Construction equipment market in india 2014

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Abstract:
Netscribes’ latest market research report titled Construction Equipment Market in India 2014 captures the largest segment of the overall domestic construction equipment market. Construction comprises the second largest sector within the Indian economy. The domestic construction equipment market is expected to witness dynamic growth in the near future owing to government investments in infrastructure, coupled with the rapid expansion of the real estate sector. The market is expected to display immense growth prospects due to the increased number of housing projects in recent years. The growth in the Indian mining industry has also translated into an exponential demand for construction equipments in India. However, scarcity of land for infrastructural development hinders the growth of the market. The market is also facing the impact of inflation in terms of hike in prices of raw materials. High costs of crude oil push up the price of fuel which cuts into the profits of end users and leads to a reduction in the demand for equipments.
Players in the market are focusing on application of latest technologies in the manufacture of construction equipments to generate higher sales. The players are also focused on expansion and are forging technical alliances with a view to acquiring a greater share of the market. Several government and industry bodies are working towards the development of the market. The Government has also taken several initiatives to ban the import of second – hand construction equipment. Huge investments are being made in all sectors in the infrastructural space to ensure rapid market growth over the next few years.

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Construction equipment market in india 2014

  1. 1. Insert Cover Image using Slide Master View Do not distort Construction Equipment Market – India April 2014
  2. 2. 2CONSTRUCTION EQUIPMENT MARKET IN INDIA 2014.PPT Executive Summary Market Huge investment in infrastructure construction presents a major growth opportunity to the Indian construction equipment market Global construction Equipment market is expected to reach INR a1 bn in 20-- growing at a CAGR of x% over 20-- - -- Domestic market is expected to grow at a CAGR of y% over 20-- - 20-- Drivers & Challenges Competition Drivers  Robust Economic Development  Growth in Infrastructure  Development of Mining Industry  FDI Inflow in Construction Industry  Growth in Housing and Construction Market Challenges  Land Acquisition Problems  Project Bottlenecks  Crude Oil Price Hike  Rising Steel Prices  Lack of Skilled Labor Major Players Player A Player B Player C Player D Player E Player F Government Initiatives Manufacturing Sector Policies Upcoming Regulations Required Initiatives
  3. 3. 3CONSTRUCTION EQUIPMENT MARKET IN INDIA 2014.PPT •Macro Economic Indicators •Market Overview  Global  India •Construction Equipment Segments • Product – wise • Service – wise •Sector wise Demand •Drivers and Challenges •Government Initiatives •Trends •Opportunity Areas •Recent Developments •Competitive Landscape •Strategic Recommendations •Appendix
  4. 4. 4 SAMPLEEconomic Indicators (1/3) GDP at Factor Cost: Quarterly Inflation Rate: Monthly 0.0 0.2 0.4 0.6 0.8 1.0 % Dec 20-- - Jan 20-- E Nov 20-- - Dec 20-- D Oct 20-- - Nov 20-- C Sep 20-- - Oct 20-- B Aug 20-- - Sep 20-- A ONLINE MARKETING IN INDIA 2014.PPT Q3 d3 c3 b3 INR tn Q4 c4 b4 a3 Q2 d2 a4c2 b2 a2 Q1 d1 c1 b1 a1 20-- - --20-- - --20-- - --20-- - --
  5. 5. 5 SAMPLEConstruction Equipment Market – Global EXIM Global Construction Equipment Market – Export Import Scenario ExportScenario Import Scenario 20-- yy1 y2 y3 20-- xx1 x2 x3 Country A Country B Others Aa1 a2 a3 20-- Bb1 b2 b3 b4 20-- a4 Country A Country B Country C Others The USA, China are the top two countries in the worldwide construction equipment exports Among the top ten exporters of construction equipment, Country M was the country that registered the highest increase in its imports in 20-- with a rate of x% CONSTRUCTION EQUIPMENT MARKET IN INDIA 2014.PPT
  6. 6. 6 SAMPLEEarth Moving Construction Equipment (1/x) Backhoe Loader Market Segmentation (2013) Backhoe Loader Market Share (2013) • Backhoe loader comprises tractor, front shovel/bucket and small backhoe in the rear and constitutes a multipurpose equipment which is extensively used in small to medium infrastructure projects • Small Backhoe loader accounts for x1% of the total backhoe market but this segment is expected to grow over next few years • Large backhoe loaders account for x2% of the overall backhoe loader market • CASE Construction equipment holds the 2nd position in overall backhoe loader market in India Backhoe Loader – Market Overview (1/x) y2 y1 y2y1 x1 x2 x2x1 CONSTRUCTION EQUIPMENT MARKET IN INDIA 2014.PPT
  7. 7. 7 SAMPLE Crawler Excavator – Market Share • Crawler Excavators is one of the largest segment in earth moving construction equipment market • The market accounted for about a% of the total earth moving equipment market in 2013 • Telcon a joint venture of Tata and Hitachi Construction Machinery is the market leader in excavators and mainly produces crawler excavators Crawler Excavators – Market Overview Major Players Player 1 Player 2 Player 3 b2 b1 b2b1 Crawler Excavator – Market Segmentation Note: Share as of 2013Note: Share as of 20132 a2 a1 a2a1 Earth Moving Construction Equipment (3/x) CONSTRUCTION EQUIPMENT MARKET IN INDIA 2014.PPT
  8. 8. 8 SAMPLE Mini Excavator Demand Share • Mini excavators are slowly emerging as ideal equipments for earthmoving purposes in the urban areas • It was first launched in Europe followed by North America • Mini excavators were first introduced in India by Telcon • They are also referred to as lower end excavators Mini Excavators – Market Overview Major Players Player 1 Player 2 Player 3 m2 m1 m2m1 Note: Mini Excavators: 14 tonnes • x1 • x2 • x3 Earth Moving Construction Equipment (4/x) CONSTRUCTION EQUIPMENT MARKET IN INDIA 2014.PPT
  9. 9. 9 SAMPLE Concrete equipment market is further divided into various segments Concrete Equipment Market – Segmentation Market Segmentation (2013) Market Segmentation (2014 e) a2 a1 a3 a4 a2 a1 a4 a3 b4 b3 b1 b2 b1 b3 b4b2 Transit Mixers accounts for around x% market share, where as Concrete Pumps accounts for around y% market share in the overall concrete equipment market in 20-- CONSTRUCTION EQUIPMENT MARKET IN INDIA 2014.PPT
  10. 10. 10 SAMPLE Material Handling Market is further divided into various segments Material Handling Market - Segmentation Market Segmentation (2013) Market Segmentation (2014 e) a4 a5 a3 a2a1 a4 a5a3 a2 a1 a5 a2a1 a3 a4 a1 a5 a2 a3 a4 Pick and Carry accounts for around x% market share, where as forklifts accounts for around y% market share in the overall material handling equipment market CONSTRUCTION EQUIPMENT MARKET IN INDIA 2014.PPT
  11. 11. 11 SAMPLE Cranes account for the highest share of demand in the material handling equipment segment Material Handling Equipment Market Crane Market Regional Demand – 2013 Crane Market Ownership – Structure 2013 Crane Market - Overview • Indian cranes market is highly fragmented and is characterized by the presence of more than 200 manufacturers • Crane rentals account for x%-y% of the total market Crane Market Segmentation – 2013 y2 y1 y2y1 x2 x1 x2x1 d1 b1 c1 a1 d1b1 c1a1 CONSTRUCTION EQUIPMENT MARKET IN INDIA 2014.PPT
  12. 12. 12 SAMPLE • Indian forklifts market is still at its nascent stage and is primarily being driven by the growth in warehousing, retail and infrastructure • Forklifts operating in the Indian market are of three types, diesel trucks, electric trucks and LPG trucks • Being a small market major forklift technologies in operation are slow in penetrating the Indian market leading to rise in influx of Chinese forklifts Forklifts – Market Overview (1/2) • A • B • C Forklifts Market Scenario Major Players Godrej Voltas Forklift Market Segments (2013) a3 a2 a1 a3 a2 a1 Cranes Market Overview (5/7) CONSTRUCTION EQUIPMENT MARKET IN INDIA 2014.PPT
  13. 13. 13 SAMPLE Road Construction equipments segment accounted for a% of the total construction equipment market in 2013 • Road construction equipment market is expected to witness robust growth owing to surge in demand from rise in infrastructure projects • Government focus on infrastructure develop will translate into higher demand for this market • xx accounts for y% revenue in the overall domestic market Road Construction Equipment Market Road Construction Equipment Market Size 0 10 20 30 40 INR bn 2018e f 2017e e 2016e d 2015e c 2014e b 2013 a x y x y Revenue Share (2013) CONSTRUCTION EQUIPMENT MARKET IN INDIA 2014.PPT
  14. 14. 14 SAMPLE Capital constraints and strict project timelines are promoting the demand for rental equipments • Rental equipment market in India is still at its nascent stage • Equipment rental market is expected to reach INR f bn in 2018 at a CAGR of x% over 2013 – 2018 • Rental market in India is highly fragmented with the organised sector accounting for x1%of the market Equipment Rental Market - Overview Equipment Rental Market Growth Rental Equipment Market Segments (2013) Equipment Rental Market Share – (2013) y2 y1 y2y1 0 20 40 60 80 100 120 2016e d 2015e c 2014e b 2013 a INR bn +13.0% 2018e f 2017e e x2 x1 x2x1 CONSTRUCTION EQUIPMENT MARKET IN INDIA 2014.PPT
  15. 15. 15 SAMPLE CONSTRUCTION EQUIPMENT MARKET IN INDIA 2014.PPT Construction Equipment – Infrastructure Demand •Indian road sector is the second largest in the world having a total length of x mn km •As of August 2013, around a% of freight and b% passenger traffic is carried by the roads •National highways account for around m% of the total road networks and handles around n% of road traffic •NHDP projects are being implemented in seven phases, which envisages to improve more than xx km of arterial routes Construction Equipment – Share of Expenditure Planned Investment in RoadsNHDP Status Roads - Overview xx%-yy% Construction Equipment Costs Share 0 2,000 4,000 6,000 8,000 10,000 INR bn bb B bb3 bb2 bb1 aa A aa2 aa1 CCBBAA 0 10,000 20,000 30,000 40,000 50,000 yy kms xx xyzzz yy zzxx Note: Status as of 31st January 2014
  16. 16. 16 SAMPLE CONSTRUCTION EQUIPMENT MARKET IN INDIA 2014.PPT Corporate • Demand for office spaces have increased following the growth in IT and ITES sectors • Off shoring operations of the foreign multinationals have added to the demand Residential Market • Growing urbanization and income have fuelled the demand for residential units • This sector is witnessing a demand for luxury and premium residential units • Rise in housing finance penetration and tax incentives to further expand this sector a%-b% Share of Construction Equipments Costs in Buildings Metro Cities Office Demand 0 10 20 30 gh 2014e h 2013 g Mn sq ft Note: Metro Cities include Delhi-NCR, Mumbai, Bengaluru, Chennai, Pune, Hyderabad and Kolkata Real Estate Market – Segmentation (1/x)
  17. 17. 17 SAMPLE CONSTRUCTION EQUIPMENT MARKET IN INDIA 2014.PPT Foreign direct investment in construction industry and construction equipments will ensure market growth • Currently, x% FDI is permitted in the construction industry under the Foreign Investment Promotion Board (FIPB)  According to th FDI policy, a three-year lock-in period for investments in housing and townships is required FDI Inflow in Construction Industry Impact • FDI inflow for the construction industry is expected to increase owing to the following steps initiated by the GoI  The housing ministry has proposed that the minimum lock-in period needs to be reduced in order to attract more FDI investment  It has also proposed that the build up area should be reduced to x sq m from y sq m and the minimum capitalization should be reduced to INR aa mn from bb mn for wholly owned subsidiaries Cumulative FDI inflows in the earth moving machinery segment was INR xx mn during Apr 2000 to Sep 2013 Sector Wise FDI Equity Flow (From 2000 – 2012 ) - %age with total FDI Inflows 0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 Service Sector a10 Construction Development a9 Telecommunications a8 Computer Software & Hardware a7 Drugs & Pharmaceuticals a6 Chemicals a5 Power a4 Automobile Industry a3 Metallurgical Industries a2 Hotel & Tourism a1 %
  18. 18. 18 SAMPLE CONSTRUCTION EQUIPMENT MARKET IN INDIA 2014.PPT Impact Lower profitability due to rising costs of steel imposes a major hindrance on market growth Rising Price of Steel • Construction equipment market is facing the impact of inflation in terms of hike in price of raw materials • Rise in steel prices adds to the cost disadvantage as steel is a primary raw material for the construction equipment industry • Steel prices have been increased by x-y % in Q3 20-- Price of raw materials is vital for determining the profitability of the Indian construction equipment market 80,000 60,000 40,000 20,000 0 INR xy 2012 yy 2010 xx 60,000 40,000 20,000 0 INR mn 2012 nn 2010 mm Chennai - Price Hike Kolkata - Price Hike Rise in steel price across some of the metros Rise in Steel Price 0 10,000 20,000 30,000 40,000 aa Dec 2012 d Mar 2012 c Dec 2011 b Mar 2011 a INR/ TN
  19. 19. 19 SAMPLE CONSTRUCTION EQUIPMENT MARKET IN INDIA 2014.PPT High price of fuels serves as a major bottleneck in the growth of the Indian construction equipment market Rise in Crude Oil Prices Impact • Construction equipments are heavily dependent on the crude oil as it serves as a primary source for fuel • Presently, x% of crude oil demand is met through imports and it is expected that imports will rise further • High costs of crude oil pushes up the price of fuel which cuts into the profits of end users and leads to reduction in the demand for equipments • Thus, volatility in crude oil prices have a marked impact on construction equipment industry as well 0 2,000 4,000 6,000 8,000 Jul 20--Jan 20--Jul 20--Jan 20-- Jan 20--Jul 20--Jan 20--Jul 20--Jan 20--Jul 20--Jan 20-- INR/barrel Rise in Crude Oil Prices
  20. 20. 20CONSTRUCTION EQUIPMENT MARKET IN INDIA 2014.PPT •Macro Economic Indicators •Market Overview  Global  India •Construction Equipment Segments • Product – wise • Service – wise •Sector wise Demand •Drivers and Challenges •Government Initiatives •Trends •Opportunity Areas •Recent Developments •Competitive Landscape •Strategic Recommendations •Appendix
  21. 21. 21 SAMPLE CONSTRUCTION EQUIPMENT MARKET IN INDIA 2014.PPT Upcoming regulations to offer multiple benefits to the construction equipment market Impact X1 z1 y1Y Government has announced plans to ban imports of second hand equipment under subsidy Schemes such as Textile Up-gradation Fund and the Credit-Linked Capital Subsidy Scheme Z X AA Upcoming Regulations Expected Benefits
  22. 22. 22 SAMPLE CONSTRUCTION EQUIPMENT MARKET IN INDIA 2014.PPT Reduction in construction equipment imports will benefit the domestic players in the Indian market Decline in CE import Market has witnessed decline in imports Cranes Import •Government of India (GOI) is planning to restrict import to safeguard the productivity and competitiveness of Indian manufacturers  GOI has asked the commerce and industry ministry to either ban import of machinery more than five years old or spell out the age limit for machinery in each sector  The government is also considering an import duty on a% of the original value of machinery, which will drive up costs for importers •Import of cranes and concrete mixers has declined by a CAGR of x% and y% in value terms between FY 2011 - 2012 and 2013 (Apr – Dec) •Domestic production of construction equipments is expected to witness robust growth over the next five years Concrete Equipment Import 0 2,000 4,000 6,000 8,000 In mn abc 2013* c 2012-2013 b 2011-2012 a Cranes Import 0 200 400 600 x In mn 2011-2012 2013* xyz 2012-2013 zy Concrete Mixers Import * Denotes, data taken between Apr - Dec
  23. 23. 23 SAMPLE CONSTRUCTION EQUIPMENT MARKET IN INDIA 2014.PPT West Bengal – Opportunity Areas (2/x) West Bengal – Infrastructure Investment •State government has formulated “Industrial and Investment policy 2013” to induce an inclusive economic growth in the state •The focus of this policy is to improve infrastructure of the state by additional mn km of highway and bridges, ports, airports and water transport in Public Private Partnership (PPP) •Infrastructure development in the power sector has witnessed a x% increase from FY 2012 •A major initiative adopted by the state include construction of affordable housing for the economically weaker section •Around zz housing units are expected to be completed by the end of the financial year under Integrated Housing for Slum Dwellers Programme (IHSDP) Proposed Budget Allocation (2014 – 2015) Sector Wise GSDP Growth Sectors Amt (In Bn) Waterways a Road b Power and Irrigation c Housing d Transport e Note: * Proposed Plans for Next Financial Year (2014 – 2015) 0 2 4 6 8 10 a1 % Z b3a3 Y b2 a2 X b1 BBAA
  24. 24. 24 SAMPLE CONSTRUCTION EQUIPMENT MARKET IN INDIA 2014.PPT Orissa – Opportunity Areas (2/x) Orissa – Infrastructure Investment •Orissa has emerged as a major investment destination in India and as of Sep 2013, it accounts for aa% share of all over India investment •Orissa government expects bulk of investments in different sectors such as coal mining, steel and a few port projects •Annual plan outlay (2014 – 2015) of the state has been tentatively pegged at INR aa1 bn, which include INR x bn for public sector undertakings •The government of Orissa plans to invest INR x mn to develop a required power transmission Infrastructure for the proposed ITIR near Bhubaneswar •State government has formulated an Affordable Housing Policy to provide affordable housing facilities to the poor  Under this policy, BDA is planning to structure and bid out a PPP project with an estimated cost of INR bb mn PPP Project Status in Orissa as of Sep 2013 Note: ITIR: Information Technology Investment Region; BDA: Bhubaneswar Development Authority Sector – Wise GSDP Growth Sectors Particulars Under Implementation In Pipeline Urban Development Number a b Cost (mn) c d Transport Number e f Cost (mn) g h Roads Number i j Cost (mn) k l 0 5 10 15 % C b3a3 B b2 a2 A b1a1 X Y
  25. 25. 25CONSTRUCTION EQUIPMENT MARKET IN INDIA 2014.PPT Product Launches 2011 Crane Launches •X1 •X2 •X3 •X4 Backhoe Loaders 2013 2013 •Y1 •Y2 •Y3 •Y4 Recent Developments (1/3)
  26. 26. 26CONSTRUCTION EQUIPMENT MARKET IN INDIA 2014.PPT •Macro Economic Indicators •Market Overview  Global  India •Construction Equipment Segments • Product – wise • Service – wise •Sector wise Demand •Drivers and Challenges •Government Initiatives •Trends •Opportunity Areas •Recent Developments •Competitive Landscape •Strategic Recommendations •Appendix
  27. 27. 27 SAMPLEKey Ratios of Top 3 Companies – Operational Basis (FY 20--) (1/3) Competitive Benchmarking (1/4) -30 -20 -10 0 10 % Player C q3 Player B q2p2 Player A q1p1 Net MarginOperating Margin • X • X CONSTRUCTION EQUIPMENT MARKET IN INDIA 2014.PPT
  28. 28. 28 SAMPLE Public: Foreign Company – Company ABC (x/x) 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 Milk Products & Nutrition Confectionery Beverages Name Designation Head Office Gurgaon CONSTRUCTION EQUIPMENT MARKET IN INDIA 2014.PPT
  29. 29. 29 SAMPLEFinancial Snapshot Key Ratios Financial Summary • The company incurred a net profit of INR x mn in FY 2013, as compared to net profit of INR y mn in FY 2012 • The company reported total income of INR a mn in FY 2013, registering an increase of b% over FY 2012 • The company earned an operating margin of m% in FY 2013, a decrease of n percentage points over FY 2012 • The company reported debt to equity ratio of c in FY 2013, a decrease of d% over FY 2012 Key Financial Performance Indicators Indicators Value (25/03/2014) Particulars y-o-y change (2013-12) 2013 2012 2011 2010 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 00 2013201220112010 INR mnINR mn Public: Foreign Company – Company ABC (x/x) CONSTRUCTION EQUIPMENT MARKET IN INDIA 2014.PPT
  30. 30. 30 SAMPLE Public: Foreign Company – Company ABC (x/x) Key Business Segments Key Geographic Segments 100% 50% 0% 2013 A% Business Highlights Food Description News Overview • xxx Manufacturing Facilities • xxx xxx 2013 x4 y 2012 x3 2011 x2 2010 x1 IndiaOutside India CONSTRUCTION EQUIPMENT MARKET IN INDIA 2014.PPT
  31. 31. 31 SAMPLE Public: Foreign Company – Company ABC (x/x) Description News Manufacturing Facilities • xxx Investment • xxx CONSTRUCTION EQUIPMENT MARKET IN INDIA 2014.PPT
  32. 32. 32 SAMPLEPublic: Foreign Company – Company ABC (x/x) • xxx • xxx • xxx• xxx TO WS CONSTRUCTION EQUIPMENT MARKET IN INDIA 2014.PPT
  33. 33. 33 SAMPLE Private: Domestic Company – Company ABC (x/x) Key People Products and Services Company Information Offices and Centres – India Name Designation Corporate Address Tel No. Fax No. Website Year of Incorporation Head Office New Delhi Category Products/Services Toffee Gum Candy CONSTRUCTION EQUIPMENT MARKET IN INDIA 2014.PPT
  34. 34. 34 SAMPLE Business Highlights Private: Domestic Company – Company ABC (x/x) Description News Overview • xxx Manufacturing Facility • xxx Distribution Network • xxx CONSTRUCTION EQUIPMENT MARKET IN INDIA 2014.PPT
  35. 35. 35 SAMPLE Private: Domestic Company –Company ABC – SWOT Analysis (x/x) • xxx • xxx • xxx• xxx TO WS CONSTRUCTION EQUIPMENT MARKET IN INDIA 2014.PPT
  36. 36. 36 SAMPLE CONSTRUCTION EQUIPMENT MARKET IN INDIA 2014.PPT Strategic Recommendations (1/x) Focus on Research and Development •A •B Introduce India Specific Products Construction equipment manufacturers need to adopt several initiatives to tap the latent potential of the Indian Construction Equipment Market •X •Y
  37. 37. 37CONSTRUCTION EQUIPMENT MARKET IN INDIA 2014.PPT Thank you for the attention About Netscribes, Inc. Netscribes, Inc. is a knowledge-consulting and solutions firm with clientele across the globe. The company’s expertise spans areas of investment & business research, business & corporate intelligence, content-management services, and knowledge-software services. At its core lies a true value proposition that draws upon a vast knowledge base. Netscribes Inc. is a one-stop shop designed to fulfil clients’ profitability and growth objectives. Disclaimer: This report is published for general information only. Although high standards have been used in the preparation, “Netscribes” is not responsible for any loss or damage arising from use of this document. This document is the sole property of Netscribes and prior permission is required for guidelines on reproduction. Phone: +91 33 4027 6214/6215 E-Mail: info@netscribes.com Follow us on: Construction Equipment Market – India 2012 report is a part of Netscribes, Inc.’s Manufacturing Industry Series. For any queries or customized research requirements, contact us at:

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