Market Research Report : Lighting industry in india 2015 - Sample

Lighting Industry – India

February 2015

2

Executive Summary

Market

Drivers & Challenges

Government

Competitive Landscape

Indian lighting industry was worth INR 135.04 bn in 2013, growing at a CAGR of 19.1%

A formidable feature of this sector is the vast distribution network of players

LED lighting, a sub-set of the lighting industry, has been growing at a CAGR of 46.0%

Published LED Standards

Regulatory Stakeholders – LED Initiatives

Government Support for LED Industry in India

Drivers Increase in Disposable Income

Growth in Rural Segment

Rise in Organized Retail

Boom in Real Estate Sector

Changing Lifestyle of Consumers

Increasing Availability of Credit

Improvement in Rural Electrification

Growing Population

Major Players

Bajaj Electricals Ltd. Crompton Greaves Ltd. GE India Industrial Pvt. Ltd.

Orient Paper & Industries Ltd. Osram India Pvt. Ltd. Philips India Ltd.

Trends LED Technology Development

Digital Signage

Solar LED Lights

LIGHTING INDUSTRY IN INDIA 2015.PPT

Challenges Tough Competition from Unorganized

Players

Depreciation of Rupee and Rise in Energy Costs

Lack of Consumer Awareness About Energy-Efficient Lighting

High Import Dependency

3 LIGHTING INDUSTRY IN INDIA 2015.PPT

•Macroeconomic Indicators

•Introduction

•Market Overview

•EXIM Data

•Drivers & Challenges

•Government Initiatives

•Trends

•Competitive Landscape

•Strategic Recommendations

•Appendix

4

The fragmented and complex lighting market can be categorized into four broad dimensions

End-market Structure

Technologies

Geographies

Applications


5

Lighting market in India is showing an upward trend with a rise in consumer base

• The Indian lighting industry reached INR ‘m1’ in 2013, growing at a CAGR of ‘r1’% over 2010-13

• Lighting industry in India is divided into different types of lighting systems

• Lighting energy consumption in commercial buildings is around ‘r2’-’r3’%

• Energy consumption from lighting in industrial plants is around ‘r4’-’r5’%

Market Overview Lighting Market Size and Growth

Lamps Market – Segmentation (2013) Lighting Market – Domestic Production

y5

y4

y3

y2

y1

INR bn

r6%

x6

u

x5

t

x4

s

x3

r

x2

q

x1

p


r7%

r9%

r8%

Segment 1

Segment 3

Segment 2

0%

20%

40%

60%

80%

100%

2013

d3%

d2%

d2%

2012

c3%

c2%

c2%

2011

a3%

a2%

b3%

b2%

b2%

2010

a1%

Category 2 Category 1 Category 3

Note: Lamps includes incandescent, fluorescent, halogen and other lamps

6

Rise in lighting equipment production in India…

• Export of lighting products from India witnessed a CAGR of ‘r1’% between FY 2012 and FY 2014

• Although cheaper products from ‘c1’ have a bigger market share in global lighting exports, declining cost competitiveness of ‘c1’ holds strong growth prospects for India in the near future

• Primary export destinations include ‘c2’, ‘c3’ and ‘c4’

Non-LED Lights – Exports Non-LED Lights – Total Exports (Value)


r7%

r6% r5%

r4%

r3%

r2%

y3

y2

y1

INR mn

2015 (Apr-Aug 2014)

s

2014

r

2013

q

2012

p

Non-LED Exports – Country-Wise Segmentation (2014)

Non-LED Exports – Country-Wise Segmentation (2015)

Note: Figures are for the respective financial years

r12% r11%

r10%

r9%

r8%

r13%

Others

Country 5

Country 4

Country 3

Country 2

Country 1

Others

Country 5

Country 4

Country 3

Country 2

Country 1

Note: Data pertain to HS Code 8539: Electric filament or discharge lamps (including sealed beam lamp units and ultra-violet or infra-red lamps), arc-lamps

7

…has resulted in eventual rise in exports


r3%

r2%

r7% r6%

r5% r4%

r9% r8%

r13%

r12% r11%

r10%

Country 2

Country 1

Others

Country 5

Country 4

Country 3 Country 3

Country 2

Country 1

Others

Country 5

Country 4

y3

y2

y1

INR mn

2015 (Apr-Aug 2014)

s

2014

r

2013

q

2012

p

Note: Data pertain to HS Code 85414020: Light emitting diodes (electro-luminescent)

• Export of lighting-emitting diodes (LEDs) from India has been growing rapidly, witnessing a CAGR of ‘r1’% between FY 2012 and FY 2014

• Although ‘c1’ has the largest market share in global LED exports, declining cost competitiveness of ‘c1’ holds strong growth prospects for India in the near future

• ‘c2’, ‘c3’ and ‘c4’ are traditionally the largest markets for Indian LEDs

LED Lights – Exports LED Lights – Total Exports (Value)

LED Exports – Country-Wise Segmentation (2014) LED Exports – Country-Wise Segmentation (2015)

Note: Figures are for the respective financial years

8

Drivers & Challenges – Summary

Drivers

Increase in Disposable Income

Growth in Rural Segment

Rise in Organized Retail

Boom in Real Estate Sector

Changing Lifestyle of Consumers

Increasing Availability of Credit

Improvement in Rural Electrification

Growing Population

Challenges

Tough Competition from Unorganized Players

Depreciation of Rupee and Rise in Energy Costs

Lack of Consumer Awareness About Energy-efficient Lighting

High Import Dependency


9

Publication of LED standards is expected to transform the lighting industry in India

Published LED Standards

Sl No IS No Title 1

2

3

4

5

6

7

8

9

• Recently announced standards on LED lighting are expected to bring about large scale lighting revolution in India Standards have been brought out by ‘n1’ and ‘n2’ to help phase out inefficient lighting

• Global standards have been considered while formulating the Indian standards which are expected to ensure that the Indian LED manufacturers meet the minimum manufacturing criterions

• Standards based on international trends are also expected to help the Indian LED products to compete with the international counterparts


10

Trends – Summary


Key Trends

LED Technology Development

Solar LED Lights Digital Signage


Porter’s Five Forces Analysis

Competitive Rivalry

Bargaining Power of Suppliers

Bargaining Power of Buyers

Threat of New Entrants

Impact i4

Impact i2

Impact i1

Impact i5

Threat of Substitutes

Impact i3

12

Competitive Benchmarking (1/5)

Public Trading Comparable (FY 2014)

Company 1 Company 2 Company 3 Company 4 Company 5

Market Capitalization (INR mn)

Share Price (INR)

EV/EBITDA (x)

EV/Revenue (x)

PE Ratio


Note: Top 5 Public companies based on the Market Capitalization; Market Capitalization, Share Price and PE ratio is as of 18/11/2014

13

• Company 3 recorded gross margin of a3%, higher than both Company 1 and Company 2 which recorded gross margin of a1% and a2% respectively

• Company 3 recorded operating margin of b3%, higher than both Company 1 and Company 2 which recorded operating margin of b1% and b2% respectively

• Company 2 recorded net margin of c2%, higher than that of Company 1 which recorded net margin of c1% but lower than that of Company 3 which recorded net margin of c3%

Key Ratios of Top 3 Companies – Operational Basis (FY 2014) (1/3)

Competitive Benchmarking (2/5)

-10

0

10

20

30

40

%

Company 3

c3 b3

a3

Company 2

c2 b2

a2

Company 1

c1

b1

a1


Net Margin Operating Margin Gross Margin


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

Chairman, MD and CEO

Joint MD

President

CFO and EVP

Head Office

H1

Public: Company 1 (1/4)


Financial Snapshot Key Ratios

Financial Summary

• The company earned a net loss of INR ‘d’ in FY 2014, as compared to net profit of INR ‘c’ in FY 2013

• It reported total income of INR ‘s’ in FY 2014, registering an increase of ‘r1’% over FY 2013

• It earned an operating margin of ‘r2’% in FY 2014, a decrease of ‘r3’ percentage points over FY 2013

• It reported debt to equity ratio of ‘n1’ in FY 2014, an increase of ‘r4’% over FY 2013

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

Key Financial Performance Indicators

Indicators Value (18/11/2014) Market Capitalization (INR mn)

Total Enterprise Value (INR mn)

EPS (INR)

PE Ratio (Absolute)

Profit / Loss Total Income

z3

z2

z1

y3

y2

y1 p

INR mn INR mn

2014

d

s

2013

c

r

2012

b

q

2011

a



Key Business Segments Key Geographic Segments

Business Highlights

Description News

Overview

• Company 1 is part of the ‘n1’ which consists of other companies such as ‘n2’, ‘n3’ and ‘n4’

• It was incorporated in ‘y1’ as ‘n5’ and was renamed to Company 1 in ‘y2’

• The company has a portfolio of over ‘a1’ different products under the segments ‘s1’, ‘s2’, ‘s3’, ‘s4’ and ‘s5’

• It also holds exclusive distribution license for ‘n6’ appliances in India

Business Operations

• The company has a strong distribution network of over ‘a2’ distributors and ‘a3’ dealers Its ‘s1’ has a retail network of over ‘a4’ outlets, while the brand ‘n6’ would have a retail network of ‘a5’ outlets by the end

of ‘y3’

• It also has a franchised customer care network of ‘a6’ centers

Note: Business Segments and Geographic Segments are based on total revenues

y6

y5

y4

y3

y2

y1

p2%

2011

s1% r1%

q1%

p1%

2014

s4% r4%

q4%

p4%

2013

s3% r3%

q3%

p3%

2012

s2% r2%

q2%

y6

y5

y4

y3

y2

y1

2014

u2%

t4%

2013

u1%

t3%

2012

t2%

2011

t1%

Segment 2 Segment 1

Segment 4

Segment 3

Segment 2

Segment 1


17

T O

W S

Public: Company 1 – SWOT Analysis (4/4)



Key People

Products and Services

Company Information Offices and Centres – India

Category Products

Name Designation

Director

Director

Director

Director

Corporate Address

Tel No.

Fax No.

Website

Year of Incorporation

Head Office

H1

Private: Company 2 (1/5)

19

Shareholders of the Company Ownership Structure

Name No. of Shares held

r4% r3%

r2%

r1%

Note: AGM as of 29th Sep 2012



Category 1

Category 3

Category 2

Category 4


Financial Snapshot Key Ratios

Financial Summary

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

z5 y6

z1

y2

z3

y5 z4

y3

y1

y4

z2

INR mn

d

2013

INR mn

s

2012

c

r

2011

b

q

2010

a

p

• The company earned a net profit of INR ‘d’ in FY 2013, as

compared to net profit of INR ‘c’ in FY 2012

• It reported total income of INR ‘s’ in FY 2013, registering an

increase of ‘r1’% over FY 2012

• It earned an operating margin of ‘r2’% in FY 2013, an increase

of ‘r3’ percentage points over FY 2012

• It reported debt to equity ratio of ‘n1’ in FY 2013, a decrease

of ‘r4’% over FY 2012



Business Highlights

Description News

Overview

• Company 2 is part of the Indian multinational ‘n1’

• The group has a workforce of over ‘a1’ employees and operates in over ‘a2’ countries in ‘r1’, ‘r2’, ‘r3’ and

‘r4’

• Company 2 is among the largest players in the Indian ‘n2’ industry

• It is among the largest manufacturers of ‘p1’ in the world, producing over ‘a3’ units annually

Business Operations

• The company operates an extensive distribution network of ‘a4’ authorized dealers and ‘a5’ retailers

across the country

• It also has ‘a6’ marketing offices and a government-approved research and development (R&D) center

that employs over ‘a7’ engineers

• The company operates ‘a8’ manufacturing facilities spread across India

The manufacturing facilities are ‘c1’ certified for ‘s1’, ‘c2’ certified for ‘s2’, ‘c3’ certified for ‘s3’ and ‘c4’ certified for ‘s4’

Moreover, all the products manufactured by the company are ‘c5’ certified by ‘n3’


22

T O

W S


Private: Company 2 – SWOT Analysis (5/5)

23

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