TATA POWER SOLAR SYSTEMS LTD.THE TURNAROUND STORY

Ashish Khanna

CEO & MD

“The greatest danger in times of

turbulence is not the turbulence-it is

to act with yesterday’s logic.”

-Peter Drucker

20121995

THE TATA BP SOLAR LEGACY

MANUFACTURING FOCUS: COST + MARGIN MODEL1989 - 2008

1989 19911990

BP: 51%

Tata: 49%

Rented Single Room

Lab cum Office

Single shed to multiple

sheds in an industrial park

• Commercial

production with 2

MW module

capacity

• Initial rate of 9

modules/day

• New

manufacturing

unit constructed

• Cell and Module

line capacities

increased to 15

and 13 MW

2007

• Cell capacity

increased to 52MW,

India’s largest

• Module capacity

increased to 85MW

CAPTIVE GLOBAL CUSTOMER BASE OF BP SOLAR

2009

• Cell line capacity

increased to 84 MW

• Over 104* Million USD

in exports revenue

• Cost + Margin Model

Tata Power

Solar,

a wholly

owned

subsidiary of

Tata Power

* At 1 USD = INR 48

THE TATA BP SOLAR LEGACY

• Revenue & profitability drop due to Chinese competition and the global recession

• Global trend of giants such as GE and Siemens exiting the solar industry

• Direct customer interaction was limited due to business model and scope

FINANCIAL RESULTS (2009-11)

228

215

203

150

175

200

225

250

FY 09 FY 10 FY 11

Net Sales ($, mn)

12.0

5.9

2.9

0.0

2.0

4.0

6.0

8.0

10.0

12.0

14.0

FY 09 FY 10 FY 11

PAT ($, mn)

PRODUCT MIX 2012-15

▪ Upgraded manufacturing capacities

and technologies

▪ 180 MW of cell and 200 MW of

module capacity

▪ Challenge of limited market reach –

module sales fluctuation

▪ Expansion into solar products –

Lighting, Pumps, and Solar

Thermal

▪ Predominately subsidy driven

businesses

Solar ProductsCells & Modules EPC

▪ Solar EPC Market: efforts limited

small scale projects of 5-10 MW

▪ Commences custom rooftop /

ground mount systems

• Attempted to enter every segment of the solar business

• This led to mounting losses and depletion of cash reserves

TO DOMINATE THE ENTIRE BUSINESS SPECTRUM2012 - 2015

FINANCIALS 2012-15

• Large mix of bought out items – issues in quality and high cost of customer service

• Uncertain off-take of modules following BP Solar exit

• Competition from Chinese products

• Business Network (Distributors and Channel Partners) issues

* One-time impact of National Solar Mission outlay

*

FINANCIAL RESULTS (2012-15)

9.3

5.1

11.0

8.7

0

2000

4000

6000

8000

10000

12000

FY 12 FY 13 FY 14 FY 15

Rev (INR, bn)

-186

-827

-1268

-1143

-1400

-1200

-1000

-800

-600

-400

-200

0

FY 12 FY 13 FY 14 FY 15

PAT (INR, mn)

A NEW STRATEGY: 2015 Onwards

Manufacturing Technology Upgradation

Changing Product & Service Mix and shutting down some businesses

Utilizing EPC Strength

Manpower Reorientation & Reskilling

Innovation

MANUFACTURING TECHNOLOGY UPGRADATION

Adapted from Preu et al., EU-PVSEC 2009

Industry Standard

mat

eria

l qu

alit

y

Module efficiency

IBC-BJHIT

PERC

MWT-PERC

20%

19%

18%

17%

16%

15%14%

21%

device quality

BC-HIT

PERC: Passivated Emitter and Rear CellMWT: Metal Wrap ThroughIBC-BJ: Interdigitated Back Contact – Back JunctionHJT: Hetero Junction Technology

Continuous Investment In Technology

for Manufacturing Backbone

Cell technology Upgrades

Product Evolution

MANUFACTURING TECHNOLOGY UPGRADATION (Contd)

1551 68

150

300

400

0

100

200

300

400

500Cell Manufacturing Capacity ( MW)

2 1345

85125

200

300

400

500

0

100

200

300

400

500

600

Module Manufacturing Capacity (MW)

TPSSL is the First Indian Company to have Shipped 1GW of

Modules Worldwide

CHANGING PRODUCT & SERVICE MIX

and shutting down some businesses

Large Utility Scale Projects

Solar Rooftops

Solar Water PumpsO&M Services

Businesses Shut

Down

Resulting Product & Service Mix

International Business

BUILDING EPC STRENGTH

Engineering Optimizations

Execution Agility

ProcurementMight

MANPOWER REORIENTATION & RESKILLING

32%

21% 19% 23%16% 12%

2012-13 2013-14 2014-15 2015-16 2016-17 2017-18

Attrition Rate 12.3

21.4

30.3

37.2

0

10

20

30

40

2014-15 2015-16 2016-17 2017-18

Revenue per Employee (INR, mn)

FOCUS ON INNOVATION

Drone based Rooftop System Design Dual & Single Axis Trackers

LASER Projects Automated Cleaning- CleanBot

LearnApplyShareEnjoyReflect

• Manufacturing Defect Reduction and

Productivity Improvement

• EPC Project Cycle Time Reduction

and Speed Up Execution

• Work Force Engagement

BUSINESS PROCESSES AND EXCELLENCE

Systematic Approach

Process

Deployment

Learning & Feedback

Integration between Processes

Robust

Business Processes

Culture of Collaboration

Fast Paced People Capability Building

Active Cost Management Through Value Engineering and Agile SCM

Process Standardization & Simplification

Formation of Innovation Council

Business Excellence Focal Themes

THE NEW STRATEGY: 2015 Onwards

Manufacturing Technology Upgradation

Changing Product & Service Mix and shutting down some businesses

Utilizing EPC Strength

Manpower Reorientation & Reskilling

Innovation

THE TURNAROUND

11.59.8 9.1 9.3

5.0

11.0 8.714.9

22.6

27.5

0.6

0.30.1

-0.2

-0.8

-1.3-1.1

-0.3

0.8

1.0

-1.5

-1.0

-0.5

0.0

0.5

1.0

1.5

0.0

5.0

10.0

15.0

20.0

25.0

30.0

FY 09 FY 10 FY 11 FY 12 FY 13 FY 14 FY 15 FY 16 FY 17 FY 18

PA

T, in

bn

INR

Re

ven

ue

, in

bn

INR

Net Sales (INR, bn) PAT (INR, bn)

THE TURNAROUND (Contd.)

-11.5%-13.1%

-1.8%

3.4% 3.7%

FY 14 FY 15 FY 16 FY 17 FY 18

PAT (%)

-63%

-106%

-13%

24% 24%

FY 14 FY 15 FY 16 FY 17 FY 18

ROE (%)

4.5 4.6

9.67.4

16

FY 14 FY 15 FY 16 FY 17 FY 18

Fixed Assets Turnover

11.08.7

14.9

22.6

27.5

FY 14 FY 15 FY 16 FY 17 FY 18

Net Sales (INR, bn)

19 10

799

1448

2350

FY 14 FY 15 FY 16 FY 17 FY 18

EBITDA (INR, mn)

TPSSL PORTFOLIO TODAY

MARQUEE PROJECTS

ONE OF INDIA’S LARGEST SOLAR PROJECTS WITH INDIA MADE CELLS & MODULES - 100 MW NTPC, Anantapur, Andhra Pradesh

WORLD’S LARGEST ROOFTOP SYSTEM*- 12 MW at Amritsar, Punjab, India

* On multiple roofs on a single premise

INDIA’S LARGEST CARPORT INSTALLATION- 2.7MW, Cochin International Airport, Kerala, India

WORLD’S LARGEST ROOFTOP SYSTEM ON CRICKET STADIUM- 820 KW at Mumbai, Maharashtra, India

AWARDS AND RECOGNITION

Thank You!Website: www.tatapower.com

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