Investor Presentation

MAY – 2015

2

Company at a Glance 1

2

4

Contents

Long term Growth Opportunity remains intact

inspite of Short Term Concerns 3

Strong Business Fundamentals

6 Risk and Concerns

Business Overview & Company Data 5

Robust Financials to Support Growth

Company at a Glance

4

Focused player in Transformer Industry with 52 years experience

Leading manufacturer of customized transformers for industrial, building and power applications:

—Oil Filled - Power and Distribution Transformers

—Dry type - Resin Impregnated and Cast Resin Dry Type Transformers

Enjoying about 15% market share in Industrial application transformers

Large Installation base of more than 56,000 transformers throughout India

State-of-the-art manufacturing facility for Oil filled Power Transformers at Makarpura in Vadodara with a built up area of 10,000 square meters

Created grass route manufacturing facility by relocating the existing operations of manufacturing of oil filled Distribution Transformers and Dry Type Transformers at Village Vadadala, Taluka Savli, Dist. Vadodara with built up area of 16300 square meters which had increased the installed capacity by 4,000 MVA (Total 13,000 MVA p.a.)

Experienced and professional management team with an average industry experience of more than 30 years.

Focus on Quality: Received ISO 9001 accredition from KPMG, USA, way back in 1998, well established Quality assurance systems and procedures and ISO 9001:2000 from ISOQAR for Quality Management System in the year 2007

Revenue Mix (FY’15)

Power

Transformers

39%

Dry

Transformers

19% Distribution

Transformers

42 %

Strong Business

Fundamentals

6

Continuous focus on improvements in technology and systems

Developed technologically superior products

Extensive use of advanced technology leading to reduction in process time, cost optimization and product quality improvement — Use of latest static mixture technology- based and computer controlled casting plant

Research & Development focus on safer and environment friendly Dry type transformers. License agreements with German companies:

Computerized designs based on internally developed software — Validated by type testing at independent Government laboratories like CPRI, ERDA, etc.

— For Cast Resin Transformer design software provided by HTT, Germany

Extensive training provided in technical and management fields with special emphasis on Total Quality Management

Products of the company enjoy ISO 9001:2000 status for design, manufacture and after sales services

MORA Transformatoren for Vacuum Resin Impregnated Transformers and coil winding technology

HOCHSPANNUNGSTECHNIK UND TRANSFORMATORBAU (HTT) for Cast Resin Transformers

7

De-risked business model

Trusted vendors to leading business houses across industries, well known PSUs and large co-operatives

Marquee client base includes GETCO, BPCL, Grasim, KSEB, Reliance Industries, Reliance Energy, Jindal Steel, Nirma, Infosys Technologies and EPC contractors like ABB, Siemens, BHEL, Larsen & Toubro, Schneider, Alstom, etc.

Long term client relationships result in

high repeat business

Top 10 clients - (in terms of revenue contribution of last year)

GUJARAT ENERGY TRANSMISSION CORPORATION LTD.

SIEMENS LTD.

BHARAT PETROLEUM CORPORATION LTD.

LARSEN AND TOUBRO LTD.

SUZLON POWER INFRASTRUCTURE LTD.

ABB INDIA LTD.

STERLING AND WILSON LTD.

RELIANCE INDUSTRIES LTD.

KERALA STATE ELECTRICITY BOARD

BHARAT HEAVY ELECTRICALS LTD.

De-risked business

With aggressive marketing and new client acquisitions, the company is constantly trying to reduce client concentration.

Top 10 client contribution has been at 29% in FY14 and 34% during FY15.

Top 10 Client Contribution

Marquee clients in high growth industries

38% 39%

46%

36%

27%31% 29%

34%

0%

10%

20%

30%

40%

50%

60%

FY'08 FY'09 FY'10 FY'11 FY'12 FY13 FY14 FY15

8

Industry-wise Revenue split (FY15)

Well diversified revenue streams

Power Projects22%

SEB16%

Utilities8%

O & G & Petroleum6%

Building4%

Steel, Metal & Minerals

4%

Chemical & Petrochem.

3%

Infrastructure3%

Cement2%

Consumer Prod.2%

Others30%

9

…and strong marketing and servicing capabilities

Well established nationwide network of 13

offices

More than 65 marketing professionals and 20

service executives in all major industrial cities

and Metros located throughout the country

Marketing office locations:

― Vadodara

― Delhi

― Mumbai

― Chennai

― Kolkata

― Bangalore

― Pune

― Chandigarh

― Secunderabad

― Coimbatore

― Ahmedabad

― Nagpur

― Jamshedpur

Strong marketing set up generates client satisfaction

Long term Growth

Opportunity remains

intact inspite of Short

Term Concerns

11

Projected investments in major industries remains weak

Source: Industry Reports

Telecom

Cement

Steel

IT

Automobile

India’s Telecom market has slowed down due to regulatory uncertainity and high inflation.

Telecom revenues are expected to grow at a CAGR of 7% to reach Rs 1.6 tn by FY17E

Cumulative capex of ~US$25 bn (~Rs 1.5 tn) expected in FY14-17E led by data network

(largely 3G) as 2G related investments have peaked out.

Consumption to grow at a CAGR of 7% over FY’15-17E (1.2x GDP)

Manufacturers adding ~40 MT over FY’16-18, 10% of the current operational capacity of

390 MT, translating in a capex of Rs 300 bn. Capacity addition pace is slowing down leading

to improvement in utilisation for existing capacity (incremental demand of ~60mt against

incremental capacity addition of ~40mt over FY16-18)

Steel consumption to grow at 7-8% per annum during the medium term

An additional capacity of ~20 mn tonnes would be added over the next 2-3 yrs.

The Indian IT industry is US$120 bn. IT exports expected to grow at 11% CAGR to reach

US$ 175-225 bn in 2020. Domestic component will grow to US$ 50 bn, equal to current

exports.

After two yrs on 20% CAGR drop &16% growth in FY15, MHCV segment is likely to show

15% CAGR for FY15-17E on better replacement demand, fleet expansion on stronger

recovery in industrial activity in 2HFY16 and increase in mining & infrastructure.

Passenger segment too will pick up with ~9% CAGR for FY16-17 v/s 4% growth in FY15

METALS Iron ore production to move up across the country after the removal of the ban.

Aluminium capacity to move up by 0.6 mn tonnes over the next 2 years.

Zinc to expand by 0.2 mn tonnes over next three years.

12

Power – Opportunity exists, awaiting +ve actions from Govt.

Integrated Energy Policy suggests rise in capacity from 130 GW in FY07 to 800 GW by FY32. 130 GW (of 170 targeted) more likely during FY08-17

12th Plan Share of IPP driven projects (40 GW) to increase - PGCIL Likely to spend Rs 538 bn, total transmission spend pegged at over Rs 1,000 bn. T&D reforms which remained lack luster over the last 4 years will drive demand in the 12th Plan with fresh impetus by the new Government through investment led programs like IPDS (replacing R APDRP), PDDUGY on feeder separation scheme (encompassing Rural electrification programme). Urbanisation, smart cities & manufacturing led “Make in India” economic growth will support long term growth

Long term annual demand for transformers estimated at over 2L MVA – meeting current capacities, but the near term outlook is challenging as industry sits on just about 60-70% utilization levels.

Expect government to accelerate actions to further ease structural constraints of power sector (Fuel prices & availability, environmental and land clearances) through positive policies. Further, SEB FRP to help ease working capital stress and help revive State T&D investments.

As the transformer industry continues to consolidate over the next 6-12 months with intense competitive environment, price pressures seem to have bottomed out. Only the fittest with stable balance sheet will survive and be able to leverage the next leg of growth.

Government Spending – Power

(FY’07-12E)

Rs. 5,338 bn

Source: Industry Sources

Generation

58%

T&D

42%

Long term T&D investments over the

12th Plan period

(FY12E-17E) expected to be 2x, at Rs

1,000 bn

13

Strong Balance Sheet

Debt free Company, insulated in high interest scenario with strong Balance

Sheet.

No money raised from public except for Rs.0.30 mn at incorporation stage

and issue of shares to Promoters, Relatives & Associates of Rs.1.95 mn in

the year 1991.

Adequate cash and liquid investments to fund future growth plans.

Cash Terms offered to vendors to get competitive prices and preference in

delivery.

Business overview

and Company Data

15

Total shares outstanding: 10,117,120 shares

Shareholding Pattern As on 31.03.2015

Promoters

47.48%

Mutual Fund /UTI/FI/Banks

10.50%

FIIs

28.97%

Bodies Corporate

5.17%

Others

7.88%

16

Profit & Loss Statement (Annual)

Year ended 31 Mar (Rs

mn) FY08 FY09 FY10 FY11 FY12 FY13 FY14 FY15

Net Sales 5,553.46 6430.64 5419.7 5262.93 5698.1 5155.02 4447.75 5168.87

Expenditure 4,374.86 4932.06 4361.72 4595.12 5280.81 4813.24 4298.06 4971.40

Materials Consumed 3,913.68 4441.89 3810.94 3915.08 4563.1 4130.30 3670.06 4255.28

Staff Cost 168.34 177.88 154.91 159.31 188.1 197.63 184.45 212.21

Manufacturing Expenses 186.87 210.61 197.05 251.43 331.47 257.98 226.33 277.93

Selling & Admin exps 105.97 101.68 198.81 269.29 198.14 227.33 217.22 225.98

EBITDA 1,178.60 1498.58 1057.99 667.82 417.2 341.78 149.69 197.47

Interest & Bank Charges. 5.04 4.67 7.4 7.94 4.8 4.91 3.67 3.00

Depreciation 31.33 44.65 59.71 74.96 82.7 76.74 71.33 72.18

Other Income 107.58 239.7 232.12 183.08 154.5 200.20 267.44 211.64

PBT 1,249.81 1688.96 1223 767.99 484.3 460.32 342.13 333.93

Tax 450.76 540.94 397.69 250.19 151.5 131.34 79.24 49.80

PAT 799.05 1148.02 825.31 517.81 332.7 328.98 262.89 284.13

Impact of charges in

accounting - - - -

Net Profit, restated 799.05 1148.02 825.31 517.81 332.7 328.98 262.89 284.13

Key Ratios (%) FY08 FY09 FY10 FY11 FY12 FY13 FY14 FY14

EBITDA Margin 21.22 23.3 19.52 12.69 7.32 6.63 3.37 3.82

Net Margin 14.39 17.85 15.23 9.84 5.84 6.38 5.91 5.50

Raw material as % of

Sales 70.47 69.07 70.32 74.39 80.08 80.12 82.51 82.33

Staff cost % of sales 3.03 2.77 2.6 2.70 3.3 3.83 4.15 4.11

YOY Growth (%)

Revenue 36.85 15.8 -15.72 -2.89 8.27 -9.53 -13.72 16.21

EBITDA 92.11 27.15 -29.4 -36.88 -37.52 -18.10 -56.20 31.92

Net Profit 101.98 43.67 -28.11 -37.26 -35.74 -1.14 -20.09 8.08

17

Annexure – Balance sheet

Year ended 31 Mar (Rs

mn) FY08 FY09 FY10 FY11 FY12 FY13 FY14 FY15

Shareholders Funds 1,646.67 2,646.74 3,324.32 3,736.16 3951.39 4102.82 4247.35 4408.16

Share Capital 101.17 101.17 101.17 101.17 101.17 101.17 101.17 101.17

Reserve & Surplus 1,545.50 2,545.57 3,223.15 3,634.99 3850.22 4001.65 4146.18 4306.99

Loan Funds 10.42 - - - - - - -

Secured Loans 10.42 - - - - - - -

Unsecured Loans - - - - - - - -

Deferred Tax Liability - - - - - - - -

Miscellaneous

Expenditure - - - - - - - -

TOTAL 1,657.09 2646.74 3,324.32 3,736.16 3951.39 4102.82 4247.35 4408.16

Fixed Assets 194.49 324.23 472.66 566.71 548.67 519.46 470.69 410.94

Gross Block 324.53 370.69 682.1 876.27 937.46 985.82 1003.65 1013.6

less: Depreciation 146.96 190.3 244.7611 317.81 396.78 466.36 532.96 602.66

Net Block 177.57 180.39 437.34 558.00 540.68 519.46 470.69 410.94

CWIP 16.92 143.84 35.32 8.71 7.99 0 3.64 13.9

Investments 581.05 1352.51 1426.79 1001.47 1098.54 1737.15 2184.52 2106.52

Deferred Tax Assets 2.53 4.62 1.93 -3.26 -2.80 3.36 6.62 19.83

Net Current Assets 879.02 965.37 1423.16 2170.69 2306.98 1842.85 1581.88 1856.97

Current assets, loans &

advances 1,772.94 1664.5 2065.59 2731.82 2877.62 2348.67 2147.14 2402.1

Inventories 806.53 522.69 605.25 881.81 1021.62 718.37 573.03 816.31

Sundry Debtors 826.1 1018.53 1304.31 1444.81 1739.89 1452.55 1427.43 1444.54

Cash & Bank balance 46.1 60.64 43.48 285.13 48.16 109.63 11.28 33.17

Loans & Advances. 94.21 62.64 112.55 120.07 67.95 68.12 135.4 108.08 Less: Current Liabilities

& Provisions 893.92 699.13 642.43 561.13 570.64 505.82 565.26 545.13

TOTAL 1,657.09 2646.74 3324.58 3736.16 3951.39 4102.82 4247.35 4408.16

18

Business Overview

Optimal product mix with 3 independent profit making strategic business units equipped to

manufacture highly customized different application transformers upto 100 MVA, 220 KV

Oil filled Transformers constitute 81% of sales while Dry Transformers comprise about 19%

Product-wise Revenue Split

Type of Transformer Range

Power Transformer 5,000 KVA,33 KV to 125,000 KVA, 220 KV

Distribution Transformer 315KVA, 11KV to 5,000 KVA, 33KV

Dry Type Transformer 63 KVA, 11KV to 7,500 KVA, 33KV

Product Portfolio

38% 38% 38%49% 49%

35% 36% 36% 40% 39%

39% 39% 42%32% 31%

38% 39% 41% 39% 42%

23% 23% 20% 19% 20% 27% 25% 23% 21% 19%

0%

20%

40%

60%

80%

100%

FY'06 FY'07 FY'08 FY'09 FY'10 FY'11 FY'12 FY'13 FY'14 FY15

Power Transformer Distribution Transformer Dry Type Transformer

Risk & Concerns

20

Risk and Concerns

RAW MATERIAL COST :

The unprecedented variation in the prices of raw materials, particularly copper, transformer oil and special steels for lamination, is a major area of concern for executing transformer orders in uncertain market condition, wherein at times some projects get stuck midway. The present challenges is managing orders within the budgeted cost and managing supplies chain to honor delivery commitments. Rise or Volatility in the prices of Copper, CRGO, Transformer Oil and Steel may impact the margin of the Company.

Depreciation of Indian Rupees against US Dollar is adversely impacting profit margin, in view of

high import contains of input materials.

COPPER PRICE MOVEMENT DURING FY 14-15

421 417 421

434 436427

420 415404

395

371

388396.9 401.4

394.4

422.35413.5

407.2 403.7 403.65

390.75

332.4339.65

355.15

300

350

400

450

500

550

AP

R'1

4

MA

Y'1

4

JUN

E'1

4

JULY

'14

AU

G'1

4

SE

P'1

4

OC

T'1

4

NO

V'1

4

DE

C'1

4

JAN

'15

FE

B'1

5

MA

R'1

5

MONTHS

Pri

ce (R

s/K

g)

HIGH

LOW

21

Risk and Concerns

COMPETITION :

Huge Capacity addition has taken place in the transformer industry, as all the players have

expanded their capacities and some have moved up the value chain by entering in to manufacture

of higher voltage class and rating transformer to take benefit of projected increase in demand of

transformers from the user industries. Further continued strong presence of foreign (Chinese &

Korean) transformer manufacturers is keeping the competitive pressures high. This new capacities

is putting tremendous pressure on the growth of revenue and margins of the Company. We expect

this pressure to continue during the year 2015-16 also. However, stress on localization & “Make in

India” should help to ease these concerns in long term.

GOVERNMENT POLICY :

Any delay by Government in implementation of its plans would lead to a fall in demand for

transformers, used in the generation, transmission and distribution segments, as transformer

demand is driven by addition in power generation capacity.

Further, change in Government policy on land acquisition for industrial projects, allotment of natural

resources and its pricing and policy changes in environmental related laws is having major impact

on corporate capex / investment in new projects.

Thank You