2. Executive Summary
Drivers:
Replacement Demand
Rising Automobile Sales
Scope in Radialization
Increasing Exports
Increasing Investment in Road
Construction
Market
Overview
Drivers &
Challenges
Key Trends
Competitive
Landscape
Global tire market is expected to grow at a CAGR of p% through 20-- to 20-- to reach INR yy bn in
20--
Huge demand from Asia Pacific region will boost the industry’s growth
Indian tire industry is expected to reach INR xx bn in 20--, growing at a CAGR of q%
Retreading of Tires
Emergence of Tubeless Tire Market
Advent of Green Tires
Focus on Radial Tires
Challenges:
Price Volatility in Rubber Prices
Absence of Raw Materials
Inappropriate Duty Structure for
Natural Rubber
Key Players
Company A Company B Company C
Company D Company E Company F
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TIRE INDUSTRY IN INDIA 2014.PPT
4. Rising automobile demand from Asia Pacific region to boost
global tire market
Market Overview – Global (1/2)
• Global tire market is expected to grow at a CAGR of p% through 20-- to 20-- to reach INR xx bn in 20--
• Huge demand from the replacement tire segment and increasing commercial and passenger vehicles sales in
developing countries is expected to drive growth in the world market
• Asia Pacific region is expected to show the strongest growth fuelled by huge demand from India and China
• Further, new construction and infrastructural projects and increase in middle class population as well as rise in
disposable income of this section in developing countries will boost the global tire industry’s growth
• However, unstable prices of raw materials and increasing dependency of tire manufacturers on OEMs for sales are
some of the challenges faced by the global tire industry
y4
y3
y2
y1
0
INR bn
p%
20--e
x6
20--e
x5
20--e
x4
20--e
x3
20--e
x2
20--
x1
Global Tire Industry – Size and Growth (Value)
Note: OEM refers to Original Equipment Manufacturer
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TIRE INDUSTRY IN INDIA 2014.PPT
5. Growth in automobile sales and advent of new vehicle
models has been the key driving force to the tire industry
Market Overview – India (1/2)
• Indian tire industry is expected to grow at a CAGR of p% through FY 20-- to FY 20-- to reach INR x6 bn in 20--.
• It manufactures a diversified range of tires catering to the various Indian transport vehicles
However, specialized tires such as aero tires are not manufactured in India
• Organized sector accounts for a major share in the overall tire sector while the unorganized sector is dominant in the
bicycles segment
• Performance of the tire industry is closely related to that of the automotive sector.
• There has been a significant increase in the tire supplies to OEMs across all segments
y4
y3
y2
y1
0
INR bn
p%
FY 20--e
x6
FY 20--e
x5
FY 20--e
x4
FY 20--e
x3
FY 20--e
x2
FY 20--
x1
Indian Tire Industry – Size and Growth (Value)
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6. PLE
Exports of New Rubber PneumatiS
c TirA
es (1
M
/2)
a3
a2
a1
P%
FY 20--
x4
FY 20--
x3
FY 20--
x2
FY 20--
x1
INR mn
a4
Export of New Rubber Pneumatic Tires (Value-Wise)
b5
b4
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TIRE INDUSTRY IN INDIA 2014.PPT
b3
b2
b1
mn Q%
FY 20--
y4
FY 20--
y3
FY 20--
y2
FY 20--
y1
Export of New Rubber Pneumatic Tires (Volume-Wise)
7. PLE
Exports of New Rubber Pneumati
S
c Tir
A
es (2
M
/2)
x2
x5
x6
x3
x4
x1
x7
a1
b1
c1
d1
e1
f1
g1
y4
y1
y2
y3
y5
y6
y7
a1
b1
c1
d1
e1
f1
g1
FY20-- FY20--
Exports Based on Volume – Product-Wise
Exports Based on Value – Product-Wise
z3
z1
z2
a2
b2
c2 d1
d2
d3
c2
a2
b2
FY20-- FY20--
Export Based on Value – Country-Wise
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TIRE INDUSTRY IN INDIA 2014.PPT
8. Drivers & Challenges – Summary
Drivers
ReplacementDemand
Rising Automobile Sales
Scope in Radialization
Increasing Exports
Increasing Investment in Road
Construction
Challenges
Price Volatility in Rubber Prices
Absence of Raw Materials
InappropriateDuty Structure for
Natural Rubber
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TIRE INDUSTRY IN INDIA 2014.PPT
9. Order books of the players is growing owing to strong
demand from replacement of tires
• Replacement demand for tires accounts for more than xx% of the total demand for tires
• Increasing replacement demand is generating strong order books for the players in the industry
• Business catering to the replacement of tires is a high margin business generating strong
revenues
• Replacement market is dominated by widespread dealer distribution network including
exclusive dealer of the companies as well as multi company dealers
ReplacementDemand Impact
p1%
p3%
p2%
Replacement Demand in T&B Segment
x y z
Apr-Dec FY 20-- Apr-Dec FY 20--
Note: T&B refers to Trucks and Buses, PV refers to Passenger Vehicles
q1%
q3%
q2%
Replacement Demand in PV Segment
a b c
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TIRE INDUSTRY IN INDIA 2014.PPT
10. Trends – Summary
Retreading of Tires Emergence of Tubeless Tire
Market
Focus on Radial Tires Advent of Green Tires
Key
Trends
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TIRE INDUSTRY IN INDIA 2014.PPT
11. Competitive Benchmarking (1/5)
Public Trading Comparables (FY 2014)
Company A Company B Company C
Market Capitalization(INR
mn)
Share Price (INR)
EV/EBITDA (x)
EV/Revenue (x)
PE Ratio
Note: Top 3 Public companies based on the Market Capitalization; Market Capitalization is as on 30/10/2014, Share Price is as on 29/10/2014 and PE ratio is as on
30/10/2014
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TIRE INDUSTRY IN INDIA 2014.PPT
12. Competitive Benchmarking (2/5)
SAMPLE
Key Ratios of Top 3 Companies – Operational Basis (FY 2014) (1/4)
a4
a3
a2
a1
%
Company C
z3
y3
x3
Company B
z2
y2
x2
Company A
z1
y1
x1
Operating Margin
Gross Margin Net Margin
• Company B recorded gross margin of x2%, higher than that of Company A and Company C which recorded gross margin
of x1% and x3% respectively
• Company B recorded highest operating margin of y2%, followed by Company C and Company A which recorded
operating margin of y3% and y1% respectively
• Company B recorded a net margin of z2%, higher than that of Company C and Company A which recorded net margin
of z3% and z2%
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TIRE INDUSTRY IN INDIA 2014.PPT
13. Public: Domestic Company – Com
S
pan
A
y A (
M
1/4)
PLE
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
Name Designation
Person 1
Person 2
Person 3
Person 4
Noida
Category Products/Services
Headquarters
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TIRE INDUSTRY IN INDIA 2014.PPT
14. Public: Domestic Company – Com
S
pan
A
y A (
M
2/4)
PLE
Financial Snapshot Key Ratios
20-- 20-- 20-- 20--
Financial Summary
• The company earned a net profit of INR y4 mn in FY 20--, as compared to
net profit of INR y3 mn in FY 20--
• The company reported total income of INR x4 mn in FY 20--, registering an
increase of p% over FY 20--
• The company earned an operating margin of z1% in FY 20--, an increase of
z2 percentage points over FY 20--
• The company reported debt to equity ratio of d1 in FY 20--, an increase of
d2% over FY 20--
Key Financial Performance Indicators
Indicators Value
Market Capitalization (INR mn)
Total Enterprise Value (INR mn)
EPS (INR)
PE Ratio (Absolute)
Particulars
y-o-y change
(2014-13)
2014 2013 2012 2011
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
Total Income Net Profit/Loss
b4
b3
b2
a1 b1
a4 y3
a3
a2 x3
y2
x2
y1
x1
INR mn INR mn
y4
x4
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TIRE INDUSTRY IN INDIA 2014.PPT
15. Public: Domestic Company – Com
S
pan
A
y A (
M
3/4)
PLE
Key Business Segments Key Geographic Segments
Description News
Overview • Company A is engaged in the manufacture and sales of tires for more than 40 years
Manufacturing Facilities
• Manufacturing presence in Asia, Europe and Africa
• Recently in Sep 2014, confirmed Hungary as the location for the first greenfield manufacturing facility
outside India
New Ventures and Product
Launch
• In Feb 2014, announced entry in Qatar to tap the potential market for truck-bus radials and high
performing passenger car tires
• In May 2014, introduced two new tires Apollo Alnac 4G All Season and Apollo Alnac 4G Winter tires at
the international tire exhibition in Germany
• Opened its first branded retail outlet in Kuwait in Aug 2014
s3
s2
s1
20--
p4%
20--
p3%
p2%
20-- 20--
Business Highlights
p1%
b3
b2
b1
2014
r3
9%y4
z4
x4
2013
r2
y3
z3
x3
2012
r1
y2
z2
x2
2011
y1
z1
x1
q a4
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TIRE INDUSTRY IN INDIA 2014.PPT
a3
a2
a1
16. Public: Domestic Company – Com
S
pan
A
y A (
M
4/4)
PLE
T
O
W
S
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TIRE INDUSTRY IN INDIA 2014.PPT
17. Opportunity Areas
Gujarat
Tamil Nadu and
Andhra Pradesh
Maharashtra
Tire manufacturing plants should be built near the major automobile production or assembly facilities to
capitalize on the growing opportunities provided by the existing as well as the emerging auto hubs in India
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TIRE INDUSTRY IN INDIA 2014.PPT
Opportunity Areas – Summary
NCR and
Surrounding
19. Thank you for the attention
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