market research report : construction equipment market in india 2012

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Construction Equipment Market – India

December 2012

2CONSTRUCTION EQUIPMENT MARKET IN INDIA 2012.PPT

Executive Summary

Market Huge investment in infrastructure construction presents a major growth opportunity to the Indian construction equipment market

Drivers & Challenges

Competition

DriversRobust Economic Development

Growth in Infrastructure

Expansion in Mining Sector

Growing presence of OEM in India

FDI Inflow in Construction

Challenges Land Acquisition Problems

Project Bottlenecks

Crude Oil Price Hike

Rising Steel Prices

Lack of Skilled Labour

Major Players

Company 1 Company 2 Company 3

Company 4 Company 5 Company 6

Focus on Technology

Aggressive Expansion Plans

Technical Collaborations Trends

Government Initiatives

Manufacturing Sector Policies

Upcoming Regulations

Required Initiatives

Decline in Import Share

Growth in After Sales Service

Environment Concerns


•Market Overview Global

India

•Construction Equipment Segments

•Sector wise Demand

•Drivers and Challenges

•Government Initiatives

•Trends

•Opportunity Areas

•Recent Developments

•Competition

•Strategic Recommendations

•Appendix


Focus on infrastructure development offers strong growth potential to the Indian construction equipment market

Construction Equipment Market India – Overview

• Indian construction equipment market is one of the fastest growing markets in the world

• Construction constitutes the second largest sector in the Indian economy

• Low infrastructure and consequently heavy investments in infrastructure in the 12th five year plan presents tremendous opportunity for growth to the Indian market

• Indian market is characterized by the dominance of foreign players alone or in partnership with Indian manufacturers of construction equipments

Construction Equipment Market

0

100

200

300

400

500

INR bn

Z%

20‐‐e

x7

20‐‐e

x6

20‐‐e

x5

20‐‐e

x4

20‐‐e

x3

20‐‐

x2

20‐‐

x1


Earth Moving Equipment – Equipment 1

Equipment 1 Sales Equipment 1 – Market Share

• Point 1

• Point 2

Market Overview

Major Players

Company 1

Company 2

Company 3

X%

Z%

Y%

Company 2Company 1 Others

0

10,000

20,000

30,000

40,000Z%

20‐‐e

x7

20‐‐e

x6

20‐‐e

x5

20‐‐e

x4

20‐‐e

x3

20‐‐

x2

20‐‐

x1

units


Rental Equipment Market

•Market Overview•Penetration•Drivers•Challenges•Trends•Scenario


Capital constraints and strict project timelines are promoting the demand for rental equipments

• Rental equipment market in India is still at its nascent stage

• Equipment rental market is expected to reach INR x bn in 20‐‐ with a CAGR of x% over 20‐‐‐

• Rental market in India is highly fragmented with the organised sector accounting for x% of the market

• Share of top y companies added to a bare minimum of z units in 20‐‐

Equipment Rental Market ‐ Overview Equipment Rental Market Growth

Rental Equipment Market Segments (20‐‐)

y%

X%

A B

Equipment Rental Market Share – (20‐‐)

x%

y%

X Y

0

50

100

150

20‐‐ 20‐‐e20‐‐e 20‐‐e

x3x2

x5

20‐‐e20‐‐

INR bn

x6

20‐‐e

x1

x4

x7Y%


Equipment Financing Market

•Market Overview•Major Features•Major Finance Providers•Finance Types•Drivers•Challenges•Role of NBFCs


Rise in construction activities presents a huge opportunity for growth to the equipment financing market

• Construction equipment financing market in India is still at its nascent stage

• Equipment financing market has a great growth potential owing to high construction activities leading to high demand for equipments

Equipment Financing Market ‐ Overview

Equipment Financing Market Growth

Equipment Financing – Market Share

0

10

20

30

40

50

60

70

80

90

100

%

20‐‐

k2

j2i2 h2g2

f2e2d2

c2

b2

a2

20‐‐

k1

j1i1h1

g1f1

e1

d1

c1

b1

a1

Others

Company 10

Company 9

Company 8

Company 7

Company 6

Company 5

Company 4

Company 3

Company 2

Company 1

0

100

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INR bn

Z%

20‐‐e

x6

20‐‐e

x5

20‐‐e

x4

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x3

20‐‐e

x2

20‐‐

x1


Infrastructure

Roads Railway Ports

Airports Irrigation Urban Development

Power Transmission Storage Telecom

Sector Wise Demand


Construction Equipment – Infrastructure Demand

•Finding 1•Finding 2

•Finding 3•Finding 4

Construction Equipment –Share of Expenditure

Planned Investment in RoadsX Status

Roads ‐ Overview

x%‐y%Construction EquipmentCosts Share

0

1,000

2,000

3,000

4,000

C

R

z3

y3

x3

B

Q

z2

y2

x2

A

P

z1y1

x1

INR bnZYX

0 10,000 20,000 30,000 40,000 50,000

kms

Xx1 x2 x3

A B C


Drivers & Challenges – Summary

Drivers

Robust Economic Development

Growth in Infrastructure

Expansion in Mining Sector

Growing Presence of OEM in India

FDI Inflow in Construction

Challenges

Land Acquisition Problems

Project Bottlenecks

Crude Oil Price Hike

Rising Steel Prices

Lack of Skilled Labour


Foreign direct investment in construction industry and construction equipments will ensure market growth

FDI Inflow in Construction Industry Impact

• Finding 1

• Finding 2

• Finding 3

• Finding 1

• Finding 2

• Finding 3

FDI in Construction Activities

FDI in Earthmoving Equipments

Construction Activities‐ FDI

Earthmoving Equipments ‐ FDI

0

50

100

150

INR bnZ%

20‐‐

x3

20‐‐

x2

220‐‐

x1

0

2

4

6

8x1

20‐‐

x2

INR bn Z%

20‐‐

x3

20‐‐


Lack of some key initiatives are hampering the development of the Indian construction equipment market

RequiredInitiatives

Initiative 1

Initiative 3

Initiative 5

Initiative 2

Initiative 4


`

Focus on Technology

Aggressive Expansion Plans

Environment Concerns

Growth in After Sales Service

Technical Collaborations

Trends – Summary

Key Trends

Decline in Import Share


Players in the market are focusing on application of latest technologies

Automation of construction

equipment gaining popularity

• Finding 1

• Finding 2

Technology Launches

• Point 1

• Point 2

• Point 3

• Point 1

• Point 2

• Point 3

Technology 1 Technology 2

Focus on Technology (1/2)


Opportunity Areas

State 1 State 2 State 3 State 4

Indian states are focusing on infrastructure development as the primary vehicle to drive economic growthEmphasis on construction of infrastructure facilities provides a huge scope for the development of

construction equipment market in India


State A – Opportunity Areas (2/3)

State A – Infrastructure Investment

•Point 1

•Point 2

•Point 3

•Point 4

•Point 5

•Point 6

State A ‐ Real GDP Growth Rate

Investment in Infrastructure (20‐‐‐‐)

x4

x2

x3

x5

x6x7

x1

E

D

C

B

G

F

A

0

5

10

15

x2

x3

20‐‐

y2

20‐‐

y1x1 x4

20‐‐

y4

%

20‐‐

y3

Country 1State A


Public: Domestic Company – Company 1 (1/3)

Key People

Products and Services

Company Information Offices and Centres – India

Category Products/Services

Segment Product 1, product 2, product 3,………………….

Others Product 1, product 2, product 3………

Name Designation

Person 1 Designation




Head Office

Corporate Address Address

Tel No. 91 ‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐

Fax No. 91 ‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐

Website website

Year of Incorporation 19‐‐

Ticker Symbol ‐‐‐‐‐‐

Stock Exchange ‐‐‐


Financial Snapshot Key Ratios

Financial Summary

• The company earned a net profit of INR 283.3 mn in FY 2012, as compared to net profit of INR 411.3 mn in FY 2011

• The company reported total Income of INR 8,618.3 mn in FY 2012 registering an increase of 15.28% over FY 2011

• The company earned an operating margin of 6.09% in FY 2012, a decrease of 0.73 percentage points over FY 2011

• The company reported debt to equity ratio of 0.92 in FY 2012, anincrease of 1.30% over FY 2011

Financial Summary

Indicators Value Market Capitalization (INR) ‐

Total Enterprise Value (INR) ‐

EPS (INR) ‐PE Ratio (Absolute) ‐

Particulars y‐o‐y change

(20‐‐‐‐)20‐‐ 20‐‐ 20‐‐ 20‐‐

Profitability RatiosOperating 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 RatiosOperating costs (% of Sales) ‐ ‐ ‐ ‐ ‐

Administration costs (% of Sales)

‐ ‐ ‐ ‐ ‐

Interest costs (% of Sales) ‐ ‐ ‐ ‐ ‐

Liquidity RatiosCurrent Ratio ‐ ‐ ‐ ‐ ‐

Cash Ratio ‐ ‐ ‐ ‐ ‐

Leverage RatiosDebt to Equity Ratio ‐ ‐ ‐ ‐ ‐

Debt to Capital Ratio ‐ ‐ ‐ ‐ ‐

Interest Coverage Ratio ‐ ‐ ‐ ‐ ‐

Efficiency RatiosFixed Asset Turnover ‐ ‐ ‐ ‐ ‐

Asset Turnover ‐ ‐ ‐ ‐ ‐

Current Asset Turnover ‐ ‐ ‐ ‐ ‐

Working Capital Turnover ‐ ‐ ‐ ‐ ‐

Capital Employed Turnover ‐ ‐ ‐ ‐ ‐

Total Income

Profit / Loss

0

5,000

10,000

0

200

400

600

Total IncomeINR mn

ProfitINR mn

2012

y4

x3

2010

x4y2

x2

20112009

y1y3

x1



Key Business Segments Key Geographic Segments

0%

50%

100%

k4y4

x4

20--

X3

z3 k3y3

x3

20--

X2

z2 k2y2

x2

20--

X1

z1k1 y1

x1

20--

X4

z4

DCBA

0%

50%

100%

20‐‐

xCountry 1


Business Highlights

Description News

Overview • Company 1 is one of the leading players in the field of x and construction equipment manufacturing

• Company has a market share of around y% in the A segment

Network and Distribution

• Effective pre‐sales and after‐sales service is provided by the company through a wide network of dealers and area offices in z locations and has x area or regional offices across the country

• Dealerships have also been established in foreign nations such as Country 1, Country 2, Country 3, Country 4, Country 5 and Country 6 with a view to provide support to the construction equipments of the company deployed in those regions

Country 1 is the only geographic segment of the

company


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