6 Secured Loans 787.7 1,247.0 Other liabilities 537.0 488.6 Total Non-Current Liabilities 1,324.7 1,735.6 Trade Payables 2,226.2 2,793.4 Other Current Liabilities 1,078.3 1,764.4 Cu
Slide 9: About the Company
| a r - 3 eh ne — = 2 o4 02 >> About the Company
Slide 10: Company Overview
Company Overview Experienced roads and highways construction company 15 30 1,600+ Years of track record in Projects under Number of plant & project execution execution machinery 6 3,815 Rs 59,250 mn States where projects Qualified and Order Book (Unexecuted orders of Rs 43,480 as on Dec 31, have bee
Slide 11: Track Record
Track Record Executed projects across geographies and clients Presence across 6 states Clients 1 1 1 1 9 2 19 3 Accreditations and awards Quality Management Environment Management Health & Safety 7 1 No. of completed projects No. of ongoing projects u Letter of appreciation in 2012 from L&T for bein
Slide 12: Milestones
Milestones Evolved from sub-contractor to main contractor with higher value contracts 2003-08 2010-14 2015-16 2017-18 Four laning of 49 mm on 7 construction projects in Incorporated in 2003 Construction project of four the Jaipur-Tonk-Deoli Maharashtra by MoRTH – section on NH-12 – laning of NH-65,
Slide 13: Completed Projects
Completed Projects Completed notable projects of different sizes & complexities Project 4 laning of Construction 2nd Renewal Coat Construction of Widening & Warora- Kuberpur to on the Pavement of Tonk-Deoli Jaipur Strengthening of Chandrapur- Fatehabad- Agra 6 lane Jaipur- Section NH96 Ballarpur Inn
Slide 14: Joint Ventures
Joint Ventures Between 2013-17, ongoing/completed 5 roads and highways projects through JVs M.G Rameshwar JV partner Tata Projects Ranjit Buildcon Colossal Contractors Prasad Sharma Limited Limited Construction Pvt Limited Contractor Changlang district Bari-Baseri-Weir- Project Babatpur to Chittorga
Slide 15: Management Team
Management Team Experienced and qualified senior management and operational team Mr. Harendra Singh Mr. Rajeev Mishra Mr. Raja Dutta Chairman and Managing Director Chief Financial Officer Chief Operating Officer • 23 years of experience in the • Over 10 years of experience in banking • 20 years of e
Slide 16: Board of Directors
Data to be updated Board of Directors Management supported by independent Board Mr. Vijendra Singh Whole-time Director • ~25 years of experience in the construction industry • Responsible for the overall functioning of the Company Ms. Dinesh Kumar Goyal Non-Executive Non Independent • Retired IAS, h
Slide 17: Key Strengths and Drivers
03 95> Key Strengths and Drivers
Slide 18: Industry Opportunity, Differentiated Business Model, Robust Order Book
INDUSTRY OPPORTUNITY Increasing investments Policy support and reforms Insufficient network DIFFERENTIATED BUSINESS MODEL TO DRIVE Evaluation and management skills GROWTH WITH Equipment bank Project team SUPERIOR MARGINS ROBUST ORDER BOOK 3.8x FY18 revenues Provides revenue visibility
Slide 19: Industry Opportunity
Industry Opportunity Increasing investment in the infrastructure sector with focus on roads & highways Government’s focus on improving domestic infrastructure leading to increasing investments in the sector (Rs tn) INR 7 tn INR 14.9 tn 62% u Total investment in the road space to grow 2.1x from INR7t
Slide 20: Industry Opportunity
Industry Opportunity Several factors driving the growth in infrastructure investments NH constitutes a mere 1.7% of the road network þ Policy changes fueling growth – land availability, fast- but carry about 40% of the total road traffic track clearances, revival of stalled projects, etc. Road Netwo
Slide 21: Differentiated Business Model
Differentiated Business Model Presence across the project lifecycle for better efficiency 1 2 3 Efficient project Technical and skilled Large in-house evaluation and team for project equipment bank management skills management Differentiated business model with focus on efficient execution, complete
Slide 22: Project Evaluation and Management
1 Project Evaluation and Management Presence across the project lifecycle for better efficiency and cost optimization u Focus on selection of projects with favorable execution conditions Preliminary project evaluation u Projects with our hurdle rate of profitability u In-house team for technical sur
Slide 23: Equipment Bank
2 Equipment Bank Invested Rs 3,900+ mn in plant and machinery in last 2.5 years u Owned equipments ensures control over execution u Ensures availability and quick mobilization u Eliminate delays and cost over-runs due to untimely break- Crushers Compactors Graders downs or non-availability Gross Blo
Slide 24: Project Team
3 Project Team Total 3,815 employees; net addition of 900+ employees in FY19 No. of employees Large number of skilled employees 3.6x 3,815 Semi Skilled 2,894 550 1,497 Unskilled 1,070 160 Highly Skilled Mar'16 Mar'17 Mar'18 Dec'18 325 Employee Expenses (Rs mn) Skilled 2,780 5.4% 3.9% u 3,815 employe
Slide 25: Order Book
Order Book Robust order book of Rs 59,250 mn (~4.2 FY18 Revenues) Robust growth in order book (Rs mn) Order book breakup (Rs 59,250 mn) 4x HAM 20% EPC 59,250 80% L1 orders 46,071 of 15,770 40,191 Maharashtra, Haryana, Others , 0.1% 16.0% 20.0% 47,480 14,463 UP, 19.8% Rajasthan, 44.3% Mar'16 Mar'17 M
Slide 26: Growth Strategy
04 Growth Strategy
Slide 27: Strategy
Strategy Continue focus on core EPC projects with superior margins § Focus on road and highways EPC § Reduce business concentration § Invest in modern construction in limited geography equipment § De-risk by expanding the § Attract and retain talented presence in different states employees Business
Slide 28: Financial Highlights
eet —~ — ~~ = o4 05 >> Financial Highlights
Slide 29: Revenue, EBITDA and PAT
Revenue, EBITDA and PAT Robust topline and profitability growth … Rs mn Revenue from Operations EBITDA & EBITDA Margin PAT & PAT Margin 10.6% 11.8% 14.9% 4.8% 5.1% 6.1% 13,927 842 2,081 10,560 534 7,409 1,244 354 781 FY16 FY17 FY18 FY16 FY17 FY18 FY16 FY17 FY18 Revenue for FY18 is net of GST, wherea
Slide 30: Return Ratios
Return Ratios … leading to superior return ratios Debt/EBITDA Return on Capital Employed Return on Net Worth 39% 40% 32% 30% 31% 29% 2.0 1.6 1.6 FY16 FY17 FY18 FY16 FY17 FY18 FY16 FY17 FY18 Disciplined working capital management Working Capital Days ü Debt is calculated as: Long Term + Short Term Bo
Slide 31: Disclaimer
Disclaimer This presentation and the accompanying slides (the “Presentation”), which have been prepared by Company HG Infra Engineering Limited (the “Company”), have been prepared solely for information purposes and do not constitute any offer, recommendation or invitation to purchase or subscribe f
H.G. Infra Engineering — Q3 FY19 Earnings Presentation on 6ix