industry updates and key performance indicators - q3 fy 2015-16 [company update]

8/20/2019 Industry Updates and Key Performance Indicators - Q3 FY 2015-16 [Company Update]

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DISCLAIMER

This presentation may contain certain forward looking statements concerning JSPL’s

future business prospects and business profitability, which are subject to a number of

risks and uncertainties and the actual results could materially differ from those in suchforward looking statements.

The risks and uncertainties relating to these statements include, but are not limited to,

risks and uncertainties regarding fluctuations in earnings, our ability to manage growth,

competition (both domestic and international), economic growth in India and the target

countries for exports, ability to attract and retain highly skilled professionals, time and

cost over runs on contracts, our ability to manage our international operations,government policies and actions with respect to investments, fiscal deficits, regulations,

etc., interest and other fiscal costs generally prevailing in the economy. Past performance

may not be indicative of future performance. We do not undertake to update our

forward-looking statements.

This presentation is not intended, and does not, constitute or form part of any offer,

invitation or the solicitation of an offer to purchase, otherwise acquire, subscribe for, sellor otherwise dispose of, any securities in JSPL or any of it’s subsidiary undertakings or

any other invitation or inducement to engage in investment activities, neither shall this

presentation nor the fact of it’s distribution form the basis of, or be relied on in

connection with, any contract or investment decision. The numbers in this presentation

are purely indicative and could change later.

2Analyst Presentation


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STEEL OUTLOOK

Q3

FY’16

INDUSTRYDEVELOPMENTS

OUR

FACILITIES FINANCIALPERFORMANCE

OPERATIONAL

PERFORMANCE

3

PRESENTATION OUTLINE


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1670

1140

169121 106

45 30 15

1623

1114

166111 102

44 30 15

World Asia EU (28) North America CIS South America Middle East Africa

CY 14 CY 152.8%

1.8 %

2.5 % 0.5 %

Global Steel performance during CY ‘15

413 February 2016

4.3 %

0.2%

Fig in (Mt)

2.3%

8.6 %

World Crude Steel Production down 3% Y-O-Y

All steel producing regions recorded decline in

crude production

Source: WSA


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India became 3rd largest Steel producing country in the world

513 February 2016

CY 14

#1 China

#2 Japan

#3 India

#4 USA

CY 15

Global Crude

production Rank 823

804

111

105

87

90

88

79

2.3%

5%

2.6%

10.5%

Source: WSA

200

194

28

26

21.8

21.9

22

18

Q3 FY 15 Q3 FY 16

3.3%

4.3%

0.7 %

15.6%


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Global Steel over capacity leads to continued lower utilization

613 February 2016

79.8%

76.9%

74.2%

69.5%

73.4%72.5%

72.2%

68.0%

69.3%

68.3%

66.9%

64.6%

2 0 1 1

2 0 1 2

2 0 1 3

2 0 1 4

J a n

F e b

M a r

A p r

M a y

J u n

J u l

A u g

S e p

O c t

N o v

D e c

2015

# More than 750 Mt of globalsteel capacity remains

unutilized

Source: WSA


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Crude Production:o April – Dec ‘15: Crude steel production grow up by 1 % (y-o-y) only.

Real Consumption of Steel:

o April – Dec ‘15 : India’s Consumption of finished steel grow by 4 % (y-o-y)

Importso April – Dec ‘15: increased by 29 % (y-o-y)

Exportso April – Sept‘15: Exports down by 30 % (y-o-y)

How the Indian Steel Industry fared during April- Dec‘15 (source: JPC)

(Qty :million MT) FY ‘15 April – Dec ‘15

Qty

change

(y-o-y) Qty

change

(y-o-y)

Production: Crude Steel 88.3 8% 67.1 1%

Finished Steel (Non Alloy+Alloy)

Import 9.3 71% 8.4 29%

Export 5.5 (8)% 2.9 (30)%

Real Consumption 76.4 3% 58.9 4%

Source: JPC


9/56Source: *The Economist Intelligence Unit, Global Forecasting Service, dated June 17, 2015; # World Steel Association 3

India’s per capita steel consumption at 59.4 Kg below World average of 217 Kg(2014)*

Consumption of steel products is bound to increase with economic growth.

Key initiatives being undertaken by Government would propel Steel demand:

•Housing for all by 2022

• “Make in India” lead to localization of manufacturing

• 24x7 Power for All initiative by 2019

• 100 Smart Cities by 2022

• AMRUT, Bullet Trains & Metro Rails, Railway Corridors, Dedicated Freight

Corridors

• 175,000 MW Clean-Energy initiative by 2022

India will continue to grow & Consume More Steel


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STEEL OUTLOOK

Q3

FY’16


OURFACILITIES

FINANCIALPERFORMANCE

OPERATIONALPERFORMANCE

9



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Domestic Iron Ore prices

1113 February 2016

Iron Ore Lump Prices Iron Ore Fines Prices

Odisha’s iron ore fines prices decreased by

- 11% since Apr’15

- 45% since Oct’15

Chhattisgarh’s iron ore fines prices decreased by



Odisha’s iron ore lumps prices decreased by



Chhattisgarh’s iron ore lumps prices decreased by



4400

4030

3820

35503325

30002900

2150

4040

38403840

3840

3840

2900

2215 2180

1600

2000

2400

2800

3200

3600

4000

4400

4800

5200

P r i c e i n R s / t ( e x - m i n e s )

Odisha DR Lumps (5-18mm, Fe 62-

63%)

Chhattisgarh DR Lumps (6-40mm,Fe 65.5%)

1800

1650

1600 15251430

1600

14501300

2546

2243

1960

1660 1660 16601560

1560

1560

900

1200

1500

1800

2100

2400

2700

3000

P r i c e i n R s / t ( e x - m i n e s )

Odisha Fines (0-10 mm, Fe 63%)

Chhattisgarh Fines (0-10 mm, Fe64%)


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Declining Pellet Prices

1213 February 2016

Pellet Prices at Barbil-Keonjhar region witnessed a fall of 44% since Apr’15 & by around 16%

since Oct’15

5350

4775

4350

40754200

4400

3570

3200

2700 2900 3000

2000

2500

3000

3500

4000

4500

5000

5500

6000

Apr'15 May'15 Jun'15 July'15 Aug'15 Sep'15 Oct'15 Nov'15 Dec'15 Jan'16 Feb'16

P e l l e t P r i c e s ( R s / M T )

Avg. Pellet Price Trend in Eastern India


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Domestic Finished steel price trend (Oct’15-Feb’16)

1313 February 2016

30103

26896

25852

27124

23000

24000

25000

26000

27000

28000

29000

30000

31000 Domestic : Flat Steel Price Trend

HR Coil- Delhi HR Plate- Delhi

25600 25500

27400

23000

24600

26000

22000

23000

24000

25000

26000

27000

28000

Domestic : Long Steel Price Trend

Wire Rod-Raipur TMT Rebar- Raipur


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Domestic Semis & intermediaries price trend (Oct’15-Feb’16)

1413 February 2016

24860

23590

22650

25700

19685

18440

17400

20000

14250

12450

12700

13900

11000

13000

15000

17000

19000

21000

23000

25000

27000

Domestic Semis & Intermediaries: Price Trend

Pencil Ingot- Mandi

Scrap (HMS 80:20)- Mandi

Sponge Iron- Raipur


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Source: CEA

198.5

5.8

42.6 38.8

285.7

Thermal Nuclear Hydro Renewables Total

Installed Capacity (GW) in India

Thermal

69%

Nuclear2%

Hydro

15%

Renewables

14%

Wind 25.1

Solar 4.3Bio Mass

4.7

Small

Hydro 4.1

Renewables (GW) Portfolio

Installed Capacity

Portfolio

10610

11226

Apr'14 - Dec'14 Apr'15 - Dec'15

Generation Capacity Addition in MWs Y-o-Y

5.81% Increase

Installed Capacity in India (Dec 2015)

280 GW in

Q2FY16


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794.7

829.8

H1+Q3 FY15 H1+Q3 FY16

Electricity Generation in BUs

4.4 % Increase Y-o-Y

-3.0%-3.6%

-1.6% -1.7%

-4.0%

-3.5%

-3.0%

-2.5%

-2.0%

-1.5%-1.0%

-0.5%

0.0%

Energy Deficit Peak Deficit

Dec-14 Dec-15

Major Highlights (Dec 2015)


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15 18 20 2731 34 37 40

85 82 80 7369 66 63 60

2009 2010 2011 2012 2013 2014 2015 H1+Q3 FY16

Ever Increasing % Share by Private Sector Private Government

Increasing Private Share in Capacity and reducing % PLF

149 160 174 200 224 245 272 285

77% 78% 75% 73%70% 66% 66% 61%

0%

20%

40%

60%80%

100%

0

50

100

150

200

250

300

2009 2010 2011 2012 2013 2014 2015 H1+Q3 FY16

Total Capacity % PLFINSTALLED CAPACITY (GWs) vs PLF (%)


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Coal Block

Auction

• In January, Govt annulled 4th round of 9 coal block auctions for non-regulated sector due to muted

response

Industry Update - Coal, Power and T&D

Long TermCoal Linkage

• Long term Fuel linkage will now be done only via auction for un-regulated sector by CIL & SECL,

24MT in the 1st year.

UMPPRevised

Documents

• Power Ministry will seek Cabinet approval for revised bidding documents for Ultra Mega Power

Projects (UMPPs)

• Bid documents have been finalised and 3 plants in Bihar, Odisha & Tamil Nadu will be auctioned by

March-end entailing an investment of over Rs 80,000 crore.

New TariffPolicy

• The Cabinet has approved amendments to the power tariff policy . Some highlights of the Policy

Amendments are :

Microgrids for remote unconnected villages and small power plants near coal washeries

Allows sale of un-requisitioned power in the spot market

Mandatory minimum purchase for clean energy

No inter-State transmission charges and losses to be levied for solar and wind power.

Allows cost pass-through for use of imported and e-auctioned coal

All new inter-state transmission projects through competitive bidding

Smart meters compulsory for consumption over 200 units


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‘ UDAY-Ujjwal Discoms Assurance Yojana ’Scheme for DISCOMS

• The Cabinet has cleared the debt-recast and reform package to revive loss-making DISCOMs. As of March 2015,

the DISCOMs accumulated losses of INR 3.8 trillion (2.8% of GDP) with their outstanding debt nearly doubling

over the last three years to INR 4.3 trillion. The Plans includes following initiatives :

Improving Operational Efficiency : Reduce AT&C Losses to 15% in 2018-19 / Smart Grids & Smart Metering

/ Reduce gap between cost and revenue from Power / Up gradation of Network / GIS Mapping of losses

Reduction in Power Costs : Coal Swapping, Better Linkages, cheap domestic coal, Increased supplyPrice

Rationalization, Correct Tariff Fixation

Reduction in interest costs : States shall take over 75% of DISCOM debt as of Sep15 – 50% in FY16 and 25%in FY17. States will issue Non-SLR bonds in lieu of the debt and the remaining 25% will be converted by

Banks/FIs into loans/Bonds.

Enforcing financial discipline : Future losses of DISCOMs will have to be taken up by states in a phased

manner, starting from FY18. Working capital allowed will be only 25% of DISCOM’s last year’s revenue.

Additional Benefits for states accepting schemes on achievement of operational milestone : priority

funding through DDUGJY, IPDS / additional coal at notified prices / low cost power from NTPC

Policy Interventions : Segregation of carriage from content / Rationalize tariff determination process /

recovery of revenue by Licensees without any revenue gap / Renewable Energy Generation Obligation

(RGO) on all future coal and lignite based power plants

• 15 States have agreed to join UDAY Scheme as on date


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STEEL OUTLOOK

Q3

’FY16


OURFACILITIES

FINANCIALPERFORMANCE

21


OPERATIONALPERFORMANCE


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Steel PowerMines &Minerals

GlobalVentures

Current Capacities – Domestic & Global

Business Segments

• Domestic

**Includes 600 MW - synchronized & will be commissioned in FY16

ConstructionMaterial &

Solution

22

4.75 MTPA Steel* 3.11 MTPA*

IPP – 3400** MW

CPP – 1649 MW

Renewable – 24 MW

2 MTPA Steel

6.25 MTPA Mines

Cement

Road solutions

LGS

Copyright @ 2015 Jindal Steel & Power Limited


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Capacity in

deail

Hot Metal

(6.75 MTPA)

BF 2.13 MTPA

DRI 3.12 MTPA

HBI 1.50 MTPA

Liquid Steel

(6.75 MTPA)

SMS 6.75 MTPA

Finished Steel

(5.25 MTPA)

WRM 0.60 MTPA

RUBM 0.75 MTPA

MLSM 0.70 MTPA

Plate Mill 2.20 MTPA

BRM 1.0 MTPA

Steel Capacities across Life Cycle

** To be commissioned 23Copyright @ 2015 Jindal Steel & Power Limited

BRM 2.8* - Will be commissioned by 1QFY17 Effective Finished Steel 8.05 MTPA


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JSPL diversifies into Value added products – will boost EBITDA margins

Speed Floor LGSCement

Road Stabilizer Bricks & PaversEPS Panels LWA

Welded MeshCut & Bend

25


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Angul

Satara

Tamnar

RaigarhCaptive power projects (within JSPL)

ProjectCapacity

(MW)Fuel Configuration Status

DCPP, Raigarh 540 Coal 4x135 MW Operational

JSPL, Raigarh 299

Coal &

waste

heat

2x25 MW & 40 MW

(Waste heat)

2x55 MW

3x25 MW

24 MW

Operational

Angul, Odisha 810 Coal 6 x135 MW Operational

Independent Power Projects (IPP)

Project

Capacity

(MW) Fuel

Configurati

on Status

Tamnar 1(a) 1,000 Coal 4x250 MW Operational

Tamnar 2(a) 2,400 Coal 4x600 MW

1,800 MW

operational,

balance 600 MW

synchronized

Satara (b) 24 Wind 18x1.5 MW Operational

(a) Within JPL; (b) Within JSPL

IPP CPP

One of the largest thermal portfolios in India

JSPL - Power Capacities

26Copyright @ 2015 Jindal Steel & Power Limited


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96.43% subsidiary of JSPL

JINDAL POWER LIMITED

27

EUP -I1000MW (4 X 250)

EUP -II1200MW (2 X 600)

EUP -III1200MW (2 X 600*)

*600 MW Synchronized, Await Commissioning


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Tamnar-I, 1,000 MW (EUP I)

Awaiting clarity on Tara

Coal Block

In the interim, coal

sourced through – market

purchase and e-auction

Bilateral/short term/

merchant

258km transmission line

from plant to national grid

Tamnar-II - 1,200 MW (EUP II)

Long term linkage from

Mahanadi Coal Limited

(MCL) and South Eastern

Coalfields Limited (SECL)

TNEB – 400MW

CSEB – 60MW

KSEB – 200MW

KSEB – 150MW

Full Open access for 400MW

TNEB PPA commenced from

Oct 2015

Tamnar-II - 1,200 MW (EUP III)

Awaiting clarity on Gare

Palma IV/2 & 3 Coal mine

Market purchase and e-

auction

CSEB – 60MW

Open access to be finalised

against PPAs

FSA

PPA

Evacuation

Raw materials, transmission & PPAs in place for achieving higher PLF

(a) E xc ludi ng auxi li ary consumpti on

Key Contractual Arrangements for JPL



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Project Buyer Type

Period Quantum

(MW)From To

Tamnar II

(Phase 1)Tamil Nadu Long Term Feb-14 Sep-28 400

Tamnar II

(Phase 1)

KSEB

Long Term Jun-16 May-41 200

Tamnar II

(Phase 1)Long Term Oct-17 Sep-42 150

Tamnar II

(Phase 1)

Chhattisgarh

Long Term

After commercial

operation of Unit and for

complete life of plant

60

Tamnar II

(Phase 2)Long Term

After commercialoperation of Unit and for

complete life of plant

60

PPA Arrangements

Over 30% of total capacity tied up *

* Out of 3400 MW (IPP) 29Copyright @ 2015 Jindal Steel & Power Limited


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Upcoming PPAs

Procurer Type Quantum (MW) Schedule delivery Tenure (years)

Uttar Pradesh Long Term 2,800 Oct-16 15

Bihar Long Term 5003 year after

submission of RFPNA

Uttar Pradesh Long Term 1,000 Oct-16 15

JPL - Well placed on account of low capital cost base



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• Tamnar II (Phase 1):

350 MW KSEB PPA, transmission corridor

is expected from Jun-16

• Long term access from WR to NR granted

for 557 MW is expected to be available by

Jun-16 upon commissioning of Champa –

Kurukshetra HVDC link (3,000 MW). This

will be useful for power sale to UP

• No constraint in power evacuation to

Western and Eastern Region entities

including Bangladesh, where we have

participated for 250 MW power supply

Kolhapur

Narendra

Wardha

Warangal

Warora

Nizamabad

Raigarh P.S

Pugalur

Jaipur

Kurukshetra

ChampaJabalpur

Orai

Gwalior

Banaskantha

Chittorgarh

Gorakhpur

Barh

Gaya

Vanarasi

3000 MW+ 3000

MW

6000MW

S

R

WR

NR

ER

NE R

Oct’1

5

Shujalpu

r`Angul

Srikakulam

DharamjaigarhRanc

hiJharsugu

da

Rapp

C&D

Bishwanath Charali

Agra

Legends:

400 kV D/C Line

765 kV D/C Line

765 kV S/C Line

800 kV HVDC Line

Rihand

Vidhyanchal

Transmission constraints expected to be resolved in the near term

Upcoming Transmission Infrastructure



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Developing a coal mine

(3 MTPA) in

Mozambique’s coal-rich

Moatize region

Coal resources

estimated at 1.2 bn

tonnes including coking

coal

Mozambique,

Africa

JSPL’s Kiepersol Colliery produces Anthracite

coal, sold domestically and internationally Plans

to ramp up capacity

South Africa, Africa

Botswana, Africa

Acquired CIC Energy in 2012 for 120 mn USD

Coal Mine with Resource of over 3 bn MT (high

grade thermal coal)

Acquired 82.04% controlling

stake in Wollongong Coal

(Erstwhile Gujarat NRE coking

coal Limited)

Australia

1.5 MT HBI & 2 MT SMS Plant – plans to make it an Integrated

Steel Plant

Shadeed, Oman

Medium to large sizedeposits of prime hard

coking and low ash – low

sulphur thermal coal for

open-cast operation

Indonesia, Asia

Summary of International Operations

Copyright @ 2015 Jindal Steel & Power Limited 32


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Oman

Holding structure for global operations

Jindal Steel & Power Ltd

Listed Operating Entity in India

Australia

Coking Coal

South Africa

Anthracite Coal

Mozambique

Thermal/ Coking Coal

Jindal Steel & Power (Mauritius) Ltd

Holding company for overseas business

2 MTPA Steel plant



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Jindal Shadeed Iron & Steel, Oman

Marching towards becoming a Fully Integrated Steel Plant

1.5 HBI 2 MTPA SMS 1.4 MTPA Rolling Mill(By 4QFY16)



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35

First & Largest Integrated steel plant of Oman

Third largest in Arabian Peninsula

Port based steel plant

Largest Arc furnace in Arabian Peninsula, with contracted natural gas

Worlds Best Performing Midrex plant (category 1.5MTPA)

Products : HBI, Blooms & Billets

Salient Features

Copyright @ 2015 Jindal Steel & Power Limited


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In July 2010, JSPL acquired Shadeed Iron & Steel Co. LLC

• Gas-based 1.5 MTPA HBI plant

commenced production in

January 2011

• Commissioned SMS of 2 MTPA

in April 2014

• 1.4 MTPA Rebar to be

commissioned in 4QFY16


Rolling Mill


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37

• Total Project Cost: USD 190 million

• Expected to be commissioned in 4Q FY 2016

g

1.4 MTPA Rebar Mill


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38

• Iron Ore Pellets from Vale (Next door neighbour)

• Natural Gas from Oman Government through long term contract (at concessional prices)

• Scrap from External Purchase

Sourcing of Raw Materials - Oman Plant

Sales break up by customer (FY-15) Sales break up by geography (FY-15)

US

Others

Conares

Sohar SteelEmirates

JSW

Al- Wataniyah

Arcellor

Vilmeks

Fecat

UAE

Kuwait

Others

Oman

India

China

Ethiopia

South Africa

South Korea

ItalySaudi Arabia

Key Markets


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A) STEEL BUSINESS

• 19% growth in Steel Production in Q3 y-o-y (1.07 million MT in Q3 FY 16 vs 0.89 million MT in

Q3 FY15)

• Two fold growth in TMT Retail sales in Q3 y-o-y

• Secured order of Prime rails for DFCC

Ever highest Monthly Rail despatch in Jan – 16

Launch of E- Commerce portal for TMT

Performance highlights

4013 February 2016


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• JSPL-Barbil Pellet Plant awarded with most prestigious JIPM award for TPM –Excellence

• First pellet plant in the world to be conferred with this JIPM award

• Jindal Shadeed won following laurels

• Prestigious “Sultan Qaboos Award” for Industrial Excellence by the Ministry of

Commerce and Industry on February 9, 2016

• 2016 Steel Manufacturing Product Line Strategy Leadership Award, GCC'', at GIL

2016: Middle East, Dammam, Saudi Arabia on February 10, 2016• Jindal Shadeed have received 2 Awards from Midrex

For the achievement of 5 Million tons of production within 4 years of Operation [2011 –

2014]

For the achievement of Exceptional annual operational availability for the year 2014 -

98.51%. (Total 3 plants have received the awards out of 72 Midrex DR Plants in the world,

and Jindal Shadeed stands number 2.) • JSPL Raigarh got placed in Limca book of world records’ for manufacturing longest 121

meter long single piece track rail

• JPL received “Par Excellence Award for 5’S implementation” by QCFI on 7th Nov’ 15

Awards & Recognitions

4113 February 2016


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Consolidated Steel Sales Volumes

Total Steel Sales volumes up 23%*

Copyright @ 2015 Jindal Steel & Power Limited 43*Year on Year


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THE PANTHER ADVANTAGE

Construction TMT Rebars


Compelling Brand Recall

Customer centric B2C Model

Panther epitomizes strength & agility – the brand promise

Jindal Panther – USP

Excellent bonding with cement

Uniform Parallel Rib Pattern

Earthquake Resistant

Corrosion Resistant

Greater Resistance to Fire

Key Customers


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Key Customers




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STEEL OUTLOOK

Q3

FY’16

INDUSTRY

DEVELOPMENTS

OUR

FACILITIES

FINANCIAL

PERFORMANCE

46


OPERATIONAL

PERFORMANCE

Analyst Presentation


48/56

47- -

Standalone Q3 FY 16 –Snapshot of Key Financials


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48- -

Consolidated Q3 FY 16 –Snapshot of Key Financials


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49- -

JPL–Snapshot of Key Financials

2014-15Q3 Q2 Q3

Turnover 815 889 825

EBITDA 186 168 414

EBITDA% 23% 19% 50%

PBT 51 61 (798)

PAT 38 45 (758)

Depreciation + Amortization 130 130 131

Cash Profit 171 178 -532

Generation (million units) 2,580 2,728 2699

PLF (%) - 4X250 MW 70% 60% 96%

PLF (%) - 3X600 MW 26% 35% 20%

Particulars 2015-16

i i i f


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Key Initiatives for FY16


Capacity Utilization Operational Efficiency

Financial Prudence


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• Reduce Working capital – Receivables & Inventories

• Skill Enhancement to enable multitasking & productivity improvements

(PBO)

• Go for volume to ensure full capacity utilization

• Focus on “Value Added Products”

• Thrust on Heavy Fabrication business

• Commission Rebar mill in Angul

• Operationalize mines in Australia

• Diversify into High Rise building segment and Low cost housing segment &

offer complete package of Steel and Construction material

Key Priorities & Focus Areas

5113 February 2016


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- - 52

Centrade Business Park, KRasa, Noida (Structure,Speedfloor)


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- -

Dharamsala Cricket Stadium Extension


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For any information please contact: -

Mr. D.Balasubramanyam – Head of Investor Relations

Tel: +91 11-26739166

Mobile: +91 8130755166

Email: - [email protected]

Mr. Nishant Baranwal – Investor Relations

Tel : +91 11-26739178

Mobile:+91 8800690255

Email: - [email protected]


mailto:[email protected]:[email protected]


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