Sadbhav Engineering Limited

Corporate Presentation April 2016

Disclaimer This presentation and the accompanying slides (the “Presentation”),which have been prepared by Sadbhav Engineering Limited (the “Company”), have been prepared solely for information purposes and do not constitute any offer, recommendation or invitation to purchase or subscribe for any securities, and shall not form the basis or be relied on in connection with any contract or binding commitment whatsoever. No offering of securities of the Company will be made except by means of a statutory offering document containing detailed information about the Company. This Presentation has been prepared by the Company based on information and data which the Company considers reliable, but the Company makes no representation or warranty, express or implied, whatsoever, and no reliance shall be placed on, the truth, accuracy, completeness, fairness and reasonableness of the contents of this Presentation. 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. Certain matters discussed in this Presentation may contain statements regarding the Company’s market opportunity and business prospects that are individually and collectively forward – looking statements. Such forward-looking statements are not guarantees of future performance and are subject to known and unknown risks, uncertainties and assumptions that are difficult to predict. These risks and uncertainties include, but are not limited to, the performance

of the Indian economy, the performance of the infrastructure industry in India and world - wide, competition, the company’s ability to successfully implement its strategy, the Company’s future level so growth and expansion, technological implementation, changes and advancements, changes in revenue, income or cashflows, the Company’s market preferences and its exposure to market risks, as well as other risks. The Company’s factual results, level so activity, performance or achievements could differ materially and adversely from results expressed in or implied by this Presentation.

Agenda

3

1.

Company Snapshot

4

2.

Business Overview – Sadbhav Engineering Limited (SEL)

9

3.

BOT Holding Co.- Sadbhav Infrastructure Project Limited (SIPL)

17

4.

Financials

22

Company Snapshot

Snapshot  Sadbhav Engineering Limited (SEL), incorporated in 1988, is engaged in o Engineering, Procurement and Construction (EPC) business for Transport, Mining and Irrigation sector o Development of roads & highways on Build, Operate and Transfer (BOT) through Sadbhav Infrastructure Project Limited (SIPL)

 Well diversified order book of Rs 74,873 mn as on March 31, 2016 with presence in 11 different states

 Company has strong in-house integrated execution capabilities with highly qualified human resources and state of the art equipments. Gross block of fixed assets as on 31st March 2016 stands at Rs. 9,387 mn.

 Pre-qualified to bid for DBFOT projects up to Rs 34,000 mn and upto Rs 14,945 mn for EPC projects  Equity shares were listed in 2006 on BSE & NSE with a market cap of Rs 2,016 mn, As on 27th April 2016 the market cap stands at ~Rs 46,500 mn. Long-term facilities & NCDs are rated A+ by CARE and short-term facilities/CP are rated A1+ by CARE

 Diversified shareholding with FIIs and DIIs holding at approx 15% and 27% respectively as on 31st March 2016  During FY16, SEL achieved a standalone & consolidated turnover of Rs 31,863 mn & Rs 38,775 mn respectively  Company has been making profits since inception in its standalone business and has paid regular dividend over the last 14 years Order Book Rs 74,873 mn – March 2016

Transport

26% 55% 19%

Irrigation Mining

Order book to sales ratio stands at 2.4 x FY16 revenue providing good revenue visibility 5

Projects Completed Till Date Segment

Size

Transport–Roads

Over 6,000 lane kms

Irrigation – Canal work

Over 300 kms

Mining

Over 350 mn cubic mt

Key Clients

Key Management Personnel Board of Directors Mr. Vishnubhai M Patel (Managing Director and Chief Executive Officer) Mr. Vasistha C Patel (Whole time Director)

Mr. Shashin V Patel (Joint Managing Director)

Mr. Nitin R Patel (CFO & Whole time Director)

Mr. Vikram R Patel (Whole time Director)

Mr. Sandip V Patel, Mr. Atul N Ruparel, Mr. Arun S Patel, Mr. Sandip A Sheth, Mr. Mirat N Bhadlawala, Ms. Purvi S Parikh acts as Independent Directors

Experienced Key Management Personnel Mr. H.C. Shah (President - Finance)

Mr. Parulkumar Shah (GM - BD)

6

Mr. Sanjay Tiwary (COO - Mining)

Mr. Tushar Shah (Company Secretary)

Mr. Amarsinh Vaghela (Technical Director -Irrigation)

Mr. Ashok Menon (President - HR)

Shareholding Pattern Institutional Investors

Shareholding Pattern as on March 2016 Category

No. of shares

%

PromoterGroup

80,909,880

47.17%

Public Shareholding

90,623,920

52.83%

46184589

26.92%

32,266

0.02%

25665457

14.96%

18,741,608

10.93%

171,533,800

100.00%

Institutions - Mutual Funds / UTI

- Financial Inst. / Banks - FIIs Non-Institutions Total Shareholding

Strong Institutional Presence over the years..

120% 100%

13%

10%

9%

13%

11%

40%

43%

42%

40%

42%

80% 60%

Institutional Promoter

40% 20%

47%

47%

49%

47%

47%

2012

2013

2014

2015

2016

0% 7

Non Institutional

Growth Story CAGR 2006-16 Net Revenue Net Profit Order book

~ 27% ~ 25% ~ 19%

Mar 2010

At the time of IPO - Mar 2006 Net Revenue Net Profit Net worth Gross Block Order Book

Rs 2,913 mn Rs 139 mn Rs 1,254 mn Rs 1,038 mn Rs 13,300 mn

BOT Projects1 1 Under Construction 1 Total Project Cost Rs 8,060 mn Mkt Cap2

8

Rs 2,016 mn

Net Revenue Net Profit Net worth Gross Block

Rs 12,569 mn Rs 538 mn Rs 3,915 mn Rs 3,322 mn

Order Book

Rs 67,686 mn

BOT Projects 6 3 Fully Operational 3 Under Construction Total Project Cost Rs 48,430 mn Mkt Cap

Rs 15,850 mn

Mar 2016 Net Revenue Net Profit Net worth Gross Block

Rs 31,863mn Rs 1,337mn Rs 14,715 mn Rs 9,387 mn

Order Book

Rs 74,873 mn

BOT Projects3 12 8 Fully Operational 1 Partially Operational 3 Under Construction Total Project Cost Rs 109,500 mn Mkt Cap4

Rs 46,500 mn

Note – Financials are on standalone basis 1.LoA date 2.On listing date 3.Including stake in MBHPL held by SEL. 4.As on 27-April-16

Business Overview - Sadbhav Engineering Limited (SEL)

Corporate Structure Sadbhav Engineering Limited 68.35%

EPC Business

Sadbhav Infrastructure Project Limited (SIPL) BOT Project Portfolio

Transport

Irrigation

Mining

Note: 1. Share purchase agreement (SPA) has been signed for stake transfer of 10.00% stake from Srei group to SIPL. SPA has been signed for stake sale of 12.18% and 9.625% stake to D.Thakkar Construction Private Ltd by SEL and SIPL respectively 2. SPA has been signed for stake transfer of 74% stake from SEL to SIPL and 26% stake from GKC Projects to SIPL

SEL

J.V

1

Ahmedabad Ring Road Infrastructure Limited (ARRIL)

100.0%

0.0%

0.0%

2

Aurangabad Jalna Tollway Limited (AJTL)

100.0%

0.0%

0.0%

3

Nagpur Seoni Expressway Limited (NSEL)

100.0%

0.0%

0.0%

4

Hyderabad Yadgiri Tollway Private Limited (HYTPL)

100.0%

0.0%

0.0%

5

Bijapur-Hungund Tollway Private Limited (BHTPL)

77.0%

0.0%

23.0%

6

Rohtak Panipat Tollway Private Limited (RPTPL)

100.0%

0.0%

0.0%

7

Maharashtra Border Check Post Network Limited (MBCPNL) 1

77.8%

12.2%

10.0%

8

Dhule Palesner Tollway Limited (DPTL)

99.9%

0.1%

0.0%

10 Shreenathji-Udaipur Tollway Private Limited (SUTPL)

100.0%

0.0%

0.0%

11 Bhilwara Rajsamanad Tollway Private Limited (BRTPL)

100.0%

0.0%

0.0%

12 Rohtak Hisar Tollway Private Limited (RHTPL)

100.0%

0.0%

0.0%

0.0%

74.0%

26.0%

13 Mysore Bellary Highway Private Limited(MBHPL) 2

Operational

10

SIPL

Under Construction

SEL - EPC Business

Transport

Order book 

Transport projects with a balance work order of Rs 40,706 mn as on March 31, 2016 which translates to 1.8 x of FY16 Transport revenue



Captive order book of Rs 2,334 mn & non captive order book of Rs 38,371 mn as on March 31, 2016

Major Projects Ongoing



Rehabilitation,

upgradation,

widening & strengthening of roads & highways 

Constructed more than 6,000 lane kms of roads & highways



Major projects completed o Widening & strengthening of

NH 15 (ADB funded) - 106 kms

•

Six lane eastern peripheral expressway, Haryana

•

Four laning of Yamunanagar - Saha - Barwala – Panchkula section, Haryana

•

Four laning of Ambala – Kaithal section of NH-65, Haryana

•

Malavalli to Pavagada section, Karnataka

•

Delhi metro project, Delhi

•

Rohtak to Hissar section, Haryana Transport Order book over the years Rs mn

66,201

53,990 45,961

o Lalsotto Kota road project in

37,929

40,706

FY15

FY16

Rajasthan – 183 kms o Early completion of ARRIL (76 kms), BHTPL (97 kms), DPTL (89 kms) 11

FY12

FY13

FY14

State-wise Transport Order book (FY16)

Key Clients

SEL - EPC Business

Irrigation

Order book



Irrigation projects with a balance work order of Rs 14,419 mn as on March 31, 2016 which translates to 2.7x of FY16 Irrigation revenue

Major Projects Ongoing

 Construction of earthen dams, canals, syphon, remodeling & improvement of canals  Constructed over 300 kms of canals 

12

Major projects completed o Construction of NMC from 108 to 127 km for SSNNL o Canal syphon across river Watrak for SSNNL o Construction canal earthwork, structures, lining and service road to Kachchh Branch Canal

•

'Bhauti high level canal, M.P

•

Omkareshwar right bank lift canal, M.P

•

Kachchh branch canal Adipur, Gujarat

•

HNSS main canal Anantapur district, Andhra Pradesh

•

Radhanpur sub branch canal, Gujarat

•

Gouravelly right side canal, Andhra Pradesh Irrigation Order book over the years

State-wise Irrigation Order book (H1 FY16)

Key Clients

Rs mn

5% 19,397

20,146

15,004

22%

14,419

40%

11,594

33%

FY12

FY13

FY14

FY15

FY16

M.P.

Gujarat

A.P.

Odisha

SEL - EPC Business

Mining

Order book 

Mining projects with a balance work order of Rs 19,747 mn as on March 31, 2016 which translates to 4.7x of FY16 Mining revenue

Major Projects Ongoing

  

13

Excavation of overburden & mining of minerals Excavated more than 350 mn cubic meters Major projects completed o Removal of Overburden at Khadia OCP o Removal of all types of material at Junad OCM of Wani area o 7 year repeat contract from GIPCL for excavation of overburden at Mangrol mines

•

Excavation work at Pit B of Jalipa Lignite Mines Barmer, Rajasthan

•

Excavation work at Mangrol lignite mines, Gujarat

•

Removal of over burden at Bharat Coking Coal , Dhanbad

•

Basantimata - Dahibari patch of Dahibari colliery of C.V. area, Jharkhand

•

Excavation of overburden at specified places of Amlohri OCP of NCL, M.P

•

Overburden & extraction of Uranium Ore Banduhurang mine, Jharkhand

Mining Order book over the years

State-wise Mining Order book (H1 FY16)

Rs mn

1% 24,049

23,925

20,222

19,748

22% 9%

9,958

FY12

52%

16%

FY13

FY14

FY15

FY16

Jharkhand Gujarat Maharashtra

M.P. Rajasthan

Key Clients

Order Book Order book to sales ratio stands at 2.4x FY16 revenue providing good revenue visibility (Rs mn)

2.8x

5.6x

3.8x

2.8x

2.4x 3%

101,426 89,407 75,542

82,000

74,873

Captive Non Captive 97%

FY12

FY13

FY14

FY15

FY16

Order Book to Sales Ratio

Segment wise Order book 3,715.2

5,173.8

74%

65%

13% 14%

20%

8,511.9

7,487.3

Over past 5 years, SEL has improved its presence in Irrigation & Mining segment from 27% of total order book as on FY11 to 45% as on FY16

29%

FY11

15% FY13 Irrigation

14

46%

Gross Block

Mining

55%

26%

25%

19%

FY15

FY16

Transport

National Footprint of Order book State

1 5

1

1 2 8

5

2

1

5

3

1

1 1 1 1

5

2 1

O/s Order Value* (Rs mn)

Haryana

291,428

6

Jharkhand

104,874

7

M.P.

88,879

6

Gujarat

69,026

12

Karnataka

34,587

2

Rajasthan

54,081

3

Maharashtra

15,948

2

A.P.

32,777

8

Delhi

14,504

4

Punjab

21,668

1

Odisha

20,892

2

748,664

53

Total

6

Project Type

Projects

Transport EPC

19

Transport BOT

3

Mining

11

Irrigation

20

Total 15

Projects

* as on 31.03.2016

53

Business Strategy

 Enhance shareholder value & returns by adopting best technologies, utilizing state of art equipments, reduce finance costs by financial structuring & other measures  Further strengthen market position & increase contribution to infrastructure needs of the country

 Continued focus on early completion of projects & high quality construction work

 Value creation of the BOT assets by securitization, monetization  Expand into new & complimentary sub-sectors in infra industry

16

 Continue expanding selectively in infra. development business into states with higher than average GDP

BOT Holding Co. - Sadbhav Infrastructure Project Limited (SIPL)

Sadbhav Infrastructure Project Ltd. • Incorporated in 2007, Sadbhav Infrastructure Project Ltd. (SIPL) is an asset holding arm of Sadbhav Engineering Ltd., currently having a portfolio of 11 Roads & Highways BOT projects with total project cost of ~Rs 101,608 mn • Equity shares of SIPL listed on BSE & NSE on 16-Sept-2015, As on 26TH April 2016 the market capitalization of SIPL stood at INR 36,103 mn

About

SIPL has a portfolio of 11 Roads & Highways BOT projects of which, 8 projects are fully operational, 1 partially operational and remaining are under various stages of development As on September 30, 2015

No. of Projects

No. of Projects

Toll

Annuity

NHAI

State

Operational

8

1

6

2

Under Construction

2

0

2

1

Total

10

1

8

3

Project Cost (Rs mn)

Lane kms

Residual life1 (Yrs/months)

Equity invested

2,207

16 Y 6 M

18,720

744

22 Y 5 M

2,434

2,951

17 Y 7M

21,154

Synopsis

Standalone Financials-SIPL Particulars (Rs mn)

1

FY15

FY14

101,608

Particulars (Rs mn)

858.0

701.1

911.8

Revenue

Other income

405.6

372.0

246.6

Total Income

1,263.6

1,073.1

1,158.4

Interest

1,400.0

1,037.5

526.8

10.4

(632.7)

6.1

Networth

12,458.3

8,435.9

Total Debt

11,721.2

12,579.1

Weighted average w.r.t. total project cost

19,476

Consolidated Financials-SIPL

Revenue

PAT

18

FY 16

82,132

FY 16

FY15

FY14

7,422.0

5,003.0

3,744.0

Other Income

201.9

285.9

215.9

Total Income

7,623.8

5,288.9

3,959.9

Interest

6,397.6

5,259.2

3,556.4

PAT

(2,737.1)

(3,450.5)

(800.7)

8,318.6

Networth

11,114.9

7,809.1

8,548.5

6,713.1

Total Debt

79,521.8

62,038.8

49,017.3

Operating Assets

Project Details

Particulars

ARRIL

AJTL

NSEL

HYTPL

BHTPL

Current Stake

99.99%

99.99%

99.99%

99.99%

76.99%

Proposed Stake

99.99%1

99.99%

99.99%

99.99%

76.99%

Toll

Toll

Annuity

Toll

Toll

Gujarat

Maharashtra

Maha/MP

Telangana

Karnataka

N.A

N.A

N.A

N.A

Monte Carlo Limited

AUDA

Govt. of Maharashtra

NHAI

NHAI

NHAI

305.4

263.2

110.9

142.6

388.8

Concession Start

Dec-06

Feb-07

Nov-07

July-10

Sep-10

Concession (yrs)

20

23.5

20

23

20

PCOD/COD

May-08

Jul-09

May-10

Dec-12

April-12

Residual Life (Yrs/Months)

10 Y 8 M

14 Y 3 M

11 Y 7 M

17 Y 4 M

14 Y 5 M

Revenue Sharing

Grant

N.A.

N.A.

Premium

Grant

Target Traffic (PCUs)

N.A.

N.A.

N.A.

34,897

39,338

Target Date

N.A.

N.A.

N.A.

01-Oct-19

01-Oct-20

Project Cost

5,435.1

2,724.0

3,747.9

4,947.1

13,688.7

Total Equity + Subdebt of SIPL

521.4

830.0

598.3

1,470.9

1,621.3

Debt Outstanding (31.03.2016)

3,396.1

1,546.0

1,950.0

3,737.6

8,196.9

Project Type State

JV Partner Client

Financials (INR mn)

Terms

Lane kms

19

Operating Assets

Terms

Project Details

Particulars

RPTPL

MBCPNL

DPTL

SUTPL

Current Stake

99.99%

77.82%

99.99%

99.99%

Proposed Stake

99.99%

78.19%1

100.00%

99.99%

Toll

Service Fee

Toll

Toll

Haryana

Maharashtra

Maharashtra

Rajasthan

N.A

SREI Infra and SREI Sahaj evillage Limited

SEL

N.A

Client

NHAI

Govt. of Maha.

NHAI

NHAI

Lane km

323.4

22 Border CPs

355.2

317.2

Concession Start

April-11

Diff. for all CPs2

Dec-09

Apr-13

Concession (yrs)

25

24.5

18

27

PCOD/COD

Jan-14

Diff. for all CPs

Jan-12

Oct-15

Residual Life (Yrs/Months)

20 Y

18 Y 1 M

11 Y 8 M

24 Y

Premium

Upfront Premium

Premium

Premium

23,800

N.A

37,000

24,281

Target Date

01-Sep-19

N.A

01-Oct-20

01-Apr-22

Project Cost

11,610.2

14,263.53

14,200.03

11,514.6

Total Equity + Subdebt of SIPL

2,426.8

3,856.6

3,483.8

3,114.6

Debt Outstanding (31.03.2016)

9,888.7

10,545.6

10,416.7

8,203.8

Project Type State JV Partner

Revenue Sharing

Financials (INR mn)

Target Traffic (PCUs)

20

Under Construction Assets

Terms

Project Details

Particulars

BRTPL

RHTPL

Current Stake

99.99%

99.99%

Proposed Stake

99.99%

99.99%

Toll

Toll

State

Rajasthan

Haryana

Client

NHAI

NHAI

Lane kms

349.0

395.2

Concession Start

Oct-13

Dec-13

Concession (yrs)

30

22

Scheduled COD

Apr-16

June-16

28 Y

19 Y 8 M

Revenue Sharing

Grant

Grant

Target Traffic (PCUs)

16,209

27,726

01-Oct-22

01-Oct-23

Expected Project Cost

6,761.0

12,715.8

Total Equity + Subdebt of SIPL

1,333.0

1,100.8

Total Equity + Subdebt invested by SIPL

1,333.0

1,100.8

2,600

8,649.7

98.65%

97.26%

Project Type

Residual Life (Yrs/Months)

Financials (INR mn)

Target Date

Debt Outstanding (31.03.2016) % EPC work complete as on 31.03.2016

As on date all projects are fully funded

21

Financials

Standalone Financials – SEL Balance Sheet (Rs mn) Share Capital

FY16

FY15

FY14

Income Statement (Rs mn)

FY16

FY15

FY14

171.5

171.5

151.7

Income from Operations

31,862.5

29,698.5

23,581.2

-

-

231.5

Expenditure

28,608.8

26,696.1

21,087.2

Reserves & Surplus

14,543.0

13,349.1

9,189.1

EBIDTA

3,253.7

3,002.4

2,494.0

Net Worth

14,714.5

13,520.6

9,572.2

%margin

10.21%

10.10%

10.60%

Long Term Borrowings

4,891.2

5,582.9

4,215.3

Short Term Borrowings

Depreciation

849.3

817.1

474.0

5,696.5

3,799.9

4,417.8

Finance Cost

862.5

890.9

931.0

10,587.7

9,382.8

8,633.1

231.6

244.1

356.7

Other Income

252.9

164.2

114.0

31.9

337.1

516.8

-194.5

-

-383.5

Total Liabilities

25,565.7

23,484.7

19,078.8

PBT

1,600.3

1,458.5

819.6

Gross Block

9,387.8

8,511.9

7,263.5

Tax

263.3

321.2

-242.0

Less: Depreciation

3,837.8

3,154.7

2,281.7

PAT

1,337.1

1,137.4

1,061.6

Net Block

5,549.9

5,357.2

4,981.9

%margin

4.20%

3.80%

4.50%

Non Current Investments

5,277.9

5,312.6

5,210.0

Net Current Assets

7,579.7

6,582.7

3,109.7

Cash and bank balances

366.5

351.1

761.7

Other Long Term Assets

6,791.7

5,881.1

5,015.6

Total Assets

25,565.7

23,484.7

19,078.8

Money recd. against Share Warrants

Total Debt DTL Other Long Term Liabilities

23

Exceptional items

Key Ratios

FY16

FY15

FY14

Net Debt to Equity

0.7

0.7

0.8

Interest Coverage Ratio

3.8

2.5

2.2

Consolidated Financials - SEL Balance Sheet (Rs mn) Share Capital

FY16

FY15 171.5

Money recd. against Share Warrants

Income Statement (Rs mn)

FY 14

FY16

FY15

FY14

171.5

151.7

Income from Operations

38,775.2

34,480.2

27,325.2

-

231.5

Expenditure

30,740.3

28,613.1

22,869.7

EBIDTA

8,034.8

5,867.1

4,455.5

% margin

20.72%

17.00%

16.30%

Depreciation

2,874.2

2,234.7

1,304.8

Interest

7,260.1

6,150.1

4,554.6

Other Income

446.3

442.3

306.3

Exceptional Item

421.5

91.1

1,217.2

-1,231.6

-1,984.3

119.5

168.7

342.7

-141.2

-1,400.3

-2,327.2

260.7

Reserves & Surplus

17,806.7

15,199.3

12,347.9

Net Worth

17,978.2

15,370.8

12,731.1

5,060.3

1,948.9

1,532.4

Long Term Borrowings

80,694.0

62,916.8

49,897.2

Short Term Borrowings

6,009.5

4,112.9

4,677.9

86,703.5

67,029.7

54,575.1

231.5

244.1

356.7

Tax

34,382.5

23,395.8

479.0

PAT

144,356.00

107,989.4

69,674.3

Minority Int & Share of Assc.

932.9

570.9

183.0

102,962.0

65,414.4

PAT After Minority Interest

467.5

-1,757.9

443.7

6,985.7

4,738.0

138,539.0

95,976.3

60,676.4

60.8

319.6

256.0

Net Current Assets

3,512.3

5,910.9

4,412.1

Cash & Bank

1,262.7

2,047.9

1,280.0

981.2

3,734.7

3,049.8

144,356.00

107,989.4

69,674.3

Minority Interest

Total Debt DTL Other Long Term Liabilities Total Liabilities Gross Block Less: Depreciation Net Block Non Current Investments

Other Long Term Assets Total Assets

#

24

Due to deferment of premium of HYTPL & RPTPL

PBT

Key Ratios Net Debt to Equity

FY16

FY15 3.8

FY14 3.9

3.8

Thank You