market research report : courier market in india 2014 - sample

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Courier Market – India

October 2014

2 COURIER MARKET IN INDIA 2014.PPT

Executive Summary

Market

Drivers & Challenges

Role of Government

Competition

Global Trade Boom

Growth in e-Commerce

Financial Institutions Dependence on Courier

Growing Business of Private Telecom Sector

Seasonal Business Upsurge Due to Occasions

The courier/ express courier market is highly fragmented with numerous small unorganized

players

The market was valued at INR X1 bn in 20-- and is expected to reach ~INR X5 bn in FY 20--

exhibiting a CAGR of X% between 20-- to 20--

Poor Infrastructure is a major decelerator

Poor Warehousing Facility is a Major Deterrent

Delay in Clearances

High Operating Costs

Ensuring Competitiveness

Infrastructure Development

Foreign Direct Investment

India Post Office Amendment Bill

Laws

Major Players

Company 1 Company 2 Company 3

Company 4 Company 5 Company 6


• Macroeconomic Indicator

• Introduction

• Market Overview

• Business Models

• Key Issues

• Drivers & Challenges

• Technology Adoption

• Role of Government

• Role of EICI

• Competitive Landscape

• Transactions

• Business Processes

• Strategic Recommendations

• Appendix

4

Economic Indicators (1/3)

11

12

13

14

15

INR tn

Q4

c4

b4

a4

Q3

c3 b3

a3

Q2

d2 c2

b2

a2

Q1

d1 c1

b1

a1

2013-14 2012-13 2011-12 2010-11

GDP at Factor Cost: Quarterly

Inflation Rate: Monthly

-2

-1

0

1

2

q

Aug 2013 - Sep 2013

r

Sep 2013 - Oct 2013 Jul 2013 - Aug 2013

p

Nov 2013 - Dec 2013

t

Oct 2013 - Nov 2013

%

s

COURIER MARKET IN INDIA 2014.PPT


Logistics primarily deals in transportation and storage operations and is significantly aided by value added service

The logistics sector comprises primarily of 3 major segments – Transportation, Storage and Value-added services. The growing Indian economy is playing an advantageous role on players operating in storage and value- added

services segments

TRANSPORTATION

Container Rail Transport

STORAGE

Road Transport

Express Logistics

Coastal Shipping

Air Cargo

Project Logistics

Warehousing

Logistics Park

Inland Container Depot

Container Freight Station

Port

Freight Forwarding

3PL/ 4PL

Courier Service

LOGISTICS SECTOR

VALUE ADDED SERVICE

Focus of the Report

Cold Chain

6

Growing business opportunities in India is driving the need for time bound service

Market Overview Market Size and Growth

• The courier/ express courier market is highly fragmented with numerous small unorganized players

• The market was valued at INR X1 bn in 20-- and is expected to reach ~INR X2 bn in FY 20--

• The market is projecting a CAGR of X% and is expected to maintain a steady growth rate till FY 20--

• India having over a lakh of pin codes, only approximately 10,000 are connected by courier service

• It thus makes the lesser known players very significant in the market as they take upon the responsibility of providing last mile service to large organized players


Express/ Courier Categories in India

Government Administered

India Post

Global Integrators

Player A, Player B, Player C etc. Global

Integrators

Player D, Player E, Player F etc. Large Indian Companies

Other Small Courier Companies

Regional Players

0

100

200

300

400

INR bn

20--e

X3

20--

X%

20--e

X6

20--e

X5

20--e

X4

X2

20--

X1

C%

B% A%

C B A

Revenue Split of Courier Sector – 20--

7

Courier Service Segmentation (1/2)

Courier Service

by

Type

On- Board Courier

• Most expensive and in depth service giving courier delivery the approach of ‘Just In Time’

• Specific for items of extreme importance and international transport

• Items maybe medical cargo like organs needed for transplantation, critical parts and tools or sensitive business or legal information

Personal Courier

• This courier service is common in big cities or over relatively short distances

• Items transported may include super sensitive and delicate articles to office files and documents

• This type of courier service is common in large companies that has complex mail systems and needs to ensure safe and timely package delivery

Same Day Courier Service • The service is available for locations within a reasonable range that

can be reached within the same day • The service normally comes at a premium price

Standard Courier Service

• Most commonly used courier service by individuals and business organizations

• Though it provides a reasonably timely service it is not as fast as other courier services and is priced accordingly

• It service provides security and timely service but fails to provide tracking and ‘signature on receipt’ facilities

Overnight Courier Service • The overnight courier service is offered for selected destinations • The service is expensive than Standard Courier but cheaper than

On- Board, Personal and Same day Courier Services

Back Loads and Part Loads Courier Service

• This type of service is usually utilized by businesses that depend on frequent delivery of items from a courier

• Urgency is ruled out and the items are delivered as and when the courier company has to deliver some other package in the same area

• This is a cost saving business strategy employed by companies


8

Ever rising number of franchisees of the big players in the market is indicative of popularity of franchisee model

Courier market in India operates through franchisee model for raising accessibility of its customers Higher the number of franchisees in the market space higher will be its visibility that will ensure greater business for

the companies

INR A mn to INR B mn Total Investment

t sq. feet to q sq. feet Area Required

ROI % Return on Investment

Y months to Z months Expected Breakeven

Low cost franchisee opportunities by renowned companies is mutually beneficial for the company as well as the franchisee operator Franchisee options of various valuations enables small starters to initiate their business easily while the company benefits as its

outlet number increases

Adequate training in Supply Chain Management

Company Support


9

Key Issues

Delivery Snags

Internet Accessibility E-Billing Popularity



Drivers & Challenges – Summary

Drivers

Global Trade Boom

Growth in e-Commerce

Financial Institutions Dependence on Courier

Growing Business of Private Telecom Sector

Seasonal Business Upsurge Due to Occasions

Challenges

Poor Infrastructure is a major decelerator

Poor Warehousing Facility is a Major Deterrent

Delay in Clearances

11

SAMPLE Express Industry Council of India (EICI)

• The EICI is an organization formed by players of the industry with the aim to protect and promote common interest of Express industry and its members

• EICI has affiliation of express bodies such as Global Express Association and Conference of Asia Pacific Express Carriers

` Role of EICI

Plays a vital role in interacting with the Government, the Customs and other related government organizations

The organization has been successful in clearing major bottlenecks and delays that occur in express industry

The organization plays a major role in bringing about speedy clearances and aid in importing greater volumes


12

Key People

Products and Services

Company Information Offices and Centres – India

Corporate Address

Player A

5th Road, 6th Street,

City A – 700 xxx

Tel No. 91 22 6679 xxxx

Fax No. 91 22 6679 xxxx

Website www.playera.com

Year of Incorporation 19--

Ticker Symbol 53xxxx (BSE)

Stock Exchange Bombay Stock Exchange

Name Designation

Person A MD

Person B CFO

Person C CEO

Head Office

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

City X

Category Products/Services

Courier and Express Package Distributor

Door-to-door express deliveries for documents, packages, commercial shipments

Packaging Air and ground express packaging services under Smart Box


13

Financial Snapshot Key Ratios

Financial Summary

• The company incurred a net loss of INR d units in FY 20--, as

compared to net loss of INR c units in FY 20--

• The company reported total income of INR R4 units in FY 20--,

registering an increase of m% over FY 20--

• The company earned an operating margin of f% in FY 20--, an

increase of g percentage points over FY 20--

• The company reported debt to equity ratio of d in FY 20--, a

decrease of h% over FY 20--

Net Profit/Loss Total Income

INR units

-20

-40

-60

-80

INR units

250

200

150

100

50

0

20--

d R4

20--

c

R3

20--

b

R2

20--

a

R1

Private: Foreign Company – Player A (2/3)

Particulars y-o-y change

(2014-13) 2014 2013 2012 2011

Profitability Ratios Operating Margin -53.06 4.89% 57.96% 5.66% 5.11%

Net Margin -33.91 2.65% 36.56% 3.01% 2.85%

Profit Before Tax Margin -50.68 4.77% 55.45% 4.94% 4.27%

Return on Equity -5.51 16.55% 22.06% 21.36% 23.63%

Return on Capital Employed -348.16 -160.22% 187.94% 71.33% 84.50%

Return on Working Capital -6.61 20.55% 27.15% 21.36% 20.68%

Return on Assets -3.73 16.06% 19.79% 14.22% 12.38%

Return on Fixed Assets 21.65 143.41% 121.76% 60.16% 42.80%

Cost Ratios Operating costs (% of Sales) 53.06 95.11% 42.04% 94.34% 94.89%

Administration costs (% of Sales)

0.00 0.00% 0.00% 0.00% 0.00%

Interest costs (% of Sales) -2.38 0.13% 2.51% 0.72% 0.84%

Liquidity Ratios Current Ratio -11.48% 1.66 1.87 2.06 1.81

Cash Ratio 5.83% 0.46 0.43 0.42 0.36

Leverage Ratios Debt to Equity Ratio -73.46% 0.03 0.11 0.50 0.91

Debt to Capital Ratio -71.29% 0.03 0.10 0.33 0.48

Interest Coverage Ratio 68.45% 38.97 23.13 7.83 6.06

Efficiency Ratios Fixed Asset Turnover 1523.99% 54.09 3.33 19.97 15.03

Asset Turnover 1019.01% 6.06 0.54 4.72 4.35

Current Asset Turnover 788.69% 3.08 0.35 3.66 3.25

Working Capital Turnover 943.41% 7.75 0.74 7.09 7.26

Capital Employed Turnover 934.35% 6.24 0.60 7.09 8.30

Improved Decline



Key Business Segments Key Geographic Segments

Business Highlights

Description News

Overview

Infrastructure

Recognitions

0%

50%

100%

20--

A

0%

50%

100%

20--

B

X X

Private: Foreign Company – Player A (3/3)

15

SAMPLE


Appendix

Ratio Calculations

Operating Margin (Operating Income/Revenues)*100

Net Margin (Net Profit / Revenues) *100

Profit Before Tax Margin (Income Before Tax / Revenues *100

Return on Equity (ROE) (Net Income / Shareholders Equity)*100

Return on Capital (ROCE) EBIT / (Total Assets – Current Liabilities)*100

Return on Working Capital (Net Income / Working Capital) *100

Return on Assets (Net Income / Total Assets)*100

Return on Fixed Assets (Net Income / Fixed Assets) *100

Operating Costs (% of Sales) (Operating Expenses / Sales) *100

Administration Costs (% of Sales)

(Administrative Expenses / Sales) *100

Interest Costs (% of Sales) (Interest Expenses / Sales) *100

Ratio Calculations

Current Ratio Current Assets / Current Liabilities

Cash Ratio {(Cash & Bank Balance + Marketable Securities) / Current Liabilities)}

Debt to Equity Total Liabilities / Shareholders Equity

Debt to Capital Ratio {Total Debt / (Shareholders Equity + Total Debt)}

Interest Coverage Ratio EBIT / Interest Expense

Fixed Asset Turnover Sales / Fixed Assets

Asset Turnover Sales / Total Assets

Current Asset Turnover Sales / Current Assets

Working Capital Turnover Sales / Working Capital

Capital Employed Turnover Sales / Shareholders Equity

16

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