Unle leashin ing Potentia ial Investor Presentation Q2 FY 20 1 - - PowerPoint PPT Presentation

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Unle leashin ing Potentia ial Investor Presentation Q2 FY 20 1 - - PowerPoint PPT Presentation

Unle leashin ing Potentia ial Investor Presentation Q2 FY 20 1 DISCLAIMER Certain statements included in this presentation may be forward looking statements made based on managements current expectations and beliefs concerning future


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Unle leashin ing Potentia ial

Investor Presentation – Q2 FY 20

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DISCLAIMER Certain statements included in this presentation may be forward looking statements made based on management’s current expectations and beliefs concerning future developments and their potential effects upon Tube Investments of India Limited and its subsidiaries. There can be no assurance that future developments affecting Tube Investments of India Limited and its subsidiaries will be those anticipated by management. These forward-looking statements are not a guarantee of future performance and involve risks, uncertainties and there are important factors that could cause actual results to differ, possibly materially, from expectations reflected in such forward-looking statements. Tube Investments of India Limited does not intend and is under no obligation, to update any particular forward-looking statement included in this presentation. The facts and figures mentioned in this presentation is for informational purposes only and does not constitute or form part of, and should not be construed as, an offer or invitation to sell securities of the Company, or the solicitation of any bid from you or any investor or an offer to subscribe for or purchase securities of the Company, and nothing contained herein shall form the basis of or be relied on in connection with any contract or commitment whatsoever. Nothing in the foregoing shall constitute and/or deem to constitute an offer or an invitation to an offer, to be made to the Indian public or any section thereof or any other jurisdiction through this presentation, and this presentation and its contents should not be construed to be a prospectus in India

  • r elsewhere. This document has not been and will not be reviewed or approved by any statutory or regulatory authority in India or any other jurisdiction or by any stock exchanges in India or
  • elsewhere. This document and the contents here of are restricted for only the intended recipient(s). This document and the contents hereof should not be (i) forwarded or delivered or

transmitted in any manner whatsoever, to any other person other than the intended recipient(s); or (ii) reproduced in any manner whatsoever. Any forwarding ,distribution or reproduction of this document in whole or in part is unauthorised. The information in this document is being provided by the Company and is subject to change without notice. The information in this presentation has not been independently verified. No representation or warranty, express or implied, is made to the accuracy, completeness or fairness of the presentation and the information contained herein and no reliance should be placed on such information. The Company or any other parties whose names appear herein shall not be liable for any statements made here in or any event or circumstance arising there from.

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Agenda

  • Unleashing the Potential
  • 4 Financial Priorities
  • Decentralization
  • Driving improvement through project

teams

  • TI WAY
  • Growth Focus
  • Strengthening the Balance Sheet
  • Business Performance by SBU
  • Back-up details on products

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Unle leashin ing th the Potentia ial

FINANCIAL OBJECTIVES DECENTRALIZ- ATION & EMPOWERMENT PROJECT-BASED APPROACH TI WAY GROWTH FOCUS

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Sales growth 17% PBT/Sales 10% ROCE 30% FCF/PAT 85%

Four Fin inancia ial l Obje jectiv ives

Bringing uniformity in how we measure progress

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Four Fin inancia ial l Obje jectiv ives

The journey so far..

4335 4983 2574 2239 18-19 17-18 H1 19-20 H1 18-19 +15%

  • 13%

14.3% 17-18 H1 19-20 18-19 H1 18-19 21.5% 19.1% 21.8% 218 371 164 218 5 10% 7% 17-18 18-19 6% H1 18-19 H1 19-20 PBT PBT% 95 208 59 154 18-19 70% H1 18-19 H1 19-20 17-18 53% 85% 86% FCF/PAT FCF

Net Sales PBT (Before Excep.) Free Cash Flow ROCE

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Decentrali lizatio ion

Empowerment at Unit levels

18 BUs created

Division head’s role changed from control to supporting BUs in growth, lowering the centre of gravity

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Projec ject-based Approach to Im Improvements

Driving a Kaizen mind-set for improvements at all levels

60+ Project Teams to Drive Improvements

Target-oriented actions for continuous improvement in all functions

Logistics Energy Sourcing Scrap Realization Fixed Cost Reduction Quality & Productivity Net Interest Revenue Enhancement ….

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TI TI WAY

9 - SEGMENTS 40 - PROCESSES

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FOCUS ON GROWTH

  • Different Approaches Based
  • n Segment Potential
  • Planning Across 3 Horizons
  • New Businesses

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2019-20 2024-25

High Growth > 15%

  • TPI Exports
  • TPI Large Dia
  • Fine Blanking
  • Railways

28% Moderate Growth 5-15%

  • TPI Domestic
  • CRSS
  • Industrial Chains
  • Industrial Gears
  • Door Frames

12% Low Growth < 5%

  • Auto Chains
  • Cycles

4%

Supported by Exports

Port rtfoli lio of Busin iness & Exp xpected Growth Patterns

Capital allocation based on future potential

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Focus on Growth th Across Th Three Hori rizons

Develop position of strength

Business growth

Leverage strength in existing businesses Use model as the basis for growth

  • Decentralize
  • Strong BU heads
  • Strong production system
  • Strong quality system
  • Capability building
  • TI Way
  • Strong fundamentals
  • High operating leverage
  • Strong balance sheet
  • Generate strong investible surplus
  • Continue capability building
  • Continue TI Way implementation
  • Invest for growth

(New businesses / Inorganic growth)

  • Replicate TI Way model

24-25 19-20

  • Acquire stressed assets in existing

businesses (incl. overseas)

  • Acquire stressed assets under

insolvency process (NCLT)

  • Start new lines of business
  • Step-out asset acquisition
  • Scaling up in new lines of business

Near adjacencies (e.g., TBW, TMT)

Gradual progression towards higher levels of growth

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Filters for new businesses

MARKET SIZE

Rs.6,000 Cr. or more

POTENTIAL

Rs.1,000 Cr. in three years LOW CAPITAL INTENSITY

1 2 3

FOCUSED ON FOUR TRENDS

Auto Electrification Unorganized to organized Import substitution and Exports B2B to B2C

Crit riteri ria for r New Busin iness Lin ines

Choosing the path carefully..

4 out of 10 may succeed..

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St Strengthenin ing th the Ba Bala lance sh sheet

Prudent Capital Management + Asset Monetization + NWC Efficiency

673 689 794 781 679 605 637 655 513 384 289 0.59 0.58 0.65 0.64 0.56 0.48 0.48 0.47 0.36 0.25 0.18

Q1 2018-19 Q4 2016-17 Q1 2017-18 Q2 2017-18 Q3 2017-18 Q4 2017-18 Q2 2018-19 Q3 2018-19 Q4 2018-19 Q1 2019-20 Q2 2019-20

Net Debt Net Debt / Equity Rs.Crs

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FIN INANCIAL PERFORMANCE BY BU BUSI SINESS

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TI TI Perf rform rmance – A Sn Snapshot

  • Rs. Cr.

Particulars Standalone Consolidated FY 18-19 H1 18-19 H1 19-20 FY 18-19 H1 18-19 H1 19-20 Net Sales 4,983 2,574 2,239 5,463 2,822 2,506 Growth %

  • 13.0%
  • 11.2%

PBT before exceptional items 371 164 218 375 187 237 % to Sales 7.4% 6.4% 9.7% 6.9% 6.6% 9.4% Exceptional Items (9) 3 19 3 3 PBT after exceptional items 362 167 237 378 190 237 Tax 119 55 58 127 61 65 PAT 244 111 179 251 129 172

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TI TI – Oth ther Key Ratio ios

8.5 7.3 13.0 6.0 9.5 17-18 H1 18-19 16-17 18-19 H1 19-20

EPS (Rs/share)

H1 18-19 17-18 H1 19-20 18-19 16-17 11.2% 13.9% 17.1% 16.9% 21.7%

ROE

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Engineering Business

  • ERW Tubes - Electric Resistance Welded Tubes
  • CDW Tubes - Cold Drawn Welded Tubes
  • TCD - Tubular Components
  • CRSS – Cold Rolled Steel Strips
  • LD - Large Diameter Tubes

Products

  • Tamil Nadu - Avadi and Tiruttani (Large Diameter Tube)
  • Maharashtra – Shirwal
  • Punjab – Mohali and Rajpura

Plants

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Engineering Business – Financial Snapshot

` Crs Particulars 18-19 H1 18-19 H1 19-20 Growth % Net Sales 2,676 1,382 1,127

  • 18.4%

PBIT 254 130 130 0.3% % to Net Sales 9.5% 9.4% 11.5% ` Crs Particulars 31-03-2019 30-09-2018 30-09-2019 Net Fixed Assets 530 533 570 Net Working Capital 157 168 146 Capital Employed 687 702 717 Capital Expenditure 84 44 63

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Engin ineeri ring Bu Busin iness - Key Parameters

2131 2676 1382 1127 18-19 17-18 H1 18-19 H1 19-20 17-18 36.9% H1 19-20 18-19 H1 18-19 26.4% 36.9% 36.3%

Net Sales PBIT (Before Excep.) ROCE

175 254 130 130 17-18 H1 19-20 18-19 H1 18-19

(`.Crs)

PBIT% PBIT

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Metal l Form rmed Bu Busin iness

  • Auto Chains
  • Fine Blanking
  • Doorframes
  • Railway Coaches
  • Industrial Chains

Products

  • Tamil Nadu – Ambattur, Nemilichery, Kakkalur, Athipet, Hosur
  • Telengana - Medak
  • Uttarakhand
  • Haryana – Bawal
  • Gujarat - Sanand

Plants

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Metal l For

  • rmed Products – Fin

Finan ancia ial Sn Snapshot

` Crs Particulars 31-03-2019 30-09-2018 30-09-2019 Net Fixed Assets 336 296 339 Net Working Capital 114 122 123 Capital Employed 450 418 462 Capital Expenditure 78 37 31 ` Crs Particulars 18-19 H1 18-19 H1 19-20 Growth % Net Sales 1,286 613 690 12.5% PBIT 123 57 74 30.3% % to Net Sales 9.6% 9.3% 10.7%

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Metal l Form rmed Products - Key Parameters

1095 1286 613 690 18-19 17-18 H1 18-19 H1 19-20 18-19 17-18 27.3% H1 18-19 H1 19-20 26.2% 27.2% 32.0%

Net Sales PBIT (Before Excep.) ROCE

102 123 57 74 H1 19-20 18-19 17-18 H1 18-19 PBIT% PBIT

(`.Crs)

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Cycles Busin siness

  • Cycles and Accessories
  • 53 new models launched

Products

  • Tamil Nadu – Ambattur
  • Punjab – Rajpura
  • 8500 Dealers across India
  • 225 Track & Trail stores as on 30th September 2019

Plants

  • BSA, Hercules, Lady bird, Roadeo, Mach City, Montra, Track & Trail

Brands

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Cycles Busin siness - Mar arket Sh Share an and Product Mix ix

7% 12% 28% 19% 35%

63 72 37 28 Industry TII

Market Share Product Mix (%)

Atlas Others Avon Hero TII

Specials Standards

Source : ACMA

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Cycles – Fin Financia ial l Sn Snap apshot

` Crs Particulars 18-19 H1 18-19 H1 19-20 Growth % Net Sales 1,232 687 504

  • 26.7%

PBIT 11 12 18 46.1% % to Net Sales 0.9% 1.8% 3.6% ` Crs Particulars 31-03-2019 30-09-2018 30-09-2019 Net Fixed Assets 134 139 135 Net Working Capital 56 103 35 Capital Employed 190 242 171 Capital Expenditure 6 4 1

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Other Details

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TI’s Presence

TPI TICI MFPD Uttarakhand (2) Punjab (3) – Mohali & Rajpura Haryana (1) - Bawal Gujarat (1) – Sanand Maharashtra (2) – Shirwal & Pune Telengana (1) - Medak Tamil Nadu (8)

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Shareholding Pattern

48% 12% 23% 17% Promoter & Promoter Group Others FII DII

Promoter Shareholding of 48% includes

  • Ambadi Investment Limited – 37%
  • Others – 11%

Top 10 Institutional Holders

  • HDFC Mutual Fund
  • Nippon India Mutual Fund
  • L&T Mutual Fund
  • SBI Mutual Fund
  • Toyota Tsusho Corporation
  • The Wellington Trust Company National

Association

  • First State Investments ICVC- Stewart

Investors

  • DSP Mutual Fund
  • Pacific Assets Trust PLC
  • Life Insurance Corporation of India

Sep-18 Dec-18 Mar-19 Jun-19 Sep-19 TII (`/Share) 263.72 304.41 354.07 383.17 362.54 Growth % 15% 15% 16% 8% (5%)

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Share Price Movement

267 266 230 264 304 354 383 363 18-19 Q3 17-18 Q3 17-18 Q4 18-19 Q4 19-20 Q2 18-19 Q1 18-19 Q2 19-20 Q1 +36%

* Share price - `457 as on 22nd Nov’19

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Metal Formed Products

Drive Chains Kit Cam Chains After Market Brands Door Frames Divisional Channels Side Impact Beams Cowl Cross Beam Railways Power transmission and Conveying Chains Engineering Class Chains Fine Blanked Products

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Track and Trail – Retail Experience

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Shanthi Gears - Products

Spur/ Helical Gear Pinion Shaft Internal Gear Worm and Wheel Straight Bevel Spiral Bevel Worm Gearboxes- Adaptable Worm Gearboxes- Standard Worm Gearboxes- Special Helical Gearboxes Bevel Helical Gearboxes

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Th Thank You

Investor Presentation – Q2 FY 20

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