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Construction Equipment Market – India

April 2014
Executive Summary
 Huge investment in infrastructure construction presents a major growth opportunity to the

Indian construction equipment market
Market  Global construction Equipment market is expected to reach INR a1 bn in 20-- growing at a
CAGR of x% over 20-- - --
 Domestic market is expected to grow at a CAGR of y% over 20-- - 20--
Drivers Challenges
 Robust Economic Development  Land Acquisition Problems
Drivers &  Growth in Infrastructure  Project Bottlenecks
Challenges  Development of Mining Industry  Crude Oil Price Hike
 FDI Inflow in Construction Industry  Rising Steel Prices
 Growth in Housing and Construction Market  Lack of Skilled Labor
 Manufacturing Sector Policies

Government  Upcoming Regulations
Initiatives  Required Initiatives
Major Players
Player A Player B Player C
Competition
Player D Player E Player F
CONSTRUCTION EQUIPMENT MARKET IN INDIA 2014.PPT 2

•Macro Economic Indicators
•Market Overview
 Global
 India
•Construction Equipment Segments
• Product – wise
• Service – wise
•Sector wise Demand
•Drivers and Challenges
•Government Initiatives
•Trends
•Opportunity Areas
•Recent Developments
•Competitive Landscape
•Strategic Recommendations
•Appendix
Economic Indicators (1/3)
GDP at Factor Cost: Quarterly
SAMPLE
INR tn
d3 c4
d1 c3 b4
d2
c1 b3
c2 a4
b1 b2 a3
a1 a2
Q1 Q2 Q3 Q4
20-- - -- 20-- - -- 20-- - -- 20-- - --
Inflation Rate: Monthly
%
1.0 B E
0.8
0.6 A C D
0.4
0.2
0.0
Aug 20-- - Sep 20-- Sep 20-- - Oct 20-- Oct 20-- - Nov 20-- Nov 20-- - Dec 20-- Dec 20-- - Jan 20--
ONLINE MARKETING IN INDIA 2014.PPT 4

Construction Equipment Market – Global EXIM
SAMPLE
Global Construction Equipment Market – Export Import Scenario
Export Scenario
Others
20-- x1 x2 x3 x Country B
Country A
20-- y1 y2 y3 y
The USA, China are the top two countries in the worldwide construction equipment exports
Import Scenario
Others
Country C
20-- a1 a2 a3 a4 A Country B
Country A
20-- b1 b2 b3 b4 B
Among the top ten exporters of construction equipment, Country M was the country that registered the highest
increase in its imports in 20-- with a rate of x%

Earth Moving Construction Equipment (1/x)
SAMPLE
Backhoe Loader – Market Overview (1/x)
• Backhoe loader comprises tractor, front shovel/bucket and small backhoe in the rear and constitutes a
multipurpose equipment which is extensively used in small to medium infrastructure projects
• Small Backhoe loader accounts for x1% of the total backhoe market but this segment is expected to grow over
next few years
• Large backhoe loaders account for x2% of the overall backhoe loader market
• CASE Construction equipment holds the 2nd position in overall backhoe loader market in India
Backhoe Loader Market Segmentation (2013) Backhoe Loader Market Share (2013)
x1 x2 y1 y2
x1
y2
y1
x2

SAMPLE
Crawler Excavators – Market Overview
• Crawler Excavators is one of the largest segment in earth Major Players

moving construction equipment market
• The market accounted for about a% of the total earth Player 1
moving equipment market in 2013
Player 2
• Telcon a joint venture of Tata and Hitachi Construction
Machinery is the market leader in excavators and mainly
Player 3
produces crawler excavators
Crawler Excavator – Market Segmentation Crawler Excavator – Market Share

a1 a2 b1 b2
a2 b2
a1 b1
Note: Share as of 2013\2 Note: Share as of 2013

SAMPLE
Mini Excavators – Market Overview
Major Players
• Mini excavators are slowly emerging as ideal equipments
for earthmoving purposes in the urban areas Player 1
• It was first launched in Europe followed by North America
Player 2
• Mini excavators were first introduced in India by Telcon
• They are also referred to as lower end excavators Player 3
Mini Excavator Demand Share
m1 • x1
• x2
m2
• x3
m1 m2
Note: Mini Excavators: 14 tonnes

Concrete equipment market is further divided into various
segments SAMPLE
Concrete Equipment Market – Segmentation
Market Segmentation (2013) Market Segmentation (2014 e)
a2 b1
a3 b4
a4 b3
a2 a4 b1 b3
a1 a1 a3 b2 b2 b4
Transit Mixers accounts for around x% market share, where as Concrete Pumps accounts for around y% market share
in the overall concrete equipment market in 20--

Material Handling Market is further divided into various
segments SAMPLE
Material Handling Market - Segmentation
Market Segmentation (2013) Market Segmentation (2014 e)
a1 a2 a5 a1 a2
a5
a4 a4
a1 a3 a5 a1 a3 a5
a2 a4 a3 a2 a4
a3
Pick and Carry accounts for around x% market share, where as forklifts accounts for around y% market share in the
overall material handling equipment market

Cranes account for the highest share of demand in the
material handling equipment segment SAMPLE
Material Handling Equipment Market
Crane Market - Overview Crane Market Regional Demand – 2013
• Indian cranes market is highly fragmented and is d1

a1 c1
characterized by the presence of more than 200
c1 a1 b1 d1
manufacturers
• Crane rentals account for x%-y% of the total market
b1
Crane Market Segmentation – 2013 Crane Market Ownership – Structure 2013

x1 x2 y1 y2
x2
y2
x1 y1

Cranes Market Overview (5/7)
SAMPLE
Forklifts – Market Overview (1/2)
• Indian forklifts market is still at its nascent stage and is

Major Players
primarily being driven by the growth in warehousing, retail
and infrastructure
• Forklifts operating in the Indian market are of three types, Godrej
diesel trucks, electric trucks and LPG trucks
• Being a small market major forklift technologies in
operation are slow in penetrating the Indian market leading Voltas
to rise in influx of Chinese forklifts
Forklifts Market Scenario Forklift Market Segments (2013)

a3
a2
•A a1 a3
•B a2
•C
a1

Road Construction equipments segment accounted for a%
of the total construction equipment market in 2013 SAMPLE
Road Construction Equipment Market
Revenue Share (2013)

• Road construction equipment market is expected to
witness robust growth owing to surge in demand
y
from rise in infrastructure projects
• Government focus on infrastructure develop will x y
translate into higher demand for this market
x
• xx accounts for y% revenue in the overall domestic
market
INR bn Road Construction Equipment Market Size

40
e f
30 c d
a b
20
10
0
2013 2014e 2015e 2016e 2017e 2018e

Capital constraints and strict project timelines are
promoting the demand for rental equipments
Equipment Rental Market - Overview
SAMPLE
Equipment Rental Market Growth
• Rental equipment market in India is still at its nascent INR bn
stage 120 +13.0% f
• Equipment rental market is expected to reach INR f e
100 d
bn in 2018 at a CAGR of x% over 2013 – 2018 80 b
c
a
• Rental market in India is highly fragmented with the 60
organised sector accounting for x1%of the market 40
20
0
2013 2014e 2015e 2016e 2017e 2018e
Rental Equipment Market Segments (2013) Equipment Rental Market Share – (2013)
x1 x2 y1 y2
x1
y2
y1
x2

Construction Equipment – Infrastructure Demand
Roads - Overview
SAMPLE
Construction Equipment – Share of Expenditure
• Indian road sector is the second largest in the world
having a total length of x mn km
• As of August 2013, around a% of freight and b%
passenger traffic is carried by the roads Construction
• National highways account for around m% of the total Equipment xx%-yy%
road networks and handles around n% of road traffic Costs Share
• NHDP projects are being implemented in seven
phases, which envisages to improve more than xx km
of arterial routes
NHDP Status Planned Investment in Roads
INR bn AA BB CC
0 10,000 20,000 30,000 40,000 50,000
kms 10,000 B
8,000 bb1
xx yy zz xyz 6,000 A
4,000 aa1 bb2
2,000 aa2 bb3
0
xx yy zz
aa bb
Note: Status as of 31st January 2014

Real Estate Market – Segmentation (1/x)
SAMPLE
Residential Market Corporate
• Growing urbanization and income have

fuelled the demand for residential units • Demand for office spaces have increased
• This sector is witnessing a demand for following the growth in IT and ITES sectors
luxury and premium residential units • Off shoring operations of the foreign
• Rise in housing finance penetration and tax multinationals have added to the demand
incentives to further expand this sector
Metro Cities Office Demand

Share of Mn sq ft gh
Construction g h
30
Equipments a%-b%
Costs in 20
Buildings 10
0
2013 2014e
Note: Metro Cities include Delhi-NCR, Mumbai, Bengaluru, Chennai, Pune, Hyderabad and Kolkata

Foreign direct investment in construction industry and
construction equipments will ensure market growth
FDI Inflow in Construction Industry
SAMPLE Impact
• Currently, x% FDI is permitted in the construction industry under the Foreign Investment
Promotion Board (FIPB)
 According to th FDI policy, a three-year lock-in period for investments in housing and townships is required
Sector Wise FDI Equity Flow (From 2000 – 2012 ) - %age with total FDI Inflows
0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20
%
Hotel & Tourism a1
Metallurgical Industries a2
Automobile Industry a3
Power a4
Chemicals a5
Cumulative FDI inflows in the
Drugs & Pharmaceuticals a6 earth moving machinery
Computer Software & Hardware a7 segment was INR xx mn during
Apr 2000 to Sep 2013
Telecommunications a8
Construction Development a9
Service Sector a10
• FDI inflow for the construction industry is expected to increase owing to the following steps initiated by the GoI
 The housing ministry has proposed that the minimum lock-in period needs to be reduced in order to attract more FDI investment
 It has also proposed that the build up area should be reduced to x sq m from y sq m and the minimum capitalization should be reduced to INR aa mn from bb mn
for wholly owned subsidiaries

Lower profitability due to rising costs of steel imposes a
major hindrance on market growth
Rising Price of Steel
SAMPLE Impact
• Construction equipment market is facing the impact of inflation in terms of hike in price of raw
materials
• Rise in steel prices adds to the cost disadvantage as steel is a primary raw material for the
construction equipment industry
• Steel prices have been increased by x-y % in Q3 20--
Rise in steel price across some of the

Rise in Steel Price
metros
INR/ TN Chennai - Price Hike Kolkata - Price Hike

aa
40,000 b c d
a
INR INR mn
30,000 80,000 xy 60,000 nn
yy mm
20,000 60,000 xx 40,000
40,000
10,000 20,000
20,000
0 0 0
Mar 2011 Dec 2011 Mar 2012 Dec 2012 2010 2012 2010 2012
Price of raw materials is vital for determining the profitability of the Indian construction equipment market

High price of fuels serves as a major bottleneck in the
growth of the Indian construction equipment market
Rise in Crude Oil Prices
SAMPLE Impact
• Construction equipments are heavily dependent on the crude oil as it serves as a primary source
for fuel
• Presently, x% of crude oil demand is met through imports and it is expected that imports will
rise further
• High costs of crude oil pushes up the price of fuel which cuts into the profits of end users and
leads to reduction in the demand for equipments
• Thus, volatility in crude oil prices have a marked impact on construction equipment industry as
well
Rise in Crude Oil Prices

INR/barrel
8,000
6,000
4,000
2,000
0
Jan 20-- Jul 20-- Jan 20-- Jul 20-- Jan 20-- Jul 20-- Jan 20-- Jul 20-- Jan 20-- Jul 20-- Jan 20--

•Market Overview
 Global
 India
•Trends
•Appendix
Upcoming regulations to offer multiple benefits to the
construction equipment market SAMPLE
Upcoming Regulations Expected Benefits
AA
X X1
Impact y1
Y
Z z1
Government has announced plans to ban imports of second hand equipment under subsidy
Schemes such as Textile Up-gradation Fund and the Credit-Linked Capital Subsidy Scheme

Reduction in construction equipment imports will benefit
the domestic players in the Indian market
Decline in CE import
SAMPLE
• Government of India (GOI) is planning to restrict import to safeguard the productivity and Market has
competitiveness of Indian manufacturers witnessed decline
 GOI has asked the commerce and industry ministry to either ban import of machinery more than in imports
five years old or spell out the age limit for machinery in each sector
 The government is also considering an import duty on a% of the original value of machinery, which
will drive up costs for importers
• Import of cranes and concrete mixers has declined by a CAGR of x% and y% in value terms
between FY 2011 - 2012 and 2013 (Apr – Dec)
• Domestic production of construction equipments is expected to witness robust growth
over the next five years
Cranes Import Concrete Equipment Import

In mn Cranes Import In mn
Concrete Mixers Import
8,000 a abc 600 x
xyz
6,000
b c 400
4,000
y z
200
2,000
0 0
2011-2012 2012-2013 2013* 2011-2012 2012-2013 2013*
* Denotes, data taken between Apr - Dec

West Bengal – Opportunity Areas (2/x)
West Bengal – Infrastructure Investment
SAMPLE
Proposed Budget Allocation (2014 – 2015)
• State government has formulated
Sectors Amt (In Bn) “Industrial and Investment policy 2013” to
induce an inclusive economic growth in the
Waterways a
state
Road b • The focus of this policy is to improve
Power and Irrigation c infrastructure of the state by additional mn
Housing d km of highway and bridges, ports, airports
Transport e and water transport in Public Private
Partnership (PPP)
Sector Wise GSDP Growth • Infrastructure development in the power
sector has witnessed a x% increase from FY
% AA BB 2012
a3 b3
10 b2 • A major initiative adopted by the state
8 include construction of affordable housing
for the economically weaker section
6 a2
• Around zz housing units are expected to be
4 a1 b1
completed by the end of the financial year
2 under Integrated Housing for Slum Dwellers
0 Programme (IHSDP)
X Y Z
Note: * Proposed Plans for Next Financial Year (2014 – 2015)

Orissa – Opportunity Areas (2/x)
Orissa – Infrastructure Investment
SAMPLE
PPP Project Status in Orissa as of Sep 2013 • Orissa has emerged as a major investment
Sectors Particulars Under In Pipeline destination in India and as of Sep 2013, it
Implementation accounts for aa% share of all over India
investment
Urban Number a b
Development • Orissa government expects bulk of
Cost (mn) c d investments in different sectors such as coal
Transport Number e f
mining, steel and a few port projects
• Annual plan outlay (2014 – 2015) of the
Cost (mn) g h state has been tentatively pegged at INR
Roads Number i j aa1 bn, which include INR x bn for public
Cost (mn) k l sector undertakings
• The government of Orissa plans to invest
Sector – Wise GSDP Growth INR x mn to develop a required power
transmission Infrastructure for the proposed
% X Y ITIR near Bhubaneswar
15 • State government has formulated an
b2 a3 b3 Affordable Housing Policy to provide
10 a2
affordable housing facilities to the poor
5 a1 b1  Under this policy, BDA is planning to structure
and bid out a PPP project with an estimated
0 cost of INR bb mn
A B C
Note: ITIR: Information Technology Investment Region; BDA: Bhubaneswar Development Authority

Recent Developments (1/3)
Product Launches
Crane Launches
• X1
• X2
2011
2013 • X3
• X4
Backhoe Loaders
• Y1
• Y2
2013
• Y3
• Y4

•Market Overview
 Global
 India
•Trends
•Appendix
Competitive Benchmarking (1/4)
Key Ratios of Top 3 Companies – Operational Basis (FY 20--) (1/3)
SAMPLE
% Operating Margin Net Margin
q3
10
p1 q1
0
-10
-20
p2 q2
-30
Player A Player B Player C
•X
•X

Public: Foreign Company – Company ABC (x/x)
Company Information Offices and Centres – India
Corporate Address
Tel No.
SAMPLE Gurgaon
Fax No.
Website
Year of Incorporation
Ticker Symbol
Stock Exchange Head Office
Products and Services

Category Products/Services
Key People
Milk Products &
Nutrition Name Designation
Confectionery
Beverages

Financial Snapshot
SAMPLE
Key Ratios
y-o-y change
Total Income Net Profit/Loss Particulars 2013 2012 2011 2010
(2013-12)
INR mn INR mn Profitability Ratios
Operating Margin
Net Margin
Profit Before Tax Margin
Return on Equity
Return on Capital Employed
0 0 Return on Working Capital
2010 2011 2012 2013 Return on Assets
Financial Summary Return on Fixed Assets
Cost Ratios
• The company incurred a net profit of INR x mn in FY 2013, as compared to Operating costs (% of Sales)
net profit of INR y mn in FY 2012 Administration costs (% of
• The company reported total income of INR a mn in FY 2013, registering an Sales)
increase of b% over FY 2012 Interest costs (% of Sales)
• The company earned an operating margin of m% in FY 2013, a decrease of Liquidity Ratios
n percentage points over FY 2012 Current Ratio
• The company reported debt to equity ratio of c in FY 2013, a decrease of Cash Ratio
d% over FY 2012 Leverage Ratios
Debt to Equity Ratio
Key Financial Performance Indicators Debt to Capital Ratio
Interest Coverage Ratio
Indicators Value (25/03/2014) Efficiency Ratios
Fixed Asset Turnover
Asset Turnover
Current Asset Turnover
Working Capital Turnover
Capital Employed Turnover
Improved Decline

Key Business Segments Key Geographic Segments
Food Outside India India

100%
x1 x2 x3 x4
y
50% A%
xxx
0%
2013 2010 2011 2012 2013
Business Highlights
Description News
Overview • xxx
SAMPLE
Manufacturing Facilities • xxx

Description News
Manufacturing Facilities • xxx
Investment • xxx
SAMPLE
SAMPLE
• xxx • xxx
S W
O T
• xxx • xxx

Private: Domestic Company – Company ABC (x/x)
Company Information Offices and Centres – India
Corporate Address
Tel No.
New Delhi
Fax No.
Website
Year of Incorporation
Head Office
Products and Services

Category Products/Services
Key People
Toffee
Name Designation
Gum
Candy
SAMPLE
Private: Domestic Company – Company ABC (x/x)
Business Highlights
Description News
Overview • xxx
SAMPLE
Manufacturing Facility • xxx
Distribution Network • xxx

Private: Domestic Company –Company ABC – SWOT Analysis
(x/x)
SAMPLE
• xxx • xxx
S W
O T
• xxx • xxx

Strategic Recommendations (1/x)
SAMPLE
Construction equipment manufacturers need to adopt several initiatives to tap the latent potential of the
Indian Construction Equipment Market
Focus on Research and Development
•A
•B
Introduce India Specific Products
•X
•Y

Thank you for the attention
Construction Equipment Market – India 2012 report is a part of Netscribes, Inc.’s
Manufacturing Industry Series.
For any queries or customized research requirements, contact us at:
Phone: +91 33 4027 6214/6215
E-Mail: info@netscribes.com
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Construction Equipment Market – India

 Huge investment in infrastructure construction presents a major growth opportunity to the

 Manufacturing Sector Policies

CONSTRUCTION EQUIPMENT MARKET IN INDIA 2014.PPT 2

Inflation Rate: Monthly

ONLINE MARKETING IN INDIA 2014.PPT 4

CONSTRUCTION EQUIPMENT MARKET IN INDIA 2014.PPT 5

CONSTRUCTION EQUIPMENT MARKET IN INDIA 2014.PPT 6

• Crawler Excavators is one of the largest segment in earth Major Players

Crawler Excavator – Market Segmentation Crawler Excavator – Market Share

Note: Share as of 2013\2 Note: Share as of 2013

CONSTRUCTION EQUIPMENT MARKET IN INDIA 2014.PPT 7

Mini Excavator Demand Share

CONSTRUCTION EQUIPMENT MARKET IN INDIA 2014.PPT 8

Market Segmentation (2013) Market Segmentation (2014 e)

CONSTRUCTION EQUIPMENT MARKET IN INDIA 2014.PPT 9

Market Segmentation (2013) Market Segmentation (2014 e)

CONSTRUCTION EQUIPMENT MARKET IN INDIA 2014.PPT 10

Crane Market - Overview Crane Market Regional Demand – 2013

• Indian cranes market is highly fragmented and is d1

Crane Market Segmentation – 2013 Crane Market Ownership – Structure 2013

CONSTRUCTION EQUIPMENT MARKET IN INDIA 2014.PPT 11

• Indian forklifts market is still at its nascent stage and is

Forklifts Market Scenario Forklift Market Segments (2013)

CONSTRUCTION EQUIPMENT MARKET IN INDIA 2014.PPT 12

Revenue Share (2013)

INR bn Road Construction Equipment Market Size

CONSTRUCTION EQUIPMENT MARKET IN INDIA 2014.PPT 13

CONSTRUCTION EQUIPMENT MARKET IN INDIA 2014.PPT 14

NHDP Status Planned Investment in Roads

CONSTRUCTION EQUIPMENT MARKET IN INDIA 2014.PPT 15

• Growing urbanization and income have

Metro Cities Office Demand

CONSTRUCTION EQUIPMENT MARKET IN INDIA 2014.PPT 16

CONSTRUCTION EQUIPMENT MARKET IN INDIA 2014.PPT 17

Rise in steel price across some of the

INR/ TN Chennai - Price Hike Kolkata - Price Hike

CONSTRUCTION EQUIPMENT MARKET IN INDIA 2014.PPT 18

Rise in Crude Oil Prices

CONSTRUCTION EQUIPMENT MARKET IN INDIA 2014.PPT 19

CONSTRUCTION EQUIPMENT MARKET IN INDIA 2014.PPT 21

Cranes Import Concrete Equipment Import

CONSTRUCTION EQUIPMENT MARKET IN INDIA 2014.PPT 22

CONSTRUCTION EQUIPMENT MARKET IN INDIA 2014.PPT 23

CONSTRUCTION EQUIPMENT MARKET IN INDIA 2014.PPT 24

CONSTRUCTION EQUIPMENT MARKET IN INDIA 2014.PPT 25

CONSTRUCTION EQUIPMENT MARKET IN INDIA 2014.PPT 27

Products and Services

CONSTRUCTION EQUIPMENT MARKET IN INDIA 2014.PPT 28

CONSTRUCTION EQUIPMENT MARKET IN INDIA 2014.PPT 29

Food Outside India India

CONSTRUCTION EQUIPMENT MARKET IN INDIA 2014.PPT 30

Manufacturing Facilities • xxx

CONSTRUCTION EQUIPMENT MARKET IN INDIA 2014.PPT 32

Products and Services

Distribution Network • xxx

CONSTRUCTION EQUIPMENT MARKET IN INDIA 2014.PPT 34

CONSTRUCTION EQUIPMENT MARKET IN INDIA 2014.PPT 35

Focus on Research and Development

Introduce India Specific Products

CONSTRUCTION EQUIPMENT MARKET IN INDIA 2014.PPT 36

About Netscribes, Inc.