Lanco Infratech Ltd - Lanco Infratech Limited

Lanco Infratech Ltd EPC POWER SOLAR NATURAL RESOURCES Investor Presenta>on ©
LANCO Group, All Rights Reserved
© LANCO Group, All Rights Reserved INFRASTRUCTURE Agenda 1 Company Overview 2 Financials 3 Industry Overview 4 Power Business 5 EPC Business 6 Solar Business 7 Natural Resource Business 8 Infrastructure Business 9 Property Development Business 10 Experienced Management Team 2
© LANCO Group, All Rights Reserved 1. Mission, Vision and Values Mission: Development of Society through
Leadership, Entrepreneurship, Ownership
Vision:
Most Admired Integrated Infrastructure Enterprise
Values:
Integrity
Continuous
Learning
Humility & Respect
Organization
before Self
Teamwork
Accountability
Achievement Drive
Positive Attitude
3
© LANCO Group, All Rights Reserved 1. India’s largest Integrated Power Developer •  Listed Holdco of the group •  Promoters Holding ~ 68% •  Adj. Net Worth US $443 mn (including Minority) Lanco Infratech Limited (LITL) EPC Construc>on Subsidiaries / Affiliates
Solar Property Development EPC GeneraSon Manufacturing Lanco Hills Lanco Power Thermal Hydro All Coal and Gas based SPVs All Hydro based SPVs • 
• 
Infrastructure Natural Resources Roads Coal Devihalli Hosekote • 
• 
Griffin Tasra •  All businesses of the group are under LITL •  Power projects of 8,086 MW in 12 states of India (3,450MW* under opera>on & 4,636 under construc>on) * 732 MW ge^ng ready for opera>ons Assumed US$ / INR = 60 © LANCO Group, All Rights Reserved 4
2. Financials – P&L US$ Mn Revenue 3,000 2,567 EBITDA 500 2,549 442 450 2,500 400 1,813 2,000 350 308 279 300 1,500 1,228 254 250 200 1,000 150 500 100 50 ‐ FY12 200 FY13 FY14 9MFY15 ‐ FY12 * Revenue : Before intersegment revenue elimination
114 100 Adj. Profit 250 230 FY14 9MFY15 Cash profit 200 ‐ FY12 FY13 FY14 9MFY15 ‐100 150 100 39 50 ‐200 ‐178 ‐ ‐241 ‐300 ‐28 ‐50 ‐100 ‐400 ‐500 FY13 ‐381 Adj. PAT= Reported PAT + Profit Eliminated
Note: 1. 
Assumed US$ / INR =60 2. 
Mn indicate million © LANCO Group, All Rights Reserved ‐150 FY12 FY13 ‐124 FY14 Cash Profit: PAT + Depreciation + Profit Eliminated
5
9MFY15 2. Financials – Balance Sheet Fixed Assets 7,000 6,782 6,800 6,890 250 235 Cash & Cash Equivalents 200 6,600 6,439 6,400 150 6,200 6,000 US$ Mn 100 5,901 5,800 97 101 FY13 FY14 90 50 5,600 ‐ 5,400 FY12 FY13 FY14 9MFY15 FY12 9MFY15 * Fixed Assets : Gross Block + CWIP
Key Balance Sheet Figures (as on Dec 31, 2014) Net Worth (including Minority Interest) Add: Profit Eliminated (as per AS 21) Adjusted Net Worth Gross Debt (of company, subsidiaries & associates) Gross debt of projects under opera>on Gross debt of projects under construc>on 192 251 443 6,329 2,955 3,374 Cash and Cash Equivalent (including subsidiaries and associates) Net Debt Net Debt / Gross Adjusted Net Worth 90 6,239 14.10 Above debt figures excludes acquisition debt of Griffin and working capital loans of Power companies
Note: 1. 
Assumed US$ / INR = 60 2. 
* As per AS‐21 / AS‐28 © LANCO Group, All Rights Reserved 6
3. Industry Overview a) Strong Push to Drive Infrastructure Growth Expenditure on Infrastructure is required to keep growth momentum of Indian economy
350
300
300
Central
Private
XII Plan spending (FY13-FY18)
250
194
200
150
100
State
Total - US$1,126bn
189
104
25
Installed Power Capacity Growth (GW)
250
XII Five Year Plan expected target ~88 GW
(as per draft document).
51
40
18
-
Source: Planning commission (XIIth five year Draft plan)
30
12
(INR/USD:50)
288 200 174 159 143 148 132 150 105 108 113 118 124 100
2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2017e
200
101
64
50
300
In BRIC countries, India’s per capita consumption lowest.
China’s per capita consumption of power is 4.8x of India.
3500
2944
3000
In order to achieve 8% growth, India
should attain atleast 7% growth in total
power sector.
2500
2000
1500
1000
616
500
0
India
Source:
China
World Bank Data 2010, (http://data.worldbank.org/indicator/EG.USE.ELEC.KH.PC)
Per capita consumption of electricity
© LANCO Group, All Rights Reserved 7
3. Industry Overview b)Power Scenario in India Growing share of Private players
Capacity Addition targets in the 12th Plan (MW)
Central State Private Total Thermal 14878 13922 43540 72340 Hydro 6004 1608 3285 10897 Nuclear 5300 0 0 5300 Total 26182 15530 46825 88537 Type/Sector Source: CEA
The 12th plan targets a capacity addition of 88,537 MW with
53% of the capacity being added by the private sector
Per capita consumption of electricity ~ growing at
brisk pace
879 819 779 735 717 672 632 613 591 2012 2011 2010 2009 2008 2007 2006 2005 2004 Per Capita Consumption Growth (Units)
Source: CEA
Recent Policy Ini-a-ves: 1.  State Electricity Boards (SEBS) Financial Restructuring Package
Electricity Generation during April 2013 to March 2014 (BUs)
Type FY13 FY14 % Change Thermal 761 792 4 2.  Ini>a>ve by Government of India to allow pass‐
through of addi>onal cost of imported coal supplied under FSA Hydro 114 135 18 Nuclear 33 34 4 Bhutan Import 5 6 17 3.  Modifica>on to Case II standard bidding documents All India 912 966 6 Source: CEA
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© LANCO Group, All Rights Reserved 4. Lanco Power Business ‐ Project Status Update Power Projects under OperaSon Plant
Anpara
Kondapalli I
Kondapalli II
Kondapalli III* Amarkantak I
Amarkantak II
Tanjore
Other Renewable
Total
Fuel
Coal
Gas
Gas
Gas Coal
Coal
Gas
Wind, Solar, Hydro
Capacity (MW)
1,200
368
366
732 300
300
120
64
3,450
Fuel Diversification
Oeake
PPA
PPA
Short Term
Short Term PPA
PPA
PPA
PPA
2% 46% 52% Gas * kondapalli III (732 MW) is getting ready for operations.
Coal Renewables including Hydro Power Projects under ConstrucSon Financial closure Capacity (MW)
oeake
EsSmated compleSon
Hydro
Y
76
Short Term
FY 17
Teesta
Hydro
Y
500
PPA
FY 17
Amarkantak III & IV
Coal
Y
1,320
Part PPA
FY 17
Vidarbha
Coal
Y
1,320
Part PPA
FY 17
Babandh
Coal (Partly Cap>ve)
Y
1,320
Part PPA
FY 17
Solar
Solar
Y
100
PPA
FY 17 Plant
Fuel
Lanco Ularanchal Total
4,636
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© LANCO Group, All Rights Reserved 4. Power Business Presence Across Value Chain De‐risking the Business Integrated presence across value chain capturing value addition across the businesses
Fuel (Coal mining)
•  Griffin coal, Collie
r e g i o n i n We s t e r n
Australia, currently
produces 4 MTPA with
resources of 1.2 bn
•  Selected as MDO by
SAIL for Tasra Open
Cast mine with
geological reserves of
approximately 250 mn
tons in Jharkhand.
Includes development
of a captive power
plant as well.
EPC
•  Completed projects with
capacity of 4,732 MW
•  4,636 MW projects under
construction
•  S t r o n g e n g i n e e r i n g
capability
•  O v e r 1 0 y e a r s o f
experience in design and
development of Power
Projects
•  Handles global suppliers
selection and sourcing of
diverse materials like
high-pressure fabricated
equipment, skids,
instrumentation &
electrical systems
Generation and O&M
•  Operating capacity of
3,450MW*
Type MW Thermal & Gas 3,386 Renewable (Hydro, Solar, Wind) TOTAL Transmission and
Distribution
Trading
64 •  One of largest private
sector player in Indian
power trading market
•  Traded 333 mn units in
quarter ended Dec 31,
2014
•  S t r a t e g y i n c l u d e s
possible expansion
into transmission and
distribution
3.450 •  Kondapalli III (732 MW) is getting
ready for operations.
•  4,636 MW projects under
construction.
* 732 MW ge^ng ready for opera>ons 10
© LANCO Group, All Rights Reserved 5. EPC Business: In‐house exper>se enhances margins Order Book (USD Mn) EPC
EPC
5,200 5,117 4,910 EPC order book of USD 4.91 billion as on Dec’14
4,800 Major EPC / Construction order executed
Kondapalli
1,214 MW
Udupi
1,200 MW
4,400 Anpara
1,200 MW
Amarkantak (I & II)
600 MW
Tanjore Power
120 MW
4,000 Budhil
70 MW
External orders under execution
EPC of Moser Baer Thermal Power Plant (600 MW x 2)
3,600 BoP of Koradi Thermal Power (3 x 660 MW)
EPC of 250 MW Gas based Power plant in Iraq
EPC of Supercritical Ennore Thermal Power Project (1*660MW) 1,600 Construction
Construction
FY12 1,445 4,383 4,363 FY13 FY14 Revenue (USD Mn) 9MFY15 1,200 724 Executing a wide range of projects spanning Thermal Power 800 Plants, Hydro Power Plants, Highways, Airports, Industrial
Structures, Transmission and Distribution, Chimneys and Cooling
400 Towers, Water Infrastructure and Heavy Civil Structures.
376 189 ‐ FY12 FY13 FY14 11
© LANCO Group, All Rights Reserved 9MFY15 6. Solar Scenario Global Scenario
  Addition of capacities:
  2009 – 7.2 GW
  2010 – 16.6 GW
  Price decreases that have brought PV
close to grid parity in several countries
have encouraged new investors
 
Expected Growth in the market
3.3-4.8x of current capacity by 2015
Source: EPIA – Global Market Outlook for PV Until 2015
Indian Perspective
  Under the MNRE policy:
  New grid projects through NVVN
  Small grid projects through IREDA
  Off-grid solar
  MNRE - Phase I
  Batch I
  Batch II
  Gujarat
  Rajasthan
Source: MNRE - Renewable Energy in India: Progress, Vision and Strategy
  RPO requirement
12 © LANCO Group, All Rights Reserved 620 MW
350 MW
365 MW
200 MW
6. Solar Business: Fully Integrated Strategy enables lowest Rs/kWh Target in 4 Yrs EPC 500 MW/PA Project Development 400 MW/PA Aim to be a Global player, as a developer and a third party EPC player.
Current Solar
Target in 3 Yrs EPC Order Book USD $ 468mn (included in EPC order book)
Integrated Manufacturing 250 MW/PA Foray into manufacturing to
support internal requirements and
reduce margin volatility, through
the cycle
Current Solar farm development portfolio – 141 MW (Operating 41 MW and
Under Construction 100 MW)
Capacity
(MW)
Tariff- Rs/Unit
Gujarat Policy
35
Rs 15 for 12 yrs, Rs 5
for next 13 Yrs
JNNSM
5
1
Policy
Project Cost
(USD mm)
PPA Duration
(Yrs)
Solar PV Farm
RPSSGP
Solar Thermal Farm
JNNSM
100
Manufacturing- Phase I
Capex
US$ 180 Mm
Debt: Equity
70:30
89
25
Capacity- Phase I
11.5
14
25
Polysilicon
16.5
2.4
25
Wafer
80 MW
Module Line
50 MW
10.5
311
25
1250 MT
13 © LANCO Group, All Rights Reserved 7. Natural Resources (Coal): FY10 FY11 Produc>on 981 Securing coal: a need; an opportunity 795 533 625 FY09 773 533 582 FY08 575 493 549 FY07 540 640 457 504 1200 1000 800 600 400 200 0 431 464 DomesSc supply falls short of demand FY12 FY13 BE FY17 BE Prov Demand (inld middlings) Source: Planning Commission (XII Plan draft document)
 
Around 70% of demand from Power Sector  
Uncertainty in domes>c supply  
Expected Import of coal by 2017 > 150 MT  
Increasing compe>>on for overseas assets  
Limited opera>onal assets Griffin Coal Tasra Open Cast Project (SAIL) •  Selected as Mine Developer and Operator (MDO) by Steel Authority of India (SAIL) for Tasra Open Cast Project and development of associated cap>ve power project. •  Located in Jharia coalfield of Dhanbad (Jharkhand) having geological reserves of approximately 250 million tons •  Se^ng up of coal washery and opera>on of power plant of 200‐300 MW capacity based on the secondary products arising from the proposed Tasra Washery. Largest opera>onal thermal coal mines in Western Australia, with Resource base of 1.2 bn Tonne Strategic loca>on – Bunbury port <100 km from mine Good connec>vity of rail and port. Current producSon :‐ capacity of 4 mtpa of coal. Expansion : Plans to ramp up produc>on to a max of 18 MTPA by FY 18 14
© LANCO Group, All Rights Reserved 8. Infrastructure Business: Leveraging Construc>on Exper>se to Build Infrastructure Lanco has moved into selective infrastructure projects to leverage its EPC experience
Awarded two NaSonal highway projects in Karnataka c. 81 km stretch connec>ng Bangalore – Hoskote – Mudbagal c. 82 km stretch connec>ng Neelamangla – Devihalli Concession periods of 20 years and 25 years respec>vely during which toll will be collected Capex of USD $ 308 mn Grant from NHAI USD $ 60 mn COD of Devihalli alained on June 25th 2012 and toll collec>on started COD of Hoskote alained on December 19th 2013 and toll collec>on started Also built jetty at Mangalore port for Udupi Power Plant
15
© LANCO Group, All Rights Reserved 9. Property Development Business Lanco Hills is the group’s foray into property development, located in Hyderabad, spread over
100 acres and comprises residential space, office space and IT SEZ
Lanco Hills
Residential
• 
• 
Towers under Phase I are ready for occupation, 97% units sold out, 63% occupied
In addition to high rise towers, 56 Villas will also be constructed
Office space
• 
• 
IT tower - 0.59 mn sqft ready for occupation, lease deed signed for 80,000 sqft.
SEZ : 0.06 mn sqft incubation space – leased out to IT companies
Property Development is restricted to Hyderabad only
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© LANCO Group, All Rights Reserved 10. Experienced Management Team LANCO Board L. Madhusudhan Rao Execu&ve Chairman L Sridhar Vice Chairman S. C. Manocha Director G. Venkatesh Babu Managing Director P. Abraham Director U.K. Kohli Director G. Bhaskara Rao Execu&ve Vice Chairman R. Krishnamoorthy Director Lanco Group Senior Management Team Finance Power   T. Adi Babu   P. Panduranga Rao   T N Subramanian   K. Raja Gopal ConstrucSon & EPC   S. C. Manocha Solar   Rajkumar Roy 17 © LANCO Group, All Rights Reserved Pan India Presence Coal Based
Plants under operation
Plants under construction
Hydro
Vamshi
Plants under operation
Vamshi Industrial
Plants under construction
Lanco Uttaranchal
Gas
Plants under operation
Rajasthan Solar
Teesta
Gurgaon
Plants under construction
Anpara
Solar
Solar Power Plants
Manufacturing at RajnandgaonChattisgarh
Wind
Gujarat Solar
Amarkantak – I & II
Amarkantak – III & IV
Vidarbha
Plants under operation
Tasra mine
Babandh
Lanco Hills
Hyderabad
Property development
Chitradurga
Road development
Kondapalli I & II
Kondapalli III
Coal mine
Registered office
Corporate Office
81 km Bangalore – Hoskote – Mudbagal
82 km Neelamangla – Devihalli
Tanjore power
18
© LANCO Group, All Rights Reserved We care for the world we live in Lanco Foundation
•  Member of the UN Global Compact
•  Operating in 11 Indian States at 13 locations
•  Covering 140 villages & 200,000 population beneficiaries
•  we have a number of initiatives in place that help us to make a difference…
• 
Focused work in the areas of:
  Disability
  Education
  Safe Drinking water
  Mobile Health Services
  Support of traditional arts & crafts
19 © LANCO Group, All Rights Reserved Recent Awards  
Lanco Amarkantak wins “Greentech Safety Award 2013” in Gold category in Thermal
Power sector
 
Lanco Anpara wins “PowerLine Award” for the Best Thermal Project
 
Lanco Amarkantak wins “Golden Peacock Occupational Health & Safety Award” for the
Year 2013
 
Lanco Solar Wins “IESA Award For Most Innovative Product” for 2012
 
Lanco Kondapalli Wins “Golden Peacock Environment Management Award for
corporate Social responsibility” for 2012
 
8th Construction World- Annual Award for
“Fastest Growing Construction Company”
 
Tanjore Power received TERI Corporate Award for
“ Environmental Excellence and Corporate Social Responsibility”
 
Tanjore Power received GreenTech silver award in Power sector for “Safety Management”
 
IKU II received IEEMA award for
“Excellence in Fast Track Commissioning of Small Hydro Projects”
 
Lanco Infratech Ltd received PRSI Golden Jubilee Award for the
“Most Impressive Public Relations Initiatives”
© LANCO Group, All Rights Reserved 20 Disclaimer No representa>on or warranty, express or implied, is made as to, and no reliance should be placed on, the fairness, accuracy, completeness or correctness of the informa>on or opinions contained in this presenta>on. Such informa>on and opinions are in all events not current arer the date of this presenta>on. Certain statements made in this presenta>on may not be based on historical informa>on or facts and may be "forward looking statements" based on the currently held beliefs and assump>ons of the management of the Company, which are expressed in good faith and in their opinion reasonable, including those rela>ng to the Company's general business plans and strategy, its future financial condi>on and growth prospects and future developments in its industry and its compe>>ve and regulatory environment. Forward‐looking statements involve known and unknown risks, uncertain>es and other factors, which may cause the actual results, financial condi>on, performance or achievements of the Company or industry results to differ materially from the results, financial condi>on, performance or achievements expressed or implied by such forward‐looking statements, including future changes or developments in the Company's business, its compe>>ve environment and poli>cal, economic, legal and social condi>ons. Further, past performance is not necessarily indica>ve of future results. Given these risks, uncertain>es and other factors, viewers of this presenta>on are cau>oned not to place undue reliance on these forward‐
looking statements. The Company disclaims any obliga>on to update these forward‐looking statements to reflect future events or developments. This presenta>on is for general informa>on purposes only, without regard to any specific objec>ves, financial situa>ons or informa>onal needs of any par>cular person. This presenta>on does not cons>tute an offer or invita>on to purchase or subscribe for any securi>es of the Company by any person in any jurisdic>on, including India and the United States. No part of it should form the basis of or be relied upon in connec>on with any investment decision or any contract or commitment to purchase or subscribe for any securi>es. The Company may alter, modify or otherwise change in any manner the content of this presenta>on, without obliga>on to no>fy any person of such change or changes. This presenta>on may not be copied or disseminated in any manner. 21
© LANCO Group, All Rights Reserved Thank You
22
© LANCO Group, All Rights Reserved