walchandnagar corporate presentation

Corporate Presentation

January 2010

Walchandnagar Industries Ltd. (WIL)

Disclaimer

This presentation has been prepared by Walchandnagar Limited (the “Company”) solely for providing information about the Company. This presentation is confidential and may not be copied or disseminated, in whole or part, in any manner.

This presentation has not been approved and will not be reviewed or approved by any statutory or regulatory authority in India or by any Stock Exchange in India and may not comply with all the disclosure requirements prescribed thereof. This presentation may not be all inclusive and may not contain all of the information that you may consider material. Any liability in respect of the contents of, or any omission from, this presentation is expressly excluded

This presentation has been prepared by the Company based on information and data which the Company considers reliable. However, no representation or warranty, express or implied is made as to, and no reliance should be placed on, the fairness, accuracy, completeness or correctness of such information or opinions contained herein. Neither the company nor any of its respective affiliates, advisers or representatives, shall have any liability whatsoever (in negligence or otherwise) for any loss howsoever arising from any use of this presentation or its contents or otherwise arising in connection with this presentation.

The information contained in this presentation is only current as of its date. Certain statements made in this presentation may not be based on historical information or facts and may be “forward-looking statements”, including those relating to the Company’s general business plans and strategy, its future financial condition and growth prospects, and future developments in its industry and its competitive and regulatory environment. Actual results may differ from these forward-looking statements due to a number of factors, including future changes or developments in the Company’s business, its competitive environment, information technology and political, economic, legal and social conditions in India and worldwide. The Company undertakes no obligation to update forward looking statements to reflect events or circumstances after the date thereof.

This presentation and any information presented herein are not intended to be and shall not be construed as an offer to sell or solicitation of or an offer to buy the Company’s equity shares or any of its other securities and shall not constitute an offer, solicitation or sale in any jurisdiction in which such offer, solicitation or sale is unlawful.

The Company may alter, modify or otherwise change in any manner the content of this presentation, without obligation to notify any person of such revision or changes.

Contents

Key Highlights

WILWIL-- An OverviewAn Overview

Key Financial Information

Annexure - Select Turnkey EPC Projects Completed- Select Components Manufactured by SPD

Pedigree of Walchand Group

4

One of the renowned industrialist of pre-independence India, who promoted and established

various business ventures in various sectors

Ranging from automobile manufacturing, civil engineering, construction of dams, bridges,

barrages and hume pipes, aircraft manufacturing, ship building, to maritime shipping

SETH WALCHAND HIRACHAND(1882 – 1953)

Founder

“Walchand Hirachand was a dreamer, a visionary, a great builder, a great leader of industry. Above all, he was a patriot, and in his own way, he was an inspiring leader of our struggle for freedom. I salute his memory.”

“When we celebrate the life of an entrepreneur like Walchand Hirachand, we must draw the correct lessons from his life. The lesson I draw is that the ultimate spur to growth and development is individual creativity and enterprise”

Dr.Manmohan Singh, Prime Minister Of India

Founder…Hindustan Aircraft Company…Pioneer in Aircraft Manufacturing

Founder…Hindustan Shipyard Vizag…Pioneer in Shipbuilding Industry

Founder… Scindia Steam Navigation Company…Pioneer in Maritime Shipping

Established many new venturesIn various core sectors like

Automobile Civil EngineeringConstruction of Dams, Bridges,

Barrages & Hume Pipes`Founder…Walchandnagar Industries

Ltd (WIL)…One of India’s leading heavy engineering and project

execution company

WIL…Building Engineering Excellence For Over 100 Years

5

WIL is one of India’s leading heavy engineering and project

execution company with a strong history

Diversification across products, sectors and geographies through its

business offerings

Manufacturing and EPC- Focus on Energy, Mining & Minerals,

Cement, Sugar etc.

Special Products- Focus on Defense, Nuclear Power and

Aerospace

Engineering- Walchand Technology Group (WTG)

Other Businesses- Foundry, Precision Instrumentation,

Gears (for variety of applications)

Continued strong engineering & project management capabilities,

backed by its technological strength and an able work force

Evolution of the Years…

Shareholding Pattern (as on Dec ’09)

Poised for strong growth in the years to come

Professionally managed with growth oriented corporate structure

Evolved into a multi divisional, multi location company

Became among the first few Indian companies to manufacture critical components for a nuclear power project managed by BARC and to be associated with ISRO for India’s space research programme

Commenced the heavy engineering & machinery manufacturing business in early 1960s

Initial business of an integrated sugar manufacturing at Walchandnagar (near Pune)

Changed its name to Walchandnagar Industries Ltd. in 1944

Incorporated in 1908 under the name Marsland and Price Company Ltd.

Founded by the visionary industrialist, Seth Walchand Hirachand

5.55LIC of India

Name % Holding

Oriental Insurance Company Ltd. 1.54

Key Institutional Shareholders

Other Public 37.5%

Promoter & Promoter Group

55%

Institutional 7.5%

A Snapshot

Organization Structure

6

Chakor L. DoshiChairman

Manufacturing & EPC Special Products Division (SPD) Other Businesses

EnergyG.S.Prakash - Boiler

Elias K Ponodath - Energy

R. Kumar - Utility Boiler

M.J. Devis - Turbines

Mr. J. L. DeshmukhMD & CEO

Key Corporate Functions

WIL has created sufficient management bandwidth to cater to all its business initiatives and growth plans

Overall Management

Business Offering

Key V

ert

icals

& P

ers

on

nel

Mr. Chirag DoshiMD

Minerals & MiningArvind ShoreS.K. Gulati

CementP.C. Bhagwat

Others:Dr. Janakiram -Oil & GasNew Business Ventures – L. RanganathanG.S.Prakash – Sugar & Centrifugal

DefenceP D Ganorkar

NuclearS S Mahabaleshwarkar

AerospaceS V Shahade

FoundryKushal Saha

PrecisionInstruments

A.B Kamlapur

Finance & AuditV R JoshiM H Purwat

Strategic Planning (SP) & Market Research (MR

SS Gangavati

MaterialsP K Mahadevan

HR &Establishments

J N Nandurkar Umesh Joshi

Defense , Hydrocarbons & Gear

Vice Adm. (Retd) S.K Krishnan

Aerospace & Nuclearpower

V.M Parthasarthy

Engineering Excellence

WTGVice Adm (Retd)N M Nadaph

GearsS.K.Dasgupta

ManufacturingV.G. Ratnaparkhi

ITS.R. Deshmukh

Manufacturing & EPC Business

7

Design, engineering, procurement and construction of mineral processing projects and bulk material handling

Projects include calcination plants, plant and machinery for extraction of metals,mine backfill projectsetc.

MoU with Continental Conveyor Ltd. in mining & materials handling systems

Minerals & Mining

Manufacturing of industrial boilers and steam generators,

Technology from Foster Wheeler USA

Power plant projects on a turnkey basis

Executed captive as well as independent power projects

Currently has capacity to execute power projects upto 100 MW

Energy

Design, manufacturing and supply of complete cement projects up to a capacity of 1 MTPA on turnkey basis

Executed over 70 cement plant projects at various domestic and international locations

Tie up with ATEC Austria to enable in bidding for larger size projects and in new geographies

Range of products include ball mills, slide shoe mills, kilns etc

Cement Others

Providing products and services for onshore and offshore oil and gas projects

Involved in structural fabrication, design, manufacture and supply of equipment

Conceptualizes, designs, implements and commissions turnkey sugar projects, batch and continuous centrifugal machines

Refer Annexure

Special Products Business

8

Associated with the Ministry of Defence, for more than 35 years

Recently supplied critical core equipment for “INS Arihant”

Major Equipments supplied for defense applications include combustion chambers, missile casings, air booster casing static and mobile launchers etc

Defence

Accredited with pre-qualifications from the BARC and NPCIL for supplying nuclear components

Undertakes site installation and integration activities of nuclear power reactors

Supplying major core equipment for various nuclear power plants for both 235 MWE and 500 MWE projects

Nuclear

Associated with ISRO since its inception, for manufacturing critical components for space research projects

Company has manufactured and supplied booster motor casings and nozzles for the satellite launch vehicles, including the ASLV, PSLV and now GSLV

Components produced have been used in the launching of satellites such as the ‘INSAT’series

Aerospace

Refer Annexure

Handles exotic materials such as maraging steel, cladded steel, inconel etc.

Engineering and Other Businesses

9

The group focuses on the research & development of engineering applications for the potential business opportunities being pursued by the Company

Employs 70 professionals…qualified engineers in several disciplines of engineering

Provides comprehensive Design and Engineering services several fields such as Nuclear Power, Aerospace, Thermal, Non-conventional Energy etc.

Walchand Technology Group (WTG)

Operates a grey and ductile iron foundry with capability to handle highly intricate castings for specialized applications

Key business focus on wind mill, industrial machinery, automotive and oil & gas sectors

Range of products include casting in grey cast & ductile iron, castings for manufacture of automotive dies etc.

Ability to handle single piece weight of 13 tonnes of grey cast iron and 8 tonnes of ductile iron

Foundry

Manufacturer of precision instruments such as pressure gauges, temperature gauges, sector mechanisms etc.

Key industry focus on automotive, wide range of process industry, power projects etc.

Used in variety of industrial applications such as CNG kits, refineries, air-conditioning, refrigeration equipment etc

Precision Instruments

Office and Plant Locations

10

Regional Offices- Delhi, Kolkata, Hyderabad and Chennai

Precision Instruments Division- Dharwad

Foundry- Satara

Marketing & Projects Office- Pune

Walchand Technology Group- Pune

Heavy Engineering Manufacturing Plant- Walchandnagar

Registered Office- Mumbai

Oil and Gas Division- Navi Mumbai

Details of offices and plant locations

Karnataka

Tamil Nadu

Andhra Pradesh

West Bengal

Maharashtra

Delhi

WIL’s manufacturing facilities are based out of Mahrashtra and Karnataka... Presence in key cities through its

regional and marketing offices

Select Facilities at Walchandnagar Plant

Area under crane: 56,000 sq mtr

Fully equipped with modern manufacturing facilities- CNC horizontal and vertical boring machines with multi axis control, lathes,

milling machines, gear cutting & grinding machines etc

Sophisticated Automatic Welding Systems capable of precision welding of exotic materials

Dust Free Halls for critical assembly and precision welding related to Aerospace, Defence and Nuclear equipment

Large sized Furnaces with Data Acquisition Systems

Optical tooling & measuring instruments for precision measurements

Material handling capacity upto 150 tonnes

Large capacity turning facility Heavy machine shop area

Heavy duty vertical boring machineHeavy equipment fabrication area

Birds eye view of Walchandnagar Plant

Key Highlights

11

Select facilities

Select Business Achievements of WIL

12

Independent power project based on municipal solid waste in India

Amongst the first few exporters of a complete cement plant

Indigenously built sugar project in India way back in 1960s

Amongst the first few exporters of sugar machinery and complete turnkey project from India

Manufacturer of …

Critical components for nuclear reactor

Main gear boxes for Indian built navy frigates

Components for satellite launch vehicle for ISRO

Critical components for 235MWE and 500 MWE nuclear power project

One of the largest optical telescope in India

Major critical components for India’s first mission to moon “CHANDRAYAAN”

Critical core components for “INS ARIHANT” India’s first nuclear submarine

Technology Absorption Award From Govt. of India

Recognition and Accreditations

13

Indian Nuclear Society “ Industrial Excellence Award” for the year 2006

Best Performance In Exports on Number of Occasions

Excellent Employee Relation Award from Govt. of Maharashtra

Corporate Social Responsibility (CSR) Practices by WIL

The Walchandnagar Township

Named after the founder, Walchandnagar is a well designed township having all

civic amenities

Spread over 157 acres of land which includes 50 acres of factory area

A cosmopolitan set-up with a population of approx. 15,000

Well established infrastructure

Runs primary schools in each Agriculture Estate and a high school

established in Walchandnagar

A 70 bedded modern hospital

Sports facilities

Senior citizen park, children play park

Banks/ATM centers etc.

CSR activities practiced by WIL way back since 1934…

14

WIL has initiated, implemented and actively practices many welfare activities for the society

Contents

Key HighlightsKey Highlights

WIL- An Overview



WIL- Key Highlights

16

Successful track record in Indian nuclear, defense and aerospace…area witnessing

huge traction

Benefits of experienced management team

Strong order book…increased visibility and

momentum for the future

An end to end turnkey solutions provider…ability to provide

manufacturing, engineering and construction services

Execution strength & capabilities backed by marquee partnerships

3

2

1

5

4

1. An End to End Turnkey Solutions Provider

17

WIL’s presence in diversified yet synergistic businesses makes it a successful integrated turn key solutions provider

Offers state of the art manufacturing facilities

Ability to manufactures diverse range of products

Industrial boilers, material handling equipments, critical and core equipment for aerospace, defense and nuclear power business, core equipment for cement plant,gear boxes etc.

Total manpower of 1,866 managerial and skilled workers

Offers complete in-house basic, manufacturing & detail engineering services

Ability to provide process system design, plant layout design, analytical studies and system integration

Over 370 qualified and experienced engineers

Offer turnkey projects for independent power projects & cement plants sugar plants boilers and steam generating plants

EPC projects for mining, bulk material handling, mineral processing, oil & gas sector

Significant number of turnkey/semi turnkey/EPC projects completed

From Manufacturing…From Manufacturing…

To Design & Engineering…To Design & Engineering…

…To Execution…To Execution

2. Successful Track Record in Indian Nuclear, Defense & Aerospace

18

.....

Associated with the Ministry of Defense (GoI) for more than 35 years

Major equipments include combustion chambers, missile casings, air booster casing static and mobile

launchers, Karthik bridges etc.

Supplied critical equipment for “INS Arihant” India’s 1st ever indigenously built nuclear submarine

Associated with the Department of Atomic Energy (GoI) for over four decades now

Pioneer in the private sector to manufacture dump tanks, fuel magazines and moderator heat exchangers

Supplies core equipment such as calendria, end shield, heat exchangers etc. for various nuclear power

plants for 235 MWE and 500 MWE projects

Recently awarded a EPC piping contract for a 700 MW power project by NPCIL

Associated with ISRO for over three decades now

Supplied certain critical components for ISRO’s Polar Sattellite Launch Vehicle and the ‘2008 Chandrayaan

Mission’, India’s maiden moon mission

Defense

Nuclear

Aerospace

Indian nuclear, defense & aerospace is witnessing huge traction…WIL plans to strengthen its position in

the above high potential areas

3. Strong Order Book…Visibility and Momentum for the Future

19

Mfg. & EPC63%

SPD27%

Other Businesses

10%

Sept 09- Order Book Break Up (INR 14,632 mn)Growth in Order Book (INR mn) over the years…

WIL’s execution strength and capabilities have resulted in continued growth in order book

Consistency in providing quality output…validated by zero cancellations of orders in the last two years

Focus on strengthening its ability to bid for larger sized power and cement projects

Focus on garnering larger market share in defense, nuclear and aerospace segments…potential high growth areas

4,500

10,000 9,687

12,195

14,632

Sep-05 Sep-06 Sep-07 Sep-08 Sep-09

CAGR (05-09): ~34%

WIL’s strong order book with a average tenure of 18-20 months...an assuarnace for future revenue growth

4. Strong Execution Capabilities Backed by Marquee Partnerships

Continental Crushing and Conveying Inc

Technical assistance in mining and bulk crushing related activities

Construction Management Capabilities

Dedicated separate in-house construction management team… qualified

engineers in the field of mechanical, electrical, instrumentation

Completed large number of projects on turnkey/ semi turn key / EPC basis

Engineering Capabilities

Ability to provide designing, detail engineering to system integration

…variety of design softwares available

Over 370 experienced engineers and technical staff

Project Management Capabilities

Project manager for every project

Well versed in modern project management tools

Large support base of prequalified partners

Select Technology Partnerships...

20

WIL leverages its inhouse core skill sets and competencies, supported by marquee global partnerships, to address

a wider section of industry and end applications

Manufacturing Capabilities

Fully equipped modern manufacturing facilities at Walchandnagar…ability to

manufacture diverse range of products, handle variety of raw material and

capability in precision welding, fabrication and machining

Boilers, material handling equipments, gear boxes, core & critical

equipments for special products and cement businesses

Magotteaux International

Technical assistance mining, cement and other related engineering activities

A-Tec Production Services GmBH

Products and services relating to the cement industry

Foster Wheeler North America Corporation

Technology relating to manufacture of high pressure steam boilers

Holds M.S. in Operations research & Industrial Engineering from U.S.A

Renders valuable advise to the company in the matters of strategic planning, organisation building, new

business initiatives etc.

Holds the position of chairman since 1998 before that he has served as MD of the company for 10 years.

Holds board position in other Indian public limited companies and private limited companies

Holds a bachelor of Engineering (Mechanical)

Joined WIL in 2004 as executive director and currently serves as MD & CEO of the company.

Worked for more than 30 years at Cummins India Ltd, with long stint on various board positions including Managing

Director

The Corporate management is supported by a strong team involving professionals with long standing

experience in several fields

5. Key Management Team - Strengths and Accomplishments

21

Holds B.A (Economics) from University of Michigan, USA and M.B.A. from INSEAD Institute Paris

Managing Director of WIL since November 25,2007.

Extensively worked on various growth initiatives, business development and exploring new business ventures for WIL

Chakor L. Doshi

Chairman

Chirag C. Doshi

Managing Director

J. L. Deshmukh

Managing Director & CEO

V. R. Joshi

Chief Financial Officer

Qualifications include BCom and CA

Worked in several companies such as Bharat Forge Ltd., DGP Hinoday Industries Ltd.

Track record of raising significant funds through domestic & international sources, Mergers & Acquisitions,

Investments & Foreign Exchange risk management

Strategy Going forward…

22

Focus on attaining prominence in EPC

Deeper engagement in Nuclear Power Business

Building Engineering Excellence

Leverage core strength to address wider cross section of industry and end application

Continuous up gradation in skill sets in technology, project management and people capability

Move up the value chain in offering:

— High pressure boilers and large turnkey plants

— Large capacity cement plants

WIL is already a recognized supplier of core nuclear power equipment

Nuclear power segment has significant potential growth opportunities

— India is expected to increase nuclear energy collaboration with US and other countries

Leverage the present position to strengthen future growth

Establishment of WTG, a dedicated engineering centre with 70 qualified engineers in diverse applications

Focus on research in engineering field for existing and potential business areas being pursued by the company

Contents

Key Highlights

WIL- An Overview

Key Financial InformationKey Financial Information


Financial Performance Over The Years

157

273

634722

529

10.1%10.3%9.9%7.6%

6.0%


EBITDA % Growth

CAGR (FY05-09): ~35%

PAT (INR mn) & PAT Margins (%)

77133

356

234

398

4.4%5.7%5.6%3.7%

2.9%


PAT % Growth

CAGR (FY05-09): ~32%

EBITDA (INR mn) & EBITDA Margins (%)

2,615

3,601

6,3747,002

5,249


Total Income (INR mn)

CAGR (FY05-09): ~19%

Networth (INR mn) & D/E (x) (1)

24

Note: WIL follows September year end

1,292

2,291

921

2,100

803

0.4 0.3 0.2

0.4

0.5


Networth D/E (x)

(1) Networth excluding revaluation reserve at the end of each year; D/E ratio calculated from the networth excluding revaluation reserve

Financial Year 2009 in Retrospect

1,0091,188

1,6121,451

11.6%9.4%10.1%8.9%

5.3%4.7%4.0%3.3%

Q1 Dec 08 Q2 Mar 09 Q3 Jun 09 Q4 Sept 09

Total Income (INR mn) EBITDA (%) PAT (%)

Focus on improving quarterly performanceSept 09 – A mixed bag for WIL

Focus on building a diversified yet synergistic business profile by

leveraging core strength of WIL

Increase portfolio of offerings by entering into technical

collaborations which enable offering larger capacity projects

Constant up-gradation of essential skill sets such as technology,

manufacturing capability, Project Management capability

Action Steps to Mitigate Risk & Improve Performance

First half affected by global recessionary pressures…

Challenges faced by WIL owing to tough macro-economic

situation,

Slow inflow of new orders

Delays in technical clearances from the customers

Delays in commercial clearances from the customers

As a result, the company witnessed contraction in sales &

profitability compared to the previous year

25

…Yet a year of strong order book for WIL

Second half did set out signs of gradual recovery and positive

outlook

WIL managed to leverage upon the same and therefore secured

some marquee and significant orders

Won the 1st EPC contract in the prestigious

petrochemical sector with the oil PSU

Won the 1st high tech piping contract for the Nuclear

Power Sector on EPC basis

Overall order flow from Aerospace, Defense, and Nuclear Power

segment remained strong

In spite of the delays in the commencement of the project there

were no cancellations, leading to a healthier order book for FY10

5 Year Financial Summary

5.7%

398

8.6%

605

71

46

10.3%

722

7,002

Sept 08Particulars Sept 05 Sept 06 Sept 07 Sept 09

Total Income 2,615 3,601 6,374 5,249

EBITDA 157 273 634 529

% to sales 6.0% 7.6% 9.9% 10.1%

Interest 18 22 30 70

Depreciation 29 38 55 105

PBT 110 213 549 354

% to sales 4.2% 5.9% 8.6% 6.7%

PAT 77 133 356 234

% to sales 2.9% 3.7% 5.6% 4.4%

2,2912,1001,292921803Networth excl. revaluation reserve

105

3,196

883

4,219

Sept 08Particulars Sept 05 Sept 06 Sept 07 Sept 09

Liabilities

Networth 1,960 1,983 2,279 4,272

Total Debt 363 296 260 1,250

Assets

Net Fixed Assets* 1,495 1,580 1,738 3,431

Cash & Bank Balances 117 479 276 415

Key P&L Items (INR mn)

Key Balance Sheet Items (INR mn)

26* Including capital WIP

Contents

Key Highlights

WIL- An Overview


Annexure Annexure -- Select Turnkey EPC Projects CompletedSelect Turnkey EPC Projects Completed-- Select Components Manufactured by SPDSelect Components Manufactured by SPD

Select Turnkey EPC Projects completed by WIL (1/2)

28

Kager Sugar Ltd Tanzania- Sugar Plant Meghalaya Cements- Cement Plant

Vedanta Group- Zinc Roaster Plant Gem Sugars- 5000 TPD Cane Sugar Plant

Select Turnkey EPC Projects completed by WIL (2/2)

29

15 MW Cogen Plant 6.6 MW Municipal Waste Power Plant

Waste Heat Recovery Boilers 25 MW Biomass Power Plant

Back

Select Equipments Manufactured by SPD (1/2)

30

Gearbox for Corvettes Gearbox for LST (L) Core Support Structure for 500MWe PFBR

Calandria for 500MWe projects Intermediate Heat ExchangerNuclear Fabrication- End Shield

Select Equipments Manufactured by SPD (2/2)

31

SLV-3

PSLV-C2: End segment and nozzle

manufactured

Manufacture of space launch vehicle support material by WIL..

Back

Thank You !

walchandnagar corporate presentation

Documents