#1Analyst Meet Presentation Q2 FY11 SW Steel Bringing alive a billion dreams MAKING OBSTACLES OBSOLETE#2Agenda Key Developments Economic and Steel Scenario Performance Highlights Projects Update JŚW 2#3Key Developments JŚW Highest ever quarterly sales - by volume (1.583mnt) and value (6,184 crores) FCD of 4800 Crores issued to JFE converted to 32mn equity shares Debt prepayment of ₹2,603 crores * *2,197 crores currently invested in MFs/FDs will be used in lieu of tied up loans draw down for Capex Coke Oven 4 (Battery A) commissioned on 4th Oct 2010 Generation from 300 MW captive power plant started 3#4Strengthening Balance Sheet JSW Consolidated total net debt - equity ratio has improved to 0.80 at Sep' 2010 end from 1.60 at Jun' 2010 end Consolidated weighted average debt cost has come down by 58bps to 6.13% during Q2 FY11 Potential Equity Infusion of 2,488 Crores over 21 months 1,588 Crores – Promoters warrants - * 600 crores - 3mn GDRs plus 1mn shares to JFE * 300 crores - 2mn shares to JFE on conversion of outstanding FCCBs Impact of FCCBs conversion ✰ Outstanding FCCBs - 1,230 crores, if converted will simultaneously increase equity and reduce debt. 4#5Awards Fastest Growing Steel Company from ASAPP Media Information Group Global HR Excellence Awards - organisation with innovative practices from APHC - Star Performer 2008-09 – Basic Iron and Steel Large Enterprise from EEPC Regional Award 2007-08 Gold Trophy -Large Enterprise Top Exporter from EEPC APHC-ASIA Pacific Human Resource Management Congress EEPC-Engineering Exports Promotion Council JSW 5#6Economic & Steel Scenario ทรัพ 6#7Source: IMF Global Economy 10 Actual Quarterly GDP growth (% YoY) 8 8.1 6 4 2 0.3 0 -2 -2.9 -4 -4.8 -6 Mar-09 Jun-09 Sep-09 Dec-09 World Adv. economies Emg. and developing economies Mar-10 Jun-10 Global economy remains on recovery path, GDP forecast for 2010 continuously upgraded Annual GDP growth (% YoY) ☐ 7.1 6.8 6.3 6.0 4.9 5.1 4.7 4.6 4.8 4.0 4.2 O 3.9 2.9 3.1 2.5 2.5 2.6 2.7 1.9 2.3 2.1 1.3 0.6 0.0 -0.6 2009 Actual -3.2 Apr-09 60-յոՐ Oct-09 2010 GDP Forecast Dates Jan-10 World Adv. economies --Emg. and developing economies Apr-10 7 Jul-10 Oct-10 JŚW#8Q4 FY09 5.8% Q1FY10 6.0% Source: MOSPI, Reuters, SIAM Q2 FY10 Q3 FY10 Q4 FY 10 Q1 FY11 Indian Economy 8.6% GDP (% YoY) GDP growth remains robust and domestic consumption growth is intact 6.5% 8.6% 100 06 90 110 120 Jan-09 Mar-09 May-09 8.8% 140 130 60-Inc 150 160 180 3MMA, Jan 2009 = 100 Vehicle Sales 170 Composite Leading Index Sep-09 Nov-09 Jan-10 Mar-10 May-10 Jul-10 Aug-10 8 Non-Food Credit Power JŚW#9Source: WSA Mar-10 125 Global Steel Trends Crude Steel Production (mnt) JŚW Steel Demand (% YoY growth) 121 121 118 Apr-10 May-10 Jun-10 Jul-10 114 113 112 Aug-10 Sep-10 13% 9% 8% 7% 5% 5% 4% World BRIC 2010 E China India 2011 E Global Steel Demand (mnt) Year 2009 2010 E World BRIC China India 1125 1272 696 641 542 55 579 60 2011 E 1340 730 599 68 9 14%#10800 HRC Prices 750 Producers raised prices in April & May to cover higher raw material costs 700 650 600 573 550 563 505 500 475 450 Oct-09 Nov-09 Dec-09 Jan-10 N.America domestic FOB US Midwest mill Russia Black Sea export FOB Source: SBB (All figures are in USD/ton) May-10 685 Jun-10 752 710 Jul-10 Aug-10 Europe import CIF S.European port China export FOB Shanghai 781\ Sep-10 10 10 Oct-10 634 623 610 715 JSW#11270 240 210 Raw Material Prices 495 395 180 177 163 150 120 265 90 91 60 Feb-10 Mar-10 Apr-10 448 249 324 130 Indian Iron Ore 63% Fe dry / China import CFR N. China port Scrap/Shredded / Rotterdam export FOB (RHS) Australian Spot HCC FOB (RHS) China Coke export FOB (RHS) Source: SBB, Macquarie Research (All figures are in USD/ton) May-10 Jun-10 Jul-10 Aug-10 Sep-10 500 450 435 218 400 200 383 Oct-10 11 345 350 155 300 200 250 JSW#1240 40 42 44 Jul-09 Aug-09 46 46 48 48 50 52 49 49 54 56 Chinese Steel Market Production vs. consumption (mnt) Monthly finished steel production reduced to 46.5mnt in Sep' 10 from 54.5mnt in May' 10 JŚW Monthly Exports (mnt) Withdrawal of export rebate in July coupled with reduced production resulted in lower exports 46 123 43 Sep-09 Oct-09 Nov-09 Dec-09 Jan-10 Feb-10 Mar-10 Apr-10 May-10 Jun-10 Jul-10 Aug-10 Sep-10 Finished Steel Production Apparent Steel Consumption Source: Mysteel, WSA (All figures are in million tons ) 53 45/ 54 Jan-10 2.9 Feb-10 2.5 3.3 4.3 5.0 5.7 4.6 Mar-10 Apr-10 May-10 Jun-10 Jul-10 Aug-10 2.8 Sep-10 3.0 12#13Indian Steel Market H1 Production vs. Consumption (mnt) Monthly Imports (mnt) 29.8 10% 4% 27.2 27.0 25.9 Finished Steel Production Apparent Steel Consumption ■ Apr -Sep' 09 Apr - Sep' 10 Source: JPC (All figures are in million tons) *Production and consumption figures netted off for double counting effect Oct' 09 0.68 60 ΛΟΝ 0.68 Dec' 09 0.62 Jan'10 0.73 Feb' 10 0.68 Mar' 10 0.68 Apr'10 0.97 May' 10 0.82 Jun' 10 Jul' 10 0.97 1.01 Aug' 10 0.46 Sep' 10 0.36 JSW 13 13#14Operating & Financial Highlights ทรัพ 14#15Production - Q2 FY 11 1.541 2% YoY % 1.571 QoQ % 1.574 0.923 38% YoY % 1.271 16% QoQ % 1.093 JŚW Q2'10 Q2'11 Rolled: Flat Q1 '11 -15% 22% YoY % 0.264 0.217 QoQ % 0.309 Q2'10 Q2 '11 Q1 '11 Q2'10 Crude Steel Q2'11 Q1 '11 Rolled: Long All numbers are in million tons 15 15#16Production - H1 FY 11 2.917 8% YoY % 3.144 1.794 32% YoY % 2.364 H1'10 H1'11 Rolled: Flat 44% YoY % 0.573 0.399 H1'10 H1'11 Crude Steel H1'10 H1'11 Rolled: Long All numbers are in million tons JŚW 16#17Saleable Steel Sales - Q2 FY 11 1.454 9% YoY % 33% QoQ % 1.583 0.870 Q2'10 Q2'11 Total Sales All numbers are in million tons 1.191 Q1'11 40% YoY % 41% QoQ % 1.215 0.379 0.859 JŚW 19% YoY % 30% QoQ% 0.451 0.346 Q2 '10 Q2' 11 Q1'11 Q2'10 Q2'11 Q1'11 Rolled: Flat Value Added -79% 57% 25% YoY % YoY % QoQ % 0.281 0.405 0.179 -20% QoQ% 0.107 0.086 0.225 Q2'10 Q2'11 Q1 '11 Q2'10 Q2'11 Q1 '11 Semis Rolled: Long 17#18Saleable Steel Sales - H1 FY 11 2.775 2.774 1.725 7% JSW 20% YoY % YoY % 0.797 2.074 0.745 H1'10 H1'11 H1'10 H1'11 Rolled: Flat Value Added -73% 51% 0.716 YoY % YoY % 0.506 0.193 0.334 H1'10 H1'11 Total Sales H1'10 H1'11 H1'10 H1'11 Semis All numbers are in million tons Rolled: Long 18#19Focus on Retail Sales JŚW Sales through JSW Shoppe-Q2 FY 11 (In '000 tons) % Share through JSW Shoppe-Q2 FY 11 (Excluding Semis) MnT, % Share 45% Value Added: Flat 74% 322 26% 152% 0.901 Rolled: 0.322 14% Long 128 Q2 FY 10 Q2 FY 11 ■ JSW Shoppe 41% Rolled: HR Products 19 19#20Financials - Q2 FY11 (Standalone) JSW Particulars Q2 FY 11 Q2 FY 10 Growth Cr. Cr. % Net Sales 5,713 4,554 25% Op. EBITDA (excl. Fx Variance) 998 1,189 -16% Op. EBITDA Margin (excl. Fx Variance) 17.3% 26.0% EBITDA 1,156 1,167 -1% EBITDA Margin 20.0% 25.5% Less: Net Finance Charges 199 228 -13% Less: Depreciation 332 281 19% Profit Before Tax 624 658 -5% Profit after Tax 445 452 -1% 20 20#21Financials - H1 FY11 (Standalone) JŚW Particulars H1 FY 11 H1 FY 10 Growth Cr. Cr. % Total Income 10,360 8,448 23% Op. EBITDA (Excl. Fx Variance) 2,130 1,940 10% Op. EBITDA Margin (Excl. Fx Variance) 20.4% 22.8% EBITDA 2,190 2,154 2% EBITDA Margin 20.9% 25.4% Less: Net Finance Charges 410 448 -8% Less Depreciation 650 552 18% Profit Before Tax 1,130 1,154 -2% Profit After Tax 796 792 1% 21#22EBITDA MOVEMENT - Q2 FY 11 (Standalone) ทรัพ 1,167 98 88 (1014) 536 206 (16) Cr. 1,156 179 EBIDTA Q2'10 Volume Cost NSR Mix CER/Other Income Fx Variance EBIDTA Q2'11 22 22#23Operational & Financial Performance - USA JSW Production (NT) Q2 FY 11 Q2 FY 10 Growth Plate Mill 37,699 48,895 -23% Pipe Mill 9,495 16,845 -44% Sales (NT) Q2 FY 11 Q2 FY 10 Growth Plate Mill 23,040 38,689 -40% Pipe Mill 11,970 17,822 -33% USD Mn Particulars Turnover EBITDA + Other Income Profit After Tax Q2 FY 11 Q2 FY 10 36.40 41.49 0.85 (21.03) (13.14) (25.13) 23 23#24Financials Q2 FY 11 (Consolidated) JSW Particulars Q2 FY 11 Q2 FY 10 Growth Cr. Cr. % Total Income 5,972 4,757 26% EBITDA 1,186 1,075 10% Less: Net Finance Charges 261 301 -13% Less :Depreciation 379 326 16% Profit Before Tax 546 449 21% Profit After Tax 373 323 16% 24#25Financials - H1 FY11 (Consolidated) JSW Particulars H1 FY 11 H1 FY 10 Growth Cr. Cr. % Total Income 10,830 8,770 23% EBITDA 2,265 2,003 13% Less: Net Finance Charges 531 598 -11% Less :Depreciation 740 642 15% Profit Before Tax 993 762 30% Profit After Tax 669 557 20% 25 25#26Net Total Debt Movement (Consolidated) JSW 569 16,510 (377) (2330) (334) Net Total Debt as New Loan Taken Repayments Prepayments on Jun'10 Cr. 12,188 (1850) Fx Variance Movement in FD/MF Net Total Debt as on Sep'10 Cash and Cash equivalent - ₹ 544 Crs. FD/Mutual Fund - ₹2,477 Crs. 26 26#27Financial Ratios Particulars Q2 FY 11 Q2 FY 10 EBITDA Margin 20.0% 25.5% PAT Margin 7.7% 9.9% Diluted EPS (*) -Standalone* 23.13 23.69 ROCE 12.1% 16.3% JŚW Particulars 30.9.2010 30.06.2010 Net Total Debt/Equity (x) 0.48 1.15 Net Total Debt/EBITDA (x) 1.64 2.59 Net Total Debt/Equity-Consolidated (x) 0.80 1.60 Net Total Debt/EBITDA-Consolidated (x) 2.65 3.61 * Not Annualized 27#28Projects Update JŚW 28#29West Bengal Projects – overview - Projects 4.5 mtpa Greenfield HRC plant Zero date JSW Implementation period Apr 2011 36 months 660 MW power plant (26% stake in SPV) Apr 2011 36 months 2.4 mtpa Kulti Sitarampur coking coal mines development Jan 2011 39 months 2.6 mtpa Ichhapur thermal coal mines development (26% stake in SPV) Jan 2011 39 months 29#30West Bengal Projects - financing JŚW Investments Steel Project cost (Debt to Equity - 2:1) Equity stake in Power plant SPV - project cost ₹3,300 crores (Debt to Equity - 3:1) Equity stake in coking coal mines SPV - project cost ₹1,350 crores (Debt to Equity – 3:1) Equity stake in thermal coal mines SPV - project cost 1,500 crores (Debt to Equity – 3:1) Total Means of Financing - * crores 15,350 215 337 98 16,000 crores Equity JSWSL/Strategic Partners/IPO WBIDC/WBMDTC Debt - RTL/FCL/ECB* Total JSWSL -JSW Steel Limited WBIDC - West Bengal Industrial development corporation limited/ WBMDTC - West Bengal mineral development and trading corporation limited RTL - Rupee term loan, FCL -Foreign currency loans, ECB – External commercial borrowing 5,327 6 10,667 16,000 30#31West Bengal Projects: structure JSWSL 94% (Min) JŚW JSWEL 74% Subsidiary WBIDCL/ WBMDTC 6% (Max) JSWBSL 26% JSWEBL Subsidiary 100% Proposed SPV 1 JSWSL - JSW Steel Ltd. JSWEL - JSW Energy Ltd. WBIDCL - West Bengal Industrial development corporation limited WBMDTC - West Bengal mineral development and trading corporation limited JSWBSL - JSW Bengal Steel Ltd. (implementing steel project) JSWEBL - JSW Energy (Bengal) Ltd. (implementing power project) SPV 1 - Implementing development of coking coal mines SPV2 - Implementing development of thermal coal mines 100% Proposed SPV 2 31#32Blast Furnace JŚW As on Jun 10 As on Sep 10 32 22#33SMS (Phase II) As on Jun 10 CEM JŚW As on Sep 10 33 33#34Beneficiation Plant As on Jun 10 RGA METAL PROFILES JŚW As on Sep 10 34 34#35LCP JŚW As on Jun 10 As on Sep 10 35#36Q & A Session ทรัพ 36#37Forward Looking and Cautionary Statement JSW Certain statements in this report concerning our future growth prospects are forward looking statements, which involve a number of risks, and uncertainties that could cause actual results to differ materially from those in such forward looking statements. The risk and uncertainties relating to these statements include, but are not limited to risks and uncertainties regarding fluctuations in earnings, our ability to manage growth, intense competition within Steel industry including those factors which may affect our cost advantage, wage increases in India, our ability to attract and retain highly skilled professionals, time and cost overruns on fixed-price, fixed-time frame contracts, our ability to commission mines within contemplated time and costs, our ability to raise the finance within time and cost client concentration, restrictions on immigration, our ability to manage our internal operations, reduced demand for steel, our ability to successfully complete and integrate potential acquisitions, liability for damages on our service contracts, the success of the companies in which the Company has made strategic investments, withdrawal of fiscal/governmental incentives, impact of regulatory measures, political instability, legal restrictions on raising capital or acquiring companies outside India, unauthorized use of our intellectual property and general economic conditions affecting our industry. The company does not undertake to update any forward looking statements that may be made from time to time by or on behalf of the company. 37#38Thank you 38 88 ทรัพ