Everest Kanto Cylinder Ltd

Disclaimer The information contained in this presentation is only current as of its date and consists of information that is already in the public domain or that is not price sensitive. All actions and statements made herein or otherwise shall be subject to the applicable laws and regulations as amended from time to time. We will accept no liability whatsoever for any loss arising directly or indirectly from the use of, reliance of any information contained in this presentation or for any omission of the information. It is advised that prior to acting upon this presentation, independent investigation including seeking advice of your financial, legal, tax and professional advisors as to the risks involved may be obtained and necessary due diligence, etc may be done at your end.

This presentation may contain certain statements of future expectations and other forward-looking statements, including those relating to our general business plans and strategy, our future financial condition and growth prospects, and future developments in our industry and our competitive and regulatory environment. Actual results, performances or events may differ materially from these forward-looking statements including the plans, objectives, expectations, estimates and intentions expressed in forward looking statements due to a number of factors, including without limitation future changes or developments in our business, our competitive environment, and political, economic, legal and social conditions in the countries we operate in. This presentation is not being used in connection with any invitation of an offer or an offer of securities and should not be used as a basis for any investment decision.

• Established in June, 1978

• Began with a Joint venture with Kanto Koatsu Yoki Manufacturing

Company of Japan

• Pioneer in production and development of Industrial and CNG

cylinders with dominant market share in South Asia and Middle East

• Largest global player in the Large Pressure Vessel space

• Three manufacturing plants in India and one each in Dubai, China and

U.S.A.

• Existing capacity of 1 Million cylinders of all sizes mainly by way of

organic and acquisition growth

• Ambitious organic growth plans in India and China

• Almost 1000 employees on rolls worldwide experienced in R&D,

production and management

• Quality control processes approved in more than 20 countries

EKC – An Introduction

EKC – Key MilestonesIncorporation of Everest Kanto Cylinder (P) Limited 1978

First commercial production at Aurangabad Plant1981

Commissioning of Tarapur Plant1988

Development of CNG cylinder for the markets1998

Supply of CNG Cascades1998

Export to European countries1998

More than 150,000 cylinders produced and dispatched2001

Commencement of production at Dubai Plant2004

Listing of Equity Shares and Gandhidham unit goes onstream2005

Doubling of Capacity in Dubai and initiation of China Project2007

Commencement of exports to Gulf countries1986

Acquisition of CPI, U.S.A. and commencement of production in China2008

EKC – Product Applications

Food and Beverage

Area/ Industry of Application

Applications

Fire Fighting Fire Fighting Equipments in ships,thermal power stations, hospitals, malls, offices, cinema halls

Auto Public and Private Transport

Industrial Inert Gas, Steel, Metal Industry, Divers, Mountainers, Power Applications

Welding Cutting and Welding Operations

Healthcare Resipratory Aid in Hospitals, MRI's, Bath Therapy, Cryosurgery

Food freezing, Beverage Industry, Bottling Process

EKC – Key Customer profile• Industrial Cylinders

– Praxair

– BOC India Ltd

– Inox Air Products Ltd

– Advanced Silicon

– Air Products

– Air Liquide

• CNG Cascades

– Mahanagar Gas Ltd

– Indraprashtha Gas Ltd

– Bhagyanagar Gas Ltd

– Gujarat Adani

• OEMs for CNG Cylinders

– Hyundai

– Toyota

– Suzuki

– Tata Motors Ltd

– Eicher Motors Ltd

– Ashok Leyland & Co Ltd

– Swaraj Mazda

• Special Cylinders

– Defence Department in India

– US Navy

Automobile CNG Cylinder

Jumbo Trailer Project India & China

EKC’s Competitive Edge

• First mover advantage in CNG space in Asia• Existing Production Capabilities & Capacities

and expansion plans leading to economies of scale which gives edge over competition

• New manufacturing facilities to adopt cost effective technologies and processes

• Supply Chain Advantage – Relationship with Tenaris going back to 15 years

• Strong Customer relationship especially with OEMs and after market players

• Regulatory approvals in over 20 Countries

EKC – Manufacturing Facilities

LocationEstablished /

AcquiredProduct Range

(In Lts.)

Capacity (In Nos.)

Industrial 

CNG 

Jumbo 

Total 

Aurangabad 1978 1-21 110,000 - - 110,000

Tarapur 1985 21-280 80,000 80,000 - 160,000

Dubai 2003 21-280 - 196,000 - 196,000

Gandhidham 2005 1-280 140,000 200,000   340,000

China 20081-280 and

Jumbo 80,000 120,000 10,000 210,000

USA 2008 Jumbo - - 4,000 4,000

GRAND TOTAL 410,000 596,000 14,000 1,020,000

EKC – Historical Key Financial Highlights TURNOVER (Rs. Million)

CAGR - 64%

0

2000

4000

6000

TURNOVER (Rs. Million) 738 1324 2355 4251 5287

2003-04 2004-05 2005-06 2006-07 2007-08

PAT (Rs. Million)

CAGR - 165%

0

500

1000

1500

PAT (Rs. Million) 21 143 324 718 1043

2003-04 2004-05 2005-06 2006-07 2007-08

EBIDTA Margin (%)

0%

10%

20%

30%

40%

EBIDTA Margin (%) 12% 22% 25% 27% 29%

2003-04 2004-05 2005-06 2006-07 2007-08

EBIDTA (Rs. Million)

0

500

1000

1500

2000

EBIDTA (Rs. Million) 89 288 589 1142 1527

2003-04 2004-05 2005-06 2006-07 2007-08

H1 2008-09 Results Highlights

• High Growth in Turnover driven by organic expansion in China and inorganic acquisition of CPI, USA

• Growth in CNG business continues to be robust with increased penetration of Indian, Middle East and CIS markets

• Significant increase in output from Dubai unit and optimum utilisation of Indian facilities

• EBITDA margins increase substantially aided by increased selling prices and better product mix and despite steep devaluation of INR vis a vis US$

• Higher interest, Depreciation and amortisation mainly due to acquisition of CPI and commencement of China operations

H1 2008-09 Results Highlights

H1 2008 H1 2007 Change

Turnover (Rs. Million) 4,101 2,391 +71.6%

Turnover (US$ Million) * 84 49

EBIDTA (Rs. Million) 1,312 706 +85.9%

EBIDTA (as % of Turnover)

32.0%

29.5%

PAT (Rs. Million) 782 506 +54.4%

PAT (US$ Million) * 16 10

EPS (Rs. Per Share) 7.73 5.19 +48.9%

* 1 US$ = Rs. 49.00

H1 2008-09 Results

2,391

4,101

-

500

1,000

1,500

2,000

2,500

3,000

3,500

4,000

4,500

H1 2007-08 H1 2008-09

TURNOVER (Rs. Million)

706

1,312

-

200

400

600

800

1,000

1,200

1,400

H1 2007-08 H1 2008-09

EBIDTA (Rs. Million)

506

782

-

200

400

600

800

H1 2007-08 H1 2008-09

PAT (Rs. Million)

H1 2008-09 Results HighlightsTurnover by Markets

India36%

Rest of Asia and CIS

52%

USA12%

India46%

Rest of Asia and CIS54%

H1 2008-09H1 2007-08

H1 2008-09 Results HighlightsTurnover by Products

H1 2008-09H1 2007-08

CNG76%

Industrial9%

Jumbo15%

CNG

Industrial

Jumbo

CNG85%

Industrial15%

CNG

Industrial

Global NGV growth outlook

• Benefits of Natural Gas Vehicles include Reduced Particulate and greenhouse gas emissions and safer than most liquid

fuels Widespread availability of NG which can also be derived from renewable

sources like biogas Technically proven and available at lower cost Can be used in all types of vehicles Minimal processing or refining requirements

• NGV growth has more than doubled during last five years

• As per Gas Vehicles Report dated June 2008, there are 8.5 Million vehicles worldwide and IANGV projects that this would increase to a level of 50 Million vehicles by 2020

Global NGV growth outlook

• Among top 10 countries, the number of NGVs has increased from a level of 1.7 Million in 2001 to a level of 7.6 Million in March 2008

• EKC has a significant presence in six of these countries which still have a low penetration rate of NGVs in the overall vehicle population

• International Gas Union has projected that the total global NGV population shall increase to a level of 100 -200 Million by the year 2030 and the final target shall be announced in 2009

Global NGV statistics – Top Ten countries

Asia and CIS

Rest of World0

1000

2000

3000

4000

NGV Population (in Nos.)

Asia and CIS 319 3683

Rest of World 1386 3917

March-01 March-08

• Top ten countries represent 89% of global NGV population

• Compound Annual Growth rate (CAGR) over last 7 years

- 24% globally- 42% for Asia and CIS

• Very low penetration rate of NGV vehicles

- 6.1 % globally- 5.9 % for Asia and CIS- 2.0% for high growth markets like

India and China

  No. of NGVs (In ‘000)

Country March-01 March-08

Argentina 735 1699

Pakistan 200 1650

Brazil 272 1533

India 25 822

Iran 1 730

Italy 370 433

Colombia 9 252

China 36 201

Bangladesh 22 160

Ukraine 35 120

Total 1705 7600

Natural Gas Scenario to positively impact CNG business in India

• Natural Gas infrastructure spans 8000 Kms with product pipeline of 10000 Kms

• Compressed Gas Distribution (CGD) networks in 19 cities - More than 0.8 M vehicles on CNG - More than 0.8 M households connected

• Expression of interest for CGD in 68 cities to be implemented over 2-5 years with investment ranging from US$ 50 –

200 Million in each city

• Projected Gas Supply expected to increase from 80.5 MMSCMD to a level of about 200 MMSCMD in 2010-11

EKC’s Global Business Outlook• China plant commenced production in May 2008 and large line expected to go

into production very shortly

• Integration activities with CPI progressing well resulting in improved production levels

• Billet Piercing Plant to be operational in this fiscal year and this is expected to lower cost of production thereby making the products more cost competitive

• Jumbo Cylinder Plant in India is scheduled to go into production in Q4 2008-09 and EKC expects to penetrate the untapped Indian market for such products by leveraging CPI’s capability in this line of business

• EKC is venturing into the market for light weight CNG cylinders mainly required by OEMs in Europe and Asia and this project is expected to go into production in Q2 2009-10. This would result in much higher value addition besides providing value to customer

• INR expected to continue to be under pressure but overall impact not significant on the bottomline

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