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5/29/2015
1
Spreading Wings…
Largest manufacturers of
Industrial Explosives and
Initiating Systems in India
Largest Cartridge manufacturing
facility in a single location, globally
One of the largest Manufacturing
Facilities of Detonating Cord
and Cast Boosters in the world
Largest exporter of industrial explosive from India in 2015
Complete product range with
presence across the product value
chain
Commissioned manufacturing
facilities for Propellants and
HMX
Who we are…
5/29/2015
2
Key Strengths
Backward
integration of raw
materials to a
large extent
Inward & outward
logistics provides a
strong distribution
network
Plants are certified
for ISO 14000 &
18000 OHSAS
(18001-2007)
Advanced
Technology & R&D
set-up recognized
by DS &T
Enhanced systems
for Safety, Health
& Environment
System controlled
through SAP ERP
Our CRISIL rating
for borrowing s for
Long term "CRISIL
AA“ and for Short
Term "CRISIL
A1+".
Marquee Clientele
Experienced
Management
Team
1984Commenced
business as a Trader
in Explosives
1996Started production
of explosives with
a license capacity of 6000 MT
1998Commenced
production of
Detonators
2000Started plants in
Waidhan for
production of Bulkexplosives
20012002-05
2007-142006
Initial public offer
(IPO);gets listed
Established another
Bulk explosive unit in
Chanderpur with 7750 MT capacity
Introduced
Cast Boosters and
PETN in the productportfolio
Started exporting and
slowly gained
acceptance inInternational market.
Expands
Domestic
operations in 14
New Bulk Plants
StartsExports
in 25countries
Manufacturing
units in Zambia,Nigeria & Turkey
Expanded5
New BulkPlants
Sets up
Manufacturing
facilities of HMX& Propellant
Milestones
2015
Supplies to BDL & TBRL commences
Imported first
Cartridge
Manufacturingmachine from USA
5/29/2015
3
Regulatory Environment
One of the very few sectors needing
Industrial License
Clearance required from Home Ministry
License also required from Chief Controller
of Explosives, GoI
Clearance required from IB-regarding
safety of location & Directors
NoC required from District Magistrate
NoC by District Magistrate after
clearance by Police, PWD,
Grampanchayat
For underground (Gasy mines) use
permission required from DGMS
Bulk explosives Cartridge explosives Detonators Detonating Cord Cast Boosters
2,16,107 MT
Licensed capacity
Installed acrosslocations in India
Locational
proximity to themines
All units located
at 50-60 kms
radius from the
major mining
regions
Largestmanufacturing
capacity in
India
74,655 T
Largest cartridge
manufacturing
Facilityat a single
location in the
world
Licensed capacity
installed in
Nagpur
190 Mi Pcs.
Well poised to
cater to rising
demand from
Indian and
overseas mining
&
Infrastructure
Industries
Among the larger
Manufacturing
Capacities in India
75 Mi Mtrs.
Licensed capacity
installed in
Nagpur
Largest
Manufacturing
Facility in India
1500 MT
LargestManufacturing
Facility
in India
Product Range & Licensed Capacities
Licensed capacity
installed in
Nagpur
Licensed capacity
installed in
Nagpur
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4
Raw Material Management
• 70% of the total raw material consumed
• Domestically sourced from GNFC, RCF & Deepak Fertilizers
• Price volatility - rise/fall clause included in rate contract with customers to a large extent
• The domestic price is Rs. 25500per MT
• Total AN demand in India, for explosives, is ~6 Lakhs MT against a domestic production of ~5.5 Lakh MT
• An Prices are stable in India from last 1 Year
Key Raw Material – Ammonium Nitrate
Plants State Clients served
4 Maharashtra 1. Western Coalfield Ltd.2. SCCL
2 MP 1. Northern Coalfield Ltd2. Reliance power (sasan)
2 Chattisgarh 1. South Eastern Coalfiel Ltd.2. Jindal Power, Sharda energy,
Lafarge, Parsak (Adani group)
2 Jharkhand 1. Tisco2. Central Coalfield Ltd, Bharat
Coking Coalfield Ltd .
3 Odhisha 1. Mahanadi Coalfield Ltd.2. Tisco
2 AP 1.SCCL Ramagundam2.SCCL Kothagundam
2 Rajasthan Hindustan Zinc, Jindal Saw
1 West Bengal Eastern Coalfield Ltd
Existing facilitiesNewly acquired
Company has acquired 100% stake in Blastec (India) Private Ltd and EMUL-TEK Private Limited having bulk explosive plant at Waidhan and Raigarh.Nagpur facility supplies cartridge explosives and detonators all over India. The rest of the plants supply bulk explosives in their resp. states
Our Domestic Presence
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5
Global Reach & Presence
Facility :
Capacity of 5000 MT of
Cartridge & 10000 Mt of
Bulk.
• Our Share-65%
Facility :
Capacity of 10000 MT of
Cartridge & 20000 MT of
Bulk.
• Our Share-55%
Facility :
Capacity of 40000 MT of ANFO
and Nonel Assembly & 5000 MT
of Cartridge Plant
• Our Share-74.50%
Zambia Nigeria Turkey
Total Overseas Sales for FY15 is 335.32 Cr as compared to 232.85 Cr of FY14.
Market Dynamics
North America
25%
Latin America
12%
Western Europe
5%Eastern Europe
5%Africa
7%
Russia5%
China16%
India5%
South East Asia
7% Australia13%
Global Industrial explosives market
Major players
India is 8th largest & fastest growing Market globally
• Size of the market ~ Rs 4,500 cr.
• Historical growth 5-6 % p.a. (last 10
years)
• Future growth expected 7-8 % p.a ,
which can be 10% in 2 years.
• Annual Explosive consumption of ~ 9
Lakh MT in FY15
• Highly concentrated market with about
30 manufacturers in the industry
GLOBAL OVERVIEW DOMESTIC OVERVIEW
Major players
Solar Industries India Limited is the market leader in the country
5/29/2015
6
Domestic Dynamics
• Main drivers for explosives demand
• Mining
• Infrastructure development
• Mining industry is the major consumer of explosives. It accounts of 90 % of total explosives .
• Coal industry consumes 70 % of total demand.
• CIL is estimating a CAGR of 7% from FY13-17.
• CIL issues tender with reverse Auction with price escalation clause quarterly basis based on movement in prices of AN, Diesel and Labour index
• MMDR Amendments bill and Coal Mines (Special provision) bill are likely to open up mining sector in a big way
Annual Customer Bifurcation5
/29
/20
15
FY15 FY14
Coal India 437.71 379.26
Non CIL & Inst 241.85 157.85
Trade & Others 380.86 317.93
AN Trading 0.00 8.71
Export & Overseas 396.05 352.75
Total 1456.47 1216.50
5/29/2015
7
Our Journey in Numbers
Overseas
manufacturing in 3 countries
Nigeria, Zambia
& Turkey
Exports to 25+
countries
FY08 FY09 FY10 FY11 FY12 FY13 FY14 FY15
Revenue(Rs. Cr) 321 530 590 723 1031 1213 1216 1456
0
200
400
600
800
1000
1200
1400
1600Revenue
FY08 FY09 FY10 FY11 FY12 FY13 FY14 FY15
Volumes(MT) 86659 98024 113345 130086 161033 190091 175764 221638
0
50000
100000
150000
200000
250000
Volumes
+18% CAGR
+20% CAGR
+19% CAGR
Our Journey in Numbers
FY10 FY11 FY12 FY13 FY14 FY15
EBIDTA(Rs.cr) 112 148 195 210 232 262
0
100
200
300EBIDTA
FY10 FY11 FY12 FY13 FY14 FY15
PAT(Rs. Cr) 59 76 101 116 118.4 147.41
0
50
100
150
200PAT
FY10 FY11 FY12 FY13 FY14 FY15
EPS(Rs.) 34 44 58 65 65.78 81.45
0
50
100EPS
5/29/2015
8
Financials – P&L 5 yr CAGR
(Rs. Crs) FY10 FY11 FY12 FY13 FY14 FY15
5yr
CAGR
Gross Income 590 724 1031 1213 1216 145620%
Excise Duty 33 43 64 93 91 110 27%
Net Income 557 680 967 1120 1126 1346 19%
Material Consumed 328 372 561 650 591 769 19%
Material Consumed % 58.8 54.73 58.02 58.06 52.49 57.13
Other Costs 144 186 236 282 339 329 18%
Other Income 26 26 25 16 18 14 -12%
EBIDTA 112 149 195 197 214 262 19%
EBIDTA % 20.09 21.75 20.14 17.64 19.0419.47
PAT 59 76 101 116 118147
20%
PAT % 10.51 11.11 10.47 11.29 11.5 11.62
EPS (annualized in Rs.) 33.8 43.64 58.42 65.47 65.44 81.45 19%
Financials – B/S
(Rs. Crs) FY10 FY11 FY12 FY13 FY14 FY15
Gross Block 172.16 270.29 386.35 436.77 575.40 667.36
Cash & Bank Balance 93.98 59.63 63.01 92.19 133.01 37.27
Net Worth 261.2 316.04 404.6 572.7 661.57 775.88
Loan Funds 107.68 138.67 283.26 344.52 442.75 328.48
Capital Employed 302.46 397.27 621.67 868.29 1048.63 1063.86
Debt Equity Ratio 0.41 0.44 0.7 0.6 0.67 0.41
Inventory Days 42 58 84 76 94 78
Debtor Days 56 48 49 47 55 48
ROCE 34.43 35.44 29.26 22.23 18.34 21.66
RONW 22.43 24.35 25.01 20.31 17.9019.00
Working Cap days 147 87 102 132 144105
Book Value 144 172 224 316 366 431
5/29/2015
9
Our Growth will come from…
Increase exports of explosives existing as well as new markets
3. Renewed demand from Housing and Infrastructure revival
4. Introducing products for the defense sector
5.
Enhanced demand from coal, iron ore & LS mining: public + private
1. Good potential in overseas market.
2.
Specialty Chemicals for Defence Sector
Product Enquiry Qty Buyer Tenor Remark
HMX 10.0 MTOrdinance Factory,
Khamaria 1 Year Order expected in Q1FY16
HMX Compounded Producrt 0.5MT BDL 1 Year Supplied in FY 15
HMX 3 .0MT TBRL, Chandigarh 2 Years1.5tn supplied in Q4FY15
and 1.5tn to be supplied
HMX - Following Tenders / Enquiries have been received:
• Propellants – We have participated in Limited tender floated by Ordinance Factory, Chanda to supply 500 units of Pinaka Propellants.
• AKASH order for 300 nos. received .To be supplied in FY17
• Company has invested Rs 175.46Crs in defense project against the Planned Capex of Rs 220 Crs
5/29/2015
10
Shareholding
THANK YOU!!!
WE INVITE YOU TO VISIT OUR
MANUFACTURING FACILITIES
Nilesh PanpaliyaCFO
We Thank you for your time
and
Invite You To Visit Our
Manufacturing Facilities
Nilesh PanpaliyaCFO