Techno Electric & Engineering Company Limited · NSE:TECHNOE
Techno Electric & Engineering — Q1 FY2019 Earnings Presentation
45 slides from Techno Electric & Engineering's earnings presentation, Jun 30, 2018
Slide 1: Investor Presentation Quarter Ended June 30, 2018
AN INVESTOR PRESENTATION Quarter Ended June 30, 2018
Slide 2: Corporate Overview, Business Segment Review, Financial Review
» Corporate Overview 03 » Business Segment Review 17 » Financial Review 39
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 to » Asset Ownership » Transmission Handover to » Operations and » Distribution Maintenance Maintenance » Industrial * TEECL is divesting its renewable energy assets to concentrate more on its core businesses of EPC and BOOT an
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 segment COMPANY OVERVIEW BUSINESS SEGMENT REVIEW FINANCIAL REVIEW
Slide 7: Advancing with Experience and Expertise: EPC
ADVANCING WITH EXPERIENCE AND EXPERTISE » T&D including rural electrification » Balance of plant » Captive waste heat recovery and upto 200 MW of conventional power plant on turnkey basis » Solutions for power-intensive industries » Less capital-intensive, high risk-reward ratio » 88% of revenues »
Slide 8: Advancing with Experience and Expertise: BOOT and BOOM
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 Energy
ADVANCING WITH EXPERIENCE AND EXPERTISE » Capital-intensive » Modest IRR » Multi-year stable income/cash flows » 10% of revenues, » 25% of EBIDTA, FY18 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 Build a 400 kV GIS substation at 49% Patran, Punjab on Build, Own, Operate and Maintain (BOOM) basis for 35 years 26% » Build a Transmis
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 ‘Best player in 765 KV AIS IEI Industry Excellence Mr. P. P. Gupta receiving Meritorious Performance in Substation Construction in Award, 2016 the best performance Power Sector in 2011-12 by India in 2018’ by PGCIL award, 2013 Ministry of Power Received Safety Award Received awar
Slide 13: Capable Leadership
CAPABLE LEADERSHIP Qualification » Honours graduate in Industrial Engineering » Postgraduate in Management (IIM, Ahmedabad) Experience » Management consultant deputed to BHEL » Merchant banker with National Grindlays Bank Association with TEECL » Joined TEECL since 1980 » Grew TEECL into prominent I
Slide 14: Leveraging Opportunities
LEVERAGING OPPORTUNITIES Policies to influence the Investment roadmap power industry of industry » 450 GW total generation capacity » ₹ 2,600 billion total transmission sector target by 2022 investments, of which ₹ 1,600 billion in 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 BOOT/BO
Slide 17: EPC
EPC BOOT and BOOM Business Green Power
Slide 18: Delivering Consistently
DELIVERING CONSISTENTLY 67% ₹ 2,500+ million ROCE of EPC as on annual cash surplus 31 March, 2018 ₹ 17,872 million 23% size of order book as on CAGR of EPC revenues 30 June, 2018 over last 4 year 24 months 88% revenue visibility Revenue of the total business from EPC as on 31 March, 2018 COMPANY OVE
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; realised retenti
Slide 21: EPC Order Book as on 30th June, 2018
EPC ORDER BOOK AS ON 30TH JUNE, 2018 Name of the client Amount in mn 41.28 PGCIL 7,377.7 ₹ 779 million % Generation 16.96 Jharkhand Bijli Vitran 3,031.6 % Nigam Ltd. 15.67 NERSS, Nagaland 2,800.0 % (BOOT Project) 12.31 DABS, Afghanistan 2,200.0 Total - % 3.42% TS Transco Ltd. 611.8 ₹ 13,715 million
Slide 22: Distinct Accounting Framework for FY17 and FY18
DISTINCT ACCOUNTING FRAMEWORK FOR FY17 AND FY18 Revenue (₹ in mn) EBITDA (₹ in mn) 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) ROCE (in %) FY 17-18 1,1
Slide 23: Promising Future Owing To (Contd.)
PROMISING FUTURE OWING TO (Contd.) » Combined expected investment of more than ₹ 12,00,000 million by IOC*, BP^, HP# and others on refinery expansions in the next five years plan » Expected capex from Vedanta and NALCO for enhanced capacities in the next 3-5 years to be valued at ~₹ 4,00,000 million
Slide 24: Promising Future: International 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 ₹ 95 crores » AFGHANISTAN The Afghanistan Breshna Sherkat (DABS), Kabul, Afghanistan for desig
Slide 25: Promising Future: Emission Control
PROMISING FUTURE OWING TO (Contd.) Pursuant to Government of India, Gazette notification of 7 th December, 2015 all Thermal Power Plants need to limit their sulphur emission. » Expected to bag 1-2 orders with an order size of ₹ 2,000-5,000 million » Requirement of global technology tie-ups by EPC pl
Slide 26: Promising Future: Solar and Waste-to-Heat
PROMISING FUTURE OWING TO Solar Power » Targeted 100 GW of solar capacity by 2022 in India through investment of ₹ 6,000 billion » 25 GW of installation expected through from EPC route of ₹ 1,500 billion; NTPC to execute 10 GW installation in the next five years » Poised to execute 3-5% of installat
Slide 27: BOOT and BOOM Business
EPC BOOT and BOOM Business Green Power
Slide 28: 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 29: 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 30: 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 31: 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 32: 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 33: 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 34: Getting Future Ready
GETTING FUTURE READY With growing government preference for private sector’s role in the power distribution and transmission segment, the BOOT and BOOM industry is expected to grow steadily. In this industry landscape, TEECL will aim to » Execute 1-2 project annually » Attain projected portfolio of
Slide 35: Green Power
EPC BOOT and BOOM Business Green Power
Slide 36: 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 37: 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 38: Divesting Green Energy Assets
DIVESTING GREEN ENERGY ASSETS Revenue (₹ in mn) EBITDA (₹ in mn) Other Income (₹ in mn) FY 17-18 1,241.85 FY 17-18 1,106.15 FY 17-18 135.94 FY 16-17 1,457.73 FY 16-17 1,312.99 FY 16-17 424.57 FY 15-16 829.30 FY 15-16 764.43 FY 15-16 598.51 FY 14-15 1,258.10 FY 14-15 1,143.20 FY 14-15 98.79 PAT (₹ in
Slide 39: Financial Review
@...: Review
Slide 40: Analysing Quarter-on-Quarter Financials - Q1FY19
ANALYSING QUARTER-ON-QUARTER FINANCIALS – Q1FY19 Revenue EBITDA (₹ in mn) (₹ in mn) 3,023 980 4,123 1,016 EBITDA Margin Other income (%) (₹ in mn) 32.41 112 24.65 114 Profit after tax Interest Cost (₹ in mn) (₹ in mn) 665 38 693 86 Q1FY19 Q1FY18 Market conditions rendered Q42017 and Q4FY18 financial
Slide 41: Analysing Quarter-on-Quarter Financials
ANALYSING QUARTER-ON-QUARTER FINANCIALS Revenue (₹ in mn) Revenue (₹ in mn) 2,700 323 3,681 442 EBIT (₹ in mn) EBIT (₹ in mn) 672 194 588 307 EBIT Margin (%) EBIT Margin (%) 24.88 59.99 15.97 69.46 Q1FY 19 Q1FY 18 Q1FY 19 Q1FY 18 1. Earlier our revenue used to be inclusive of taxes, now, post GST, i
Slide 42: Annual Financials
ANNUAL FINANCIALS Revenue (₹ in mn) EBIT (₹ in mn) EPC 11,733.71 EPC 1,755.99 12,109.54 1,773.42 Energy Existing 1,241.85 Energy Existing 709.81 1,267.13 918.54 Energy Sold* 0.00 Energy Sold* 0.00 190.60 158.80 Corporate (Normal) 258.09 Corporate (Normal) 258.09 136.54 136.54 Corporate (One time)* 0
Slide 43: Annual Financials - Balance Sheet
ANNUAL FINANCIALS - (Contd.) Balance Sheet 2017 2018 SOURCES OF FUNDS Shareholders’ funds 11,070 12,223 Minority interest --- --- Loan funds 2,099 224 Deferred tax liabilities 975 1,130 Other liabilities and provisions 213 355 Total 14,358 13,932 APPLICATION OF FUNDS Net fixed assets 6,468 5,846 Inv
Slide 44: Decoding TEECL's FY18 Performance
DECODING TEECL’S FY18 PERFORMANCE Distinct taxation in FY17 and FY18 owing to Adoption of GST by TEECL but not raised roll out of GST with clients » Revenues negatively impacted by ~10-11% in » Accounted bills with GST from sub-contractors FY18 because earlier they were recorded as expenses, and bil
Slide 45: Techno Electric & Engineering Company Limited
TECHNO ELECTRIC & ENGINEERING COMPANY LIMITED Corporate Office: 1B Park Plaza, 71 Park Street, Kolkata 700 016
Techno Electric & Engineering Company — Q1 FY2019 Earnings Presentation on 6ix