How to do sector research and size Of opportunity in India today Along with the sources, download from the Youtube Descriptionrn Why Numbers? =a F ACT The best quotes from “Factfulness” by [] | ] Hans Rostling, the book U Bill Gates called “one of the best books T’ve read ina long time” The World Cannot be understood without numbersKey Indian Stats India's population growth CAGR: 12% la 12 s uM 22 [ercenm A a a as go ane es a “ . | fl 0197) nee tsme ast Decade Economic Growth USA. [China UK india®™ Brazil Indonesia Russia Turke} Saudi Arabia os|_07 ‘South Africa o4[ 04] 04] 0 ‘Source: RBI, World Bank, OECD Data, Technopuak Analais 61 25 76 26 10 26 09. 2.1 08 22, O8 15 08(0) CY 2011 | CY 2012 | CY 2013 | Cy 2018 Crean oa USA 48,467| 49,883] 51,603] 53,107] 55,033 59.928 4,550. 5618 6,317 7,051 7,651 8,759, UK 39,080/ 41,653] 42,019] 42,938] 46,968 39,932 India ZEST 1.458] 1,444] 1,450| 1,574 1,981 [Brazil 11,286] 13,246] 12,370] 12,300} 12,113 9881 Indonesia 3.122] 3.643] 3,694[ 3,624[ 3,492 3.837 Russia 10,675 | 15, 14,101 10,751 Turkey 10,672 11,707 12,095] 10,949 10,500 Saudi Arabia 19.263 | 25,24: 24,464] 20,628 20,804 [South Africa 7329] 7.501] 6,829] 6428] 5,733 6.121 i‘ llMany industries in India are a big fis big pond: Banking Wires&Cables . Insurance AMC Sector FMCG Sector . Consumer Durables QSR Chemicals I Consumer Durable Penetration Internet PenetrationIndustry Body: RBI, IRDAI, AMFI, SIAM etc. Annual Reports Conference calls Investor Presentations Market Research Firms DRHP Research Reports? Consultancy ReportsLet’s look at the Banking sector b. Share in Total Credit Outstanding 100 90 80 70 60 50 40 30 20 10 Per cent o i Mar-12 = Mar-13 Mar-14 Mar-15 Mar-16, Mar-17 Mar-18 PSBs ™ PVBs. = FBsLet’s look at the Banking sectorFE t's took at the Banking sectorre Let’s look at the W res/cables sector Domestic industry size of cables and w idustry (on the basis of mahufacturers’ realisation) (Rs billion) (Rs billion) 600 SIZE OF OPPORTUNITY. 52000 crore Source:Polycab, DRHPOrganized vs Unorganized Trend in share of organised vs wnorganised plaversra Switches Industry Ts Size of the domestic switches industry (Rs billion) (Rs ition) Fy 2018 Source: Industry estimates, CRISIL Research Source:Polycab, DRHP-= Expected industry CAGR ‘Stze of the domestic switches industry (Rs billion) {Rs bation) Note: P: Projected Source: Industry estimates, CRISILne Let's look at the Insurance sector Mi. Low Insurance penetration Protection gap (2014) I. i Lifeinsurance penetration (2017) | Life insurance density USS (2017) ze il... litis:.. HII Industry growing at 11% CAGR, Pvt Players growth at 20%* 2a me if 2 * =;fm —| Let's look at the Insurance sector eee © Source:IBEF, Reportra Let's look at the Insurance sector ‘Trend in heath insurance premium Source: DAI Trend of private —— share = =| = =| =| a me” aon mu ets 5 Fy2019 Source:HDFC Life, DRHP__a Let's look at the AMC sector Mucus! fund assees have grown strongly this millennium 250 AUM growth since FY00 AUM in tition Source: AMFI, Not Tn India, asset base of mutual funds as 62 percent of GDP is just 11 per cent, while the world average is SOUFCE:HDEG A RHPMonthly SIP contributions getting bigger le 8 BS Be Ri Sie uojug 2 UI uonNgiAUoD dis 21200 LI-A0N 1-0 Aides Ly-6ny deine dy-une Li-few diady 2eW L983 dvver 91-090 94-20N 9190 gi-dos gu-6ny ovine ov-une 94-Aew giady AMLco Amfi Website Fyzoz21 —FY201020 / FY 201049 FY ZON748 Fr 201647, SR ye un mal tae set acs esis S005 asi som 2518 ome e273 798s e208 263 ame 7808 eve 7554 ees 7308 ae ozs 0mFea Fi) 2017 Active and passively managed funds” Actively managed funds* Dd) ir) rat Mtl eI rei Let's look at the FMCG sector Low penetration Low premiumization | Indian FMCG Market Price Segmentation 2018 Hand Wash* (isis 26 Instant Coffee assent | Face Wash _ Premium Hair Conditioner | psy Soups* Dishwash Liquids il Body Wash 3 Mass UL Investor Provertatonra Let's look at the FMCG sector Figure 9 : Highperetration brand winoers ore ali wining by growing penetrationHmm Growth of different segments in FMCG | |. a sila a 5 * B : Cll+Bain ReportPenetration Level of Different Categories eee = Cll#Bain ReportPenetration Level of Different Categories 100% te Cli*Bain ReportPenetration Level of Different Categories [cheat i mi | Tea 99% Coffee 21% Peer]Penetration Level of Different Categories 26% (2019) 11% x E — ‘ai| Snacks Market Growth si(‘<‘iétS to grow ata CAGR of 143% over 5 years a Se ] 43,000 a (Canided Seimeine Mosquito Repellent ‘OUTLOOK Demand of Mosquito Repellents in India (USD Mn) @ wot = gy a i rl e@ Hindustan Foods Annt cs oa ReportAnother value migration? The Indian market: snapshot } fersonal Care Appliances: {Growth of body shavers ; cAGR | cacr cAGR 12.98% 13.35% 14.62% 3196 126.2 35377 221.6 Blas 83.8 2017 2020 7 2020 2017 2020 Retail Retail Retail value i volume value (USO Million) (000 units) (USD Million) ETPrimeEuromonitor Blog Ey "The male grooming industry which comprises of product categories such as shaving creams, razors an Blades, bath and shower Jeodorants, hair care, skin care and fragrances is one of the fa rket, Almost 6. However, the largest cateim | Beverage Growth ia min ir) ‘CNGR cms Total Sales Volumes (MN cases) ) = Sales Volume CAGR: ~18.9% 2017-2018 \ "india m International Varun Beverages, DRHPfam Beverage GOW Ee a ses, cece ‘Coca Cola Co} tar] sa 163] ia] 17.7 ‘Coca Cola Co) 16.0 [160] 164 | 16.7 Tne 143 [14.4] 13.8. “Coca-Cola (The Coca Cola Co} Cea re Sit S.S: #0 Co Ine Fania TMountain Deve (PepsiCo Tne ae] 52 7973 8.0 74) 17 t8T iox| 105) {00.0 | “100.0 % volume 2015/16 CAGR (2015-20) 21.7 aAlcohol Growth Brown vs. White spirits: total volume Brandy 957.2 5588 (03%) Dark Rum 371.3 3753 aa) 1,552.1 1,603.6 am Total volume 2,460.6 2,537.71 2.3%) Gin Vodka 697 2.5 White Rum 64 3 i Total volume 99 104.3 63%) Deter Vohene Sguos we aremanitor mera 5541 (08%) 376.8 4x) 1,650.7 aw 2,581.6 arm 565.3 20%) 380 (ax 1,695.3 am 2,640.63 3%) 24.9 aw (aan)i Let’s look at the Commercial Vehicle sector IMBHCV DOMESTIC SALES (LAST 10 YEARS) 21,033 19,002 13,351 79,223 badiea Ste) 36,867 . 19,586 13,708) 17,725 BPE Eg Ashok Leyland, Annual Reportre Let's look at the Commercial Vehicle sector Source:Statista‘Per Capita Spend on Food Services by Urban Population cy 2014 CY 2018 Burger King, DRHP- 3brs Food Services Growth 3 / Industry Growing at 9-10% Burger King, DRHP Fy 2016 [FV 2007 L__ 3,090 3.376i Burger King, DRHP- The table below shows the Indian food services market CAGR by segment between Fiscal 2014 and Fiscal 2019, as well as lexpected CAGR by segment between Fiscal 2019 and Fiscal 2¢ am [eAGREVIOEDTNumber of Restaurants 2010 2011 2012 2013 204 2015 17 1026 | 2016 2017 1227 1134 2018 2019 Bike Burger King Burger King, OIgsk_| _gsk_| _Qsn Master | Master | Malipie ranchsee| Franchisee | Franchisee 1289 300], 400 noens| 225250) 200s '300-550) 550-600) 500-550) | 525553 ES SEES EE? 1536 TW) 466%) 4-66] ORS) 665 3 aS SRL eRe] teset Sane assie) rae pat Hav] ese) ee] 20224) Tv 200280) for, 1802001) 350-4001 300-3501) 40501) 300-280) Total Build U snd Opening | | { Fee. Store] T90ETO] — 26003300 38-10) 7510007 — 300] aa G0O] TOO |Sizein sa) 4 400} | ee aversee sales O7SOWL|12IIL VDIIL/OMONL Tria) OrONL| LAIST ear Tea Hak, Pry Recah, Sy Rh fr wi na i APC ‘Seneca wei oe 2519 Kael Gf Me Darsh persed Seah & Wo ranches esis Devglopmen) $+ Terwyaly le of Weal Develop 1. pvet, can areal ten 8% a ALN, siaeiete seeaiaiieilsao = Rajendra Gogri Concall in Chemicals cas t Some of them may come back. But overall we see that margins will be higher because chemicals have so many products. So, which one will come back when in next 1-2-3 years, how capacity rationalization takes place in China we will have to see on a product-to-product basis. But in general, as earlier said geographical de- risking the foreign customers also want to source more from India and also if the Indian capacity comes then there can be more of a long-term shift of demand taking place into India. QuFY18 4 This was for agrochemical then you know that will be similar on polymer, pigments side also, pigment intermediate. So, in general any western company now when they have choice whether to invest in their own country or go to India and China. | think, everybody will start to look at it because the CAPEX in India will be in the range of 40% to 60% of the CAPEX in U.S. or Europe. Now everybody has started looking at it. And once it will have domino effect more and more company will start putting assets in India and then more and more will be willing to take that further, AARTI, ConcallChinese Labour costs rising Hourly cost of compensation (China vs India) = Labour costin 5 aa China on increasing a ag 45- trend aad 40 1 = Labour cost in China 5 ' lower than that of India 31 30 26 A a4 1212 13 12 ‘iii i i 1 I l I 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 India China i ; i Indian chemical Ind ‘Source: Cefic, CRISIL Research ical to double in next 5+From Research Reports = 10: Cost of manufacturing drugs USA 100 _ Europe 85-90 India = USFDA approved plants . 45-50 - Others 35-40 China 35-40 Source: Neogen ChemicalsBxGrrenicas ‘DSpeciaity chemicals rerrochemias mreruizers DPharmaceChemica Exhibit 16: Over FY05-19, domestic amines industry has shown a strong correlation. rrevenve growth for pharma and agrochemicels end-user industries ‘= Phorma/ agrochemicol industries growth = Amines industry growth, homafogrochemicls sectors combined winessed Torolyt, Aurobindo, BASF Indio, Bharor Rasoy Hetero. Insecticides fio}. Ico, 18 Chom & Pshea 2 Room AC Penetration RAC Market Penetration - Select Asian Countries and Global E ax = = Giobat Japan Malaysia Thailand India 2 4 Sullvan Arabs Amber, DRHP-8 = Consumer Durables Penetration ‘Market Penetration of Consumer Durables, India vs. Global (%), Fiscal 2015 as ase ates 70% s 60% 25% 20% 17% Room At Refrigerat wM Fo TV Air Cooler 1 8 Youn. Frost 8 “ Amber, DRHP‘NUMBER OF INTEENET USERS INDIA IS TUANET USERS AURAL AND UREA Meet MoteInternet Penetration Naukri traffic share among traditional job (om etops ptops, web mob and Ap) bse on ie spent (Overall trafic (rom desktops, web mobile app} on time spent: Industry and The Sources T | AIOCD-AWACS monthly Gartner, Nasscom RBI, Hemandra Hazari IRDAI+IBEF Central electricity authority Nielsen, Euromonitor Various Consultancies +broker Cll Report+IBEF ReportsNaukri Presentations/TRAI TRAIL