CESC Limited Powering India since 1899 January 2014 www.cesc.co.in - - PowerPoint PPT Presentation

CESC Limited

Powering India since 1899 January 2014 www.cesc.co.in

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RP- Sanjiv Goenka Group

Power & Natural Resources Carbon Black Retail Media & Entertainment Infrastructure IT & Education

Power & Natural Resources Retail Carbon Black Infratructure Media & Entertainment IT & Education

CESC - 4th largest Private Power Utility Noida Power *- Private Discom in

Noida

Integrated Coal Mining * - Pioneer

in private sector Coal Mining

Harrisons Malayalam – Largest

Plantation company in South India

Spencer`s Retail *- Pioneer in

• rganized food retailing in India

Phillips Carbon Black - Largest in

India & 8th largest in world

CESC Properties*- Showcasing East

India’s 1st Specialty Mall

Saregama India - Biggest collection

• f Indian Music

Open* – Weekly current affairs

magazine

Firstsource Solutions - Among the

top 3 pure play BPO companies in India

Business Sectors

Companies

* unlisted

RP- Sanjiv Goenka Group – Business Sectors

3 Power & Natural Reources 51% Media & Entertainment 1% Carbon Black 19% IT & Education 19% Retail 10%

Asset base

• Rs. 25,000 crs+

(Rs. bn )

Financials of RP- Sanjiv Goenka Group companies

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Gross Revenues (FY`13) EBIDTA (FY`13) Net Profit (FY`13) Current Market cap* Promoter Holding Institutional Holding

CESC 53.20 14.20 6.18 55.00 52% 39% Firstsource Solutions 28.20 2.80 1.47 14.00 57% 22% Phillips Carbon Black 22.80 1.10 (0.20) 2.10 52% 21% Spencer`s Retail 13.50 (0.78) (2.10)

• 100%
• Noida Power Company

8.00 2.73 1.33

• 73%
• Saregama India

1.75 0.28 0.11 1.40 55% 24% Harrisons Malayalam 3.47 0.25 0.02 1.00 50% 5% Integrated Coal Mining 3.70 0.36 0.22

• 100%
• Crescent Power

1.24 0.62 0.20

• 100%

• 4 thermal plants – Installed capacity of 1225 MW
• Meeting peak system demand of 1900 MW

Generation

• Distribution Licensee for Kolkata & Howrah - 567 sq.km area, 2.7

mn consumers, 19500 ckt km T&D network , T&D loss 12% Distribution

• Coal mining of 3 MTPA via associate company meets 50% of coal

requirement Coal

• Pursuing Organized retailing via Spencer`s Retail
• PAN India presence with 1 mn sqft and 130+ stores

Retail

• Risk free annuity income generating asset - Inaugurated “Quest”,

Eastern India`s first Luxury mall in Kolkata Real Estate

• Two IPPs of 600 MW each under construction in Haldia &
• Chandrapur. Generation capacity to double by 2014

IPPs

• Recently acquired Fisrtsource Solutions Ltd
• Among the top 3 pure play BPO companies in India

Technology

SPV`s

CESC Snapshot

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Operating performance:

• No. Of Consumers (Lakhs)

PLF%(excluding peaking Station) Sales (MU) * Revenue (Rs. bn)

7 6948 7206 7595 8135 8270 8577 FY'08 FY'09 FY'10 FY`11 FY'12 FY'13 29.30 32.00 34.49 41.72 46.69 53.17 FY'08 FY'09 FY'10 FY`11 FY`12 FY`13 97% 97% 93% 85% 88% 86% FY'08 FY'09 FY'10 FY`11 FY'12 FY'13 22.08 22.94 23.84 24.89 25.86 27.02 FY'08 FY'09 FY'10 FY`11 FY`12 FY`13

Dividend History PBT (Rs. Bn) Debt / Equity Ratio

Profitability

EPS (Rs.)

8 4.03 4.65 5.22 6.14 6.93 7.73 FY'08 FY'09 FY'10 FY`11 FY'12 FY'13 30 33 35 39 45 50 FY'08 FY'09 FY'10 FY`11 FY'12 FY'13 25% 35% 40% 50% 70% FY'06 FY'07 FY`11 FY'12 FY'13

Coal & Gas based IPPs on a PAN India basis Portfolio of Renewable projects (Solar, Wind, Hydro and MSW) Privatization of Distribution Franchisee

Growth plans

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 First Independent Power Plant (IPP) of CESC  Being set up in Chandrapur, near Nagpur  2x300 MW configuration  Project cost of Rs. 3500 crs funded at 75:25

debt equity ratio

 Coal linkage available from CIL  BTG supplied by Shanghai Electric , China  BoP undertaken by Punj Lloyd  Long Term PPA for 100 MW signed with

TANGEDCO

 First unit synchronized on 2nd Sept 2013  Project to be commissioned in 2013-14

600 MW Chandrapur TPP, Maharashtra

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600 MW Haldia TPP, West Bengal

 To meet the growing need of its consumers,

CESC is setting up a 600 MW (2x300) TPP in Haldia, near Kolkata

 Fully regulated project approved by WBERC  Project include 80 kms long 400 kV

Transmission line from Haldia to CESC network

 Project cost of Rs. 4000 crs+ funded at 75:25

debt equity ratio

 Coal linkage available from CIL  BTG supplied by Shanghai Electric , China  BoP undertaken by Punj Lloyd  Project to be commissioned in 2014-15

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 Surya Vidyut Ltd, a fully owned subsidiary of CESC

has commissioned a total of 24 MW wind power project in Jaisalmer, Rajasthan

 The project consist of 12 WTGs of 2 MW each  The first phase of 14 MW was commissioned in Jan

2013 and the PPA was signed with Jaipur Vidyut Vitran Nigam Ltd (JVVNL) for 25 years

 The second phase of 10 MW was commissioned in

March 2013 and the PPA was signed with Ajmer Vidyut Vitran Nigam Ltd (JVVNL) for 25 years

 CESC plans to increase its presence in the wind

business, driven by favorable tariff regime and positive long term outlook for renewable energy

Wind Power Project

CESC wind sites in Jaisalmer, Rajasthan

Distribution Franchisee

 Ranchi, Jharkhand – Declared H1 through competitive bidding.

Distribution Franchisee Agreement singed. Formal handover in next few

• months. Annual Revenue Rs.4000 million and 0.3 million consumers

 Member of successful bidding consortium in Port Harcourt Distribution

Co., Nigeria. Our role is for consultancy services relating to planning for T & D Network, augmentation & loss reduction. Annual fee $2.5 million

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Coal Sourcing Strategy



Thermal power plants to continue to meet the country`s energy requirements



CESC would implement IPPs which secures a domestic coal linkage



Secure long term off take arrangements of imported coal to meet shortfall if any



Landed cost of imported coal to be competitive



Acquisition of coal mine to enjoy cost advantage



Participation in domestic coal block auction when such opportunity arise

Resource Generation Ltd



Coal purchases from Resource Generation’s planned Boikarabelo mine has been extended to 139 MT from 37 MT



Access to 139 MT over 38 years – 73 MT in phase 1, 66 MT in phase 2



Mining expected to start by 2015, Index linked favorable pricing formula



Current holding of RP-SG Group at 5.3%

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

Developed 1st luxury mall in Eastern India on 3 acres land in central Kolkata area



4,15,000 sq.ft retail area, 900+ car parking



Designed by RTKL (UK), construction by L&T



95%+ area already signed



Anchor stores incl Lifestyle, Spencer's, Mother care, Star Mark, INOX



International brands inc Burberry, Emporio Armani, Apple, Estee Lauder, Gucci, Canali, Furla, Tumi, Rolex, Omega….



Food brands include Smoke House Deli, Bombay Brasserie, Irish House, Yauatcha, Serafina …..



Mall inaugurated on 30th September 2013

Real Estate

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“Quest” Shopping Mall inaugurated

RETAIL BUSINESS

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

Rs.14 bn food-first, hyper & supermarket chain since 1996



30 million NOB’s per annum (est. 50 Mn footfalls per annum)



Strong Brand traction with target customer



14% same store sales growth in each of last 3 years



Private label program across food, fashion, home and general merchandising.



130+ stores spread over 38 cities and about 1mn sq ft



Ranked 2nd in India’s most respected companies in Retail in a study conducted by Business World in 2013



Won the ‘Most Admired Hypermarket Retailer of the Year Award’’ at the India Retail Forum in September 2013



Spencer’s ranks 30th among India’s top 50 ‘Most Trusted Brands’ in the Economic Times Brand Equity survey 2013

Spencer’s Retail

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FINE LIVING AFFORDABLE

We’re on top of trends so you will find the latest and finest at Spencer’s

• a mix of

commodity & indulgence merchandise Bright, clean stores, category adjacencies and fast checkouts make shopping at Spencer’s easy and fun Superior quality products since 1863 including private labels bearing the Spencer’s hallmark signature Market Right prices are a great reason to shop at Spencer’s

ASSORTMENT SERVICE PRICE QUALITY

• Caters to consumer aspirations
• Platform for differentiation
• Fashion / “Want” items
• Drive Shopping trips / build traffic
• Create market right price impression
• OPP / KVI benchmarking to drive

affordability

How Spencer’s “Makes Fine Living affordable”

• A blend of commodity (80%) & indulgence (20%) merchandise with relevant opening price points

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Spencer’s Footprint

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• TA Hypers – 646 K sft
• TA Supers – 101 K sft
• TA Small stores – 208 K sft
• Au bon pain – 28 cafes

Regions States TA (‘000) Hypers >15 k Supers Dailies <3k SAS TOTAL 3k -15k East WB 230 7 2 10 19 TOTAL 230 7 2 10 19 West Maharash tra 36 1 1 Gujarat 24 1 1 TOTAL 60 2 2 North East UP 114 3 1 14 18 NCR 132 4 3 5 12 TOTAL 246 7 4 19 30 South 1 Kerala 17 1 4 5 T.N 120 2 2 33 37 TOTAL 137 2 3 37 42 South 2 Bangalore 48 2 2 2 6 Coastal A.P 93 4 1 8 13 Hyderaba d 141 3 3 16 22 TOTAL 282 9 6 26 41 TOTAL 955 K 27 15 92 134

Hyper & Super footprint

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Hypers Supers

Mumbai (Malad) Hyderabad Vizag Vijayawada, Guntur Kakinada Durgapur Gorakhpur NCR Hypers : Ghaziabad, Gurgaon, Dreamz, Haridwar Super : MMX mall, Indirapuram,Dharuhera Vadodara Warangal Bangalore - Hyper : Koramangala, Sarjapur; Supers: Mosque Rd, JP Nagar Trichy, Thiruvalla Super Kolkata Hypers : South City, Mani Square, Rash Behari, Axis mall,New Town, Super : Avisar,Upahar Luckno w

27 Hypers – 646 K sqft 15 Supers – 101 K sqft

Rajamundhry Allahabad Coimbatore super, Erode super,Velachery Hyper Siliguri

Food has highest share ~ 80%

Sales Mix

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STAPLES 20.2% FRESH 15.8% FMCG 39.4% LIQUOR 3.2% APPAREL 5.8% E & E 5.8% HWP 9.8%

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TA Mix 2009 2010 2011 2012 2013 Hypers 47% 51% 53% 59% 66% Supers/ Dailies 53% 49% 47% 41% 34%

Format Mix – Growing in Hypers

694 795 962 1,060 1,230 122 136 174 199 233 175 170 172 171 183

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2 27 50

• 100
• 50
• 50

100 150 200 250 600 700 800 900 1,000 1,100 1,200 1,300 FY09 FY10 FY11 FY12 FY13 R s / s q f t R s / s q f t

Progress on Operating Matrix

Sale/sqft GMROF Opex/sqft EBIDTA/sqft

Sales/Sft Opex/Sqft Store EBIDTA/Sqft GMROF

Working capital trends

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Category Net Working Capital (Rs. Mn) Mar'09 Mar'10 Mar'11 Mar’12 Mar'13 Staples 50

• 13

21

• 8

FMCG 140 60

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25 68 Apparel 130 100 36 50 30 E & E 90 50 14 20 22 HWP & Fur 100 70 19

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10 Others 10

• 30
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• 15
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Total 520 250

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96 91

• No. of days

Cover 30 12 4 3

New Roll Out Plan - For FY-14

STORE LOCATION MOP HYPER Kolkata* Apr-13 39000 Chennai* May-13 20000 Dharuhera (NCR)* June-13 8000 Meerut* Oct-13 22000 Kolkata* Nov-13 26000 Raipur* Dec-13 30000 Dhanbad* Dec-13 19500 Aligarh Feb-13 19000 Lucknow Feb-14 23000 Bhopal Feb-14 35000 Greater Noida Feb-14 35000 Hyderabad Mar-14 19000 Total 3,00,000 apprx

28 * Since open

Private Label FMCG / Food FMCG / Non- Food

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Private Label General Merchandise Apparel

Formal Wear Casual Wear Ethnic Wear

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 Au Bon Pain is a is a fast casual dining concept founded in

Boston in 1978 by the late Louis Kane and has over 280 cafes across the world

 RP-SG group is the master franchisee of Au Bon Pain, USA

in India

 Started in 2009, in Bengaluru; Au Bon Pain Café India

Limited has 29 cafes in Bengaluru and 2 in Kolkata

 Cafes spread across High Street & Malls, Business & IT

Parks, Hospitals and Universities

 Au Bon Pain offers a wide range of menu choices for all

day parts consisting of scrumptious sandwiches, palatable soups, salads, delectable baked goods, beverages, cakes and desserts

 Strong roll out plan in 2013-14. Entering NCR and

expansion in West Bengal

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Specialty Brands -Au Bon Pain

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Firstsource Solutions Ltd.

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• Among the top 3 pure play BPO companies in India (NASSCOM 2012 rankings)

Leading Scale Player

• In December 2001 by ICICI Ltd, CESC acquired majority stake in FY`13

Founded

• CESC (56.82%), Metavante (6.85%), ICICI Bank (4.87%%)

Major Shareholders

• Full range of business process management services across the customer life cycle delivered

through transaction processing, CRM, collections and receivables mgmt. Service Offerings Client base includes 21 Fortune 500 and 9 FTSE 100 companies.

• Healthcare: 5 of the top 10 Health insurance / managed care companies in the US and over 800

hospitals in the US

• Telecom & Media: 2 of the Top 10 U.S. telecom companies, 2 of the top 5 mobile service

providers in the U.K., largest pay TV operator in the U.K., largest pay TV operator in Australia, 3

• f the Top 5 mobile service providers in India
• BFSI: 5 of the top 10 U.S. banks, 8 of the top 10 general-purpose credit card issuers in the

U.S., largest bank and mortgage lender in the U.K., 1 of the Top 3 motor issuers in the U.K, India’s leading private life insurer Clients

An Overview

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Enhanced business continuity capability

USA 14 Centers 3,396 Employees Sri Lanka 1 Center 543 Employees 6 Centers 4,811 Employees Europe 22,177 Employees 25 Centers India 1,438 Employees 2 Centers Philippines

Strong Domain Expertise driven business model Blended 78% onshore and 22% offshore model

3,248 Seats 637 Seats 2,097 Seats 17,167 Seats 1,209 Seats

An Overview

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Financial Performance – FY2013

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• US Healthcare spending to increase to $4.3 trillion in 2017 (20% of GDP) from $2.7 trillion

in 2008 (17% of GDP)

(Source: Centers for Medicare & Medicaid Services) Hospital care accounts for approximately 30% of total healthcare expenditure amounting to $700 billion

• Recently passed healthcare reform bill represents a significant opportunity across both payer and provider segments

through increased penetration and specific reform mandates

Administrative costs are estimated to be 14%, amounting to $100 billion Administrative costs for private health insurers have averaged approx. 12% of premiums over the last 40 years, amounting to about $50 billion

Estimated USD 50-55 bn addressable market opportunity in Healthcare provider space by 2020

Provider Payer

Challenging operating environment and revenue pressures for hospitals leading to increased focus

• n revenue cycle management

Complex environment that can benefit from

• utsourcing

Key regulatory changes include:

• Mandated expansion of Medicaid to families earning up-to 133%
• f Federal Poverty Level. Likely to bring approx 11M Americans

under Medicaid as per this provision

• Increased focus on quality and improved health outcomes as

reimbursement and payment become predicated on outcomes

• Reimbursement reductions and payment bundling to providers.

Likely to save $300BN in cost to government in 10 years, forcing healthcare providers to look at reducing administrative costs

Key regulatory changes include:

• Mandated medical loss ratio threshold of 15%
• Elimination of pre-existing condition as a basis for coverage
• Lifetime caps on medical expenses eliminated. Payor companies will have

to pay much more for chronic treatments

• Rescission of coverage eliminated, except non payment of premiums
• Fundamental and profound changes will emerge as insurers adapt their

care delivery models toward managing a member’s wellness rather than their disease state

• Industry fees of $8 billion for insurance companies from 2014 increasing

to $14.3 billion in 2018

Healthcare – BPO Market Opportunity

US HC Spend ($ trillion)

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T&M – BPO Market Opportunity

• As per NASSCOM-McKinsey perspective 2020 study, total addressable BPO market for telecom & media is expected to

be USD 20-25 bn by 2020 Industry Trends BPO Opportunity

In developed countries, Telecom is a mature industry Increased usage of new and complex technologies (i.e. Smart-phones, HDTV, DVR, Wi-fi@home etc.) Market convergence – Triple play / quad play Market concentration (3-4 large players)

• Focus shifting from subscriber growth to consolidation and cost optimization
• Clients rationalizing their outsourcing partners to a smaller number of

strategic partners with flexible global delivery networks

• Growing demand for technical support as consumers start using complex

technology

• Suppliers who have domain expertise in all sub segments (Mobile, fixed

line, broadband and DTH) and understand the underlying business dynamics / complexities are well positioned

• Revenue potential from each client is high due to market concentration/

high transaction volumes.

• Local political issues favor companies having in-country delivery capabilities

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BFSI – BPO Market Opportunity

• BFSI is the largest market segment constituting 45% of addressable BPO market opportunity by 2020 (USD 155-

165 bn)

Key Addressable Segment Current State and Impact on BPO Opportunity

• Industry is resurfacing from the financial crisis
• Clients are preoccupied with internal restructuring and
• utsourcing decisions are lower on priority
• Increasing regulatory oversight and government ownership
• Less conducive environment for offshoring due to political

considerations

• Organisations with onsite delivery capabilities positioned

favorably in such environment

• Though BFSI has been estimated as a large market segment

for BPO, immediate prospects are challenging

• Strong in-sourcing philosophy with major / tier-1 financial

institutions having large captives

• Large sub segments such as wholesale banking and mid tier

banking market is yet to open up

• Specific segments such as credit card collections / recovery is

seeing significantly lower volumes due to lower placements

• Expect growth to come back in medium to long term once
• verall economic environment stabilizes

Sub segment Addressable market 2020 in USD Bn Retail Banking 90-95

• Deposits

48-50

• Credit cards

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• Mortgages

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• Lending

6-7 Wholesale banking 30-33 Insurance 30 Asset management 5-7 Total BFSI 155-165

The materials contained herein (the “Materials”) are for use at this presentation only and not for further distribution by you or any other person. Neither the Materials, nor anything contained herein, shall form the basis of, or be relied

• n in connection with, any contract to purchase or subscribe for any securities of any of the companies described

herein, nor shall it or any part of it form the basis of or be relied on in connection with any contract or commitment

• whatsoever. None of the companies described herein or any of their respective affiliates, advisors or representatives

shall have any liability whatsoever (in negligence or otherwise) for any loss howsoever arising from any use of the Materials or their contents or otherwise arising in connection with the Materials. The Materials are confidential and must not be distributed, published or reproduced (in whole or in part) or disclosed by recipients to any other person. The Materials do not constitute an offer or recommendation regarding the securities of the companies described herein. Except for the historical information contained herein, statements in this release which contain words or phrases such as “will”, “aim”, “will likely result”, “would”, “believe”, “may”, “expect”, “will continue”, “anticipate”, “estimate”, “intend”, “plan”, “contemplate”, “seek to”, “future”, “objective”, “goal”, “strategy”, “philosophy”, “project”, “should”, “will pursue” and similar expressions or variations of such expressions may constitute "forward-looking statements". These forward-looking statements involve a number of risks, uncertainties and other factors that could cause actual results to differ materially from those suggested by the forward-looking statements. These risks and uncertainties include, but are not limited to our ability to successfully implement our strategy, future levels of non-performing loans, our growth and expansion, the adequacy of our allowance for credit losses, our provisioning policies, technological changes, investment income, cash flow projections, our exposure to market risks as well as other

• risks. CESC undertakes no obligation to update forward-looking statements to reflect events or circumstances after

the date thereof. 40

Thank You