Batliboi Limited · NSE:BATLIBOI
Batliboi — Investor Presentation (2004)
34 slides from Batliboi's investor presentation, 2004
Slide 1: Indian Capital Goods Industry
Indian Capital Goods Industry
Slide 2: Introduction
Introduction • Strong and Vibrant – Core of India’s Industrial Strategy -1951 • Serving a Wide Cross-section of Industry Segments • International Standards of Quality Control – ASME, ISO 9000 • Value Addition - Highest in Industry • Engine of Growth • Strong Forward and Backward Linkages
Slide 3: Current Scenario
Current Scenario • Recession for Last few Concurrent Years • Situation has improved • First Phase of Tariff Reforms • Successfully Faced Competitive Pressures
Slide 4: Capital Goods Industry
CAPITAL GOODS INDUSTRY • The manufacturing sector recorded 8 per cent growth in the 1st quarter of 2004 against a growth rate of 6.6 per cent in the same period of 2003. • Machinery production index up by 25.1 per cent against three per cent increase registered in the same period of 2003. • April –
Slide 5: Capital Goods Industry
CAPITAL GOODS INDUSTRY • Opening up of the economy has had an impact on the domestic industry in terms of import competition. • Remarkable turnaround in the capital good industry in 2003 – 04 after a six year period of recession with a growth rate of 13.6 %. • Good prospects for sustaining domestic
Slide 6: Capital Goods Industry
CAPITAL GOODS INDUSTRY • Some sectors on a healthy growth path - Air & Gas Compressors - Switchgear - Diesel Engines - Distribution Transformers - Electric Motors - Machine Tools - Tractors - Printing Machinery - Cranes - Industrial Furnace - Oil & Gas Equipment - Textile Machinery
Slide 7: Excellent Growth
Excellent Growth Segments with excellent growth 2002-03 2003-04 50 44 40 30 31 30 24 22 20 10 7 6.5 5.4 -0.1 0 -10 -4.9 AIR COMP RESSOR DISTRIBUTION ELECTRIC CABLES& WIRES MACHINE TOOLS POWER CABLES TRANSFORMER
Slide 8: Capital Goods: Trend Upwards
10 15 20 25 0 5 -5 -15 -10 1982-83 1984-85 1986-87 1988-89 1990-91 1992-93 1994-95 1996-97 1998-99 CAPITAL GOODS: Trend Upwards 2000-01 2002-03 2003-04
Slide 9: Growth Rate – 8%?
Growth Rate – 8% ? • Growth Rate – 8% ? 100% 90% 80% 70% 60% 50% 40% 30% 20% 33.5% 26.2% 10% 0% 2003 2004 2005 2006 2007 2008 2009 2010 Industry% Services% Agriculture%
Slide 10: Growth Rate – 8%?
Growth Rate – 8% ? • What does 8% Growth mean for Industry? 14% 13.1% Growth % 12.6% 12.2% 11.8% 11.4% 12% 11.1% 9.7% 10% 8% 6.5% 6% 4% 2% 0% 2003 2004 2005 2006 2007 2008 2009 2010 Industrial Growth will have to Increase from 6.5% to 13% in Two Years, and Stabilize at 11% Per Year
Slide 11: Challenges Facing Indian Capital Goods
Challenges Facing Indian Capital Goods Foreign Financiers Domestic and Contractors Policy Favour Home Constraints Country Suppliers Lower Tariffs (Below WTO Capital Goods Bound Rate) & Industry Falling Global Prices Inverted Duty Infrastructure and Structure Cost of Capital
Slide 12: Policy Driven Uncompetitiveness
Policy Driven Uncompetitiveness Cost Disadvantages Faced By Indian Companies (due to costs which are not applicable to Foreign Contractors for “Zero duty and Deemed Export” Projects S.No. Items Impact Terminal Sales / W.C. tax varies between states (4% - 1. 12%) 4.6 - 13.9 (*)Financial Cost for reim
Slide 13: Batliboi Group
—EEE Batliboi Group ——_— BATLIBOI = De
Slide 14: Business Domains
Business Domains Machine Tools Motors Textile Wind Energy Engineering Business Air conditioning Domains Environmental Engineering and Refrigeration Logistics Exports
Slide 15: Batliboi Ltd. - Business Units
Batliboi Ltd. - Business Units Textile Engineering Group Machine Tools Group Air Conditioning and Refrigeration Group
Slide 16: Manufacturing Facilities
Manufacturing Facilities At our plants at Udhna (Surat) and Bangalore we manufacture sophisticated machinery. The range includes equipment designed and fabricated indigenously, as well as in collaboration with some of the world’s leading engineering companies .
Slide 17: Business Units: Machine Tools
Business Units Machine Tools – Manufacture of Conventional Machines- Radial & Milling machines – CNC controlled Machining Centres & Lathe machines – Special Purpose machines – Primarily for Automobile & Auto Components – Imports – Machines not manufactured in India, Machines which are more competiti
Slide 18: Business Units: Textile Machinery
Business Units Textile Machinery – Textile Machinery for the following sectors : • Spinning • Knitting • Weaving • Garmenting • Processing – Textile Air Engineering for Spinning & Weaving • Climate Control – Humidity & Temperature • Waste Recovery
Slide 19: Business Units: Air Conditioning & Refrigeration
Business Units Air Conditioning & Refrigeration – Turnkey Projects – Packaged air Conditioners – Compressors – Chillers – Precision Air Conditioners for Telecom & IT
Slide 20: Network
Network Corporate Office International Division Manufacturing Ludhiana Facilities Offices New Delhi Kanpur Udhna Kolkata Jamshedp Mumbai ur Pune Kolhapur Secunderabad Bangalore Guntur Tirupur Chennai Coimbatore Madurai Madura i
Slide 21: Steps taken at Batliboi
Steps taken at Batliboi • Exiting from Non Core Businesses • Right sizing the Organisation • Reducing Interest Burden • Reorganising Businesses • Redefining Business Processes • Export Initiatives
Slide 22: Exiting from Non Core Businesses
Exiting from Non Core Businesses • Businesses not contributing to the profitability closed down : - Instrumentation - Material Handling - Power Generation - Home Appliances One of the Yards sticks : Employee Cost < 40 % of value addition
Slide 23: Rightsizing the Organisation
Rightsizing the Organisation • Employee strength reduced from 1450 in 1999 to 650 in 2004 – Current Cost 35 % lower than 1999 – Positions not adding value eliminated – Focus on white collared jobs – Roles / Responsibilities enlarged resulting in positions becoming redundant – Delayered the organisat
Slide 24: Reducing the Interest Burden
Reducing the Interest Burden • Short Term & Long Term debt reduced from Rs. 47 crores to Rs. 6 crores • Annual Interest cost reduced from Rs.9 crores to < Rs. 0.7 lacs • How ? – Disposal of Non Performing Assets – Improving Working Capital – Current assets reduced by 55 % – Equity Infusion
Slide 25: Reorganising Business
Reorganising Business • Moved from Matrix type organisation to Focused Business Groups - Strategic Business Units created / realigned • Commonality of customers • Technology & Products - Divisions of SBUs accountable for Topline, Middleline Bottomline
Slide 26: Redefining Business Process
Redefining Business Process • Balance Scorecard introduced ( through Cedar Consulting) – Business Objectives and Goals articulated – ( short term & medium term ) – Initiatives / Projects identified to deliver Objectives & Goals – Measurement yardsticks / milestones put into place – Responsibilities
Slide 27: Balanced Scorecard
Balanced Scorecard Initiatives taken to improve performance in : • Productivity • Product Development • Marketing • Human Resources • Costs
Slide 28: Balanced Scorecard - Initiatives
Balanced Scorecard - Initiatives Productivity : • Baroda productivity Council appointed to improve productivity • Kaizan Consultants engaged • Investment in Fixed assets in Manufacturing • ERP • Employee Productivity – Clearly defined targets – Activities Targeted – MIS revamped – Response / feedbac
Slide 29: Balanced Scorecard - Initiatives
Balanced Scorecard - Initiatives Product Development • Customers / Fields reports • Design & Development • Processes including value addition • Fixed assets addition
Slide 30: Balanced Scorecard - Initiatives
Balanced Scorecard - Initiatives Marketing : • Internal processes – customer centric • Activities which wins over customers benchmarked and monitored ( proposals, quotations, technical queries, response time , supply of spares) • Product wise / Segment wise opportunities identified and revenue targe
Slide 31: Balanced Scorecard - Initiatives
Balanced Scorecard - Initiatives Human Resources • Reward / Compensation - Clearly defined and transparent KRAs - KRA linked to rewards - SBUs / Divisions rewards linked to profit - Training to support KRA - SBU / Division’s rewards linked to profit •Behavioural Competencies Assessment - Consulting
Slide 32: International
International Product Exports – Distributorship channels – Europe , Middle East – Focus on Textile producing Nations – primarily Asia Outsourcing – Machine tools – outsourcing for Czech & Italian Company – Textile Air Engineering – manufacturing components / assemblies for Collaborators
Slide 33: Results
Results (All figures in Rs.Crores) Last 1st Qrt Growth 2nd Qrt Growth 1st Half Growth Year’s (04-05) Over Actual over Yealy over 1st Actual 1st Qrt (04-05) 2nd Qrt Actual half year (03-04) (03-04) (03-04) (04-05) Actual Full Year (04-05) Order Booking 183 59 74 % 46 15 % 105 42 % Turnover 155 46 69
Slide 34: Thank you
—EEE Thank you ——_— BATLIBOI = De