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fundamental and technical analysis of capital goods sector fundamental and technical analysis of capital goods sector Presentation Transcript

  • Group members 1) DIVYA SHETTIGAR 2) KESHAV GITE 3) KRUTIKA SACHDE 4) LALIT DHURI 5) RUPESH REGE 6) SWAPNIL WAGULDE
  • CAPITAL GOODS SECTOR  Introduction  Current scenario  Budget  Future growth  Challenges and strategies
  • Introduction  Backbone of manufacturing industry.  Cumulative foreign direct investments (actual inflows) in the capital goods industry amounted to over US $ 1.6 billion since January 2000.  The capital goods industry contributes 12% to the total manufacturing activity (which is about 15% of the GDP).  Capital goods and engineering sector as strategic sector for Indian economy View slide
  • •Budget 1)Road construction:  A regulatory authority for road sector.  3000 kms of road projects in Gujarat, Madhya Pradesh, Maharashtra, Rajasthan and Uttar Pradesh will be awarded in the first six months of 2013-14. 2) Industrial corridors:  Plans for seven new cities have been finalised and work on two new smart industrial cities at Dholera, Gujarat and Shendra Bidkin, Maharashtra will start duing 2013-14  Delhi Mumbai Industrial Corridor (DMIC) to be provided additional funds during2013-14 within the share of the Government of India in the overall outlay, if Required. View slide
  • 3) Ports:  Two new major ports will be established in Sagar, West Bengal and in Andhra Pradesh to add 100 million tonnes of capacity.  A new outer harbour to be developed in the VOC port at Thoothukkudi, Tamil Nadu through PPP at an estimated cost of ` 7,500 crore.
  • 4) National waterways:  A bill to declare the Lakhipur-Bhanga stretch of river Barak in Assam as the sixth national waterway to be moved in Parliament.  Preparatory work underway to build a grid connecting waterways, roads and ports. 5) Micro, Small and Medium Enterprises:  Benefits or preferences enjoyed by MSME to continue upto three years after they grow out of this category.  Refinancing capacity of SIDBI raised to ` 10,000 crore.
  • 6) Textiles:  Technology Upgradation Fund Scheme (TUFS) to continue in 12th Plan with an investment target of ` 1,51,000 crore.  Allocation of ` 50 crore to Ministry of Textile to incentivise setting up Apparel Parks within the SITPs to house apparel manufacturing units.
  • 7) Agricultural credit :  For 2013-14, target of agricultural credit kept at ` 7 lakh crore.  Interest subvention scheme for short-term crop loans to be continued scheme extended for crop loans borrowed from private sector scheduled commercial banks. 8) Green revolution :  500 crore allocated to start a programme of crop diversification that would Promote technological innovation and encourage farmers to choose crop alternatives.
  • Current scenario  Industrial growth has remained subdued since July 2011 due to weak global demand, weak supply linkages, high import costs, and sluggish investment activities.  During 2012-13 (April to November), industrial growth slowed to 1.0 per cent,The Industrial sector was mainly affected by the contraction in the output of capital goods
  • Future growth  Capacity creation and transformation in sector is driving growth in the engineering industry  It contributes to domestic and international demand for engineering goods from India
  • Challlenges and strategies challenges  Technological Competency  Import of Second Hand Capital Goods  Cost Competitiveness Strategies  Transformation in Objective and Approach  Strengthening Research and Development  Strengthening Technological Competencies
  • Bharat Electronics Limited  Introduction • Set up at Bengaluru , India – 1954 • State-owned electronics company with about nine factories, and few regional offices in India. • Manufacture and supply of strategic electronic products primarily to Defense Services. • It has grown into a multi-product, multi-technology, multi-unit company serving the needs of customers in diverse fields in India and abroad. • One of the eight PSUs under Ministry of Defence, Government Of India. • It has even earned the government's Navratna status.
  •  Products • BEL Weapon Locating Radar • BEL Battle Field Surveillance Radar(BFSR-SR) • LYNX II • • • • • • • • • • radar warning receivers composite communication system night vision devices versatile communication system (VCS) IFF Interrogator X-Ray tube radar finger printing system V/ultra high frequency (UHF) search receivers printed circuit board (PCB) assembly components and mechanical assemblies
  •  Vision To be a world - class enterprise in professional electronics  Mission To be a customer focused, globally competitive Company in defence electronics and in other chosen areas of professional electronics, through quality, technology and innovation.
  • Honeywell Automation India Limited  Introduction • Set up at Pune - 1988 • A market leader in Electronics-Instrumentation and Process Control equipment industry. • leading provider of Integrated automation and software solution that improves productivity enhancing comfort and ensuring the safety and security to homes and business premises. • First one & only company in India- Awarded the prestigious ISO 9001 certificate. • With over 2500 employees and an annual turnover of about Rs. 868 crores.
  •  Product & Services • Control & safety Systems • Terminal Automation Products • Sensing & Controlling Systems • Global Engineering Services  vision With a vision that spurs the company to enchance.  Mission To improve the businesses of our clients and we carry out that mission by delivering leading-edge automation and control solutions, equipment and services.
  • Ratio analysis Ratio name Bharat Electronics ltd Honeywell Automation India ltd 1) Current ratio 1.54 2.32 2) Debt equity ratio - - 4) Asset turnover ratio 1.08 2.49 5) Interest coverage ratio 1,798.54 351.94 6) Net profit margin 13.06% 5.09% 7) EBDITA margin 1,200.0 133.7 8) ROCE 19.14% 16.96% 9) Earning per share 103.74 96.33 10) Price earning ratio 15.2 29.1 3) Shareholders equity ratio
  • Recommendation  Bharat Electronics ltd.  Buy- @ Rs 1,267.00 on 31 May 2013  Due to Bharat Electronics (BEL) reported sales of Rs27.2bn in Q4 (up 22% YoY)  The stock is trading at 10x FY14E earnings. We expect stock to deliver 10% and 12% CAGR on sales and earnings over FY13-15E. • Honeywell Automation India ltd.  Hold – company Q4 net profit falls to 57% to Rs.15.3 cr.
  • LARSEN&TURBO  Introduction:    Larsen & Toubro Ltd (L&T) is a technology, engineering, construction and manufacturing company. It is established in 1938 by two danish engineers Larsen and Soren Turbo. Larsen & Toubro Ltd was incorporated in the year 1946 as a private limited company.  Business segmentation: • • • • • engineering and construction electrical & electronics machinery & industrial products financial services development projects
  •  Vission: • L&T SHALL BE PROFESSIONALLY MANAGED INDIAN MULTINATIONAL,COMITTED TOTAL CUSTOMER SATIAFACTION AND ENHANCING SHARE HOLDERS VALUE. • L&T-ites SHALL BE INNOVATIVE,ENTREPRENEURIAL AND EMPOWERED TEAM CONSTANTLY CREATING VALUES AND ATTENDING GLOBAL BENCHMARKS. • L&T SHALL FOSTER A CULTURE OF CARING ,TRUST AND CONTINUOS LEARNING WHILE MEETING EXPECTATION OF EMPLOYEES,STAKEHOLDERS AND SOCIETY "
  • Gammon India Ltd.  Introduction:  Founded by Mr J. C. Gammon  Gammon India was incorporated in the year 1922 as a private limited company  Products:  INFRASTRUCTURE  IRRIGATION PROJECTS  POWER PROJECT  GROUND ENGINEERING AND WATER SUPPLY
  •  Vision: “To Consistently build the reputation of Gammon amongst all stakeholders as a respected and influential leader in the Construction and Infrastructure Domain with Global Presence and Local Expertise backed with a sustained focus on attributes of Sustainability and Profitability and Employee engagement and Pride”
  • Ratio analysis Ratio name Larsen&Turbo Gammon Ind.Ltd. 1) Current ratio 1.20 1.12 2) Debt equity ratio 0.39 1.20 3) Dividend payout ratio 24.95% 3.64% 4) Asset turnover ratio 1.66 1.20 5) Interest coverage ratio 13.62 1.43 6) Net profit margin 8.18% 1.52% 7) EBDITA margin 28.28% 24.78% 8) ROCE 23.67% 10.46% 9) Earning per share 72.77 6.41 10) Price earning ratio 17.47 18.39
  • Technical analysis: 1) Larsen&Turbo  1 year chare on daily basis:
  • Gammon Ind.Ltd.  1 year chart on daily basis:
  • Recommendation on fundamental basis  Larsen&Turbo  Gammon Ind.Ltd.
  • Siemens Ltd  Siemens’ heritage in India dates right back to 1867  Leading powerhouse in electronics and electrical engineering with a     business volume aggregating about Rs. 12,000 crore. Operates in the core business areas of Industry, Infrastructure & Cities, Energy and Healthcare. It has a nation-wide sales and service network, 21 manufacturing plants and employs about 18,000 people. Siemens in India focuses on sustainable growth, innovation and environmental solutions. Along with leveraging its strong presence in the high-end technology segment, Siemens is also building a portfolio of innovative, simple-to-use, maintenance-friendly, affordable, reliable and timely-to-market solutions customized for India.
  • ABB Ltd.  The Company was incorporated on 24.12.1949  Leader in power and automation technologies  Operates in around 100 countries and employs about 130,000 people.  ABB’s operations are organized into five global divisions1. Power products 2. Power system 3. Discrete automation and motion 4. Low voltage products 5. Process automation
  • Ratio analysis Ratio name ABB ltd Siemens ltd 1) Current ratio 1.16 1.28 2) Debt equity ratio 0.13 3) Interest coverage ratio 5.77 4) Net profit margin 1.81 6.98 5) EBDITA margin 3.20 8.55 6) ROCE 8.52 31.23 7) Earning per share 6.48 10.09 8) Price earning ratio 96.51 103.08
  • Recommendation  ABB Ltd.  Siemens Ltd.
  • Greaves cotton ltd.  Introduction:    Established in 1859. one of India's leading and well-diversified engineering companies. The Company's core competencies are in Diesel / Petrol Engines, Gensets, Pumpsets and Construction Equipment.  Products :      Farm equipment. Automotive engines. Auxiliary power. Construction equipment. Industrial engines.
  •  Mission: "To manufacture and market a wide range of high quality products, services and systems of world class technology to the total satisfaction of customers in domestic and overseas markets.“
  • Suzlon Energy  Introduction:  It commenced it’s operation in 1995.  One of the major global leader in the wind power energy.  It’s customer mix comprising of SMEs, large corporate house, PSU and utility sector.  Products:  S9X suite-2.1MW:  S88-2.1MW:  S82-1.5MW:  S66-1.25MW:  S52-600KW:
  •  Vision:  To be the technology leader in the wind sector.  To be in the top three wind companies in all the key markets of the world.  To be the global leader in providing profitable, end-to-end wind power solutions.  To be the 'company of choice' for stakeholders.
  • Ratio analysis Ratio name Greaves cotton Suzlon energy 1) Current ratio 1.95 0.67 2) Debt equity ratio 0.03 2.15 3) Shareholders equity ratio 62.87% 16.36% 4) Asset turnover ratio 1.58 0.1 5) Interest coverage ratio -1.01 6) Net profit margin 10.57% -171% 7) EBDITA margin 11% -0.84 8) ROCE 17.38% -8.4% 9) Earning per share 5.7 -16.82 10) Price earning ratio 11.89
  • Recommendation  Greaves cotton  suzlon energy
  • Jindal saw ltd.  Introduction  It started operation in the year 1984.  one of the country's topmost industry houses and the foremost indigenous steel producers and exporters.  Using international acclaimed U- O-E technology.  Diversified from a single product company to a multi-product company.  Products  Seamless Pipes & Tubes  large diameter pipes  Ductile Iron(DI) Pipes
  •  Vision ”sustainable development firmly in place, Jindal SAW has played a leading role in developing livable cities across the world - that in turn has helped transform the lives of people staying in them.”
  • Punj lloyd ltd  introduction • Founded in 1988 • A global US $ 2.06 billion EPC conglomerate • Providing services in Energy, Infrastructure and Defence s • Present across Middle East & Africa, Asia Pacific, South A • International offices in 21 countries • Rich multicultural manpower from over 37 nationalities • International clients from top Oil & Gas majors and Gover • Equipment assets worth US $ 426 million •Declared ‘Infrastructure Company of the Year’ at Essar steel Infrastructure award 2010 in association with CNBC TV 18.
  •  Projects      Offshore & Onshore Field Development Pipelines Tankage and Terminals Defense equipment infrastructure projects  Vision  To be the Company of choice for our clients in our global markets, for all our business, driven by entrepreneurial spirit, cutting edge technology and execution excellence.  Mission  We will deliver reliable, high-quality solutions for global infrastructure, always ensuring that integrity, safety and sustainability are at the heart of everything we do.
  • Ratio analysis Ratio name Jindal saw ltd Punj lloyd ltd 1) Current ratio 1.33 1.41 2) Debt equity ratio 19.39 57.67 3) Shareholders equity ratio 0.01 0.01 4) Asset turnover ratio 0.7 0.77 5) Interest coverage ratio 3.86 1.16 6) Net profit margin 4.24% 0.98% 7) EBDITA margin 0.12 0.13 8) ROCE 0.05 0.02 9) Earning per share 8.12 1.74 10) Price earning ratio 22.28 35.20
  • Recommendation  Jindal saw ltd.  Punj lloyd ltd.
  • Bharat Heavy Electrical Limited  Introduction:    Established in 1956. BHEL is one of the largest engineering and manufacturing enterprises in India. Manufacture electrical equipment required for generation, transmission and utilization of electrical power.  Products :      Steam Turbines Piping Systems Compressors Turbo generators Pumps
  • Company Background  BHEL is one of the largest engineering and manufacturing enterprises in India and is one of the leading international companies in the field of power  Work force of 62,500, out of which over 11,000 are highly qualified engineers  BHEL has 14 manufacturing units  Incorporated as Heavy Electricals (Pvt.) Limited in August 1956  Manufacture electrical equipment required for generation, transmission and utilization of electrical power  Heavy Electricals (India) Limited formally merged with Bharat Heavy Electricals Limited (BHEL) in 1974
  • Vision , Mission, Values Vision :A global engineering enterprise providing solutions for a better tomorrow Mission:Providing sustainable business solutions in the fields of energy, industry & Infrastructure Values:Governance Respect Excellence Loyalty Integrity Commitment Innovation Team work
  • Praj Industries  Introduction:  Praj Industries was set up in 1984.  One of the major global leader to deliver cutting edge technologies to distillery industries. .  It is leading biofuel Technology Company providing number of processes and systems for ethanol and biodiesel productions.  Products:  Alcohol / Fuel Ethanol Plants  Brewery Plants  Water and Wastewater Treatment  Critical Process Equipment and Systems  Bionutrients  Agri Services
  • Vision , Mission, Values Vision :We aspire to be the most preferred organization for all stakeholders through environment friendly, sustainable solutions that can make world a better place Mission:Develope and deliver cost-effective, safe, clean and reliable solutions that will maximize prosperity of our customer Values:Integrity Innovation Respect
  • Ratio analysis Ratio name BHEL PRAJ 1) Current ratio 1.37 1.09 2) Debt equity ratio 3.15 0.05 3) Shareholders equity ratio 67.72% 36.65% 4) Asset turnover ratio 5.07 1.58 5) Interest coverage ratio 200.25 201.90 6) Net profit margin 13.99% 7.13% 7) EBDITA margin 24.2% 9.47% 8) ROCE 45.14% 20.20% 9) Earning per share 28.76 3.67 10) Price earning ratio 31.30 9.88
  • Recommendation Buy PRAJ (YES) (NO) = NO Reason = As per the ratio analysis BHEL Hold PRAJ (YES) (NO) = NO Reason = As per the ratio analysis BHEL Sell PRAJ (YES) (NO) = YES Reason = As per the ratio analysis BHEL YES YES NO