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Construction Chemicals Market – India
November 2014
2
Executive Summary
Market
Drivers and Challenges
Trends
Competition
Construction chemicals market stood at INR xx bn in 20-- and is expected to reach INR yy bn in 20--, growing at a CAGR of about z%
Growing focus on construction activities in India has led to significant rise in demand for construction chemicals in the Indian market
Focus on Tier 2 and Tier 3 Cities
Use of Silicone-based Chemicals
Eco-Friendly Construction Chemicals
Rising Compliance with International Manufacturing Standards
Drivers
Growth in Infrastructure Investment
Increase in Urban Housing
Rise in Disposable Income
Steady Economic Growth
Continuous FDI Inflow
Challenges
Low Consumer Awareness
Lack of Standards
Price Sensitivity
Unskilled Labor
CONSTRUCTION CHEMICALS MARKET IN INDIA 2014.PPT
Key Players
Company A Company B Company C
Company D Company E Company F
3
•Macroeconomic Indicators
•Introduction
•Market Overview
•Construction Chemicals - Classification
•Major Application Areas
•Penetration Rate - Key Segments
•Supply Chain Analysis
•Major Manufacturing Hubs
•Sector-wise Demand
•Drivers and Challenges
•Trends
•Recent Developments
•Opportunity Areas
•Competitive Landscape
•Strategic Initiatives
•Appendix CONSTRUCTION CHEMICALS MARKET IN INDIA 2014.PPT
4 CONSTRUCTION CHEMICALS MARKET IN INDIA 2014.PPT
Economic Indicators (1/3)
11
12
13
14
15
b2
a2
Q1
d1 c1
b1
a1
Q4
c4
b4
a4
Q3
c3
b3
a3
Q2
d2 c2
INR tn
2013-14 2012-13 2011-12 2010-11
GDP at Factor Cost: Quarterly
Inflation Rate: Monthly
-2
-1
0
1
2
q
Jul 2013 - Aug 2013
p
%
Nov 2013 - Dec 2013
t
Oct 2013 - Nov 2013
s
Sep 2013 - Oct 2013
r
Aug 2013 - Sep 2013
5
Specialty Chemicals – Domestic Market Overview
Specialty Chemicals – Market Size and Growth
• Specialty chemicals are high value low volume chemicals used mainly because of its performance improving properties • Global specialty chemicals industry accounts for b% of the global chemical industry in 20-- • Indian specialty chemicals industry is expected to reach INR cc bn by 20-- and INR dd bn by 20-- • By 20--, Indian cities are likely to contribute p% of the total population and this rise in urbanization will drive the
growth of specialty chemicals •Rise in urbanization will boost investments in residential, industrial and commercial sector and increase demand for paints and coatings, specialty polymers, construction chemicals, home care surfactants, paper chemicals, cosmetic chemicals, plastic additives among others
Market Segmentation Based on Product Type-20--
x4
x4
x3
x2
x1
0
INR bn
Z%
20--e
y2
20--
y1
a4
a3
a2
a1
a6
a5
Plastic Additives
Homecare Surfactants
Specialty Polymers
Paints and Coatings
Construction Chemicals
Others
CONSTRUCTION CHEMICALS MARKET IN INDIA 2014.PPT
6
Construction chemicals cater to demand from diverse projects across different construction sectors
Construction Chemicals Market Segments
y1
y2
Unorganized Organized
Indian Construction Chemicals Market Growth
b4
b3
b2
b1
0
INR bn
P%
20--e
x7
20--e
x6
20--e
x5
20--e
x4
20--e
x3
20--
x2
20--
x1
• Focus on the quality and standards of construction has
led to a surge in demand for construction chemicals
• Construction chemicals industry in India is dominated by
the organized segment
• Top 3 – 4 players operating in the market account for
nearly q% of the overall market share
• Though use of construction chemicals increases the
project by d-e%, these chemicals increases the longevity
of the end product and improves performance
CONSTRUCTION CHEMICALS MARKET IN INDIA 2014.PPT
7
Drivers & Challenges – Summary
Drivers
Growth in Infrastructure Investment
Increase in Urban Housing
Rise in Disposable Income
Steady Economic Growth
Continuous FDI Inflow
Challenges
Low Consumer Awareness
Lack of Standards
Price Sensitivity
Unskilled Labor
CONSTRUCTION CHEMICALS MARKET IN INDIA 2014.PPT
8 CONSTRUCTION CHEMICALS MARKET IN INDIA 2014.PPT
Trends – Summary
Focus on Tier 2 and Tier 3 Cities Use of Silicone-Based Chemicals
Rising compliance with international manufacturing standards
Eco-Friendly Construction Chemicals
Key Trends
9
Opportunity Areas
Gujarat Madhya Pradesh West Bengal Orissa
• Indian states are focusing on infrastructure development as the primary vehicle to drive economic growth
• Emphasis on construction of infrastructure facilities provides a huge scope for the development of the construction chemicals market in India
Opportunity Areas – Summary
CONSTRUCTION CHEMICALS MARKET IN INDIA 2014.PPT
10
Porter’s Five Forces Analysis
Competitive Rivalry
Bargaining Power of Suppliers
Bargaining Power of Buyers
Threat of Substitutes
Threat of New Entrants
Impact X
Impact X
Impact X
Impact X
Impact X
CONSTRUCTION CHEMICALS MARKET IN INDIA 2014.PPT
11
Competitive Benchmarking (1/5)
Public Trading Comparables
Company A Company B Company C Company D
Market Capitalization (INR mn)
Share Price (INR)
EV/EBITDA (x)
EV/Revenue (x)
PE Ratio
CONSTRUCTION CHEMICALS MARKET IN INDIA 2014.PPT
12
Public: Domestic Company – Company A Ltd. (1/4)
Key People
Products and Services
Company Information Offices and Centres – India
Corporate Address
Company A, Street A
City B
State C
Tel No.
Fax No.
Website
Year of Incorporation
Ticker Symbol
Stock Exchange
Category Products/Services
Construction Chemicals
Others
Name Designation
Person 1 Chairman, Managing Director
Person 2 Chief Executive of Manufacturing
Person 3 Director of Legal, Compliance
Person 4 Vice-President of Business and Markets-South Asia
Head Office
Mumbai
CONSTRUCTION CHEMICALS MARKET IN INDIA 2014.PPT
13 CONSTRUCTION CHEMICALS MARKET IN INDIA 2014.PPT
Financial Snapshot Key Ratios
Financial Summary
Public: Domestic Company – Company A Ltd. (2/4)
• The company incurred a net loss of INR ‘d2’ mn in FY 20-- as against INR ‘c2’ mn in FY 20--
• The company reported total income of INR ‘d1’ mn in FY 20--, registering an increase of ‘p’% over FY 20--
• The company earned an operating margin of ‘x.x’% in FY 20--, an increase of ‘y.y’ % points over FY 20--
• The company reported debt to equity ratio of ‘w.w’ in FY 20--, an increase of ‘z.z’% over FY 20--
Key Financial Performance Indicators
Indicators Value (dd/mm/yyyy) Market Capitalization (INR)
Total Enterprise Value (INR)
EPS (INR)
PE Ratio (Absolute)
Particulars 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 Decline
Net Profit/Loss Total Income
x1
y3
y2
y4
y1
y0
x4
x3
x2
c1
2011
b2
b1
2010
a2
a1
2013
d2
INR mn INR mn
d1
2012
c2
14
Key Business Segments Key Geographic Segments
Key Recent Developments
Public: Domestic Company – Company A Ltd. (3/4)
Description News
Overview
• The company is one of the leading chemical companies operating in the global market with around pp production sites around the world
• The company’s construction chemicals division, owned by Z Group, operates in India, Bhutan and Nepal
Product Launch • In Mar 20-- the company launched a new brand K for the construction industry • In FY 20--, the company began the production of direct dyes and launched smart coats for
paper coatings
p3
p2
p1
20--
b4
20--
b2 a1 c2 z2
y2
b3 a2
c3 z3
y3
x3 x2
20--
b1 c1
z1
y1
x1
a3 c4
z4
y4
x4
20--
Agricultural Solution
Others
Functional Soln.
Chemicals
Plastics
Performance Products
0%
50%
100%
20--
s4
20--
s3
20--
s2
20--
d1
s1
India Foreign
CONSTRUCTION CHEMICALS MARKET IN INDIA 2014.PPT
15 CONSTRUCTION CHEMICALS MARKET IN INDIA 2014.PPT
T O
W S
Public: Domestic Company – Company A Ltd. (4/4)
16 CONSTRUCTION CHEMICALS MARKET IN INDIA 2014.PPT
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