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Lead Acid Battery Market IndiaLead Acid Battery Market – India
May 2013
Executive Summary
Market
Lead‐acid battery market in India was pegged at INR ‘b’ bn in 2012 and is expected to grow at a CAGR of x% till 2017
There are two types of batteries available in the market, Type 1 batteries and Type 2 batteries, ith th f h i i ifi tl hi h k t h
Drivers &
with the former having a significantly higher market share
Drivers: Growing automotive industry Increasing demand for power backup
Challenges: Polluting and toxic nature of lead Threat from other types of batteries
Challenges Booming renewable energy sector Recycling efficiency Lucrative replacement market
Volatility in lead prices Large unorganized segment
Batteries (Management and Handling) Rules, 2001 Procedure for registration/renewal of
g g Customs clearance of imports of new lead acid batteries Responsibilities of dealer Responsibilities of manufacturer, importer, assembler and re‐conditioner
Government Regulation
Procedure for registration/renewal of registration of recyclers Responsibilities of recycler Responsibilities of auctioneer Responsibilities of consumer or bulk consumer
Competitive Landscape
Major Public Players Major Private Players
Company 1 Company 3 Company 5
2LEAD‐ACID BATTERY MARKET IN INDIA 2013.PPT
Company 2 Company 4 Company 6
•Economic Indicators•Introduction•Market Overview•Drivers & Challenges•Government RegulationGovernment Regulation•Competitive Landscape•Strategic Recommendations•Strategic Recommendations•Appendix
3LEAD‐ACID BATTERY MARKET IN INDIA 2013.PPT
Economic Indicators (1/3)
a2a1
INR tn
14b4c4b3
GDP at Factor Cost: Quarterly
d3
a2b2
c2
d2
a1b1
c1
d1
13
12
11
d4c3
Q2Q1
10
Q4Q32012‐132011‐122010‐112009‐10
Inflation Rate: Monthlyy
0 8
1.0
%
ca
0.2
0.4
0.6
0.8
edb
4
0.0
Nov 2012 ‐ Dec 2012Oct 2012 ‐ Nov 2012Sep 2012 ‐ Oct 2012Aug 2012 ‐ Sep 2012Jul 2012‐ Aug 2012
Lead‐acid battery market in India is progressing at a steady rate due to growing demand across sectors
Market Overview – Lead‐Acid Batteries Market Size and Growth (Value‐Wise)• Lead‐acid battery market in India has been exhibiting steady growth rates for the past few years 400
INR bn
%h
•Market comprises two major segments, Type 1 batteries and Type 2 batteries Type 1 batteries constitute a larger share of the overall market
100
200
300x%
df
g
cb
a
However, Type 2 batteries which are currently exhibiting a better growth rate than Type 1 are expected to narrow the gap within a few years
• Indian market is duopolistic in nature with the top 2 players Company 1 and Company 2 controlling ~90%
Market Segmentation (Value‐Wise)
0
2011 2012 2013e 2014e 2015e 2017e2016e
players, Company 1 and Company 2, controlling 90% of the organized market Industry enjoys strong pricing power due to its inherent duopolistic nature
Passenger vehicle space is dominated by Company 1 and
Type 1 Type 2
g p y p yCompany 2 due to their strong tie‐ups with recognized international players
Unorganized players dominate the lower end of the replacement market (commercial vehicles and tractors) due to the price sensitive nature of the segment
p1%
q1% q2%
p2%
5LEAD‐ACID BATTERY MARKET IN INDIA 2013.PPT
due to the price sensitive nature of the segment
2012 2017e
Drivers & Challenges – Summary
D i
Challenges
Polluting and toxic nature of leadDrivers
Growing automotive industry
Increasing demand for power backup
g
Threat from other types of batteries
Volatility in lead pricesIncreasing demand for power backup
Booming renewable energy sector
Recycling efficiency
Large unorganized segment
Lucrative replacement market
6LEAD‐ACID BATTERY MARKET IN INDIA 2013.PPT
Government Regulation – Summary
Batteries (Management and Handling) Rules, 2001
C t l f i t f l d id b tt i
Responsibilities of dealer
Customs clearance of imports of new lead acid batteries
`Government Regulations
Responsibilities of manufacturer, importer, assembler and re‐conditioner
Procedure for registration/renewal of registration of recyclersg
Responsibilities of recycler
Responsibilities of auctioneer
7LEAD‐ACID BATTERY MARKET IN INDIA 2013.PPT
Responsibilities of consumer or bulk consumer
Competitive Benchmarking (2/5)
Key Ratios of Top 3 Companies – Operational Basis (FY 2012) (1/3)
40
% Net MarginOperating MarginGross Margin
10
20
30
40
b3
a3
c2b2
a2
c1b1
a1
0
Company 3
c3
Company2Company 1
• Company 3 recorded gross margin of a3%, higher than both Company 1 and Company 2 which recorded gross margin of p y g g , g p y p y g ga1% and a2% respectively
• Company 2 recorded operating margin of b2%, higher than that of Company 3 which recorded operating margin of b3% but lower than that of Company 1 which recorded operating margin of b1%
• Company 1 recorded the highest net margin of c1% followed by Company 2 which recorded net margin of c2% and Company 3 which recorded net margin of c3%
8
Company 3 which recorded net margin of c3%
LEAD‐ACID BATTERY MARKET IN INDIA 2013.PPT
Major Public Companies – Summary
5,000
5,500
Net Profit/Loss Size of the Bubble represents Market Capitalization in INR mn
3,500
4,000
4,500 c
2,000
2,500
3,000
b
500
1,000
1,500
a0
0 5,000 10,000 15,000 20,000 25,000 30,000 35,000 40,000 45,000 50,000 55,000 60,000
Total income
a
Company 3Company 2Company 1
9LEAD‐ACID BATTERY MARKET IN INDIA 2013.PPT
Note: All figures are in INR mn and are based on FY 2012: Market Capitalization as on 18/03/2013
Company 3Company 2Company 1
Public: Domestic Company – Company 1(1/4)Company Information Offices and Centres – India
Corporate Address
Tel No.
Fax No.
Website
Year of Incorporation
Products and Services
Ticker Symbol
Stock Exchange
Hyderabad Head Office
Key People
Products and Services
Category Products/Services
N D i tiName Designation
Person 1 M.D.
Person 2 C.F.O.
Person 3 Director
10LEAD‐ACID BATTERY MARKET IN INDIA 2013.PPT
Person 4 Director
i i l S h K i
Public: Domestic Company – Company 1(2/4)Financial Snapshot Key Ratios
Particulars y‐o‐y change (2012‐11)
2012 2011 2010 2009
Profitability RatiosOperating Margin
Net Profit/LossTotal Income INR bn
3
INR bn
30
b2 2d2
Net MarginProfit Before Tax MarginReturn on EquityReturn on Capital EmployedReturn on Working CapitalReturn on Assets
2
1
0
20
10
0
2012
a2d1
2011
b2
c1
2010
c2
b1
2009
a1
Financial Summary
• The company incurred a net profit of INR X mn in FY 20XX, as compared to net profit of INR Y mn in FY 20YY
• The company reported total Income of INR XX mn in FY 20XX,
Return on Fixed Assets
Cost RatiosOperating costs (% of Sales)Administration costs (% of Sales)
Interest costs (% of Sales)registering an increase of X per cent over FY 20YY
• The company earned an operating margin of X.X per cent in FY 20XX, an increase of X.X percentage points over FY 20YY
• The company reported debt to equity ratio of X.XX in FY 20XX, a decrease of X.X per cent over FY 20YY
Interest costs (% of Sales)
Liquidity RatiosCurrent RatioCash Ratio
Leverage RatiosDebt to Equity Ratio
b i l ia decrease of X.X per cent over FY 20YY
Key Financial Performance Indicators
Indicators Value (18/03/2013)Market Capitalization (INR mn)
Total Enterprise Value (INR mn)
Debt to Capital RatioInterest Coverage Ratio
Efficiency RatiosFixed Asset TurnoverAsset TurnoverCurrent Asset Turnover
11LEAD‐ACID BATTERY MARKET IN INDIA 2013.PPT
Total Enterprise Value (INR mn)
EPS (INR)
PE Ratio (Absolute)
Working Capital TurnoverCapital Employed Turnover
Improved Decline
Public: Domestic Company – Company 1(3/4)Key Business Segments Key Geographic Segments
100%
Segment2Segment 1
100%
Region 2Region 1
0%
50%
100%
a1% c1% d1%
c2%
b1%
b2% d2%a2% 0%
50%
100%
v2%u2% w2%
y1%
y2%
u1% w1%v1%
Business Highlights
0%
2010 2011
c2%
2009
b2% d2%a2%
2012
0%
2010 2011
% % y2%
2009 2012
Description News
Overview
• The company is into sale of lead acid storage batteries for industrial and automotive applications
• It created Asia’s largest, single location, vertically‐integrated battery manufacturing facility accredited for ISO 9001:2000, ISO/TS 16949 (certified by TUV NORD), ISO 14001 and OHSAS18001‐ 2007
• Type 1 batteries constitute~55% of its revenues while Type 2 batteries account for the remaining• Type 1 batteries constitute 55% of its revenues while Type 2 batteries account for the remaining
Collaborations • The company has a collaboration with Company A, USA
Expansion Plans
• The company has finalized plans for setting up a geenfield batteries plant with an investment outlay of INR 1900 mn
• It will soon join the original vehicle (OV) bandwagon after establishing a substantial market share in the
12LEAD‐ACID BATTERY MARKET IN INDIA 2013.PPT
j g ( ) g greplacement market
Public: Domestic Company – Company 1 – SWOT Analysis (4/4)
WS
TO
13
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14LEAD‐ACID BATTERY MARKET IN INDIA 2013.PPT
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