indian radio cab market 2012 challenges and growth opportunities

UR Associates Research

Indian Radio Cab Market 2012 - Challenges and Growth Opportunities

Contact us: [email protected]

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A “Sunrise Industry in India”, Indian Radio Cab industry is characterized by huge demand, high growth rates and plenty of buzz

Major presence in Mumbai, Delhi NCR,

Bangalore & Hyderabad

Major players – Meru Cabs, Easy Cabs, Mega

Cabs and TAB Cabs

Current market size –XX cabs

Current market value –Rs X bn

Current 2013 2014 2015 2016 2017

XX XXXX

XXXX

XX

Total radio cabs

X%

X%X%

X%

X%

Meru cabs Easy cabs Mega cabs Tab cabs Others

Radio cab market size Current – 2017E (By value & volume) Current market share (By volume)

Indian radio cab market outlook

Copyright © UR Associates www.urassociates.in

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Advertising revenues are another source of revenues. Please read our industryreport for further details.

Please read ourindustry report forfurther details


Please read ourindustry reportfor further details




Business model


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Radio cab fares vary from city-to-city

City Fare per km (Rs)

Day time charges Waiting charges Night time charges

Mumbai XX XX XXDelhi NCR XX XX XXDelhi NCR (Economy radio cabs) XX XX XX

Bangalore XX XX XX

Hyderabad XX XX XXKolkata XX XX XXChandigarh XX XX XXAmritsar XX XX XX

Ludhiana XX XX XX

Jaipur XX XX XX

Radio cab fares

B&Y taxi faresCity Fare per km (Rs)

Day time charges Waiting charges Night time charges

Mumbai XX XX XXDelhi XX XX XXKolkata XX XX XX


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Radio cab company

Person H

Person G

Person F Person D

Person C

Person BPerson A

Person E

Stakeholders of a radio cab company


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Meru cabs, Easy cabs and Mega cabs are the three major companies that havedominated the radio cab market till date. Tab Cabs is the latest entrant into theindustry and ……………………

MERU CABS EASY CABS MEGA CABS TAB CABS

Incorporation year 20-- 20-- 20-- 20--Fleet size XX XX XX XX

Area under operations Mumbai, Delhi NCR, Bangalore and Hyderabad

Mumbai, Delhi NCR, Bangalore and Hyderabad

Mumbai, Delhi, Bangalore, Kolkata, Ludhiana,

Chandigarh and Amritsar

Mumbai

Market share (volume terms) xx% xx% xx% x%

FY11 Net sales (Rs mn) XX XX XX XX

Sales CAGR (FY07-11) xx.x% xx.x% xx.x% xx

FY11 net profit/(loss) (Rs mn) XX XX XX XX

Accumulated profit/(losses) FY07-11 (Rs mn)

XX XX XX XX

FY11 Total debt (Rs mn) XX XX XX XX

Overview of major players


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Demand drivers & growth opportunities

Huge demand exists due to Please read our Industry report for further details

City Census 20-- Census 20-- % addition % growthCity A XX X X x%

City B XX X X x%

City C XX X X x%

City D XX X X x%

Total XX X X x%

Increasing urbanization

XX XX XX XX XX XX XX

x.x% x.x% x.x%

x.x%x.x% x.x%

x.x%

0.0%

5.0%

10.0%

0

10,000

20,000

30,000

40,000

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

Rs

Per per capita (at constant prices) GDP growth rate

Favourable economic indicators

FY 02 FY 07 FY 11 FY 17E

X X XX

Mn

FY 02 FY 07 FY 11 FY 17E

XX

X

XMn

Domestic passengers throughput forecasts

International passengers throughput forecasts


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The big four need another XXXX-XXXX more cabs to meet the current demand

Please read our industry report for further details.

Current demand analysis for the big 4 companies Metrics Meru cabs Easy cabs Mega cabs Tab cabs Min Max Min Max Min Max Min Max No. of calls --- per xxx X Y X Y X Y X Y Average call ---- --- x% y% x% y% x% y% x% y% No. of calls ---- X Y X Y X Y X Y Current fleet size X X X X X X X X % -- x% y% x% y% x% y% x% y% Trips per -- per --- x y x y x y x y No. of additional cabs required

XX YY XX YY XX YY XX YY

Min Max Total cabs requirement assuming no ----

X Y

% of ---- x% y% z% x% y% z% Total cab requirement X Y Z X Y Z



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Comparative analysis of Income of Radio Cab drivers Vs. Income of Black & Yellow taxi driversBlack & Yellow taxi driver avg. income Radio cab driver avg. income

Metrics Values Metrics ValuesAvg. xx X Avg. xx YAvg. xx X Avg. xx YCharge xx (Rs) X Charge xx (Rs) YCharge above x X Charge above x Y

Avg. income xx (Rs) X Avg. income xx (Rs) Y

Cost x (Rs) X Cost x + y (Rs) Yxx (Rs) X x (Rs) YTotal take home income xx (Rs) X Total take home income xx (Rs) Y

Avg. no. of xx X Avg. no. of xx Y

Taxi rent for xx(Rs) X Taxi rent for xx (Rs) Y

Avg. take home income per month (Rs) XX Avg. take home income per month (Rs) YY

On an average, a radio cab driver earns xx% more than a Black & Yellow taxi driver.Please read our industry report for further details.



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Many large cities like xx, xx, xx and xx are relatively untapped

Top 10 most populous cities

City Population Major Cab Operators

XX XX XX

XX XX XX

XX XX XX

XX XX XX

XX XX XX

XX XX XX

XX XX XX

XX XX XX

XX XX XX

XX XX XX

There are no big players with fleet size more than xx in other major cities like xx,xx, xx, xx, xx, xx and xx….. Please read our industry report for further details


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Please read our industry report to get the insight of the challenges faced by the radio cab operators in carrying out their operations

Availability of drivers, a key hurdle

due toEight major reasons for the shortage of drivers – detailed viewpoints of drivers, cab operators

and regulatory authorities

A highly regulated market

leading to Please read our Industry report for further details

Operational challenges

leading to Please read our Industry report for further details

Challenges


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The online car aggregators have the ability to be a worthwhile competitors to theradio cab operators in the long run

The online aggregators do not own the fleet, but they can be credited with ...................

Characteristics

Point-to-point servicesLocal travel services

Airport transfer servicesOut station services

Competitive challenges


Sample Presentation

Economy radio cabs – the business model yet to be successful

The concept of economy radio cabsstarted in City A in 20xx. However, evenafter xx years there is still no sizeableplayer in terms of fleet size and moreimportantly in terms of revenues. Quickcabs, Player A, Player B, Player C andPlayer D are some of the players whohave entered the City A as economyradio cab service providers.

FY09 FY10 FY11

X

X X

Y Y Y

Z

Z

Z

Rs mn

Operating income Net profit after tax Total debt

Quick Cabs - Financials

The economy radio cab companies charge a daily rental of around Rs XXX-XXX from thedrivers, which is at a xxx of about xx-xx% compared to the rentals charged by the standardradio cab companies.

Competitive challenges


Sample Presentation

This industry incurs high operational cost along with high depreciation expenses. As this is a capital intensivesector, the companies also have to bear high interest cost.

We expect the cab companies to report an EBITDA margin of ~x.x - x.x% during FY13-15E with a PAT marginin the range of x.x – x.x% over the period.

The companies have reported ----- operatingperformance with an EBITDA margin of ~X-X%but have reported ----- bottom line --- highdepreciation as well as interest costs. We estimatethe following ranges for expenditure as a % ofsales:• Operational expenses: x%• Administrative & marketing expenses: x%• Employee expenses: x%• Depreciation expenses: x%• Interest expenses: x%

MERU CABS (Rs mn)Year FY13E FY14E FY15ERevenues XXXX XXXX XXXXEBITDA XXX XXX XXX PAT XX XX XX

EASY CABS (Rs mn)Year FY13E FY14E FY15ERevenues XXXX XXXX XXXXEBITDA XXX XXX XXXPAT XX XX XX

MEGA CABS (Rs mn)Year FY13E FY14E FY15ERevenues XXXX XXXX XXXXEBITDA XXX XXX XXX PAT XX XX XX

TAB CABS (Rs mn)Year FY13E FY14E FY15ERevenues XXXX XXXX XXXXEBITDA XXX XXX XXX PAT XX XX XX

Financial estimates


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We have rated the performance of the companies vis-à-vis their peers on various parameters. The ratings arebased on UR Associates research and interaction with the various stakeholders of the Indian Radio CabIndustry

We have outlined 6 suggestions /recommendations to the IndianRadio Cab Industry for betteroperating performance andovercoming challenges faced bythe industry.

Please read our industry reportfor further details.

Company standings and our suggestions to the industry

Parameters Meru Cabs Easy Cabs Mega Cabs Tab Cabs

Current fleetsize

XX XX XX XX

Brandrecognition

XX XX XX XX

Financialperformance

XX XX XX XX

Operationalefficiency

XX XX XX XX

Managementcomfort

XX XX XX XX

Ability toexpand

XX XX XX XX

Rating of radio cab operators UR Associates suggestion to the industry


Sample Presentation

We are only presenting MERU CABS profile in the presentation, all other cab companies profiles are prepared on similar lines.

Please Read Our Industry Report For Further Details

MERU CABS EASY CABS MEGA CABS

TAB CABS SUPER CABZ

Company profiles


Sample Presentation

Launched: Month 20xx Total fleet: XXXX Fleet type: Cab A, Cab B, Cab C and Cab DArea of operations:City A, City B, City C and City DExisting PE/VCs: XXX Fund

Meru Cabs was started in 20xx by Mr. XYZ, a first generation entrepreneur in partnership with private equityfirm ABC Ltd. Meru has ushered the Radio cab market in India and has been one of the most popular names inthis industry

Company highlights #x player in Indian Radio cab market with the “MERU” name being the synonymous with radio cab.

Largest fleet of radio cabs with about xx% market share in terms of volume

Revenues from radio cab services are almost x times of the nearest competitor

xrd largest radio taxi company in the world

Serves more than x million passengers a month

Company profile – Meru Cabs


Sample Presentation

xxxx

xxxx

xxx

xxxx

Mumbai Delhi Hyderabad Bangalore

2007 2008 2009 2010 2011 2012

X xx x x x

x

xx x x

x

xx x

x

x

x

xx

x

No. of cabs

Mumbai Delhi Hyderabad Bangalore

XXXX

XXXX

XXXX XXXXXXXX

XXX

Current

Current fleet size

Fleet size evolution

Group structure

V-Link Travel Solutions Pvt.

Ltd.

Meru Cabs Pvt. Ltd.

V-Link Fleet Management

Solutions

Automotive Solutions

Please readour industryreport forfurther details


Car Rentals





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Ownership

Meru Cabs Pvt. Ltd. wasestablished by V-Link TravelSolutions Pvt. Ltd. inpartnership with India ValueFund Advisors (IVFA). IVFA is aprivate equity fund establishedin 2000 with .………………...

Please read our industry reportfor further details.

Board of Directors Management

Neeraj Gupta: He is a firstgeneration entrepreneur andthe Managing Director of V-LinkTravel Solutions Pvt. Ltd. andMeru Cabs Pvt. Ltd. Neerajstarted his passenger transportbusiness under the name'Travel Link' in 20xx and hadstarted Meru Cabs inpartnership with IVFA.

For other Directors of the Boardplease read our industry report.

Siddhartha Pahwa: He wasrecently appointed as the CEO.Prior to this, he was the COO ofMeru Cabs. He has over 15years of experience in SupplyChain, Operations and Financemanagement. Earlier, he wasthe President - Supply Chain &Generics at Abbott HealthcarePvt. Ltd.Please read our industry reportfor other members of themanagement team.



Sample Presentation

CABVERTISE: An important driver for growth

“Cabvertise” is theadvertising services offeredby Meru cabs which is seenas a much more effectiveand cost beneficialalternative to outdoormedia. At presentadvertising revenuescontribute ~x% to the totalrevenues of the company.

Meru currently has xxx companies as itscustomers for cabvertise services. Theadvertising formats are:

Advertisement format A: Advertisement format B: Advertisement format C:

Meru quotes Rs xxxx – xxxx per xx for cabvertise services. Please read our industryreport for further details.



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SWOT ANALYSIS

Strengths Please read our industry report for details

Weakness Please read our industry report for details

Opportunities Please read our industry report for details

Threats Please read our industry report for details



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Financial performance

FY07 (4 months)

FY 08 FY 09 FY 10 FY 11

XX XX

XX

XX

XX

Rs million Gross revenues

FY07 (4 months)

FY 08 FY 09 FY 10 FY 11

XX

X

X

X

Rs millionEBITDA

Please read ourindustry reportfor furtherdetails.


FY07 (4 months)

FY 08 FY 09 FY 10 FY 11

X

X

X

X

X

Rs million Net profit




Sample Presentation

Revenue forecasts

MERU CABS

Metrics FY 12E FY 13E FY 14E FY 15E Fleet size XXXX XXXX XXXX XXXX

Avg. xxxx per xxx XX XX XX XX

No. of xxxx per xxx X X X X

Avg. no. of xxxx per xxx X X X X

Total no. of xxxx XXX XXX XXX XXX

Cab xx rate x% x% x% x%

Revenue (Rs million) XXXX XXXX XXXX XXXX

Advertising revenues per xx/yy XXX XXX XXX XXX

xxx rate x% x% x% x%

Advertising revenues per xx/yy XXXX XXXX XXXX XXXX Total advertising revenues (Rs million) XX XX XX XX

Total revenues (Rs million) XXXX XXXX XXXX XXXX

% growth x% x% x% x%

We expect that withxxxx cities, Meru shouldreach the xxxx mark inthe next x years time.

Please read ourindustry report forfurther details.



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Key Balance Sheet items

(Rs million) FY07 FY08 FY09 FY10 FY11

Paid-up share capital x x x x X

Reserves surplus xxx xxx xxx xxx xxx

Shareholders' funds XXXX XXXX XXXX XXXX XXXXShare application money

xx xx xx xx xx

Loan funds xx xx xx xx xx

Gross block xxxx xxxx xxxx xxxx xxxx

Accumulated D&A xx xx xx xx xx

Net Block XXX XXX XXX XXX XXX

Capital work-in-progress

X X X X X

Fixed Assets XXXX XXXX XXXX XXXX XXXX

Please read ourindustry report forfurther details.

Five Potential Riskswhich can impact theoperational efficiency ofthe company as well asother cab operators.

Please read our industryreport for furtherdetails.

Potential risks



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The information contained herein is confidential and is intended solely for the addressee(s). Any unauthorized access, use,reproduction, disclosure or dissemination is prohibited. The information and opinions on which this communication is basedhave been complied or arrived at from sources believed to be reliable and in good faith, but no representation or warranty,express or implied, is made as to their accuracy, correctness and are subject to change without notice. Certain mattersdiscussed in this Document may contain statements that are individually and collectively forward-looking statements. Suchforward-looking statements are not guarantees of future performance and are subject to known and unknown risks,uncertainties and assumptions that are difficult to predict. Recipient/s should consider this report only for informationpurpose. The information enclosed in the report has not been vetted by the compliance department due to the time sensitivityof the information/document. UR Associates shall not assume any legal liability or responsibility for any incorrect, misleadingor altered information contained herein.

Please read our 75 page comprehensive industry report to get in-depth insight ofthe Indian Radio Cab Market, the Growth Drivers, Challenges, RegulatoryFramework, Company profiles and Financial Performance and Estimates.


Contact us for the full report: [email protected]

Sample Presentation

indian radio cab market 2012 challenges and growth opportunities

Automotive

prtotalxx x x x

growthmntacity bxxx

cabs cabs

city dxxx x es x

volume pl xxmxx x

mmeru cabs

indian radio cab industry

tacurrent market value