HI-TECH PIPES LIMITED — Investor Presentation 2021

Jun 8, 2021

Hi-Tech Pipes Limited.

Investor Presentation | June 2021

Providing Innovative Solutions

Disclaimer

This presentation and the accompanying slides (the "Presentation"), which have been prepared by Hitech Pipes Ltd. (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.

This presentation contains certain forward-looking statements concerning the Company'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 such forward-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 abroad, 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 regulations, interest and other fiscal costs generally prevailing in the economy. The Company does not undertake to make any announcement in case any of these forward-looking statements become materially incorrect in future or update any forward-looking statements made from time to time by or on behalf of the Company

Key Performance Indicators – Q4 FY21

Key Performance Indicators – FY21

Particulars (Rs crore)	Q4 FY21	Q4 FY20	Y-o-Y %	Q3 FY21	Q-o-Q %	FY21	FY20	Y-o-Y %
Total Income from Operations	391.50	299.78	30.6%	415.69	-5.8%	1,340.63	1,209.61	10.8%
Raw Materials	353.55	271.95	30.0%	376.31	-6.1%	1,210.20	1,095.45	10.5%
Employee Cost	6.01	5.32	13.0%	5.00	20.2%	18.77	17.79	5.5%
Other Cost	12.63	8.03	57.3%	11.17	13.1%	40.85	37.15	10.0%
EBITDA	19.31	14.48	33.4%	23.21	-16.8%	70.81	59.22	19.6%
EBITDA Margin	0.05	0.05	2.1%	0.06	-11.7%	0.05	0.05	7.9%
Other Income	0.42	0.93	-54.8%	0.29	44.8%	0.79	1.25	-36.8%
Depreciation	2.34	2.04	14.7%	2.06	13.6%	8.32	6.57	26.6%
Interest	8.81	8.60	2.4%	8.78	0.3%	32.28	30.03	7.5%
Profit Before Tax	8.58	4.77	79.9%	12.66	-32.2%	31.00	23.87	29.8%
Tax	2.06	0.56	267.9%	3.40	-39.4%	8.18	3.47	135.7%
Profit After Tax	6.52	4.21	54.9%	9.26	-29.6%	22.82	20.40	11.9%
Basic EPS ( in Rs.)	5.95	3.85	54.6%	8.48	-29.8%	20.85	18.85	10.6%

Consolidated Profitability Highlights – Q4 & FY21

Particulars (Rs crore)	Mar-20	Mar-21
Equity	173.61	205.19
Equity Share Capital	10.93	11.20
Other Equity	162.68	193.99
Non Current Liabilities	102.65	133.06
Financial Liabilities
Borrowing	88.97	116.17
Other Financial liabilities	0.82	0.80
Provisions	0.97	0.90
Deferred Tax Liabilities (Net)	11.89	15.19
Current Liabilities	291.50	261.03
Financial Liabilities
Borrowings	206.50	178.93
Trade Payables	56.06	49.23
Other Financial Liabilities	17.33	22.69
Other Current Liabilities	5.40	3.19
Provisions	5.40	4.18
Current Tax Liabilities (Net)	0.81	2.81
Total	567.76	599.28

Consolidated Balance Sheet – FY21

Consolidated Cash Flow – FY21

Particulars (Rs crore)	FY21	FY20
Net Profit Before Tax and Extra Ordinary Activity	30.99	23.86
Add/ Less Adjustments for:
Depreciation	8.32	6.57
Interest Received	(0.78)	(0.86)
Finance Costs	32.29	30.04
Operating Profit Before Working Capital Changes	70.81	59.61
Adjustments for Working Capital	(1.90)	(27.99)
Cash Generated from Operations	68.91	31.61
Direct Taxes Paid	4.79	6.67
Net Cash Flow from Operating Activities	64.11	24.94
Net Cash Flow from Investing Activities	(39.63)	(38.85)
Net Cash Flow from Financing Activities	(24.57)	13.79
Net Increase/ (Decrease) Changes in Cash & Cash Equivalent	(0.09)	(0.11)
Cash & Cash Equivalent at the Beginning of the Year	0.73	0.84
Cash & Cash Equivalent at the closing of the Year	0.63	0.72

Recent Developments – New Value-Added Products addition in Portfolio

A new product line viz. CR Sheet (used for fabrication of Steel Furniture) has been developed and Special Annealing Furnaces has been installed at Sikanderabad (UP) manufacturing facility

The demand for this product has been encouraging and well accepted by customers

With commissioning of new Khopoli (Maharashtra) Facility, share of value-added products to increase.

The facility will be manufacturing MS and GP Steel Hollow Sections

New Value-Added products like "Galvanized Colour Coated Roofing Sheets" are under development process

The company has successfully registered its products in the prestigious High Speed Bullet Train Project (Ahmedabad to Mumbai). Substantial demand is expected from this project in the coming period. Moreover, the company has also started supplying Jumbo MS Hollow Sections (Hi-Tech Bahubali) to the various prestigious projects

The company has won various Government Tenders under the "Jal Jivan Mission" Projects of the various State Governments

Recent Developments – Capacity Expansion on Track

Company's total capacity stands at 5.8 lac tonnes and can be expanded by about 20% more through brownfield route and debottlenecking

New Continuous Pickling line with capacity of 2.5 lakh tons and Two New CR Slitting Lines wider width with Capacity of 1 lakh tonnes per annum has been successfully commissioned started at Sikanderabad (UP) facility.

These projects will help to produce superior quality value added products

Recent Developments – Cost Optimisation through adding Solar Power Capacities

The company has commissioned Roof Top Solar Projects under Opex Model at its Sikanderabad (UP) and Khopoli (Maharashtra) facilities

With this, the total Roof Top Solar Power Generation installed capacity has increased to 3,300 KW

The increase in solar power capacity would help in saving power & fuel cost, which is a significant part of total operating cost

Company Overview

Built CoreStrength	Installed Capacity5,80,000 MTPA	Diversified Presence5 Plants across 4 states
StrongDistribution	Dealers & Distributors390+	SKUs550+
ProductInnovation	Product Offerings450+	Products availabilityAcross 17 States
Established Brands
Strong FinancialPerformance	Net Sales+20% CAGR*	EBITDA+15% CAGR*

EPS

+20% CAGR*

Net Worth

+28% CAGR*

* 5 year CAGR from FY17-FY21

Hi-Tech Pipes | Capabilities Built So Far…

• 1988-1996
• Commenced Manufacturing 'MS pipes' at Sikanderabad unit-1
• Started manufacturing Cold Rolled Coils' and strips

• 2001-2010
• Installation of 'Hot-Dipped Galvanizing' facility
• Commenced production of 'Metal Beam Crash Barriers'
• Initiated production of 'Hollow Sections and Solar Mounting Sections'

• Sikanderabad Unit –II facility commenced for manufacture 'Steel Tubes & Hollow Sections'
• Started commercial production of 'Steel Tubes & Hollow Sections' at the Sanand (Gujarat) Unit-III
• Listed on the NSE-SME

2017-2019

Commenced operations at Hindupur (Andhra Pradesh) Unit IV

Modernized the 'Cold Rolling Plant' at Sikandrabad unit

Started 'Tube Mill No. 3' at Sanand

Migrated to NSE Main Board in May 2018

2019-2021

• Started Colled Rolling expansion project for wider product of HRoP, CRCA, CRFH, GPGC
• Commenced Khopoli, Maharashtra facility of 80,000 MTPA – Unit V

…Over the 35 Years of Consistent Growth and Innovation

Recently commenced a new facility at Khopoli, Maharashtra to cater Maharashtra and Goa region

One of the India's leading manufacturer of Steel Pipes with presence in more than 5,000 retail stores

Continuously enhancing manufacturing capabilities while diversifying into various product categories

Offering a range of piping solutions to cater diverse needs of consumers / sectors

Setting-up new manufacturing facilities at strategic location to strengthen Pan-India presence

Continued Investment in Building Competencies to Cater to Demand…

Encompassing 580,000 MTPA of production ambience and a strong network of 390+ Dealers & Distributors Pan India

Plant Location	Capacity (MTPA)	Product Portfolio
Sikandrabad, UP	2,55,000	MS Steel Pipes, HollowSections, GI Pipes, ColdRolled Coils & Strips
Sanand, Gujarat	1,25,000	MS Steel Pipes, HollowSections & GP Pipes
Hindupur, AP	1,20,000	MS Steel Pipes, HollowSections & GI Pipes
Khopoli,Maharashtra	80,000	MS Steel Pipes & HollowSections,CR Pipes, GPpipes
Total	5,80,000	Diversified Range

…with Strategic Locations for a Pan-India Presence and Distribution

Brand Name	Descriptionof item	Key Application	Brand LOGO's
JALSHAKTI	GI Pipes	Borewell, Water, Agriculture
CASEWELL	MS & GI Casino pipes	Borewell
ORGANIC	GI Pipes	Poly Houses, Agriculture
BAHUBALI	Large DiaHollowSection	Infra, Airport, Metro Stations
PRE-GAL	GI Pipes	Indian Coastal & related
FIREFIGHTER	MS & GI Pipes	Fire Safety –Buildings
SHAKTI	MS Hollow Section	Construction industries
FLATMAX	CRCA Coils & Strips	Automobiles, White Goods
CRASHGAURD	Metal Beam crash Barrier	Roads & Railways Safety

Application Based Product Portfolio

				ElectricalProducts
--	--	--	--	------------------------	--

Emerged as a holistic pipe solution provider with 590+ SKUs….

…Making Hi-Tech a One-Stop Shop for a wide range of sectors

Widening and Deepening the Product Range for Diversified Applications

Mr. Ajay Kumar Bansal

Chairman & Managing Director

Mr. Anish Bansal Whole-Time Director

Mr. P.K. Saxena Non-Executive Independent Director

Mr. Vivek Goyal Non-Executive Independent Director

Mrs. Neerja Kumar Non-Executive Independent Director

Mr. Arvind Bansal CFO

Mr. Arun Sharma CS & Compliance Officer

Mr. Mahesh Kumar Non-Executive Independent Director

• An Industry stalwart with over 36 years of experience in the steel industry
• Chairman of the FII (Steel tube Panel); Represented industry at various National & International forums
• Played an instrumental role in the Company's expansion over the years

• B.Sc. (Economics ) in Banking & Finance graduate from the Cardiff University, England, with over 13 years of experience in Business Development & Administration
• His area of expertise includes corporate finance, strategy, marketing, product development, project implementation, international trade and finance along with other corporate matters

Pedigreed Management Team with Deep Sector Knowledge…

Marquee Projects which used Hi -Tech Products

Crash Barrier at Yamuna Expressway

Curtain Walling Structure at Mumbai Int'l Airport

Toll Plaza at Bandra-Worli Sea Link

Fire Fighting Pipes at Seven Hills Hospital

Grandstand Roofing at Buddh Int'l Circuit

…Leading to Long Standing Relationships with Marquee Clientele..

PERFORMANCE EXCELLENCE AWARD MINISRY OF STEEL, GOVERNMENT OF INDIA

…Validated by Quality Certifications and Client Awards

Strategic Focus

With recent capacity expansions, strengthening our base in the Western & Southern market where there is a higher demand for value-added galvanized pipes

New value-added products like "Color Coded Roofing Sheets" are under development process

Focus on enhancing the distribution network to help marketing of wide-rage of product

Network comprises more than 390 distributors and dealers, and 590+ SKUs spread across India

Continue to be an application based, One-Stop Solution provider with a widerange of value-added and customized products

which will enable in gaining further market share

Expanding Value-Added "Brand" Products Portfolio with Strengthening Distribution Network

Operating Margins to Improve

Better Capacity Utilisation would drive sales volumes and drive operating leverage benefits

Operating Cost/ton to come down led by better volumes & cost optimisation measures; EBITDA/ton to improve

Improvement in Capacity Utilisation, Cost Optimisation to drive Operating Margins

Increasing share of Value Added Products

Widened the product mix by developing value-added products

Regularly introducing new products and aaddressing widening customer needs from a wide range of industries

Per Capital Consumption (Kgs) - Steel

Per Capital Consumption (Kgs) – Pipes

8%	SteelPipes&TubescontributioninIndianSteelConsumption	7.8 milliontonnes	Production inFY 2019
7-8%CAGR	Pipesmarkettogrowby2023compareto4-5%inlast5years	3x	Growth instructural pipesdemand by 2023

Sector wise Consumption Break-Up

Source: Industry data

Huge Opportunity in the Indian Steel Pipes & Tubes Industry

Infrastructure & Housing

• Urban development program Smart cities, Amrut, Hriday
• Growing vertical mode of development increased spending on Skyscrapers
• Increasing Warehousing demand due to rapid digital transformation
• Rapid Urbanization in Tier II & III cities rising construction of G+20 structures, Green building norms & Rural Housing scheme (PMAY-G)

Investment of ~ Rs. 50 Lakh Crores by 2030 for redevelopment of ~400 stations and build 4 new freight corridors

Railways Infrastructure

Micro Irrigation - target to reach 100 lakh hectares in 5 five years

Poly House – Future of Farming – High Subsidy

Agriculture

Future of Power Generation – exponential growth

Solar

Source: Industry data

Huge demand from various sectors aided by Government Schemes

Annual Financials

Key Performance Highlights

EBITDA/ton improved sharply in FY21 led by improvement in sales realization; Increase in contribution from Value Added Products leading to better realizations

29

Key Performance Highlights

In Rs Crore

Key Financial Ratios

Return on Assets %

Raising Funds through equity to strengthen the balance sheet

• Company has issued and allotted 13.70 lakh fully convertible warrants at a price of Rs 164 per warrant aggregating up-to Rs 22.468 Crores to the persons belonging to promoter, promoter group and non-promoter group category
• Of the total 13.70 lakh warrants, 4.50 lakh warrants are allotted to promoters and the balance 9.20 lakh warrants to non-promoter group
• The fund raising through equity has strengthened the balance sheet and the funds would be utilized for working capital requirements and capital expenditure
• 5.70 lakh warrants has been converted into equity shares till date aggregating to Rs 9.35 crore. Of the 5.70 lakh equity shares converted, 1.50 lakh equity shares allocated to promoters (as on March 12, 2021) and 4.20 lakh equity shares to non-promoter group (out of which 1.30 Lakhs were allotted on March 31, 2021)
• 8.00 lakh warrants are pending for conversion as on date
• Post conversion, the total no. of equity shares stands at 1,14,96,100 as of May 2021 and equity share capital increased to Rs 11.49 crores

	As on March 31,		Increase in Equity
Number of Equity Shares	2021	% of Total	Shares (Converted)	As on May 31, 2021	% of Total
Promoters	70,01,883	62.48%	-	70,01,883	60.91%
Non Promoter	42,04,217	37.51%	2,90,000	44,94,217	39.09%
Total	1,12,06,100	100%	2,90,000	1,14,96,100	100%

Particulars (Rs crore)	FY17	FY18	FY19	FY20	FY21
Total Income from Operations	637.4	1,015.7	1,360.4	1,209.6	1,340.6
Raw Materials	562.7	913.3	1,236.4	1,095.4	1,210.2
Employee Cost	10.6	12.1	13.7	17.8	18.8
Other Cost	24.3	30.1	35.6	37.2	40.8
EBITDA	39.9	60.1	74.8	59.2	70.8
EBITDA Margin	6.26%	5.92%	5.50%	4.90%	5.28%
Other Income	2.4	1.3	1.4	1.2	0.8
Depreciation	6.9	4.0	5.3	6.6	8.3
Interest	20.4	27.4	29.9	30.0	32.3
Profit Before Tax	14.9	30.0	41.0	23.9	31.0
Tax	4.5	9.0	13.6	3.5	8.2
Profit After Tax	10.4	21.0	27.5	20.4	22.8
Basic EPS ( in Rs.)	10.08	20.39	25.79	18.85	20.85

Consolidated P&L – Last 5 Years

Historical Consolidated Balance Sheet

Particulars (Rs crore)	Mar-18	Mar-19	Mar-20	Mar-21
Equity	113.6	146.8	173.6	205.2
Equity Share Capital	10.5	10.7	10.9	11.2
Other Equity	103.1	136.1	162.7	194.0
Non Current Liabilities	83.8	84.7	102.7	133.1
Financial Liabilities
Borrowing	70.4	71.7	89.0	116.2
Other Financial liabilities	6.4	0.9	0.82	0.8
Provisions	0.6	0.6	1.0	0.9
Deferred Tax Liabilities (Net)	6.4	11.4	11.9	15.2
Current Liabilities	251.2	273.7	291.5	261.0
Financial Liabilities
Borrowings	172.1	186.5	206.5	178.9
Trade Payables	45.4	59.1	56.1	49.2
Other Financial Liabilities	13.1	14.8	17.3	22.7
Other Current Liabilities	16.0	5.1	5.4	3.2
Provisions	1.2	3.8	5.4	4.2
Current Tax Liabilities (Net)	3.3	4.3	0.8	2.8
Total	448.6	505.2	567.8	599.3

Financial Assets

Particulars (Rs crore)	Mar-18	Mar-19	Mar-20	Mar-21
Non-current Assets	149.4	177.4	209.0	241.8
Property, Plant and Equipment	123.9	169.1	173.0	202.5
Capital Work in Progress	17.4	3.7	29.4	29.9
Other Intangible asset	0.1	0.1	0.0	0.0
Financial Assets
Loans	2.7	2.9	3.6	4.2
Other Non Current Assets	5.3	1.6	3.0	5.3
Current Assets	299.2	327.8	358.7	357.5
Inventories	154.3	151.2	178.8	188.5
Debtors	103.9	137.4	137.3	120.6
Cash & Cash Equivalent	0.9	0.8	0.7	0.6
Bank Balance	11.9	15.2	18.0	16.3
Other Current Assets	28.1	23.2	23.9	31.5
Total Assets	448.6	505.2	567.8	599.3

For more details, please contact:

Company:	Investor Relations Advisors:
Hi-Tech Pipes Limited.	Strategic Growth Advisors Pvt. Ltd.
CIN: L27202DL1985PLC019750	CIN: U74140MH2010PTC204285
Mr. Arvind Bansal, CFO	Mr. Vijay Goel / Mr. Aakash Mehta
cfo@hitechpipes.in
Phone: 011-48440050	+91 9920124357 / +91 9870679263
www.hitechpipes.in	www.sgapl.net

vijay.goel@sgapl.net / aakash.s.m@sgapl.net