Published on March 12, 2014
Power Backup Market – India March 2014
2 Executive Summary Market Drivers & Challenges Trends Competition Power backup devices include generators, UPS and inverters Demand-Supply gap in power distribution is the primary reason for boom in power backup market Inverter Market Trends UPS Market Trends Diesel Genset Market Trends Drivers •Energy Deficiency •Rising Disposable Income •Demand from Telecom Operators •Increase in Rural Demand •Healthy Economic Outlook Challenges •Competition from Unorganized Sector •Lack of Consumer Awareness •Growth in Chinese Imports •Decline in Growth of Desktop Sales Major Players Company A Company B Company C Company D Company E Company F POWER BACKUP MARKET IN INDIA 2014.PPT
3 •Macro Economic Indicators •Introduction •Market Overview •Key Production and Demand Hubs •Supply Chain Analysis •Key Demand Sectors •Drivers and Challenges •Industry Bodies and Associations •Trends •Competitive Landscape •Strategic Initiatives •Appendix POWER BACKUP MARKET IN INDIA 2014.PPT
4PHOTOVOLTAIC GENERATOR 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 2013-142012-132011-122010-11 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 Power Backup Market – UPS UPS Market – Overview • Growing investments in IT and rapid development of the IT sector has contributed to the boom in the UPS market • Growing consciousness about the need to protect costly electronic equipment is benefiting the market • Domestic manufacturers are expected to witness stiff competition from foreign players • Manufacturers operating in the industry are emerging as complete solution providers rather than mere suppliers UPS Market Segments (2013) UPS Market Growth (Value) UPS Market Growth (Volume) 0 20 40 60 80 100 120 2018e h1 2017e g1 2016e f1 2015e d1 2014e c1 2013e b1 2012 a1 INR bn x% 0 2 4 6 8 10 mn y% 2018e h2 2017e g2 2016e f2 2015e d2 2014e c2 2013e b2 2012 a2 r% q% p% Large (>20 KVA) Medium (5-20 KVA) Small (<5 KVA) m% n% UPS System Battery POWER BACKUP MARKET IN INDIA 2014.PPT
6 Major Manufacturing Hubs •Region A in India is the manufacturing hub of the power backup industry •In this region, State 1 is the key manufacturing hub for power backup electronics •Emergence of State 1 as a major hub can be attributed to the fact that its is a duty tax exempted zone •Major players operating in the power backup market have set up their production base in the region •Other than Region A, City 1 is an established manufacturing hub for the power backup battery industry Overview Production Hubs Power Backup Production Hubs POWER BACKUP MARKET IN INDIA 2014.PPT
7 Rise in Electronic Transactions and ATMs Growing reliance on modes of electronic payment and ATMs are driving the demand for power backup systems • For financial institutions relying on uninterrupted power to run critical information systems, events such as power outages can lead to wide-scale disruption in their enterprise-wide management services • Owing to advancements in technology, the banking sector has witnessed a shift from paper to computer- based files, bank tellers to ATMs and file cabinets to server racks • Smooth functioning of banking operations is essential to survive the growing competition in the Indian BFSI sector • Rising preferences for electronic transactions has led to increased demand for power backups Growth in Electronic Payment Rising trend of ATMs 200 150 100 50 0 x% 2015e s 2010 r ‘000 0 10 20 30 40 50 % 2011-12 q 2009-10 p ATM Concentration Pattern Area Concentration Metro a% Non Metro Urban b% Semi Urban c% Rural d% POWER BACKUP MARKET IN INDIA 2014.PPT
8 Drivers & Challenges – Summary Drivers Energy Deficiency Rising Disposable Income Demand from Telecom Operators Increase in Rural Demand Challenges Competition from Unorganized Sector Lack of Consumer Awareness Growth in Chinese Imports Decline in Growth of Desktop Sales POWER BACKUP MARKET IN INDIA 2014.PPT
9 Trends – Inverters Key Trends Technological Innovations Contract Manufacturing Opportunities Shrinking Unorganized Sector POWER BACKUP MARKET IN INDIA 2014.PPT
10 Trends – UPS New Product Launches Branded Segment Gaining Popularity Improvement in Aesthetics Focus on Retail and Channel Sales Key Trends POWER BACKUP MARKET IN INDIA 2014.PPT
11 Trends – Diesel Gensets Rental MarketHybrid Generators POWER BACKUP MARKET IN INDIA 2014.PPT
12PHOTOVOLTAIC GENERATOR MARKET IN INDIA 2014.PPT Market Competition – Porter’s Five Forces Analysis Bargaining Power of Suppliers Threat of New Entrants Competitive Rivalry Bargaining Power of Buyers Threat of Substitutes Impact X Impact X Impact XImpact X Impact X
13 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 POWER BACKUP MARKET IN INDIA 2014.PPT
14 Key Ratios of Top 4 Companies – Operational Basis (FY 2013) (1/3) Competitive Benchmarking (2/5) 0 10 20 30 40 % Company D d3 d2 d1 Company C c3c2 c1 Company B b3b2 b1 Company A a3 a2 a1 Net MarginGross Margin Operating Margin • Company C recorded gross margin of c1%, higher than Company A, Company B and Company D which recorded gross margins of a1%, b1% and d1% respectively • Company C recorded operating margin of c2%, higher than Company A, Company B and Company D which recorded operating margin of a2%, b2% and d2% respectively • Company C earned a net margin of c3%, significantly higher than Company A, Company B and Company D which recorded net margins of a3%, b3% and d3% respectively POWER BACKUP MARKET IN INDIA 2014.PPT
15 Key People Products and Services Company Information Offices and Centres – India Corporate Address Tel No. Fax No. Website Year of Incorporation Ticker Symbol Stock Exchange Category Products/Services Electrical components Equipment Name Designation Person 1 Chairman Person 2 Managing Director Person 3 Director Person 4 Additional Director New Delhi POWER BACKUP MARKET IN INDIA 2014.PPT Public: Domestic Company – Company A (1/4) Head Office
16 Financial Snapshot Key Ratios Financial Summary • The company earned a net profit of INR ‘d2’ bn in FY 20--, as compared to net profit of INR ‘c2’ bn in FY 20-- • The company reported total income of INR ‘d1’ bn in FY 20--, registering an increase of ‘p’% over FY 20-- • It earned an operating margin of ‘x.x’ per cent in FY 20--, an increase of ‘y.y’ percentage points over FY 20-- • The company reported debt to equity ratio of ‘w.w’ in FY 20--, an increase of ‘z.z’ per cent over FY 20-- Key Financial Performance Indicators Indicators Value (dd/mm/yyyy) Market Capitalization (INR mn) Total Enterprise Value (INR mn) EPS (INR) PE Ratio (Absolute) Particulars y-o-y change (20-- – -- ) 20-- 20-- 20-- 20-- 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/LossTotal Income 0 2000 4000 6000 8000 0 50 100 150 200 INR mnINR mn 2013 d2 d1 2012 c2 c1 2011 b2 b1 2010 a2 a1 POWER BACKUP MARKET IN INDIA 2014.PPT Public: Domestic Company – Company A (2/4)
17 Key Business Segments Key Geographic Segments Business Highlights 0% 50% 100% a2% 2010 c1% b1% a1% c3% b3% a3% 2011 c2% b2% 2013 c4% b4% a4% 2012 Segment 3Segment 2Segment 1 Description News Overview • Company A is a part of the Company 1Group established in collaboration with globally renowned , Country 2-based Company 2 • The company manufactures generators, multipurpose engines, chemicals, yarns, pipes, consumer durables, precision cutting tools etc. • Company A got ISO 9002 certification in Oct 1998, and has also been awarded ISO 14001 certification Collaborations • Company A collaborated with Company 3 for manufacturing of diesel generators with Company 3 brand of Engines Expansion Plans • The group is planning to diversify and enter the IT industry 50% 100% 0% 2013 100% Region 1 Region 1 is the only geographic segment in which the company has been operating for the past five years POWER BACKUP MARKET IN INDIA 2014.PPT Public: Domestic Company – Company A (3/4)
18 TO WS POWER BACKUP MARKET IN INDIA 2014.PPT Public: Domestic Company – Company A – SWOT Analysis (4/4)
19 Key People Products and Services Company Information Offices and Centres – India Category Products/Services Electrical Equipment Name Designation Person 1 Director Person 2 Director Person 3 Director Person 4 Director New Delhi Corporate Address Tel No. Fax No. Website Year of Incorporation POWER BACKUP MARKET IN INDIA 2014.PPT Private: Domestic Company – Company B (1/5) Head Office
20 Shareholders of the Company as on dd/mm/yyyy Ownership Structure Name No. of Shares held Shareholder 1 a Shareholder 1 b Shareholder 1 c Shareholder 1 d Shareholder 1 f Shareholder 1 g Shareholder 1 h Shareholder 1 i Shareholder 1 j Shareholder 1 k Total x 100 2012 100 2011 100 2013 Type A Shareholders POWER BACKUP MARKET IN INDIA 2014.PPT Private: Domestic Company – Company B (2/5)
21 Financial Snapshot Key Ratios Particulars y-o-y change (20– – --) 20-- 20-- 20-- 20-- 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 Financial Summary • The company incurred a net loss of INR –’d2’ mn in FY 20--, as compared to net profit of INR ‘c2’ mn in FY 20-- • The company reported total income of INR 1,529.9 mn in FY 20--, registering an increase of 0.34% over FY 20-- • The company earned an operating margin of ‘x.x’% in FY 20--, a decrease of ‘y.y’ percentage points over FY 20-- • The company reported debt to equity ratio of ‘w.w’ in FY 20--, a decrease of ‘z.z’% over FY 20-- Net Profit/LossTotal Income 80 60 0 40 20 6000 4000 2000 0 a1 INR mnINR mn 2013 d2 d1 2012 c2 c1 2011 b2 b1 2010 a2 POWER BACKUP MARKET IN INDIA 2014.PPT Private: Domestic Company – Company B (3/5)
22 Business Highlights Description News Overview • Company B has complete range of digital and sinewave inverters and UPS ranging from 400VA to 2000VA • It also has external battery models, which have been specially designed for multi PC requirements of customers • It is India‘s First ISO 9001-2000 Certified Manufacturing Company Network • It has a pan India network of branch offices and service centers with its headquarters in City 1 POWER BACKUP MARKET IN INDIA 2014.PPT Private: Domestic Company – Company B (4/5)
23 TO WS POWER BACKUP MARKET IN INDIA 2014.PPT Private: Domestic Company – Company B – SWOT Analysis (5/5)
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