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Wind Turbine Market – India March 2013
Executive Summary
Market
Wind Energy has been the fastest growing renewable energy sector in the country till FY2012 With a cumulative installed capacity of over -- GW (by Dec 2012) wind power currently accounts for almost -% of the total installed capacity in the renewable energy sector The wind turbine sector is forecasted to grow at a CAGR of --% to reach -- GW by 2017 The market has slumped p currentlyy due to withdrawal of the flagship g p AD & GBI scheme byy the Government
Drivers
Drivers & Challenges
Trends Regulatory B di Bodies
Challenges
– Huge Untapped Wind Power Potential – India Remains Energy Deficient – Global Drive towards Clean Energy – Volatile Oil Prices – Depleting Coal Reserves
– Withdrawal of GBI and AD Schemes – Rise in Raw material Prices – Land Acquisition Problems
Potential of Off-Shore Capacity Vertical Integration g Hybrid Generators Advent of Small Wind Turbines Major Regulatory Bodies & their roles Policy and Regulatory Incentives Major Players
Competitive L d Landscape
Company A
Company B
Company C
Company D
Company E
Company F
WIND TURBINE MARKET IN INDIA 2013.PPT
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•Macroeconomic Indicators •Introduction •Market Overview • Indian Market • EXIM
•Drivers & Challenges •Trends •Regulatory Bodies •Competitive Landscape •Market Entry •Appendix WIND TURBINE MARKET IN INDIA 2013.PPT
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Economic Indicators (1/3) GDP at Factor Cost: Quarterly
SAMPLE
INR tn 14
13.06 12.39
12
11.47
12.94 12 94 12.29 11.52
11
10.58
10.70
13
13.95 13.24
13.40 12.62
12.13
11.66
10 Q1
Q2 2009-10
2010-11
Q3 2012-13
2011-12
Q4
Inflation Rate: Monthlyy % 1.0
0.94
0.93
08 0.8 0.6
0.47
0.46
0.46
Oct 2012 - Nov 2012
Nov 2012 - Dec 2012
0.4 0.2 0.0
Jul 2012- Aug 2012
Aug 2012 - Sep 2012
Sep 2012 - Oct 2012
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Wind turbines consists of twelve distinct and vital components Wind Turbine Generator (WTG)
1
2
3
4
5
6
7
8
9
10
11
12
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Wind turbine market is poised to grow with the potential revamp of the Generation Based Incentive scheme Market Overview • Wind Energy has been the fastest growing renewable energy sector in the country till FY2012 • This sector is forecasted to grow at a CAGR of --% to reach --GW by 2017 • Cumulative C l ti iinstallations t ll ti off wind i d tturbine bi generators t stands t d att -- GW by b 2012 end d • India has a manufacturing capacity of -- GW annually • More than --% of the nation’s wind installations to date is concentrated in just five states in southern and western India – Tamil Nadu, Andhra Pradesh, Karnataka, Maharashtra, and Gujarat • The market has slumped currently due to withdrawal of the flagship Accelerated Depreciation & Generation Based Incentive scheme by the Government • However, the Ministry of New and Renewable Energy have indicated that the GBI scheme might be reinstated in the 2013 Union Budget
Market Size: Historical & Forecast (2007-2017) GW x11
yy xx x1
x3
x5
x2
x4
x6
2007
2008
2009
2010
2011
2012
x7
2013e
WIND TURBINE MARKET IN INDIA 2013.PPT
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2014e
x9
2015e
x10
2016e
2017e 6
Drivers & Challenges – Summary
Drivers
Challenges
Huge Untapped Wind Power Potential
Withdrawal of GBI and AD Schemes
India Remains Energy Deficient
Rise in Raw material Prices
Global Drive towards Clean Energy
Land Acquisition Problems
Volatile Oil Prices Depleting Coal Reserves
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Roll back of incentive schemes have led to an ebb in the wind turbine manufacturing sector Withdrawal of GBI and AD Schemes
Impact
• Wind turbine installation has registered slow growth in FY2013, in sharp contrast to the past year’s growth • Tamil T il N Nadu, d the h windiest i di state, capacity i addition ddi i h has ffallen ll b by more than h h half lf while hil R Rajasthan j h has witnessed a drastic decline • Withdrawal of generation-based incentive (GBI) and accelerated depreciation (AD) schemes have emerged as the main reasons behind this debacle • The GBI scheme ((launched in 2009)) was in addition to the ggovernment’s p promotional scheme,, AD, launched in the 1990s • Accelerated depreciation (AD) was withdrawn from April 1st, 2012 • GBI also lapsed in March 2012 and was not renewed
GBI Scheme
Accelerated Depreciation Scheme
• It entitled the wind energy producer to get INR 0.50/unit (over and above the tariff) of electricityy produced for the first 4 to 10 years of project life subject to maximum cap of INR 6.2 mn/MW • The scheme could be availed only if AD Scheme had not been availed
• Wind energy producer were entitled to claim up to 80 % AD in the 1st yyear itself (against g the normal rate of 15%) • Over the years AD was the major driver for the development of the wind industry in the country
However, the Ministry of New and Renewable Energy has given hope to wind power developers and turbine manufacturers that the GBI scheme may be reinstated in the near future WIND TURBINE MARKET IN INDIA 2013.PPT
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Trends – Summary
Potential of Off-Shore Capacity
Vertical Integration
Key Trends Advent of Small Wind Turbines
Hybrid Generators
SAMPLE WIND TURBINE MARKET IN INDIA 2013.PPT
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Bigger wind farm developers are slowly moving towards vertical integration along the industry value chain Vertical Integration
Wind Power – Line of Business’
1
2
3
4
5
6
7
8
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Company A’s share of Indian wind-turbine market continues to be on the decline Wind Turbine Market – Market Share • The number of turbine suppliers in India almost doubled to -- in 2012 as compared to FY2010
x6 x5 x1 x4
x3
a
b
c
d
e
f
x2 FY2012
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Competitive Benchmarking (2/5) Key Ratios of Top 5 Companies – Operational Basis (FY 2012) (1/3) Operating Margin
%
A
B
Net Margin
C
D
E
• A recorded operating margin of --%, higher than that of B, C and E which recorded operating margin of --%, --% and --% respectively but lower than that of D which recorded operating margin of --% • Net margin for all the five company’s are negative, however, A recorded the highest net margin of --%
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Company A (1/5) Company Information Corporate Address
Street A Maharashtra
T l No. Tel N
+91-22-12345678 91 22 12345678
Fax No.
+91-22-12345679
Website
www.xyz.com
Year of Incorporation
19--
Ticker Symbol
--
Stock Exchange
BSE
Offices and Centres – India
Mumbai Head Office
Products and Services Category
Products/Services
Wind Sector
Wind turbine generators, wind power systems and related components such as drive d i systems, t annular l generators t etc. t
Project Services
Land sourcing and permitting, wind resource assessment and installation and commissioning services
Others
Sale/sub-lease of land; infrastructure d l development; t sale l off ffoundry d and d fforging i components; generation and sale of power
Key People N Name
D i ti Designation
Person A
Founder, Chairman, MD
Person B
CFO
Person C
Global Head of Public Relations
Person D
Chief Economist 13
Company A – Shareholding Pattern (2/5) Shareholders of the Company as on 28.09.2012 Name
Ownership Structure
No. of Shares held
Foreign Holdings Corporate p Bodies
P
-b
Q
--
R
--
S
-Total
-a
Note: AGM as of 28th Sep 2012 WIND TURBINE MARKET IN INDIA 2013.PPT
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Company A (3/5) Financial Snapshot Total Income
Key Ratios Particulars
Net Profit/Loss
INR bn
INR bn
2009
2010
2011
2012
Financial Summary
y-o-y change (2012-11)
2012
2011
2010
2009
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 incurred a net loss of INR -- bn in FY 2012, as compared to net loss of INR -- bn in FY 2011 p y reported p total income of INR -- bn in FY 2012, • The company registering an increase of --% over FY 2011 • The company earned an operating margin of --% in FY 2012, an increase of -- percentage points over FY 2011 • The company reported debt to equity ratio of -- in FY 2012, an increase of --% over FY 2011
Key Financial Performance Indicators Indicators
Value (26/12/2012)
Market Capitalization (INR mn) Total Enterprise Value (INR mn) EPS (INR) PE Ratio (Absolute)
-----
Operating costs (% of Sales) Administration costs (% of Sales) Interest costs (% ( of Sales))
Liquidity Ratios Current Ratio Cash Ratio
Leverage Ratios Debt to Equity q y Ratio Debt to Capital Ratio Interest Coverage Ratio
Efficiency Ratios Fixed Asset Turnover Asset Turnover C Current tA Assett Turnover T Working Capital Turnover Capital Employed Turnover Improved
Decline
15
Company A (4/5) Business Highlights Description
News • -- is promoted by the -- and was incorporated in -- for the manufacture/assembly of wind turbine generators (WTGs)
Overview
• -- group acquired a controlling stake in --, an established -- design and consulting house in the wind energy business in 2007 , through a holding company --
• It has two full-scale full scale production facilities in -- and -- with a total annual capacity of 950 MW. Network
• The Indian manufacturing plant serves the Asia-Pacific market
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SWOT Analysis: Company A (5/5) • Point 1
• Point 2
• Point 3
S
W
T
O
• Point 4
SAMPLE WIND TURBINE MARKET IN INDIA 2013.PPT
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Market Entry
SAMPLE
Market Entry Strategies – Indian Wind Turbine Industry (1/2)
Header 1
Header 2
Header 3
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