Economic Analysis Of Infrastructure Of INDIA


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Economic Analysis Of Infrastructure Of INDIA

  1. 1. <ul><li>ECONOMIC ANALYSIS OF INFRASTRUCTURE </li></ul><ul><li>-MACRO ANALYSIS </li></ul><ul><li>-INDUSTRY ANALYSIS </li></ul><ul><li>-MICRO ANALYSIS </li></ul>
  2. 2. <ul><li>(BackBone of the Economy) </li></ul><ul><li>MACRO Analysis </li></ul><ul><li>The value of goods exported and imported make </li></ul><ul><li>up close to 50% of world GDP vs. less than 20% in the 1980s. </li></ul><ul><li>The World Bank launched two new funds The bank's Infrastructure Recovery and Assets (INFRA) platform and the Infrastructure Crisis Facility (ICF)(over $55 billion) </li></ul>
  3. 3. <ul><li>FDI (Foreign Direct Investment) </li></ul><ul><li>Investment from other countries has Increased </li></ul><ul><li>2008-09 (April-March) 21,413 </li></ul><ul><li>2009 (April-July) 10673 </li></ul><ul><li>( Amount Rupees in crores (US$ in million) </li></ul><ul><li>Monetary Policy </li></ul><ul><li>Reserve Bank has injected large liquidity in the system since mid-September 2008 </li></ul>Table 16: Reduction in Deposit and Lending Rates (October 2008 - April 2009*) (Basis points) Bank Group Deposit Rates Lending Rates (BPLR) Public Sector Banks 125-250 125-225 Private Sector Banks 75-200 100-125 Five Major Foreign Banks 100-200 0-100 * As on April 18, 2009.
  4. 4. <ul><li>Bank Rate   The Bank Rate is 6.0 per cent.  Repo Rate   The repo rate under the Liquidity Adjustment Facility (LAF) is 4.75 per cent. It was earlier 9.0 in mid september . Reverse Repo Rate   The reverse repo rate under the LAF is 3.25 per cent. It was earlier 6.0 in mid september </li></ul><ul><li>Cash Reserve Ratio </li></ul><ul><li>The cash reserve ratio (CRR) of scheduled banks is 5.0 per cent of their net demand and time liabilities (NDTL).  It was earlier 9.0 in mid september </li></ul><ul><li>Statutory Liquidity Ratio </li></ul><ul><li>The Statutory Liquidity Ratio (SLR) of scheduled commercial banks (SCBs) has increased from 24 per cent from 25 per cent of their NDTL with effect from November 8, 2008. </li></ul>
  5. 5. <ul><li>The CVD and Special CVD exemption granted to imports of cement has been withdrawn w.e.f. 2nd January, 2009. </li></ul><ul><li>The India Infrastructure Financing Company Limited (IIFCL) has been authorized to raise Rs 10,000 crore through Government guaranteed tax free bonds 2008-09 </li></ul><ul><li>Rs 30,000 crore in 2009-10. </li></ul><ul><li>(The capital so raised will be used by IIFCL to refinance bank lending of longer maturity to eligible infrastructure projects.) </li></ul>
  6. 6. <ul><li>Budget 2009-10 promises increased investment in the infrastructure sector. Some of the key features are: </li></ul><ul><li>The fund allocation for the current year to NHAI for the National Highways Development Programme (NHDP) is being increased by 23 per cent over the 2008-09 </li></ul><ul><li>Allocation for the Railways increased from Rs.10,800 crores made in the Interim Budget for 2009-10 to Rs.15,800 crores. </li></ul><ul><li>Under JNNURM, the allocation for this scheme is being stepped up by 87 per cent to Rs.12,887 crores in the current budget. </li></ul><ul><li>Allocation for Bharat Nirman outlay increased by 45%. </li></ul><ul><li>IIFCL to refinance 60% of the loan for PPP projects and together with banks to support Rs 1,00,000 crores loans to these projects. </li></ul><ul><li>Allocation for Power development programme, Commonwealth games, Accelerated irrigation programme increased. </li></ul>
  7. 7. <ul><li>Before Recession </li></ul><ul><li>Contribution in GDP was 10.1% </li></ul><ul><li>After Recession </li></ul><ul><li>Contribution in GDP was 6.5% </li></ul><ul><li>Industry Analysis </li></ul><ul><li>The size of the Real Estate market is estimated at US$ 12 billion and has been showing a robust growth of about 30% per annum. </li></ul><ul><li>Real estate segment continued witnessing recovery in demand </li></ul><ul><li>Sustained demand in suburban and city centric residential segment </li></ul><ul><li>Signs of revival in luxury housing segment </li></ul><ul><li>Leasing enquiries have picked up; optimistic on lease conversions in coming quarters </li></ul>
  8. 8. <ul><li>Cement Industry </li></ul><ul><li>India’s cement industry is steadily growing and is set to add on 50 Million Tones additional capacity during the current year as the demand still remains high. </li></ul><ul><li>Cement Industry growth of 9.4% in the fourth quarter of FY09 </li></ul>
  9. 9. <ul><li>Steel Industry </li></ul><ul><li>World’s crude steel production has reached a level of 1,329 mn tonnes in 2008 but declined by 1.1% on YoY basis </li></ul><ul><li>Growth in crude steel production such as China and India which registered a CAGR of 18.7% and 10.6% </li></ul><ul><li>With global economic meltdown Steel Production has registered a negative growth on YoY basis. </li></ul>
  10. 11. <ul><li>Before Recession </li></ul><ul><li>The turnover were increasing @ 24.2% </li></ul><ul><li>Profit before tax were increasing @ 50.6% </li></ul><ul><li>After Recession </li></ul><ul><li>The turnover now are increasing @ 25.7%. </li></ul><ul><li>Profit before tax now increasing @ 30.23%. </li></ul><ul><li>Larsen & Toubro has got new order worth about Rs 966 crore </li></ul><ul><li>In engineering and construction business, in this quarter, we had more than 60% growth in new order inflow. It consisted of orders from the power sector, from hydrocarbon sector and other infrastructure segments </li></ul>
  11. 12. <ul><li>The machinery and industrial products business, has actually de-grown to a large extent by about 28% in the first six month of the year. Although it constitutes just about 6% of our total business </li></ul><ul><li>They have a 14% growth in the six months period, it could have been slightly higher </li></ul><ul><li>In the construction division our budget will be around Rs 30,000 crore for this year, which is going alright and the budget is in line. They have a lesser order intake in Q1 and Q2 and have a larger order intake in Q3 and Q4. </li></ul><ul><li>Q4 FY09 numbers have been better than what the street expected. It posted a net profit of to Rs 998 crore, up 3.23% from Rs 966.8 crore YoY. </li></ul><ul><li>The Market price Of Share was Rs.790 on 31 Oct 2008 and on 31 Oct 2009 is Rs.1598 </li></ul>
  12. 13. <ul><li>Company had a strong presence in project financing like IDFC and had also started agriculture tractor financing and micro-financing. </li></ul><ul><li>The company has assets worth Rs 8,000-8,500 crore, which should rise to Rs 11,000-12,000 crore by FY10-end </li></ul><ul><li>has raised USD 400 million via a qualified institutional placement (QIP) and USD 200 million via foreign currency convertible bonds (FCCBs) issue,  it will be used in ship building, nuclear forging, power plants and ports. </li></ul><ul><li>The company has diluted 1.9% equity </li></ul>
  13. 14. <ul><li>Before Recession </li></ul><ul><li>The turnover were increasing @ 29.6% </li></ul><ul><li>Profit before tax were increasing @ 32.3% </li></ul><ul><li>After Recession </li></ul><ul><li>The turnover now are increasing @ 13.33%. </li></ul><ul><li>Profit before tax now increasing @ 5.5%. </li></ul><ul><li>Increase in profitability has been brought by 3primary reasons. </li></ul><ul><li>Thrust on costs management across the project execution lifecycle. </li></ul>
  14. 15. <ul><li>Selection of a more profitable project-portfolio. This included a conscious decision to move to higher value added works like hydro power projects. </li></ul><ul><li>The easing out of commodity prices, especially cement and steel. </li></ul><ul><li>Revenue and profit growth reflects the execution performance of the company in 2008-09. </li></ul><ul><li>That shows in 2007-08, the company was fairly selective in project selection for bidding. </li></ul><ul><li>Focus on securing safer projects that were backed by the government and also emphasis was laid on higher margin projects. </li></ul>
  15. 16. <ul><li>Before Recession </li></ul><ul><li>The turnover were increasing tremendously @ 2.75 times in last 5 years </li></ul><ul><li>Profit before tax were increasing tremendously @ 5 times in last 5 years </li></ul><ul><li>After Recession </li></ul><ul><li>The turnover now are Decreased @ 33.33%. </li></ul><ul><li>Profit before tax Remains same 45 % (approx) </li></ul><ul><li>DLF Limited was  conferred the  Best Global Developer Award for 2009  by Euromoney magazine  at  Euromoney’s Fifth Annual Real Estate  Awards </li></ul>
  16. 17. <ul><li>Net profit was up 11.05% to Rs 439.74 crore versus Rs 396 crore, QoQ in 2 Quarter </li></ul><ul><li>DLF-LOR joint venture, it had announced the 50:50 joint venture with the UK-based Laing O’Rourke. </li></ul><ul><li>Demand has recovered, sales in homes have picked up considerably </li></ul><ul><li>DLF has won the bid and has been awarded 350 acres of Land by HSIIDC in Gurgaon </li></ul><ul><li>Focus on de-leveraging: Sale of non-core assets and land parcels </li></ul><ul><li>Total developable area at 432 msf </li></ul><ul><li>49 msf of projects area under construction at the end of the quarter </li></ul>
  17. 18. <ul><li>DLF also won the awards for  Best </li></ul><ul><li>Developer in Asia and Best Developer in India </li></ul><ul><li>6.57 mln sqft has been added in under construction in Q2 </li></ul><ul><li>Continue to focus on sales / launch of Mid – Income housing projects(Focus on launch of Homes at City Center locations) </li></ul><ul><li>DLF to build one lakh houses costing under Rs 20 lakh each </li></ul>
  18. 19. <ul><li>Before Recession </li></ul><ul><li>The turnover were increasing @ 40%(average) </li></ul><ul><li>Profit before tax were increasing @ 57% </li></ul><ul><li>After Recession </li></ul><ul><li>The turnover now decreased @ 29.1%. </li></ul><ul><li>Profit before tax now decreased @ 30.3% </li></ul><ul><li>Unitech on 31 Oct. reported a 50.44 percent fall in its consolidated net profit at Rs.177.86 crore for the quarter ended on Sep 30. </li></ul><ul><li>Unitech said it had reduced its debt by Rs.2,397 crore during the first half of the current fiscal. </li></ul>
  19. 20. <ul><li>Company has entered into 50:50 joint venture with a local developer for about 100 acres of mixed-use development on the Western Expressway of Mumbai </li></ul><ul><li>Project constitutes the development of 1 million sq. ft. of office space out of the total developable area of approximately 18 million sq. ft. </li></ul><ul><li>During the year, 181 companies were added as the subsidiaries of your Company, thereby taking the total number of subsidiary companies to 316 as on March 31, 2008. </li></ul>
  20. 21. <ul><li>The foreign exchange earnings and expenditures of the Company during the year under review were Nil and Rs. 147.73 million as compared to Rs.21.59 million and Rs.154.96 million in the previous year </li></ul><ul><li>It succesfully raised nearly USD 900 million via two qualified institutional placement  </li></ul><ul><li>Unitech Habitat, a residential development, was supposed to be delivered by June 2009. Construction is still on and will take some time . </li></ul><ul><li>It plans to reduce its gearing to 1.33 times in FY09 </li></ul>
  21. 22. <ul><li>Infrastructure was effected initially but now is on a recovery track. </li></ul><ul><li>Being Back Bone Of a Country every nation is doing expenditure in this sector to come out of Recession </li></ul><ul><li>Major companies in India has shown positive results in this quarter. </li></ul><ul><li>Companies have learn Efficient working after Recession. </li></ul>