Market Research Report : Shipping and port market in india 2014 - Sample by Netscribes, Inc.

Shipping and Port Market â&#x20AC;&#x201C; India November 2014

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Executive Summary

 Indian shipping sector is expected to witness a major growth due to the rapid increase in economic activities and increased EXIM trade Market Overview

 Indian shipping sector includes various other sub sectors such as coastal shipping, ship building and ship repair which collectively provide ample opportunity in this sector  Indian overseas seaborne trade grew at a CAGR of x% between 19xx-xx and 20xx-xx

Drivers

Challenges

– Increased import of coal Drivers & Challenges

– India as a manufacturing hub

– Increased competition and decrease in order numbers

– Increased import of oil

– Decrease in exports

– Increased import of natural gas

– Poor connectivity

– Increased import of iron-ore

– Oversupply of tonnage

– Estimated shortage of food grain Government Bodies, Policies and Initiatives

 Maritime States Developments Council

 Establishment of Port Community System

 National Maritime Development Programme

 Investments from PE firms

 Traffic Authority at Major Ports

 100% allowance of FDI

 Approval of Model Concession Agreement

 Promoting tourism  Improving cargo throughput Major Players

Competition

Player 1

Player 2

Player 3

SHIPPING AND PORT MARKET IN INDIA 2014.PPT

Player 4

Player 5

•Macroeconomic Indicators •Introduction •Market Overview Shipping Port

•Investments Undertaken at the Major Ports •Recent and Emerging Opportunities •Government Initiative •Drivers and Challenges •Competitive Landscape

•Strategic Recommendations •Appendix SHIPPING AND PORT MARKET IN INDIA 2014.PPT

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Economic Indicators (1/3) GDP at Factor Cost: Quarterly INR tn 15

d1 c1 b1

c4 b4 a4

c3 b3 a3

c2 b2 a2

Q2 2011-12

2012-13

2013-14

Q3 2014-15

Inflation Rate: Monthly % 2 1

0 -1

-2

Jul 2013 - Aug 2013

Aug 2013 - Sep 2013

Sep 2013 - Oct 2013

Oct 2013 - Nov 2013

SHIPPING AND PORT MARKET IN INDIA 2014.PPT

Nov 2013 - Dec 2013 4

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Shipping and Port Industry – Introduction Shipping and Port Industry

Shipping and port industry is one of the major industries in India and has always been a major area of focus for the Indian government It plays a crucial role in the development of the Indian economy Segments Shipping

Ports

Ship building and repair

Key Characteristics of the shipping and port industry

Ports

• Text

Shipping

• Text

SHIPPING AND PORT MARKET IN INDIA 2014.PPT

Ship building and repair

• Text

Indian fleet comprises of coastal and overseas vessels which cater to the need of Indiaâ&#x20AC;&#x2122;s overall sea EXIM trade

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Shipping Vessels

20--

20-A% E%

D% C% E%

G% Segment 1

Segment 4

Segment 2

Segment 5

Segment 3

Segment 6

Segment 7

Segment 1

Segment 3

Segment 5

Segment 2

Segment 4

Segment 6

Number of Vessels - x

Segment 7

Number of Vessels - y

SHIPPING AND PORT MARKET IN INDIA 2014.PPT

Shipping industry is an essential sector which boosts India’s economic growth by a large extent

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Shipping – Overview

Growth of Indian Tonnage

• Shipping is a global industry and is considered as the

Coastal

Overseas

‘000 GRT

backbone of international trade  Its global nature makes it dependent on the development of the worlds economy – Characterized to be cyclic in nature and the freight rates tend to be volatile

• Indian shipping industry plays an important role in the development of the Indian economy  Indian seaborne trade accounts x% of trade in terms of volume and y% by value

0 20--

20--

Indian Overseas Seaborne Trade

 Government of India is set to invest INR x tr by 20-- for the

development of shipping and port infrastructure

• In Dec, 2013 out of the x vessels registered y vessels were registered in costal trade and z is overseas a1

trade 0

1999-00

2012-13

Note: The ship building number and capacity is for the number of ships delivered by public and private sectors an their capacity is in respect with DWT SHIPPING AND PORT MARKET IN INDIA 2014.PPT

Coastal shipping in India is at its nascent stage and is expected to show robust growth in future

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Coastal Shipping – Overview

Number of Coastal Vessels

• Coastal shipping is expected to offer a huge growth opportunity for transportation of cargo within India

X% b1

20--

 India has about 7,517 km of coastal areas which is a boon for coastal shipping – Coastal shipping accounts for an estimated 7% of total domestic cargo movement

• Lack of proper connectivity, inadequate infrastructure, high capital cost and unfavorable taxation facility are some of the major hindrances • The Government having recognized that coastal shipping is a very energy efficient and comparatively cheaper mode of transport, which could greatly relieve the pressure on rail and road transport and the new government is taking initiatives to boost costal shipping  The Shipping ministry has issued guidelines on priority berthing of coastal vessels at ports owned by the Indian government  This will be in addition to the dedicated berths for handling of coastal thermal coal already existing at these ports  The ports will also have to give priority berthing to coastal container vessels at private terminals and at container berths run by the ports themselves

Capacity of Coastal Vessels Segment 1

Segment 2

X% a1 a2

b1 b2

c1 c2

d1 d2

20--

0.0

Note: GRT stands for Gross Register Tonnage and DWT stands for Dead Weight Tonnage SHIPPING AND PORT MARKET IN INDIA 2014.PPT

Increasing trade and fierce competition in the industry is expected to add to the growing market

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Shipbuilding – Overview

Market Size of Shipbuilding

• Indian shipbuilding being a part of global shipping industry is expected to get a major boost owing to the rise in global trade  Anticipated increase in the EXIM trade of India and thereby increased number of ships required to support the growing trade will lead to dynamic growth

• To capitalize on the forthcoming opportunities in the industry, players are taking various initiatives  They have expressed their interest in categorizing shipbuilding as a part of infrastructure, extension of the subsidy scheme till 2017 is also one of the proposals put forward by the players

20--

20--e

Shipbuilding Number and Capacity

• Currently, India has 27 shipyards with 6 under Central Public Sector, 2 under State Governments and 19 private shipyards

X% a1

 Gujarat, with its 1,600 km long coastline provides ample opportunities for shipbuilding – Gujarat alone accounts x% of India’s shipbuilding capacity, which is y% of global shipbuilding capacity

INR bn

a2 b2

0.0 2011-12

2012-13

2011-12

2012-13

Note: The ship building number and capacity is for the number of ships delivered by public and private sectors an their capacity is in respect with DWT SHIPPING AND PORT MARKET IN INDIA 2014.PPT

Increasing sea-trade and global fleet size is expected to push the industry forward

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Ship Repair – Overview

Market Share and Size

• Indian ship repair industry is expected to witness a major boom in its growth in the years to come

Region 1

 Overall increase in global trade and fleet size will increase

Region 2

the frequency of periodic maintenance and repairs thereby boosting this sector significantly – Indian sea-borne trade is also expected to increase significantly by 2020, thereby leading to the development of the ship repair

industry in India

 In order to sustain growth and create a strong revenue

generation model due to increased trading activities, the

Number of Ships Repaired (in numbers)

government has also played its part – All major ports in the country are directed to expand their

Segment 1

business from port service to ship repairing so as to cater to the increasing traffic

Segment 2

• Currently the average revenue of the sector is INR x a1

bn pa

c1 c2 d1

20--

SHIPPING AND PORT MARKET IN INDIA 2014.PPT

20--

Major Ports in India (1/13)

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Port 1 – Overview (1/2) • Port 1 is considered to be the oldest port in the eastern region of India  Text

Financial Highlights

Performance Indicators Commodity

Total Operating Revenue INR bn a1

20xx-20xx

Liquid Bulk

Net Surplus/Deficit b1

Dry Bulk c1

Break Bulk Container Overall

0 2010-11

2011-12

2012-13

Note: The performance indicators are based on average turn around time in days SHIPPING AND PORT MARKET IN INDIA 2014.PPT

Major Ports in India (1/13)

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Port 1– Overview (1/2)

Commodity Wise Traffic Handled (in ‘000)

• Text

Segment 1

Segment 4

Segment 2

Segment 5

Segment 3

Segment 6

Apr-Nov 2012

Apr-Nov 2013

Commodity Wise Capacity Estimation (mt) Segment 1

Segment 4

Segment 7

Segment 1

Segment 4

Segment 7

Segment 2

Segment 5

Segment 8

Segment 2

Segment 5

Segment 8

Segment 3

Segment 6

Segment 3

Segment 6

150

100 b1

100

Commodity Wise Traffic Estimation (mt)

80 a1

20 0

0 2015-16e

2019-20e

2015-16e

SHIPPING AND PORT MARKET IN INDIA 2014.PPT

2019-20e 12

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Investments Undertaken at the Major Ports (1/6)

Estimated Cost (INR mn)

Capacity (MTPA)

Container Terminal, NSICT

BPCL Jetty

Third Container Terminal

Port Name & Description Port 1

Port 2 Construction of two new off Shore container berths and Development of container terminal on BOT basis in Mumbai Harbor

Port 3 Bulk Cargo Berths No. 5A & 6A

SHIPPING AND PORT MARKET IN INDIA 2014.PPT

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Recent & Emerging Opportunities (1/6)

Estimated Cost (INR mn)

Capacity (MTPA)

Development of 13th to 16th multipurpose cargo berth (other than liquid & container cargo berth)

Creation of berthing and allied facilities of Tekkra near Tuna (outside kandla Creek) – Phase – 1

Setting up of Single Point Mooring (SPM) and allied facilities off Veera in Gulf of Kutch

Port Name & Description Port 1

Port 2 Setting up of Mechanized Iron Ore handling facilities at Berth – 14 Development of Container Terminal

SHIPPING AND PORT MARKET IN INDIA 2014.PPT

Major Government Bodies

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Tariff Authority at Major ports (TAMP) • Constituted in 1997, the TAMP is an independent authority which regulates matters related to port tariffs  Regulates all sorts of tariffs related to vessels and cargoes and decides the rates for various properties in the major port trusts of India and the private operators  TAMP also notifies the conditions governing the application of tariffs  The notifications are published in the Gazette of India

• The union government has the power to modify these orders or issue ‘policy directions’

Government Bodies

Maritime States Development Council (MSDC) • Maritime States Development Council helps in maintaining an integrated port development policy across the Indian ports

National Maritime Development Program (NMDP) • Announced in 2005, the NMDP envisages an investment of INR 1003.30 bn on 387 projects in ports and shipping sector over a period of 20 years • Fund allocated for the port and shipping sector separately are:  Port sector – INR 558.04 bn through PPP basis  Shipping sector – INR 445.35 bn through budgetary and internal and external budgetary resources

SHIPPING AND PORT MARKET IN INDIA 2014.PPT

Drivers & Challenges

Drivers

Challenges

Increased import of coal

Increased competition and decrease in order numbers

India as a manufacturing hub

Decrease in exports

Increased import of oil

Poor connectivity

Increased import of natural gas

Oversupply of tonnage

Increased import of Iron-ore Estimated shortage of food grain

SHIPPING AND PORT MARKET IN INDIA 2014.PPT

Increased demand for thermal coal and shortage of domestic production will result in higher imports of coal

SAMPLE

Increased import of coal

Impact

• Dominance of coal in the energy sector in India is expected to continue in the foreseeable future • Demand for coal imports will grow in future as Indian installations of coal-fired power stations expand • India’s demand for coal is expected to increase by x% annually over the period 20xx-xx  Coal production in India in 20xx-xx was z mt  Total imports for the same period of coal and products was y mt  Demand-supply gap in 20xx-xx was met through coal imports which depicted a growth of x% YOY

• Indian shipping is expected to see a good future due to the increase in the demand for coal  India is expected to replace China as the leading source of coal demand growth area

Coal Demand Projection Segment 1

Segment 3

Segment 2

Segment 4

Coking Coal Stocks at Indian Ports Segment 5 Ports

2013(mt)

2012(mt)

Y-o-Y Change

Paradip

Gangavaram Haldia

Vishkapatnam New Mangalore Krishnapatnam

0.0 2016-17e

2021-22e

2024-25e SHIPPING AND PORT MARKET IN INDIA 2014.PPT

Porter’s Five Forces Analysis

SAMPLE Impact High

Threat of New Entrants • Text

Impact Low

Bargaining Power of Suppliers • Text

Impact High

Impact Medium

Competitive Rivalry

• Text

Bargaining Power of Buyers

Impact Low-Medium Threat of Substitutes • Text

SHIPPING AND PORT MARKET IN INDIA 2014.PPT

Competitive Benchmarking (1/5)

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Public Trading Comparable (FY 2014) Player 1

Player 2

Market Capitalization (INR mn)

Share Price (INR)

EV/EBITDA (x)

EV/Revenue (x)

PE Ratio

Note: 2 domestic cargo transportation companies based on the Market Capitalization; Market Capitalization , PE ratio and Share Price is as on 14/10/2014 SHIPPING AND PORT MARKET IN INDIA 2014.PPT

Competitive Benchmarking (3/5)

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

Operating Margin

C B A

Net Margin

x1 y2 y1

0 Company A

Company B

Company C

• Text

SHIPPING AND PORT MARKET IN INDIA 2014.PPT

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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

Mumbai

Head Office

Stock Exchange

Products and Services Key People Category

Products/Services Name

Designation

Products/Services

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

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

Key Ratios

Total Income

Particulars

Net Profit/Loss

INR mn

INR mn x2

x4 0

y4 y1

-1,000

-2,000 20--

20--

Financial Summary • Company earned a net profit of INR x mn in FY 20xx, as compared to a net profit of INR y mn in FY 20xx • The company reported total Income of INR x mn in FY 20xx, registering an increase of z% over FY 20xx • The company earned an operating margin of x% in FY 20xx a decrease of y percentage points over FY 20xx

• The company reported debt to equity ratio of x in FY 20xx, a decrease of y% over FY 20xx

Key Financial Performance Indicators Indicators Market Capitalization (INR mn) Total Enterprise Value (INR mn) EPS (INR) PE Ratio (Absolute)

Value (14/10/2014)

y-o-y change (20xx-xx)

20xx

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

SHIPPING AND PORT MARKET IN INDIA 2014.PPT

Decline

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

Key Geographic Segments

Segment 1

Segment 3

Segment 2

Segment 4

x A1% B1% 0%

C1%

Region 1

y A2% D1%

B2% C2%

D2%

z A3% B3% C3%

100%

D3%

20--

50% 0%

20--

Key Information Description

Details

Overview

• Text

SHIPPING AND PORT MARKET IN INDIA 2014.PPT

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Public: Domestic Company – Player 1 (4/5) Description

Latest Developments

Details

• Text

SHIPPING AND PORT MARKET IN INDIA 2014.PPT

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

• Text

•S

•W

•Strength

•Weakness

•O

•T

•Opportunity

•Threat

• Text

•SOFTWARE MARKET IN CHINA 2014.PPT SHIPPING AND PORT MARKET IN INDIA 2014.PPT

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

Offices and Centres – India

Corporate Address

Tel No. Fax No. Website Year of Incorporation Ticker Symbol

Mumbai

Head Office

Stock Exchange

Products and Services Key People Category

Products/Services Name

Designation

Syed Abdi Arun V. Phatak Products

Rajesh Tulsiani Praveen Kumar Bhandari Note: The list of products and services is not exhaustive SHIPPING AND PORT MARKET IN INDIA 2014.PPT

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

Key Ratios

Total Income

Profit INR mn

Profit / Loss a4

a1 a1

20--

b4 b3

2 1 0

20--

Particulars

y-o-y change (20xx-xx)

20xx

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

Financial Summary • Company earned a net profit of INR x mn in FY 20xx, as compared to a net profit of INR y mn in FY 20xx

• The company reported total Income of INR x mn in FY 20xx, registering an increase of z% over FY 20xx • The company earned an operating margin of x% in FY 20xx a decrease of y percentage points over FY 20xx • The company reported debt to equity ratio of x in FY 20xx, a decrease of y% over FY 20xx

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 Improved

SHIPPING AND PORT MARKET IN INDIA 2014.PPT

Decline Decline

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Private: Domestic Company â&#x20AC;&#x201C; Company 2 (3/5) Shareholders of the Company as on 26/09/2013 Name

No. of Shares held

ABC

k Total

xyz

Ownership Structure

Segment 1

Note: Shareholding pattern as on AGM dated 26th Sep 2013

SHIPPING AND PORT MARKET IN INDIA 2014.PPT

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Private: Domestic Company – Player 2 (4/5) Description

Details

Infrastructure

• Text

SHIPPING AND PORT MARKET IN INDIA 2014.PPT

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

• Text

•S

•W

•Strength

•Weakness

•O

•T

•Opportunity

•Threat

• Text

•SOFTWARE MARKET IN CHINA 2014.PPT SHIPPING AND PORT MARKET IN INDIA 2014.PPT

Strategic Recommendations Strategy

SAMPLE Adoption Area

Infrastructure development

• Text

R&D

• Text

Regional Growth Exploring niche markets

• Text

• Business strategies including increasing the fleet strength, fleet modernization providing better and wide range of facilities should be adopted SHIPPING AND PORT MARKET IN INDIA 2014.PPT

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SHIPPING AND PORT MARKET IN INDIA 2014.PPT