Construction Chemicals Market India November 2014
Executive Summary Market Construction chemicals market stood at INR xx bn in and is expected to reach INR yy bn in, growing at a CAGR of about z% Growing focus on construction activities in India has led to significant rise in demand for construction chemicals in the Indian market Drivers and Challenges Drivers Growth in Infrastructure Investment Increase in Urban Housing Rise in Disposable Income Steady Economic Growth Continuous FDI Inflow Challenges Low Consumer Awareness Lack of Standards Price Sensitivity Unskilled Labor Trends Focus on Tier 2 and Tier 3 Cities Use of Silicone-based Chemicals Eco-Friendly Construction Chemicals Rising Compliance with International Manufacturing Standards Key Players Competition Company A Company B Company C Company D Company E Company F 2
Macroeconomic Indicators Introduction Market Overview Construction Chemicals - Classification Major Application Areas Penetration Rate - Key Segments Supply Chain Analysis Major Manufacturing Hubs Sector-wise Demand Drivers and Challenges Trends Recent Developments Opportunity Areas Competitive Landscape Strategic Initiatives Appendix 3
Economic Indicators (1/3) GDP at Factor Cost: Quarterly INR tn 15 14 13 12 d1 c1 b1 a1 d2 c2 b2 a2 c3 b3 a3 c4 b4 a4 11 Q1 Q2 2010-11 2011-12 2012-13 Q3 2013-14 Q4 Inflation Rate: Monthly 2 1 % p q r s 0-1 -2 t Jul 2013 - Aug 2013 Aug 2013 - Sep 2013 Sep 2013 - Oct 2013 Oct 2013 - Nov 2013 Nov 2013 - Dec 2013 4
Specialty Chemicals Domestic Market Overview Specialty Chemicals Market Size and Growth Market Segmentation Based on Product Type- INR bn x4 x4 Z% y2 a1 a2 Construction Chemicals x3 x2 x1 0 y1 a6 a5 a4 a3 Paints and Coatings Specialty Polymers Homecare Surfactants Plastic Additives Others e Specialty chemicals are high value low volume chemicals used mainly because of its performance improving properties Global specialty chemicals industry accounts for b% of the global chemical industry in Indian specialty chemicals industry is expected to reach INR cc bn by and INR dd bn by By, Indian cities are likely to contribute p% of the total population and this rise in urbanization will drive the growth of specialty chemicals Rise in urbanization will boost investments in residential, industrial and commercial sector and increase demand for paints and coatings, specialty polymers, construction chemicals, home care surfactants, paper chemicals, cosmetic chemicals, plastic additives among others 5
Construction chemicals cater to demand from diverse projects across different construction sectors Indian Construction Chemicals Market Growth INR bn b4 P% x7 x6 x5 b3 x4 x3 b2 x1 x2 b1 0 e e e e e Construction Chemicals Market Segments Focus on the quality and standards of construction has led to a surge in demand for construction chemicals Construction chemicals industry in India is dominated by the organized segment Top 3 4 players operating in the market account for nearly q% of the overall market share Though use of construction chemicals increases the project by d-e%, these chemicals increases the longevity of the end product and improves performance Organized y1 Unorganized y2 6
Drivers & Challenges Summary Challenges Drivers Growth in Infrastructure Investment Increase in Urban Housing Rise in Disposable Income Low Consumer Awareness Lack of Standards Price Sensitivity Unskilled Labor Steady Economic Growth Continuous FDI Inflow 7
Trends Summary Focus on Tier 2 and Tier 3 Cities Use of Silicone-Based Chemicals Key Trends Rising compliance with international manufacturing standards Eco-Friendly Construction Chemicals 8
Opportunity Areas Summary Opportunity Areas Gujarat Madhya Pradesh West Bengal Orissa Indian states are focusing on infrastructure development as the primary vehicle to drive economic growth Emphasis on construction of infrastructure facilities provides a huge scope for the development of the construction chemicals market in India 9
Porter s Five Forces Analysis Threat of New Entrants Impact X Impact X Impact X Impact X Bargaining Power of Suppliers Competitive Rivalry Bargaining Power of Buyers Impact X Threat of Substitutes 10
Competitive Benchmarking (1/5) Public Trading Comparables Company A Company B Company C Company D Market Capitalization (INR mn) Share Price (INR) EV/EBITDA (x) EV/Revenue (x) PE Ratio 11
Public: Domestic Company Company A Ltd. (1/4) Company Information Offices and Centres India Corporate Address Company A, Street A City B State C Tel No. Fax No. Website Year of Incorporation Ticker Symbol Stock Exchange Products and Services Mumbai Head Office Category Products/Services Key People Construction Chemicals Others Name Person 1 Person 2 Person 3 Person 4 Designation Chairman, Managing Director Chief Executive of Manufacturing Director of Legal, Compliance Vice-President of Business and Markets-South Asia 12
Public: Domestic Company Company A Ltd. (2/4) Financial Snapshot INR mn x4 x3 x2 x1 a2 a1 2010 Financial Summary The company incurred a net loss of INR d2 mn in FY as against INR c2 mn in FY The company reported total income of INR d1 mn in FY, registering an increase of p % over FY The company earned an operating margin of x.x % in FY, an increase of y.y % points over FY The company reported debt to equity ratio of w.w in FY, an increase of z.z % over FY Key Financial Performance Indicators Indicators Market Capitalization (INR) Total Enterprise Value (INR) EPS (INR) PE Ratio (Absolute) Total Income b2 b1 2011 Net Profit/Loss c2 c1 2012 d2 d1 2013 Value (dd/mm/yyyy) INR mn y4 y3 y2 y1 y0 Key Ratios Particulars 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 y-o-y change (2013-12) 2013 2012 2011 2010 Improved Decline 13
Public: Domestic Company Company A Ltd. (3/4) Key Business Segments Key Geographic Segments Agricultural Solution Performance Products p3 x1 x2 p2 p1 y1 c1 z1 b1 y2 z2 b2 a1 c2 Plastics Chemicals x3 y3 z3 c3 a2 b3 Functional Soln. Others x4 y4 z4 a3 c4 b4 100% 50% 0% s1 d1 India s2 Foreign s3 s4 Key Recent Developments Description Overview News The company is one of the leading chemical companies operating in the global market with around pp production sites around the world The company s construction chemicals division, owned by Z Group, operates in India, Bhutan and Nepal Product Launch In Mar the company launched a new brand K for the construction industry In FY, the company began the production of direct dyes and launched smart coats for paper coatings 14
Public: Domestic Company Company A Ltd. (4/4) S O W T 15
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