Insert Cover Image using Slide Master View Do not distort
Courier Market – India October 2014
Executive Summary Market
Drivers & Challenges
Role of Government
The courier/ express courier market is highly fragmented with numerous small unorganized players The market was valued at INR X1 bn in 20-- and is expected to reach ~INR X5 bn in FY 20-exhibiting a CAGR of X% between 20-- to 20- Global Trade Boom Growth in e-Commerce Financial Institutions Dependence on Courier Growing Business of Private Telecom Sector Seasonal Business Upsurge Due to Occasions
Poor Infrastructure is a major decelerator Poor Warehousing Facility is a Major Deterrent Delay in Clearances High Operating Costs
Ensuring Competitiveness Infrastructure Development Foreign Direct Investment India Post Office Amendment Bill Laws Major Players
Competition
Company 1
Company 2
Company 3
Company 4
Company 5
Company 6
COURIER MARKET IN INDIA 2014.PPT
2
• Macroeconomic Indicator • Introduction • Market Overview • Business Models • Key Issues • Drivers & Challenges • Technology Adoption • Role of Government • Role of EICI • Competitive Landscape • Transactions • Business Processes • Strategic Recommendations • Appendix
COURIER MARKET IN INDIA 2014.PPT
3
Economic Indicators (1/3) GDP at Factor Cost: Quarterly INR tn 15
13
d1 c1 b1
12
a1
14
c4 b4 a4
c3 b3 a3
d2 c2 b2 a2
11
Q1
Q2 2010-11
2011-12
Q3 2013-14
2012-13
Q4
Inflation Rate: Monthly % 2 1
p
r
s
q
0 -1
t
-2
Jul 2013 - Aug 2013
Aug 2013 - Sep 2013
Sep 2013 - Oct 2013
Oct 2013 - Nov 2013
COURIER MARKET IN INDIA 2014.PPT
Nov 2013 - Dec 2013 4
Logistics primarily deals in transportation and storage operations and is significantly aided by value added service LOGISTICS SECTOR
TRANSPORTATION
STORAGE
Container Rail Transport
Warehousing
Road Transport
Logistics Park
Express Logistics
Inland Container Depot
Coastal Shipping
Container Freight Station
Air Cargo
Cold Chain
Project Logistics
Port
VALUE ADDED SERVICE
Freight Forwarding
3PL/ 4PL
Courier Service
Focus of the Report
The logistics sector comprises primarily of 3 major segments – Transportation, Storage and Value-added services. The growing Indian economy is playing an advantageous role on players operating in storage and value- added services segments
COURIER MARKET IN INDIA 2014.PPT
5
Growing business opportunities in India is driving the need for time bound service Market Overview
Market Size and Growth
• The courier/ express courier market is highly fragmented with numerous small unorganized players • The market was valued at INR X1 bn in 20-- and is expected to reach ~INR X2 bn in FY 20-• The market is projecting a CAGR of X% and is expected to maintain a steady growth rate till FY 20-• India having over a lakh of pin codes, only approximately 10,000 are connected by courier service • It thus makes the lesser known players very significant in the market as they take upon the responsibility of providing last mile service to large organized players
INR bn
400
X6
X%
300 200
X1
X3
X2
X5
X4
100 0 20--
20--
20--e
20--e
20--e
20--e
Revenue Split of Courier Sector – 20--
Express/ Courier Categories in India C%
Government Administered
India Post
Global Integrators
Player A, Player B, Player C etc.
Large Indian Companies
Regional Players
B%
A%
Player D, Player E, Player F etc.
Other Small Courier Companies COURIER MARKET IN INDIA 2014.PPT
A
B
C 6
Courier Service Segmentation (1/2)
Courier Service by Type
On- Board Courier
• Most expensive and in depth service giving courier delivery the approach of ‘Just In Time’ • Specific for items of extreme importance and international transport • Items maybe medical cargo like organs needed for transplantation, critical parts and tools or sensitive business or legal information
Personal Courier
• This courier service is common in big cities or over relatively short distances • Items transported may include super sensitive and delicate articles to office files and documents • This type of courier service is common in large companies that has complex mail systems and needs to ensure safe and timely package delivery
Same Day Courier Service
• The service is available for locations within a reasonable range that can be reached within the same day • The service normally comes at a premium price
Standard Courier Service
• Most commonly used courier service by individuals and business organizations • Though it provides a reasonably timely service it is not as fast as other courier services and is priced accordingly • It service provides security and timely service but fails to provide tracking and ‘signature on receipt’ facilities
Overnight Courier Service
• The overnight courier service is offered for selected destinations • The service is expensive than Standard Courier but cheaper than On- Board, Personal and Same day Courier Services
Back Loads and Part Loads Courier Service
• This type of service is usually utilized by businesses that depend on frequent delivery of items from a courier • Urgency is ruled out and the items are delivered as and when the courier company has to deliver some other package in the same area • This is a cost saving business strategy employed by companies
COURIER MARKET IN INDIA 2014.PPT
7
Ever rising number of franchisees of the big players in the market is indicative of popularity of franchisee model Courier market in India operates through franchisee model for raising accessibility of its customers Higher the number of franchisees in the market space higher will be its visibility that will ensure greater business for the companies
Total Investment
Area Required
Company Support
INR A mn to INR B mn Return on Investment
ROI %
Expected Breakeven
Y months to Z months
t sq. feet to q sq. feet
Adequate training in Supply Chain Management
Low cost franchisee opportunities by renowned companies is mutually beneficial for the company as well as the franchisee operator Franchisee options of various valuations enables small starters to initiate their business easily while the company benefits as its outlet number increases
COURIER MARKET IN INDIA 2014.PPT
8
Delivery Snags
Key Issues Internet Accessibility
E-Billing Popularity
COURIER MARKET IN INDIA 2014.PPT
9
Drivers & Challenges – Summary
Drivers
Challenges
Global Trade Boom
Poor Infrastructure is a major decelerator
Growth in e-Commerce
Poor Warehousing Facility is a Major Deterrent
Financial Institutions Dependence on Courier
Delay in Clearances
Growing Business of Private Telecom Sector Seasonal Business Upsurge Due to Occasions
COURIER MARKET IN INDIA 2014.PPT
10
SAMPLE
Express Industry Council of India (EICI)
• The EICI is an organization formed by players of the industry with the aim to protect and promote common interest of Express industry and its members • EICI has affiliation of express bodies such as Global Express Association and Conference of Asia Pacific Express Carriers
Plays a vital role in interacting with the Government, the Customs and other related government organizations
Role of EICI
`
The organization has been successful in clearing major bottlenecks and delays that occur in express industry
The organization plays a major role in bringing about speedy clearances and aid in importing greater volumes
COURIER MARKET IN INDIA 2014.PPT
11
Public: Domestic Company – Player A (1/3) Company Information Corporate Address
Player A 5th Road, 6th Street, City A – 700 xxx
Tel No.
91 22 6679 xxxx
Fax No.
91 22 6679 xxxx
Website
www.playera.com
Year of Incorporation
19--
Ticker Symbol
53xxxx (BSE)
Stock Exchange
Bombay Stock Exchange
Offices and Centres – India
City X
Head Office
Products and Services Key People
Category
Products/Services
Courier and Express Package Distributor
Door-to-door express deliveries for documents, packages, commercial shipments
Packaging
Air and ground express packaging services under Smart Box
Name
Designation
Person A
MD
Person B
CFO
Person C
CEO
COURIER MARKET IN INDIA 2014.PPT
12
Private: Foreign Company – Player A (2/3) Financial Snapshot
Key Ratios
Total Income
Net Profit/Loss
INR units
Particulars
INR units
250 200
-20 a
150
b
100
R2
50 0
c R3
-40
d R4
-60
R1
20--
-80
20--
20--
20--
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
• The company incurred a net loss of INR d units in FY 20--, as compared to net loss of INR c units in FY 20-• The company reported total income of INR R4 units in FY 20--, registering an increase of m% over FY 20--
Leverage Ratios
• The company reported debt to equity ratio of d in FY 20--, a decrease of h% over FY 20--
2013
2012
2011
-53.06
4.89%
57.96%
5.66%
5.11%
-33.91
2.65%
36.56%
3.01%
2.85%
-50.68
4.77%
55.45%
4.94%
4.27%
-5.51
16.55%
22.06%
21.36%
23.63%
-348.16
-160.22%
187.94% 71.33%
84.50%
-6.61
20.55%
27.15%
21.36%
20.68%
-3.73
16.06%
19.79%
14.22%
12.38%
21.65
143.41%
121.76% 60.16%
42.80%
53.06
95.11%
42.04%
94.34%
94.89%
0.00
0.00%
0.00%
0.00%
0.00%
-2.38
0.13%
2.51%
0.72%
0.84%
-11.48%
1.66
1.87
2.06
1.81
5.83%
0.46
0.43
0.42
0.36
-73.46%
0.03
0.11
0.50
0.91
-71.29%
0.03
0.10
0.33
0.48
68.45%
38.97
23.13
7.83
6.06
1523.99%
54.09
3.33
19.97
15.03
1019.01%
6.06
0.54
4.72
4.35
788.69%
3.08
0.35
3.66
3.25
943.41%
7.75
0.74
7.09
7.26
934.35%
6.24
0.60
7.09
8.30
Cost Ratios
Liquidity Ratios
• The company earned an operating margin of f% in FY 20--, an increase of g percentage points over FY 20--
2014
Profitability Ratios
Operating costs (% of Sales) Administration costs (% of Sales) Interest costs (% of Sales)
Financial Summary
y-o-y change (2014-13)
Current Ratio Cash Ratio 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
COURIER MARKET IN INDIA 2014.PPT
Decline
13
Private: Foreign Company – Player A (3/3) Key Business Segments
Key Geographic Segments
A
B
100%
100%
X
50% 0%
X
50% 0%
20--
20--
Business Highlights Description
News
Overview
Infrastructure
Recognitions
COURIER MARKET IN INDIA 2014.PPT
14
Appendix
SAMPLE
Ratio
Calculations
Ratio
Calculations
Operating Margin
(Operating Income/Revenues)*100
Current Ratio
Current Assets / Current Liabilities
Net Margin
(Net Profit / Revenues) *100
Cash Ratio
Profit Before Tax Margin
(Income Before Tax / Revenues *100
{(Cash & Bank Balance + Marketable Securities) / Current Liabilities)}
Debt to Equity
Total Liabilities / Shareholders Equity
Debt to Capital Ratio
{Total Debt / (Shareholders Equity + Total Debt)}
Interest Coverage Ratio
EBIT / Interest Expense
Fixed Asset Turnover
Sales / Fixed Assets
Asset Turnover
Sales / Total Assets
Return on Equity (ROE)
(Net Income / Shareholders Equity)*100
Return on Capital (ROCE)
EBIT / (Total Assets – Current Liabilities)*100
Return on Working Capital
(Net Income / Working Capital) *100
Return on Assets
(Net Income / Total Assets)*100
Return on Fixed Assets
(Net Income / Fixed Assets) *100
Operating Costs (% of Sales)
(Operating Expenses / Sales) *100
Current Asset Turnover
Sales / Current Assets
Administration Costs (% of Sales)
(Administrative Expenses / Sales) *100
Working Capital Turnover
Sales / Working Capital
Interest Costs (% of Sales)
(Interest Expenses / Sales) *100
Capital Employed Turnover
Sales / Shareholders Equity
COURIER MARKET IN INDIA 2014.PPT
15
Thank you for the attention The Courier Market – India report is part of Netscribes, Inc. Automotive & Logistics Industry Series. For any queries or customized research requirements, contact us at: Phone: E-Mail:
+91 22 4098 7600 info@netscribes.com
About Netscribes, Inc. Netscribes, Inc. is a knowledge-consulting and solutions firm with clientele across the globe. The company’s expertise spans areas of investment & business research, business & corporate intelligence, content-management services, and knowledge-software services. At its core lies a true value proposition that draws upon a vast knowledge base. Netscribes, Inc. is a one-stop shop designed to fulfil clients’ profitability and growth objectives. Disclaimer: This report is published for general information only. Although high standards have been used in the preparation, “Netscribes” is not responsible for any loss or damage arising from use of this document. This document is the sole property of Netscribes and prior permission is required for guidelines on reproduction. COURIER MARKET IN INDIA 2014.PPT
16