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2 FOUNDRY MARKET IN INDIA 2014.PPT
Executive Summary
Market
Drivers & Challenges
Future Outlook
Competition
Foundry market in India registered production of x mn metric tons of castings in 2012-13
In 2012-13, India was the world’s third largest producer of castings and also one of the top 10 in terms of average production per plant
India currently has over y foundries in the small, medium and large scale sectors with around z units having international quality accreditation
Foundry industry is a major feeder to various sectors, automobile sector accounting for the largest share
Vision Plan 2020 for Foundry Industry – Initiated by The Institute of Indian Foundrymen (IIF) to recommend initiatives for strong growth and help India emerge as a leading supplier of quality castings to the global market by 2020
Vision Plan 2020 Interventions– In order to realize the Vision Plan 2020, various interventions are required which aims to benefit the entire value chain and ensure balanced growth of the foundry sector
Drivers – Growing Automotive Industry
– Growth in Other End-User Segments
– Growth in MSME Sector
– Supportive Government participation
– Low Cost of Labor
– Improving Technology and Modernization
Challenges – Market Constraints
– Rising Input Costs
– Low Capacity Utilization
Major Players
Player 1 Player 2 Player 3
Player 4 Player 5 Player 6
3
•Macroeconomic Indicators
•Introduction
•Market Overview
•Foundry Clusters
•Export-Import
•Drivers & Challenges
•Competition
•Future Outlook
•Strategic Recommendations
•Appendix FOUNDRY MARKET IN INDIA 2014.PPT
4
Economic Indicators (1/3)
INR tn
Q4 Q3 Q2 Q1
2013-14 2012-13 2011-12 2010-11
GDP at Factor Cost: Quarterly
Inflation Rate: Monthly
Sep 2013 - Oct 2013 Nov 2013 - Dec 2013 Jul 2013 - Aug 2013 Aug 2013 - Sep 2013 Oct 2013 - Nov 2013
%
FOUNDRY MARKET IN INDIA 2014.PPT
5
•Macroeconomic Indicators
•Introduction
•Market Overview
•Foundry Clusters
•Export-Import
•Drivers & Challenges
•Competition
•Future Outlook
•Strategic Recommendations
•Appendix FOUNDRY MARKET IN INDIA 2014.PPT
6
Types of Casting Processes
Casting Processes
Expendable Moulds Permanent Moulds Special Processes
Text Text
Text
Text Text Text
Text Text
Permanent Pattern Expendable Pattern
Text Text Text
Text Text
Text Text
FOUNDRY MARKET IN INDIA 2014.PPT
7
•Macroeconomic Indicators
•Introduction
•Market Overview
•Foundry Clusters
•Export-Import
•Drivers & Challenges
•Competition
•Future Outlook
•Strategic Recommendations
•Appendix FOUNDRY MARKET IN INDIA 2014.PPT
8
Global foundry market has witnessed a steady recovery from the loss of production owing to global economic crisis
Global Foundry Market – Overview
• In 2011, the global casting production had finally managed to exceed the pre-2008 level (X mn MT in 2007) signifying the recovery of the metal casting industry from the economic downturn Industry had witnessed a sharp decline in casting production in 2009 and took two years to reach the pre recession figures
• In 2012, casting production increased to more than Y mn MT, up by A% y-o-y which clearly implies the continued upward trend in worldwide production
• The world’s two largest casting producers, China and United States, increased their production by Z1 mn MT and Z2 mn MT respectively However, majority of the countries reported decline in annual production volume over 2011
Casting production dipped by C% y-o-y in Brazil, which is among the top producing countries
Finland, Italy, Norway, Pakistan, South Africa, Switzerland and Taiwan also experienced double digit contraction during 2012
2008 2007 2009
B2% B1%
2012 2010 2011
mn MT
Global Production of Castings
MT refers to metric tons
FOUNDRY MARKET IN INDIA 2014.PPT
9
Out of the top 10 countries, production figures for only China, United States and Korea are higher than that of 2011
Global Top 10 Casting Producing Countries (2012)
China
mn MT Ductile Iron Steel Non-Ferrous Malleable Iron Gray Iron
United States India Japan Germany Russia* Brazil Korea Italy France
• Text
Note: India casting production figure is for the financial year 2012-13
*2011 data
**Includes compacted graphite iron
***Includes malleable iron
Improved Decline
FOUNDRY MARKET IN INDIA 2014.PPT
10
Foundry market is growing consistently in India and it is the third largest producer of castings in the world
Domestic Foundry Market – Overview (1/2) • India ranks second in the world based on the number of registered foundry units (X) after China and third in terms of
total production (Y mn MT), preceded by China and United States
• INR M bn Indian foundry industry is labor intensive and employs around R1 mn persons directly and another R2 mn indirectly
• Production of castings in India took a dip in 2008-09 due to the global crisis, but has recovered with strong growth (B1% CAGR) during 2009-13
• India’s share in the overall global casting production was P% in 2012-13
• Foundry market in India is expected to reach ~INR Q bn by 2016-17 backed by healthy growth in the automotive, construction, mining and earthmoving equipment, railway, steel plant and farm equipment industries
B1%
mn MT
2012-13 2014-15e 2013-14e 2009-10 2007-08 2011-12 2010-11 2008-09
B2%
2015-16e 2017-18e 2016-17e 2018-19e
Production of Castings – India
FOUNDRY MARKET IN INDIA 2014.PPT
11
Foundry market in India supplies castings to various other sectors
Sector-wise Consumption of Castings (2011)
• Text
Diesel Engines
Machine Tools
Electrical Equipment
Earthmoving
Railways
Valves
Others Pumps and Compressors
Power
Sanitary
Pipes and Fittings
Industrial Machinery
Automobile
Agricultural Machinery
With growing demand from the automobile and engineering sectors coupled with India’s rapidly growing economy, the foundry market is expected to grow strongly in the near future
FOUNDRY MARKET IN INDIA 2014.PPT
12
•Macroeconomic Indicators
•Introduction
•Market Overview
•Foundry Clusters
•Export-Import
•Drivers & Challenges
•Competition
•Future Outlook
•Strategic Recommendations
•Appendix FOUNDRY MARKET IN INDIA 2014.PPT
13
Major Foundry Clusters in India (5/7)
• Text
Foundry Cluster: Rajkot
Sector-wise Consumption of Castings
Pumps/valves
Machine tools
Automotive/textile
Oil engines
Others
Others
Foundry Units – Type-wise Segmentation
Medium
Small
Micro
Production • ~a mn tonnes per annum
Turnover • INR c bn (2011-12)
Employment • d people (2011-12)
Export • INR e bn (2011-12) to US, UK, Nigeria, Middle
East, Germany
• Text
Challenges
FOUNDRY MARKET IN INDIA 2014.PPT
14
•Macroeconomic Indicators
•Introduction
•Market Overview
•Foundry Clusters
•Export-Import
•Drivers & Challenges
•Competition
•Future Outlook
•Strategic Recommendations
•Appendix FOUNDRY MARKET IN INDIA 2014.PPT
15
India has witnessed a steep rise in export of casting products during 2009-10 to 2012-13
Exports (Product-wise)
Country-Wise Segmentation for Tubes, pipes and hollow profiles, of cast iron (2012-13)
Country-Wise Segmentation for Other cast articles of iron or steel (2012-13)
SRI LANKA DSR
SPAIN
ALGERIA
OMAN
U ARAB EMTS
OTHERS
U ARAB EMTS
SOUTH AFRICA
U K
OTHERS
GERMANY
U S A
*For the period Apr-Jan
2012-13 2009-10
A%
INR bn
2011-12 2010-11 2013-14*
Tubes, pipes and hollow profiles, of cast iron
Other cast articles of iron or steel
FOUNDRY MARKET IN INDIA 2014.PPT
16
•Macroeconomic Indicators
•Introduction
•Market Overview
•Foundry Clusters
•Export-Import
•Drivers & Challenges
•Competition
•Future Outlook
•Strategic Recommendations
•Appendix FOUNDRY MARKET IN INDIA 2014.PPT
17
Drivers & Challenges – Summary
Drivers
Growing Automotive Industry
Growth in Other End-User Segments
Growth in MSME Sector
Supportive Government Participation
Low Cost of Labor
Improving Technology and Modernization
Challenges
Market Constraints
Rising Input Costs
Low Capacity Utilization
FOUNDRY MARKET IN INDIA 2014.PPT
18
Growth in Other End-User Segments (5/14)
• Text
Industrial Equipment
Industry – Share in GDP Segment-wise Construction Equipment Market Size & Growth
INR bn
A%
2018e 2017e 2016e 2015e 2014e 2013 2007-08
%
2013-14 2012-13 2011-12 2010-11 2009-10 2008-09
Mining and quarrying Electricity, gas and water supply
Construction Manufacturing
FOUNDRY MARKET IN INDIA 2014.PPT
19
Growth in MSME Sector
Foundry market in India will be aided by the strong growth of the MSME sector
• Text
Impact
Number of Enterprises Employment Gross Output
Strong growth of the MSME sector will facilitate the development of the foundry market in India
2007-08 2008-09 2009-10 2010-11 2011-12
A%
mn units mn
B%
2011-12 2010-11 2009-10 2008-09 2007-08 2010-11 2011-12 2007-08
INR tr
2008-09
C%
2009-10
Note: Projected data for the years 2007-08 to 2011-12
FOUNDRY MARKET IN INDIA 2014.PPT
20
•Macroeconomic Indicators
•Introduction
•Market Overview
•Foundry Clusters
•Export-Import
•Drivers & Challenges
•Competition
•Future Outlook
•Strategic Recommendations
•Appendix FOUNDRY MARKET IN INDIA 2014.PPT
21
Porter’s Five Forces Analysis
Competitive Rivalry
• Text
Bargaining Power of Suppliers
• Text
Bargaining Power of Buyers
• Text
Threat of Substitutes
• Text
Threat of New Entrants
• Text
Impact Text
Impact Text
Impact Text
Impact Text
Impact Text
FOUNDRY MARKET IN INDIA 2014.PPT
22
Competitive Benchmarking (1/5)
Public Trading Comparables (FY 2014)
Player 1 Player 2 Player 3 Player 4
Market Capitalization (INR mn)
Share Price (INR)
EV/EBITDA (INR mn)
EV/Revenue (INR mn)
PE Ratio
Note: Market Capitalization, Share Price and PE ratio is as of 3rdJun 2014
FOUNDRY MARKET IN INDIA 2014.PPT
23
Key Ratios of Major 3 Public Companies – Operational Basis (FY 2013) (1/3)
Competitive Benchmarking (2/5)
Player 3 Player 2 Player 1
% Net Margin Operating Margin
• Text
FOUNDRY MARKET IN INDIA 2014.PPT
24
Public: Domestic Company – Player 1 (1/5)
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
Name Designation
Note: The list of products and services is not exhaustive
Head Office
FOUNDRY MARKET IN INDIA 2014.PPT
25
Public: Domestic Company – Player 1 (2/5) Financial Snapshot Key Ratios
Financial Summary
• The company incurred a net loss of INR -- mn in FY 2014, as compared to net loss of INR -- mn in FY 2013
• The company reported total income of INR -- mn in FY 2014, registering an increase of -- per cent over FY 2013
• The company earned an operating margin of -- per cent in FY 2014, an increase of -- percentage points over FY 2013
• The company reported debt to equity ratio of -- in FY 2014, an increase of -- per cent over FY 2013
Key Financial Performance Indicators
Indicators Value (06/06/2014) Market Capitalization (INR mn)
Total Enterprise Value (INR mn)
EPS (INR) .
PE Ratio (Absolute) .
Particulars y-o-y change
(2014-13) 2014 2013 2012 2011
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
Total Income Net Profit/Loss
2012 2013 2011 2014
INR mn INR mn
FOUNDRY MARKET IN INDIA 2014.PPT
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Public: Domestic Company – Player 1 (3/5) Key Business Segments Key Geographic Segments
Key Recent Developments (1/2)
Description News
Overview • Text
Clientele • Text
2014
Pipes
2011 2010 2013 2012
Note: Business Segments and Geographic Segments are based on total revenues; Geographic segments were available for latest 2013
Text
Foreign India
FOUNDRY MARKET IN INDIA 2014.PPT
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Key Recent Developments (2/2)
Description News
Manufacturing Facilities • Text
Research and
Development • Text
Q4 2013-14 • Text
Public: Domestic Company – Player 1 (4/5)
FOUNDRY MARKET IN INDIA 2014.PPT
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• Text • Text
• Text • Text
T O
W S
Public: Domestic Company – Player 1 (5/5)
FOUNDRY MARKET IN INDIA 2014.PPT
29
Private: Domestic Company – Player 2 (1/5)
Key People
Products and Services
Company Information Offices and Centres – India
Category Products/Services
Name Designation
Note: The list of products and services is not exhaustive
Corporate Address
Tel No. +
Fax No. +
Website
Year of Incorporation Head Office
FOUNDRY MARKET IN INDIA 2014.PPT
30
Shareholders of the Company Ownership Structure
Name No. of Shares held
Total
Note: Shareholding pattern as on AGM dated 29th Sep 2013
Other top 50 shareholders
Corporate Bodies
Directors or relatives of directors
Private: Domestic Company – Player 2 (2/5)
FOUNDRY MARKET IN INDIA 2014.PPT
31
Private: Domestic Company – Player 2 (3/5)
Financial Snapshot Key Ratios
Financial Summary
• The company incurred a net profit of INR -- mn in FY 2013, as compared to net profit of INR -- mn in FY 2012
• The company reported total income of INR -- mn in FY 2013, registering a decrease of -- per cent over FY 2012
• The company earned an operating margin of -- per cent in FY 2013 a decrease of -- percentage points over FY 2012
• The company reported debt to equity ratio of -- in FY 2013, a decrease of -- per cent over FY 2012
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
Total Income Net Profit/Loss
2010
INR mn INR mn
2013 2012 2011
FOUNDRY MARKET IN INDIA 2014.PPT
32
Private: Domestic Company – Player 2 (4/5)
Key Recent Developments
Description News
Overview • Text
Manufacturing Plants • Text
Certifications • Text
Awards • Text
FOUNDRY MARKET IN INDIA 2014.PPT
33
• Text • Text
• Text • Text
T O
W S
Private: Domestic Company – Player 2 (5/5)
FOUNDRY MARKET IN INDIA 2014.PPT
34
•Macroeconomic Indicators
•Introduction
•Market Overview
•Foundry Clusters
•Export-Import
•Drivers & Challenges
•Competition
•Future Outlook
•Strategic Recommendations
•Appendix FOUNDRY MARKET IN INDIA 2014.PPT
35
In order to realise the Vision Plan 2020, various interventions are required...
Vision Plan 2020 Interventions
Technology Upgradation Fund
• Text
Capacity Consolidation
• Text
New Capacity Creation
• Text
Green Foundry Initiative
• Text
Better facilities • Text
• An Implementing Agency for the India Foundry Mission (IFM) will have full authority to represent, demonstrate the pilots and implement the various recommendations and professionally monitor the growth
• It will have a predetermined lifespan of 5 years and will create and strengthen the vehicles to take on the growth thereafter
India Foundry Mission Vision Plan 2020
FOUNDRY MARKET IN INDIA 2014.PPT
36
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FOUNDRY MARKET IN INDIA 2014.PPT