Star Cement Ltd. · NSE:STARCEMENT
Star Cement — Q3 FY2019 Earnings Presentation
32 slides from Star Cement's earnings presentation, Feb 16, 2019
Slide 1: Cover letter to stock exchanges
16th February, 2019 The Secretary BSE Limited Corporate Relationship Department, 1st Floor New Trading Ring, Rotunda Building, P. J. Tower Dalal Street, Fort Mumbai – 400001 Stock code: STARCEMENT The Manager Listing Department National Stock Exchange of India Limited Exchange Plaza, C-1, Block G, 5
Slide 2: Star Cement Limited (SCL) Investor Presentation
Star Cement Limited (SCL) Investor Presentation Cementing growth. Branding success. BSE Scrip code: 540575 NSE Scrip code: STARCEMENT Feb 2019
Slide 3: Disclaimer
Disclaimer The information contained in this presentation is only current as of its date. All actions and statements made herein or otherwise shall be subject to the applicable laws and regulations as amended from time to time. There is no representation that all information relating to the context
Slide 4: We are expanding the growth horizon and creating a differential
From North East to East From Growth to Efficiencies From Commodity to Brand From Capacities to Capabilities We are expanding the growth horizon and creating a differential. 02
Slide 5: The Birth of a Star
The Birth of a Star 2001 The Star was born 2005 Operations commenced Largest Cement manufacturer in NER Emerging market player In Eastern India (WB & Bihar) Strategically located Cement Manufacturing Facilities Cement Business operates under SCL & its subsidiaries Star Anti-Rust Cement
Slide 6: Counting the Stars
Counting the Stars ₹ 1850+ Crores ₹ 1629 Largest private Crores sector investment Turnover recorded in FY in North Eastern Region 2017 -18 (NER) # Highest Market share in NER – 1,00,000+ biggest pie in the region No. of technical touchpoints provided to the end-users # ~50% CAGR of PAT over last 5 1
Slide 7: The Star Bandwidth
The Star Bandwidth 31.13% 68.87% Public Star Cement Ltd. (Formerly Cement Promoters Manufacturing Company Ltd.) (‘SCL’) 100% 51% 87.5% 12.5% Megha Technical & Engineers Star Cement Meghalaya Ltd. Meghalaya Power Ltd. Pvt. Ltd. (‘MTEPL’) (‘SCML’) (‘MPL’) 05
Slide 8: Strong NER Roots
Strong NER Roots Promoters have strong links with NER - a crucial factor behind SFCL’s success Mr. Sajjan Bhajanka, Chairman & MD Mr. Sanjay Agarwal, Managing Director Experience Experience Graduate with 49 years of industry experience in Plywood, Graduate with 34 years of industry experience La
Slide 9: Professional Management
Professional Management Key Management personnel running the organization in a very professional manner Mr. Pankaj Kejriwal, Executive Director Mr. Sanjay Kr. Gupta, CEO Education Education & Experience Chemical Engineer with experience of over 20 years FCA with varied experience of over 26 year
Slide 10: Journey of a Star
Journey of a Star Cumulative capacities at the end of financial years FY 10-11 FY 04-05 FY 07-08 0.80 FY 12-13 Clinker (MMT) 0.40 0.60 2.60 FY 14-15 2.60 Cement (MMT) FY 07-08 FY 16-17 FY 04-05 FY 12-13 4.30 1.06 0.40 3.00 FY 10-11 FY 15-16 1.27 3.70 FY 12-13 FY 14-15 Power (MW) FY 09-10 51 8 51 08
Slide 11: What Makes Star Cement Tick?
What Makes Star Cement Tick? Dependable Strategic Location, Well-established Adequate plant raw material Beneficiaries of brand in NER with Proximity to Raw capacities to cater source and easy fiscal incentives strong consumer Materials & Market to the market availability of focus power Market Succe
Slide 12: Location Advantage: The Game Changer
Location Advantage: The Game Changer Arunachal Pradesh Sikkim Itanagar Gangtok 110 kms Siliguri Dispur Assam Nagaland (Guwahati) 220 km Kohima Patna Shillong Our strategically located Bihar Meghalaya plants cater to the Imphal Eastern & North Eastern Manipur Regions, giving us strong customer Aizawl
Slide 13: The Star Logistics Edge
The Star Logistics Edge Limestone mines are located within 2-3 kms of our plants, providing strong raw material linkage, easy accessibility and uninterrupted supply of raw material Coal is available in close proximity, ensuring cost and operational efficiencies Availability of coal also provid
Slide 14: The Star Logistics Edge
The Star Logistics Edge Untapped NER and Eastern markets have strong potential for further growth Over the last few years, cement arrivals in NER from mainland players has come down to 12% from 30% - owing to strong location advantage for the existing players in NER Strong entry barriers for n
Slide 15: The Star Fiscal Edge: Financial Incentives
The Star Fiscal Edge: Financial Incentives SCL’s plants enjoy many fiscal benefits granted by Central / State Governments Exemption Balance Exemption period** SCML SCL-GGU SCL-LMS 100% under Section 80 IE, Income Tax > 4 years > 4 years - subject to MAT IGST / CGST on Clinker 29% / 58% > 4 years - >
Slide 16: Powering Growth
Powering Growth Power Availability of best quality low cost coal ensures increased benefits for power plant Captive power ensures non-dependency on grid power Fly ash generated from power plant is used in cement plants at almost nil cost 14
Slide 17: The Mark of a Star: Branding Success
The Mark of a Star: Branding Success For Star, cement is not merely a commodity and therefore, we do not sell cement, rather we build and sell brands Star as a Brand have a very high recall value, enabling repeat customers STAR CEMENT is the most preferred brand in NER and is witnessing consis
Slide 18: Awards and Accolades
Awards and Accolades Mahindra Transport Award for ”Best Practices in Award for “Fastest Growing ZEE Business “Emerging Excellence Award 2016 - Employee Engagement“- Company” above Rs. 1000 Company of the Year FY National Award in Mining as 2017-2018 National HRD Network Crs at Economic Times well as
Slide 19: The Star Shines Bright and Strong
The Star Shines Bright and Strong Enjoys a leadership position in the North East with market share of more than 22% Gradually increasing share in the Eastern region through concerted efforts Strong dealer and distributor network built over the years, steering year-on-year growth, enabling lead
Slide 20: Marketing the Star Brand
Marketing the Star Brand Innovative strategy, large distribution network, pioneering initiatives Pioneers in initiating distribution through direct network, i.e. Dealers rather than C&F agents in NER Building the Brand aggressively and innovatively in the markets of West Bengal & Bihar Consume
Slide 21: Marketing the Star Brand
Marketing the Star Brand Innovative strategy, large distribution network, pioneering initiatives Technical assistance to retail consumers to ensure better connect - drives demand and builds brand confidence Value-enhancing technical marketing for customers On-site technical support to customers
Slide 22: Retail-driven Marketing strategy
Retail-driven Marketing strategy Distribution network spread across 10 states Distribution Network While our peers adopted the wholesaler Retailers ~9,000 model, we have built on our strong network Dealers ~2,270 of partners over the last decade The result – Deeper penetration, greater Robust
Slide 23: CSR – Assam & Meghalaya
CSR – Assam & Meghalaya HEALTH & SANITATION Organised regular health camps in Lumshnong and Chamata Pathar Donated Ambulance to initiate ambulance service at Shillong Public toilets are under construction in social institutions and household Eye check up camps were held at Sonapur and patien
Slide 24: CSR – Assam & Meghalaya
CSR – Assam & Meghalaya EDUCATION Under Star Pragyajyoti Project, around 10 LP schools are covered under computer literacy Program Additional class rooms and facilities were constructed in Chamata LP school in Sonapur area Scholarships were provided to promising students of Lumshnong and Sonap
Slide 25: Opportunities Beckon… and Star's Journey Continues
Opportunities Beckon… and Star’s Journey Continues 23
Slide 26: East India: Huge Untapped Potential
East India: Huge Untapped Potential Total Capacity (MMT) Total Production (MMT) and capacity utilization (%) 70 66 66 60 100 58 95 60 53 48 50 44.3 49 90 50 45 41 43 85 37 38.7 85 40 84 36 40 37 31 33 80 80 34 29 30 77 76 75 30 73 73 71 70 20 20 67 65 10 10 60 55 0 0 50 FY 10 FY 11 FY 12 FY 13 FY 14
Slide 27: East India: Huge Untapped Potential
East India: Huge Untapped Potential Per capita cement consumption in East is the lowest, Per Capita cement thus underlining huge potential for growth consumption (kgs) North Housing shortage in Urban India - Of the total housing Housing shortage in Urban & Rural shortages in urban India, East alone
Slide 28: North East Region: An Expanding Opportunity Landscape
North East Region: An Expanding Opportunity Landscape 8 states with abundant Separate Ministry for the Region – Natural Resources Doner (Development of North Eastern Region) to Limestone, Coal, Dolomite, Quartz, Granite, Sandstone, Shale boost development Central government’s infrastructure developm
Slide 29: North East Region: Opportunities Galore
North East Region: Opportunities Galore 12 11 11.3 11.3 11.3 Five-year 2007- 2012- 2017- 10 Plans 2012 2017 2022 10 9 7.91 NER Cement 8 7.14 7.2 Capacity (Mn 7 7 6.3 6.6 Tons) NER GDP 5.82 6.02 10% 13.7% 16.4% 6 5.4 Growth NER Cement 4 Demand (Mn Tons) NER Per 2 Capita 8.6% 12.4% 15.2% growth 0 FY 1
Slide 30: The Star is Set to Shine Brighter: More Frontiers of Growth
The Star is Set to Shine Brighter: More Frontiers of Growth Further growth in high potential areas by leveraging operational and financial efficiencies Seize the growth opportunities in NER, Eastern Region – partner the government's initiatives to boost infrastructure Strengthen and expand dea
Slide 31: The Numbers Speak: Successful Financial Track Record
The Numbers Speak: Successful Financial Track Record In ₹ Crores 2014-15 2015-16 2016-17 2017-18 Q3 FY 18 Q3 FY 19 Gross Sales 1,473 1,763 1,552 1,629 373 415 C O N S O L I D AT E D F I N A N C I A L S Net Sales 1,430 1,715 1,522 1,606 376 415 EBIDTA 437 401 411 526 142 123 EBIDTA Margin (%) 31% 23%
Slide 32: Thank You
Thank You Mr. Sanjay Kr. Gupta +91 33 24484170 investors@starcement.co.in www.starcement.co.in