9mfy13 consolidated revenue higher by 13% at 627 crore ... meet/222364_20130212.pdfpune nagar road,...

News Release: For immediate publication

9MFY13 consolidated Revenue higher by 13% at ` 627 crore,

PAT grew by 7%

Pune, February 13, 2013: Innoventive Industries Limited (IIL) a multi-product

engineering company which manufactures precision steel tubes, membrane panel strips, auto components, oil well drilling couplings, pup joints, high voltage soft starters

and other steel products catering to applications in diverse sectors such as transportation, power, oil & gas and general engineering has announced its financial

results for the quarter and nine months ended December 31, 2012.

Consolidated Financial Highlights

9MFY13 Revenues increased by 13% and were at ` 627.05 crore in comparison to 9MFY12

revenues of ` 554.14 crore. This was driven primarily by DOM tubes and oil & gas

segments performance over the nine months. Revenues consist of net sales and other income

PBT of ` 89.27 crore was higher by 13% when compared to 9MFY12 PBT of ` 78.79 crore

PAT was ` 57.83 crore compared to ` 53.98 crore in 9MFY12

EPS stands at ` 9.70 per share as against 9MFY12 EPS of ` 9.42 per share which are not

comparable due increase in number of share following IPO in May 2011

Standalone Financial Highlights

9MFY13

Revenues were at ` 485.94 crore up by 8% in comparison to 9MFY12 revenues of ` 451.56 crore. Motor vehicle parts, tubes division and other products contributed to

the performance. Revenues comprise of net sales and other income

EBITDA of ` 123.58 crore was higher by 7% when compared to 9MFY12 EBITDA of ` 115.10 crore and margins stood at 25% due to an improved product mix

PAT was ` 44.80 crore when compared to 9MFY12 PAT of ` 45.64 crore

EPS stands at ` 7.51 per share as against 9MFY12 EPS of ` 7.97 per share which are not

comparable due to the IPO in May 2011

Registered Office: GAT No – 1261, Village: Sanaswadi, Pune Nagar Road, Tal Shirur, Pune - 412208

Standalone Financial Highlights

Q3FY13

Revenues were at ` 169.54 crore grew by 5% in comparison to Q3FY12 revenues of

` 161.07 crore. Lower growth witnessed in tubes & products division owing to a slower off take in the domestic market and overall difficult market conditions. Revenues

comprise of net sales and other income

EBITDA were at ` 39.26 crore compared to Q3FY12 EBITDA of ` 42.27 crore and margins stood at 23%

PAT was ` 13.66 crore when compared to ` 17.22 crore in Q3FY12. PAT was further impacted owing to additional depreciation on commissioning of new machinery and

increased personnel cost

EPS stands at ` 2.29 per share as against Q3FY12 EPS of ` 3.01 per share which are not comparable due to the IPO in May 2011

Chairman’s Message

Commenting on the results, Mr. Chandu Chavan, Chairman of Innoventive Industries,

said:

“We have been able to deliver a steady performance on a y-o-y basis despite a difficult

operating environment. Consolidated Revenues for 9M FY13 grew 13% to INR 627.05 crore

while PAT was higher by 7% at INR 57.83 crore.

As we establish ourselves to be one of the players for CEW/DOM tubes in export markets, we also plan to simultaneously create a market for offerings such as those from ITPL’s product range which will enable us to widen our product portfolio for exports.

The integration with ITPL is on track and it’s niche product range has added value to the overall product offerings in the niche engineering space. Initial efforts to market ITPL’s products through IIL’s improving global distribution network have been encouraging and we are confident that greater progress on this front will contribute to further growth and add value for all stakeholders in the coming years.

The business environment continues to remain sluggish and near-term visibility remains

muted. However, we would continue to implement strategic initiatives to enhance our distribution network and rationalize our product mix which have helped us to augment

our strengths even in the prevailing market conditions. This has enhanced our competitiveness and placed us in a position to improve on past performance once the

operating environment improves.”

Operating Highlights

IIL acquired a 51% stake in Innovative Technomics Pvt. Ltd (ITPL) an industry leader in high voltage soft starters and testing equipment

IIL has received a patent for its ‘Cold Pilgering’ technology for a period of 20 years w.e.f April 24, 2009,also IIL has filed for two more new patents

As of December 31, 2012, the company’s long term consolidated Debt : Equity stands at

0.45 Expanding customer base and value added products has contributed substantially to

overall revenues

New customer addition and commercialization of new developed products contributed to overall performance

Outlook

The near term visibility seems muted, however the long term sustained growth remains

robust due to:

Increasing market acceptance of our CEW/DOM tubes over various geographies

Pressure on manufacturers in developed markets to identify cost effective suppl iers to meet their raw material and components requirements without compromising on

quality

Improved position through strategic initiatives to increase penetration in export markets

-ENDS

About Innoventive Industries Ltd (IIL) Innoventive Industries Limited (BSE:INNOIND, NSE:INNOIND, Reuters: INNV.BO, Bloomberg: IIL:IN) is a multi-product engineering company which manufactures precision steel tubes, membrane panel strips, auto components, oil well drilling couplings, pup joints and other steel products catering to applications in diverse sectors such as transportation, power, oil & gas and general engineering. It specializes in processing various types of steel, has a capability to make tubular transformations, enjoys flexible production systems and is able to undertake faster development cycles and effective supply chain management for efficient delivery. IIL has a well developed in-house R&D setup which has led to innovation in the manufacturing

process leading to significant savings in resources and heightened competiveness. The company has received a patent for its unique manufacturing process and is in the

process of filing additional patents for some of its other innovations.

IIL has five manufacturing facilities spread across Pune District and Silvassa. Its manufacturing facility at Pimple Jagtap was granted the ‘Mega Project’ status by the Govt. of Maharashtra under the ‘Package Scheme of Incentives 2007 which entitles the

company to relief from certain duties and benefit of Industrial Promotion Subsidy. IIL markets its products in the domestic as well as export markets and its customer list

includes some of the leading names in their industries.

For further details, please contact:

Investor Relations Rabindra Basu / Mayank Vaswani Innoventive Industries Ltd Citigate Dewe Rogerson [email protected] Tel: +91 22 6645 1248 / 6645 1230 [email protected] / [email protected]

Safe Harbour

Some of the statements in this press release that are not historical facts are forward-looking statements. These forward-

looking statements include our financial and growth projections as well as statements concerning our plans, strategies,

intentions and beliefs concerning our business and the markets in which we operate. These statements are based on

information currently available to us, and we assume no obligation to update these statements as circumstances

change. There are risks and uncertainties that could cause actual events to differ materially from these forward-

looking statements. These risks include, but are not limited to, the level of market demand for our services, the highly-

competitive market for the types of services that we offer, market conditions that could cause our customers to reduce

their spending for our services, our ability to create, acquire and build new businesses and to grow our existing

businesses, our ability to attract and retain qualified personnel, currency fluctuations and market conditions in India

and elsewhere around the world, and other risks not specifically mentioned herein but those that are common to

industry.

mailto:[email protected]

mailto:[email protected]

2

Our Manufacturing Facilities

Q3 & 9M FY13 Investor Presentation

Some of the statements in this presentation that are not historical facts are forward looking statements. These forward-looking statements include our financial and growth projections as well as statements concerning our plans, strategies, intentions and beliefs concerning our business and the markets in which we operate.

These statements are based on information currently available to us, and we assume no obligation to update these statements as circumstances change. There are risks and uncertainties that could cause actual events to differ materially from these forward-looking statements. These risks include, but are not limited to, the level of market demand for our services, the highly-competitive market for the types of services that we offer, market conditions that could cause our customers to reduce their spending for our services, our ability to create, acquire and build new businesses and to grow our existing businesses, our ability to attract and retain qualified personnel, currency fluctuations and market conditions in India and elsewhere around the world, and other risks not specifically mentioned herein but those that are common to industry.

Further, this presentation may make references to reports and publications available in the public domain. Innoventive Industries Ltd. makes no representation as to their accuracy or that the company subscribes to those views / findings.

BSE: INNOIND, NSE: INNOIND,

Reuters: INNV.BO, Bloomberg: IIL:IN

3

Safe Harbour Statement


Chairman’s Message 19

Financial Highlights Q3FY2013 (Standalone) 20

Financial Highlights 9MFY2013 (Standalone) 23

Financial Highlights 9MFY2013 (Consolidated) 25

Shareholding 28

Key Growth Drivers 29

Our Strategy 30

Business Outlook 31

Snapshot 6

Diverse Product Profile 7

Product Application & Advantage 8

Competitive Edge 9

Demonstrated Track Record 10

Corporate Details 12

Inorganic Growth 14

4

Discussions and Highlights

Financial Performance : Sustained growth

Innoventive Industries Ltd : A solid operating platform


6

Uniquely Positioned Operations

Multi Product Company

Precision Steel Tubes Membrane Panel Strips Auto Components Complete range of stocks for Oil & Gas

Products Cold Rolled Coils Other Steel Products

Catering To Diverse Sectors

Transportation General Engineering Power Oil & Gas

Global Footprint Direct Marketing Efforts Developed Markets in

10 Countries Over 500 domestic &

export customers Supplies CEW tubes to above100 customers

Robust R&D Innovative Processes Patent approval

received for ‘Cold Pilgering ’ technology

Multiple Patents filed for product innovations

Developing Value-Added Products

Strong Mgmt & Operations Team

Technocrat Promoters Professional

Management Team Over 1,500 Employees


7

Diverse Product Profile

DOM/CEW, ERW Tubes & Products

• Drawn Over Mandrel (DOM)/ Cold Drawn Electric Welded (CEW) tubes manufactured by our innovative process

• Machined tubular components

Auto Components

• Machined components

• Press fabricated parts

• Robotic welding of components and assemblies

Power Equipment Components

• Narrow-width Membrane Strips for sub-critical and super-critical boilers

• Tubes for energy sector

Oil & Gas

• Ready-to-assemble machined parts like machined tubings, couplings, casing couplings, pup joints and cross overs etc.

• Open die and Close die forgings

Others

• Cold Rolled steel sheets

• Laminates and Stampings

• High voltage soft starters and testing equipment


8

Product Application & Advantage

Application – Extensive usage in several fields such as automobile industry, shock absorbers, fuel line, brake line, steering columns, tie roads propeller shafts and bobbin tubes- textile industries, etc.

IIL’s advantage – Manufactured using its unique ‘Cold Pilgering ’ technology which has received a patent in India with unmatched quality and competitive pricing against peers in both domestic and export markets

Application – Application in piston rod, push rod, hose fittings and transmission components, machined rear axle spindle, compressor parts, fuel injection, etc.

IIL’s advantage – Ability to design products as per client specifications and supply consistent quality products on time

Application – Membrane panel strips and energy tubes find application in boilers and heat exchangers

IIL’s advantage – Only manufacturer of membrane strips in the country with unmatched quality and pricing

Application – Products find application in the high opportunity oil & gas sector

IIL’s advantage – Superior quality products that meet internationally prescribed quality tests combined with competitive pricing

DOM/CEW, ERW Tubes & Products

Auto Components

Power Equipment Component

Oil & Gas


Leveraging on Engineering Capabilities

9

Patented ‘Cold Pilgering’

technology

Membrane Panel

Strips

• Patented its indigenous technology used to manufacture DOM/CEW tubes of various specifications

• Received a patent approval for 20 years w.e.f April 24, 2009

• Cost reduction in terms of energy, labour and material in comparison to the traditional draw bench technique

• Customised designs for tools & dies result in enhanced efficiency

• Products manufactured by this method have unmatched quality with a superior surface finish and a higher tensile strength alongside being competitively priced

• Having received the patent for India, IIL is eligible to apply for the same in other countries. Patent application fees have already been paid for in 33 other countries

• IIL manufactures membrane panel strips (narrow width ~ 10.3mm) directly from HR coils leading to improved quality at lower cost

• A strong understanding in metallurgy has helped IIL to carry out improvements in traditional processes

• Conventionally these strips are manufactured using steel bars

• It is an import substitute product with applications in the power sector


All figures are on a consolidated basis

10

Demonstrated Track Record

8 11

29

62

80

0102030405060708090

FY08 FY09 FY10 FY11 FY12

PAT (` in Crore)

37

70

118

167

212

0

50

100

150

200

250


EBITDA (` in Crore)

11%

19%

28% 24% 27%

4% 6%

7% 11% 15%

3% 4% 7%

9%

10%

0%

5%

10%

15%

20%

25%

30%


Margins (%)

EBITDA % PBT% PAT %

CAGR: 78%

CAGR: 56%

CAGR: 25%

325 371

425

705 790

0

100

200

300

400

500

600

700

800


Revenue (` in Crore)


• Export contribution rising in total revenue

• Expanding reach to more markets – now exporting to North America, Europe and Middle East

• Volumes & widening product range are leading to revenue growth from overseas markets

• Increasing share of high value products in export revenues

• Improved distribution channels in overseas markets

• Reducing single customer concentration in revenue

• Increasing revenue per customer

• Catering to rising demand from key customers

• Upselling new products to existing customers

• Growth also driven by expanding customer base

11

Demonstrated Track Record

25% 22% 22% 21% 20%

40% 38% 37% 38% 36%

44% 44% 47% 48% 45%

0%

10%

20%

30%

40%

50%


Revenue : Top Customers (%)

Top Customer Top 5 Customer Top 10 Customer

95% 92% 91% 84% 76%

5% 8% 9% 16% 24%

0%

20%

40%

60%

80%

100%


Revenue: Domestic Vs. Exports (%)

Domestic Exports


12

Board of Directors

Mr. Chandu Chavan Chairman and Managing Director

Mr. Sanjay Asher Independent Director

Mr. Ravindra Katre Whole Time Director

Mr. Ramprasad Joshi Independent Director

Mr. Sanjay Waghulade Whole Time Director

Mr. Pradeep Tupe Independent Director

Mr. William Sean Sovak Nominee Director (Kavos Capital Ltd)

Mr. Yashpaul Gupta Independent Director

Mr. Rahul Raisurana Nominee Director (Standard Chartered PE)

Dr. Rajendra Jagdale Independent Director

Ms. Bhagyam Ramani Independent Director

Mr. K.V. Ramarathnam Whole Time Director


13

Key Management Personnel

Mr. Jitendra Palande – Group CEO Well Qualified &

Competent professionals

Strong Technical Knowledge

Rich Industry experience

Mr. Avinash Adige – CEO Auto Division

Mr. Devdatta Ratnakar – CEO Tube Division

Mr. Sanjay Bhade – COO Tube Division


…in the backdrop of market realities

14

Inorganic growth…

Innovative Technomics


Key Subsidiaries

15

Salem Steel NA, LLC

20

12

20

07

• Supplies DOM & Seamless tubes across US • Acquired an 85% stake in Salem Steel NA, USA

Sankalp Engineering & Services Pvt. Ltd. (erstwhile Sankalp Forging Pvt. Ltd.)

• Manufactures forgings & couplings for oil & gas • Increased stake in Sankalp Engineering & Services Pvt. Ltd.

(erstwhile Sankalp Forging Pvt. Ltd.) from 26% to 51% in 2008

Saicon Steels Pvt. Ltd.

• Conversion of HR coils into cold rolled close annealed (CRCA) • Acquired 51% stake in Saicon Steels Pvt. Ltd. 20

07

Innovative Technomics Ltd.

20

12 Innovative

Technomics

• Manufactures high voltage soft starters and testing equipment for domestic and international markets

• Acquired a 51% stake in Innovative Technomics Pvt. Ltd.


IIL has acquired a 51% stake in Innovative Technomics Pvt. Ltd (ITPL) an industry leader in high voltage soft starters and testing equipment.

ITPL has a strong presence in domestic markets and has recently entered the Middle East and European markets.

ITPL’s business has been valued at INR 230 million.

ITPL’s range of niche engineering products comprises of High Voltage Soft Starters, High Speed Testing Equipment and Linear Motor Systems used in industries such as water, oil & gas, steel, cement, textile, etc.

Acquisition of ITPL, India (Oct 2012)

16 Q3 & 9M FY13 Investor Presentation

Acquisition Strategy

• Will look at acquiring profitable distribution set-ups in developed markets to improve global distribution infrastructure and accelerate product off-take

• Will not invest in manufacturing assets in developed markets owing to its already established high quality and cost competitive manufacturing base in India

Overseas

• Will pursue high end engineering businesses with potential of near term scalability

• Will look to acquire manufacturing assets with strong inherent value which are available at attractive valuations

Domestic

17 Q3 & 9M FY13 Investor Presentation

Commenting on the Company’s performance for Q3 & 9M FY13, Mr. Chandu Chavan, Chairman & Managing Director, Innoventive Industries Ltd., said:

“We have been able to deliver a steady performance on a y-o-y basis despite a difficult operating environment. Consolidated Revenues for 9M FY13 grew 13% to INR 627.05 crore while PAT was higher by 7% at INR 57.83 crore.

As we establish ourselves to be one of the players for CEW/DOM tubes in export markets, we also plan to simultaneously create a market for offerings such as those from ITPL’s product range which will enable us to widen our product portfolio for exports.

The integration with ITPL is on track and it’s niche product range has added value to the overall product offerings in the niche engineering space. Initial efforts to market ITPL’s products through IIL’s improving global distribution network have been encouraging and we are confident that greater progress on this front will contribute to further growth and add value for all stakeholders in the coming years.

The business environment continues to remain sluggish and near-term visibility remains muted. However, we would continue to implement strategic initiatives to enhance our distribution network and rationalize our product mix which have helped us to augment our strengths even in the prevailing market conditions. This has enhanced our competitiveness and placed us in a position to improve on past performance once the operating environment improves.”

19

Chairman’s Message


Tubes & Products divisions witnessed lower sales owing to slower off take in the domestic market and overall difficult market conditions

PBT and PAT impacted owing to increased personnel cost, which includes increase with retrospective effect from April 01,2012. The Personnel cost increased from INR 6.24 crore in Q2FY13 to INR 9.32 crore in Q3 FY 13

20

Financial Highlights – Q3 FY2013 (S tan d alo n e )

22 24

17

048

1216202428

Q3FY2012 Q2FY2013 Q3FY2013

PBT (` in Crore)

161 180 169

0

50

100

150

200

Q3FY2012 Q2FY2013 Q3FY2013


17

19

14

10

12

14

16

18

20

Q3FY2012 Q2FY2013 Q3FY2013

PAT (` in Crore)

26% 26%

23%

14% 13%

10% 11% 11%

8% 0%

5%

10%

15%

20%

25%

30%

Q3FY2012 Q2FY2013 Q3FY2013

Margins (%)

EBITDA % PBT% PAT %


Segmental Performance – Q3 FY2013 (S tan d alo n e )

21

9

27

0.7

8

28

1.2

9

21

0.5 0

10

20

30

Motor Vehicle Part Tubes & Product Others

Segmental EBIT (` in Crore)

Q3FY12 Q2FY13 Q3FY13

41

113

7

44

115

21

47

102

21

0

40

80

120


Segmental Revenue (` in Crore)

Q3FY12 Q2FY13 Q3FY13


* Basic/Diluted (not annualised). EPS for the given period is not comparable due to issue of shares in IPO.

Quarter ended December 31, 2012

Q3FY2013 Q2FY2013 Q3FY2012 QoQ

Growth YoY

Growth

` Crore

% of Turnover

` Crore

% of Turnover

` Crore

% of Turnover

% %

Net Sales 168.51 172.47 159.07 -2% 6%

Other Income 1.03 1% 7.20 4% 2.00 1% -86% -48%

Total Income 169.54 179.67 161.07 -6% 5%

Material Consumption 98.44 58% 100.07 58% 97.77 61% - -

Employee Cost 9.32 5% 6.24 3% 5.39 3% 49% 73%

Other Expenditure 22.53 13% 27.03 15% 15.64 10% -17% 44%

EBITDA 39.26 23% 46.33 26% 42.27 26% -15% -7%

Depreciation 9.25 5% 9.05 5% 5.46 3% 2% 69%

EBIT 30.00 18% 37.28 21% 36.81 23% -20% -18%

Finance Cost 12.91 8% 13.11 7% 14.74 9% -2% -12%

PBT 17.10 10% 24.17 13% 22.06 14% -29% -23%

Tax 3.43 5.19 4.84 -34% -29%

PAT 13.66 8% 18.99 11% 17.22 11% -28% -21%

EPS* 2.29 3.18 3.01

22

Financial Table – Q3 FY2013 (S tan d alo n e)


23

Financial Highlights – 9M FY2013 (S tan d alo n e )

57 58

10

20

30

40

50

60

9MFY2012 9MFY2013

PBT (` in Crore) 452

486

0

100

200

300

400

500

9MFY2012 9MFY2013


46 45

10

20

30

40

50

9MFY2012 9MFY2013

PAT (` in Crore)

26% 26%

13% 12%

10% 9%

0%

5%

10%

15%

20%

25%

30%

9MFY12 9MFY13

Margins (%)

EBITDA % PBT% PAT %



Nine Months ended December 31, 2012

9MFY2013 9MFY2012 YoY

Growth

` crore

% of Turnover

` Crore

% of Turnover

%

Net Sales 471.08 444.20 6%

Other Income 14.86 3% 7.36 2% 102%

Total Income 485.94 451.56 8%

Material Consumption 274.86 58% 275.66 62% -

Employee Cost 21.44 4% 14.25 3% 50%

Other Expenditure 66.07 14% 46.55 10% 42%

EBITDA 123.58 25% 115.10 25% 7%

Depreciation 26.57 5% 15.62 3% 70%

EBIT 97.00 20% 99.49 22% -2%

Finance Cost 39.34 8% 42.35 9% -7%

PBT 57.66 12% 57.14 13% 1%

Tax 12.86 11.50

PAT 44.80 9% 45.64 10% -2%

EPS* 7.51 7.97

24

Financial Table – 9M FY2013 (S tan d alo n e)

27

72

2

24

71

2 0

20

40

60

80


Segmental EBIT (` in Crore)

9MFY12 9MFY13

124

297

30

126

306

52

050

100150200250300350



9MFY12 9MFY13


79

89

15

30

45

60

75

90

9MFY2012 9MFY2013

PBT (` in Crore)

54 58

10

20

30

40

50

60

9MFY2012 9MFY2013

Profit after tax & minority interest (` in Crore)

554

627

100

200

300

400

500

600

700

9MFY2012 9MFY2013


Revenue growth largely driven by DOM tube and oil & gas performance

New customer additions and commercialization of new developed products contributed to overall growth during the entire period

PAT growth slightly lower than revenue growth due to increased depreciation and Tax rate

25

Financial Highlights – 9M FY2013 (Co n s o l id ate d)



26

Financial Table – 9M FY2013 (Co n s o l id ate d)

Nine Months ended December 31, 2012 9MFY13 ` crore

9MFY12 ` crore

Growth %

Total Revenue 627.05 554.14 13%

Profit before Tax 89.27 78.79 13%

Profit after Tax and Minority Interest 57.83 53.98 7%

EPS* 9.70 9.42

124

293

42 79

16

126

337

44

98

22

050

100150200250300350

Motor Vehicle Part Tubes & Product Cold Rolled Coils Oil & Gas others


9MFY12 9MFY13


Export contribution continued to remain substantial in the overall revenue

Increasing number of products being supplied to US, Europe, Latin America and Middle-East

Expanding customer base and value added products has helped maintain export revenues

Top Customer Performance & Exports (Co n s o l id ate d)

27

Export 23%

Domestic 77%

9MFY13

Export 23%

Domestic 77%

9MFY12

21%

37%

45%

20%

35%

46%

0%

5%

10%

15%

20%

25%

30%

35%

40%

45%50%

Top Customer Top 5 Customer Top 10 Customer

9MFY12 9MFY13


28

Shareholding as on December 31, 2012

Promoters 45.4%

Standard Chartered PE 14.0%

Kavos Capital 13.5%

Other 9.7%

Reliance Capital 5.9%

IIL Employee Welfare Trust 3.2%

Kitara 4.8%

Insurance Companies 2.7%


29

Key Growth Drivers

• Major capacity expansion during last and current year for CEW / DOM tubes and Allied Products – Funded by IPO

• Poised to cater to the growing end user demand for its products

• Preferred vendor with established clients and present across their product range - to realise greater volumes as they grow

• Several emerging accounts are past the initial approval phase - ramp up in volumes is imminent

• The domestic engineering and automotive industries are expected to continue growing in the foreseeable future

• Demand from the global oil & gas industry is increasing with drilling reaching newer depths • Demand from other industries for cost effective solutions is ever increasing

• Strong relations with existing customers - increasing acceptance for its newer products

• Effective market penetration due to strong associations with customers • Established long term relations with suppliers

• Pimple-Jagtap facility eligible for IPS claims in form of VAT refunds due to ‘Mega Project Status’

• Qualifies for Industrial Promotion Subsidy (IPS) equivalent to 75% of investment in fixed assets

Capacity expansion

Expanding customer accounts

Growth in end user industries

Relationships

Fiscal

incentives


30

Our Strategy

• Increase proportion of high margin products in revenue mix

• Leverage process expertise to widen portfolio of niche and customised products

Enhancing Product Mix

• Enhance global reach - have appointed 13 agencies in Europe

• Acquisition of front end marketing companies will lead to improved realisations e.g. Salem Steel NA, USA

Improve Marketing & Distribution

• Leverage innovation capabilities in new product and process areas

• Engage with customers for product developments at R&D stage

R&D • Optimize division-

wise contribution to avoid dependence on any single industry / segment

• Increase the share of exports and establish global customer base in various countries and currencies

Diversification • Pursue

JVs/acquisition with manufacturers who offer synergies to IIL

• Offer expertise to potential domestic and international JV partners while gaining access to new products, markets and technology

Partnerships


31

Business Outlook – FY2013

Tubes & Products (T&P)

• Growing acceptance for our CEW/DOM tubes over seamless tubes which possess unmatched quality and a proven track record

• Cost pressures are compelling companies to look for cost competitive options

• Existing products are finding newer applications which will lead to further growth in this segment

Motor Vehicle Parts (MVP)

• Maintained reasonable sales level, based on the 2 wheeler majors’ performance

• Performance to be in line with the sales of two and three wheeler automobiles

• Impending introduction of new components to assist offtake Oil & Gas

• Favorable demand for hydrocarbons

• Increasing vendor certifications is set to improve performance in this segment

• Oil & Gas products of IIL are finding greater acceptance by global oil well drilling companies

• Supply contracts with global companies are in place – volumes to expand

Cold Rolled Coils (CR) and Others

• Membrane panel strips and super critical panel strips which are import substitutes, are finding increasing usage in the domestic industry from companies like BHEL, Alstom, etc.

• IIL matches the quality of global manufacturers in this product

• This business is expected to witness traction in the coming year


9mfy13 consolidated revenue higher by 13% at 627 crore ... meet/222364_20130212.pdfpune nagar road,...

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