Welspun Corp Presentation 09 May 2011

8/3/2019 Welspun Corp Presentation 09 May 2011

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On The Path of Global Leadership

WELSPUN CITY, ANJAR


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Disclaimer

Certain statements made in this presentation may not be based on historical information or facts and may be forward looking sta tements, including those relating to general business plans and strategy of Welspun Corp. Limited (WCL"), its future outlook and growth prospec ts, and future

developments in its businesses and its competitive and regulatory environment. Actual results may differ materially from these forward-looking statements due to a number of factors, inter alia including future changes or developments in WCL's business, its competitive environment, its ability to implement its strategies and initiatives and respond to technological changes and political, economic, regulatory and social conditions in India.This presentation does not constitute a prospectus, offering circular or offering memorandum or an offer invitation, or a solicitation of any offer, to

purchase or sell, any shares of WCL and should not be considered or construed in any manner whatsoever as a recommendation that any person should subscribe for or purchase any of WCL's shares. Neither this presentation nor any other documentation or information (or any part thereof)

delivered or supplied under or in relation thereto shall be deemed to constitute an offer of or an invitation by or on behalf of WCL to subscribe for or purchase any of its shares.

WCL, as such, makes no representation or warranty, express or implied, as to, and does not accept any responsibility or liability with respect to, the fairness, accuracy, completeness or correctness of any information or opinions contained herein. The information contained in this presentation,

unless otherwise specified is only current as of the date of this presentation. WCL assumes no responsibility to publicly amend, modify or revise any forward looking statements contained herein, on the basis of any subsequent development, information or events, or otherwise. Unless otherwise stated in this document, the information contained herein is based on management information and estimates. The information contained herein is

subject to change without notice and past performance is not indicative of future results. WCL 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. This presentation may not be copied and

disseminated in any manner.

THE INFORMATION PRESENTED HERE IS NOT AN OFFER INVITATION OR SOLICITATION OF ANY OFFER TO PURCHASE OR SELL ANY EQUITY SHARES OR ANY OTHER SECURITY OF WCL.

This presentation is not for publication or distribution, directly or indirectly, in or into the United States, Canada or Japan.

These materials are not an offer or solicitation of any offer of securities for purchase or sale in or into the United States , Canada or Japan.


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Welspun Group

Brief Synopsis

One of the fastest emerging global groups, with multiplecountries strategy and manufacturing facilities

Group companies enjoys market leadership positions :

Top 2 Large Diameter Pipe Company in World -Financial Times, UK

Globally renowned towel company

Global relationship with marquee clients including Fortune100 companies like Exxon Mobil (Golden Pass Pipeline),Chevron, Shell, Bechtel, Wal- Mart, Target etc

Equity investment by renowned investors like ICICI Life,Temasek (Govt. of Singapore), 3i (UK), Genesis (UK)

Excellent relationship with domestic and international lenders

Key Markets

80% export mainly to US, Europe, Latin America, Middle Eastetc

International Setup

Christy, UK

Sorema, Portugal

Textile facility in Mexico

Office in Manhattan-NY, Huston-US

Pipe facility in Arkansas, US

Pipe Facility in Saudi Arabia (In process)

Welspun Corp Economic Times Emerging Company of the Year Awardfor Corporate Excellence - 2008

Welspun India Gold Trophy for Best Exporter Textile Promotion Council (TEXPROCIL) 2008

Welspun Corp 2nd Largest (Large Diameter) Line Pipe Manufacturerin the World - Financial Times UK - 2008

Welspun India Supplier of the Year Award J C Penny - 2008

Welspun India Earth Care Awards Times of India andJindal Steel Ltd - 2008

Welspun India Sustainability Award - Walmart - 2007

Welspun Corp One of the fastest growing large companies in India Business Today - 2007

Welspun India 4 Gold Trophies for Outstanding Export Performance Textile Promotion Council (TEXPROCIL) - 2007

Global Recognitions

Welspun Corp Star Performer Award for the year 2008-09All India Export Excellence Awards - EEPC 2010


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May 2011 Page 4

WCL An Introduction

WCL, flagship company of Welspun Group, is one of thelargest pipe manufacturing company in the world

Incorporated in 1995, the Company offers a complete rangeof high grade line pipes ranging from inch to 100 inchused inter alia for transmission of oil & gas

Partner of Choice for more than 50 Oil & Gas Giants acrossthe globe with a geographically diverse client base includingChevron, Exxon Mobil (Golden Pass Pipeline), Saudi Aramco,British Gas , Kinder Morgan etc

International footprint

Accredited with ISO 9001, ISO 14001 and OHSAS 18001certifications

Strong order book of U.S. $ 1.5 Bn

26,834 39,94557,395

73,50358,604

020,00040,00060,00080,000

2006-07 2007-08 2008-09 2009-10 9M 2010-11

(INR MM)CAGR (07-10): 40%

617 991 1,250US $ MM

2,666

5,845 4,768

11,3019,447

5003,5006,5009,500

12,500

2006-07 2007-08 2008-09 2009-10 9M 2010-11

(INR MM) CAGR (07-10): 62%

61 145 104US $ MM

Gross Profit

Steady Growth in Revenues and ProfitConsolidated Total Revenues

Summary Market Statistics

As of May 09, 2011 INR MM US$ MM (6)

Share Price (INR/ US$) 189.05 4.22

Market Capitalization 38,693 865

Enterprise Value (1) 46,042 1,029

41.07%

0.06%23.10%

35.77% Promoter

Mutual Funds

FII

Public, Banks and FinancialInstitutions

Shareholding Pattern, as on Mar. 31, 2010

Note1. Net Debt at INR 7,349 MM as on 31 Mar, 20102. Average exchange rate of US$1 = Rs 43.51 from 01-Apr-06 till 31-Mar-07

Note3. Average exchange rate of US$1 = Rs.40.29 from 01-Apr-07 till 31-Mar-084. Average exchange rate of US$1 = Rs.45.91 from 01-Apr-08 t ill 31-Mar-095. Average exchange rate of US$1 = Rs.44.90 from 01-Apr-09 t ill 31-Mar-106. Exchange rate of US$1 = Rs. 44.7300 on May 09 2011

1,637

252 (5)

(5)(4)(3)(2)

(2) (3) (4)

1311(6)

211(6)


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May 2011 Page 5

WCL An Introduction

Welspun Corp Limited (WCL)Promoters (41.07%) Public and Others (58.93%)

Welspun Plate and Coil MillDivision

Manufacturer of state-of-artPlates and Coils

Plates & Coils

Pipes

- Longitudinal (LSAW)

- Helical / Spiral (HSAW)- Electrical (ERW)

Welspun Pipes Inc, USA Welspun Natural ResourcesPvt. Ltd.Oil & Gas Exploration Activities

Welspun Tubular LLCManufacturer of Pipes,

Coating and Double jointing

Welspun Global Trade LLC C o r p o r a

t e S t r u c

t u r e

P r o

d u c

t s

M a n u f a c

t u r i n g

F a c

i l i t i e s

Premier integrated set-up for manufacturing weldedpipes. Installed state-of-the-art-technology and iscompletely geared to meet the requirements of theglobal industry. The Longitudinal Pipes division (LSAW) has a

capacity of 350,000 metric ton per annum. TheSpiral Pipes division (HSAW) has a capacity of

550,000 metric ton per annum. The ERW Pipes division has a capacity of 200,000

metric tonper annum. It also has Coating capabilities

Anjar & Dahej Pipe Mills With manufacturing facility on a 740-acre site adjacent

to the Li tt le Rock Por t Authori ty, the $150 mill ionfacility commissioned in February 2009.

This API certified facility currently employs more than300 people and is capable of producing 350,000 tonsof HSAW pipes annually for the use of the oil and gasindustry.

The facility can produce Pipes from 24 to 60 inches asouter diameter; 6 mm to 25 mm as wall thickness andlengthof 40 -80ft.

It also has Coating and Double Jointing capabilitiesand is a one-stop-solution provider to Welspun'svalued customers

Little Rock , Arkansas, USA This backward integration at Anjar, Kutch,

Gujarat, India has annual capacit y t oproduce 1.5 million tones of Plate and Coilwith plates (up to 4.5 meters wide, 140 mmthickness) and Coil (up to 2.8 meters wide,25 mm thickness) with strength of 120,000PSI.

This mill can cater to high end specializedproduct requirement of Line Pipe Industry(API grades), Shipping, Heavy construction,Bridges, Boiler plates, Wind blades etc.

Plate-cum-Coil Mill

WCL 100% WCL 100%

Oil and Gas

100% Beneficial Interest100% Beneficial Interest

Welspun Infratech Ltd.Infrastructure

(Welspun Projects ltd)

Welspun Energy LtdSolar & Renewable Energy

Renewable Energy &

Infrastructure

Dammam, Saudi Arabia Manufacturing facility of 300,000 tons of

HSAW pipes annually for the use of the oiland gas industry.


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Growth at Infinity

Merger of coating J.V. with WCL

New Capacity at Anjar, Gujarat for HSAW & Coating

Incorporated

350,000 tons US Spiral Mill commissioned

Approvals from O&G majors for new facility

Anjar Facility , A Key Contributor

Embarked on a Growth Journey

HSAW, Dahej, Gujarat

LSAW, Dahej, Gujarat

Pipe Coating in JV with EUPEC, Germany

Dahej, Gujarat

Growth 8

2006

2005

2004

2001

2000

1998

1995

Rs. 180 mn.

Rs. 585 mn.

Rs. 2,565 mn.

Rs. 8,277 mn.

Rs. 10,385 mn.

Rs. 18,298 mn.

2007Rs. 26,834 mn.

Rs. 39,945 mn. 2008Commissioning of Plate Mill & 43 MW Power Plant

Rs. 57,395 mn. 2009

Rs. 73,503 mn. 2010

- 100,000 tons HSAW Plant in KarnatakaoperationalInvestment in Middle East with HSAW

capacity of 300,000 MT operational- 350,000 MT pipe capacity addition under

implementation in IndiaForay into infra & pipe laying for O&G andwater through MSK Projects India Ltd.

9M FY 2010-11Rs. 58,604 mn.

Revenue

150,000 MT Spiral Mill commissioned


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Welspun Corp Limited: Strong Value & Growth Story

Strong Industry Fundamentals1

Global Footprint & Pre Approved with Oil & Gas Majors3

Robust Business Fundamentals & Healthy Order Book2

Strong Management Team with Proven Execution Capabilities4

Exponential Growth in Revenues & Margins5


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Proposed pipeline of GAILPhase I by 2011 (Under Execution)

Name of PipelineLength(Kms)

Cost(Rs Cr)

Add. Cap(MMSCMD)

DVPL Ph -II / Vijaypur Dadri 1,115 10,830 80

Dadri - Bawana - Nangal 646 2,349 31

Chainsa - Jhajjhar - Hissar 349 1,259 35

Sub Total 2,110 14,438 146

Phase II by 2012 (Approved in 2009)

Name of Pipeline Length(Kms)Cost

(Rs Cr)Add. Cap

(MMSCMD)

Jagdishpur - Haldia 2,050 7,596 32

Dabhol - Bangalore 1,389 5,014 16

Kochi - Mangalore - Bangalore 1,114 3,263 16

Sub Total 4,553 15,873 64

Grand Total 6,663 30,311 210

CompanyTotal Length

(kms)Quantity(KMT)(1)

BusinessPotential

(US$ Bn) (2)

GAIL 6,663 1,332 1.6

RGTIL 2,750 550 0.7

GSPL 5,675 1,135 1.4

Total 15,088 3,017 3.7

1. Strong Industry Fundamentals

Relatively Few Major Players

North America26%

Latin America5%

Europe18%Africa

7%

Midd le East17%

Asia18%

Australasia9%

Share of Expected DemandUntil 2016 Industry is highly capital intensive with high barriers to

entry

Niche markets exist which have been effectivelyexploited by Welspun Reliability and reputation for excellence are

paramount, as pipelines are used for criticalapplications such as oil and gas transport

Prospects for the industry brightening with oil pricesgaining strength

Welspun is well placed, with global clients and state-of- the-art technology, to capitalise on this opportunity

Source GAIL India Investor Presentation , August 2010

International Demand Outlook till 2016

Region Projects

Total

Length(kms) Quantity(MMT)(1)

BusinessPotential

(US$Bn) (2)

North America 185 64,578 13 15

Latin America 38 28,596 6 7

Europe 127 42,208 8 10

Africa 50 23,725 5 6

Middle East 120 39,346 8 9

Asia 126 69,278 14 17

Australasia 61 17,764 4 4

Total 707 285,495 57 69

Source: Simdex, US, Jan 2011 Update

Source: Simdex, US, Jan 2011 Update

Source: Industry Sources

Note 1. Conversion rate of 200 tonnes / km 2. Conversion rate of $1,200 / ton 3. As illustrated in the adjoining tables

Domestic Market Size

Source: GAIL India Ltd Presentation Aug 10 / Company data

Global Demand

Business potential of around USD 69 Bn (3) - Simdex Replacement of the old pipelines in US

New Gas is required to replace annual decline inexisting gas supplies in North America, which shallenhance demand for new pipelines

Shale Gas gradually increase its share in total gasrequirement in US

Alaska Pipeline project -another boost to the demandfor pipes

Domestic Demand Low pipeline penetration in India provides huge

potential Natural Gas as a source of energy is growing at a rapid

pace and shall grow the demand for pipelines Formation of the Petroleum & Natural Gas RegulatoryBoard (PNGRB) to give boost to trunk pipelines

City Gas Distribution set to take-off Liquefied Natural Gas (LNG) terminals projects to

enhance pipe demand Water Infrastructure projects: A Key driver for HSAW

pipes


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377501

670 718814

720

193

384 373

0

100

200

300

400

500600

700

800

900

FY06 FY07 FY08 FY09 FY10 9M FY11

Going Strength to Strength

FY07 FY09 FY10

Oil & Gas CoApproval 36 >50 >50

Production( '000 MT) 501 717 814

Revenue(US$ MM) 571 1,250 1,637

PAT(US$ MM) 36 47 136

No. of countries Global Global Global

Export Market 67% 76% 77%

2. Robust Business Fundamentals & Healthy Order Book

Strongly Positioned

350

1,300

200

1,850 1,500

350

350

(200)

200

600

1,000

1,400

1,800

2,200

LSAW H SAW ERW To talPipe

Plate Mill

Current Capacities

000 MT pa

Export Market Gaining DominanceProduction Growth

000 MT

77%76%83%67%

23%24%17%33%

0%

20%

40%

60%

80%

100%

FY07 FY08 FY09 FY10

Export Domestic

Welspun serves several marqueecustomers like Exxon Mobil (GoldenPass Pipeline), Kinder Morgan, Ruby(El Paso) and GAIL because of itsspecialized offerings

It has long term contracts with giantslike TransCanada; and frameworkagreements with Chevron, SaudiAramco, etc

Successfully expanded into highlycompetitive North and Latin America totake advantage of higher realizations

Pipes Plates

Existing Capacities New Capacities


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Process Process

Steel Slab(API Grade)

Steel Plates/Coils (API Grade)

Pipes(API Grade for O&G)

Selling Price (1):$ 850- 900 /ton.

Selling Price (1):

$ 1,000-1,050 /ton .Selling Price (1):

$ 1,300-1,400/ton .

Raw Steel

Welpsuns Value Chain (from Slabs to Pipes)

Process


Backward integration into plates provides critical value advantage

Opportunity to service the high end steel category which is currently serviced through importsNote1. Indicative market prices


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Order Book

Orders Booked during FY 09 - $ 1.6 bn

Orders at the beginning of FY 10 - $ 1.6 bn

Orders Booked during FY 10 - $ 1.3 bn

Orders executed during FY 10 - $ 1.6 bn

Orders at the beginning of FY 11 - $ 1.4 bn

Orders Booked during FY 11 (YTD) - $ 1.4 bnOrders executed during 9M FY 10 - $ 1.3 bn

Current Orders in Hand (938 k Tonnes) - $ 1.5 bn

Raw material tied up for all outstanding orders

Majority of the shipping finalized


Current Order Book Geographical Distribution by Volume

Some of the Top Clients for Pipes

Client CountryEnterprise USA

Transcanada Pipe Line Limited CanadaGas Authority of India Ltd. IndiaIndian Oil Corporation of India IndiaSaudi Aramco Middle-East

0%10%20%30%40%50%60%70%80%90%

Export Domestic

86%

14%


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http://www.ft.com/


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AGIP NTPC

BECHTEL ONGC

BRITISH GAS PETRO CHINA

BRITISH PETROLEUM PETRONAS, MALAYSIACHINA NATIONAL PETROLEUM CORPORATION PDO, OMAN

CPMEC, CHINA PGN, INDONESIA

CHEVRON (Framework Agreement) QATAR PETROLEUM

DOW RELIANCE INDUSTRIES LIMITED

RUBY (ELPASO) SAIPEM, SNAM

EGYPTIAN GENERAL PETROLEUM CORPO RATION S AUDI ARAMCO (Framework Agreement)

ENTERPRISE SHELL

EXXON-MOBIL (GOLDEN PASS PIPELINE) STOLT OFFSHORE Acergy

GAIL SONATRACH

GASCO, ABUD HABI TOTA LGASCO, EGYP T TECH NIP

GAZPROM (ST ROYTRANSGAZ) TRANSCANADA (Long Term Contract)

KINDER MOR GAN UNOCAL

MOGE, MYANMER PERU LNG (HUNT OIL)

N.A.O.C. - NIGERIA VIETSOPETRO

NPCC, ABU DHABI

3. Global Footprint & Pre Approved with Oil & Gas Majors

3 - 5 years

Setting up plant2 years

Seeking APIapproval

1 year

Approval frommajor domestic/ international

oil and gascompanies

2 3 years

Accreditation ProcessA significant entry barrier
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4. Strong Management Team with Proven ExecutionCapabilities

Mr. L. T. Hotwani is Director, Supply Chain Managementof Welspun Corp Limited. With a rich experience of over 36years, Mr. Hotwani is instrumental in sourcing raw materialsand managing supply chain with global players

Mr. B.K. Goenka is the Chairman, and the chief architect

of the Welspun Group. Today, with his entrepreneurialability and professionalism, he has built up one of the mostadmired business conglomerates

Mr. R.R. Mandawewala is the Managing Director . He hasbeen a key contributor in Welspuns journey. A CharteredAccountant by profession and with over 20 years of experience, he has cross-industry expertise varying fromTextiles to SAW pipes.

Mr. M.L. Mittal serves as Executive Director . A CharteredAccountant by profession, Mr. Mittal has been instrumentalin arranging Long Term Loans and Working CapitalFacilities. During his tenure, the Company has successfullyfunded several expansions projects.

Mr. Akhil Jindal serves as Director of Corporate Affairs .He graduated with an Engineering Degree and thereafter an

MBA from Indian Institute of Management, Bangalore. Mr.Jindal is responsible for strategic inorganic/organicinitiatives within the Group and has spearheaded large fundraisings, cross border acquisitions, private equity raisingsand financial closure of projects exceeding over US$ 1 bn.

Mr. Asim Chakraborty is Executive Director and Plant Head

of the Anjar facility. A Civil Engineer from the University of Kolkata, Mr. Chakraborty has been instrumental in timelyconstruction of various projects

Mr. Vipul Mathur is the Director of Marketing & Sales(Pipes & Plates Division) . A Science Graduate and Masters inBusiness Administration (MBA) in Marketing, he has a richexperience of over 16 years in the Oil & Gas Pipe Industry

Mr. Prashant Mukherjee serves as Director of WeldedPipes . A Graduate in Science (Engineering, Mech) with over 24

years experience mostly in the Oil & Gas Pipe Industry, Mr.Mukherjee has been instrumental in implementing expansionprojects in the Company

Mr. B.R. Jaju serves as Director & CFO . A Charteredaccountant by profession, member of Company Secretary (FCS),as well as a Law Degree (LL.B). He has a rich experience over30 years in finance and global M&A activities. Mr. Jaju has beenawarded 3 times as Best Performing CFO in the year 2003, 2005and 2006, by the most credible nationally renowned jury.

Management Team

Mr. David J. Delie serves as President Welspun TubularLLC. A graduate in Science (Electrical Engineering) and aMasters Degree in Engineering Management from theUniversity of Pittsburgh, he has an extensive 33-yearbackground in the steel and pipe industry. Mr Delie has

served on the Board of Directors of Berg Steel Pipe Corp.,EB Pipe Coating, Inc., the American Iron & Steel Institute(AISI).


15/27May 2011 Page 15


LSAW Pipes ERW Pipes

HSAW PipesCoating of Pipes


16/27May 2011 Page 16


PlatesPlates

US Plant


17/27May 2011 Page 17

4. Strong Management Team with Proven ExecutionCapabilitiesUS Plant

Rationale for US Plant Opportunity to locate closer to customers who were facing supply challenges

Transportation cost becomes quite large for inter-continental shipment

Existing capacity in the US was not able to serve the requirement of US clients

State of the art facility at Little Rock, Arkansas. Commissioned in Feb-09 and has obtained all APIapprovals

Key supplier for last 5 years in US with client list that includes Chevron, Exxon Mobil (Golden PassPipeline), Kinder-Morgan and Ruby (El Paso)

Framework agreement with Chevron, making Welspun one of the three global preferred vendor fornext 3-5 years

Supplied pipes for worlds deepest pipe - line in Gulf of Mexico

In 9M FY 2011 utilization levels ramp-up to 63%


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Notes1. Excluding Other Income2. Using avg. exchange rate of US$1 = Rs.44.28 from 01-Apr-05 till 31 -Mar-06

3. Using avg. exchange rate of US$1 = Rs.43.51 from 01-Apr-06 till 31-Mar-074. Using avg. exchange rate of US$1 = Rs.40.29 from 01-Apr-07 till 31-Mar-08

10,493

3,384

1,655

6,555 6,348

13,186

0

4,000

8,000

12,000

2005-06 2006-07 2007-08 2008-09 2009-10 9M-2010-11(3) (4) (7)(5)(2)

37 78

5. Exponential Growth in Revenues & Margins

371

501

641695

814

640

154

356387

50

250

450

650

850

2005-06 2006-07 2007-08 2008-09 2009-10 9M -2010-11

(000 MT) (INR MM)CAGR (06-10): 22%

(INR MM)

5,150

1,425

614

3,408

2,135

6,104

0

1,500

3,000

4,500

6,000

2005-06 2006-07 2007-08 2008-09 2009-10 9M-2010-110.0%

4.0%

8.0%

12.0%

16.0%

PAT Margin (%)(INR MM)CAGR (06-10): 68% CAGR (06-10): 78%

163 138US$ MM

Sales (volume) Consolidated Revenues (1)

EBITDA (1) Profit After Tax

1,250US$ MM 991413(2) 617 (3)

(4) (5)

Notes5. Using avg. exchange rate of US$1 = Rs.45.91 from 01-Apr-08 till 31 -Mar-096. Includes extraordinary items : forex provisioning of INR1,256MM, Inventory write-down of INR 385MM,

ECB provisions of INR 178MM7. Using avg. exchange rate of US$1 = Rs.44.90 from 01-Apr-09 till 31 -Mar-108. Includes recovery of past forex provisioning ( in FY09) , which is reflected in better realization and cost of material9. Exchange rate of US$1 = Rs.44..705 as at 31-Dec-10

(3) (4) (5)(2)14 33 85 47

1,637(7)

294 136 (7)

18,29826,834

39,945

57,395

73,503

58,604

0

25,000

50,000

75,000

100,000

2005-06 2006-07 2007-08 2008-09 2009-10 9M-2010-11

CAGR (05-10): 42%

(8)

# Plates

(#)(#)

(#)

(9)1311

235(9)

115(9)

US$ MM

(6)

(6)


19/27May 2011 Page 19

4.28.7

18.3

11.5

28.423.3

0

7

14

21

28

35

2005-06 2006-07 2007-08 2008-09 2009-10 9M-2010-11

CAGR (06-10): 61%

14.7%

19.5%

11.4%

17.3%19.1%

12.2%

21.8% 21.7%

13.7%

21.0%

0%

5%

10%

15%

20%

25%

2005-06 2006-07 2007-08 2008-09 2009-10

R OC E R OE


EPS (Rs./Share)(Diluted)

ROCE and ROE (%)


20/27May 2011 Page 20


Consolidated Balance Sheet (Rs. Mn.) FY2009 FY2010 ChangeSources of FundsShareholders' Funds

Share Capital 932 1,022 89 Reserves and Surplus 14,664 27,990 13,325

15,597 29,011 13,414

Minority Interest 0 0 (0) Foreign Currency Monetary Item Translation Difference A/c - 75 75 Loan Funds -

Secured Loans 26,435 18,654 (7,780) Unsecured Loans 103 6,822 6,718

26,538 25,476 (1,062) Deferred Tax Liabilities (Net) 2,488 3,352 865

Total 44,623 57,915 13,292


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Consolidated Balance Sheet (Rs. Mn.) FY2009 FY2010 ChangeApplication Of FundsFixed Assets

Gross Block 34,844 38,810 3,966 Less:Depreciation/Amortisation/Impairment 3,847 5,889 2,042 Net Block 30,996 32,921 1,924

Capital Work-In-Progress 5,808 5,412 (396) 36,804 38,333 1,529

Investments 1,140 1,596 456

Foreign Currency Monetary Item Translation Difference A/c 355 - (355) Current Assets, Loans and Advances - Income Accrued on Investments 113 13 (99) Inventories 26,113 20,322 (5,791) Sundry Debtors 4,601 8,077 3,476 Cash and Bank Balances 9,470 17,028 7,558 Loans and Advances 5,552 6,031 479

45,848 51,471 5,623

Less : Current Liabilities and Provisions - Current Liabilities 38,955 32,291 (6,663) Provisions 601 1,219 618

39,555 33,510 (6,045) Net Current Assets 6,293 17,961 11,668

Preliminary Expenses 0 0 (0) Deferred Revenue Expenditure 31 25 (5)

Total 44,623 57,915 13,292


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May 2011 Page 22

Consolidated Balance Sheet as on 30 th Sept 2010

ParticularsH1 FY 2011

As at 30.09.2010

Unaudited (Rs. Mn)A Sources of Funds1 Shareholders Fund

a Share Capital 1,023b Reserves and Surplus 31,470c Share Application Money -d Minority Interest 1,548

2 Loan Funds 38,9133 Foreign Currency Monetory Item Translation Difference Account 384 Deferred Tax Liabilities-Net 3,761

Total 76,753B Application of Funds1 Fixed Assets 40,2962 Build Operate and Transfer Projects Expenditure 4,1593 Investments 13,0654 Foreign Currency Monetory Item Translation Difference Account5 Current Assets, Loans and Advances

a Inventories 19,002b Sundry Debtors 12,998c Cash and Bank Balances 13,132d Loans and Advances 4,964

Less4 Current Liabilities and Provisions

a Current Liabilities 29,404b Provisions 1,482

5 Miscellaneous Expenditure 25Total 76,753

Breakdown of Production and Sales in Metric Tonnes (MT)


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May 2011 Page 23

9M & Q3 FY 2010-11 Highlights

Summary of 9M & Q3 FY11 (Rs. Million)

Breakdown of Production and Sales in MT

Major Highlights in 9M FY11

Sales strengthened by volume growth and consolidationof Infra business and is up by 2%

Interest costs lower by 42%, due to repayment of high

cost debt Depreciation is higher by 17%, due to capitalization ofnew capacities and consolidation of Infra business

PAT at Rs. 5,150 million reflects the growth of 16% on aYoY basis

Net Debt of Rs 11,120 million and Net Debt Equity Ratioof 33%

Status of ProjectsCapacity of Pipes is being increased to 2.2 million MTPA:

LSAW expansion of 350 K MTPA at Anjar in Q1 FY 2012. HSAW plant of 100K MTPA at Karnataka is now fully

operational. Saudi Plant commences production in Q4 FY11

New Initiatives The company successfully completed the investment in

the Saudi plant, which has commenced production in Q4FY11

Implementation of L-SAW plant at Anjar is on schedule,and is likely to be commissioned by the end of Q1 FY12

The Mandya plant in Karnataka has started productionand is ramping up to achieve desired level of production.

Welspun Middle East is establishing its presence inDubai to cater to the bouyant markets of Middle East andAfrica.

Particulars Q3 FY11 Q3 FY10 Growth%9M

FY119M

FY10Growth

%Sales 15,862 16,395 -3% 58,604 57,528 2%Reported EBITDA* 3,154 3,561* -11% 10,493 10,336* 2%

Interest 454 428 6% 1,046 1,790 -42%Depreciation 653 511 28% 1,808 1,541 17%PAT 1,465 1,668 -12% 5,150 4,439 16%Cash PAT 2,297 2,300 7,481 6,191 21%EPS (Rs./Share) -Diluted 6.65 7.83 -15% 23.26 20.91 11%

Reported EBITDAMargin (%) 19.9% 21.7% 17.9% 18.0%

PAT Margin (%) 9.2% 10.2% 8.8% 7.7%

Production Volume (intons) Q3 FY11 Q3 FY10 Change 9M FY11 9M FY10 Change

Total Pipes Consolidated 211,787 156,679 35% 719,613 613,544 17%

Plates & Coils 144,279 93,586 54% 372,635 276,749 35%

Sales Volume (in tons) Q3 FY11 Q3 FY10 Change 9M FY11 9M FY10 Change

Total Pipes Consolidated # 163,611 170,216 -4% 639,862 610,319 5%

Plates & Coils* 124,511 112,329 11% 355,937 288,279 23%

( )

*Reported EBITDA and Profits for the quarter and nine months period ended 31st December 2009 i ncludes Foreign Exchange realig nment gain of Rs 590 milli onand Rs 1,260 million.

# Company recorded higher inventory of pipes in Q3 FY11due to delay in shipment of certain export orders. The above inventory of finished pipes is beingdispatched in Q4 FY11 ensuring that the company achieves its annual sales target and records its highest ever sales in FY11.* Includes Internal Sales


24/27

May 2011 Page 24

Summary

2Robust BusinessFundamentals& Healthy Order Book

Strong volume growth Order Book in excess of US$

1.5 Bn Capacities of global size Comprehensive product mix

Strong Management Teamwith Proven ExecutionCapabilities

Recognized by the FT as thesecond largest steel pipeproducer in the world in 2007

First Indian company to supplypipes for offshore projects in US

4 3 Global Footprint & PreApproved with O&G Majors

Presence across more than 25countries

Pre-approved with more than50 O&G Majors

1 Strong IndustryFundamentals

Capital intensive, highbarriers to entry

North America expected tolead demand

5 Exponential Growth inRevenues & Margins

Revenues have grown at aCAGR of 42% over the lastfive years

PAT has grown at a CAGR of78% in the same period

1 Strong IndustryFundamentals

Capital intensive, highbarriers to entry

North America expected tolead demand


25/27

May 2011 Page 25

Welspun on the Path of Global Leadership

Scale of operations through large economic plants across the globeScale Leadership

Adopt and innovate cutting-edge technology to satisfy stringentrequirements of customers

TechnologyLeadership

Produce world class products at the least cost and maintain competitive edgeCost Leadership

Consistent focus on quality at all levels; be the best in delighting customersQuality Leadership

Most efficient and effective processes to achieve optimal utilizationsProcess Leadership

Best in class people : Produce extraordinary resultsPeople Leadership

Global Leadership Serve Globally, Act Locally


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May 2011 Page 26

Key questions on recent updates

What is Welspun's exposure to current civil proceedings?

During the previous year one of the customer reported defect in the pipes suppliedalleging grade of steel used did not meet the specifications, the company replaced thedefective pipes and also provided for the expected loss on this account. During the year

the said customer initiated legal action against the company in the United States ofAmerica claiming loss / damages of $ 66 million on account of defects in the pipessupplied, consequently the company also initiated legal action against the steel supplierclaiming corresponding loss / damages it may suffer on account of this claim of thecustomer. Hence the company does not expect any liability on account of the claimagainst it.


27/27

Thank You

For further details, please contact:

Navin Agarwal

AVP - Corporate Affairs

Email: [email protected]

Akhil Jindal

Director - Corporate Affairs

Email: [email protected]

Company Website: http://www.welspuncorp.com

Welspun Corp Presentation 09 May 2011

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Transcript of Welspun Corp Presentation 09 May 2011