Techno Electric & Engineering Company Limited · NSE:TECHNOE
Techno Electric & Engineering — Q1 FY2018 Earnings Presentation
41 slides from Techno Electric & Engineering's earnings presentation, Jun 30, 2017
Slide 1: An Investor Presentation: Quarter ended June 30, 2017
AN INVESTOR PRESENTATION Quarter ended June 30, 2017 TECHNO ELECTRIC & ENGINEERING COMPANY LIMITED 1
Slide 2: Abbreviations Used
ABBREVIATIONS USED TEECL Techno Electric & Engineering Company Limited IREDA India Renewable Energy Development Agency PGCIL Power Grid Corporation of India Limited BHEL Bharat Heavy Electricals Limited GBI Generation Based Incentive REC Renewable Energy Certificate CDM Clean Development Mechanism C
Slide 3: Snapshot
SNAPSHOT TEECL is 3.5 decade Completed and Employs 500+ old primarily power delivered 350+ professionals sector EPC company projects in existence (engineering, headquartered in (up to 31 March commercial, Kolkata (India), listed 2017) graduates and on NSE, BSE post-graduates) Core engineering Credit
Slide 4: Techno's Operating Structure
TECHNO’S OPERATING STRUCTURE Techno Electric & Engineering Company Limited 100% 49% 49% 26% Simran Wind Jhajjar KT Patran Transmission Kohima Mariani Generation Transco Private Projects Limited Company Limited Transmission Limited Limited 129.90 Design, Build, Finance, Operate Build a transmission n
Slide 5: Overview
OVERVIEW TEECL, one of the most attractive proxies of India’s power sector One of the largest in the power-infrastructure space in India Engaged in three business types – EPC/Asset Ownership/Operations and Maintenance Covers three power sector segments - generation, transmission and distribution Lif
Slide 6: Rich Promoter Profile & Experience
RICH PROMOTER PROFILE & EXPERIENCE TEECL led by Mr P. P. Gupta, Key promoter & Managing Director Honours Graduate in Industrial Engineering; post-graduate in Management (IIM, Ahmedabad); working experience with BHEL; merchant banker with National Grindlays Bank Partnered in Techno Electric and Engin
Slide 7: One-Stop Solutions Provider
ONE-STOP SOLUTIONS PROVIDER BOOT and BOOM EPC (T&D + rural Green power projects (providing electrification + generation (10% of annuity income) captive waste heat revenues, 32% of recovery + solutions EBIDTA, FY17) for power-intensive industries (88% of revenues, 67% of EBIDTA, FY17) PPP transmissio
Slide 8: Growing Respect and Recognition
GROWING RESPECT AND RECOGNITION IEI Industry Excellence Award, IEI Industry Excellence Award 2016 from The 2016 Institution of Engineers (India) for demonstrating Highest Order of Business Excellence Certificate of appreciation from North Bihar Power Distribution Co. Ltd. & Bihar State Power Mr. P.
Slide 9: TEECL Businesses
TEECL BUSINESSES Engineering, Transmission Renewable Energy Procurement and projects under Generation Construction PPP model (BOOT Services and BOOM) TECHNO ELECTRIC & ENGINEERING COMPANY LIMITED 9
Slide 10: Optimistic Outlook: Power Sector
OPTIMISTIC OUTLOOK: POWER SECTOR Thirteenth Plan Highlights (2017 – 2022) : Total Generation capacity target: 450 GW Total capacity in demand till 2022: 280 GW, Fresh Capacity addition: 85 GW Total Transmission investments: INR 2,600 Bn, of which 1,600 Bn in 400 KV +, and 1,000 Bn in 220 KV Target S
Slide 11: Power Grid spending and opportunity (Contd.)
(Contd.) INR 1100 bn INR 1500 bn Power Grid spending Power Grid spending in 12th Five Year in 13th Five Year ~50% generation capacity growth in five years; transmission capacity growth only ~30% out of which 35% generation capacity is in private sector where as only 2% is in private sector in the tr
Slide 12: Our BOOT and BOOM Business
1 OUR BOOT AND BOOM BUSINESS Why transmission? Leveraging EPC knowledge as transmission complements EPC Long-term annuity incomes; annuity model enhances valuation and profitable encashment opportunity Generates operations & maintenance revenues Asset ownership; enhances scale and stability Growing
Slide 13: Techno's Transmission Competitiveness
Techno’s transmission competitiveness Extension of EPC capability - leveraged knowledge; extended from one segment to another Competitiveness has translated into a higher strike rate in bagging projects Active solutions orientation • 400 kVA to 765 kVA substations • Extensive vendor ecosystem - time
Slide 14: Project One: Jhajjar KT – Haryana
PROJECT ONE: JHAJJAR KT – HARYANA Pioneering BOOT transmission model at state level. TEECL first successful network bidder Implementing agency Jhajjar KT Transco Pvt. Ltd. 51:49 JV of Kalpataru Power Transmission Ltd. and Techno Electric JV commissioned 400 kV project (March 2012) Project commission
Slide 15: Jhajjar KT Project Details
JHAJJAR KT PROJECT DETAILS Using products/sub-systems from globally reputed manufacturers INR 4440 mn project (debt and equity) INR 2760 mn debt and combined equity (INR 760 mn) from JV partners INR 920 mn grant by Central Government INR 45 mn income/month without considering inflation Current (post
Slide 16: Project Two: Patran, Punjab
PROJECT TWO: PATRAN, PUNJAB 400 kV transmission system Comprises LILO of 1,000 MVA evacuation commissioned in June 2016 both circuits capacity INR 2000 mn project with Debt Equity ratio of 3 Build, Own, Operate and Maintain (BOOM) transmission network Implementing company acquired by TEECL from PFC
Slide 17: Project Three: Kohima – Nagaland
PROJECT THREE: KOHIMA – NAGALAND Build, Own, Operate and Maintain (BOOM) transmission network. INR 13000 mn project with Debt Equity ratio of 3 Implementing agency REC Ltd. 74:26 Kalpataru Power Transmission Ltd. and Techno Electric Designing, constructing, erecting, completing and commissioning res
Slide 18: Road Forward
ROAD FORWARD Execute 1-2 project Projected portfolio of annually 4-5 projects, 2020 From 20% of EPC orders from Generate increasing insourcing of PPP projects in 2012 to 10% in EPC contracts 2015 to 20% (est.) by 2020 Increased competitiveness is Increasing expertise and focus in translating into pr
Slide 19: Our EPC Services Business
2 OUR ENGINEERING, PROCUREMENT AND CONSTRUCTION (EPC) SERVICES BUSINESS Power Transmission and Industrial sector (including generation distribution power intensive industries, aluminium smelter, refineries) Turnkey solutions to EHV substations • Power distribution systems to captive power plants •
Slide 20: Techno's EPC Competitiveness
Techno’s EPC competitiveness Promoter-driven for 35 years Three-decade experience (including BOP packages) Respected for project management, timeliness, completion and cost-effectiveness Partnership with large International manufacturers Management of customer expectations and contractual obligation
Slide 21: Techno's Operating Philosophy
Techno’s operating philosophy Focus on PAT/retained cash (not size of order book) Cash rich; high liquidity; low gearing; income mix (lumpy and annuity) Project execution synced with project cash cycle; zero penalty record; realized retention money within 6 months of project completion Marginal work
Slide 22: Core Business (EPC) Highlights
Core business (EPC) 105% Order book 90% ROCE of EPC INR 24,500 as on 31 March, of overall FY17 revenues 2017 mn (as on June 30, 2017) Selective Bright project outlook for bidding next 5 years Annual cash surplus Revenue of more than Currently receivables visibility of INR 2500 45 days 24 of turnover
Slide 23: Techno's EPC Order Book
TECHNO’ S EPC ORDER BOOK Segment - wise order book as on 30 June, 2017 Generation Transmission Distribution INR 1871 million INR 17405 million INR 5224 million INR INR INR 20000 26000 24500 million million million As on 31 Mar, 2015 As on 31 Mar, 2016 As on 30th June, 2017 TECHNO ELECTRIC & ENGINEER
Slide 24: Order Book as on 30th June, 2017
ORDER BOOK as on 30th June, 2017 (INR mn) Name of the client Amount % Power Grid Corporation of India Ltd. 13,000 53.13 Jharkhand Bijli Vitran Nigam Ltd 4,860 19.85 NERSS, Nagaland (BOOT Project) 2,500 10.21 NTPC Ltd 1,871 7.65 Rajasthan Rajya Vidyut Prasaran Nigam Ltd 1,169 4.78 North Bihar Power D
Slide 25: Techno's Impressive Clientele
TECHNO’S IMPRESSIVE CLIENTELE Helped build 50% of India’s National power grid Historically engaged with more than 50% NTPC projects (various capacities) Multi-year engagements with Power Grid Corporation, BHEL, Indian Oil, NTPC and Hindalco Associated with power distribution solutions for major oil
Slide 26: EPC Financials
EPC FINANCIALS (INR in mn.) 2012-13 2013-14 2014-15 2015-16 2016-17 Revenue 5,158.90 5,705.10 6,680.90 10,142.75 12,109.45 EBIDTA 572.90 601.60 938.30 1,449.40 1,812.25 PAT 392.10 500.50 662.60 946.29 1,237.90 Cash surplus 400.20 509.60 675.40 1,000.00 1,500.00 ROCE (%) 52.50 62.40 80.50 108.00 105.
Slide 27: EPC – Road Forward: Flue Gas Desulfurisation
EPC – ROAD FORWARD FLUE GAS DESULFARISATION (FGD) Pursuant to Govt. of India, Gazette notification of 7th December, 2015 all Thermal Power Plants need to limit the Sulphur emission. India having more than 200 GW of thermal power plants, translates to a capital investment of more than INR 8,00,000 mn
Slide 28: EPC – Emerging Opportunities: STATCOM
EPC – EMERGING OPPORTUNITIES STATCOM INSTALLATION Government plans to install 50 nos of STATCOM having a total investment of INR 80 bn over a period of 3-5 years. Techno won the first STATCOM installation at 400 kV substation at Solapur, Satna & Aurangabad in joint biding with Chinese Company RONGXI
Slide 29: EPC – Emerging Opportunities: Industrial
EPC – EMERGING OPPORTUNITIES INDUSTRIAL IOC, BP, HP plan to spend more than INR 12,00,000 mn on refinery expansions in the next 5 years. Vedanta and NALCO plan to invest around INR 4,00,000 mn on expansion of its capacities in the next 3-5 years. Expertise in certain niche areas in handling complex
Slide 30: Renewable Energy Generation
3 RENEWABLE ENERGY GENERATION OUTLOOK Wind power 8.5% 6000-8000 MW to 21,136.40 MW Targeted 100 GW of India’ s power be commissioned installed capacity capacity (2022, capacity annually National Wind Energy Mission) GOVERNMENT ROLE India first to commission Wind energy exceeded MNRE reference capaci
Slide 31: Government Catalysts
GOVERNMENT CATALYSTS RENEWABLE ENERGY GENERATION-BASED CLEAN DEVELOPMENT CERTIFICATES INCENTIVES MECHANISM INCENTIVES 1000 units of green INR 0.5/unit produced Projects in developing electricity sold generates available to wind power countries can earn Certified one REC which can be sold producers o
Slide 32: Current Asset Overview
CURRENT ASSET OVERVIEW Sold 44.45 MW of wind power assets at an effective valuation of INR 2150 mn during the Q1 FY 2016. Sold 33 MW of wind energy assets at an effective valuation of INR 1650 mn in Jan 2017. Exited the assets at the same price at which investment was made. 12 MW of wind energy asse
Slide 33: Current Asset Overview
CURRENT ASSET OVERVIEW Simran Wind Project Limited Capacity 18 MW 111.90 MW Date of During 2009-10 March 31, 2011 - February 24, 2012 Acquisition/Com missioning Location Karnataka Tamil Nadu (111.90 MW) Capacity 12 turbines * 1.5 MW each 48 turbines * 1.5 MW each 19 turbines * 2.1 MW each PLF 18% -
Slide 34: Simran Wind Project Limited (Contd.)
(Contd.) Simran Wind Project Limited Capacity 18 MW 111.90 MW Project cost – INR 6650 mn* O&M Free for first 5 years; 5% escalation Free for first 4.5 years; 5% escalation from INR 1 from INR 1 mn/MW mn/MW GBI benefit - 111.9 MW registered with IREDA *IFC had originally invested 3.38% in Simran Wind
Slide 35: Green Energy Financials
GREEN ENERGY FINANCIALS (INR in mn.) 2013-14 2014-15 2015-16 2016-17 Revenue 1,379.80 1258.10 829.30 1,457.70 EBIDTA 1,323.60 1143.20 764.43 1,313.00 PAT (inc other income) 338.00 283.30 393.2 777.30 Cash generated 995.40 873.70 870.00 824.00 Units generated (in mn) 344.60 300.44 188.13 308.40 Reali
Slide 36: Quarterly Financials
QUARTERLY FINANCIALS (INR mn) Standalone Consolidated June-17 June-16 Change (%) June-17 June-16 Change (%) Revenues 3,681 2,383 54% 4,122 2,709 52% Operating expenses 3,071 1,976 55% 3,106 1,998 55% EBITDA 610 121 449% 1016 712 43% EBITDA % 16.6% 17.1% -3% 24.6% 26.3% -6% Other income 66.5 175 59%
Slide 37: Consolidated Financials
CONSOLIDATED FINANCIALS Consolidated Income Statement (INR mn) 2012-13 2013-14 2014-15 2015-16 2016-17 Revenues 7,001.25 7,084.85 7,938.93 10,972.02 13,567.18 Growth % (14.60) 1.19 12.05 38.21 23.65 Operating expenses 4,655.10 5,159.60 5,857.60 8,766.21 10,442.10 Other income 205.87 119.91 202.36 *
Slide 38: Consolidated Financials: Balance Sheet
CONSOLIDATED FINANCIALS Consolidated Balance Sheet (INR mn) 2013 2014 2015 2016 2017 SOURCES OF FUNDS Shareholders’funds 7,700 8,371 9,147 9,279 11,070 Minority interest 188 193 199 --- --- Loan funds 5,172 4,785 3,967 3,068 2,099 Deferred tax liabilities 7 9 7 1,025 1,161 Other liabilities and prov
Slide 39: Consolidated Revenue, EBIDTA, PAT and EPS
Consolidated revenue, EBIDTA, Profit after Tax and Earning Per Share Revenue (Rs/mn) EBIDTA (Rs/mn) 14000 3500 12000 3000 10000 2500 8000 2000 6000 1500 4000 1000 2000 500 0 0 2012-13 2013-14 2014-15 2015-16 2016-17 2012-13 2013-14 2014-15 2015-16 2016-17 PAT (Rs/mn) EPS 2000 20 1500 15 1000 10 500
Slide 40: Ratios
Ratios** EBIDTA Margin % PBT Margin % 35 25 30 20 25 20 15 15 10 10 5 5 0 0 PAT Margin % Book Value Per Share 20 120 100 15 80 10 60 40 5 20 0 0 ** Ratios are calculated based on consolidated figures TECHNO ELECTRIC & ENGINEERING COMPANY LIMITED 40
Slide 41: Thank You!
THANK YOU! TECHNO ELECTRIC & ENGINEERING COMPANY LIMITED 41
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