Techno Electric & Engineering Company Limited · NSE:TECHNOE
Techno Electric & Engineering — Investor Presentation (August 2016)
40 slides from Techno Electric & Engineering's investor presentation, August 2016
Slide 1: An Investor Presentation August 2016
AN INVESTOR PRESENTATION August 2016 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 Completed and Employs 500+ headquartered in delivered 300+ professionals Kolkata (India) projects in existence (engineering, (up to 31 March commercial, 2016) graduates and post-graduates) Core engineering Listed and traded on Enjoyed a market team possesses the Bombay Stock capita
Slide 4: Techno's Operating Structure
TECHNO’S OPERATING STRUCTURE 100% 49% Simran Wind Projects Limited 117.90 EPC Linkages Green power TECHNO ELECTRIC & ENGINEERING COMPANY LIMITED 4
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 (8% of annuity income) captive waste heat revenues, 35% of recovery + solutions EBIDTA, FY16) for power-intensive industries (92% of revenues, 65% of EBIDTA, FY16) PPP transmission
Slide 8: Growing Respect and Recognition
GROWING RESPECT AND RECOGNITION Mr. P. P. Gupta National award for meritorious performance receiving the best performance award, in the power sector from the 2013 Ministry of Power, 2014 Best performance award 2015, 2014 & 2013 from Power Grid Corporation Meritorious Performance in ‘Best Under a Bil
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 Twelfth Plan capacity addition: 100,000 MW (Pvt. sector: 57%, CPSUs: 29%, SEBs: 14%) Generation capacity > Transmission capacity Transmission spending to rise: 30p/rupee invested in generation to 50p/rupee USD 75 bn transmission investment (Twelfth and Thirteenth Pla
Slide 11: Power Grid spending and transmission opportunity (Contd.)
(Contd.) INR 600 bn INR 800 bn INR 1100 bn Power Grid spending Power Grid spending Power Grid spending in 10th Five Year Plan in 11th Five Year in 12th Five Year National Tariff Policy 2006; tariff-based competitive bidding for transmission projects Transmission projects through increased private se
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 450 mn income/month without considering inflation Current (pos
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: 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 18: Our Engineering, Procurement and Construction (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 19: 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 20: 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 21: EPC key metrics and order book
Core business (EPC) 108% Order book 92% ROCE of EPC INR 27500 as on 31st March, of overall FY16 revenues 2016 mn (as on 10 Aug, 2016) Selective High growth project for three bidding years Annual cash surplus Revenue of more than Currently receivables visibility of INR 1000 120 days 24 of turnover; m
Slide 22: Techno's EPC Order Book
TECHNO’ S EPC ORDER BOOK Segment - wise order book as 10 August, 2016 Generation Transmission Distribution INR 2000 million INR 23000 million INR 2500 million INR INR INR 12000 20000 27500 million million million As on 31 Mar, 2014 As on 31 Mar, 2015 As on 10 Aug, 2016 TECHNO ELECTRIC & ENGINEERING
Slide 23: Order Book as on 10th August, 2016
ORDER BOOK as on 10th August, 2016 (INR in mn.) Name of the client Amount % Power Grid Corporation of India Ltd. 21,000 76.36 North Bihar Power Distribution Co Ltd 2,500 9.09 NTPC Ltd 2,100 7.64 Rajasthan Rajya Vidyut Prasaran Nigam Ltd 675 2.45 Bihar State Electricity Board 650 2.36 APTRANSCO Ltd,
Slide 24: 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 25: EPC Financials
EPC FINANCIALS (INR in mn.) 2011-12 2012-13 2013-14 2014-15 2015-16 Revenue 7,040.50 5,158.90 5,705.10 6,680.90 10,142.75 EBIDTA 1,081.20 572.90 601.60 938.30 1,449.40 PAT 828.50 392.10 500.50 662.60 946.29 Cash surplus 836.70 400.20 509.60 675.40 1,000.00 ROCE (%) 90.40 52.50 62.40 80.50 108.00 • L
Slide 26: EPC – Road Forward
EPC – ROAD FORWARD GREEN ENERGY CORRIDOR Government plans to roll out green energy corridor’ project at an estimated cost of INR 430 bn to facilitate the flow of renewable energy into the National Grid. Germany has committed developmental and technical assistance of €1 billion for the project throug
Slide 27: EPC – Emerging Opportunities
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 1st STATCOM installation at 400 kV substation at Solapur, Satna & Aurangabad in joint biding with Chinese Company RONGXIN.
Slide 28: EPC – Emerging Opportunities: Solar
EPC – EMERGING OPPORTUNITIES SOLAR POWER INSTALLATION Total installed capacity in India as on 31st March 2016 – 6 GW Targeted Solar Capacity in India by 2022 – 100 GW. Would require a capital investment of about INR 6000 bn At least 25 GW installation out of said 100 GW to come through EPC route tra
Slide 29: 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 30: 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 31: 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. Exited the assets at the same price at which investment was made. Intend to divest balance portfolio of 162.9 MW wind assets to improve strength for bidding more PPP projects in
Slide 32: Current Asset Overview
CURRENT ASSET OVERVIEW Techno Electric Simran Wind Project Limited Capacity 45 MW 6 MW 111.90 MW Date of During 2009-10 During 2009-10 March 31, 2011 - February Acquisition/Com 24, 2012 missioning Location Karnataka (12 MW) and Karnataka Tamil Nadu (111.90 MW) Tamil Nadu (33 MW) Capacity 30 turbines
Slide 33: Techno Electric Simran Wind Project Limited (Contd.)
(Contd.) Techno Electric Simran Wind Project Limited Capacity 45 MW 6 MW 111.90 MW Project cost – – INR 6650 mn* O&M Free for first 5 years; 5% Free for first 5 years; 5% Free for first 4.5 years; 5% escalation from INR 1 escalation from INR 1 escalation from INR 1 mn/MW mn/MW mn/MW GBI benefit - -
Slide 34: Green Energy Financials
GREEN ENERGY FINANCIALS (INR in mn.) 2012-13 2013-14 2014-15 2015-16 Revenue 1,842.40 1,379.80 1258.10 829.30 EBIDTA (inc other Income) 1,773.40 1,323.60 1143.20 764.43 PAT (inc other income) 635.20 338.00 283.30 393.2 Cash generated 1,282.10 995.40 873.70 870.00 Units generated 471.89 344.60 300.44
Slide 35: Consolidated revenue, EBIDTA, PAT and EPS
Consolidated revenue, EBIDTA, Profit after Tax and Earning Per Share Revenues EBIDTA (Rs/mln) 12,000.0 3,000.0 10,000.0 2,500.0 8,000.0 2,000.0 6,000.0 1,500.0 4,000.0 1,000.0 2,000.0 500.0 0.0 0.0 2011-12 2012-13 2013-14 2014-15 2015-16 2011-12 2012-13 2013-14 2014-15 2015-16 PAT (Rs/mln) EPS 1,600
Slide 36: Ratios
Ratios** EBIDTA margin % (with PAT Margin % PBT Margin % other Income) 20.0 20.0 40.0 15.0 10.0 10.0 20.0 5.0 0.0 0.0 0.0 Book Value per Share Dividend Payout Ratio * 200.0 30.0 150.0 20.0 100.0 50.0 10.0 0.0 0.0 * Company dividend payout policy- at least 20% of PAT ** Ratios are calculated based on
Slide 37: Consolidated Financials
CONSOLIDATED FINANCIALS Consolidated Income Statement (INR mn) 2011-12 2012-13 2013-14 2014-15 2015-16 Revenues 8,198.63 7,001.25 7,084.85 7,938.93 10,972.02 Growth % 14.41 (14.60) 1.19 12.05 38.21 Operating expenses 6,002.30 4,655.10 5,159.60 5,857.60 8,759.04 Other income 224.63 205.87 119.91 202.
Slide 38: Consolidated Financials
CONSOLIDATED FINANCIALS Consolidated Balance Sheet (INR mn) March 31, March 31, March 31, March 31, March 31, 2012 2013 2014 2015 2016 SOURCES OF FUNDS Shareholders’funds 6,696 7,700 8,371 9,147 10,145 Minority interest 167 188 193 199 --- Loan funds 4,164 5,172 4,785 3,967 3,068 Deferred tax liabil
Slide 39: Quarterly Financials
QUARTERLY FINANCIALS (INR mn) Standalone Consolidated Jun-16 Jun-15 Change (%) Jun-16 Jun-15 Change (%) Revenues 2,383 1,831 30 2,709 2,015 34 Operating expenses 1,976 1,527 29 1,997 1,539 30 EBITDA 407 304 34 712 476 50 EBITDA % 17.08% 16.60% 26.28% 23.62% Other income 12 8 50 82 46 78 Depreciation
Slide 40: Thank You!
THANK YOU! TECHNO ELECTRIC & ENGINEERING COMPANY LIMITED 40
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