22790805 eic analysis of chemical industry
Post on 06-Apr-2018
221 Views
Preview:
TRANSCRIPT
-
8/3/2019 22790805 Eic Analysis of Chemical Industry
1/36
EIC ANALYSIS
CHEMICAL INDUSTRY
ECONOMY
INDUSTRY
COMPANY
-
8/3/2019 22790805 Eic Analysis of Chemical Industry
2/36
CONTENTS
ECONOMY RELATED
FACTORS
Growth RatesInterest Rates
InflationBOP, Foreign TradeExchange RatesSavings & InvestmentsDemographic DataMonsoon
FIRM SPECIFIC
ANALYSIS
Company Details Technical andFundamental
Analysis Common SizeStatements
Ratio Analysis Trend Analysis
INDUSTRY RELATED
FACTORS
PLCDemand & Supply
Barriers to EntryMarket for the ProductsSupply of inputsGovernment AttitudeOther Details
-
8/3/2019 22790805 Eic Analysis of Chemical Industry
3/36
Growth Rates-
GDP
2006-07 2007-08
AGRICULTURE - 4.5 % 3.8%
INDUSTRY - 8.1% 10.6%
SERVICES - 10.7% 11.2%
Indexof Industrial
Production (IIP)
April-May 2008 rose by
5.0%
April-May 2007 rose by
10.9%
-
8/3/2019 22790805 Eic Analysis of Chemical Industry
4/36
As on 18th Sep. 2008 12.1%
MAR. 2007 4.76%
MAR. 2008 7.75%
JULY 2008 11.89%
AUGUST 2008 12.6%
INFLATION
-
8/3/2019 22790805 Eic Analysis of Chemical Industry
5/36
INTEREST RATES
Bank Rate- 6.00%Repo Rate 9.00%Reverse Repo 6.00%
PLR : 12.75%-13.25%Savings Bank Rate : 3.5%Deposit Rate : 7.50%-9.60%
RESERVE RATIOS
CRR 9.00%SLR- 25.00%
-
8/3/2019 22790805 Eic Analysis of Chemical Industry
6/36
BalanceofPayments
Merchandise Exports rose by 23.7% as against 21.8%in 2006-07
Forex Reserves - US $ 309.7 billion at end-March 2008.
FOREIGN TRADE
Exports 21.7 % against 24.2% (as a % of GDP)Imports 31.8% against 37.9%(as a % of GDP).
-
8/3/2019 22790805 Eic Analysis of Chemical Industry
7/36
Exchange Rates
March 2008 INR 39.97 / USD
July 8 INR 43.37 / USD
July 25 - INR 42.23 / USD
Rupee depreciated against upto July 2008
USD 5.4%
EURO 5.0%POUND STERLING 5.2%
JPY 1.3 %
Ason 18th Sep., 2008
INR / 1 USD : 46.3400
INR / 1 EURO : 65.8200
INR / 100 Jap YEN : 43.6900
INR / 1 Pound Sterling : 82.9600
-
8/3/2019 22790805 Eic Analysis of Chemical Industry
8/36
MARKET TREND (as on 18th Sep. 2008) BSE Sensex : 13518.80
S&P CNX Nifty : 4074.90MONSOON Up to July 23, 2008 -cumulative rainfall 98% June-September forecasted to be 100 % by India
Meteorological Department (IMD)
DEMOGRAPHICS
Population as on 1st Mar. 2001- 1,027,015,247Male - 531,277,078
Female - 495,738,169Most Populous State Uttar PradeshLeast Populous State SikkimHighest Density Delhi with 9,294 persons / sq. kmLowest Density- Arunachal Pradesh 13 persons / sq. kmSex Ratio 933 females over 1000 males
Literacy Rate 65%.
-
8/3/2019 22790805 Eic Analysis of Chemical Industry
9/36
Chemical Industry
Includes manufacture and/or distribute chemicals including
basic, intermediate and specialty chemicals, plastic resinsand materials used in synthetic fibers, paints and coatings
Currently producing 70000 products.
Products Classification Inorganic
Organic (commodity) chemicals,
Drugs and pharmaceuticals, Plastics and petrochemicals,
Dyes and pigments,
Fine and specialty chemicals,
Pesticides and agrochemicals, and
Fertilizers.
-
8/3/2019 22790805 Eic Analysis of Chemical Industry
10/36
COMPOSITION- Current & Projected
Composition OfIndian Chemical Industry - 2006
57%25%
18%
BASIC
SPECIALTY
KNOWLWDGE
Composition (Projected) OfIndian Chemical Industry-2010
52%
23%
25%
BASIC
SPECIALTY
KNOWLWDGE
-
8/3/2019 22790805 Eic Analysis of Chemical Industry
11/36
Product Life Cycle
Chemical
Industry
-
8/3/2019 22790805 Eic Analysis of Chemical Industry
12/36
Overview
Total Investment US$60 billion
Contribution to GDP 3%
Share in Exports 13-14%
Imports 8 9%
12th
largest in World 3rd Largest in Asia
Per capita consumption in India 1/10th ofworld average
Global chemical Indus. US$ 1.7 trillion One of the fastest growing Industry in India
Average growth rate 12.5%
(In termsofVolume)
-
8/3/2019 22790805 Eic Analysis of Chemical Industry
13/36
Key Features-
Fragmented and dispersed - multi product and multifaceted.
A Fragemented Chemical Industry in India
0
1
2
3
4
5
6
78
9
Xylen
e
Machine
Tools
Ceme
nt
Caustic
Soda
Urea Te
aSte
el
Metha
nol
Benzene
Soda
Ash
Scooters
Woole
nFabrics
PassengerC
ars
Cigarr
ettes
AirCooler
s
Viscose
StapleFib
re
Industry
HerfindahlIndex
-
8/3/2019 22790805 Eic Analysis of Chemical Industry
14/36
Key Features
Chemicals sold directly to large customers and throughdistribution channels.
Annual Turnover Rs. 90,000 crore (approx.)
1/3rd contribution by 3 main sub-sectors basic
chemicals, petrochemicals and pharmaceuticals.
-
8/3/2019 22790805 Eic Analysis of Chemical Industry
15/36
RoleofGovernment INPUT COSTS
REVOLUTIONIZING THE POWER SECTOR
INFRASTRUCTURE IMPROVEMENT
PCPIRs
R&D
FINANCIAL ASSISTANCE
EXPORT PROMOTION
ENVIRONMENT RELATED ISSUES
AMENDMENT IN LABOR LAWS
-
8/3/2019 22790805 Eic Analysis of Chemical Industry
16/36
SWOT FRAMEWORK ANALYSIS OF
INDIAN CHEMICAL INDUSTRY
Diversified Manufacturing Base
Vibrant downstream industries in differentsegments
Competitive core industries
Capability to produce world-class end
products
STRENGTHS
-
8/3/2019 22790805 Eic Analysis of Chemical Industry
17/36
STRENGTHS
Strong presence in the export market insub-segments
Large domestic market
Major raw material component sources
within the country
Good R&D base
-
8/3/2019 22790805 Eic Analysis of Chemical Industry
18/36
-
8/3/2019 22790805 Eic Analysis of Chemical Industry
19/36
WEAKNESSES
SCALE OF PRODUCTION
TECHNOLOGY
MULTIPLICITY OF TAXES
LABOR LAWS
-
8/3/2019 22790805 Eic Analysis of Chemical Industry
20/36
OPPORTUNITIES
Challenge to compete globally by concentrating onweaknesses
Markets in the developed countries
A large number of products going off patent.
Advantages in certain categories can be used for boostingexports.
Close to middle-east- cheaper and abundant source forpetrochemicals feedstock.
-
8/3/2019 22790805 Eic Analysis of Chemical Industry
21/36
Stringent environmental laws in the western countries
Climatic conditions in India
Competencies to utilize renewable resources
Competency to emerge as a global player in the area of
Specialty chemicals.
OPPORTUNITIES
-
8/3/2019 22790805 Eic Analysis of Chemical Industry
22/36
THREATS
Imports of chemicals, intermediates and end products
Tariff levels for chemicals
Greater competition due to
Chinese products
Bilateral/multilateral trade agreements
The labor laws, power supply and infrastructurefacilities
-
8/3/2019 22790805 Eic Analysis of Chemical Industry
23/36
Growth Imperatives
Imperatives Degree of relevance
Basic Specialty Knowledge
Aggressive growth strategies
Stimulated demand
Access to global markets
Invest in new areas
Medium Medium High
Consolidation High High High
Research & Development (R&D) Low Medium High
Cost reduction
Operational
Financial
High Medium Low
Collaboration
Clusters
Co-opetition
Institutional interaction
Low High Medium
-
8/3/2019 22790805 Eic Analysis of Chemical Industry
24/36
Firm Specific Analysis- BASF Ltd.
Started in India in 1943,
when it acquired shares of R. A. Cole Private Limited
Indoplast Limited in January 1963
BASF India Limited in September 1967.
Public limited listed company
Subsidiary of BASF Aktiengesellschaft, Germany.
Prasad Chandran- Chairman and Managing director
-
8/3/2019 22790805 Eic Analysis of Chemical Industry
25/36
At present, the BASF Group in India isrepresented by the following companies:
BASF India Limited
BASF Coatings Private Limited
BASF Styrenics Private Limited
BASF Polyurethanes India Limited
BASF Construction Chemicals (India) Private Limited
BASF Catalyst India Private Limited
BASF Asia Pacific (India) Private Limited
-
8/3/2019 22790805 Eic Analysis of Chemical Industry
26/36
Activities & Products
Offers innovative, hi-tech and safe solutions
Tanning agents,
Leather chemicals and auxiliaries,
Crop protection chemicals,
Textile chemicals,
Dispersions and specialty chemicals,
-
8/3/2019 22790805 Eic Analysis of Chemical Industry
27/36
Products
Plastics, automotive and coil coatings, catalysts,construction chemicals, polystyrene and polyurethanesystems.
Strong manufacturing and R&D base,
>1300 employees multi-location production sites and anR&D centre,
Global Technology Platform
-
8/3/2019 22790805 Eic Analysis of Chemical Industry
28/36
BASF- FINANCIALS
NETWORTH Rs. 339.68 Cr.
BOOKVALUE Rs. 120.50 Cr.
P/E 9.47
TURNOVER Rs. 1031.86 Cr.
PAT Rs. 59.37 Cr.
Market Capitalization Rs. 720.82 Cr.
-
8/3/2019 22790805 Eic Analysis of Chemical Industry
29/36
TECHNICAL ANALYSIS
BASF vs. Sensex ason 18th Sep., 2008
240
245
250
255
260
265
270
1 2 3 4 5 6 7 8 9 10 11 12
Time
In
d
e
x BASF
Sensex
BASF vs. Sensex (Jan 2008 to Sep. 2008)
0
50
100
150
200
250
300
350
1 2 3 4 5 6 7 8 9
Date
In
d
e
x BASF
Sensex
-
8/3/2019 22790805 Eic Analysis of Chemical Industry
30/36
BASF vs. Nifty ason 18th Sep., 2008.
240
245
250
255
260
265
270
1 2 3 4 5 6 7 8 9 10 11 12
Time
In
d
e
x BASF
Nifty
BASF vs. Nifty (Jan 2008 - Sep. 2008)
0
50
100
150
200
250
300
350
1 2 3 4 5 6 7 8 9
Date
In
d
e
x BASF
Nifty
-
8/3/2019 22790805 Eic Analysis of Chemical Industry
31/36
RATIO ANALYSIS
ROE
0
0.02
0.04
0.06
0.08
0.1
0.12
0.14
0.16
0.18
ROE
1 2 3 4 5
Years
Trend - ROE
Series1
-
8/3/2019 22790805 Eic Analysis of Chemical Industry
32/36
ROTA
00.02
0.04
0.06
0.08
0.1
0.12
0.14
0.16
0.18
ROTA
1 2 3 4 5
Years
Trend - ROTA (04-08)
Series1
Series2
Series3
0
0.05
0.1
0.15
0.2
0.25
0.3
RONA
1 2 3 4 5
Years
Trend - RONA(04- 08)
Series1
-
8/3/2019 22790805 Eic Analysis of Chemical Industry
33/36
0
200
400
600
800
1000
1200
Sales
1 2 3 4 5
Years
TREND Analysis- Sales (04-08)
Series1
0
20
40
60
80
100
120
EBIT
1 2 3 4 5
Ye
ars
TREND Analysis- EBIT (04-08)
Series1
245
250
255
260
265
270
275
280285290
295
CA
1 2 3 4 5
Years
TREND Analysis- CA (04-08)
Series1
SALES EBIT
Current Assets
0
10
20
30
40
50
60
PAT
1 2 3 4 5
Years
TREND Analysis- PAT (04-08)
Series1
PAT
-
8/3/2019 22790805 Eic Analysis of Chemical Industry
34/36
0
20
40
60
80
100
120
140
160
CL
1 2 3 4 5
Years
TREND Analysis- CL (04-08)
Series1
0
50
100
150
200
250
300
350
TA
1 2 3 4 5
Years
TREND Analysis- TA (04-08)
Series1
0
50
100
150
200
250
300
350
NW
1 2 3 4 5
Years
TREND Analysis- NW (04-08)
Series1
15.5
16
16.5
17
17.5
18
18.5
19
19.5
20
Dividend
1 2 3 4 5
Years
TREND Analysis- Dividend (04-08)
Series1
CURRENT LIABILITIES TOTAL ASSETS
NETWORTH DIVIDEND
-
8/3/2019 22790805 Eic Analysis of Chemical Industry
35/36
Conclusion
Consistent Trend
Increasing Returns
Profitable
-
8/3/2019 22790805 Eic Analysis of Chemical Industry
36/36
THANKYOU !
top related