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

Warehousing Market â&#x20AC;&#x201C; India October 2014

Executive Summary

Market

 Warehousing market in India is poised to grow at a significant rate till 20-- making it one of the prime investment segment of the logistic industry  Demand for warehousing requirement is expected to grow at ~b% CAGR till 2020  Unorganized vs. organized breakup of warehousing sector is in the ratio of x : y  Segmentation split of warehousing requirement: Cold storage, Industrial/Retail, CFS/ICD and Agriculture

Drivers

Drivers & Challenges

Government Initiatives Trends

Challenges

 Rapid Growth in Organized Retail & Major Industry Segments  Growth in E-commerce  Growth in International Trade  Growth in Containerization  Rising Domestic Consumption  Increased Demand from Farmers

 Strategic Challenges  Operational Challenges

 Initiatives by the Department of Food and Public Distribution  Shift to GST tax regime  Warehousing Act

 Private Investment in Logistics Parks and FTWZs  Infrastructural Developments  Development of the Dedicated Freight Corridor

 Consolidation in the Warehousing Market  Changing Tax Policy and Outsourcing of Warehousing to 3PLs

 State of Automation in the Warehousing Industry  PE Activity in Warehousing Market  Adoption of New Technologies

Major Players

Competition

Player 1

Player 2

Player 3

Player 4

Player 5

Player 6

Player 7

Player 8

WAREHOUSING MARKET IN INDIA 2014.PPT

•Macroeconomic Indicators •Introduction •Logistic Market Overview

•Warehouse Market •Warehouse Classification •Business Models •Establishment Criteria •Drivers & Challenges •Government Initiative •Warehousing Opportunities in India  Opportunities in Rural Areas

•Trends

•Competitive Landscape •Strategic Recommendation •Appendix WAREHOUSING MARKET IN INDIA 2014.PPT

Macroeconomic Indicators (1/3) GDP at Factor Cost: Quarterly INR tr 16 15

c1 b1 a1

c4 b4 a4

c3 b3 a3

c2 b2 a2

Q2 2011-12

2012-13

Q3 2013-14

Q4 2014-15

Inflation Rate: Monthly % 2 1

r q

0 -1

-2

Jul 2013 - Aug 2013

Aug 2013 - Sep 2013

Sep 2013 - Oct 2013

ABC MARKET IN INDIA 2014.PPT

Oct 2013 - Nov 2013

Nov 2013 - Dec 2013

SAMPLE

Warehousing – Value Chain

Logistics

Transportation

Warehousing

Value-added Services

• Text

Text

WAREHOUSING MARKET IN INDIA 2014.PPT

Asia – Pacific Market Overview • Text Mature

• Text Unique

• Text Mid-level

• Text Developing

Transportation

Warehousing Value added services

Prime Logistics Function in India

Text Text Text

Note: WMS - Warehouse Management System

WAREHOUSING MARKET IN INDIA 2014.PPT

Logistics market in India has witnessed an exponential growth rate over the past decade Logistics Market Overview – India • Logistics is defined as a business planning framework involving procurement, maintenance, distribution, and replacement of personnel and material  In 20--, the global annual logistics spend has been valued at about INR x tr  The annual logistics cost in India is valued at INR x bn and it is growing at a-b% annually  The annual logistics cost in India is estimated to be c% of the GDP  The Transportation, Logistics, Warehousing and Packaging Sector in India is dominated by the unorganized segment, while the organized segment accounts for less than d% of the logistic sector in India  Globally, logistics industry represents a significant part of the economy, as it generally constitute between e-f % of the GDP of a country

• India is still on the evolving stages in the logistic Industry with much of its focus being on enabling ‘physical distribution’ rather than ‘progressive integrated logistics management’

Logistics Performance Indicator LPI score

Logistic Market Size & Growth INR bn

World Rank(proportion to highest ranking nations)

p x1

+x% x2

0 2007

2010

2012

2014

2013

WAREHOUSING MARKET IN INDIA 2014.PPT

2014e

2015e

2016e

2017e

2018e 7

Warehousing market in India is poised to grow due to rapid expansion of agriculture and industrial sectors in India Warehousing Market – Overview (1/2) • Warehousing forms a crucial link in the overall logistics value chain • A warehouse provides facilities for processing, packing, blending, grading of the goods for the purpose of sale

Warehousing – Market Size & Growth INR bn +X%

• Prospective buyers can inspect the goods kept in a warehouse

• Warehousing capacity (agriculture) as per planning commission working committee report 20-- is b MMT

2013

2014e

2015e

 Recent estimates suggest that it has increased to q MMT by Mar, 20--

• Growing at a rate of c-d% every year warehousing market in India is expected to grow more than INR y bn approx by 20-• Broadly classified, the Indian warehouse market majorly consists of two segments – Agricultural and Industrial/Retail warehousing • Further segmentations are done on the basis of services provided, and analyzed subsequently

2016e

2017e

2018e

Market Segmentation – Application Based Warehousing

20--

Cold Storage

• Agricultural produce is estimated to grow upto z MMT by 20--

Transportation

Industrial Retail

• As per Government figures of food production in 20--, the gap between agri-warehousing supply and demand stands at nearly n MMT

VALs

CFS/ICD

Freight Forwarding

Agriculture

• Agri - warehousing market was estimated at about INR f bn in 20--

B4%

C3%

B3% B1%

• Industrial sector growth slowed to a 20 year low of e% in 20--, raising fresh worries about the health of the crucial sector, however the same is expected to grow at close to g% in 20-B2% Note: Market size of warehousing does not include temperature controlled warehousing

C1%

Logistics Market

WAREHOUSING MARKET IN INDIA 2014.PPT

C2%

C4% Warehousing Market 8

The warehousing market exhibits tremendous potential for growth and investment opportunities Warehousing Market â&#x20AC;&#x201C; Overview (2/2)

Industrial Warehousing (IW) Market INR bn +x%

2013 â&#x20AC;˘ Text

2014e

2015e

2016e

2017e

2018e

Agricultural Warehousing (AW) Market INR bn +y% e1

2013

2014e

2015e

2016e

2017e

2018e

Note: Market size of warehousing does not include temperature controlled warehousing

WAREHOUSING MARKET IN INDIA 2014.PPT

Warehousing attractiveness – comparative analysis Parameters Sub-segments

Demand growth

Capital requirement

Entry barriers

CFS ICD Agricultural warehousing Cold warehousing Logistics park FTWZ Small scale independent warehousing Large independent high end warehouse Network of large high end warehouse Note: Parameters are ranked in accordance with the following scale : 1 – Very High > 2 – High > 3 – Medium > 4 – Low ICD - Inland Container Depot , CFS - Container Freight Station, FTWZ - Free Trade and Warehousing Zones

WAREHOUSING MARKET IN INDIA 2014.PPT

India’s fast paced international and domestic trade by air provides tremendous scope for warehouse market Air Cargo Output through All Indian Airports International

MMT

Domestic +x%

• Text

f2 a2

2005-06 2006-07 2007-08 2008-09 2009-10 2010-11 2011-12 2012-13

Emergence and Growth of New Cargo Centers Classification

Volume (2006)

Volume (2011)

Growth in CAGR

Major airports

Tier-II hubs (metros)

Text

Pune, Kochi, Kozhikode, Ahmedabad, Trivandrum

Tier-II hubs (non metros)

Text

Amritsar, Nagpur, Jaipur, Guwahati, Coimbatore

Government Initiatives •Text

Plan

Investment

10th Plan (20--)

Text

11th Plan (20--)

Text

12th Five-Year Plan (20--)

Text

WAREHOUSING MARKET IN INDIA 2014.PPT

90 % by volume and 70 % by value of India’s external trade is via maritime traffic

• Text

A Government of India (GoI) initiative

Capacity

Text

Maritime Agenda : Vision 2020

mn tons

Traffic

Text a2

a1 b1

Text

Government Initiatives Schemes to develop new airports in Tier I and Tier II Text cities will be launched for implementation through the Airport Authority of India or the PPP mode

WAREHOUSING MARKET IN INDIA 2014.PPT

2009-10

2011-12 2016-17e 2019-20e

Phase 1

Phase 2

Phase 3

Two primary business models based on operator’s preferences

SAMPLE

Model A

Built-to-suit (BTS)

• Text

Direct land purchase

• Text

Partnership with land developer

• Text

Text

 Text

Built-to-suit (BTS)

Text

 Text

Long-term Land Lease

Text

 Text

Model B

WAREHOUSING MARKET IN INDIA 2014.PPT

SAMPLE

Key parameters for building warehouses

Parameters

Text

• Text

Text

• Text

Text

• Text

Text

• Text

Text

• Text

WAREHOUSING MARKET IN INDIA 2014.PPT

SAMPLE

Warehousing attractiveness – Indian cities Types of Hubs

Definitions

Cities

Primary Hubs

• Text

Text

Secondary Hubs

• Text

Text

Tertiary Hubs

• Text

Text

WAREHOUSING MARKET IN INDIA 2014.PPT

Drivers & Challenges

Drivers Rapid Growth in Organized Retail & Major Industry Segments

Challenges

Growth in E-commerce Strategic Challenges Growth in International Trade Growth in Containerization

Operational Challenges

Rising Domestic Consumption Increased Demand from Farmers

WAREHOUSING MARKET IN INDIA 2014.PPT

Presence of extremely affordable and desirable e-Commerce options is driving demand for warehousing in India Growth in e-Commerce

Impact

â&#x20AC;˘ Text

e-Commerce Market Size & Growth INR tr a6

+x% 4 a1

e-Commerce Market Segmentation (2013) Online Travel Retailing Financial Services

B3% B4%

B2%

Online Other Services Classifieds

2013

B5%

B1%

2014e 2015e 2016e 2017e 2018e WAREHOUSING MARKET IN INDIA 2014.PPT

Growth in international trade is providing huge impetus to the growth of warehousing sector Growth in International Trade

Impact

• Text

India’s Total Export INR bn

+x% a3 a1

India’s Total Import

Government of India plans to double India’s exports of goods and services of by 2014-15

INR bn +y% b3

a2 Imports into India are also expected to grow further, particularly of oil and capital good

2009-10 2010-11 2011-12 2012-13 2013-14 WAREHOUSING MARKET IN INDIA 2014.PPT

0 2009-10 2010-11 2011-12 2012-13 2013-14 18

Rising containerized cargo traffic has led to growth of CFSs and ICDs Growth in Containerization (1/2)

Impact

â&#x20AC;˘ Text

Growth in Overall Containerized Cargo Containerized Traffic (Volume in mn TEU) +x% a1

2009

2010

2011

WAREHOUSING MARKET IN INDIA 2014.PPT

2012

2013

Rising income and consumption levels will indirectly push the demand for better warehousing in India Rising Domestic Consumption

Impact

• Text

Aggregate Disposable Income (INR tr)

Aggregate Consumption (INR tr) 100% 80%

a1 B5% B3%

20%

a3 C4%

C3%

60% 40%

B4%

a2 C5%

D5% D4% D3%

C2%

0% 2005

p1 M5%

80%

M3%

Globals

B2%

B1%

Household Income Brackets 100% (INR ‘000)

C1%

D2% D1%

2015e

2025e

Strivers

>1000

500-1000 Seekers 200-500 Aspirers 90-200 Deprived <90

60% 40% 20%

N5% N4%

Q5%

N3%

Q4%

M2% Q3% N2% M1%

0% 2005 WAREHOUSING MARKET IN INDIA 2014.PPT

M4%

N1% 2015e

Q2%

Q1%

2025e 20

Skewed distribution of warehouses is a major concern for the farmers Increased Demand from Farmers (2/2) Necessity of warehouse in rural India â&#x20AC;˘ Text

Region Wise Distribution of Agricultural Storage Capacity (2013) Rural india godown profile

B5%

B6%

single chamber

B4%

two chamber

North South

three or more chamber

B3%

X3%

X2% X1%

B1% Capacity Utilization

West East

Y1%

Y2%

Y3%

all surveyed godowns

godowns sanctioned by NABARAD

godowns sanctioned by NCDC

Central North-East and UT

B2%

WAREHOUSING MARKET IN INDIA 2014.PPT

Strategic Challenges (6/7) Lack of Power Supply & Rising Cost

Impact

• Text

Future Power Demand-Supply Scenario Peak

‘000 MW

Base

a1 Y1% X1%

a2 Y2% X2%

Peak Power Scenario in India (2013)

a3 Y3% X3%

a4 Y4% X4%

Y5%

a6 Y6%

X5%

X6%

Peak Demand b1

a2 b2

Peak Demand Met a3 b3

30 a4 b4 10

a5 b5

Demand Supply Demand Supply Demand Supply

2007

2012e

2017e

North

WAREHOUSING MARKET IN INDIA 2014.PPT

West

South

East

North- East 22

Operational Challenges (4/5) Low Level of IT Penetration (2/3)

â&#x20AC;˘ Text

Cloud Technology Penetration and Share and Growth of Indiaâ&#x20AC;&#x2122;s Services Sector Text

Service Sector Segmentation at Factor Cost (2012-13) Financing, insurance, real estate, & business services

Text

Transport, storage, & communication Trade, hotels, & restaurants Community, social, & personal services IT and ITeS form a Others major portion of B1% business services B5% though with much limited B2% penetration in the warehouse sector B3% B4%

WAREHOUSING MARKET IN INDIA 2014.PPT

Government has taken strong initiatives and implemented various policies for the development of warehousing sector Initiatives by the Department of Food and Public Distribution • Text

Shift to GST Tax Regime • Text

Warehousing Act

Key Initiatives

• Text

Private Investment in Logistics Parks and FTWZs • Text

Infrastructural Developments • Text

Development of the Dedicated Freight Corridor • Text

WAREHOUSING MARKET IN INDIA 2014.PPT

The Department is implementing a scheme to create an additional storage capacity of 0.54 MMT in the NE States Initiatives by the Department of Food and Public Distribution (2/2) Significant Achievements of the Year

Augmentation of Storage Capacity in NE Region • Text

States

Total Capacity Approved (MT)

Planning for Capacity Augmentation (MT) Created under 11th FYP

Planned for 12th FYP

State 1 • Text

State 2 State 3 State 4

State 5 State 6 State 7 State 8 Total WAREHOUSING MARKET IN INDIA 2014.PPT

Opportunities for Warehousing in India (2/5) Growth in Major Warehousing Sectors (1/2) Growth of Pharmaceutical Market (Value-wise) INR tr

Growth of Automobile Sector (Production-wise) 000â&#x20AC;&#x2122; units +x2%

2011-12

2012-13

+x1%

a1 2005

2013

2020

2009-10

Growth in FMCG Sector (Revenue-wise)

2010-11

Growth in Agriculture Sector +x4%

INR tr +x3% c1

2009

2010

2011

INR tr d3

2009-10

2010-11

2011-12

2012-13

2013-14

2012

2013

WAREHOUSING MARKET IN INDIA 2014.PPT

Opportunities for Warehousing in India (3/5) Growth in Major Warehousing Sectors (2/2) International Cargo Handled through Major Airports (Jan – Sep, 2013) 000’ tons a1 a2 a3 a5 a4 City 1

City 2

City 3

City 4

City 5

City 6

City 7

Exim Cargo Handled by Major Indian Ports (2012) mn tons b4 b1 b2

Port 1

Port 2

b8 b9

Port 3

Port 4

Port 5

Port 6

Port 7

Port 8

WAREHOUSING MARKET IN INDIA 2014.PPT

Port 9

b10

Port 10

b11

b12

Port 11

Port 12

SAMPLE

Key Trends â&#x20AC;&#x201C; Summary

Consolidation in the Warehousing Market

Changing Tax Policy and Outsourcing of Warehousing to 3PLs

` Trends

State of Automation in the Warehousing Industry

PE Activity in Warehousing Market

Adoption of New Technologies

COURIER MARKET IN INDIA 2014.PPT

E-commerce companies choose to run the operations inhouse as supply chain is a core aspect of the business Changing Tax Policy and Outsourcing of Warehousing to 3PLs (2/2)

• Text

Industry Preference for Outsourcing FMCG and Retail Industries

• Text

Apparel & Fashion Companies, Ecommerce Industry

• Text

Beverage Companies

• Text

Note: C&F: Clearing and Forwarding, 3PL: Third Party Logistics, FMCG: Fast Moving Consumer Goods

WAREHOUSING MARKET IN INDIA 2014.PPT

Growth in warehouse business has attracted large scale investments from PE firms PE Activity in Warehousing Market

â&#x20AC;˘ Text

PE investments from 2011-14 Sector

Value (INR mn)

Annual revenue growth

Warehousing and Cold Chain Storage / Agri Logistics

a - b%

Some PE Investments in Warehousing Sector Year

Logistics Company

PE Investor

20--

Text

20--

Text

20--

Text

20--

Text

20--

Text

WAREHOUSING MARKET IN INDIA 2014.PPT

Deal Size (INR mn)

Porter’s Five Forces Analysis

SAMPLE Impact Medium

Threat of New Entrants • Text

Impact Medium

Impact High Impact High Competitive Rivalry Bargaining Power of Buyers

Bargaining Power of Suppliers • Text

• Text

Impact Low Threat of Substitutes • Text

WAREHOUSING MARKET IN INDIA 2014.PPT

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

Net Margin b2

a3 b3

10 5

Player 1

Player 2

Player 3

• Player 3 recorded operating margin of -%, higher than that of Player 1 which recorded operating margin of -% but lower than that of Player 2 which recorded operating margin of -% • Net margin for Player 1, Player 2 and Player 3 are -%, -% and -% respectively, wherein Player 2 has the highest net margin among these three companies

WAREHOUSING MARKET IN INDIA 2014.PPT

SAMPLE

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

Offices and Centres – India

Corporate Address

Tel No. Fax No. Website Year of Incorporation

Head Office

Ticker Symbol Stock Exchange

Products and Services Category

Products/Services

Key People Name

Designation

Sectors (EPC)

WAREHOUSING MARKET IN INDIA 2014.PPT

SAMPLE

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

Key Ratios

Total Income

Net Profit/Loss

Particulars

INR mn

INR mn p1

p4 p3 r4

2011

2012

2013

2014

Financial Summary • The company earned a net profit of INR - mn in FY 2014, as compared to net profit of INR - mn in FY 2013 • The company reported total income of INR - mn in FY 2014, registering an increase of -% over FY 2013 • The company earned an operating margin of -% in FY 2014, a decrease of m percentage points over FY 2013 • The company reported debt to equity ratio of - in FY 2014, registering an increase of -% over FY 2013

Value (08/27/2014)

Market Capitalization (INR mn) Total Enterprise Value (INR mn) EPS (INR)

PE Ratio (Absolute)

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

Key Financial Performance Indicators Indicators

y-o-y change (2014-13)

Efficiency Ratios Fixed Asset Turnover Asset Turnover Current Asset Turnover Working Capital Turnover Capital Employed Turnover

Note : This company has had a fiscal year change on Dec-31, 2011

Improved

WAREHOUSING MARKET IN INDIA 2014.PPT

Decline

SAMPLE

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

Key Geographic Segments

Container Freight Stations

Multimodal Transport Operations

Australia & New Zealand

Mediterranean

Far East

Project & Engineering Solutions

Others

Africa

America

India

Europe

F1% C1% A1% 2010

C2% B1%

A2%

C3% 8% B2%

2012

A3% 2013

E1% D1%

C4% B3%

A4%

B4%

2014

C1% A1% 2010

B1%

E2% D2% C2% 2012

F4%

F3%

F2% G2% B2% A2%

E3% D3% C3% 2013

G3% B3% A3%

E4% D4% C4%

G4% B4% A4%

2014

Business Highlights(1/2) Description

News

Overview

• Text

WAREHOUSING MARKET IN INDIA 2014.PPT

SAMPLE

Public: Domestic Company – Player 1 (4/5) Business Highlights(2/2) Description

News

Extensive Product Portfolio

• Text

Awards & Recognitions

• Text

Acquisitions

• Text

WAREHOUSING MARKET IN INDIA 2014.PPT

SAMPLE

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

• Text

T • Text

• Text

WAREHOUSING MARKET IN INDIA 2014.PPT

SAMPLE

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

Sectors (EPC)

WAREHOUSING MARKET IN INDIA 2014.PPT

SAMPLE

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

Ownership Structure Bodies corporate

Name

No. of Shares held

Directors or relatives of directors Other top 50 shareholders

B3% B2%

100%

B1%

Total Ownership structure corresponds to Date of AGM: 20/09/2013

WAREHOUSING MARKET IN INDIA 2014.PPT

SAMPLE

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

Key Ratios

Particulars

Net Profit/Loss

y-o-y change (2013-12)

2013

2012

2011

2010

Profitability Ratios INR mn

INR mn p4

p1 r1

2011

2012

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 2010

Operating costs (% of Sales) Administration costs (% of Sales) Interest costs (% of Sales)

2013

Liquidity Ratios

Financial Summary • The company earned 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 an increase of -% over FY 2012 • The company earned an operating margin of -% in FY 2013, an increase of k percentage points over FY 2012

• The company reported debt to equity ratio of q in FY 2013, an increase of % over FY 2012

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

WAREHOUSING MARKET IN INDIA 2014.PPT

Decline

SAMPLE

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

News

Overview

• Text

Extensive Product Portfolio

• Text

MoU Agreement

• Text

WAREHOUSING MARKET IN INDIA 2014.PPT

SAMPLE

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

• Text

WAREHOUSING MARKET IN INDIA 2014.PPT

Strategic Recommendation (1/7)

SAMPLE

Opportunities for Warehousing in Haryana (1/2) Overview Strategically Positioned and Fact File

Competitive Advantage

• Text

Haryana Economic Snapshots

Upcoming Investment Projects

• Text

WAREHOUSING MARKET IN INDIA 2014.PPT

Strategic Recommendation (7/7) Improving Order Picking Efficiency

Assignment Policy 1 • Text

Assignment Policy 2 • Text

Cause

Assignment Policy 3 • Text

Effect

Assignment Policy 4 • Text

Minimizing the total distance traveled • Text

WAREHOUSING MARKET IN INDIA 2014.PPT

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WAREHOUSING MARKET IN INDIA 2014.PPT