Download - Market Research Report : Construction equipment market in india 2014

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Construction Equipment Market – India

April 2014

2 CONSTRUCTION EQUIPMENT MARKET IN INDIA 2014.PPT

Executive Summary

Market

Huge investment in infrastructure construction presents a major growth opportunity to the Indian construction equipment market Global construction Equipment market is expected to reach INR a1 bn in 20-- growing at a

CAGR of x% over 20-- - -- Domestic market is expected to grow at a CAGR of y% over 20-- - 20--

Drivers & Challenges

Competition

Drivers Robust Economic Development

Growth in Infrastructure

Development of Mining Industry

FDI Inflow in Construction Industry

Growth in Housing and Construction Market

Challenges Land Acquisition Problems

Project Bottlenecks

Crude Oil Price Hike

Rising Steel Prices

Lack of Skilled Labor

Major Players

Player A Player B Player C

Player D Player E Player F

Government Initiatives

Manufacturing Sector Policies

Upcoming Regulations

Required Initiatives


•Macro Economic Indicators •Market Overview

Global India

•Construction Equipment Segments • Product – wise • Service – wise

•Sector wise Demand •Drivers and Challenges •Government Initiatives •Trends •Opportunity Areas •Recent Developments •Competitive Landscape •Strategic Recommendations •Appendix

4

SAMPLE Economic Indicators (1/3)

GDP at Factor Cost: Quarterly

Inflation Rate: Monthly

0.0

0.2

0.4

0.6

0.8

1.0

%

Dec 20-- - Jan 20--

E

Nov 20-- - Dec 20--

D

Oct 20-- - Nov 20--

C

Sep 20-- - Oct 20--

B

Aug 20-- - Sep 20--

A

ONLINE MARKETING IN INDIA 2014.PPT

Q3

d3 c3 b3

INR tn

Q4

c4 b4

a3

Q2

d2

a4 c2 b2 a2

Q1

d1 c1

b1

a1

20-- - -- 20-- - -- 20-- - -- 20-- - --

5

SAMPLE Construction Equipment Market – Global EXIM

Global Construction Equipment Market – Export Import Scenario

Export Scenario

Import Scenario

20-- y y1 y2 y3

20-- x x1 x2 x3

Country A

Country B

Others

A a1 a2 a3

20-- B b1 b2 b3 b4

20-- a4

Country A

Country B

Country C

Others

The USA, China are the top two countries in the worldwide construction equipment exports

Among the top ten exporters of construction equipment, Country M was the country that registered the highest increase in its imports in 20-- with a rate of x%

CONSTRUCTION EQUIPMENT MARKET IN INDIA 2014.PPT

6

SAMPLE Earth Moving Construction Equipment (1/x)

Backhoe Loader Market Segmentation (2013) Backhoe Loader Market Share (2013)

•Backhoe loader comprises tractor, front shovel/bucket and small backhoe in the rear and constitutes a multipurpose equipment which is extensively used in small to medium infrastructure projects

• Small Backhoe loader accounts for x1% of the total backhoe market but this segment is expected to grow over next few years

• Large backhoe loaders account for x2% of the overall backhoe loader market

• CASE Construction equipment holds the 2nd position in overall backhoe loader market in India

Backhoe Loader – Market Overview (1/x)

y2

y1

y2 y1

x1

x2

x2 x1


7

SAMPLE

Crawler Excavator – Market Share

• Crawler Excavators is one of the largest segment in earth

moving construction equipment market

• The market accounted for about a% of the total earth

moving equipment market in 2013

• Telcon a joint venture of Tata and Hitachi Construction

Machinery is the market leader in excavators and mainly

produces crawler excavators

Crawler Excavators – Market Overview

Major Players

Player 1

Player 2

Player 3

b2

b1

b2 b1

Crawler Excavator – Market Segmentation

Note: Share as of 2013 Note: Share as of 2013\2

a2

a1

a2 a1

Earth Moving Construction Equipment (3/x)


8

SAMPLE

Mini Excavator Demand Share

•Mini excavators are slowly emerging as ideal equipments for earthmoving purposes in the urban areas

• It was first launched in Europe followed by North America

•Mini excavators were first introduced in India by Telcon

• They are also referred to as lower end excavators

Mini Excavators – Market Overview

Major Players

Player 1

Player 2

Player 3

m2

m1

m2 m1

Note: Mini Excavators: 14 tonnes

• x1

• x2

• x3

Earth Moving Construction Equipment (4/x)


9

SAMPLE Concrete equipment market is further divided into various segments

Concrete Equipment Market – Segmentation

Market Segmentation (2013) Market Segmentation (2014 e)

a2

a1

a3

a4

a2

a1

a4

a3

b4

b3

b1

b2 b1 b3

b4 b2

Transit Mixers accounts for around x% market share, where as Concrete Pumps accounts for around y% market share in the overall concrete equipment market in 20--


10

SAMPLE Material Handling Market is further divided into various segments

Material Handling Market - Segmentation

Market Segmentation (2013) Market Segmentation (2014 e)

a4

a5

a3

a2 a1

a4

a5 a3

a2

a1

a5 a2 a1

a3

a4

a1 a5

a2

a3

a4

Pick and Carry accounts for around x% market share, where as forklifts accounts for around y% market share in the overall material handling equipment market


11

SAMPLE Cranes account for the highest share of demand in the material handling equipment segment

Material Handling Equipment Market

Crane Market Regional Demand – 2013

Crane Market Ownership – Structure 2013

Crane Market - Overview

• Indian cranes market is highly fragmented and is

characterized by the presence of more than 200

manufacturers

• Crane rentals account for x%-y% of the total market

Crane Market Segmentation – 2013

y2

y1

y2 y1

x2

x1

x2 x1

d1

b1

c1 a1 d1 b1

c1 a1


12

SAMPLE • Indian forklifts market is still at its nascent stage and is

primarily being driven by the growth in warehousing, retail and infrastructure

• Forklifts operating in the Indian market are of three types, diesel trucks, electric trucks and LPG trucks

•Being a small market major forklift technologies in operation are slow in penetrating the Indian market leading to rise in influx of Chinese forklifts

Forklifts – Market Overview (1/2)

•A

•B

• C

Forklifts Market Scenario

Major Players

Godrej

Voltas

Forklift Market Segments (2013)

a3 a2

a1

a3

a2

a1

Cranes Market Overview (5/7)


13

SAMPLE Road Construction equipments segment accounted for a% of the total construction equipment market in 2013

•Road construction equipment market is expected to

witness robust growth owing to surge in demand

from rise in infrastructure projects

•Government focus on infrastructure develop will

translate into higher demand for this market

• xx accounts for y% revenue in the overall domestic

market

Road Construction Equipment Market

Road Construction Equipment Market Size

0

10

20

30

40

INR bn

2018e

f

2017e

e

2016e

d

2015e

c

2014e

b

2013

a

x

y

x y

Revenue Share (2013)


14

SAMPLE 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 f bn in 2018 at a CAGR of x% over 2013 – 2018

•Rental market in India is highly fragmented with the organised sector accounting for x1%of the market

Equipment Rental Market - Overview Equipment Rental Market Growth

Rental Equipment Market Segments (2013) Equipment Rental Market Share – (2013)

y2

y1

y2 y1

0

20

40

60

80

100

120

2016e

d

2015e

c

2014e

b

2013

a

INR bn

+13.0%

2018e

f

2017e

e

x2

x1

x2 x1


15

SAMPLE


Construction Equipment – Infrastructure Demand

• Indian road sector is the second largest in the world having a total length of x mn km

•As of August 2013, around a% of freight and b% passenger traffic is carried by the roads

•National highways account for around m% of the total road networks and handles around n% of road traffic

•NHDP projects are being implemented in seven phases, which envisages to improve more than xx km of arterial routes

Construction Equipment – Share of Expenditure

Planned Investment in Roads NHDP Status

Roads - Overview

xx%-yy% Construction Equipment Costs Share

0

2,000

4,000

6,000

8,000

10,000

INR bn

bb

B

bb3

bb2

bb1

aa

A

aa2

aa1

CC BB AA 0 10,000 20,000 30,000 40,000 50,000

yy

kms

xx xyz zz

yy zz xx

Note: Status as of 31st January 2014

16

SAMPLE


Corporate

• Demand for office spaces have increased following the growth in IT and ITES sectors

• Off shoring operations of the foreign multinationals have added to the demand

Residential Market

• Growing urbanization and income have fuelled the demand for residential units

• This sector is witnessing a demand for luxury and premium residential units

• Rise in housing finance penetration and tax incentives to further expand this sector

a%-b%

Share of Construction Equipments

Costs in Buildings

Metro Cities Office Demand

0

10

20

30

gh

2014e

h

2013

g

Mn sq ft

Note: Metro Cities include Delhi-NCR, Mumbai, Bengaluru, Chennai, Pune, Hyderabad and Kolkata

Real Estate Market – Segmentation (1/x)

17

SAMPLE


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

• Currently, x% FDI is permitted in the construction industry under the Foreign Investment

Promotion Board (FIPB)

According to th FDI policy, a three-year lock-in period for investments in housing and townships is required

FDI Inflow in Construction Industry Impact

• FDI inflow for the construction industry is expected to increase owing to the following steps initiated by the GoI The housing ministry has proposed that the minimum lock-in period needs to be reduced in order to attract more FDI investment It has also proposed that the build up area should be reduced to x sq m from y sq m and the minimum capitalization should be reduced to INR aa mn from bb mn

for wholly owned subsidiaries

Cumulative FDI inflows in the earth moving machinery

segment was INR xx mn during Apr 2000 to Sep 2013

Sector Wise FDI Equity Flow (From 2000 – 2012 ) - %age with total FDI Inflows

0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20

Service Sector a10

Construction Development a9

Telecommunications a8

Computer Software & Hardware a7

Drugs & Pharmaceuticals a6

Chemicals a5

Power a4

Automobile Industry a3

Metallurgical Industries a2

Hotel & Tourism a1 %

18

SAMPLE


Impact

Lower profitability due to rising costs of steel imposes a major hindrance on market growth

Rising Price of Steel

• Construction equipment market is facing the impact of inflation in terms of hike in price of raw materials

•Rise in steel prices adds to the cost disadvantage as steel is a primary raw material for the construction equipment industry

• Steel prices have been increased by x-y % in Q3 20--

Price of raw materials is vital for determining the profitability of the Indian construction equipment market

80,000

60,000

40,000

20,000

0

INR

xy

2012

yy

2010

xx

60,000

40,000

20,000

0

INR mn

2012

nn

2010

mm

Chennai - Price Hike Kolkata - Price Hike

Rise in steel price across some of the metros

Rise in Steel Price

0

10,000

20,000

30,000

40,000aa

Dec 2012

d

Mar 2012

c

Dec 2011

b

Mar 2011

a

INR/ TN

19

SAMPLE


High price of fuels serves as a major bottleneck in the growth of the Indian construction equipment market

Rise in Crude Oil Prices Impact • Construction equipments are heavily dependent on the crude oil as it serves as a primary source

for fuel

• Presently, x% of crude oil demand is met through imports and it is expected that imports will rise further

•High costs of crude oil pushes up the price of fuel which cuts into the profits of end users and leads to reduction in the demand for equipments

• Thus, volatility in crude oil prices have a marked impact on construction equipment industry as well

0

2,000

4,000

6,000

8,000

Jul 20-- Jan 20-- Jul 20-- Jan 20-- Jan 20-- Jul 20-- Jan 20-- Jul 20-- Jan 20-- Jul 20-- Jan 20--

INR/barrel

Rise in Crude Oil Prices



Global India



21

SAMPLE


Upcoming regulations to offer multiple benefits to the construction equipment market

Impact

X1

z1

y1 Y

Government has announced plans to ban imports of second hand equipment under subsidy Schemes such as Textile Up-gradation Fund and the Credit-Linked Capital Subsidy Scheme

Z

X

AA

Upcoming Regulations Expected Benefits

22

SAMPLE


Reduction in construction equipment imports will benefit the domestic players in the Indian market

Decline in CE import

Market has witnessed decline

in imports

Cranes Import

•Government of India (GOI) is planning to restrict import to safeguard the productivity and competitiveness of Indian manufacturers GOI has asked the commerce and industry ministry to either ban import of machinery more than

five years old or spell out the age limit for machinery in each sector The government is also considering an import duty on a% of the original value of machinery, which

will drive up costs for importers

• Import of cranes and concrete mixers has declined by a CAGR of x% and y% in value terms between FY 2011 - 2012 and 2013 (Apr – Dec)

•Domestic production of construction equipments is expected to witness robust growth over the next five years

Concrete Equipment Import

0

2,000

4,000

6,000

8,000

In mn

abc

2013*

c

2012-2013

b

2011-2012

a

Cranes Import

0

200

400

600 x

In mn

2011-2012 2013*

xyz

2012-2013

z y

Concrete Mixers Import

* Denotes, data taken between Apr - Dec

23

SAMPLE


West Bengal – Opportunity Areas (2/x)

West Bengal – Infrastructure Investment

• State government has formulated “Industrial and Investment policy 2013” to induce an inclusive economic growth in the state

•The focus of this policy is to improve infrastructure of the state by additional mn km of highway and bridges, ports, airports and water transport in Public Private Partnership (PPP)

• Infrastructure development in the power sector has witnessed a x% increase from FY 2012

•A major initiative adopted by the state include construction of affordable housing for the economically weaker section

•Around zz housing units are expected to be completed by the end of the financial year under Integrated Housing for Slum Dwellers Programme (IHSDP)

Proposed Budget Allocation (2014 – 2015)

Sector Wise GSDP Growth

Sectors Amt (In Bn)

Waterways a

Road b

Power and Irrigation c Housing d

Transport e

Note: * Proposed Plans for Next Financial Year (2014 – 2015)

0

2

4

6

8

10

a1

%

Z

b3 a3

Y

b2

a2

X

b1

BB AA

24

SAMPLE


Orissa – Opportunity Areas (2/x)

Orissa – Infrastructure Investment

•Orissa has emerged as a major investment destination in India and as of Sep 2013, it accounts for aa% share of all over India investment

•Orissa government expects bulk of investments in different sectors such as coal mining, steel and a few port projects

•Annual plan outlay (2014 – 2015) of the state has been tentatively pegged at INR aa1 bn, which include INR x bn for public sector undertakings

•The government of Orissa plans to invest INR x mn to develop a required power transmission Infrastructure for the proposed ITIR near Bhubaneswar

• State government has formulated an Affordable Housing Policy to provide affordable housing facilities to the poor Under this policy, BDA is planning to structure

and bid out a PPP project with an estimated cost of INR bb mn

PPP Project Status in Orissa as of Sep 2013

Note: ITIR: Information Technology Investment Region; BDA: Bhubaneswar Development Authority

Sector – Wise GSDP Growth

Sectors Particulars Under Implementation

In Pipeline

Urban Development

Number a b

Cost (mn) c d

Transport Number e f

Cost (mn) g h

Roads Number i j

Cost (mn) k l

0

5

10

15

%

C

b3 a3

B

b2 a2

A

b1 a1

X Y


Product Launches

2011

Crane Launches

•X1 •X2 •X3 •X4

Backhoe Loaders

2013

2013

•Y1 •Y2 •Y3 •Y4

Recent Developments (1/3)



Global India



27

SAMPLE Key Ratios of Top 3 Companies – Operational Basis (FY 20--) (1/3)

Competitive Benchmarking (1/4)

-30

-20

-10

0

10

%

Player C

q3

Player B

q2 p2

Player A

q1 p1

Net Margin Operating Margin

• X

• X


28

SAMPLE

Public: Foreign Company – Company ABC (x/x)

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

Category Products/Services

Milk Products & Nutrition

Confectionery

Beverages

Name Designation

Head Office

Gurgaon


29

SAMPLE Financial Snapshot Key Ratios

Financial Summary • The company incurred a net profit of INR x mn in FY 2013, as compared to

net profit of INR y mn in FY 2012

• The company reported total income of INR a mn in FY 2013, registering an increase of b% over FY 2012

• The company earned an operating margin of m% in FY 2013, a decrease of n percentage points over FY 2012

• The company reported debt to equity ratio of c in FY 2013, a decrease of d% over FY 2012

Key Financial Performance Indicators

Indicators Value (25/03/2014)

Particulars y-o-y change

(2013-12) 2013 2012 2011 2010

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

0 0 2013 2012 2011 2010

INR mn INR mn



30

SAMPLE


Key Business Segments Key Geographic Segments

100%

50%

0%

2013

A%

Business Highlights

Food

Description News

Overview • xxx

Manufacturing Facilities • xxx

xxx

2013

x4 y

2012

x3

2011

x2

2010

x1

India Outside India


31

SAMPLE


Description News

Manufacturing Facilities • xxx

Investment • xxx


32

SAMPLE Public: Foreign Company – Company ABC (x/x)

• xxx • xxx

• xxx • xxx

T O

W S


33

SAMPLE

Private: Domestic Company – Company ABC (x/x)

Key People

Products and Services

Company Information Offices and Centres – India

Name Designation

Corporate Address

Tel No.

Fax No.

Website

Year of Incorporation Head Office

New Delhi

Category Products/Services

Toffee

Gum

Candy


34

SAMPLE

Business Highlights

Private: Domestic Company – Company ABC (x/x)

Description News

Overview • xxx

Manufacturing Facility • xxx

Distribution Network • xxx


35

SAMPLE Private: Domestic Company –Company ABC – SWOT Analysis (x/x)

• xxx • xxx

• xxx • xxx

T O

W S


36

SAMPLE


Strategic Recommendations (1/x)

Focus on Research and Development

•A

•B

Introduce India Specific Products

Construction equipment manufacturers need to adopt several initiatives to tap the latent potential of the Indian Construction Equipment Market

•X

•Y


Thank you for the attention

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Download - Market Research Report : Construction equipment market in india 2014

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