Market Research Report : Tire industry in india 2014 - Sample

Tire Industry – India November 2014

Executive Summary Market Overview

 Global tire market is expected to grow at a CAGR of p% through 20-- to 20-- to reach INR yy bn in 20- Huge demand from Asia Pacific region will boost the industry’s growth  Indian tire industry is expected to reach INR xx bn in 20--, growing at a CAGR of q%

Drivers & Challenges

Drivers:  Replacement Demand  Rising Automobile Sales  Scope in Radialization  Increasing Exports  Increasing Investment in Road Construction

Key Trends

 Retreading of Tires  Emergence of Tubeless Tire Market  Advent of Green Tires  Focus on Radial Tires

Challenges:  Price Volatility in Rubber Prices  Absence of Raw Materials  Inappropriate Duty Structure for Natural Rubber

Key Players

Competitive Landscape

Company A

Company B

Company C

Company D

Company E

Company F

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•Macroeconomic Indicators

•Introduction •Market Overview •Export-Import

•Drivers & Challenges •Government Initiatives •Trends

•Competitive Landscape •Opportunities •Strategic Recommendations

•Appendix TIRE INDUSTRY IN INDIA 2014.PPT

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Rising automobile demand from Asia Pacific region to boost global tire market Market Overview – Global (1/2) • Global tire market is expected to grow at a CAGR of p% through 20-- to 20-- to reach INR xx bn in 20-• Huge demand from the replacement tire segment and increasing commercial and passenger vehicles sales in developing countries is expected to drive growth in the world market • Asia Pacific region is expected to show the strongest growth fuelled by huge demand from India and China • Further, new construction and infrastructural projects and increase in middle class population as well as rise in disposable income of this section in developing countries will boost the global tire industry’s growth • However, unstable prices of raw materials and increasing dependency of tire manufacturers on OEMs for sales are some of the challenges faced by the global tire industry

Global Tire Industry – Size and Growth (Value) INR bn y4 y3

p% x1

x2

x3

20--e

20--e

x4

x5

20--e

20--e

x6

y2 y1 0 20--

20--e

Note: OEM refers to Original Equipment Manufacturer TIRE INDUSTRY IN INDIA 2014.PPT

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Growth in automobile sales and advent of new vehicle models has been the key driving force to the tire industry Market Overview – India (1/2) • Indian tire industry is expected to grow at a CAGR of p% through FY 20-- to FY 20-- to reach INR x6 bn in 20--.

• It manufactures a diversified range of tires catering to the various Indian transport vehicles  However, specialized tires such as aero tires are not manufactured in India

• Organized sector accounts for a major share in the overall tire sector while the unorganized sector is dominant in the bicycles segment • Performance of the tire industry is closely related to that of the automotive sector.

• There has been a significant increase in the tire supplies to OEMs across all segments

Indian Tire Industry – Size and Growth (Value) INR bn y4 y3

p% x1

x2

x3

x4

FY 20--

FY 20--e

FY 20--e

FY 20--e

x5

x6

FY 20--e

FY 20--e

y2 y1 0

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SAMPLE

Exports of New Rubber Pneumatic Tires (1/2)

Export of New Rubber Pneumatic Tires (Value-Wise) INR mn a4 P% a3

x3

x4

x2 x1

a2

a1 FY 20--

FY 20--

FY 20--

FY 20--

Export of New Rubber Pneumatic Tires (Volume-Wise) mn

Q%

b5 b4

y3 y1

y2

FY 20--

FY 20--

y4

b3 b2 b1

TIRE INDUSTRY IN INDIA 2014.PPT

FY 20--

FY 20-6

SAMPLE

Exports of New Rubber Pneumatic Tires (2/2) Export Based on Value – Country-Wise FY20--

FY20-a1 x1 x2

x7 x6

x5

x3 x4

a1

y1

b1 c1

y2

d1

y3

y7

e1

y4

f1 g1

y6

Exports Based on Value – Product-Wise FY20--

y5

b1 c1 d1 e1 f1 g1

Exports Based on Volume – Product-Wise FY20--

z1 z2

a2

d1 d2

c2

b2

a2

c2

b2

d3

z3

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Drivers & Challenges – Summary

Drivers

Challenges

Replacement Demand

Price Volatility in Rubber Prices

Rising Automobile Sales

Absence of Raw Materials

Scope in Radialization

Inappropriate Duty Structure for Natural Rubber

Increasing Exports Increasing Investment in Road Construction

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Order books of the players is growing owing to strong demand from replacement of tires Replacement Demand

Impact

• Replacement demand for tires accounts for more than xx% of the total demand for tires • Increasing replacement demand is generating strong order books for the players in the industry • Business catering to the replacement of tires is a high margin business generating strong revenues • Replacement market is dominated by widespread dealer distribution network including exclusive dealer of the companies as well as multi company dealers

Replacement Demand in T&B Segment x

y

Replacement Demand in PV Segment

z

a

b

c

q3%

p3% p2%

q2%

q1% p1%

Apr-Dec FY 20--

Apr-Dec FY 20--

Note: T&B refers to Trucks and Buses, PV refers to Passenger Vehicles TIRE INDUSTRY IN INDIA 2014.PPT

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Trends – Summary

Emergence of Tubeless Tire Market

Retreading of Tires

Key Trends Focus on Radial Tires

Advent of Green Tires

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Competitive Benchmarking (1/5) Public Trading Comparables (FY 2014) Company A

Company B

Company C

Market Capitalization (INR mn) Share Price (INR)

EV/EBITDA (x)

EV/Revenue (x)

PE Ratio

Note: Top 3 Public companies based on the Market Capitalization; Market Capitalization is as on 30/10/2014, Share Price is as on 29/10/2014 and PE ratio is as on 30/10/2014 TIRE INDUSTRY IN INDIA 2014.PPT

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Competitive Benchmarking (2/5)

SAMPLE

Key Ratios of Top 3 Companies – Operational Basis (FY 2014) (1/4) Gross Margin

%

Net Margin

x2

a4 a3

y2 x1

a2

Operating Margin

z2 y1

x3 y3

z1

z3

a1 Company A

Company B

Company C

• Company B recorded gross margin of x2%, higher than that of Company A and Company C which recorded gross margin of x1% and x3% respectively • Company B recorded highest operating margin of y2%, followed by Company C and Company A which recorded operating margin of y3% and y1% respectively • Company B recorded a net margin of z2%, higher than that of Company C and Company A which recorded net margin of z3% and z2%

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SAMPLE

Public: Domestic Company – Company A (1/4) Company Information

Offices and Centres – India

Corporate Address Tel No. Noida

Fax No. Website Year of Incorporation Ticker Symbol Stock Exchange

Headquarters

Products and Services Category

Products/Services

Key People Name

Designation

Person 1 Person 2 Person 3 Person 4 TIRE INDUSTRY IN INDIA 2014.PPT

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SAMPLE

Public: Domestic Company – Company A (2/4) Financial Snapshot Total Income

INR mn

a4

Key Ratios

y1

y2

Net Profit/Loss

INR mn

y4

y3

b4

a3 a2

b3 x1

x2

x4

x3

a1

b2 b1

20--

20--

20--

20--

Financial Summary • The company reported total income of INR x4 mn in FY 20--, registering an increase of p% over FY 20-• The company earned an operating margin of z1% in FY 20--, an increase of z2 percentage points over FY 20-• The company reported debt to equity ratio of d1 in FY 20--, an increase of d2% over FY 20--

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

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

• The company earned a net profit of INR y4 mn in FY 20--, as compared to net profit of INR y3 mn in FY 20--

Market Capitalization (INR mn)

Particulars

Value

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

TIRE INDUSTRY IN INDIA 2014.PPT

Decline

14

SAMPLE

Public: Domestic Company – Company A (3/4) Key Business Segments

Key Geographic Segments

q

a1

a3

a4

b3

s3 s2

a2

p1%

p2%

p3%

p4%

s1 20--

20--

x2

x3

x4

y1 z1

y2 z2 r1

y3 z3 r2

9%y4 z4 r3

2011

2012

2013

2014

b2 b1

20--

x1

20--

Business Highlights Description

News

Overview

• Company A is engaged in the manufacture and sales of tires for more than 40 years

Manufacturing Facilities

• Manufacturing presence in Asia, Europe and Africa • Recently in Sep 2014, confirmed Hungary as the location for the first greenfield manufacturing facility outside India

New Ventures and Product Launch

• In Feb 2014, announced entry in Qatar to tap the potential market for truck-bus radials and high performing passenger car tires • In May 2014, introduced two new tires Apollo Alnac 4G All Season and Apollo Alnac 4G Winter tires at the international tire exhibition in Germany • Opened its first branded retail outlet in Kuwait in Aug 2014

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SAMPLE

Public: Domestic Company – Company A (4/4)

S

W

O

T

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Opportunity Areas – Summary

Opportunity Areas

Gujarat

Tamil Nadu and Andhra Pradesh

Maharashtra

NCR and Surrounding

Tire manufacturing plants should be built near the major automobile production or assembly facilities to capitalize on the growing opportunities provided by the existing as well as the emerging auto hubs in India

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Strategic Recommendations

SAMPLE

X

Y

Z

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Thank you for the attention Tire Industry – India report is part of Netscribes’ Manufacturing Industry Series.

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