Market Research Report :Facilities Management Services Market in India 2012


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Facilities management services market in India was valued at INR 585 bn in 2011 and is slated to grow at a CAGR of 25%. There is an increasing demand for such services as emphasis on urban development and modernisation of office spaces is rising. Consistent economic growth has led to a booming real estate sector in India which will positively impact this market in the near future.

The report begins with an introduction to facilities management services, including hard services and soft services. Facility management services imply the use of third-party service providers to maintain part of the building facility or outsourcing the management to an organization that executes this service professionally. This section also throws light on the various applications of facility management services such as retail and shopping malls, hotels, hospitals, banks, corporate houses, IT and ITES companies, manufacturing firms and others.

This is followed by the market overview section that gives an insight into the facilities management services market in India, its market size and growth, along with the split between organized and unorganized market. Low organized penetration of facilities management services in India leaves huge potential for players to develop this market. Geographic distribution and region wise market split of facilities management services has been provided. Organised market is mostly concentrated in and around metros and big cities while the unorganized market covers the facilities management requirements in tier I and tier II cities. The section also includes the facility management services supply chain consisting of different types of suppliers with varied service offerings. Additionally, an analysis of Porter’s Five Forces provides an insight into the competitive intensity and attractiveness of the market.

An analysis of the drivers and challenges explains the factors leading to the growth of the market including boom in real estate, rise in infrastructural development, growth in retail sector, growth of hospitality sector and improving healthcare scenario. The key challenges identified are shortage of manpower and large unorganized segment.

Key trends in the market have also been analysed which includes evolving project management and general contracting services, development of facilities management training and education, and investments and M&A activity in the facilities management sector.

The competition section provides an overview of the competitive landscape in the market and includes a detailed profile of the major players. A bubble chart for the private players, depicting their relative positions in the market with respect to their total income, net profit/loss and total assets is included. This section also includes list of products and services, key people, financial snapshot, key ratios and key recent developments for all companies,

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Market Research Report :Facilities Management Services Market in India 2012

  1. 1. Insert Cover Image using Slide Master View Do not distortFacilities Management Services Market –Facilities Management Services Market IndiaMarch 2012
  2. 2. Executive Summary  Facility Management services imply the use of a third‐party service provider to maintain part of the building  facility or outsourcing the management to an organization that executes this service professionallyIntroduction  It includes hard services and soft services and has application in retail and shopping malls, hotels, hospitals,  banks, corporate houses, IT and ITES companies, manufacturing firms and others  Facilities management services market in India was valued at INR c bn in 20‐‐ and is slated to grow to INR a bn  in 20‐‐, at a CAGR of b% Market  It is a highly fragmented industry with few organized players and mostly unorganized small operators  Consistent economic growth has led to a booming real estate sector in India, which will strongly drive the  g growth of this market in the near future Drivers Challenges – Boom in real estate – Shortage of manpower Drivers &  – Rise in infrastructural development – Large unorganized segment Challenges g – Growth in retail sector – Growth of hospitality sector – Improving healthcare scenario  Evolving project management and general contracting services Trends  Development of facilities management training and education Development of facilities management training and education  Investments and M&A activity in facilities management sector Major PlayersCo pet t oCompetition Player 1 Player 2 Player 3 Player 4 Player 5 Player 6 FACILITIES MANAGEMENT SERVICES MARKET IN INDIA 2012.PPT 2
  3. 3. •Introduction t oduct o•Market Overview•Drivers & Challenges•Drivers & Challenges•Trends•Competition•Strategic Recommendations•Appendix FACILITIES MANAGEMENT SERVICES MARKET IN INDIA 2012.PPT 3
  4. 4. Facilities management covers a wide spectrum of essential  support services  Facilities Management Services – Introduction Facility Management (FM) services imply the use of a third‐party service provider to maintain part of the building facility  or outsourcing the management of entire facilities to an organization that executes this service professionally Facilities Management Services  Hard Services  Soft Services  Electrical services Housekeeping and cleaning Mechanical services Safety and security services Cooling and HVAC services Horticulture and landscaping services Water management and plumbing Pantry and catering services Energy Management Energy Management Office support services Office support servicesSource: FACILITIES MANAGEMENT SERVICES MARKET IN INDIA 2012.PPT 4
  5. 5. Facilities management services market is poised for strong  growth owing to the booming real estate sector in India Facilities Management Services Market Market Size and Growth • Facilities management services market in India has  been growing steadily over the years and is set to  INR bn witness rapid growth over the next five years i id h h fi • It is a highly fragmented industry with few organized  x% players and mostly unorganized small operators • Facilities management business is largely  unorganized in India and operates on low margins d d d l • Consolidation in this segment is slowly gaining  0 momentum as players are growing their business by  2011 2012e 2013e 2014e 2015e acquiring smaller firms • Facilities management services are primarily  l l concentrated in and around metros with low  y% penetration in tier I and tier II cities Segment 1 • There is an increasing demand for such services as  Segment 2 emphasis on urban development and modernisation  emphasis on urban development and modernisation of office spaces are growing • Consistent economic growth has led to a booming  z% real estate sector in India, which will strongly drive  the growth of this market in the near future the growth of this market in the near futureSource: FACILITIES MANAGEMENT SERVICES MARKET IN INDIA 2012.PPT 5
  6. 6. Drivers & Challenges – Summary  Drivers Boom in real estate Challenges Rise in infrastructural development Shortage of manpower Growth in retail sector Large unorganized segment Growth of hospitality sector Improving healthcare scenario FACILITIES MANAGEMENT SERVICES MARKET IN INDIA 2012.PPT 6
  7. 7. Demand for facilities management services will be  augmented by the growing retail industry and malls  Growth in retail sector Impact • Indian retail industry has been growing strongly over the last few years with rapid expansion of  organised retailing formats like malls and supermarkets • Number of malls in India grew by a% over the last one year, supporting the prevailing mall boom  culture in the country • Facilities management services market will benefit as the retail sector continues growing  strongly as it constitutes a major portion of the costs of such in‐built environments Growth of Retail Sector Companies Expansion Plans • Plans to invest INR b bn to open b Reliance Footprint stores in  INR tr Reliance Retail tier II and tier III cities in India by 20‐‐ x% • Reliance Lifestyle plans to open d new stores by 20‐‐20 • Plans to invest nearly INR e bn during 20 to expand its various Plans to invest nearly INR e bn during 20‐‐ to expand its various  Pantaloon Retail India 0 retail formats 2010 2014e • It plans to aggressively expand retail outlets across various  Shopper’s Stop Growth of Malls formats in new cities and add f mn sq ft by 20‐‐ Retail space addition Retail space addition • Plans to invest around INR g bn and add about h mn sq ft of  g q Bharti Retail Bh i R il retail space by 20‐‐ Number of malls No. mn sq ft • It plans to open h more stores across India by 20‐‐, which will  Lifestyle International include i lifestyle retail stores, as well as around j Home Centres  stores 0 0 • Plans to invest INR k bn to add l stores across various retail  Gitanjali Gems 2010‐11 2011‐12 formats by Mar 20‐‐Source: FACILITIES MANAGEMENT SERVICES MARKET IN INDIA 2012.PPT 7
  8. 8. Trends – Summary Evolving project management  and general contracting services g g Key Trends T d Development of facilities  Investments and M&A activity  management training and  g g in facilities management sector i f iliti t t education FACILITIES MANAGEMENT SERVICES MARKET IN INDIA 2012.PPT 8
  9. 9. Public: Foreign Company – Player (1/3) Company Information Offices and Centres – India  Corporate Address Tel No. Fax No. Website Year of Incorporation Ticker Symbol Stock Exchange Head Office Other Offices Products and Services Products and Services Category Products/Services Key People Category 1 Product 1, Product 2 Name N Designation D i ti A Category 2 Product 1, Product 2 B CSource: FACILITIES MANAGEMENT SERVICES MARKET IN INDIA 2012.PPT 9
  10. 10. Public: Foreign Company – Player (2/3) Financial Snapshot i i lS h Key Ratios K i y‐o‐y change  Total Income Net Profit/Loss Particulars  20‐‐ 20‐‐ 20‐‐ 20‐‐ (20‐‐) INR mn INR mn Profitability Ratios Operating Margin Net Margin Profit Before Tax Margin 0 Return on Equity Return on Capital Employed 0 Return on Working Capital 20-- 20‐‐ 20‐‐ 20‐‐ Return on Assets Financial Summary  Return on Fixed Assets Cost Ratios • The company earned a net profit of INR a mn in FY 20‐‐, as  Operating costs (% of Sales) compared to net profit of INR b mn in FY 20‐‐ Administration costs (% of  • The company reported total income of INR c mn in FY 20‐‐,  Sales) registering an increase of d% over FY 20‐‐ registering an increase of d% over FY 20 Interest costs (% of Sales) Interest costs (% of Sales) Liquidity Ratios • The company earned an operating margin of e% in FY 20‐‐, an  Current Ratio increase of f percentage points over FY 20‐‐ Cash Ratio • In 20‐‐, the company’s debt to equity ratio showed a decrease of g%  Leverage Ratios as compared to FY 20‐‐ Debt to Equity Ratio Debt to Capital Ratio b i l i Key Financial Performance Indicators Interest Coverage Ratio Indicators Value (dd/mm/yyyy) Efficiency Ratios Market Capitalization (INR mn) Fixed Asset Turnover Total Enterprise Value (INR mn) Asset Turnover Current Asset Turnover EPS (INR) EPS (INR) Working Capital Turnover PE Ratio (Absolute) Capital Employed TurnoverSource: Improved Decline FACILITIES MANAGEMENT SERVICES MARKET IN INDIA 2012.PPT 10
  11. 11. Public: Foreign Company – Player (3/3) Key Business Segments Key Geographic Segments Segment 1 Segment 2 Segment 1 Segment 2 Segment 3 S t3 Segment 4 Segment 5 Segment 5 0% Segment 6 Segment 6 0% 20‐‐ 20‐‐ 20‐‐ 20‐‐ 20‐‐ 20‐‐ Segment 7 Business Highlights Description  News • Player provides integrated real estate and investment management services to owner, occupier, and  Overview investor clients worldwide • It has recently merged with international property consultancy a for a consideration of ~INR b bn, with all  Collaborations c offices and businesses across Europe operating under player • Its clientele in India includes Accenture, Bank of America, BMW, Citigroup, IBM, Intel, Microsoft, Philips,  Clientele RBS, Yahoo • It bagged the Euromoney Real Estate Awards Top Global Real Estate Advisor and Consultant in 20‐‐ Awards and Recognition Awards and Recognition • It was also awarded the Fortune World’s Most Admired Companies in 20‐‐, 20‐‐ and 20‐‐Source: FACILITIES MANAGEMENT SERVICES MARKET IN INDIA 2012.PPT 11
  12. 12. Private: Domestic Company – Player (1/3) Company Information Offices and Centres – India  Corporate Address Tel No. Fax No. Website Year of Incorporation Head Office Other Offices Products and Services Products and Services Category Products/Services Key People Category 1 Product 1, Product 2 Name Designation Category 2 Product 1, Product 2 A B C DSource: FACILITIES MANAGEMENT SERVICES MARKET IN INDIA 2012.PPT 12
  13. 13. Private: Domestic Company – Player (2/3) Financial Snapshot i i lS h Key Ratios K i y‐o‐y change  Total Income Net Profit/Loss Particulars  (20‐‐) 20‐‐ 20‐‐ 20‐‐ 20‐‐ Profitability Ratios INR mn INR mn 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 0 0 Cost Ratios 20‐‐ 20‐‐ 20‐‐ 20‐‐ Operating costs (% of Sales) Administration costs (% of  Sales) Financial Summary  Interest costs (% of Sales) Interest costs (% of Sales) • The company earned a net profit of INR a mn in FY 20‐‐, as  Liquidity Ratios Current Ratio compared to net profit of INR b mn in FY 20‐‐ Cash Ratio • The company reported total income of INR c mn in FY 20‐‐,  Leverage Ratios registering an increase of d% over FY 20‐‐ Debt to Equity Ratio Debt to Capital Ratio b i l i • The company earned an operating margin of e% in FY 20‐‐, an  Interest Coverage Ratio increase of f percentage points over FY 20‐‐ Efficiency Ratios • In 20‐‐, the company’s debt to equity ratio showed a decrease  Fixed Asset Turnover of g% as compared to FY 20‐‐ Asset Turnover Current Asset Turnover Working Capital Turnover Capital Employed TurnoverSource: Improved Decline FACILITIES MANAGEMENT SERVICES MARKET IN INDIA 2012.PPT 13
  14. 14. Private: Domestic Company –Player (3/3) Business Highlights Description  News • Player is a subsidiary of company with pan India presence spanning all metros tier 2 tier 3 and even tier Player is a subsidiary of company with pan India presence spanning all metros, tier‐2, tier‐3 and even tier‐ 4 cities Overview • It has over a employees and is one of the top facility management service companies in India, servicing  sectors like  BFSI, retail, corporate, airports, ITES, government, telecom and diplomatic missions • Its clientele includes Birla Sun Life, Aviva, Religare, Bank of Baroda, ICICI Prudential, Calyon Bank and  McKinsey in the BFSI sector, Shoppers Stop, Crown Group, Spencer’s, Planet Retail, V3S in the retail  sector, Reliance Industries, HCC, DLF, Yamaha, USHA, Oriflame, IBM in the corporate sector, Tata  Clientele Teleservices, Aircel, Reliance Communications, MTS in the telecom sector • Additionally, its clients also include government organizations like  Indian Railways, BCCI, Delhi Metro and  diplomatic organizations like the Singapore High Commission • As part of its expansion and consolidation drive, it has recently acquired a strategic stake in CNCS Facility  Alliances Solutions, which will also help to expand its client base Awards and Recognitions • It was the first FMS ISO 9001 certified company  and has also achieved ESCO Certification in 20‐‐Source: SAMPLE FACILITIES MANAGEMENT SERVICES MARKET IN INDIA 2012.PPT 14
  15. 15. Thank you for the attentionThe Facilities Management Services Market ‐ India report is a special feature from Research on India. For more detailed information or customized research requirements please contact:Gaurav KumarPhone: +91 33 4064 6214E‐Mail: gaurav.kumar@netscribes.comResearch on India is a product of Netscribes (India) Pvt. Ltd. Research on India is dedicated to disseminating information and providing quick Research on India is a product of Netscribes (India) Pvt Ltd Research on India is dedicated to disseminating information and providing quickinsights on “hot” industries in India and other emerging markets. Track our new releases and major updates in these industries onAbout NetscribesNetscribes is a knowledge‐consulting and solutions firm with clientele across the globe. The company’s expertise spans areas of investment &  g g f g p y p p fbusiness 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 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 the preparation, Research on India, Disclaimer: This report is published for general information only Although high standards have been used the preparation Research on IndiaNetscribes (India) Pvt. Ltd. or “Netscribes” is not responsible for any loss or damage arising from use of this document. This document is the sole property of Netscribes (India) Pvt. Ltd. and prior permission is required for guidelines on reproduction. FACILITIES MANAGEMENT SERVICES MARKET IN INDIA 2012.PPT 15