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ENGINEERING INDUSTRY IN INDIA

Presented by -Sweta Leena Panda (000308)

ENGINEERING INDUSTERY

CHALLENGES

MARKET SIZE

Capacity creation in sectors such as infrastructure, power, mining, oil & gas, refinery, steel, automotive, and consumer durables driving demand in the engineering sector .Rising demand for electrical and construction equipment Nuclear capacity expansion to provide significant business opportunities to the electrical machinery industry Rapid increase in infrastructure investment and industrial production to fuel further growth Comparative advantage vis--vis peers in terms of manufacturing costs, market knowledge, technology and creativity Highly organised sector and dominated by large players employing over four million skilled and semi-skilled labour De-licensed engineering sector 100% FDI permitted .Cumulative FDI totaled USD 19.9 billion over April 2000 2013 due to policy report.Advantage India Engineering exports from India: USD56.7 billion

Engineering exports target from India: USD125.0 billion FY 13FY 15

KEY PLAYERSCompany Revenues (FY13) Products Larsen & Toubro USD28.3 billion Engineering & Construction, Cement, Electrical & Electronics Bharat Heavy Electricals Ltd USD9.3 billionPower Generation, Transmission, TransportationSiemens India Ltd USD2.6 billion Power Generation and Distribution Equipment, Transportation Systems, Communication and Healthcare Products ABB Ltd USD1.4 billion** Transformers, Switch Gears, Control Gears Crompton Greaves Ltd USD2.1 billion Power Generation and Transmission Equipment Engineers India USD0.5 billion Highways & Bridges, Mass Rapid Transport Systems Construction, Specialist Materials Manufacturing

GROWTH

Growth drivers

Demand-side Drivers Policy Investment

De-licensing Reduction in tariff and customs Supportive government policies leading to higher investments

Capacity addition for power generation Increase in infrastructure spending Rise in exports

Increasing FDI inflows Higher M&A Easy credit facilities for manufacturing companies

GROWTHRobust growth in Indias Engineering exports over the years

FY09FY10FY11FY12FY13FY1431.345.338.358.167.156.7CAGR:12.6% Exports performance of principle commodities

FUTURE GROWTH

Increasing industrialisation and economic development to drive capital goods & engineering market

Capital goods & engineering turnover is expected to reach USD125.4 billion by 2017 from USD57.6 billion in 2012

Expansion in the electrical equipment industry

Engineering research & design segment revenues to increase fourfold by 2020

Electrical equipment market size expected to reach to USD105 billion by 2022 from USD24.2 billion in 2011

ER&D revenues projected to reach to USD45 billion in 2020 from USD11.2 billion in 2012 57.6125,420122017CG and Engineering TurnoverCAGR:16.8%

24.210520122022Electrical equipment market sizeCAGR:14.2%

11.24520122020ER&D revenueCAGR:19.0%

FUTURE GROWTH

Indian construction equipment market to grow sevenfold from 2012 to 2020

Construction equipment market projected to reach USD22.7 billion by 2020 from USD3 billion in 2012

Indian telecom equipment market to more than double by 2020

Increased production of Central Public Sector Enterprise (CPSE)

Telecom equipment market to reach USD37 billion by 2020 from USD16 billion in 2011

Production of CPSE under DHI to aggregate USD10.7 billion by 2014 from USD9.2 billion in 2011 322.7Construction equipment market revenue2020

CAGR:28.8%

16372020Telecom equipment market sizeCAGR:9.7%

9.210.720112014 Production of CPSE'sCAGR:5.4% 20112012

CONCLUSIONIndia's engineering sector is forecast to grow by almost 25 per cent a year for the next few years because of higher investment in infrastructure, favourable government policies and new oil and gas power and metallurgy projects.

World class infrastructure is of utmost importance for unleashing high and sustained growth. In fact, it is the long term driver for the construction sector as well. While short term factors may keep sentiments subdued, over the long term, demand will remain strong. The proposed increase in doubling investment in infrastructure from Rs 20 trillion to Rs 41 trillion in the twelfth five-year plan (2012-2017) should translate into a business for construction companies as and when the black clouds clear-up.