Sagar Cements Limited Corporate Presentation @ MAY 2015
Sagar Cements Limited
Corpora te P resen ta t i on
@ MAY 2015
Corporate Presentation 2
Experienced cement player with over 25 Years in business
Strong Sales and Distribution Network
One of the most Efficient Cement Players in the Country
Market Leader in South India for Sulphate Resistant Cement (SRC)
Capacity increased nearly 10 times since inception 1985 primarily
through debottlenecking and up gradation.
Current Clinker Capacity : 2.20 MTPA; Cement Capacity : 2.65 MTPA Bri
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Company Snapshot
• Plant is Located at Mattampally, Nalgonda District,Andhra Pradesh • Part of Nalgonda Cement Cluster • Head Office based out of Hyderabad
Corporate Presentation 3
Efficient Cement Producer
Strategically Located in proximity to Major Markets and Raw Material Sources
Major Markets Coal Mines
Plant Location Fly Ash Source
Plant located in close proximity to Major Markets.
Average Lead Distance of only 700 kms
Very well connected to various Locations and Ports .
Proximity to Major Markets
Proximity to Major Markets
Adequate Limestone reserves with over 1000 million Tons of proven Reserves
- Company has Mining Lease on 1158 Acres
- Company also has Prospecting License for 1967 Acres.
Coal Mines (Major Fuel) are less than 150 kms from the Plant . Company has over 75% Coal Linkage from Singareni Collieries Company Limited and balance is sourced from overseas.
Other Additives are also available abundantly nearby .
Company sources 70% of its Electrical Power from the Grid, 15% from its group company & 10% from Energy Exchange.
Packing Material is mostly sourced from its Group Company – Panchavati Polyfibres Limited
Corporate Presentation 4
Strong Sales & Distribution Network
Balanced Product Mix & Strong Brand Equity
Proximity to Major Markets Good Brand Equity
Dealers – 575 Sub Dealers – 1500 Wholesalers – 25 Distribution / Consignment Agents - 10
Bus Panel
Bus Shelter Bus Paintings
Shop Paintings
Wall Paintings Cab Paintings
Corporate Presentation 5
Strong Sales & Distribution Network
New Railway Line
Total Investment for new railway line – ` 123 crore
Completion of the new railway line will lead to better efficiencies and savings in costs
Dispatches by rail expected to go up by 20%
Project Completion – H1 FY 2016
DESPATCH DETAILS
Mode Q1 FY13 Q2 FY13 Q3 FY13 Q4 FY13 TOTAL
ROAD 391,173 366,627 350,200 441,557 1,549,557
RAIL 13,226 5,050 2,669 18,504 39,449
TOTAL 404,399 371,677 352,869 460,061 1,589,006
Mode Q1 FY14 Q2 FY14 Q3 FY14 Q4 FY14 TOTAL
ROAD 361,042 277,970 324,774 450,710 1,414,496
RAIL - 2,688 2,645 - 5,333
TOTAL 361,042 280,658 327,419 450,710 1,419,829
Mode Q1 FY15 Q2 FY15 Q3 FY15 Q4 FY15 TOTAL
ROAD 405,886 331,912 334,103 471,057 1,542,958
RAIL - 0 0 2,656 2,656
TOTAL 405,886 331,912 334,103 473,713 15,45,614
FY 2015 FY2014 FY2013 FY2012
Markets Quantity % of Total
Sales Quantity % of Total
Sales Quantity % of Total
Sales Quantity % of Total
Sales (in Tonnes) (in Tonnes) (in Tonnes) (in Tonnes)
Andhra & Telengana
6,01,668 38.82 6,86,251 48.33 8,08,687 51.02 8,76,122 53.71
Karnataka 2,34,105 15.10 1,76,186 12.41 2,21,725 13.99 2,27,317 13.93
Tamil Nadu 2,49,853 16.12 1,94,721 13.71 2,11,461 13.34 1,92,478 11.8
Maharashtra 3,10,487 20.03 2,28,433 16.09 2,14,071 13.51 1,92,713 11.81
Orissa 1,09,487 7.06 77,094 5.43 61,782 3.9 61,499 3.77
Others 44,498 2.87 57,172 4.03 77,277 4.24 20,284 4.98
Total 15,50,098 100.00 14,19,857 100.00 15,85,003 100 16,31,393 100
OPC, 64%
PPC, 35%
SRC, 1 PRODUCT MIX
43
57
SALES MIX
Trade
Non-Trade
Corporate Presentation 6
Strong & Experienced Team
Experienced & Technical Knowhow Process
Professional and Experienced Management
Over Three Decades of Experience
In-depth understanding and knowledge of Market and Customer behavior
Ability to acquire and integrate Plants and Processes
Proven track record of setting-up Greenfield plants at Optimum cost/time.
Most of the Senior Management have been with the Company for more than 15 Years
Continuous improvement in Operating Efficiency
Constant focus on Debottlenecking and upgrading to enhance capacity at minimal cost
Company is Certified as
ISO 9001 : 2000 QMS ISO 14001 : 2004 EMS OHSAS 18001 : 2005 RMF & ICD for SOX Compliance
Name Qualification Experience
Shri O. Swaminatha Reddy Chairman & Independent Director
B.Com.(Hons) ACA A Financial and Management consultant, known for his acumen in corporate finance. He has been associated with the Board since 1983.
Earlier he had served as Chairman of Andhra Bank and AP State Finance Corporation. He is on the Board of several reputed companies.
Shri S.Veera Reddy Managing Director
Studied up to BA
An agriculturalist turned industrialist. Was a co-promoter of well known Priyadarshini Group of Companies. He was appointed as Managing
Director in 1991 and has played a key role in steering the company to its present status.
He also acquired a sick unit, viz Amareshwari Cements Limited, and successfully turned it around.
Dr.S.Anand Reddy Joint Managing Director
MBBS Inducted on the Board on 23rd November 1991, was later appointed as a Whole-time Director (Marketing and Projects) in 1992. He has
been instrumental for promoting the subsidiary company Sagar Power Limited, of which he is presently the Managing Director.
Shri S. Sreekanth Reddy Executive Director
B.E.
PG Dip in Cement Technology
After having gained industrial experience of over 15 years, he joined Sagar Cements as its Technical Consultant in 2002 and was inducted in
the Board as a Whole-time Director.
Shri K. Thanu Pillai Independent Director
M.B.A. , CAIIB Appointed as Director on 27th February 1997. He has more than 30 years of experience in Banking and retired as Managing Director of State
Bank of Hyderabad. He is also on the Board of several well known companies.
Shri. John-Eric Bertrand Director
Commercial Engineer & MBA Mr. John-Eric Bertrand is an Investment Manager at Ackermans & van Haaren NV. Before joining AVH, he worked as Senior Consultant at
Roland Berger Strategy Consultants.
Shri Rajendra Prasad Nominee Director
M.Com ,LL.B Nominee Director of APIDC
Shri.V.H.Ramakrishnan Independent Director
ACA, ACMA Appointed as Director on 30th March 2015, he has more than 35 years experience both domestic and international banking and retired as
General Manager (International0 of Bank of India. He is also on the Board of several well known companies.
Board of Directors
Corporate Presentation 7
Financials
28 38
8
50
0
25
3
29
8
22
7
64
6
10
9
-37
3
37
83
28 27
7
30
9
16
5
19
1
17
4
44
1
88 -25
6
29
66
FY06 FY07 FY08 FY09 FY10 FY11 FY12 FY13 FY14 FY15
In R
s. M
illio
n
Profit before Taxes Profit after Taxes
85
438 576 599
865 814
1,247
682
191
566
FY06 FY07 FY08 FY09 FY10 FY11 FY12 FY13 FY14 FY15 In
Rs.
Mill
ion
Sales EBIDTA Profit
1,5
38
2,4
71
2,7
46
3,3
43
5,2
30
5,3
47
6,6
91
6,3
90
5,6
11
6,6
27
75
9
1,2
76
1,5
03
2,0
57
3,7
71
4,1
33
5,9
48
5,5
85
4,8
89
5,7
56
FY06 FY07 FY08 FY09 FY10 FY11 FY12 FY13 FY14 FY15
In R
s. M
illio
n
Gross Sales Nett Sales
Net worth Debt Capital Employed
249
737
1,05
3 1,92
2
2,07
1
2,21
7
2,59
7
2,66
4
2,40
9
5,21
3
FY06 FY07 FY08 FY09 FY10 FY11 FY12 FY13 FY14 FY15
In R
s. M
illio
n
12
141
1,85
2
1,93
0
1,50
2
1,59
5
1,1
50 1,43
1
1,23
3
1,44
6
FY06 FY07 FY08 FY09 FY10 FY11 FY12 FY13 FY14 FY15
In R
s. M
illio
n
260
877
2,90
5
3,85
2
3,57
3
3,81
1 5,13
4
5,30
5
5,20
6 6,42
9
FY06 FY07 FY08 FY09 FY10 FY11 FY12 FY13 FY14 FY15
In R
s. M
illio
n
Net worth of the company expands more than 10 times in 7 Years
Debt-Equity Ratio ROCE % ROE %
0.1 0.2
1.8
1.0
0.7 0.7
0.4 0.5 0.5
0.3
FY06 FY07 FY08 FY09 FY10 FY11 FY12 FY13 FY14 FY15
21
46
18 11
16 14 19
8
-2
66
FY06 FY07 FY08 FY09 FY10 FY11 FY12 FY13 FY14 FY15
11
38 29
9 9 8 17
3
-11
57
FY06 FY07 FY08 FY09 FY10 FY11 FY12 FY13 FY14 FY15
Corporate Presentation 8
14,674 19,071
0
5,000
10,000
15,000
20,000
25,000
Q4 FY14 Q4 FY15
` In
lakh
(1,135)
2,170
(2,000)
(1,000)
-
1,000
2,000
3,000
Q4 FY14 Q4 FY15
(462)
4,158
-2,000
0
2,000
4,000
6,000
Q4 FY14 Q4 FY15
Financials – Current Financial Year
Net Income EBIDTA Profit
Q4 FY 2015
• Total Income increased by 30% to ` 19,071 lakh from ` 14,674 lakh in Q4 FY15 • EBITDA increased to ` 4158 lakh from ` -462 lakh in Q4 FY15
• Operating margins for the quarter at 21.80% • Net Profit stood at ` 2170 lakh compared to a loss of ` 1135 lakh in a corresponding quarter last year • Diluted EPS (not annualized) at ` 12.48 for Q4 FY15
48,894 57,557
0
9,000
18,000
27,000
36,000
45,000
54,000
63,000
FY14 FY15
(2,558)
29,665
(10,000)
-
10,000
20,000
30,000
40,000
FY14 FY15
131
5,662
0
1,000
2,000
3,000
4,000
5,000
6,000
FY14 FY15
Net Income EBIDTA Profit
FY 2015
` In
lakh
• Total Income from operations stood at Rs. ` 57,557 lakhs as against ` 48,894 lakh in FY15
• EBITDA increased to 5662 lakh from ` 131 lakh in FY15
• Operating margins for the period stood at 9.84%
• Net Profit at ` 29665 lakh compared to ` -2558 lakh Profit in FY 15
• Diluted EPS (not annualized) at ` 170.61 for FY15
Corporate Presentation 9
Sl.No Year Production Equity Reserves Total Turnover PBID Interest PBD Dep. PBT Tax NPAT Cash Dividend
% Term Loan D/E Ratio EPS
Book Value Per Share
1 Dec-85 75919 284.89 89.87 374.76 941.47 242.81 80.24 162.57 74.88 87.69 0.00 87.69 162.57 10 578.00 1.54 3.08 12.78
2 Dec-86 111389 284.93 259.94 544.87 1307.43 338.09 82.59 255.50 88.60 166.90 0.00 167.20 255.80 10 578.00 1.06 5.87 18.79
3 Dec-87 111890 284.93 299.40 584.33 1275.74 322.29 87.19 235.10 176.86 58.24 14.00 46.89 223.75 12 590.20 1.01 1.65 20.21
4 Mar-89 150813 284.93 309.06 593.99 1626.02 281.69 103.67 178.02 137.91 40.11 7.15 32.96 170.87 10 711.95 1.20 1.16 20.59
5 1989-90 122074 284.93 311.59 596.52 1340.03 254.30 95.89 158.41 121.38 37.03 6.00 31.03 152.41 10 579.36 0.97 1.09 20.72
6 1990-91 120633 284.98 412.52 697.50 1604.76 393.03 105.90 287.13 120.54 166.59 20.00 143.68 264.22 15 418.04 0.60 5.04 24.31
7 1991-92 130407 284.98 468.62 753.60 1828.60 388.08 103.79 284.29 139.61 144.68 45.00 101.71 241.32 16 255.12 0.34 3.57 26.31
8 1992-93 154878 779.04 1055.01 1834.05 2488.16 542.94 213.30 329.64 178.19 151.45 0.00 151.10 329.29 16 1108.80 0.60 1.94 21.81
9 1993-94 180973 800.74 985.41 1786.15 2826.58 250.96 178.39 72.57 160.07 -87.50 0.00 -85.37 74.70 - 1376.00 0.77 -1.07 21.31
10 1994-95 256901 809.55 1141.93 1951.48 4201.63 705.71 346.47 359.24 208.97 150.27 0.00 153.64 362.61 - 1783.63 0.91 1.90 23.43
11 1995-96 256691 809.87 1540.04 2349.91 6260.26 1188.51 398.32 790.19 238.73 551.46 0.00 551.37 790.10 20 1488.09 0.63 6.81 28.39
12 1996-97 278827 809.89 1859.51 2669.40 7078.94 1111.00 334.23 776.77 251.39 525.38 70.17 455.22 706.61 16 1405.49 0.53 5.62 32.38
13 1997-98 305541 809.89 2087.66 2897.55 7380.83 915.66 296.22 619.44 253.33 366.11 50.17 297.23 550.56 16 1379.04 0.48 3.67 35.25
14 1998-99 296109 809.91 2205.67 3015.58 6766.06 707.90 272.75 435.15 268.18 166.97 17.24 123.95 392.13 - 1255.98 0.42 1.53 36.77
15 1999-00 340107 1121.00 2249.75 3370.75 7574.53 542.99 236.77 306.22 252.75 53.47 2.00 50.01 302.76 - 2178.87 0.65 0.45 37.77
16 2000-01 393509 1126.05 2498.10 3624.15 9553.18 1153.73 458.38 695.35 313.40 381.95 35.37 346.58 659.98 12 1877.25 0.52 3.08 32.18
17 2001-02 386545 1115.23 2752.83 3868.06 10073.54 1073.55 433.44 640.11 356.07 284.04 61.10 222.94 579.01 0 1991.43 0.51 2.00 34.68
18 2002-03 312887 1115.23 1891.36 3006.59 8119.64 -16.52 459.61 -476.13 385.65 -861.78 -134.82 -726.96 -341.31 0 2212.03 0.74 -6.52 26.96
19 2003-04 355004 1115.23 1903.43 3018.66 11134.26 950.10 569.24 380.86 368.79 12.07 -52.51 64.58 433.37 0 2214.82 0.73 0.58 27.07
20 2004-05 341118 1115.23 2055.06 3170.29 12377.68 1089.07 464.71 624.36 321.60 302.76 130.35 172.41 494.01 10 592.79 0.19 1.55 28.43
21 2005-06 279500 1115.23 2183.96 3299.19 15443.46 848.04 260.91 587.13 302.18 284.95 1.60 283.35 585.53 10 117.79 0.04 2.54 29.58
22 2006-07 276400 1376.83 6833.72 8210.55 24802.14 4383.73 160.38 4223.35 341.43 3881.92 1115.24 2766.68 3108.11 25 1407.35 0.17 24.52 59.63
23 2007-08 282242 1388.26 10294.34 11682.60 27561.42 5759.05 340.09 5418.96 413.46 5005.50 1909.94 3095.56 3509.02 25 18521.42 1.80 23.70 84.15
24 2008-09 431250 1500.23 19742.85 21243.08 33511.06 5985.54 1589.88 4395.66 1872.25 2523.41 877.74 1645.67 3517.92 20 19300.32 1.00 11.48 141.60
25 2009-10 1120351 1500.23 22245.57 23745.80 52979.04 8645.92 2895.07 5750.85 2768.85 2982.00 1069.65 1912.35 4681.20 25 15024.00 0.73 12.75 158.28
26 2010-11 1490662 1738.80 20425.94 22164.74 55394.89 8139.19 3113.95 5025.24 2759.79 2265.45 524.25 1741.20 4500.99 20 15952.97 0.72 10.01 148.16
27 2011-12 1625336 1738.80 24231.3 25970.1 75468.8 12469.2 3418.2 9051 2589.7 6461.3 2049.7 4411.6 7001.3 30 11505.2 0.44 25.37 149.36
28 2012-13 1587419 1738.80 24905.85 26644.65 72120.29 6822.15 3055.38 3766.77 2674.39 1092.38 214.40 877.98 3552.37 10 14307.18 0.54 5.05 153.24
29 2013-14 1419943 1738.80 22347.75 24086.55 63071.16 1912.94 2954.75 -1041.81 2693.40 -3735.20 1177.09 -2558.11 135.29 0 12327.79 0.51 -14.71 138.52
30 2014-15 1551598 1738.80 50394.47 52133.27 73738.81 42265.6 2308.23 39957.4 2150.47 37806.9 8141.70 29665.2 83.82 75 14456.08 0.27 170.6 299.82
Past Years Financial Performance ` In lakh
(except Dividend,D/E Ratio,EPS,Book Value per Share)
Corporate Presentation 10
Shareholding
Shareholding Pattern
Promoters 57%
FIIs & MFs 9%
Bodies Corporate 25%
Public 9%
2.5 24.5 23.7
11.5 12.8 10.0 25.4
5.1 -14.7
170.6
FY06 FY07 FY08 FY09 FY10 FY11 FY12 FY13 FY14 FY15
as on 31st March 2015
Few Key Investors
FIIs & MFs
S.No Name of the Shareholder % of Holding
1 SBI Mutual Funds 7.20
2 Kotak Mutual Funds 2.16
Bodies Corporate
1 Twinvest Financial Services Limited 4.68
2 AVH Resources India Private Limited 18.55
3 Sagar Priya Housing & Industrial Enterprises Ltd 4.94
Particulars Nominal Amount
Authorised Share Capital 22,00,00,000
Issued, Subscribed and Paid up Share Capital 17,38,80,140
Capital Structure
Earnings per Share (EPS)
In `
In `
Corporate Presentation 11
Incorporated on 23rd June 1994 . Authorized capital : INR 150 Millions . Paid up capital : INR 108.60 Millions
Hydro Power : 8.30 MW ( 4.30 MW plant at Guntur branch Canal , Guntur Dist. & 4.00 MW at Lock-in-sula , Kurnool Dist. , Andhra Pradesh , India)
Wind Power : 1.65 MW capacity Turbine from Vestas commissioned on June 2nd 2009 at Theni Dist. , Tamil Nadu and expected PLF is 32%
The company is holding 100% stake in Super Hydro Electric Private Limited which is implementing 28.30 MW Hydro Power Generation in Uttarakhand
Turnover : INR 158.90 Million in FY 2014 and expected turnover for next year is INR 160 Million
PANCHAVATI POLYFIBRES LIMITED
Incorporated on 15th Nov 1984. Authorized capital : INR 40 Millions . Paid up capital : INR 15.68 Millions
Manufacturing of Woven Sacks with a capacity of 58.50 Million sacks with 90 Looms
Major Customers are Sagar Cements , My Home Cements , Penna Cements and other Cement Industries in Andhra Pradesh
Turnover : INR 400.20 Million in FY 2014 and expected turnover for next year is INR 440 Million.
Turn Key Solutions provider (Design, Engineering & Project Management) to Cement Industry & Small Hydro Power Projects .
Major Customers are :
Bharathi Cement Corporation Limited Vicat Sagar Cement Private Limited Maruthi Cements Limited, Nepal Keerthi Industries Limited, Hyderabad Super Hydro Electric Private Limited Syrian Cement Co., Aleppo Alchaba Cement, Syria Trotus Cement, Syria Amrit Cement, Meghalaya
Group & Associated Companies
Corporate Presentation 12
Share Purchase Agreement entered for acquisition of BMM Cements Limited at an enterprise value of ₹ 540 Crore
Acquisition to provide scale and locational advantage
BMM owns 1 MTPA Cement unit along with Captive Power Plant (Coal based) of 25 MW with a firm PPA of selling 15 MW
to AP GENCO
Located at Anantpur district in Andhra Pradesh, close to important markets of Karnataka, Tamil Nadu.
BMM cements has limestone reserves of ~ 155 Million tons,
Acquisition to enable Sagar Cements tap key regions of Tamil Nadu, Karnataka and Rayalaseema of AP.
Sagar Cements Group’ Total Cement Capacity to go upto 3.75 million TPA from existing 2.75 million TPA
Expecting the completion of acquisition by end of June 2015
Presently Sagar buying Cement from BMM and selling as Traded Cement in the Markets.
Group & Associated Companies
Corporate Presentation 13
Strong and Experienced Management Team
Continuous focus on cost control and improvement in Operating Efficiency
Well positioned to capitalize on growth .
Strong Sales and Distribution Network
To sum it up…..
Corporate Presentation 14
This presentation and the accompanying slides (the “Presentation”), which have been prepared by Sagar Cements 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 and of the economies of various international markets, the performance of the cement industry in India and world-wide, competition, the company’s ability to successfully implement its strategy, the Company’s future levels of growth and expansion, technological implementation, changes and advancements, changes in revenue, income or cash flows, the Company’s market preferences and its exposure to market risks, as well as other risks. The Company’s actual results, levels of activity, performance or achievements could differ materially and adversely from results expressed in or implied by this Presentation. The Company assumes no obligation to update any forward-looking information contained in this Presentation. Any forward-looking statements and projections made by third parties included in this Presentation are not adopted by the Company and the Company is not responsible for such third party statements and projections.
Disclaimer