Slide 1: Investor Presentation
Investor Presentation By Ashok Atluri © Zen Technologies Ltd Confidential
Slide 2: The New Govt…
The New Govt… • Invest in Defence Industry? • #MakeInIndia vs #DesignDevelop&MakeInIndia? • Export Promotion • Encouragement to Indigenously Designed Products? (a la USA?) • DPP under Buy Indian from 30% IC to 40% IC (At least) • Ban Import of Certain Defence Items?
Slide 3: Import of certain items to be banned in defence sector: Parrikar
followus: f W 3 hindustan fuiem™ world cities opinion sports entertainment lifestyle realestate photos vil battle for bihar sholay@40 | 69thindependenceday | ht48hours | movie reviews Import of certain items to be banned in defence sector: Parrikar PTI, New Delhi | Updated: Mar 21, 2015 15:40 IST CE
Slide 4: Spectrum of Products
Spectrum of Products • Hardware to Software • High Technology Products - Manufacturing Cost of 0% to 30% • Value Capture – up to 80% in Design and Development • Built to Print – What is the Value Capture? • CRO vs R&D • Simulator – – What is it? Software? Hardware? – What is it used for?
Slide 5: Operational Preparedness
Operational Preparedness • Why is real training so costly? Eg: Training on Tanks • Ineffective or Impractical? • Video Games? • Improvement up to 90% - Experience with ATGM Sim • Simulators…for what?
Slide 6: Simulators for Weapons' Training
Simulators for Weapons’ Training • Simulators for Everything • Requirements for Simulators – basis of arriving? • What is the Market Size?
Slide 7: Defence Opportunity Est - Select Sims
Defence Opportunity Est - Select Sims Selected Simulators Armour Combat Training Simulators UAV Sim Tactical Engagement Sim Infantry Weapons Training Sim Driving Sim AGL & MMG Sims 81mm Mortar Sim Rs 6,000 Cr. Opportunity Size
Slide 8: Immediate Opportunity
Immediate Opportunity • Advanced Stage – Expected Rs 500+ Crores • Execution in FY17 & FY18 • Expected RFPs for Larger Contracts – FY17 onwards • AMCs – Expected along with Equipment Orders
Slide 9: Annual Maintenance Contracts
Annual Maintenance Contracts • Typical Lifecycle - 15 years • 2 years warranty • Expected 13 years AMC/Support • Expected 5 years at the time of signing of contract • Annuity Income
Slide 10: Zen's Competitive Advantages – R&D
Zen’s Competitive Advantages – R&D • 40% of staff in R&D - 97/243 • 23% of staff in Customer Support – 57/243 • FY14 & FY15: Op Revenues @ Rs 46 Cr and 78 Cr • FY14 & FY15: R&D Exp: Rs 20.66 Cr & Rs 13.07 Cr • CRO vs Real R&D – IP Ownership? • Source code, algorithms, mechanical designs, electronic
Slide 11: Zen's Competitive Advantages
Zen’s Competitive Advantages -
Slide 12: Zen's Competitive Advantages
Zen’s Competitive Advantages • Ability to Realize a Simulator Fast – Libraries/Deep Competence • Indian Customers –100% Repeat Police/Defence Customers • 22+ Years Track Record • Prototypes Ready for Upcoming Requirements • #MakeInIndia Stress by GoI
Slide 13: Zen's Growth – Product Development (Ansoff)
Zen’s Growth – Product Development (Ansoff) Existing Product New Product Existing Market Market Product Penetration Development New Market Market Diworseification Development
Slide 14: Additional Opportunities
Additional Opportunities • Aviation Simulation • Exports • Offsets
Slide 15: Aviation Simulation
Aviation Simulation • No Credible Domestic Players • Preference for Indigenous Solutions • Need Some Expertise to Fill the Gap – Rockwell Collins • Hired A Team with Knowledge – Kamath HJ • Location: Bangalore
Slide 16: Exports - Opportunity
Exports - Opportunity • Opportunity as Preparedness is Becoming Important in Europe, Middle East, Africa, etc • Cost/Availability of Sims Prohibitive/Difficult • Small Markets Ignored • Zen’s Solution
Slide 17: Combat Training Centres
Combat Training Centres • Not Product, Solution • From Hostage Scenarios to War Scenarios • Zen’s vast range of Simulators • Customization for the End User
Slide 18: Offsets
Offsets • 30% Obligation of Overseas Vendors • Difficult to Fulfill • New Opportunity for Zen • 1.5x Higher Offset Credit • Zen Products – A Ready Made Solution • Expect Great Demand for this Option • New DPP clause: Ease of Change in DPP Partner
Slide 19: Competition
Competition • Thales • Cubic Defense • Meggitt • Rheinmetall • Saab • Israeli Companies/OEMs • Russian Companies/OEMs • Large Pvt Indian Cos and DPSUs
Slide 20: It's not the size of the dog in the fight
It’s not the size of the dog in the fight, it’s the size of the fight in the dog – Mark Twain
Slide 21: Key Milestones
Key Milestones 1993 Incorporation 1996 ZEN SATS 1998 In-house R&D recognition by Govt of India 2002 AWeSIM 2004 Driving Training Simulator 2006 BMP DS & BMP IMS 2008 Live Simulation – TacSim 2011 Tank Simulator (BG, CG, & DS) 2013 UAV Simulator 2014 ACTS;© Zen New Govt Ltd Technologies 23 Confidenti
Slide 22: Disclaimer
Z 174 being there... Disclaimer Certain statements in this release concerning our future growth prospects are forward- looking statements, which involve a number of risks and uncertainties that could cause actual results to differ materially from those in such forward-looking statements. The risks a