Insert Cover Image using Slide Master View Do not distort Electric Wire and Cable Market – India October 2014
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Electric Wire and Cable Market – India
October 2014
2
Executive Summary
Market Overview
Drivers & Challenges
EXIM
Competitive Landscape
The Indian wire and cable industry is predominantly volume-driven It accounts for ~ ’x’% of the total transmission and distribution segment In 20--, the market stood at INR ‘a’ bn and is expected to reach INR ‘b’ bn by FY 2018, growing at CAGR of
about ‘y’%
Export
India majorly exports to UK, USA, Nepal, UAE and Sri Lanka
Drivers
Focus on Power Sector
Large Investments in Telecom Sector
Robust Industrialization
Growing Urbanization
Challenges
Increase in Price of Raw Materials
Increase in Competition
Safety Hazards
Major Players
Company A Company B Company C
Company D Company E Company F
Trends Technological Innovations
Preference for Aluminum
Import
India mainly imports from Russia, UAE, Turkey and China
ELECTRIC WIRE AND CABLE MARKET IN INDIA 2014.PPT
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•Macroeconomic Indicators
•Introduction
•Market Overview
•Export-Import
•Drivers & Challenges
•Government Initiatives
•Trends
•Competitive Landscape
•Opportunities
•Strategic Recommendations
•Appendix
ELECTRIC WIRE AND CABLE MARKET IN INDIA 2014.PPT
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Economic Indicators (1/3)
11
12
13
14
15
b2
a2
Q1
d1 c1
b1
a1
Q4
c4
b4
a4
Q3
c3
b3
a3
Q2
d2 c2
INR tn
2013-14 2012-13 2011-12 2010-11
GDP at Factor Cost: Quarterly
Inflation Rate: Monthly
-2
-1
0
1
2
q
Jul 2013 - Aug 2013
p
%
Nov 2013 - Dec 2013
t
Oct 2013 - Nov 2013
s
Sep 2013 - Oct 2013
r
Aug 2013 - Sep 2013
ELECTRIC WIRE AND CABLE MARKET IN INDIA 2014.PPT
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Backed by growth in end-user industries, wire and cable demand is expected to increase rapidly in the coming years Wire and Cable-Market Overview (1/2)
• Indian wires and cable market is primarily dependent on sales volume and involves huge quality and technical specifications
End-use industries like telecom, energy generation, automotive, construction determines the market prospects for wire and cable industry
• Rise in investment in infrastructure in developing countries like India, China, Brazil , Russia are stimulating the market growth of wire and cable industry
International players are considering India as a potential market for HV and EHV cables
ELECTRIC WIRE AND CABLE MARKET IN INDIA 2014.PPT
FY2013
x1
0
x2
x3
x4
x5
x6
INR bn
FY 20--
f
e d
c b
Y%
FY 20-- FY 20-- FY 20-- FY 20-- FY 20--
a
Indian Wire and Cable Market – Size and Growth
p1%
p2%
Organized
Unorganised
Market Segmentation-Sector-wise
6
Drivers & Challenges – Summary
Drivers
Focus on Power Sector
Large Investments in Telecom Sector
Robust Industrialization
Growing Urbanization
Challenges
Increase in Price of Raw Materials
Increase in Competition
Safety Hazards
ELECTRIC WIRE AND CABLE MARKET IN INDIA 2014.PPT
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Emphasis on transmission lines addition in the 12th FYP will boost the domestic demand for cables
• Indian government has placed utmost importance to the power sector and also to the development of infrastructure
Growth of the infrastructure and power sector is directly related to the GDP of the country
• H1 FY 20-- saw an inflow of INR ‘xx’ bn in the power sector through the FDI route
• FDI up to ‘yy’% is permitted under the automatic route for projects involved in electricity generation (except atomic energy), transmission, distribution and power trading
• Since the power sector is developing and expanding, so the need for electric cables and wires is on the rise and likely to increase even further
Focus on Power Sector (1/4)
Transmission Lines Additions
Impact
b5
b4
b3
b2
b1
0
INR bn
12th FYP
a3%
a4%
11th FYP
a1%
a2%
Distribution
Transmission
z5
z6
z4
z3
z2
z1
0
p1
p2
10th FYP
‘000 Ckt
12th FYP
p3
11th FYP
ELECTRIC WIRE AND CABLE MARKET IN INDIA 2014.PPT
Planned T&D Investments
H1 refers to the first six month of the financial year
8
Trends
Preference for Aluminum
Technological Innovations
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Porter’s Five Forces Analysis
Competitive Rivalry
Bargaining Power of Suppliers
Bargaining Power of Buyers
Threat of Substitutes
Threat of New Entrants
Impact X
Impact X
Impact X
Impact X
Impact X
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Competitive Benchmarking (1/5)
Public Trading Comparables
Company A Company B Company C Company D
Market Capitalization (INR mn)
Share Price (INR)
EV/EBITDA (x)
EV/Revenue (x)
PE Ratio
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Key Ratios of Top 4 Companies – Operational Basis (FY 2013) (1/3)
Competitive Benchmarking (2/5)
• Company B recorded gross margin of b1%, higher than that of Company A, Company C and Company D which recorded gross margin of a1%, c1%, d1% respectively
• Company A recorded highest operating margin of a2%, followed by Company B, Company D and Company C which recorded operating margin of b2%, d2%, and c2% respectively
• Company A recorded a net margin of a3%, higher than that of Company D and Company C but lower than Company B which recorded net margin of b3%
x5
x4
x3
x2
x1
%
Company D
d3 d2
d1
Company C
c3 c2
c1
Company B
b3 b2
b1
Company A
a3 a2
a1
Net Margin Operating Margin Gross Margin
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Public: Domestic Company – Company A Ltd. (1/4)
Key People
Products and Services
Company Information Offices and Centres – India
Corporate Address
Tel No.
Fax No.
Website
Year of Incorporation
Ticker Symbol
Stock Exchange
Name Designation
Person 1 Chairman and Managing Director
Person 2 Director
Person 3 Director( Finance)
Person 4 Executive Director
Noida
Category Products/Services
Lighting Products
Wires and cables
Energy Meters
Modular Wiring
accessories
Headquarters
ELECTRIC WIRE AND CABLE MARKET IN INDIA 2014.PPT
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Financial Snapshot Key Ratios
Financial Summary
Public: Domestic Company – Company A Ltd. (2/4)
• The company incurred a net loss of INR ‘d2’ mn in FY 20-- as against INR ‘c2’ mn in FY 20--
• The company reported total income of INR ‘d1’ mn in FY 20--, registering an increase of ‘p’% over FY 20--
• The company earned an operating margin of ‘x.x’% in FY 20--, an increase of ‘y.y’ % points over FY 20--
• The company reported debt to equity ratio of ‘w.w’ in FY 20--, an increase of ‘z.z’% over FY 20--
Key Financial Performance Indicators
Indicators Value (dd/mm/yyyy) Market Capitalization (INR)
Total Enterprise Value (INR)
EPS (INR)
PE Ratio (Absolute)
Particulars y-o-y change
(20-- - --) 20-- 20-- 20-- 20--
Profitability Ratios
Operating Margin
Net Margin
Profit Before Tax Margin
Return on Equity
Return on Capital Employed
Return on Working Capital
Return on Assets
Return on Fixed Assets
Cost Ratios
Operating costs (% of Sales)
Administration costs (% of Sales)
Interest costs (% of Sales)
Liquidity Ratios
Current Ratio
Cash Ratio
Leverage Ratios
Debt to Equity Ratio
Debt to Capital Ratio
Interest Coverage Ratio
Efficiency Ratios
Fixed Asset Turnover
Asset Turnover
Current Asset Turnover
Working Capital Turnover
Capital Employed Turnover
Improved Decline
Net Profit/Loss Total Income
x1
y3
y2
y4
y1
y0
x4
x3
x2
c1
20--
b2
b1
20--
a2
a1
20--
d2
INR mn INR mn
d1
20--
c2
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Key Business Segments Key Geographic Segments
Business Highlights
Description News
Overview
• Company A Ltd. was formerly known as Company E Ltd. and changed its name to Company A Ltd. in July 20--
• Manufactures and markets a wide range of electrical products like wires and cables, fans, switches, geysers and mobile accessories
• Demerged its metering and power generation business in 20-- and diversified the business of LED lighting products and energy efficient water heaters and fans
Expansion Plans • In FY 20--, acquired two factories at SIDCUL Haridwar and is looking to diversify into home appliances
x4
x3
x2
x1
x0
20--
c4 b4
a4
20--
c3 b3
a3
20--
e1 d1 b2
a2
20--
c1
b1 a1
y3
y2
y1
20--
p4
20--
p3
20--
p2
20--
s1 r1
p1
Switchgear
M&PG
Others
Lighting
Cables&Wires Other Countries European Union India
ELECTRIC WIRE AND CABLE MARKET IN INDIA 2014.PPT
Public: Domestic Company – Company A Ltd. (3/4)
15
T O
W S
Public: Domestic Company – Company A (4/4)
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Private: Domestic Company – Company B (1/5)
Key People
Products and Services
Mumbai
Company Information Offices and Centres – India
Corporate Address
Tel No.
Fax No.
Website
Year of Incorporation
Category Products/Services
Cables
Wires
Headquarters
Name Designation
Person 1 CEO
Person 2 Director
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Private: Domestic Company – Company B (2/5)
Shareholders of the Company as on dd/mm/yyyy Ownership Structure
Name No. of Shares held
Shareholder 1 a
Shareholder 1 b
Total x
48.6%
Directors or relatives of directors
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Financial Snapshot Key Ratios
Financial Summary
Particulars y-o-y change
(20-- - --) 20-- 20-- 20-- 20--
Profitability Ratios
Operating Margin
Net Margin
Profit Before Tax Margin
Return on Equity
Return on Capital Employed
Return on Working Capital
Return on Assets
Return on Fixed Assets
Cost Ratios Operating costs (% of Sales)
Administration costs (% of Sales)
Interest costs (% of Sales)
Liquidity Ratios Current Ratio
Cash Ratio
Leverage Ratios Debt to Equity Ratio
Debt to Capital Ratio
Interest Coverage Ratio
Efficiency Ratios Fixed Asset Turnover
Asset Turnover
Current Asset Turnover
Working Capital Turnover
Capital Employed Turnover
Improved Decline
Net Profit/Loss Total Income
x3
x2
x1
y3
y1
y2
b4
a4
2012
b3
a3
2011
b2
a2
2010
b1
a1
INR mn
2013
INR mn
ELECTRIC WIRE AND CABLE MARKET IN INDIA 2014.PPT
Private: Domestic Company – Company B (3/5)
• Company earned a net profit of INR ‘b4’ mn in FY 20--, as compared to net profit of INR ‘b3’ mn in FY 20--
• It reported total income of INR ‘a4’ mn in FY 20--, registering a decrease of ‘p’% over FY 20--
• Earned an operating margin of ‘x.x’ % in FY 20-- a decrease of ‘y.y’ percentage points over FY 20--
• The company reported debt to equity ratio of ‘w.w’ in FY 20--, an increase of ‘z.z’% over FY 20--
19
Business Highlights
Description News
Overview
• Company B manufactures, supplies and exports electrical wires and cables in India
• Manufacturing facility is in ‘Z’
• ISO 9001-2008 and ISO 14001 : 2004 certified and follows BIS and CSA standards
Certifications and approvals
• The products are approved by Technical Advisory Committee, Mumbai port trust, HPCL and Public Works Department (PWD)
• Obtained certificate of performance from companies like Reliance Petroleum Ltd. and Abby Lighting
Clients • Domestic clients include A, B, C., D • It also exports its products in countries like UK, North Ireland and Middle East
ELECTRIC WIRE AND CABLE MARKET IN INDIA 2014.PPT
Private: Domestic Company – Company B (4/5)
20
T O
W S
Private: Domestic Company – Company B (5/5)
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Growing prominence of renewable energy in India to provide huge opportunity to wire and cable industry
• Principal sources of renewable energy are
Wind Energy
Small Hydro up to 25 MW
Biofuel
Solar Energy
• Renewable energy capacity presently accounts for x% of the total installed power capacity and y% of the electricity produced in India
• The installed capacity is estimated to increase to z% by 20--
• India plans to more than double its renewable energy capacity by 20--
• The Government of India plans to generate an additional xx GW of renewable energy in the 12th Plan Period, more than double the yy GW added during the 11th Five Year Plan
Renewable Energy Market Segmentation
d%
b%
c%
a%
Shift Towards Renewable Energy Forecasted Generation Mix by 20--
Jan, 2014
Small Hydro Power
Solar
Biofuel
Wind
Total installed capacity of
renewable energy is x GW
Resources Estimated Installed Capacity (GW)
Coal xx
Gas xx
Hydro xx
Renewable xx
Nuclear xx
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ELECTRIC WIRE AND CABLE MARKET IN INDIA 2014.PPT