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Pennar Engineered Building Systems Limited
Investor Presentation Q4FY16/ FY16
Disclaimer
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This presentation contains “forward looking statements” including, but without limitation, statements relating to the implementation of strategic initiatives, and other statements relating to Pennar Engineered Building Systems Limited’s future business developments and economic performance.
While these forward looking statements indicate our assessment and future expectations concerning the development of our
business, a number of risks, uncertainties and other unknown factors could cause actual developments and results to differ
materially from our expectations.
These factors include, but are not limited to, general market, macro-economic, governmental and regulatory trends,
movements in currency exchange and interest rates, competitive pressures, technological developments, changes in the
financial conditions of third parties dealing with us, legislative developments, and other key factors that could affect our
business and financial performance.
Pennar Engineered Building Systems Limited undertakes no obligation to periodically revise any forward looking statements
to reflect future / likely events or circumstances.
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Q4FY16 Results
Ultratech Cements Ltd. 99 meter clear span building
Financial Performance Q4FY16
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212.0
146.3
277.0
14.90%
12.56%
20.08%
0%
5%
10%
15%
20%
25%
0
50
100
150
200
250
300
Q4FY15 Q3FY16 Q4FY16
EBITDA (Rs in Mn) EBITDA Margin (%)
1588.8
1385.9 1551.1
1422.6
1164.9
1379.4 117.6
75.2
144.5
0
25
50
75
100
125
150
175
0
500
1,000
1,500
2,000
Q4FY15 Q3FY16 Q4FY16
Gross Revenue (Rs in Mn) Net Revenue (Rs in Mn) PAT (Rs in Mn)
Highlights of Q4FY16 performance (1/3)
Margin expansion continues its trend.
Order book stands at Rs. 4240 Million
Large New Orders –
– Received major orders from, L&T Construction, TVS Infrastructure, Gamesa, My Home, Hetero Drugs, Annora
Pharma, Himedia Laboratories, SRR Projects, RKV Developers, Indus Projects, Ashapura Group, Avenue
Supermarts etc.
Prospective orders worth 55,195 MT in the pipeline.
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Highlights of Q4FY16 performance (2/3)
Engineering Services -
– Received new jobs on Tekla Structures and Dollar General.
– Presently, increasing manpower at Vishakhapatnam office to provide engineering services to our US-based
clients.
– Current manpower strength for NCI jobs is 84 at both locations.
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Highlights of Q4FY16 performance (3/3)
Other Highlights -
Third-party Baroda factory taken for production (On Job-work basis model).
– Production at this new facility has started in the month of May.
– Orders in and around Madhya Pradesh, Gujarat and North are being manufactured at this facility.
– Evaluating various options for setting up permanent facility
Board approves term sheet signing with Engineering Services firm.
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8
FY16 Results Kannur International Airport
Financial Performance FY16
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FY16 revenues flat on soft and volatile raw material prices
467.1
650.4
10.49%
14.55%
0%
5%
10%
15%
20%
25%
0
100
200
300
400
500
600
700
FY15 FY16
EBITDA (Rs in Mn) EBITDA Margin (%)
5022.7 5086.3
4451.5 4469.2
219.1
301.6
0
100
200
300
400
500
0
1,000
2,000
3,000
4,000
5,000
6,000
FY15 FY16
Gross Revenue (Rs in Mn) Net Revenue (Rs in Mn) PAT (Rs in Mn)
Recent Projects (1/2)
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UltraTech – Pipe Structure ITC – Green Project, 12 Floors
Kannur International Airport Kannur International Airport ITC – Green Project, 12 Floors
Recent Projects (2/2)
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Module Mounting Structure
Phoenix Residential Building Decathlon MRF - Factory Warehouse
Saraf Agencies
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Company Overview
IOT Infra Dahej, Gujarat
Pennar Group Overview
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Pennar Industries Ltd.
Steel Products & Profiles
Precision Tubes
Industrial Components
Systems & projects
Pennar Engineered Building Systems Ltd.
Pre-Engineered Buildings
Custom Designed Steel Structures
Engineering Services
Pennar Group of Companies
Pennar Enviro Ltd.
Water Treatment Solutions
Water Treatment Chemicals
Fuel Additives
Pennar Engineered Building Systems Limited (PENPEBS) - Overview
One of the leading custom designed building systems solutions provider in India
Industry size of the Indian PEB was ~INR 55,000 million with a 13% CAGR over 3 years
Pennar’s market share was ~8% (1) in a fragmented industry in FY14
Manufacturing facility equipped with high-precision machines to fabricate and supply quality-replete steel buildings
Production capacity of 90,000 MT p.a.
One of the few companies that offers leak-proof roofing systems in India
Technical know-how licensing agreement with NCI Group Inc. USA
156 ongoing projects across 20 states, aggregating to order book of INR 3.6 Bn(2)
Key customers include Ultratech Cement, Volvo India and Larsen & Toubro with repeat orders from 17 customers as on June 30, 2015
14 (1) Source: CARE Research, Report mandated by the company (2) As on June 30, 2015
Indian PEB market was at INR 55,000 million in FY14 and is expected to be at INR 91,680 million by FY17(1)
Key Events and Milestones
Commissioning of 0.5 MW solar power generation facility
Investment by Zephyr Peacock India Fund
Manufacturing capacity expanded to 90,000MT
Entered into an agreement for commencement of engineering services
Manufacturing capacity expanded to 60,000 MT
Achieved Rs 1,000 million from Gross Revenue from Operations
Commenced commercial production with a capacity of 30,000 MT
Received Gold Rati g fro the I dia Gree Buildi g Cou cil for achievi g the gree building standards as per IGBC Green Factory Building Rating Technology
Entered into Double Lok® technical know-how agreement with NCI Group, Inc.
Incorporation and commencement of business of the Company
Crossed Rs. 4,500 million Gross Revenue from Operations 2015
2014
2013
2011
2010
2008
2009
15
Crossed Rs. 5,000 million Gross Revenue from Operations 2016
PENPEBS - One of the Leading PEBS provider in India
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Diversified Products and Solutions
Established Track Record for Timely Execution
Experienced Management & Strong Parentage
Robust Financial Performance
Strong Engineering Design Capabilities and Technological Tie-Ups
Diversified Products and Solutions
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Pre-Engineered Buildings
• Custom designed and fabricated, available in large multi-dimensional spans
• Offer enhanced speed, flexibility and capable of withstanding weather changes
• Top PEBs built:
– Coal Storage Shed at Visakhapatnam;
– Factory Building at Khopoli, Odisha
–Warehouse Buildings at Dahej, Bangalore
Structural & High Rise Steel Buildings
• Comprising of steel and cement plants, multi-level car-parks, towers and high rise buildings
• Existing in-house capabilities for design and manufacture
• Installed two buildings:
– G+7 – Multi Storied Building
– G+10 – Multi Storied Building at Hyderabad
Design & Engineering Services
• Developing integrated and comprehensive engineering design solutions
• In-house engineering and design team comprising of 147 technical personnel
• Design services out-sourcing agreement with a US based entity
Ability to offer diversified products and solutions makes Pennar a preferred partner by key customers
Solar Module Mounting Structures
• Design, supply and erect structures used for mounting solar modules
• Application in solar photo-voltaic plants, solar canal tops, solar roof tops, solar thermal plants and solar car parks
PENPEBS Components
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PEBS Components & Solutions
Primaries (Main Frame)
H sections
I beams
Secondaries
Purlins
Fascia channels
Eave Struts
Side runners
Claddings
Double-Lok ® roofing
Roof sheeting
Wall systems
Accessories
Fasteners
Walk doors
Louvers
Windows
Sky lights
Ridge ventilators
Roof & jack curbs
Niche Solutions
Green Buildings
Low Cost Housing
Building Systems
Double-Lok® Standing Seam Roofing with 10 years leak
proof warranty by PEBS Pennar
Purlins/Girts/Eave struts are pre-galvanized with 275 gsm.
Primary structures shot-blasted to Swedish standard SA
2.5 with epoxy primer
Continuous supervision at site during installation
Standard Trapezoidal Roof Sheeting
Purlins/Girts/Eave struts are Pre-galvanized with 120 gsm.
Primary structures with manual cleaning with alkyd primer
Periodic supervision at site during installation
Strong Engineering & Design Capabilities and Technological Tie-Ups
Award winning and experienced in-house design and engineering team of 176 technical personnel as of
March 31, 2016
Technical arrangement with NCI Group Inc, USA for Double Lok® Standing Seam Roofing System
– One of the few companies to offer leak-proof roofing systems in India
Out-sourcing agreement with USA based company which ensures:
– Exposure to the latest know-how, design and computer aided technologies
Licensed some of the latest and advanced software in CAD technology and manufacturing
Equipped to handle complex software to design complex custom designed structures
Provides design and engineering services for projects executed by others as well
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Best pre-engineered building for
Ultratech Cement Factory, Kotputli, Rajasthan – CIDC
Vishwakarma Award, 2015
Certificate of commendation for a cold storage shed
at Kotputli, Rajasthan- INSDAG
National Award, 2014
Infrastructure company of the
year - Construction Week India Awards,
2013 (Runner up)
Established Track Record for Timely Execution
Timely execution of more than 400 projects in 5 years across various sectors
Strong supply chain relationships, network of sales offices and building
contracts and integrated operations allows to consistently deliver projects in
an efficient and timely manner
Consolidation of order and project management departments into one
ensures operational efficiencies
Established relationships with materials suppliers like JSW Steel Ltd., Tata
Steel Ltd., Asian Paints and various vendors further strengthens the business
operations
Network of approved building contractors across India allows the Company to
provide end-to-end solutions
Repeat orders from 17 customers, including Ultratech Cements Ltd., Volvo
India Private Ltd., Larson & Toubro Ltd.
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99 meter clear span building
Largest building executed by a
PEBS player in India
Solar Mounting Structures
Multi-storied Building Processing Unit
Robust Financial Performance
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Net Revenues & PAT EBITDA & Margin
292
361 370
467
650
11.86% 12.57%
10.16% 10.49%
14.55%
0.00%
5.00%
10.00%
15.00%
20.00%
0
100
200
300
400
500
600
700
FY12 FY13 FY14 FY15 FY16
EBITDA (in Rs. Mn) EBITDA Margin (%)
2,489 2,910
3,697
4,452
4,469
106
148
182
219
302
0
50
100
150
200
250
300
350
0
1,000
2,000
3,000
4,000
5,000
FY12 FY13 FY14 FY15 FY16
Total Net Revenue (in Rs. Mn) PAT (in Rs. Mn)
Shareholding Pattern
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Shareholding Pattern as on 31st March 2016
Promoters (63%)
Mutual Funds (18%)
FPI (3%)
Others (16%)
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PEBS Industry
Volvo India
Typical PEB system
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The pre-engineered steel building system offers advantages to the customer as a more feasible, practical and efficient alternative
to conventional buildings. The system has earned acceptance across the world and is gaining rapid ground in India as well.
Some of the distinct advantages
include:
Durable - Weather resistant,
earthquake resistant
Faster - Reduced construction
time thus ensuring enhanced
speed in delivery and erection
Flexible - Easy to expand
Value - Low project cost,
maintenance costs
Aesthetics - Gives the engineer
enough flexibility to create
unique structures
Lower Costs – Lower
maintenance costs and faster
construction time has direct
impact on revenue
PEB offers many advantages over conventional construction
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Industry Growth
PEB industry growth expected to be substantial – driven by construction growth and higher PEBS penetration. Industrial (manufacturing, warehouses) segment to remain domination while infrastructure and retail segments to grow rapidly
Design Fast design turnaround. Modular designs – basic designs are re-used as far as possible
Fabrication Fabrication is off-site in a plant – parts are assembled (bolted) on-site
Project Execution Typically turnkey projects – design, fabrication and execution is handled by PEBS players
Cost 5-20% lower upfront cost than structural steel. For complex warehouses PEB becomes more cost competitive
Market Segments/ Application
PEB preferred for light weight structures mostly in industrial segments and low-rise commercial and infrastructure. Rising demand for complex warehouses ((with specific requirements around height, span, positioning of columns, insulation, ventilation, etc)
Timeline PEBS has advantage of 40-50% shorter timelines compared to RCC
PEBS Sector – Potential Opportunities
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Industrial
Expected Investment of INR 2.5 trillion to create a potential market of INR 2,50,000 million*
– Cement - 479 million tonnes
– Automotive Industry – INR 50,000 million
– Engineering and Capital Goods - Significant demand for manufacturing plants and sheds for PEB
Real Estate
Government’s scheme of affordable housing is expected to create potential demand of INR 180,000 million
Commercial /High Rises Buildings
– Availability of commercial space is expected to grow from 650 million sq.mt. in 2012 to 1,900 million sq.mt. in 2030
– Creates a market potential of INR 55,000 million*
Infrastructure
Investments expected to the tune of INR 65 trillion in FY 2012-17
– Civil Aviation – Investment of INR 72,000 million
– Metro Rail – Investment of INR 13,00,000 million
– Power Plants – Investment of USD 250 Bn
– Ports – Investment of USD 49.75 Bn
Commercial
Application across warehousing & FMCG retail shops
Agri-warehousing
– 10% of total warehousing in India - Strong potential demand for PEB
– Expected demand of ~INR 20,000 million of silos every year
Warehousing
– Large clear-span storage sheds can be catered by PEB construction effectively
– Requirement in FY14 is 919 million sq.ft., expected to grow at 9%*
PEB penetration stands low at ~20% presenting a Strong Opportunity
* In the next 5 years. Source: CARE Research
Investor Contacts
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Contact Details:
Pennar Engineered Building Systems Ltd.
Floor: 9, DHFLVC Silicon Towers
Kondapur, Hyderabad - 500 084, Telangana
CIN : L45400AP2008PLC057182
Investor Relations - [email protected]
