Market Research Report : Foundry market in india 2014 - Sample by Netscribes, Inc.

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Foundry Market â&#x20AC;&#x201C; India June 2014

Executive Summary

Market

 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

Drivers

Drivers & Challenges

Future Outlook

Challenges

– Growing Automotive Industry – Growth in Other End-User Segments – Growth in MSME Sector – Supportive Government participation – Low Cost of Labor – Improving Technology and Modernization

– Market Constraints – Rising Input Costs – Low Capacity Utilization

 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 Major Players

Competition

Player 1

Player 2

Player 3

Player 4

Player 5

Player 6

FOUNDRY MARKET IN INDIA 2014.PPT

•Macroeconomic Indicators •Introduction •Market Overview •Foundry Clusters •Export-Import •Drivers & Challenges •Competition •Future Outlook •Strategic Recommendations •Appendix FOUNDRY MARKET IN INDIA 2014.PPT

Economic Indicators (1/3) GDP at Factor Cost: Quarterly INR tn

Q2 2010-11

2011-12

Q3 2013-14

2012-13

Inflation Rate: Monthly %

Jul 2013 - Aug 2013

Aug 2013 - Sep 2013

Sep 2013 - Oct 2013

Oct 2013 - Nov 2013

FOUNDRY MARKET IN INDIA 2014.PPT

Nov 2013 - Dec 2013

Types of Casting Processes Casting Processes

Expendable Moulds

Permanent Moulds

Text

Special Processes

Text

Expendable Pattern

Text Text

Text

Permanent Pattern

Text

FOUNDRY MARKET IN INDIA 2014.PPT

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

Global Production of Castings mn MT B2%

B1%

2007

2008

2009

2010

2011

2012 MT refers to metric tons

FOUNDRY MARKET IN INDIA 2014.PPT

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) â&#x20AC;˘ Text

Gray Iron

mn MT

Ductile Iron

Steel

Malleable Iron

Non-Ferrous *2011 data **Includes compacted graphite iron ***Includes malleable iron

China

United States

India

Japan

Germany

Russia*

Brazil

Korea

Italy Improved

Note: India casting production figure is for the financial year 2012-13 FOUNDRY MARKET IN INDIA 2014.PPT

France Decline

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

Production of Castings – India mn MT B2% B1%

2007-08

2008-09

2009-10

2010-11

2011-12

2012-13 2013-14e 2014-15e 2015-16e 2016-17e 2017-18e 2018-19e

FOUNDRY MARKET IN INDIA 2014.PPT

Foundry market in India supplies castings to various other sectors Sector-wise Consumption of Castings (2011) â&#x20AC;˘ Text

Automobile

Power

Sanitary

Valves

Pipes and Fittings

Diesel Engines

Agricultural Machinery

Electrical Equipment

Industrial Machinery

Earthmoving

Railways

Machine Tools

Pumps and Compressors

Others

With growing demand from the automobile and engineering sectors coupled with Indiaâ&#x20AC;&#x2122;s rapidly growing economy, the foundry market is expected to grow strongly in the near future FOUNDRY MARKET IN INDIA 2014.PPT

Major Foundry Clusters in India (5/7) Foundry Cluster: Rajkot • Text

Production Turnover

• INR c bn (2011-12)

Employment

• d people (2011-12)

Export

Challenges

• ~a mn tonnes per annum

• Text

• INR e bn (2011-12) to US, UK, Nigeria, Middle East, Germany

Sector-wise Consumption of Castings

Foundry Units – Type-wise Segmentation

Oil engines

Micro

Automotive/textile

Small

Machine tools

Medium

Pumps/valves Others Others

FOUNDRY MARKET IN INDIA 2014.PPT

India has witnessed a steep rise in export of casting products during 2009-10 to 2012-13 Exports (Product-wise) Tubes, pipes and hollow profiles, of cast iron Other cast articles of iron or steel INR bn A%

2009-10

2010-11

2011-12

Country-Wise Segmentation for Tubes, pipes and hollow profiles, of cast iron (2012-13)

2012-13

2013-14*

Country-Wise Segmentation for Other cast articles of iron or steel (2012-13)

U ARAB EMTS

USA

OMAN

GERMANY

ALGERIA

SPAIN

SOUTH AFRICA

SRI LANKA DSR

U ARAB EMTS

OTHERS

*For the period Apr-Jan FOUNDRY MARKET IN INDIA 2014.PPT

Drivers & Challenges â&#x20AC;&#x201C; Summary

Drivers Growing Automotive Industry

Challenges

Growth in Other End-User Segments

Market Constraints

Growth in MSME Sector

Rising Input Costs

Supportive Government Participation

Low Capacity Utilization

Low Cost of Labor Improving Technology and Modernization

FOUNDRY MARKET IN INDIA 2014.PPT

Growth in Other End-User Segments (5/14) Industrial Equipment • Text

Industry – Share in GDP Segment-wise

Construction Equipment Market Size & Growth

Manufacturing

Construction

Electricity, gas and water supply

Mining and quarrying

INR bn

2007-08

2008-09

2009-10

2010-11

2011-12

2012-13

2013-14

2013

FOUNDRY MARKET IN INDIA 2014.PPT

2014e

2015e

2016e

2017e

2018e 18

Foundry market in India will be aided by the strong growth of the MSME sector Growth in MSME Sector

Impact

â&#x20AC;˘ Text

Strong growth of the MSME sector will facilitate the development of the foundry market in India Number of Enterprises mn

mn units

Gross Output

Employment INR tr

2007-08 2008-09 2009-10 2010-11 2011-12

Note: Projected data for the years 2007-08 to 2011-12 FOUNDRY MARKET IN INDIA 2014.PPT

Porter’s Five Forces Analysis

Threat of New Entrants

Impact Text

• Text

Impact Text

Competitive Rivalry

Bargaining Power of Suppliers • Text

Impact Text

Bargaining Power of Buyers • Text

• Text

Impact Text Threat of Substitutes • Text

FOUNDRY MARKET IN INDIA 2014.PPT

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

Competitive Benchmarking (2/5) Key Ratios of Major 3 Public Companies – Operational Basis (FY 2013) (1/3) Operating Margin

Player 1

Net Margin

Player 2

Player 3

• Text

FOUNDRY MARKET IN INDIA 2014.PPT

Public: Domestic Company – Player 1 (1/5) Company Information

Offices and Centres – India

Corporate Address Tel No.

Fax No.

Website Year of Incorporation Ticker Symbol

Stock Exchange

Head Office

Products and Services Category

Products/Services

Key People Name

Designation

Note: The list of products and services is not exhaustive FOUNDRY MARKET IN INDIA 2014.PPT

Public: Domestic Company – Player 1 (2/5) Financial Snapshot Total Income

Key Ratios Net Profit/Loss

INR mn

Particulars

y-o-y change (2014-13)

2014

2013

2012

2011

Profitability Ratios

2011

2012

2013

2014

Financial Summary

Cost Ratios

• 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 Market Capitalization (INR mn) Total Enterprise Value (INR mn) EPS (INR) PE Ratio (Absolute)

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

Value (06/06/2014)

. .

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

FOUNDRY MARKET IN INDIA 2014.PPT

Decline

Public: Domestic Company – Player 1 (3/5) Key Business Segments

Key Geographic Segments

Pipes

India

Foreign

2011

2012

Text

2014

2010

2013

Key Recent Developments (1/2) Description

News

Overview

• Text

Clientele

• Text

Note: Business Segments and Geographic Segments are based on total revenues; Geographic segments were available for latest 2013 FOUNDRY MARKET IN INDIA 2014.PPT

Public: Domestic Company – Player 1 (4/5) Key Recent Developments (2/2) Description

News

Manufacturing Facilities

• Text

Research and Development

• Text

Q4 2013-14

• Text

FOUNDRY MARKET IN INDIA 2014.PPT

Public: Domestic Company – Player 1 (5/5)

• Text

FOUNDRY MARKET IN INDIA 2014.PPT

Private: Domestic Company – Player 2 (1/5) Company Information

Offices and Centres – India

Corporate Address

Tel No.

Fax No.

Website Year of Incorporation

Head Office

Products and Services Category

Products/Services

Key People Name

Designation

Note: The list of products and services is not exhaustive FOUNDRY MARKET IN INDIA 2014.PPT

Private: Domestic Company â&#x20AC;&#x201C; Player 2 (2/5) Shareholders of the Company Name

Ownership Structure No. of Shares held

Directors or relatives of directors Corporate Bodies Other top 50 shareholders

Total

Note: Shareholding pattern as on AGM dated 29th Sep 2013 FOUNDRY MARKET IN INDIA 2014.PPT

Private: Domestic Company – Player 2 (3/5) Financial Snapshot Total Income

Key Ratios Particulars

Net Profit/Loss

INR mn

2010

2011

2012

2013

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

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

FOUNDRY MARKET IN INDIA 2014.PPT

Decline

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

Private: Domestic Company – Player 2 (5/5)

• Text

FOUNDRY MARKET IN INDIA 2014.PPT

In order to realise the Vision Plan 2020, various interventions are required... India Foundry Mission Vision Plan 2020 • 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

Vision Plan 2020 Interventions Technology Upgradation Fund

• Text

Capacity Consolidation

• Text

New Capacity Creation

• Text

Green Foundry Initiative

• Text

Better facilities

• Text

FOUNDRY MARKET IN INDIA 2014.PPT

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