analyst sitevisit

7/31/2019 Analyst Sitevisit

1/34

1

JSW Steel Ltd.

Presentation to Analysts

Tornagallu (Bellary)

27thMarch 2006


2/34

2

Contents

Group Highlights

JSW Steel

Rights Issue

Project Status


3/34

3

O.P. Jindal

P R Jindal Sajjan Jindal Ratan Jindal Naveen Jindal

Pipes Carbon steel Stainless steel Power & rail

Jindal Saw Ltd.

Jindal United Steel

Inc.

Saw Pipes Inc.

Jindal Stainless

Ltd.

Jindal Steel &

Power Ltd.JSW group

JSW Steel Ltd.

JSW Energy Ltd.

Southern Iron &

Steel Co. Ltd.

South West Port Ltd.

JSW Aluminium Ltd.

Overview - O.P.Jindal Organization


4/34

4

Revenues ofover US$ 4 bn

Group ranked548th byForbes

Assetsover US$

4.6 bn

Employingover 20,000people

Diverse businessinterests

-Steel & related- Power

- Industrial gases

- Ports

O. P. JindalGroup

O.P.Jindal Group - Highlights


5/34

5

Turnover over

US$ 2 billion

Diversifiedbusiness insteel, power,

port andaluminium

Worlds

largest airseparation

oxygen

plantEmployingover 9,000

people

Known for growthand aggression

- Turnover from US$ 22mn to over US$ 2 bn in

ten years

JSWgroup

JSW Group - Highlights


6/34

6

JSW Steel


7/34

7

4.13.8

2.5

7

0

1

2

3

4

5

6

7

8

2006 2007 2008 2009

Millio

nton

JSW Steel - Capacity

Capacity to increase from 2.5 to 7 mtpa in 3 years


8/34

8

Capex & Financing Plan

Upto 3.8 mtpa Nearing completion 3.8 to 7 mtpa Rs. 6,150 crore:

Financing Rs. in crore

Equity / Internal accruals : 2550

Debt : 3600

Total : 6150


9/34

9

JSW Steel

Slabs 1.0

HR Coils 1.5

HR Plates 0.2CR 0.1

GP 0.8

PPGI 0.1

Total finished steel 3.7

% of value addition 26%

Product mix at 3.8 mtpa capacity

-Product Mix


10/34

10

JSW Steel

Turnover over $1.7 bn

Market share of 12% in the domestic

market

Employee strength over 4000


11/34

11

Share Holding Pattern 28.02.06

44%

15%

31%

10%

Promoters

Institutional

Investors

FIIs

Others / public


12/34

12

JSW Steel - Key Strengths

Blend of 2 technologies - no petro fuelusage

Proximity to sources of rich Iron Ore

reserves - 30% captive Iron ore at 4 mtpa

capacity

Integrated from Iron Ore to galvanised

and colour coated products


13/34

13

Sole producer of flat steel in southernregion


Waste utilisation up to 85% / Zero

effluent discharge

Extremely environment friendly &

socially responsible approach


14/34

14

Exports to over 50 countries


Non unionised work force

Long term tie ups with customer


15/34

15

Shree Precoated

Brakes India Tube Products of India

Supplies to589 OEMsacrossIndia

Voltas Ltd.

Some Domestic Customers


16/34

16

Some International Customers


17/34

17*Karnataka State Industrial & Investment Development Corporation

Sajjan Jindal

V C & M D

Dr B.N. SinghJMD & CEO M.V.S. RaoDirector (Finance)

Board of Directors

Audit, Remuneration, shareholders & investors grievance committees

PromoterDirectors

2

ExecutiveDirectors

2

KSIIDC*Nominee Director

1

IndependentDirectors

5

Lender NomineeDirectors

3

JSW Steel - Management Structure

Diversified Board & Management Structure


18/34

18

Independent directors from diverse fields : Mr. Anthony Pedder, an internationally renowned steel expert

Dr. Vijay Kelkar, an eminent economist

Mr. Sudipto Sarkar, a reputed lawyer

Mr. Uday Chitale, a reputed Chartered Accountant

Dr. S. K. Gupta, an acclaimed steel expert

Effective Internal control system

Sound corporate governance practices

JSW Steel-Profile of Directors


19/34

19

Financial highlights..

JSW Steel


20/34

20

Net cash accr ual s

1 5 1 8

1 355018180

FY03 FY04 FY05

Interest

5635

4880 4700

FY 0 3 FY 0 4 FY 0 5

Gr oss sales

27936

58560

86900

FY 0 3 FY 0 4 FY 0 5

JSW Steel - Financial Trends(Figures in Rs. Mn)

EBIDTA

71 531 5000

23650

FY03 FY04 FY05


21/34

21

JSW Steel Current Financials

31.12.05 31.12.04

Gross sales 50312 47436

Net sales 45969 44965

EBIDTA 13383 14931

EBIDTA Margin 29% 33%

Interest 2788 3618

Profit before tax 7090 8133

Net profit 4459 4660

9 months endedParticulars

(Figures in Rs. Mn)


22/34

22

JSW Steel Gearing Ratios

EBIDTA / Interest Debt / equity

1.27

3.07

5.03 4.80

FY 03 FY 04 FY 05 FY '06(9

mths)

5.47

2.32

1.33

1.00

FY 03 FY 04 FY 05 FY '06(9

mths)


23/34

23

Going forward . . .

JSW Steel


24/34

24

Volume growth, 7 mtpa by FY 2009and 10 mtpa by FY 2011

Pellet capacity to 5 mtpa by FY 2007

Slab capacity to 3.9 mtpa by FY 2007

HR Coils capacity to 3.2 mtpa by FY 2008

CR products capacity to 1.8 mtpa by 2008

Colour coated capacity to 0.1 mtpa by FY

JSW Steel - Strategy

Value added products increasing from 38% to

53% by 2008


25/34

25

JSW Steel - Strategy

Integration to reduce cost

Allocation of additional iron ore reserves

Investment opportunities in overseas Coal mines

for Coal

Maintain gearing of 1

Investment in cutting edge management

practices Innovation

Quality systems


26/34

26

Delay in tying up further captive rawmaterial source

JSW Steel - Challenges / Concerns

Declining but yet relatively firm coal prices

valuation of coal mine Meet the growth imperative at 1:1 debt

equity

Talent retention


27/34

Rights Issue


28/34

28

Rights-Broad Terms

Fund raising upto Rs. 400 crs. (withoutwarrants)

Entitlement ratio on equity shares 1:8

Warrants entitlement of one Series A & oneSeries B warrant for every equity shareoffered on rights basis

Warrant conversion period

Series A : 18 - 36 months from allotment date

Series B : 24 - 48 months from allotment date


29/34

29

The terms of warrants issue shall bedecided by the committee of the Board

Warrants to be listed on allotment and

will be tradable

Rights-Broad Terms


30/34

30

Project Status


31/34

31

Up to 3.8 mtpa Expansion - Project Status

Commissioning to be completed by June 2006

Component Status

Converter Apr-06

Coke oven Apr-06

Lime calcinations Plant Apr-06

Sinter Plant May-06

Modernisation of Hot Strip Mill May-06

Blast furnace Jun-06

Pellet Plant Jun-06

Slab Caster Jun-06


32/34

32

Upto 7 mtpa Expansion - Status

Financial closure:

- In principle approvals in place

Orders placed:

-Blast furnace of capacity 4019 M3

(Largest in India)

Land leveling started:-Blast furnace

-BOF and CCP


33/34

33

Key ratios

*Market value per share is as on 24th March 2006 for all the calculations, whereverrequired

All figures annualised wherever necessary

ROCE 17.26%

ROE 18.62%

EV / EBIDTA 4.5x

Cash EPS Rs. 84

Book value per share Rs. 224

Market value per share* 264.65

As on 31st December '05


34/34

34

THANK YOU

analyst sitevisit

Documents