SIMPLEX INFRASTRUCTURE LIMITED
Investor / Analysts Meet - Feb, 2018
Simple Solutions for Complex Structures
1 SIMPLEX INFRASTRUCTURES LTD. Disclaimer
Certain statements in this presentation concerning our future growth prospects are forward- looking statements, which are subject to a number of risks, uncertainties and assumptions that could cause actual results to differ materially from those contemplated in such forward- looking statements. Important factors that could cause actual results to differ materially from our expectations include, amongst others general economic and business conditions in India, our ability to successfully implement our strategy, our growth and expansion plans and technological changes, changes in the value of the Rupee and other currency changes, changes in the Indian and international interest rates, change in laws and regulations that apply to the Indian and global infrastructure sector, increasing competition in and the conditions of the Indian infrastructure sector, changes in political conditions and regulatory framework in India. Neither our company, nor our directors nor any of their respective affiliates have any obligation to update or otherwise revise any statements reflecting circumstances arising after this date or to reflect the occurrence of underlying events even if the underlying assumptions do not come to fruition.
2 SIMPLEX INFRASTRUCTURES LTD. Contents
1. Simplex Infrastructure – Company Snapshot
2. Business Verticals
3. Key Investment Highlights
4. Company Strategy
5. Annexure
3 SIMPLEX INFRASTRUCTURES LTD. Company Snapshot
Overview Stock price performance – Last 12 months ● Established in 1924 and executed over 2,900 projects ● Uninterrupted profit track record since inception ● Mundhras took over in 1947 and witnessed growth at 17% CAGR over 70 years ● Diversified order book with presence across various construction verticals — Ground Engineering, Industrial, Building & Housing, Power, Marine, Roads, Railways, Bridges, Elevated Road & Rail Corridors and Urban Infra – Airports; Metro Rails; Sewerage and Utilities ● Pan-India and overseas with presence across 200 active project sites ● Order Book of INR 176.53 bn as on Dec 31, 2017 with Order Book / Sales ratio of 3.3x Source: NSE ● Order Inflow of INR 50.71 bn in 9MFY18 in addition to L1 status in orders of INR 13.30 bn Shareholding – As on Dec 31, 2017 ● Experienced Management and skilled workforce which includes 7,336 employees and also owned Construction Equipment worth INR 29.96 bn as of Dec 31, 2017 ● Key Projects executed: o Bhubaneswar Chandikhol Raod Project – Odisha o MMRDA Eastern Freeway Bridge – Maharashtra o ICTT Cochin DP World – Kerala o Hotel Hilton – Doha o Maithon Power project (2 X 525 MW) – Jharkhand ● Major Investors having stake in the Company: o HDFC (through various Mutual Funds) o Reliance Capital (through various Mutual Funds) Source: BSE o State Bank of India 4 SIMPLEX INFRASTRUCTURES LTD. Milestones
1993 - Went Public 1996 - Follow on public issue of Equity shares & Rights Issue of POCD 1992 - Built international class hotel at Tashkent, Uzbekistan 2004 – Began Overseas Expansion.
1990 - Piling jobs in UAE – Abu 2005 - Private Placement of 15% Dhabi equity shares for INR 93 Cr at INR 1960 - Foray into construction 726 per share of INR 10 each. of Thermal Power Plants ranging 10 to 4000 MW 2007 – QIP INR 400 Cr, 13% dilution at 625 per share of INR 2 1958 - Designed and constructed the first RCC framed structure in 2010 – Foray into Power T&D Asia, the 17-storied National and Road BOT Tower in Kolkata
1947 – Mundhras Take over 2011 – Entry in Ethiopia, Bangladesh & Saudi Arabia 1940 - Built King George Docks in 2012 – India's tallest Mumbai Pilgrimage Construction completed 1935 – Foray into construction of 2014 – Completed BOOM Industrial Structures Project 1924 - Pioneered cast- 2015 – Built airport on in- situ driven turnkey basis piles in Asia. 1924 2017 5 SIMPLEX INFRASTRUCTURES LTD. Contents
1. Simplex Infrastructure – Company Snapshot
2. Business Verticals
3. Key Investment Highlights
4. Company Strategy
5. Annexure
6 SIMPLEX INFRASTRUCTURES LTD. Business Verticals
Building & Housing Ground Engg Power
Bridges Urban Infra
Marine Roads
Industrial
Contribution to Order Book (as on Dec 31, 2017) SIMPLEX 7 INFRASTRUCTURES LTD. Building & Housing
Order Book (As on Dec 31, 2017) Details of Major Projects Executed
Project Cost Project Name Location (INR bn)
World One - Tallest Residential Building Maharashtra 4.77 INR 47.7 bn
Palladium Building Karnataka 4.57
Regal Garden Haryana 3.07
DGP MAP - Siliguri West Bengal 2.94
Key Clientele Details of Major Under Execution
Project Cost Project Name Location Client Name (INR bn)
Construction of buildings for IIT Odisha 5.24 NBCC Lodha Bhubaneswar (NBCC)
DLF Godrej Construction of HIG in Dwarka (DDA) New Delhi 3.78
Construction of Residential project " Tata Housing Hiranandani West Bengal 2.26 Grand One“ (Bengal Shriram Hi-tech City)
ITC Prestige The Park – project in Mumbai Maharashtra 2.19
8 SIMPLEX INFRASTRUCTURES LTD. Power
Order Book (As on Dec 31, 2017) Details of Major Projects Executed
Project Cost Project Name Location (INR bn)
Maithon Power Plant Jharkhand 5.93 INR 42.4 bn
Coastal Project Gujarat 4.37
Jindal Power Plant Chhattisgarh 3.07
Vindhyachal - NTPC Uttar Pradesh 2.38
Key Clientele Details of Major Under Execution
Project Cost Project Name Location Client Name (INR bn)
Contraction of RCC Chimney, NDCT for Tamil Nadu 12.23 BHEL PGCIL 2x660 MW Super Thermal Power station Raw water Reservoir for North NTPC NHPC Jharkhand 6.19 Karanpura STPP ( 3x660 MW) BOW of main plant & off-site civil works Uttar Bajaj Infra Vedanta 2.73 for Meja thermal power plant (2x663 MW) Pradesh Construction of 400 KV , 220 KN and 132 Madhya Jindal Gujarat UMPP 1.85 KV substantion and transmission lines Pradesh
9 SIMPLEX INFRASTRUCTURES LTD. Urban Infrastructure
Order Book (As on Dec 31, 2017) Details of Major Projects Executed
Project Cost Project Name Location (INR bn) INR 38.8 bn Mohali Sports Complex Punjab 7.19
Mumbai Metro Maharashtra 4.57
Bilaspur Sewerage Chhattisgarh 2.69
Andal Airport West Bengal 1.77
Key Clientele Details of Major Under Execution
Project Cost Project Name Location Client Name (INR bn)
Mumbai Metro - Metro work and Maharashtra 10.80 Mumbai Metro Delhi Metro 11 stations (MMRDA) Metrolink express for Gandhinagar Ahmedabad Metro Bangalore Metro Gujarat 6.62 and Ahmedabad – 6 stations Sewarage for Kolkata Sewarage for Indore Bangalore Metro - Construction of Karnataka 5.79 Corporation Corporation Via duct and 5 Metro Station Urban Sewerage for sewerage at Udaipur Airport Jaipur Airport West Bengal 2.20 Halisahar
10 SIMPLEX INFRASTRUCTURES LTD. Roads
Order Book (As on Dec 31, 2017) Details of Major Projects Executed
Project Cost INR 17.7 bn Project Name Location (INR bn)
Bhubaneswar – Chanikhol Odisha 9.16
Eastern Freeway Maharashtra 8.12
PVNR Expressway Telangana 4.25
Mayor Mohd Haif Bridge Bangladesh BDT 12 bn
Key Clientele Details of Major Under Execution
Project Cost Project Name Location Client Name (INR bn)
Construction of 4/6 laning of 20.683 Km Assam 3.87 NHAI NHIDCL of Daboka -Dimapur bypass (NHIDCL) Fore laning of NH-37 from Rangagara to MSRDC HMDA Assam 1.96 Kaliabor Tinali (NHAI) Widening & Strengthening of existing NH from 2 to 4 lane from WB border to Assam Assam 1.29 (NHAI) Upgradation and rehabilitation of Bodla - Chattisgarh 1.15 Taregaojn -Daldali Road (PWD – CG)
11 SIMPLEX INFRASTRUCTURES LTD. Contents
1. Simplex Infrastructure – Company Snapshot
2. Business Verticals
3. Key Investment Highlights
4. Company Strategy
5. Annexure
12 SIMPLEX INFRASTRUCTURES LTD. Key Investment Highlights
1 Strong Execution • More than 9 decades of experience in completing over 2,900 projects across various industry segments and geographies Track Record • 200+ in-house project execution teams with INR 29.96 bn owned construction equipment
2 • Robust order book diversified across 9 industry segments, 9 countries and 22 states in India with strong counterparties Diversified Order • Order book of INR ~177 bn (as on Dec 31, 2017) and order book to sales ratio of 3.3x providing strong Book cash flow visibility for next 3-4 years • Shorter project duration of 3 months to 40 months with avg 2.5 years along with blended EBITDA margin of ~11.8%
3 • Company has had stable financial performance in terms of margins and return metrics along with low Stable Financials leverage with Strong Credit • CARE Ratings assigned CARE A rating in view of long and satisfactory track record of the company, Rating proven project execution capabilities, strong order book position and diversified project mix as well as client portfolio
4
Professional and • Board comprising of 4 Executive and 4 Non-executive Independent directors • Strong Corporate Governance due to presence of independent directors in board & various Experienced Board committees
5 Favorable Industry • Various initiatives such as Bharat Mala, Sagar Mala, Pradhan Mantri Awas Yojna, Pradhan Mantri Sadak Yojna, Regional Connectivity Scheme, Freight Corridors, Industrial Corridors, Smart Cities, etc. Dynamics to provide additional impetus to Construction industry
13 SIMPLEX INFRASTRUCTURES LTD. 1 Strong Execution Track Record
Proven Execution Capabilities Details of Major Projects Executed
● Completed 2,900 project across business Project Cost Project Name Location segments and geographies. (INR bn) ● 200+ in-house project execution teams with INR Bhubaneswar Chandikhol Raod Project Odisha 9.20 29.96 bn owned construction equipment
● Robust planning and management systems for MMRDA - Eastern Freeway Bridge Maharashtra 8.10 projects, plants and human resources. ● In house developed ERP for realtime project ICTT - Cochin DP World Kerala 5.85 management and monitoring Hotel Hilton Doha QAR 93 mn ● Also, has a full-fledged designing & drawing department and a separate R&D department as Maithon Power project - 2 X 525 MW (Tata Jharkhand 5.20 well Group)
Key Clientele Details of Major Under Execution
Project Cost Client Name Project Name Location (INR bn)
Contraction of RCC Chimney, NDCT for NBCC BHEL PGCIL Tamil Nadu 12.23 2x660 MW Super Thermal Power station Mumbai Metro - Metro work and 11 DLF NTPC NHPC Maharashtra 10.80 stations (MMRDA) Metrolink express for Gandhinagar and Tata Housing Mumbai Metro Delhi Metro Gujarat 6.62 Ahmedabad – 6 stations Construction of buildings for IIT NHAI NHIDCL Jaipur Airport Odisha 5.24 Bhubaneswar (NBCC)
14 SIMPLEX INFRASTRUCTURES LTD. 2 Diversified Order Book
Total Order Book Regionally Diversified Across 22 States
JK – 0.5% States contributing to more than 10% of Order Book
DL – 2.3% HR – 3.9%
SK – 0.5% AS – 10.6%
RJ – 4.1% UP – 6.0% BH – 0.4% Diversified across 9 Industry Segments GJ – JH – MN – 4.7% MP – 1.6% 3.7% 0.1%
CG – 1.1% WB – OD – 4.8% 15.9%
MH – 6.6% TL – 1.9%
GA – 0.1% KA – AP – 14.1% 0.3% Contribution to Order Book: ● Domestic – 95.1%
TN – ● International – 4.9% 11.9%
KL – 5.1%
15 SIMPLEX INFRASTRUCTURES LTD. 3 Stable Financials
Total Sales (INR mn) Profitability Margins (%)
Return on Equity Leverage
Note: 1. All figures are derived from standalone financials 2. Figures for FY15 are based on IGAAP standard; Figure for FY16, FY17 and 9mFY18 are based on IndAS 3. EBITDA Margin: EBITDA / Operating Revenue; PAT Margin = PAT / Total Revenue; 16 SIMPLEX 4. RoE = PAT / Net Worth (for that financial year) INFRASTRUCTURES LTD. 4 Professional and Experienced Board
Mr Rajiv Mundhra Mr S. Dutta Mr A. N. Basu Mr D. N. Basu Executive Chairman Whole-time Director Whole-time Director Whole-time Director
With the Company since A finance professional with over Associated with the Company Associated with the Company 1997and has several years of 50 years of experience with since 2002 and has experience since 1967 and has expertise in experience in finance, project proficiency in corp. finance & of nearly four decades in wide handling infrastructure and planning, monitoring, control & accounts, taxation, management spectrum of civil infrastructure industrial projects - civil, execution, business admin. & consultancy, M&A and financial activities structural, architectural management management construction on EPC with design
Mr N. N. Bhattacharyya Mr S. K. Damani Mr Asutosh Sen Ms Leena Ghosh Independent Director Independent Director Independent Director Independent Director
Has several years of experience Is a past president of the Indian Has over 40 years of work Has diverse work experience in in corporate restructuring, Plastic andhas several years of experience in the field of Accounting and Audit area finance, accounts and auditing. experience both in India and accounts, finance and internal He was the ED and acting MD China audit and is currently the of Industrial Reconstruction Chairman of the Audit Bank Committee
17 SIMPLEX INFRASTRUCTURES LTD. 4 Effective Leadership Team
Effective Management and Skilled Workforce Long Association of Leadership Team leading to Optimal Project Execution ● Experienced Management and skilled workforce which includes 7,336 employees Experience Name Designation ● Long Employee association leading to in continuity with Simplex in management– Average 15 years for top & middle Sr. Executive levels N K Kakani 12 Director ● In-house 200+ project execution teams Sr. Vice President - Banwarilal Bajoria 25 ● Continuous Training of labour, supervisors, Company Secretary artisans, construction engineers and others Sr. Technical Shyamal Kumar Maiti 34 Skilled Workforce of 7,336 Employess Director
Samiran Bhattacharyya Sr. Vice President 30
Subir Basu Technical Director 35
Sanjay Rai Vice President 26
18 SIMPLEX INFRASTRUCTURES LTD. 5 Favorable Industry Dynamics (1/2)
Roads
● Expected investment of INR 4.3 tn in national highways from FY18-22 ● Lion’s share of these investments expected in EPC (47%) ● Expected investment of INR 4.4 tn in state highways from FY17-21 ● Momentum on account of completion of remaining length of NHDP programme, new projects such as Bharat Mala, upgradation of SH to NH, four-laning of NH, and Pradhan Mantri Gram Sadak Yojna
Urban Infrastructure
● Construction spend in urban infrastructure to be ~INR 3.7 tn between FY18-22 ● In the Union Budget FY18, Centre allocated INR 162.4 bn for Swachh Bharat ● Allocation of INR 500 bn for five years (FY16-20) under AMRUT, as against INR 360 bn spent under JNNURM over the past five years ● Construction spends on metros in India will increase 1.9 times to ~INR 1.1 tn over the next five years ● Also, government has decided to develop 100 cities as smart cities
Source: CRISIL Disclaimer: Unless otherwise indicated, the information in this section is derived from a report titled “Infrastructure Industry Report” (“CRISIL Report”) prepared by CRISIL Limited, various official and unofficial publicly available materials. It has not been prepared or independently verified by the Company, the Lead Manager or their respective legal or financial advisors, and no representation is made as to the accuracy of this information, which may be inconsistent with information available or compiled from other sources. Industry sources and publications generally state that the information contained therein has been obtained 19 SIMPLEX from sources generally believed to be reliable, but their accuracy, completeness, underlying assumptions and reliability cannot be assured. Accordingly, INFRASTRUCTURES LTD. investment decisions should not be based on such information. 5 Favorable Industry Dynamics (2/2)
Ports Airport
● Port traffic expected to grow at a 3-5 % over fiscal 2017 ● INR 260-280 billion of investment in airports to 2022 between 2018 and 2022 ● INR 300-350 bn to be invested in Ports till FY22 ● Share of greenfield projects in total airport investment is expected to rise to 70-75% by fiscal ● Maharashtra, Gujarat, Odisha, Tamil Nadu, and Kerala 2022, from 45-50% in fiscal 2017 will together account for 80-85% of total investment ● Airport investments will be driven by major ● Total investment planned by the government in the greenfield airports such as Navi Mumbai, Goa, and Sagarmala till FY 2035 is close to INR 8 tn Bhogapuram, especially from fiscal 2019 onward
Real Estate
● Housing for All by 2022 to provide significant push to the housing sector ● Some of the schemes implemented by the government are: o PMAY - minimize the housing shortage faced by the urban poor o Affordable Housing - Extension of CLSS to ● With majority of projects under implementation or under middle income group planning / concept stage, huge potential investment in o Implementation of RERA & GST future
Source: CRISIL Disclaimer: Unless otherwise indicated, the information in this section is derived from a report titled “Infrastructure Industry Report” (“CRISIL Report”) prepared by CRISIL Limited, various official and unofficial publicly available materials. It has not been prepared or independently verified by the Company, the Lead Manager or their respective legal or financial advisors, and no representation is made as to the accuracy of this information, which may be inconsistent with information available or compiled from other sources. Industry sources and publications generally state that the information contained therein has been obtained 20 SIMPLEX from sources generally believed to be reliable, but their accuracy, completeness, underlying assumptions and reliability cannot be assured. Accordingly, INFRASTRUCTURES LTD. investment decisions should not be based on such information. Contents
1. Simplex Infrastructure – Company Snapshot
2. Business Verticals
3. Key Investment Highlights
4. Company Strategy
5. Annexure
21 SIMPLEX INFRASTRUCTURES LTD. Company Strategy
• Focus on core competency of the Company i.e. Construction Business (EPC and Item rate contracts) with asset light strategy Focused • Diversified and robust Business Model Business Model • Not dependent on specific segment / client • Selective approach for BOOT / HAM Projects • Monetize BOT Road assets on a case to case basis
• With impetus of Government on development of Infrastructure and Housing for Impetus on All in India, focus on bidding for construction projects in India Domestic Business • Focus on Urban Infrastructure viz Metro , Sewerage , Airport works • Explore further opportunities in Marine Sector and Building Sector
Strengthening • Continuing efforts in collection from debtors Financial • Sustained efforts towards reducing both Net Working Capital and Borrowings Position • Reduction of finance costs
22 SIMPLEX INFRASTRUCTURES LTD. Contents
1. Simplex Infrastructure – Company Snapshot
2. Business Verticals
3. Key Investment Highlights
4. Company Strategy
5. Annexure
23 SIMPLEX INFRASTRUCTURES LTD. Profit & Loss Statement
12 months 9 Months Particular IGAAP IndAS IndAS FY2015 FY2016 FY2017 FY2018 Revenue from Operations 55,816 59,046 56,075 41,180 Other Income 530 981 891 758 Total Revenue /Income 56,346 60,028 56,966 41,938 Construction Materials Consumed 18,133 19,604 16,367 13,099 Purchases of Stock-in-Trade 253 31 23 60 Changes in Inventories of WIP and SIT 360 80 33 (170) Employee Benefits Expense 4,811 5,111 5,143 4,119 Finance Costs 3,843 4,286 4,454 3,455 Depreciation and Amortisation Expense 1,368 2,036 1,978 1,403 Other Expenses 26,638 27,398 27,623 18,864 Total Expenses 55,407 58,545 55,620 40,829 Profit before Tax 939 1,482 1,346 854 Current Tax 347 626 420 224 Current Tax provision for earlier years (32) (111) (328) written back (net) Deferred Tax - charge / (credit) - (94) 52 10 Total Tax Expense 315 421 143 233 Profit for the year 624 1,061 1,203 876
24 SIMPLEX INFRASTRUCTURES LTD. All Figures in INR mn Balance Sheet (IndAS) – FY16, FY17
Particular FY2016 FY2017 Particular FY2016 FY2017
ASSETS EQUITY & LIABILITIES
Property, plant and equipment 1,27,973 1,17,102 Equity share capital 993 993
Capital work-in-progress 1,232 1,148 Other Equity 1,41,510 1,52,037 Intangible assets (except Goodwill) 141 197 Total equity 1,42,503 1,53,030 Investments 12,353 13,156 Other Financial Assets 828 408 Long Term Borrowings 61,016 58,043 Other Non-current Assets 1,522 1,719 Provisions 1,042 1,214 Total Non-Current Assets 1,44,049 1,33,730 Deferred tax liabilities (net) 7,981 10,641 Inventories 72,805 74,644 Total non-current liabilities 70,039 69,898 Investments 456 229 Short Term Borrowings 2,75,428 2,70,113
Trade Receivables 1,28,904 1,52,939 Trade Payables 1,52,679 1,71,185
Cash & Cash balance 2,119 2,024 Other Financial Liabilities 18,473 36,642 Bank balance 212 1,269 Other Current Liabilities 1,27,307 1,39,239
Loans 8,107 14,273 Short Term Provisions 425 506 Other Financial Assets 31,213 33,364 Current tax liabilities (net) 4,709 1,149 Current Tax Assets 519 663 Total current liabilities 5,79,021 6,18,834 Other Current Assets 4,03,179 4,28,627 Total liabilities 6,49,060 6,88,732 Total Current Assets 6,47,514 7,08,032
Total Assets 7,91,563 8,41,762 Total Equity and Liabilities 7,91,563 8,41,762
25 SIMPLEX INFRASTRUCTURES LTD. All Figures in INR mn Balance Sheet (IGAAP) – FY15, FY16
Particular FY2015 FY2016 Particular FY2015 FY2016
ASSETS EQUITY & LIABILITIES
Tangible Assets 1,11,420 1,15,537 Equity share capital 993 993
Intangible Assets 179 141 Other Equity 1,43,226 1,52,888 Capital Work-in-progress 485 1,052 Total equity 1,44,219 1,53,881 Non-current Investments 11,688 11,251 Long-term Borrowings 52,737 62,083 Long-term Loans and Advances 4,383 2,663 Deferred Tax Liabilities (Net) 19,192 16,464 Other Non-current Assets 219 93 Other Long-term Liabilities 820 590 Total Non-Current Assets 1,28,374 1,30,737 Long-term Provisions 935 1,042 Current Investments 3,073 3,996 Total non-current liabilities 73,684 80,179 Inventories 95,243 84,812 Short Term Borrowings 2,66,778 2,60,826 Trade Receivables 2,16,544 1,98,221 Trade Payables 1,76,877 1,77,415
Cash and Bank Balances 2,270 1,419 Other Current Liabilities 1,21,594 1,27,342
Short-term Loans and Advances 82,195 86,834 Short Term Provisions 780 5,154
Other Current Assets 2,56,233 2,98,778 Total current liabilities 5,66,029 5,70,737
Total Current Assets 6,55,558 6,74,060 Total liabilities 6,39,713 6,50,916
Total Assets 7,83,932 8,04,797 Total Equity and Liabilities 7,83,932 8,04,797
26 SIMPLEX INFRASTRUCTURES LTD. All Figures in INR mn Thank You
Website: www.simplexinfra.com Contact: Mr. Naresh Rathi- Email: [email protected], Mobile: +91 9836588088 Scrip Codes: NSE – SIMPLEXINF, BSE – 523838, Reuters – SMCP.BO, Bloomberg - SINFIN
27 SIMPLEX INFRASTRUCTURES LTD.