market research report : lead acid battery market in india 2013

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Lead Acid Battery Market IndiaLead Acid Battery Market – India

May 2013

Executive Summary

Market

Lead‐acid battery market in India was pegged at INR ‘b’ bn in 2012 and is expected to grow at a CAGR of x% till 2017

There are two types of batteries available in the market, Type 1 batteries and Type 2 batteries, ith th f h i i ifi tl hi h k t h

Drivers &

with the former having a significantly higher market share

Drivers: Growing automotive industry Increasing demand for power backup

Challenges: Polluting and toxic nature of lead Threat from other types of batteries

Challenges Booming renewable energy sector Recycling efficiency Lucrative replacement market

Volatility in lead prices Large unorganized segment

Batteries (Management and Handling) Rules, 2001 Procedure for registration/renewal of

g g Customs clearance of imports of new lead acid batteries Responsibilities of dealer Responsibilities of manufacturer, importer, assembler and re‐conditioner

Government Regulation

Procedure for registration/renewal of registration of recyclers Responsibilities of recycler Responsibilities of auctioneer Responsibilities of consumer or bulk consumer

Competitive Landscape

Major Public Players Major Private Players

Company 1 Company 3 Company 5

2LEAD‐ACID BATTERY MARKET IN INDIA 2013.PPT

Company 2 Company 4 Company 6

•Economic Indicators•Introduction•Market Overview•Drivers & Challenges•Government RegulationGovernment Regulation•Competitive Landscape•Strategic Recommendations•Strategic Recommendations•Appendix


Economic Indicators (1/3)

a2a1

INR tn

14b4c4b3

GDP at Factor Cost: Quarterly

d3

a2b2

c2

d2

a1b1

c1

d1

13

12

11

d4c3

Q2Q1

10

Q4Q32012‐132011‐122010‐112009‐10

Inflation Rate: Monthlyy

0 8

1.0

%

ca

0.2

0.4

0.6

0.8

edb

4

0.0

Nov 2012 ‐ Dec 2012Oct 2012 ‐ Nov 2012Sep 2012 ‐ Oct 2012Aug 2012 ‐ Sep 2012Jul 2012‐ Aug 2012

Lead‐acid battery market in India is progressing at a steady rate due to growing demand across sectors

Market Overview – Lead‐Acid Batteries Market Size and Growth (Value‐Wise)• Lead‐acid battery market in India has been exhibiting steady growth rates for the past few years 400

INR bn

%h

•Market comprises two major segments, Type 1 batteries and Type 2 batteries Type 1 batteries constitute a larger share of the overall market

100

200

300x%

df

g

cb

a

However, Type 2 batteries which are currently exhibiting a better growth rate than Type 1 are expected to narrow the gap within a few years

• Indian market is duopolistic in nature with the top 2 players Company 1 and Company 2 controlling ~90%

Market Segmentation (Value‐Wise)

0

2011 2012 2013e 2014e 2015e 2017e2016e

players, Company 1 and Company 2, controlling 90% of the organized market Industry enjoys strong pricing power due to its inherent duopolistic nature

Passenger vehicle space is dominated by Company 1 and

Type 1 Type 2

g p y p yCompany 2 due to their strong tie‐ups with recognized international players

Unorganized players dominate the lower end of the replacement market (commercial vehicles and tractors) due to the price sensitive nature of the segment

p1%

q1% q2%

p2%


due to the price sensitive nature of the segment

2012 2017e

Drivers & Challenges – Summary

D i

Challenges

Polluting and toxic nature of leadDrivers

Growing automotive industry

Increasing demand for power backup

g

Threat from other types of batteries

Volatility in lead pricesIncreasing demand for power backup

Booming renewable energy sector

Recycling efficiency

Large unorganized segment

Lucrative replacement market


Government Regulation – Summary

Batteries (Management and Handling) Rules, 2001

C t l f i t f l d id b tt i

Responsibilities of dealer

Customs clearance of imports of new lead acid batteries

`Government Regulations

Responsibilities of manufacturer, importer, assembler and re‐conditioner

Procedure for registration/renewal of registration of recyclersg

Responsibilities of recycler

Responsibilities of auctioneer


Responsibilities of consumer or bulk consumer

Competitive Benchmarking (2/5)

Key Ratios of Top 3 Companies – Operational Basis (FY 2012) (1/3)

40

% Net MarginOperating MarginGross Margin

10

20

30

40

b3

a3

c2b2

a2

c1b1

a1

0

Company 3

c3

Company2Company 1

• Company 3 recorded gross margin of a3%, higher than both Company 1 and Company 2 which recorded gross margin of p y g g , g p y p y g ga1% and a2% respectively

• Company 2 recorded operating margin of b2%, higher than that of Company 3 which recorded operating margin of b3% but lower than that of Company 1 which recorded operating margin of b1%

• Company 1 recorded the highest net margin of c1% followed by Company 2 which recorded net margin of c2% and Company 3 which recorded net margin of c3%

8

Company 3 which recorded net margin of c3%

LEAD‐ACID BATTERY MARKET IN INDIA 2013.PPT

Major Public Companies – Summary

5,000

5,500

Net Profit/Loss Size of the Bubble represents Market Capitalization in INR mn

3,500

4,000

4,500 c

2,000

2,500

3,000

b

500

1,000

1,500

a0

0 5,000 10,000 15,000 20,000 25,000 30,000 35,000 40,000 45,000 50,000 55,000 60,000

Total income

a

Company 3Company 2Company 1


Note: All figures are in INR mn and are based on FY 2012: Market Capitalization as on 18/03/2013

Company 3Company 2Company 1

Public: Domestic Company – Company 1(1/4)Company Information Offices and Centres – India

Corporate Address

Tel No.

Fax No.

Website

Year of Incorporation

Products and Services

Ticker Symbol

Stock Exchange

Hyderabad Head Office

Key People

Products and Services

Category Products/Services

N D i tiName Designation

Person 1 M.D.

Person 2 C.F.O.

Person 3 Director


Person 4 Director

i i l S h K i

Public: Domestic Company – Company 1(2/4)Financial Snapshot Key Ratios

Particulars y‐o‐y change (2012‐11)

2012 2011 2010 2009

Profitability RatiosOperating Margin

Net Profit/LossTotal Income INR bn

3

INR bn

30

b2 2d2

Net MarginProfit Before Tax MarginReturn on EquityReturn on Capital EmployedReturn on Working CapitalReturn on Assets

2

1

0

20

10

0

2012

a2d1

2011

b2

c1

2010

c2

b1

2009

a1

Financial Summary

• The company incurred a net profit of INR X mn in FY 20XX, as compared to net profit of INR Y mn in FY 20YY

• The company reported total Income of INR XX mn in FY 20XX,

Return on Fixed Assets

Cost RatiosOperating costs (% of Sales)Administration costs (% of Sales)

Interest costs (% of Sales)registering an increase of X per cent over FY 20YY

• The company earned an operating margin of X.X per cent in FY 20XX, an increase of X.X percentage points over FY 20YY

• The company reported debt to equity ratio of X.XX in FY 20XX, a decrease of X.X per cent over FY 20YY

Interest costs (% of Sales)

Liquidity RatiosCurrent RatioCash Ratio

Leverage RatiosDebt to Equity Ratio

b i l ia decrease of X.X per cent over FY 20YY

Key Financial Performance Indicators

Indicators Value (18/03/2013)Market Capitalization (INR mn)

Total Enterprise Value (INR mn)

Debt to Capital RatioInterest Coverage Ratio

Efficiency RatiosFixed Asset TurnoverAsset TurnoverCurrent Asset Turnover


Total Enterprise Value (INR mn)

EPS (INR)

PE Ratio (Absolute)

Working Capital TurnoverCapital Employed Turnover

Improved Decline

Public: Domestic Company – Company 1(3/4)Key Business Segments Key Geographic Segments

100%

Segment2Segment 1

100%

Region 2Region 1

0%

50%

100%

a1% c1% d1%

c2%

b1%

b2% d2%a2% 0%

50%

100%

v2%u2% w2%

y1%

y2%

u1% w1%v1%

Business Highlights

0%

2010 2011

c2%

2009

b2% d2%a2%

2012

0%

2010 2011

% % y2%

2009 2012

Description News

Overview

• The company is into sale of lead acid storage batteries for industrial and automotive applications

• It created Asia’s largest, single location, vertically‐integrated battery manufacturing facility accredited for ISO 9001:2000, ISO/TS 16949 (certified by TUV NORD), ISO 14001 and OHSAS18001‐ 2007

• Type 1 batteries constitute~55% of its revenues while Type 2 batteries account for the remaining• Type 1 batteries constitute 55% of its revenues while Type 2 batteries account for the remaining

Collaborations • The company has a collaboration with Company A, USA

Expansion Plans

• The company has finalized plans for setting up a geenfield batteries plant with an investment outlay of INR 1900 mn

• It will soon join the original vehicle (OV) bandwagon after establishing a substantial market share in the


j g ( ) g greplacement market

Public: Domestic Company – Company 1 – SWOT Analysis (4/4)

WS

TO

13

Thank you for the attentionThe Lead‐Acid Battery Market – India 2013 report is a part of Netscribes’ Energy and Utilities Series.For more detailed information or customized research requirements please contact:

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market research report : lead acid battery market in india 2013

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