Market Research Report :Motors Market in India 2013

Motors Market IndiaMotors Market – India

July 2013

Executive Summary

MarketMotors find wide application in numerous key sectors of the economyRobust growth of the end user industries is expected to accelerate the demand for motors in the Indian market

Drivers & Challenges

Drivers Rise in Infrastructure Investments

Industrial Growth

Developments in the Power Sector

ChallengesVolatile Raw Materials Prices

Lack of Capacity Utilization

Consumer OutlookChallenges

Growth in Consumer Durables

Agricultural Pumps Demand

Robust Automotive Market

Healthy Economic Outlook

Trends Energy Efficient Motors

Customer Services

y

Competition

Major Players

Company A Company B

Company C Company D

2

p y p y

Company E Company F

MOTORS MARKET IN INDIA 2013.PPT

•Macro Economic Indicators•IntroductionM k t O i•Market Overview•Motors Demand Scenario•Motors Manufacturing HubMotors Manufacturing Hub•Supply Chain Analysis•Export ‐ Import•Drivers and Challenges•Government Initiatives & RegulationsT d•Trends•Competitive Landscape•Strategic Initiatives

3

Strategic Initiatives•Appendix


SAMPLE Economic Indicators (1/3)

Gross Fiscal Deficit: Monthly

600

500

INR bnx6

x5x3500

400

300

200

100

x4

x3

x2

x1

Exchange Rate: Monthly

100

0Month ‐‐Month ‐‐Month ‐‐Month ‐‐Month ‐‐Month ‐‐

g y

55.0x2

USD/INR

x1

54.0

54.5 x3 x6

x2x5

x4

4

53.5Month 20‐‐Month 20‐‐ Month 20‐‐ Month 20‐‐Month 20‐‐Month 20‐‐


Expansion of the Indian power sector will drive the growth of the Transmission & Distribution equipment industryT&D Industry ‐ Overview T&D Market Size

Transmission and distribution industry in India is heterogeneous and engages in the

INR bn

Z%x5

production of a wide range of equipment

Electrical Equipment Market Size

x5x4x3

x2x1

Sector INR bn ( )

T&D Market Share (20‐‐‐‐)

0

200‐‐‐‐200‐‐‐200‐‐‐‐200‐‐‐‐200‐‐‐

Sector INR bn (‐‐‐)

Boilers x1

Turbines x2

Generators x3

x7x6

x1 G

F

E

D

C

B

ACables x4

Transmission Lines and Conductors x5

Transformers x6

Switchgear & Controlgear x7

x5

4

x2

Switchgear & Controlgear x7

Rotating Machines x8

Energy Meters x9

Capacitors x10

5MOTORS MARKET IN INDIA 2013.PPT

x4

x3Other Electrical Equipment x11

Total X

AC motors find greater preference for a wide variety of applications in industrial to domestic sectors

AC Motors ‐ Overview

‘000 KW Segment BSegment A000 KWx9

a9

x8

a8

x7

a7

x6

a6

x5

a5

x4

a4

x3

a3

x2

a2

x1

a1

Segment BSegment A

b9b8b7b6b5b4b3b2b1

a1

0

20‐‐e20‐‐e20‐‐e20‐‐e20‐‐e20‐‐20‐‐20‐‐20‐‐

• This segment comprises of A motors and B motors

• It offers the advantages of simple design, reliable operations and easily found replacements

• Segment A motor is the least expensive motor for applications that need more than x HP of power owing to the simple d i f h

6

design of the motor


SAMPLE Motors Market – Segments (1/2)

Motors Market – Volume Share (1/2)

HT Motors Flame Proof Motors

x1x4

x3x2

x2

BA

x1

DCBA

•Total volume of HT Motors in the market is around X units

• Segment A motors accounted for the majority of the

• Total volume of Flame Proof Motors in the market is around Y units

• Flame Proof Motors of frame size A accounted for

7

• Segment A motors accounted for the majority of the market in 20‐‐

• Flame Proof Motors of frame size A accounted for highest share of the market in 20‐‐


New demand dominates the procurement demand for motors across the domestic market

Motors Market – Demand Share (20‐‐)

Regional Ranking ‐ Demand Wise

x1

West

x2

Replacement DemandNew Demand Replacement DemandNew Demand

x1

x2

x1

x2

South & East

North


Supply Chain Analysis (1/2)

Purchase Decision Influencers

A B C D

Motors Market – Share of Sub‐Contracting

•Point 1

x2

•Point 1•Point 2•Point 3

x1

9

Segment BSegment A


SAMPLE Exports and Imports (Value‐wise) (HS Code – 850110)

Exports

INR bnZ%

x5x4

0

x1

x5

x3

x2

Imports

20‐‐‐20‐‐‐20‐‐‐200‐‐‐200‐‐‐

INR bn

x5

Z%

x3x1

x4

x2

0

20‐‐20‐‐‐ 20‐‐‐20‐‐‐ 20‐‐‐


SAMPLE Exports and Imports (Country‐wise) (HS Code – ‐‐‐‐‐‐‐‐‐)

Exports (Value) Exports (Volume)

x6 Country 1x2

x3

x4 Country 1x1

x5

x4

Country 3

Country 2

Country 5

Country 4

x

x5 x1

Country 5

Country 4

Country 3

Country 2

x3 x2Country 6 x6 Country 6

Imports (Value) Imports (Volume)

x61

Country 2

Country 1 x6

x5 1Country 2

Country 1

x5

x4

x1

Country 6

Country 5

Country 4

Country 3 x4

x3

x1

Country 6

Country 5

Country 4

Country 3

11

x3 x2 x2


Drivers & Challenges – Summary

Drivers

Rise in Infrastructure Investments

Industrial Growth Challenges

Developments in the Power Sector

Growth in Consumer Durables

Volatile Raw Material Prices

Lack of Capacity Utilization

Agricultural Pumps Demand

Robust Automotive Market

Consumer Outlook

Healthy Economic Outlook


Rising motors demand owing to rapid industrial growth plays a key role in the development of motors market

Industrial Growth (1/5)

• Finding 1 Sub finding 1

Impact

• Finding 2

Finding 3

Industry – Gross Capital Formation Segment‐wise Industry – Share in GDP Segment‐wise

INR bn

x5x4

x3x1

DCBAx6x5

5

x4

a4

x3

a3

x2

a2

x1

a1

b5

a5

b4

a4

b3

a3

x2

b2

a2

b1

a1

c6

b6

a6

c5

b5

a5

c4

b4

a4

c3

b3

a3

c2

b2

a2

c1

b1

a1

13

0

200‐‐

d5c5

200‐‐

d4c4

200‐‐

d3c3

b3

200‐‐

d2c2

b2

200‐‐

d1c1

0

20‐‐e

d6

20‐‐

d5

20‐‐

d4

20‐‐

d3

20‐‐

d2

20‐‐

d1


Motors market is suffering from overcapacity owing to delay in projects coupled with low capacity utilization

Lack of Capacity Utilization Impact

• Point 1

Motors Production Capacity Utilization

• Point 2

• Point 3

x2

x1

MWA B

0

x2

T&D Equipment Capacity Utilization Segment‐wise (20‐‐‐)%

54x3x2x1

20‐‐

0

x9x8x7x6x5x4x3

14

0

IHGFEDCBA


…order to promote the adoption of energy efficient motors and reduce energy costs

Focus on Energy Efficiency (2/2)

Motors ‐ Life Cycle CostsEnergy Efficiency Motors Energy Saving Potential

SectorConservation Potential

Energy Handled by Motors100

%

c1 b3 c3b2 c2b1

A B C

Energy Efficiency Motors ‐ Energy Saving Potential

Sector A x1 y1

Sector B x2 y2y

Sector C x3 y3a3a2a1

Sector D x4 y4

0

y3y2

kW

y1Fi di 1

15

yyy

x1 Years x2 Years x3 YearsFinding 1


SAMPLE Standards governing the motors industry has been revised from time to time

Motors Industry ‐ ‐‐‐‐

X 1: Performance of Y1 Motors X2 ‐ Performance of Y2 Motors

•Point 1•Point 2•Point 3

•Point 1 •Point 2•Point 3

•Point 1•Point 2

16

Indian Standard X has been revised and is based on the Z Standard Y


Demonstration of X (1/2)

X Values for Y Specified in Z ‐ Comparison

Point 1

ZX1 X2 X3 X4 X5

Y1 Y2 Y3 Y4 Y4

‐ ‐ ‐ ‐ ‐ ‐

‐ ‐ ‐ ‐ ‐ ‐

‐ ‐ ‐ ‐ ‐ ‐

‐ ‐ ‐ ‐ ‐ ‐

‐ ‐ ‐ ‐ ‐ ‐


Government focus on increasing the penetration of electric supply in rural as well as urban localities via various…

Rural Electrification (1/2)

Point 1

Plan A ‐ Xth and Yth Z Plan

• Point 1

• Point 2

• Point 3

Point 1

Point 2

Point 3

18

Note: REC refers to Rural Electrification Corporation Limited

Point 4


Power Transmission Network Expansion – Z Plan

Category A B C D

X1

Segment 1 a1 a2 a3 a4

S 2 b1 b2 b3 b4Segment 2 b1 b2 b3 b4

Segment 3 c1 c2 c3 c4

Segment 4 d1 d2 d3 d4

Segment total E F G H

X2

Segment 1 a1 a2 a3 a4

S t 2 b1 b2 b3 b4Segment 2 b1 b2 b3 b4

X

0

INR bn

a120‐‐ b1 Xc1

A

B

C

19

a120 b1 Xc1 C


Trends – Summary

Energy Efficient Motors

Customer ServicesTrends


Motors industry in India is focusing on the adoption of Energy Efficient (EE) motors …

•Point 1

Energy Efficient Motors (1/3)

Point 1

Factors Driving EE Motors Adoption

X1 X2 X3 X4

P i t 1• Point 1

• Point 2


Competitive Benchmarking (1/5)

Public Trading Comparables (FY 20‐‐)

Company 1 Company 2 Company 3 Company 4

Market Capitalization (INR mn)

‐ ‐ ‐ ‐

Share Price (INR) ‐ ‐ ‐ ‐

EV/EBITDA (x) ‐ ‐ ‐ ‐

/EV/Revenue (x) ‐ ‐ ‐ ‐

PE Ratio ‐ ‐ ‐ ‐


Public: Domestic Company – Company A (1/4)

Company Information Offices and Centres – India

Corporate Address Address

Tel No. 91 ‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐Tel No. 91

Fax No. 91 ‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐

Website website

Year of Incorporation 19‐‐

Products and Services

Ticker Symbol ‐‐‐‐‐‐

Stock Exchange ‐‐‐

Key People

Products and Services

Category Products/Services

Segment Product 1, product 2, product N D i ti

Head Office

3,………………….

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

Name Designation

Person 1 Designation



23

, p , pPerson 4 Designation


i i l S h K i

Public: Domestic Company – Company A (2/4)

Financial Snapshot Key Ratios

Particulars y‐o‐y change

(20‐‐‐)20‐‐ 20‐‐ 20‐‐ 20‐‐

Profitability RatiosOperating Margin 0.36 4.05% 3.69% 3.48% 9.67%

Net Profit/LossTotal Income

60000

80000

3 000

4,000y3 y4

INR mn INR mny1

y2

Net Margin ‐0.61 1.85% 2.47% 1.00% 5.64%

Profit Before Tax Margin ‐0.80 2.78% 3.58% 1.58% 8.39%

Return on Equity ‐1.86 5.42% 7.28% 2.61% 14.63%

Return on Capital Employed 0.95 11.82% 10.87% 9.11% 25.10%

Return on Working Capital 5.21 31.23% 26.02% 13.98% 37.62%

Return on Assets 0.37 4.75% 4.38% 3.82% 10.95%

0

20000

40000

60000

0

1,000

2,000

3,000

x3 x4

20‐‐ 20‐‐

x1 x2

20‐‐ 20‐‐

Financial Summary

• The company earned a net profit of INR x mn in FY 20‐‐, as compared to net profit of INR y mn in FY 20‐‐

• The company reported total income of INR y mn in FY 20‐‐, registering an increase of % over FY 20

Return on Fixed Assets 0.78 25.83% 25.05% 27.79% 78.13%

Cost RatiosOperating costs (% of Sales) ‐0.34 95.94% 96.29% 96.51% 90.30%

Administration costs (% of Sales)

0.56 15.73% 15.17% 13.30% 11.86%

Interest costs (% of Sales) 0 11 0 49% 0 38% 0 27% 0 41%registering an increase of z% over FY 20‐‐

• The company earned an operating margin of y1 % in FY 20‐‐, an increase of x2 percentage points over FY 20‐‐

• The company reported debt to equity ratio of z1 in FY 20‐‐

Interest costs (% of Sales) 0.11 0.49% 0.38% 0.27% 0.41%

Liquidity RatiosCurrent Ratio ‐2.18% 1.25 1.28 1.47 1.52

Cash Ratio ‐63.75% 0.03 0.07 0.18 0.17

Leverage RatiosDebt to Equity Ratio ‐ 0.13 0.00 0.00 0.00

Key Financial Performance Indicators

Indicators Value (dd/mm/yyyy)Market Capitalization (INR mn) ‐Total Enterprise Value (INR mn) ‐EPS (INR) (21/3/2013)

Debt to Capital Ratio ‐ 0.11 0.00 0.00 0.00

Interest Coverage Ratio ‐16.15% 8.22 9.80 12.69 23.75

Efficiency RatiosFixed Asset Turnover ‐5.59% 6.37 6.74 7.97 8.05

Asset Turnover ‐0.78% 1.17 1.18 1.10 1.13

Current Asset Turnover 1 19% 1 56 1 54 1 29 1 32

24

EPS (INR) (21/3/2013) ‐PE Ratio (Absolute) (21/3/2013) ‐

Current Asset Turnover 1.19% 1.56 1.54 1.29 1.32

Working Capital Turnover 9.86% 7.70 7.01 4.01 3.88

Capital Employed Turnover 12.00% 2.93 2.61 2.94 2.28Improved Decline


Public: Domestic Company – Company A(3/4)

Key Business Segments Key Geographic Segments

100%

CEBDA

100%

BA

0%

50%

100%

d1c1

b1

a1

e4d4

c4b4

a4

e3d3

c3b3

a3

e2d2

c2b2

a2

e1 0%

50%

y4

x4

y3

x3

y2

x2

y1

x1

Business Highlights

%

20‐‐20‐‐20‐‐20‐‐

0%

20‐‐20‐‐20‐‐

y

20‐‐

y

Description News

Overview

• Company A operates in the field of X and caters to the utility and the industrial end user segments

•Manufacturing and production activities of the company are divided into x global divisions•Manufacturing and production activities of the company are divided into x global divisions viz. a1, a2, a3 , a4 and a5

Manufacturing Facilities •Operations network of the company includes x1 manufacturing facilities, more than x2 marketing offices x3 service centers x4 logistics warehouses x5 Power & Automation

25

and Networkmarketing offices, x3 service centers, x4 logistics warehouses, x5 Power & Automation Engineering Centers and a network of over x6 channel partners


Thank you for the attention

Phone: +91 22 4098 7600

The Motors Market – India 2013 report is a part of Netscribes, Inc.’s Manufacturing Industry Series.For any queries or customized research requirements, contact us at:

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