#1Building a stronger future Investor Presentation Q2 and H1FY21#2Disclaimer SALASAR Building a stronger future This presentation and the accompanying slides (the "Presentation"), which have been prepared by Salasar Techno Engineering 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 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.#3Contents 01 | Q2/H1FY21 Highlights 02 | Company Overview 03 | Industry Opportunities 750 04 | Growth Strategy | Historical Financial Performance SALASAR Building a stronger future#4Q2/H1FY21 Highlights SALASAR Building a stronger future#5Q2/H1FY21 consolidated P&L statement SALASAR Building a stronger future Particulars (INR Cr) Q2FY21 Q2FY20 H2FY21 H2FY20 ■Manufacturing - Steel Structures and Others ■■ EPC Power Transmission Net Sales 147.6 153.1 210.7 316.7 ■ EPC - Railway Electrification Cost of Goods Sold 119.2 122.0 169.0 253.7 3% Employee Cost 7.5 7.7 12.9 14.9 9% Other Indirect Expenses 5.8 7.5 9.0 15.4 Total Expenditure 132.5 137.2 190.9 284.0 EBITDA 15.0 15.9 19.8 32.6 EBITDA Margin % 10.2% 10.4% 9.4% 10.3% Other Income 1.2 0.2 1.8 0.4 88% Interest 4.2 5.7 7.8 10.3 Depreciation 1.4 1.2 2.7 2.4 H1FY21 Revenue by Segments Profit Before Tax 10.6 9.2 11.1 20.3 Provision for Tax 2.4 -0.2 2.7 3.9 Profit After Tax 8.2 9.3 8.4 16.5 PAT Margin % 5.5% 6.1% 4.0% 5.2% 5#6Consolidated Balance Sheet as on 30th Sept'20 SALASAR Building a stronger future (Rs Cr) EQUITY & LIABILITY Share Capital Other Equity Shareholder's Funds Sep-20 Mar-20 (Rs Cr) Sep-20 Mar-20 13.3 13.3 ASSETS Non-Current Assets: 205.2 193.8 Net Block 92.7 91.1 218.5 207.1 Capital Work in Progress 1.3 0.3 Non-Current Liabilities: Other Non Current Assets 12.3 14.2 Total Non-Current Assets 106.3 105.6 Secured Loans 4.1 5.3 Deferred Tax Assets / Liabilities 3.6 3.1 Current Assets: Other Long Term Liabilities - Inventories 92.8 93.5 Long Term Provisions 2.5 2.3 Sundry Debtors 221.8 214.1 Total Non-Current Liabilities 10.2 10.7 Cash and Bank 11.1 10.6 Current Liabilities: Other Financial Assets 16.2 11.8 Trade Payables 19.9 21.4 Other Current Assets 18.3 16.3 Other Current Liabilities 60.1 54.2 Current Tax assets (Net) 0.8 1.6 Short Term Borrowings 158.2 159.6 Total Current Assets 361.0 347.9 Short Term Provisions 0.4 0.3 Net Current Assets (Including Current Investments) 122.4 112.3 Total Current Liabilities 238.6 235.6 Net Current Assets (Excluding Current Investments) 119.7 110.8 Total Liabilities 467.3 453.5 Total Assets 467.3 453.5#7Recent Developments SALASAR Building a stronger future 1 Secured 6 tenders from Prasar Bharti 3 Secured order from AVAADA Clean Project Private Limited 5 - Scope: Design, Supply, Erection, Testing and commissioning of 100M self-supporting lattice steel tower - Value: Rs 13.45 cr - Scope: Supply of Solar Module Mounting Structure for their 300MW Plant at Bikaner Rajasthan - Value: Rs 7.40 cr Secured order from Western Railway, Vadodara - Scope: Design, supply, erection, testing and commissioning of 25 KV AC OHE between Dabhoi Badoli Section - Value: Rs 16.7 cr Received 2nd order under 2-year 2 4 supply agreement with American Tower Corporation (ATC) for supply of towers in 5 African countries - South Africa, Kenya, Uganda, Nigeria and Ghana in Q1 - Scope: Supply telecom towers to Burkina Faso and Nigeria - Value: USD 1 Mn Won EPC order for Railway Electrification at Pratapgarh & Janghai Stations of Lucknow Division - Scope: Design, Supply, Erection, Testing and Commissioning of 25 KV AC Single phase OHE in connection with yard remodeling - Value: Rs 10.56 cr 6 Secured order from Northern Railway, New Delhi - Scope: Design, supply, erection, testing and commissioning of 25KV AC single phase OHE in connection with Raibareli yard remodelling - Value: Rs 6.54 cr 7#8Company Overview SALASAR Building a stronger future#9Diversified product portfolio 0 Transmission Line Towers Manufacturing and deployment of transmission towers for EPC business, Turnkey Projects, supplying structures to other EPC contractors 3 Solar Structures Manufacturing, fabrication and deployment of solar module mounting structures 05 SALASAR Building a stronger future Telecom Towers Production of towers and monopoles that are designed as per time-tested Ramboll designs, in-house IIT certified designs, or tailored as per customer design 0% 2 Railway Electrification Design, supply, erection, testing & commissioning of railway electrification including normal height OHE, High Rise OHE & TSS Works 0 4 Utility Poles Production of custom-made poles of the highest quality equipped with technologies like LED lights, CCTV cameras, pollution sensors, Wi-Fi routers 45K Telecom Towers 475KM Power Transmission lines 217TKM* Railway Track electrification Track Kilometres 9#10Technology driven facilities 3 State-of-art Steel Structure Manufacturing and Galvanising Facilities 1 2 Location: District Hapur (UP) Unit-I, Jindal Nagar Unit-II, Khera, Pilkhuwa Unit-III, Khera, Pilkhuwa Raw Materials: Steel Shape and Section Zinc (for Galvanising) Nuts and Bolts Total Area: 1,30,000 Square yards Installed Capacity: 1,00,000 MT of Steel Galvanizing Machinery: CNC Machines Industrial Machinery Hydra & Cranes SALASAR Building a stronger future 10#11Technical Tie-up with Ramboll, Denmark To manufacture lighter and lower costing tower structures and high mast poles. Their designs reduce the cost by 20% compared to conventional angular towers. RAMBOLL Ramboll Telecom is a world leader in designing telecom and high mast Poles. With the experience of designing towers for last sixty years, their designs are time-tested and proven for performance SALASAR Building a stronger future 11#12SALASAR Building a stronger future Experienced management team Mr. Alok Kumar B.Sc from Punjab University, Chandigarh With experience spanning over 4 decades in trading, manufacturing and fabrication of iron & steel, Mr. Kumar is behind the group's spirit and commitment to deliver products and services of uncompromising quality and integrity Mr. Shashank Agarwal B.E. (Mech.) from MIT, Manipal With 25+ years of experience, Mr. Agarwal is a first generation entrepreneur who has been instrumental in building Salasar into one of the leading players in the sector. He is involved in all aspects of business and has been the driving force in creating the brand and image of Salasar Chairman & Managing Director Mr. Alok Kumar AR SE Joint Managing Director Mr. Shashank Agarwal Board of Directors: 1 Shalabh Agarwal Director 2 Tripti Gupta Director Anil Kumar Jain 3 Non-Executive and Independent Director 5 Amit Jain Non-Executive and Independent Director Sanjay Chandak Non-Executive and Independent Director Vijay Kr jain Non-Executive and Independent Director Key Management: Pramod Kumar Kala Chief Finance Officer 12#13Strong client base Telecom Sector airtel indus TOWERS TowerVision Infrastructure Sharing AMERICAN TOWER jio HUAWEI HFCL GROUP ERICSSON Bharti Infratel Limited Power Sector KEC adani™ KEC INTERNATIONAL LIMITED ΤΑΤΑ TATA PROJECTS बी एच ई एल BHEL पावरग्रिड WELSPUN Dare to Commit Welspun Energy Ltd. ABB S Sterlite 1 Approved vendor for Power Grid Corporation Ltd. 2 Qualified to bid for Rural Electrification projects 3 Qualified by CORE (Central Organization for Railway Track Electrification) रेल भारतीय रे पश्चिमांचल वि INDIAN वितरण RAILW निगम लिमिटेड trans ० प्र० सरकार का उपक्रम केन्द्रीय CENTRAL ORGAN विद्युतीकरण FOR RAILW ISATIO Others/EPC TRANSMISSION U.P. POWER TR CORPORATION LIMITED UP UPPT CL SALASAR Building a stronger future (संचरण निगम निगम लिमिटेड झारखण्ड ऊर्जा- HARKHAND URJA 4 SANCHARAN NIGAM LIMITED OPTCL Lifeline of Orissa HVPN AEG CL HP POWER CORPORATION LTD. 13#14Industry Opportunities SALASAR Building a stronger future#15Industry opportunity - Telecom SALASAR Building a stronger future Mobile and Internet penetration ■ The proportion of unique mobile subscribers to the total population is expected to reach around 63% in 2025 from 58% in July 2018 ■ With the increase in the mobile phone penetration and reducing data costs in India, it is expected that the current internet user base that stands at 687 Mn might get doubled in the next 5 years 5G Rollout Plans & 4G Penetration ◉ Increase in the 4G penetration to provide 4G access to ~80%* of India's mobile subscriber base by 2024 Increased Demand for Telecom Tower Infrastructure pan India ☐ 5G rollout likely to attract ~USD 30 Bn^ in collective capital expenditures over a period of next 5 years by the top three telecom operators in India ■ With the positive outlook of the telecom sector it would be lucrative to move beyond traditional telecom business to wider digital consumer space like content and mobile banking solutions ☐ ☐ Government Initiatives that will provide a boost to the Telecom Infrastructure Segment The Government of India planned to roll out a new National Telecom Policy 2018 in lieu of rapid technological advancement in the sector over the past few years. The policy intends to attract investments worth USD 100 Bn in the sector by 2022 The Department of Information Technology intends to set up over 1 Mn internet-enabled common service centers across India as per the National e-Governance Plan *Ericsson Mobility Report November 2018 ^UBS Report 15#16Industry opportunity - Power & Railway – " Increased demand for power transmission infrastructure development Power consumption is estimated to reach up to 1,894.7 TW in 2022 Increased demand for power transmission infrastructure development due to increasing inter regional power demand supply gap Government Initiatives The Union Budget 2020-21 has allocated USD 2.27 Bn to the Ministry of Power Increasing Demand for Electricity 10% CAGR 1697 1252 2509 ☐ Additional USD 786.95 Mn to Deen Dayal Upadhyay Gram Jyoti Yojana (DDUGJY) to provide power transmission infrastructure for rural electrification. 2020 2022 2027 SALASAR Building a stronger future Growth in Renewable Energy 175GW 2022 87GW 2020 Yearly capacity addition of 15-20GW Railways Electrification orders are on a rapid growth; aiming to double their capacity ☐ The railways have set a 100% electrification target by the next four years ■ The Government is going to come up with a 'National Rail Plan' to enable the country to integrate its rail network and develop a multi-modal transportation network. Current Railway capex for 2020-21 is INR 1.5 Lakh Cr. expected to grow at CAGR of 18% for the next 10 years Electrification of 6,000 Km route is targeted, with wiring of the entire broad gauge network now envisaged for completion by 2023-24 16#17Growth Strategy SALASAR Building a stronger future#18SALASAR Building a stronger future Growth strategy 2 New business manufacturing of structures for Road and Railway overbridges (ROBs) of 1,000 MT per month at a Capex of Rs 20 Cr during FY21. The capex will be funded from the subscription amount of warrants issued and internal accruals. The manufacturing will start by the end of FY21 and is expected to generate revenue of ~Rs 100 Crore yearly from next year. The company is already in the process of ordering the machines and the construction/erection of shed and other covered areas for the new plant has already started Tapping industry opportunities by expanding product portfolio and optimal utilization of existing capacity 3 Expanding tower designs and leveraging on their tie-ups with Ramboll to provide value to the clients Strong focus on the export market to increase its share in the foreign market. Increasing market share domestically by targeting new customers and expanding relationships with the existing ones. Innovating and manufacturing differentiated products like camouflaged towers, monopoles, etc. to provide for the evolving infrastructural needs of the society 5 18#19Historical Financial Performance SALASAR Building a stronger future#20Key financial highlights Volumes (MT) 55657 51956 41703 Revenue (INR Cr) 74993 494.7 58619 384.3 310.0 SALASAR Building a stronger future 654.9 526.2 FY16 FY17 FY18 FY19 FY20 FY16 FY17 FY18 FY19 FY20 EBITDA (INR Cr) and Margin (%) 54.0 38.7 29.1 9.4% FY16 10.1% FY17 73.4 51.8 PAT (INR Cr) and Margin (%) 18.7 11.7 29.6 33.3 22.3 10.9% 11.2% 9.8% 3.6% 4.9% 6.0% 5.1% 4.3% FY18 FY19 FY20 FY16 FY17 FY18 FY19 FY20 20 20#21Consolidated P&L Statement SALASAR Building a stronger future Particulars (Rs Cr) Net Sales Cost of Goods Sold Employee Cost Other Indirect Expenses Total Expenditure FY20 FY19 FY18 526.2 654.9 494.7* 415.1 526.0 386.7 31.0 28.0 22.9 28.3 27.5 31.1 474.4 581.5 440.7 EBITDA 51.8 73.4 54.0 EBITDA Margin % 9.8% 11.2% 10.9% Other Income 1.7 0.8 1.2 Interest 20.6 16.3 8.4 Depreciation 5.0 4.6 3.9 Profit Before Tax 27.9 53.3 43.2 Provision for Tax 5.6 20.0 13.6 Profit After Tax 22.3 33.3 29.6 PAT Margin % 4.3% 5.1% 6.0% *(excl. Excise duty) 21#22Thank You Salasar Techno Eng Pramod Kala - CFO SALASAR Building a stronger future [email protected] [email protected] Pareto Capital (Investor Relations) Pooja Dokania/ Sresth Jaiswal [email protected] [email protected] PARETO CAPITAL SALASAR Building a stronger future