Venus Pipes & Tubes Ltd. · NSE:VENUSPIPES
Venus Pipes & Tubes — Q2 FY23 Earnings Presentation
42 slides from Venus Pipes & Tubes's earnings presentation, Nov 9, 2022
Slide 1: Exchange filing cover letter
Date: 09/11/2022 To, Listing Department Department of Corporate Services National Stock Exchange of India Limited BSE Limited Exchange Plaza, C-1, G Block, Phiroze Jeejeebhoy Towers, Bandra Kurla Complex, Dalal Street, Bandra (East), Mumbai – 400 051 Mumbai – 400 001 Symbol: VENUSPIPES Scrip Code: 5
Slide 2: Venus Pipes & Tubes Limited Investor Presentation November 2022
VENUS PIPES & TUBES LIMITED Investor Presentation November 2022
Slide 3: Safe Harbour
Safe Harbour This presentation and the accompanying slides (the “Presentation”), which have been prepared by Venus Pipes & Tubes Limited (the “Company”), have been prepared solely for information purposes and do not constitute any offer, recommendation or invitation to purchase or subscribe for any
Slide 4: Q2 & H1 FY23 Financial & Operational Highlights
Q2 & H1 FY23 FINANCIAL & OPERATIONAL HIGHLIGHTS
Slide 5: Update for Q2FY23
Update for Q2FY23 Highlights Capex: Cost & Source of funding • Placed order for procuring bigger diameter Tube Mill to manufacture stainless • Proposed capex of Rs. 50 Crores which will include tube mill along with entire steel welded pipes finishing infrastructure i.e. Annealing furnace, Pickling a
Slide 6: Geographical Revenue Split – Q2 & H1FY23
Geographical Revenue Split – Q2 & H1FY23 Direct Domestic Sales (in Rs cr) Export Sales (in Rs cr) ✓ Direct Domestic sales (to brands) +138% +23% have shown 136% growth YoY in Exports impacted 15.7 Q2FY23. 148.1 due to geo political reasons. 12.8 ✓ A slowdown in exports in the +136% -80% quarter due
Slide 7: State wise Revenue Split – Q2 & H1FY23
State wise Revenue Split – Q2 & H1FY23 8.4% 7.5% 4.3% 5.4% 22.7% 23.6% 28.7% 35.2% Q2FY22 53.3% Q2FY23 H1FY22 H1FY23 31.0% 56.1% 9.5% 34.0% 12.9% 34.8% 32.6% Gujarat Maharashtra Telengana Others ✓ Following the strategy to diversify across states, our share from top revenue generating state of Mahar
Slide 8: Product Revenue Split – Q2 & H1FY23
Product Revenue Split – Q2 & H1FY23 Seamless Sales (in Rs cr) Welded Sales (in Rs cr) +73% +39% 87.6 136.7 ✓ Sales for seamless pipes up by 73% in H1FY23 from H1 last year. +47% 98.7 +29% 50.7 76.4 ✓ This segment has 2-3% more 42.8 margins than other categories and 33.3 52.1 we aim for it to contrib
Slide 9: Key Financials – Q2FY23
Key Financials – Q2FY23 Revenue (in ₹ Cr) EBITDA (in ₹ Cr) PAT (in ₹ Cr) +41% +32% +26% 240.0 30.0 19.5 22.7 15.5 ✓ Revenue for Q2FY23 stood at +41% 170.5 +16% +17% Rs. 126 crs as compared to Rs. 126.4 15.5 10.3 89.5 crs in Q2FY22, a growth of 13.4 8.8 89.5 41% ✓ Revenue for H1FY23 stood at Rs. 240
Slide 10: Profit & Loss – Q2 & H1FY23
Profit & Loss – Q2 & H1FY23 Profit and Loss (in ₹ Cr) Q2FY23 Q2FY22 YoY Q1FY23 QoQ H1FY23 H1FY22 YoY Revenue from Operations 126.4 89.5 41.2% 113.6 11.3% 240.0 170.5 40.8% Cost of Goods Sold 101.3 72.4 90.5 191.8 140.0 Gross Profit 25.1 17.1 46.8% 23.1 8.7% 48.2 30.5 58.0% Gross Profit Margins (%) 1
Slide 11: Balance Sheet
Balance Sheet Assets (in ₹ Cr) Sep-22 March-22 Equity & Liabilities (in ₹ Cr) Sep-22 March-22 Non - Current Assets 63.7 30.4 Total Equity 298.5 128.5 Share Capital 20.3 15.2 Property Plant & Equipments 31.8 21.3 Reserves & Surplus 278.2 113.3 CWIP 28.9 7.4 Non-Current Liabilities 6.7 15.5 Intangible
Slide 12: Cashflow Statement
Cashflow Statement Particulars (in ₹ Cr) H1 FY23 FY22 Net Profit Before Tax 26.1 42.9 Adjustments for: Non - Cash Items / Other Investment or Financial Items 3.2 5.6 Operating profit before working capital changes 29.3 48.5 Changes in working capital (32.5) (97.4) Cash generated from Operations (3.2
Slide 13: Management Commentary
Management Commentary Commenting on the Q2 & H1FY23 performance of the company Mr. Arun Kothari, Managing Director for Venus Pipes & Tubes Limited Said, “Despite challenging external environment, we are proud to report robust growth in this quarter. Our revenues for Q2FY23 have grown by 41% on Y-o-Y
Slide 14: Venus Pipes & Tubes Limited
Venus Pipes & Tubes Limited Making ourselves as first reference and preference in stainless steel pipes 58 105% Vision and tubes manufacturer Clientele base out of PAT CAGR Fortune 500 Companies from FY19 to FY22 in India To provide quality and flawless service for dealing with customer / Diversifie
Slide 15: Product Portfolio & Applications
Product Portfolio & Applications Products manufactured are as per the International Standards to cater both Domestic & International markets Stainless Steel High Precision and Stainless Steel Hydraulic and Stainless Steel Seamless Pipes Stainless Steel Welded Pipes Stainless Steel Box Pipes Heat Exc
Slide 16: Diversified End Use
Multiple End User Industry Diversified End Use Chemical Engineering Fertilisers Pharmaceutical Power Food Processing Paper Oil & Gas Aerospace 15
Slide 17: State of the Art Infrastructure
State of the Art Infrastructure… Strategically located Manufacturing facility at Dhaneti (Kutch) within proximity of Kandla & Mudra ports for enabling imports and exports Facility on a land admeasuring 82,962 Sq. Mt. Surplus land of 60,562 Sq. Mt. available for proposed capacity expansion/integratio
Slide 18: Stringent Quality Inspection & Testing
…with Stringent Quality Inspection & Testing Rigorous testing system for our products to Ensure Finest Quality is delivered for our products Tensile Test Hydro-static Test Quality Tests Hardness Test Eddy Current Test Non-Destructive Tests Destructive Tests IGC Test Air under Water Test Reverse-bend
Slide 19: Marquee Clientele
Marquee Clientele > OYKmes gdani aed oe LIMITED rs) anl 2 : 5 . ajanta pharma e Taste of India asianpaints (a8 ae Ci | IZ Dal G li ENGINEERS BHEL IPI coromande! = almia INDIA LIMITED FUTURE POSITIVE Bharat Sugar SF ANavratna Company] ie Z \ @ a marmen = gVisra ro tee Q\ [/ ENGINEERING LTD. ITC Limit
Slide 20: New Customers in FY22
New Customers in FY22 We got the privilege to add more feathers in our cap in FY22 by acquiring clients from varied sectors ▪ Toyo Engineering India Private Ltd - Toyo Engineering India P Ltd, ▪ Chemical: Asian Paint, Hikal Ltd, Navin fluorine, Gujarat one of the leading EPC consultants for Oil & ga
Slide 21: Awards & Certifications
Awards & Certifications Calendar Years Certifications & Accreditations Our manufacturing facilities at Dhaneti have been accredited with management system standards certificate for compliance with ISO 9001: 2015, ISO 2016 14001:2015 requirements 2017 Our Company has been verified and recognized as m
Slide 22: Experienced Board of Directors
Experienced Board of Directors Jayantiram M Choudhary Arun Kothari Megharam S Choudhary Dhruv M Patel Chairman and Non-Ex Director Managing Director Whole Time Director Whole Time Director Associated with the Company since its Associated with the Company since 2021 as Associated with our Company sin
Slide 23: Strong Management Team
Strong Management Team Jayantiram M Choudhary Arun Kothari Megharam S Choudhary Dhruv M Patel Chairman and Non-Ex Director Managing Director Whole Time Director Whole Time Director Associated with the Company since Associated with the Company since Associated with our Company Associated with the Com
Slide 24: Delivering Value to Stakeholders
Delivering Value to Stakeholders May 2022 ✓ Listing of Venus Pipes & Tubes Limited ✓ Listing done on BSE & NSE ✓ Fresh Issue of Equity shares aggregating to ₹ 165.4 Cr. ✓ Objects of the Issue : 1. Financing the project cost towards • Capacity expansion • Technological upgradation • Cost optimization
Slide 25: Industry Outlook
INDUSTRY OUTLOOK
Slide 26: Industry Outlook
Industry Outlook ✓ The Indian stainless-steel sector is the 2nd largest producer (till 2020) and consumer in the world and has a total manufacturing capacity of more than 5 Mn tons of stainless steel annually ✓ India’s per capital stainless steel consumption has increased from 1.2 Kg in 2010 to 2.5
Slide 27: Industry Growth Drivers
Industry Growth Drivers Industry Growth Drivers ✓ Significant demand for Pipes & Tubes specifically from industry like chemical , pharma, engineering etc. ✓ In value terms, the size of Chemical industry is currently estimated at USD 178 Bn which is slate to grow to USD 300 Bn by 2025, growing annual
Slide 28: Strategies to Support Growth
STRATEGIES TO SUPPORT GROWTH
Slide 29: Capacity Expansion & Backward Integration
Capacity Expansion & Backward Integration Capacity Expansion for Finished Products (MTPA) Pursuing Capacity Expansion…. Current Post Expansion Particulars 33,600 Size (mm) Capacity Size (mm) Capacity 3.7x Capacity Expansion Seamless 6 – 114.3 3,600 MTPA 6 – 168.3 9,600 MTPA Welded 6 – 219.3 8,400 MT
Slide 30: Geographical Expansion
Geographical Expansion FY22 Exports in More than 20+ Countries 10.5% ₹ 40.4 crs 4.8% ₹ 14.7 crs 3.4% ₹ 6.0 Crs FY20 Contribution from Export Revenue Leverage our Existing Relationship to Deepen our Presence in Export Markets 29
Slide 31: Improving Efficiency & Brand Positioning
Improving Efficiency & Brand Positioning Creating Brand for “VENUS” thereby increasing the Productivity & Efficiency Enhancement contribution from direct sales for higher realizations Install acid regeneration plant for lower consumption of acids to improve operating margins and better plant product
Slide 32: Historical Financial & Operational Highlights
HISTORICAL FINANCIAL & OPERATIONAL HIGHLIGHTS
Slide 33: Product Category Split
Product Category Split Revenue (in ₹ Cr) Volume (in MTS) +26% 221 8,506 ✓ Revenue and Volumes have grown 7,412 +40% 7,146 tremendously across both our Welded 139 segments in a short span of just 4 125 4,222 years 81 ✓ Volume growth for Welded has been at a CAGR of 26% and for Seamless FY19 FY20 FY21
Slide 34: Direct Sales Split
Direct Sales Split Direct Domestic Sales Spilt ✓ Revenue contribution from Other 3.4% 6.8% 5.3% 1.1% industries has increased from 4.3% 3.6% 4.3% 2.9% 1.1% in FY20 to 7.4% in FY22 7.4% 30.7% ✓ Revenue dependency from chemical 44.6% FY20 FY21 49.7% FY22 industry has reduced from 44.6% in 38.8% FY20 t
Slide 35: Sales Split across Geography
Sales Split across Geography ✓ Revenue contribution from exports have increased from 3.4% in FY20 to 10.5% in FY22 Geography 40.4% 37.4% 43.8% 45.8% ✓ Direct domestic sales to end consumers FY20 FY21 FY22 have increased from 37.4% in FY21 to 45.8% 56.3% 57.9% in FY22 4.8% ✓ Revenue contribution from
Slide 36: Key Historical Financials
Key Historical Financials Revenue (in ₹ Cr) EBITDA (in ₹ Cr) PAT (in ₹ Cr) +48% 387 49 +105% 32 309 +81% 24 35 178 119 12 8 4 4 FY19 FY20 FY21 FY22 FY19 FY20 FY21 FY22 FY19 FY20 FY21 FY22 Gross Profit Margin EBITDA Margin PAT Margin 18.6% 12.7% 8.2% 11.2% 7.6% 15.5% 14.4% 11.7% 7.0% 6.5% 3.1% 2.3% F
Slide 37: Profit & Loss
Profit & Loss Profit and Loss (in ₹ Cr) FY22 FY21 FY20 FY19 CAGR Revenue from Operations 386.9 309.3 177.8 118.8 Cost of Goods Sold 315.0 261.5 157.0 101.6 Gross Profit 71.9 47.9 20.8 17.1 61% Gross Profit Margins (%) 18.6% 15.5% 11.7% 14.4% 415 bps Employee Cost 6.2 3.2 2.7 2.5 Other Expenses 16.4
Slide 38: Balance Sheet
Balance Sheet Assets (in ₹ Cr) Mar-22 Mar-21 Mar-20 Mar-19 Equity & Liabilities (in ₹ Cr) Mar-22 Mar-21 Mar-20 Mar-19 Non - Current Assets 30.4 20.9 17.5 10.0 Total Equity 128.5 39.9 16.3 12.2 Share Capital 15.2 8.7 8.7 8.7 Property Plant & Equipments 21.3 19.5 12.2 9.8 Reserves & Surplus 113.3 31.2
Slide 39: Cashflow Statement
Cashflow Statement Particulars (in ₹ Cr) FY22 FY21 FY20 FY19 Net Profit Before Tax 42.9 31.0 6.5 4.9 Adjustments for: Non -Cash Items / Other Investment or Financial Items 5.6 5.1 4.1 2.6 Operating profit before working capital changes 48.5 36.1 10.6 7.6 Changes in working capital -97.4 -24.0 -7.1 -
Slide 40: Key Ratios
Key Ratios ROE* Debt / Equity Ratio ROCE* 59% 2.6 61% 57% 2.4 44% 31% 30% 30% 25% 0.9 0.5 FY19 FY20 FY21 FY22 FY19 FY20 FY21 FY22 FY19 FY20 FY21 FY22 *The company had made Private Placement on 21st October 2021 of ₹ 59.443 cr 39
Slide 41: Key Takeaways
Key Takeaways Capacity Expansion Geographical Expansion Brand Value Proposing to expand our existing manufacturing capacity We intend to leverage our existing We intend to make consistent efforts to for welded pipes/tubes and seamless pipes/tubes for relationships to further deepen our strengthen ou
Slide 42: Thank You
Thank You Venus Pipes & Tubes Limited CIN: L74140GJ2015PLC082306 Mr. Kunal Bubna (President – Accounts & Finance) cs@venuspipes.com Strategic Growth Advisors Private Limited CIN: U74140MH2010PTC204285 Mr. Sagar Shroff / Ms. Saloni Soni sagar.shroff@sgapl.net / saloni.soni@sgapl.net +91 98205 19303 /