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Ackermans & van Haaren INVESTING IN INDIA
A Presentation By Ace Global
INDIA :  Growth  through economic liberalisation   Source: RBI Statistics Current Period Post Reform Period Pre Reform Period In spite of the Global slowdown, the Economy is expected to grow at a modest  6.5 %  & 6.7 % during  FY 09  & FY 10External debt mainly  corporate commercial borrowings
Global events and links with India ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]
How  the meltdown affected  India...  Govt.  Source: RBI Statistics ,Press Article Decline in  exports resulted in  layoffs in labour intensive sectors Export Growth % Soaring Oil Prices High inflation,  Govt. subsidies Fiscal deficits rose to 6% (target 3%)
How  the meltdown affected  India … Pvt. sector.   Source: RBI Statistics , Press Article During the meltdown, FIIs pulled out $12.2 billion out of the Indian Stock Market Collapse of the Equity Market, devaluation, and reduced access to debt >  Investment led Expansion dropped; warrants  redemption became difficult. Govt. swiftly arrested debt flows into construction, real estate sectors based on subprime links and inflation effects.
US, EU and Japan Source: IMF, Respective countries official government sources Recovery  not likely before 2010 New drivers of global growth? BRICs
The  short term outlook on BRICs Source: IMF, Respective countries official government sources ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]
For Liquidity … Commodities boom over,  Inflation under control  More room to cut lending rates Increased Money Supply in the Domestic Economy Govt. borrowing can crowd out  private sector Private sector banks would have  enough  liquidity  for the Private sector RBI may expand its balance sheet to lend  to Government For Investment… 1.3 50 billion $ in investments Government fiscal packages totaled up to Rs  1.2 trillion during the last fiscal year  (4% of GDP) Fiscal deficit rose to 6% against the 3% target  Oil prices back to pre-boom levels, and govt. recovering the subsidies. Fiscal deficit is narrowing.
India  to recover in Q3 2009 Source: IMF, Respective countries official government sources McKinsey Global Survey Results – April 2009 “  A Sizeable Majority (53%) expect India will emerge from the crisis economically stronger” “ Low dependence on exports (15% of GDP) has cushioned the impact of global slow down” “ Low oil prices and domestic investment growth will help India recover in Q3 2009” Election results and new budget may affect  pace
The  long term argument
Advantage India ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]
101.1 91.3 10.9 2.4 1.2 74.1 106 55.1 5.5 3.3 49.9 93.1 94.9 33.1 9.5 11.4 3.8 14.6 15.2 3.8 6.3 2.6 13.7 30.6 20.9 21.7 Definition of household income brackets based on annual household income: Globals (more than INR 1,000,000), Strivers (INR 500,000 to 1,000,000),  Seekers (200,000 to 500,000), Aspirers (90,000 to 200,000), Deprived (less than 90,000)  Middle Class India’s real GDP growth in % Source: MGI Household income brackets 2005 E 2015 F 2025 F Number of Households, (in million) Aggregate disposable income–2000 (in INR trillion)
Promising  Domestic Sectors ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]
[object Object]
[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],Useful Business Advice- Negotiations
Sagar Cements Limited Corporate Presentation May 2009
Company Snapshot ,[object Object],[object Object],[object Object],[object Object],[object Object],Sagar Cements Limited
Indian Cement Industry Overview ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],Source : Industry reports, May 2007 ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],Sagar Cements Limited Low per capita consumption points to significant potential for future growth Demand growth continuing unabated…
Indian Cement Industry Overview ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],(63%) (19%) (14%) (52%) (24%) (21%) 141 mn Tons 222 mn Tons Source : Enam Research, CMA,NCAER Sagar Cements Limited Significant Capacity addition Required Capacity utilizations at a high
Indian Cement Industry Overview ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],Source : CMA Source : CMA Sagar Cements Limited Capacity additions lag demand growth Demand Supply mismatch leading to improved prices
Efficient Cement Producer Strategically Located in proximity to Major Markets and Raw Material Sources ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],Sagar Cements Limited           Access to Raw Materials / Energy Sources Proximity to Major Markets Strategically located  Major Markets  Coal Mines  Plant Location  Fly Ash Source
Efficient Cement Producer Continuous improvement in operating efficiencies Sagar Cements Limited Sustenance of average production cost despite rising input costs Consumption per unit of Production
Strong Sales and Distribution Network Balanced Product Mix & Good Brand Equity ,[object Object],[object Object],[object Object],[object Object],Sagar Cements Limited Sales & Distribution Network Good  Brand Equity Bus Shelter Bus Paintings Shop Paintings Wall Paintings Cab Paintings
Strong Management with execution track Record ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],Sagar Cements Limited Processes Experience & Technical Knowhow
Financials Profit set to more than Triple Sagar Cements Limited Sales Profit EBIDTA
Financials Net worth of the company to more than triple in 3 Years Sagar Cements Limited Net worth Capital Employed Debt
Financials Sagar Cements Limited Debt-Equity Ratio ROE % ROCE %
Financials #1 as on 31 st  March 2009 Sagar Cements Limited Shareholding Pattern #1 Share price Movement  in BSE Earnings per Share (EPS) Few Key Investors 1 India Fund Inc (Blackstone Group) 5.39 2 AVH Resources India Private Limited 14.78 3 Paraficim S.A.S (Subsidiary of Vicat S.A) 6.67 4 Prinicipal Mutual Fund ~3.5 5 Twinvest Financial Services Limited 6.88 6 Savyasachi Constructions Private Limited 1.96 7 Passionate Investment Management P. Ltd 1.96
Expansion Plans ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],Sagar Cements Limited  ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],Tanzania Cement Company Key Success factors Karnataka Cement Plant Oman Cement Plant  
To sum it up….. ,[object Object],[object Object],[object Object],[object Object],Sagar Cements Limited
New investments 2009:  Oriental Quarries & Mines ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]

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The Development Of A Stake In India Baron Luc Bertrand Ac

  • 1. Ackermans & van Haaren INVESTING IN INDIA
  • 2. A Presentation By Ace Global
  • 3. INDIA : Growth through economic liberalisation Source: RBI Statistics Current Period Post Reform Period Pre Reform Period In spite of the Global slowdown, the Economy is expected to grow at a modest 6.5 % & 6.7 % during FY 09 & FY 10External debt mainly corporate commercial borrowings
  • 4.
  • 5. How the meltdown affected India... Govt. Source: RBI Statistics ,Press Article Decline in exports resulted in layoffs in labour intensive sectors Export Growth % Soaring Oil Prices High inflation, Govt. subsidies Fiscal deficits rose to 6% (target 3%)
  • 6. How the meltdown affected India … Pvt. sector. Source: RBI Statistics , Press Article During the meltdown, FIIs pulled out $12.2 billion out of the Indian Stock Market Collapse of the Equity Market, devaluation, and reduced access to debt > Investment led Expansion dropped; warrants redemption became difficult. Govt. swiftly arrested debt flows into construction, real estate sectors based on subprime links and inflation effects.
  • 7. US, EU and Japan Source: IMF, Respective countries official government sources Recovery not likely before 2010 New drivers of global growth? BRICs
  • 8.
  • 9. For Liquidity … Commodities boom over, Inflation under control More room to cut lending rates Increased Money Supply in the Domestic Economy Govt. borrowing can crowd out private sector Private sector banks would have enough liquidity for the Private sector RBI may expand its balance sheet to lend to Government For Investment… 1.3 50 billion $ in investments Government fiscal packages totaled up to Rs 1.2 trillion during the last fiscal year (4% of GDP) Fiscal deficit rose to 6% against the 3% target Oil prices back to pre-boom levels, and govt. recovering the subsidies. Fiscal deficit is narrowing.
  • 10. India to recover in Q3 2009 Source: IMF, Respective countries official government sources McKinsey Global Survey Results – April 2009 “ A Sizeable Majority (53%) expect India will emerge from the crisis economically stronger” “ Low dependence on exports (15% of GDP) has cushioned the impact of global slow down” “ Low oil prices and domestic investment growth will help India recover in Q3 2009” Election results and new budget may affect pace
  • 11. The long term argument
  • 12.
  • 13. 101.1 91.3 10.9 2.4 1.2 74.1 106 55.1 5.5 3.3 49.9 93.1 94.9 33.1 9.5 11.4 3.8 14.6 15.2 3.8 6.3 2.6 13.7 30.6 20.9 21.7 Definition of household income brackets based on annual household income: Globals (more than INR 1,000,000), Strivers (INR 500,000 to 1,000,000), Seekers (200,000 to 500,000), Aspirers (90,000 to 200,000), Deprived (less than 90,000) Middle Class India’s real GDP growth in % Source: MGI Household income brackets 2005 E 2015 F 2025 F Number of Households, (in million) Aggregate disposable income–2000 (in INR trillion)
  • 14.
  • 15.
  • 16.
  • 17. Sagar Cements Limited Corporate Presentation May 2009
  • 18.
  • 19.
  • 20.
  • 21.
  • 22.
  • 23. Efficient Cement Producer Continuous improvement in operating efficiencies Sagar Cements Limited Sustenance of average production cost despite rising input costs Consumption per unit of Production
  • 24.
  • 25.
  • 26. Financials Profit set to more than Triple Sagar Cements Limited Sales Profit EBIDTA
  • 27. Financials Net worth of the company to more than triple in 3 Years Sagar Cements Limited Net worth Capital Employed Debt
  • 28. Financials Sagar Cements Limited Debt-Equity Ratio ROE % ROCE %
  • 29. Financials #1 as on 31 st March 2009 Sagar Cements Limited Shareholding Pattern #1 Share price Movement in BSE Earnings per Share (EPS) Few Key Investors 1 India Fund Inc (Blackstone Group) 5.39 2 AVH Resources India Private Limited 14.78 3 Paraficim S.A.S (Subsidiary of Vicat S.A) 6.67 4 Prinicipal Mutual Fund ~3.5 5 Twinvest Financial Services Limited 6.88 6 Savyasachi Constructions Private Limited 1.96 7 Passionate Investment Management P. Ltd 1.96
  • 30.
  • 31.
  • 32.