RPP INFRA PROJECTS LTD CORPORATE PRESENTATION | FY19 - PDF document

RPP INFRA PROJECTS LTD CORPORATE PRESENTATION | FY19

Disclaimer This presentation contains forward-looking statements which may be identified by their use of words like “plans,” “expects,” “will,” “anticipates,” “believes,” “intends,” “projects,” “estimates” or other words of similar meaning. All statements that address expectations or projections about the future, including, but not limited to, statements about the strategy for growth, product development, market position, expenditures, and financial results, are forward-looking statements. Forward-looking statements are based on certain assumptions and expectations of future events. The company referred to in this presentation cannot guarantee that these assumptions and expectations are accurate or will be realized. The actual results, performance or achievements, could thus differ materially from those projected in any such forward-looking statements. These company assume no responsibility to publicly amend, modify or revise any forward looking statements, on the basis of any subsequent developments, information or events, or otherwise. 2

Agenda 1 Introduction to the Company Slides 4-7 2 Q4FY19 Review & Future Guidance Slides 8-14 3 Industry Overview Slides 15-17 4 Appendix – Company Overview Slides 18-29

Strong Delivery Despite Tough Environment FY19 Guidance FY19 Actual FY20 Outlook Revenue INR 5.3-5.5 Bn INR 5.8 Bn FY19 Highlights o Strong Order Book of INR 19.44 Bn o Revenue growth of 16.3% despite tough operating environment o Reported EBITDA Margins at 10.7%, not including GST- related adjustments o GST-adjusted EBITDA Margins stand at 13.1%; in-line with guidance o High book to bill ratio at 3.35x o Working Capital Situation eased; bank guarantees tied up in March 2019 o Promoter pledge on 9.7 lk shares released in Q1FY20 o Changes in billing pattern to stage-wise completion vs item-wise completion earlier, led to cost booking to INR 140 Mn, without booking consequent revenue 4

A Pure Play Niche EPC Company Order Book (Mar’19) – INR NR 19,442.5 Mn Mn  Strong presence in the fast-growing micro-markets of Buildings South India 23% Water  Currently spreading its footprints in Maharashtra and MP Management for geographical diversification 35%  Diversified presence in Highways, Roads & Bridges, Civil Construction in Water Management, Irrigation and Power projects  Focus on small government projects with superior project execution skills  Short tenure projects provide strong revenue visibility Infrastructure 43% Orders won in Q4 FY19 : 4,937 Mn 5

A Fast Growing Company … PAT (INR Mn) EBITDA (INR Mn) Revenue (INR Mn) 661 315 620 5,807 502 4,991 243 239 463 207 3,663 348 173 318 3,147 2,631 117 2,329 FY 14 FY 15 FY 16 FY 17 FY 18 FY 19 FY 14 FY 15 FY 16 FY 17 FY 18 FY 19 FY 14 FY 15 FY 16 FY 17 FY 18 FY 19 Adjusted PAT T in FY18 is excluding one time tax expense of Rs Rs. 17.96 crores to 6 resolve pending IT T disputes from FY10 to FY16

…With a Strong Balance Sheet, Creating S uperior Shareholder Value RoE (%) Net debt to equity (x) 17.4% 0.58 14.7% 0.49 12.7% 12.30% 10.5% 0.33 0.30 8.6% 0.20 (0.03) FY 14 FY 15 FY 16 FY 17 FY 18 FY 19 FY 14 FY 15 FY 16 FY 17 FY 18 FY 19 7

Q4FY19: Stable Performance Amid Tight Liquidity Operational Highlights EBITDA (INR Mn) n) & EBITDA A Margin n (%) Revenue (INR Mn Mn) 2,067 12.8% 7.2% • Q4FY19 revenue growth of 181 46% led by strong 149 execution of order book o Revenue up 29% YoY due to 1,417 strong execution • Changes in billing pattern to stage-wise completion vs o EBITDA up 25% item-wise completion Q4FY18 Q4FY19 Q4FY18 Q4FY19 earlier, led to 56% increase o PAT up 38% YoY in costs, thus impacting Repo porte ted PAT (INR Mn) n) EBITDA margins 83 • Higher finance costs attributed to final tie-up of BG limits, only in March 15 2019, thus remaining unutilised in Q4FY19 Q4FY18 Q4FY19 8

FY19 – Balance Sheet Strength Intact 12.3% 0.3x Return on Net Debt to Equity Equity (%) (x) 87 Days 103 Days 13 Days Payable Days Receivable Days Inventory Days 9

Q4 & FY19 At a Glance INR NR Mn Mn Q4FY19 Q4FY18 % C % Chang nge (YoY oY) FY19 FY18 % % Change (YoY) Revenues 2,067 1,417 46% 5,807 4,991 16.3% EBITDA 149 181 -18% 619.7 660.6 - 6.2% EBITD TDA Ma Margin 7.2% 12.7% 10.7% 13.2% Finance Cost 72.8 47 56% 232.4 185.6 25.2% Reported PAT 14.9 82.9 -82% 243.5 133.5 - 22.2% Reported EPS (INR) 0.66 3.67 -82% 10.77 5.84 - 21.9% 10

Business Review ROADS  Current Order Book – INR 8,309 Mn  Embedded EBITDA margins of 12-14% WATER R MA MANA NAGEME MENT  Current Order Book – INR 6,764 Mn  Embedded EBITDA margins of 15-18% BUI UILDING NGS  Current Order Book – INR 4,369 Mn  Embedded EBITDA margins of 10-12% 11

Q4 FY19 – Strong Order Inflows Name Amou ount Segment State Q4FY FY19 Wins ns Slum Clearance Board, Tamil Nadu INR 1,057 Buildings Tamilnadu BHEL, Chennai INR 629 Mn Buildings Tamilnadu Tiruppur City Municipal Corporation INR 1,947 Mn Water Management Tamilnadu BHEL, Chennai INR 402 Mn Buildings Tamilnadu Thoothukudi Smart City INR 180 Mn Water Management Tamilnadu Gujarat Water Supply Board – 40% share INR 405 Mn Water Management Gujarat Gujarat Water Supply Board – 40% share INR 317 Mn Water Management Gujarat 12

Order Book Break up Ord Orderb rbook Gro rowth th Tra rajectory Andhra Bangladesh (INR NR Mn Mn) Pradesh Telangana 4% 100% 100% 1% 0% Jharkhand Govt Order Book 3% Karnataka 5% 19,442 Kerala INR NR 6.5 Bn 7% New Order Wins in H2FY19 so far Madhya Pradesh Gujarat 1% 4% Tamil Nadu 49% 10 10 11,750 States of Operations 7,860 7,250 3 Maharashtra Countries of Operations 25% Srilanka 2% FY16 FY17 FY18 FY19 13

Key Investment Highlights Growing Order Book c.2.5x in 3 ye years Short duration projects • 3.35x Book ok to Bill ll ratio io Strong revenue visibility 87% of proj ojects to be com omple leted in 18-24 mon onths hs pe perio iod Superior Revenue Growth • 15 15-20% fo for next xt 2 ye years De-risked Business Profile • 100% Gove vernment orde ders Healthy Balance Sheet • Lowe ower net debt bt on book oks 14

Industry Overview 15

Construction industry in India: Compelling growth drivers o Growing economy and increasing urbanization along with favorable policy bodes well for construction sector in the country o Big boost in infrastructure spending expected over next few years Highway Construction km/day 30 27 Signif nific icant Tractio ion n in NHAI HAI Orde derin ing 23 17 16 Signif nific icant NHA HAI Bid id Pipe pelin line of 2,222 km 12 11 INR NR c.800 Bn 9 8 7 5 5 5 4 Highway Projects Awarded in FY19 FY13 FY14 FY15 FY16 FY17 FY18 FY19 Morth km/day HAM, , 440 440 Struc uctural l positive cha hang nges in sector or 3,400 km Streamlined & ease in n process s for or obt btaining env nvironment ntal / green clearance app pproval driving fast ster execution EPC, , 360 360 Highway Projects Government’s approval of new arbitration guidelines constructed in FY19 to help p in n spe peedy reso solution of pending claims, improving cash flow ows Source: GOI websites 16 (1) Source: CRISIL

Rural Infra: A Strong Government Focus o Pradhan Mantri Gram Sadak Yojana (PMGSY), launched by GoI to provide connectivity to unconnected Habitations as part of a poverty reduction strategy o Involves construction of about 3.71 lakh km. of roads for New Connectivity and 3.68 lakh km. under upgradation 171,041 119,943 51,098 New Connectivity Upgradation Works No of Works Cleared Works 148,612 599,238 22,429 Completed Road Completed Length In-progress Road Works (kms) Works Source: PMGSY Website

Appendix – Business Highlights 18

De-Risked Business Model Short Low Ticket Max Project Duration: 24 mths Max Project Size < INR 250 Crores Duration Projects Projects Superior Profitability EBITDA Margins: 12%-13% 19

Improving Geographical Diversification FY14 Order Book – INR 5,360 mn Order Book (Mar’19) – INR 19,442 Mn Andhra Pradesh Bangladesh Telangana 1% 4% 0% Jharkhand 3% Karnataka 5% Uttar Pra rade desh, , 9% 9% Kerala Mahara rashtra ra, , 7% 6% 6% Madhya Pradesh Gujarat 1% 4% Tamil Nadu Karna rnataka, , 49% 12% Tami mil Nadu du, , 73% Maharashtra 25% Srilanka 2% 20

High Revenue Visibility Project Duration Project Duration by Sector 5-10 mths 2% 39% 11-15 mths 25% 23% 11% 8% 16-24 mths 3% 2% 87% 5-10 Mths 11-15 Mths 16-24 Mths Building Infra Water Mgmt Book to bill ratio: 4.8x 21

Efficient Operations Large Talent Pool Small Ticket Size Stringent Captive equipment Onsite Enhance Liquidity Operations Control Strategic Subcontracting Raise Accelerate Milestone Bills Project Faster Completion Accurate Project Modelling 22