Welspun Enterprises Ltd. · NSE:WELENT
Welspun Enterprises — Investor Presentation (July 2020)
51 slides from Welspun Enterprises's investor presentation, July 2020
Slide 1: Welspun Enterprises Ltd: An Infra Player with a Difference
WELSPUN ENTERPRISES LTD An Infra Player with a Difference July 2020 Actual photo of Delhi-Meerut Expressway; completed in record 19 months vs. scheduled 30 months 1
Slide 2: Safe Harbor
SAFE HARBOR The information contained in this presentation is provided by Welspun Enterprises Limited (the “Company”). Although care has been taken to ensure that the information in this presentation is accurate, and that the opinions expressed are fair and reasonable, the information is subject to
Slide 3: COVID-19 – Impact and Response
COVID-19 – IMPACT AND RESPONSE 3
Slide 4: Fighting COVID19 Together
FIGHTING COVID19 TOGETHER #WellAndHome : Safety and Comfort for extended 100,000+ Welspun family Robust IT infrastructure to enable Work from Home Isolation wards, Tie-ups with hospitals, Emergency helpline AI based robotic consultancy, virtually connecting with specialist doctor #WellAndLearn:
Slide 5: COVID19 - Impact on Environment, Operations, Liquidity
COVID19 - IMPACT Project sites were temporarily shut from March end till Mid April Environment & No Covid cases were reported and operations have restarted gradually Operations All government guidelines are being followed during construction Completed takeover of BOT Toll project (Mukarba ch
Slide 6: Key Investment Highlights
Wy WELSPUN ENTERPRISES all KEY INVESTMENT HIGHLIGHTS Welspun Group comes with vast experience of - Nurturing businesses -Executing marquee projects - Investing & timely value unlocking NIP report Welspun Enterprises - Focused as a developer with special emphasis on HAM - Robust order book provides s
Slide 7: Key Investment Highlights
a KEY INVESTMENT HIGHLIGHTS WELS WELSPUN ENTERPRISES all Welspun Group comes with vast experience of - Nurturing businesses -Executing marquee projects - Investing & timely value unlocking Sunrise Infra Sector ~ Rs. 111 trillion capital expenditure in infrastructure sector during FY2020-25 as per NI
Slide 8: Welspun Group Overview
WELSPUN GROUP OVERVIEW Revenue EBITDA Fixed Asset Base Rs. 194 bn Rs. 28 bn Rs. 64 bn Asset creation calibrated to CAGR 20% (1995-2020) Overall 15% EBITDA margin Demand & Cash flows Net Debt of Rs. 34 bn Net Debt to Equity Net Cash position in WEL 0.39 x Continuous focus on reducing Almost Zero Debt
Slide 9: Group's Rich Experience of Project Execution
GROUP’S RICH EXPERIENCE OF PROJECT EXECUTION History of designing & building manufacturing plants & projects worth USD 3 bn+ Successfully built Anjar Welspun City, spread across 2,500 acres in Gujarat Built renewable energy portfolio of 1,000+ MW worth Rs.10,000+ crores & successfully divested it Tr
Slide 10: Key Investment Highlights
KEY INVESTMENT HIGHLIGHTS 10
Slide 11: Road Sector to Get Strong Thrust from Government
ROAD SECTOR TO GET STRONG THRUST FROM GOVERNMENT Sector wise break up of Capex of Sector wise share in the NIP for Road Rs. 111 trillion in NIP during 2020-2025 sector Ports & Airports Agri & Food Industrial Infra 2% Processing Infra 3% 2% Social Infra Private Centre 4% 39% 25% Digital Infra 3% Ener
Slide 12: Road Sector to Get Strong Thrust from Government
ROAD SECTOR TO GET STRONG THRUST FROM GOVERNMENT Vision 2025 for Roads Development of 60,000 km of NH - 2,500 km of Expressways, 9,000 km of Economic corridors, 2,000 km of coastal and port connectivity Higher penetration of advanced technology Significantly higher share of the private sector in NH
Slide 13: Potential Under Buy & Turnaround Strategy
POTENTIAL UNDER BUY & TURNAROUND STRATEGY Several projects awarded to various infra players with weaker balance sheet are not financially closed / execution is stuck ….WEL with its strong banking relationship, robust balance sheet and operational excellence sees this as an opportunity to be a Turnar
Slide 14: Water Sector – Key Focus Area for Government
WATER SECTOR – KEY FOCUS AREA FOR GOVERNMENT Government’s Mission: ‘Har Ghar Nal Se Jal’ With India’s water crisis nearing a tipping point, the government announced the Jal Jeevan Mission to provide potable water to every rural household by 2024. 100% Rs 12.6 trillion capital expenditure to be House
Slide 15: Key Investment Highlights
KEY INVESTMENT HIGHLIGHTS 15
Slide 16: NHAI Hybrid Annuity Model (HAM) Introduced in 2016
NHAI HYBRID ANNUITY MODEL (HAM) INTRODUCED IN 2016…. ….to overcome BOT issues including Land Acquisition Change of scope Traffic changes Toll Risk Financing ….thus, now NHAI awarding more projects under HAM and pure EPC. HAM advantageous to both Developer & Authority NHAI as a partner At least 80% l
Slide 17: Key Investment Highlights
KEY INVESTMENT HIGHLIGHTS 17
Slide 18: Operational Excellence: Robust Road Portfolio
ROBUST ROAD PORTFOLIO: Rs. 106+ BILLION, 660+ KM WITH…. ….Order book of Rs. 47 Billion# Robust order book provides strong visibility Net Cash position… Cash on books OPERATIONAL EXCELLENCE Experience of operating Rs. 415 Million FINANCIAL STRENGTH 500+km Toll projects Among very Completed India’s Fi
Slide 19: Strong Platform Set for Future Growth
STRONG PLATFORM SET FOR FUTURE GROWTH Continuously building Road portfolio through bid / buy strategy for profitable growth Current order book at ~Rs 47 billion (excluding GST) As on June 2020 EPC of BOT 24% EPC of HAM 76% EPC of HAM EPC of BOT Other EPC 19
Slide 20: Operating Leverage to Improve Margins
OPERATING LEVERAGE TO IMPROVE MARGINS FY20 revenue contributed by 5 HAM projects Margin improvement as fixed cost absorption increased with higher execution on multiple projects Revenues and Operating EBITDA (Rs. Mn) 20,000 17.0% 17,394 17,600 18,000 16.0% 16,000 15.0% 14,000 14.0% 12,000 13.0% 9,97
Slide 21: With Undivided Focus on Shareholder Value Creation
WITH UNDIVIDED FOCUS ON SHAREHOLDER VALUE CREATION 39.9% Promoter Management FIIs Banks & Insurance Cos Shareholding Pattern Mutual Funds/AIF (as on 30th June 2020) 2.0% Public 4.2% 2.2% 50.3% 1.4% Market Statistics Creating Shareholder value As on July 30, 2020 INR USD Stated Dividend Distribution
Slide 22: Through an Experienced Board and Management
THROUGH AN EXPERIENCED BOARD AND MANAGEMENT Board of Directors Management Team B.K.Goenka, Chairman Sandeep Garg, Managing Director & CEO, Member of Board • Amongst India’s most dynamic businessmen; Past President ASSOCHAM (2019) • Harvard Graduate with 30+ years of experience in diverse roles in in
Slide 23: Key Investment Highlights
KEY INVESTMENT HIGHLIGHTS 23
Slide 24: One of Its Kind Asset Light Model
ONE OF ITS KIND ASSET LIGHT MODEL De-risked execution model Undertakes only Focus mainly on Value unlocking High Value Added Minimal EPC Assets HAM from assets PMC Leverages balance sheet Construction completely Minimal Plant & Continuous unlocking of strength & financial outsourced. Project Machine
Slide 25: Creating Value Through a Profound Strategy
CREATING VALUE THROUGH A PROFOUND STRATEGY 1 2 3 4 Bid for differentiated Achieve early Award construction to Project Management projects/ financial closure best suited sub- Consultancy Buy distressed contractor projects • Reduce execution risk • Lower competition • Strong Balance Sheet • Rigorous m
Slide 26: Delhi Meerut E-Way: Validating Our Differentiated Strategy
DELHI MEERUT E-WAY: VALIDATING OUR DIFFERENTIATED STRATEGY Project Under the Aegis of Prime Minister of India Shri Narendra Modi and NHAI Laying of foundation stone Inauguration of completed project India’s FIRST 14-Lane Expressway India’s FIRST Green Expressway India’s FIRST COMPLETED HAM project –
Slide 27: Appreciation by Prime Minister of India Shri Narendra Modi
APPRECIATION BY PRIME MINISTER OF INDIA SHRI NARENDRA MODI 27
Slide 28: Appreciation by Shri Nitin Gadkari, Union Minister
APPRECIATION BY SHRI NITIN GADKARI, UNION MINISTER 28
Slide 29: Building Much More Than an Expressway
BUILDING MUCH MORE THAN AN EXPRESSWAY Vertical garden developed along the entire bridge 40,000+ Trees transplanted and retained existing trees 3,230 Solar Panels Beautification Initiatives Electrification through solar power of 1050 kWp Wall art & replicas of famous monuments 29
Slide 30: Environment. Education. Empowerment.
WELSPUN ENTERPRISES CSR INITIATIVES Our social mission is enshrined within the 3Es i.e. Education, Empowerment and Environment & Health ENVIRONMENT. Project Model Village To create a sustainable rural community that generates and maintains the resources to improve its level of well-being and happine
Slide 31: Financials
WY WELSPUN ENTERPRISES | Y INFRASTRUCTURE AND ENERGY FINANCIALS
Slide 32: Income Statement Q1 FY21 - Standalone
INCOME STATEMENT Q1 FY21 - STANDALONE Income Statement Snapshot (Rs Million) Particulars Q1FY21 Q1FY20 YoY Growth Q4FY20 QoQ Growth Revenue from Operations 1,741 5,159 -66.2% 4,504 -61.3% Other Income 96 116 -17.2% 151 -36.3% Total Income 1,837 5,275 -65.2% 4,655 -60.5% Operating EBITDA** 195 631 -6
Slide 33: Income Statement Trend - Standalone
INCOME STATEMENT TREND - STANDALONE Income Statement Snapshot (Rs Million) Particulars FY18 FY19 FY20 Revenue from Operations 9,972 17,394 17,600 Other Income 956 546 526 Total Income 10,928 17,940 18,126 Operating EBITDA** 951 2,106 2,151 Operating EBITDA margin 9.5% 12.1% 12.2% EBITDA 1,660 2,369
Slide 34: Balance Sheet Snapshot - Standalone
BALANCE SHEET SNAPSHOT - STANDALONE Balance Sheet Snapshot (Rs. Million) 30th Jun 2020 31st Mar 2020 Net worth 17,502 17,355 Gross Debt 4,734 3,100 - Long Term Debt 3,994 334 - Short Term Debt 740 2,766 Cash & Cash Equivalents* 5,148 5,293 Net Debt /(Cash) (415) (2,193) Other Long Term Liabilities 3
Slide 35: Key Highlights
KEY HIGHLIGHTS Well Positioned to Benefit from India’s Economic Growth & Development Unique Position with Strong Financials to tap Infra Opportunities Strong Order book providing visibility for next 2 years Asset light business model in Infra with regular project value-enhancement post COD Demonstra
Slide 36: Way Forward
WAY FORWARD Continue approach of prudent bid/buy strategy to strengthen Road portfolio Targeting projects where differentiation is possible Tapping opportunities in State road HAM projects on a selective basis Divest/securitise completed projects in order to unlock value and capital Looking at oppor
Slide 37: Thank You
THANK YOU For further details, please contact: Sridhar Narasimhan President (Finance & Accounts) Email: sridhar_narasimhan@welspun.com 37
Slide 38: Appendix
WY WELSPUN ENTERPRISES INFRASTRUCTURE AND ENERGY APPENDIX
Slide 39: NHAI Hybrid Annuity Model (HAM) Overview
NHAI HYBRID ANNUITY MODEL (HAM) OVERVIEW Award criterion: Lowest NPV value based on Construction cost and O&M cost, quoted by the bidders Returns to Concessionaire on Capital Arranged - Annuity payments (biannually) till end of concession period as per predetermined schedule - Interest payments (on
Slide 40: HAM - Lower Risk-Reward vs. BOT
HAM - LOWER RISK-REWARD VS. BOT BOT Toll HAM Traffic Risk Risk borne by concessionaire No risk on the concessionaire Risk with concessionaire as tariffs decided Toll Tariff Rates No risk on the concessionaire as per National Tariff Policy Higher Lower Equity Requirement (25-30% of project cost) (12-
Slide 41: Welspun Enterprises Infrastructure Portfolio
WELSPUN ENTERPRISES INFRASTRUCTURE PORTFOLIO Robust portfolio of 10 infrastructure projects in roads and water supply HAM PROJECTS BOT PROJECTS Delhi-Meerut Expressway (Pkg 1) Gagalheri-Saharanpur- Mukarba Chowk – Panipat Yamunanagar (GSY) Authority: NHAI Status: Completed; Four Authority: NHAI Auth
Slide 42: HAM: Delhi-Meerut Expressway Package 1
1 HAM: DELHI-MEERUT EXPRESSWAY PACKAGE 1 Scope: 14 Lane expressway: Six-laning of Delhi – Meerut PROJECT DETAILS Expressway & four-laning either side from 0th km to existing km 8.4 of NH-24 in Delhi Project Length (Kms) 8.716 Km Award Date Jan 2016 Status: Record completion within 19 months. Receive
Slide 43: HAM: Gagalheri-Saharanpur-Yamunanagar
2 HAM: GAGALHERI-SAHARANPUR-YAMUNANAGAR Scope: 4-Laning of Gagalheri-Saharanpur-Yamunanagar PROJECT DETAILS section of NH-73 in UP / Haryana Project Length (Kms) 51.5 Km Status: NHAI declared the Appointed Date for the Project Acquisition Date Jan 2018 as 26th January 2018; execution in full swing F
Slide 44: HAM: Chutmalpur-Ganeshpur & Roorkee-Chutmalpur-Gagalheri
3 HAM: CHUTMALPUR-GANESHPUR & ROORKEE-CHUTMALPUR-GAGALHERI Scope: 4-Laning of Chutmalpur-Ganeshpur section of NH- PROJECT DETAILS 72A & Roorkee-Chutmalpur-Gagalheri section of NH-73 in UP Project Length (Kms) 53.3 Km & Uttarakhand Acquisition Date Jan 2018 Status: NHAI declared the Appointed Date as
Slide 45: HAM: Aunta-Simaria (Ganga Bridge with Approach Roads)
4 HAM: AUNTA-SIMARIA (Ganga Bridge with Approach Roads) Scope: Six- Laning from Aunta-Simaria (Ganga Bridge with PROJECT DETAILS Approach Roads) Section from km 197.9 to km 206.1 of NH- 31 in Bihar. Includes widest extradosed bridge on Ganga Project Length (Kms) 8.15 Km river Award Date Aug 2017 Fin
Slide 46: HAM: Chikhali-Tarsod
5 HAM: CHIKHALI-TARSOD Scope: 4-laning of Chikhali – Tarsod (Package-IIA) section PROJECT DETAILS of NH-6 from km 360.0 to km 422.7 in Maharashtra Project Length (Kms) 62.7 Km Status: NHAI declared the Appointed Date as 16th January Acquisition Date Jan 2018 2019; execution in full swing Financial C
Slide 47: HAM: Package No. AM 2
6 HAM: PACKAGE NO. AM 2 Scope: Upgradation of Roads in Maharashtra State or Two PROJECT DETAILS Laning Road/ Two Laning Road with paved shoulder under Project Length (Kms) 352.15 Km MRIP Package on Hybrid Annuity Mode (HAM) Package No. AM 2. Award Date Nov 2018 Key Features: Concessionaire to receiv
Slide 48: HAM: Sattanathapuram - Nagapattinam
7 HAM: SATTANATHAPURAM - NAGAPATTINAM Scope: 4 laning of Sattanathapuram to Nagapattinam PROJECT DETAILS (Design Ch Km 123.8 to Km 179.6) section of NH-45A (New Project Length (Kms) 55.755 Km NH -332) in Tamil Nadu Award Date July 2018 Status: Received Letter of Award (LoA) in July 2018; signed FC d
Slide 49: BOT: Mukarba Chowk – Panipat
1 BOT: MUKARBA CHOWK – PANIPAT Scope: 6 to 8 laning from Mukarba Chowk at Km 15.5 and PROJECT DETAILS extends to Panipat at Km 86 in the State of Haryana. Project Stretch lies in the Panipat & Sonipat district of Haryana and Project Length (Kms) 71.1 Km Delhi Acquisition Date June 2020 Financial Clo
Slide 50: Other BOT Projects Summary
OTHER BOT PROJECTS SUMMARY Experience & expertise of successfully operating water project and 500+ kms of roads (Rs. Mn) External Value on Debt on Concession Sector Project Name Location books COD books End (March-20) (March-20) Highways Himmatnagar Bypass Gujarat 6 - Apr-06 Aug-20 Water Supply Dewa
Slide 51: Investment in Oil & Gas Blocks: Potential Value Accretion
INVESTMENT IN OIL & GAS BLOCKS: POTENTIAL VALUE ACCRETION Adani Welspun Exploration Ltd (AWEL), a 65:35 JV between Adani Group & WEL, is the key investment vehicle AWEL WEL Effective Block Name Location Status Stake Stake Mumbai AWEL has decided to execute Phase – II of the MB-OSN-2005/2 100% 35% Hi
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