Analyst Meet

1
Analyst Meet

• Third Quarter 2005-06

2
Contents

• Operations
• Financials
• Outlook
• Industry
• Company

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Operations highlights

• Volume growth of 5.5 in crude steel and 18 in
  galvanised products
• Converter life crosses 9500 heats
• Blast furnace production 72,000 MT in Dec-05
• Average Coke price 180 / ton vs 250 / ton in
  the previous quarter

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Operations highlights contd./..

• Significant reduction in fuel rate consumption as
  compared to the previous quarter
• Channel financing facility for dealers

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Operations Production Q3
(In mln. tons)
6
Operations Sales Q3
(In mln. tons)
Mn ton
7
Production upto Dec, 05 vs Dec, 04
Volume mt
7
26
28
13
8
Sales upto Dec, 05 vs Dec, 04
Volume mt
24
9
34
9

• Operations
• Financials
• Outlook
• Industry
• Company

10
Financials Highlights Q3

• Debt equity ratio at 1
• Interest cost reduced by 23 to Rs. 89.51 Crore
  as compared to Q3, 05
• Rating assigned by CARE AA(-)

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Financials Highlights Q3 contd./.

• Debt repayment of Rs. 227 Crore (Rs. 776 Crore up
  to 9 months in FY 06)
• Financial appraisal for 2.8 mtpa expansion
  completed

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Financials PL Account Q3
Rs. in Crs.
13
Financials PL Account 9 months
Rs. in Crs.
14

• Operations
• Financials
• Outlook
• Industry
• Company

15
Industry Outlook

• Determinants of the Outlook
• Price behaviour
• Production data
• Demand outlook
• Average operating cost
• Examining these

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Price Behaviour
( / ton)
Source - WSD June 2005 report Metal bulletin
17
Global production data
Source - IISI
18
Production Data contd./..
Source - IISI
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Demand Outlook (In mln. tons)
Demand to grow by 4-5 for world and 7 for
Asia Pacific
Source - IISI
20
Average operating cost
( / ton)
Source - WSD June 2005 report
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Industry Outlook

• Robust economic growth particularly in
  infrastucture, construction auto
• Consolidation in industry intensifies
• Chinese cutting production significantly
• Aluminium industry restructuring-an example
• Chinese local market prices up by US 25 (source
  Tex Report)

Considering all factors a stable price regime
is expected Demand continues to be strong
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• Operations
• Financials
• Outlook
• Industry
• Company

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Outlook - Company

• Cost Leadership journey
• Ongoing projects
• New projects

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Cost leadership journey

• Optimisation of coal blend to reduce cost get
  lowest consumption rate
• Recycling of waste upto 85
• Special measures to increase Convertor lining
  life 10000 heats
• Beneficiation of low grade Iron ores

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On going projects

• Expansion of Steel capacity from 2.5 to 3.8 Mln.
  tn.
• Expansion of Pellet plant capacity from 4.2 to 5
  Mln. tn.
• Expansion of Hot Rolling Mill from 2 to 2.5 Mln.
  tn.

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Sinter Plant
ESP Screening
27
Sinter Plant
Sinter cooler
28
Blast Furnace
29
Blast Furnace
30
Coke Oven 2
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Capacity post expansion
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On going projects to be commissioned in phases by
1st quarter 2006-07. Impact for 9-10 months
during FY 06 - 07
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New projects

• 1.0 mtpa CRM project - March 07
• Capacity expansion to 7 mtpa - March 09

Cost of the projects - Rs. 6150 Crs.
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Product Mix Enhancement CR complex

• HR Slit 0.10
• HR Pickled Oiled 0.10
• CR Annealed skin passed 0.60
• CR Full Hard 0.20

Value added product profile would improve to 53
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Financing plan
Sources of funds Rs. in crore Equity /
Internal accruals 2550 Debt
3600 Total 6150
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Key ratios
All figures annualised wherever necessary
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Rights Issue
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Rights-Broad Terms

• Fund raising upto Rs. 400 crs. (without warrants)
• Entitlement ratio on equity shares 18
• Warrants entitlement of one Series A one Series
  B warrant for every equity share offered on
  rights basis
• Warrant conversion period
• Series A 18 - 36 months from allotment date
• Series B 24 - 48 months from allotment date

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Rights-Broad Terms

• The terms of warrants issue shall be decided by
  the committee of the Board
• Warrants to be listed on allotment and will be
  tradable

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Thank You