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Strategic plan A process of developing and maintaining a viable fit between the organizations objectives and resources and the changing market opportunities.

The aim of strategic plan is to shape and reshape the companys businesses so that they combine and produce satisfactory profits growth.

-Peter Drucker

MARKET ANALYSISPresents information about the commercial market in which your Business operates, the purchasing habits of customers in that market, and information about competitors

Introduction ~ Power SectorIndian Power Industry is one of the largest and most important industries in India as it fulfils the energy requirements of various other industriesMost critical components of infrastructure that affects economic growth and the well-being of our nationIndia has the worlds 5th largest electricity generation capacity and it is the 6th largest energy consumer accounting for 3.4% of global energy consumptionIndias energy demand has grown at an average of 3.6% p.a. over the past 30 yearsIntroduction ~ Power SectorPower is generated by State utilities, Central utilities and Private players. The share of installed capacity of power available with each of the three sectors:

As per the latest Report of CEA (Central Electricity Authority), the Total Installed Capacity of Power in India is 173626.40 MW.

i.e. as on 31-03-2011, 5Fuel Type Generation Capacity

IBEF Indian Brand Equity FoundationMTOE: Thetonne of oil equivalent(toe) is aunit of energy: the amount of energy released by burning onetonneofcrude oil6Market SizeElectricity production in India stood at 911.6 terra watt hour (TWh) in FY13, a four per cent growth over the previous fiscalOver FY0713, electricity production has expanded at a CAGR of 5.5 per centThe Planning Commissions 12thPlan projects that total domestic energy production would reach 669.6 million tonnes of oil equivalent (MTOE) by 201617 and 844 MTOE by 202122

Source: IBEF Report, updated Oct, 2013IBEF Indian Brand Equity FoundationMTOE: Thetonne of oil equivalent(toe) is aunit of energy: the amount of energy released by burning onetonneofcrude oil7Market Share of Major PlayersIBEF Indian Brand Equity FoundationMTOE: Thetonne of oil equivalent(toe) is aunit of energy: the amount of energy released by burning onetonneofcrude oil8Demand-Supply Scenario

Growth Drivers of the SectorDemand Supply GapRegulatory Role of GovernmentRaw MaterialsTransmission & DistributionFDI Equity Flows in Power SectorGrowth Drivers for Power from Nuclear, Hydro and Renewable Energy Sources

FDI Equity InflowsRankRBIs Regional OfficeStates CoveredAmount of FDI Inflows%age with FDI inflows for Power Sector

Rs. In Cr.US $ in Million1.MumbaiMaharashtra, Dadra & Nagar Haveli, Daman & Diu

6,364.70

1,386.52 25.56 2.New DelhiDelhi, part of UP and Haryana3,469.53

732.76 13.51 3.HyderabadAndhra Pradesh3,327.96729.8113.454.AhemdabadGujarat3,120.89686.3712.65 5.BangaloreKarnataka1,574.04346.20 6.38Total of Above17,857.123,881.6671.55

Vision: To be the most admired and responsible Integrated Power Company with international footprint, delivering sustainable value to all stakeholderBusiness Card

About Tata PowerTata Power is Indias largest integrated power company with a significant international presenceInternational presence includes strategic investments in Indonesia through 30% stake in coal mines and a geothermal projectAn installed generation capacity of 8521 MW in India and a presence in all the segments of the power sector First 150 MW thermal unit in the country & First 500 MW thermal unit in the country.

Presence in all Sectors of PowerMission StatementWe will become the most admired and responsible Power Company delivering sustainable value by:Operating our assets at benchmark levelsExecuting projects safely, with predictable benchmark quality, cost and timeGrowing the Tata Power businesses, be it across the value chain or across geographies, and also in allied or new businessesDriving Organizational Transformation that will make us have the conviction and capabilities to deliver on our strategic intentAchieving our sustainability intent of Leadership with Care, by having leading and best practices on Care for the Environment, Care for the Community, Care for the Customers and Shareholders, and Care for the People

ManagementTeamNameDesignationAnil SardanaCEOAnil SardanaManaging DirectorAshok K BasuDirectorCyrus P MistryChairmanDeepak M SatwalekarDirectorHanoz M MistryCo. Secretary & Compl. OfficerHanoz M MistrySecretaryHomiar S VachhaDirectorNawshir H MirzaDirectorPiyush G MankadDirectorR GopalakrishnanDirectorS PadmanabhanExecutive DirectorS RamakrishnanExecutive DirectorT Thomas MathewNominee DirectorVishakha V MulyeDirectorTop Competitors

Public Sector:

2. Private Sector:

Compare OfferingsFINISHED PRODUCTSTATA POWERNTPCRELIANCE POWERProduct NameSales Value (in Cr.)Product NameSales Value (in Cr.)Product NameSales Value (in Cr.)Power Supply9081.3300Generation of Electricity64792.6100Service Income12.0100Contract Revenue410.8700Other Operating Revenue1280.8200Coal0.0000Other Operating Revenue54.1700Consultancy Income126.8100Service Income34.7700Fly Ash2.5000BCG Matrix for the Tata Group

Indian HotelsTata SteelTata MotorsTata PowerTata CommunicationsVoltasTata TeleservicesTata TeaTata ChemicalsTata Steel, Tata Power, Tata Motors and Indian Hotels emerge as clear Stars(high market growth, highmarket share). Hence, they should be retained and the investment inthese companies should be increased.SWOT for Reliance PowerSWOT for NTPCSWOT for Tata PowerMichael Porters Five Forces Analysis

Potential Entrants (Threat of Mobility)Highly capital-intensive industry and hence demands huge investmentPower producers Behemoth like NTPC, SEBs contributing around 85 % of total power producedDitto for Power Grid Corp. of India in Transmission and Distribution SegmentMajor plans by big companies like Reliance power, Adani power, Lanco etc. to make a entry into power sector after market opened up for private sector through Electricity Act 2003 and subsequent reformsHowever obtaining regulatory approvals,fuel linkages, land etc. still remain the major bottlenecks.Hence the threat of new entrant appears to be low

Substitutes (Threat of Substitutes)Power does not have substitute but it can be generated from different sources of energy.Currently thermal power is dominant in India, coal being the major raw material. Coal availability is limited and therefore power from nuclear, hydro and other renewable sources could be used as substitute for thermal power in future. Agreements with various countries for nuclear collaboration will give major impetus to Nuclear power plantsAlthough demand for power outstrips its supply, going forward, thermal power plant companies have threat from non-thermal power generators.Hence the threat of substitute products is medium

Buyers (Bargaining Power)Industrial consumers have huge demand for powerTheir bargaining power is low in India as the number of power companies to buy from is limited in number. Hence power companies are in better position. Retail customers -Government regulates the power sector to ensure supply of power at reasonable prices but this regulation is limited. Peak shortage is much more in every region and it is about 12 % on all India basis which allow suppliers to dictate terms with the buyers.Overall, the bargaining power of buyers is Medium.

Suppliers (Bargaining Power)Coal is majorly used as a feed for generating power. The supply of coal in India is limited and hence coal players are in dominant position.Power companies are required to import coal if the domestic supply is not sufficient, which proves to be an expensive affair.With companies like Lanco, Adani Power buying coal mines in Indonesia, Australia etc. to import better grade coal than available in India, market dominance of Govt. Companies like Coal India will subside gradually.However looking at the present situation, the power of suppliers is high.

ndustry RivalryPower producing companies No competitive rivalry as demand for power is way above its supply and all the power generated is used up.However, with government encouragement, private participation is expected to increase in the coming years to take advantage of huge demand for powerPower equipment market - Market leader like BHEL is facing tough competition from L&T, Alstom, Doosan and most importantly Chinese suppliers.Major orders of Boiler, Turbine and Generator grabbed by Chinese suppliers from most of the private sector clients.So overall the intensity of competitive rivalry is medium.

Conclusion

Current STRATEGIES

Current Strategy of Tata Power Telecom-operator like strategyTata Power set-up 76 acquisition camps covering western and central areas of the city. It has also been distributing pamphlets in target areas to create awareness.A total of 3,160 forms have been received from customers requesting the changeover to the network with several more expectedTata Power Community Engagement StrategyWhen Indias government opened up the utility sector for private investment a few years ago, Tata Power started investing heavily in expansionThe company prides itself on commitment to ideals that put people before profits; careful managementHence, Tata Powers engagement with SustainabilityTata Power developed and implemented, a community engagement framework consistent with the companys core values. The framework spells out how every new project should be undertaken, defining how employees should engage with communities and monitor progress at every stepTata Power Initiatives

Strategy of Tata Power

Strategy of NTPC Strategy of Reliance Power FINANCIAL ANALYSIS & EVALUATIONAssessmentof the (1)effectivenesswith whichfunds(investmentanddebt) areemployedin a firm, (2)efficiencyandprofitabilityof itsoperations

Financial HighlightsTata Power Groups Consolidated Revenue, up by 27% to Rs. 33,000 Cr.Acquired 26% stake in large mines at PT Baramulti Suksessarana Tbk, IndonesiaOperating profit up by 31% at Rs. 6,444.70 Cr.PAT stood at Rs. 85.43 Cr. as against Rs. 1087.68 Cr. reported in FY12Board recommended Dividend at Rs. 1.15 per share of Re. 1 each considering difficult period due to MundraEagerly awaits finalisation of compensation tariff for its Mundra UMPPCost-Gap AnalysisAs a % of SalesTATA Power200920102011201220132014E2015ECommentsMaterial Cost59%36%26%28%1%0%0%Decreasing year on year

Personnel Cost3%3%2%3%3%3%2%Almost StableSales Cost1%1%1%1%4%5%6%Increasing After year 2012Capital Cost4%3%3%3%3%3%3%Not much fluctuating, stableOther Costs1%1%1%1%5%6%8%Increasing drastically After year 2012Cost-Gap AnalysisAs a % of PATTATA Power200920102011201220132014E2015EMaterial Cost816%255%131%182%5%2%1%Personnel Cost44%18%10%19%18%15%13%Sales Cost20%9%5%9%26%27%29%Capital Cost50%25%14%17%22%19%16%Other Costs16%6%4%5%32%36%42%Peer Financial Comparison (in Cr., Mar-2012)RatiosTata Power NTPCReliance PowerCommentsProfitability Ratios:Gross Profit Margin (%)15.3618.2324.88The business generates a low level of revenue to pay for operatingexpensesandnet profit in comparison.Net Profit Margin (%)-4.1114.2531.32The sales are not enough to achieve acceptable profitROCE (%)9.2911.433.87Mid-way between both; The co. generates more earnings per rupee of capital employedLiquidity & Solvency Ratios:Current Ratio1.101.961.35Lowest of all; matches CA with CLQuick Ratio1.171.801.32Normal value is below 1; they can use a portion of idle cash to generate profitsDebt-Equity Ratio2.250.760.83Lower values indicate less risk; Business relies more on external lenders thus it is at higher riskthat you are not generating enough sales, thegross profit marginis too low, or that you are not keeping your operating expenses under control to leave an acceptable profit.42Peer Financial Comparison (in Cr., Mar-2012)RatiosTata Power NTPCReliance PowerCommentsManagement Efficiency Ratios:Inventory Turnover Ratio15.5315.8812.57Efficiency in controlling inventory levels are placed in between the 2 competitors; not very impressiveDebtors Turnover Ratio7.738.744.03Mediocreimprovement in the process ofcash collection on credit salesInvestment Turnover Ratio15.5315.8812.57NTPC ratio indicates good use of the funds placed into the business; while decreasing to Tata PowerFixed Assets Ratio0.790.740.31Tata Power is efficient at managing its fixed assets.Fixed assets are important because they usually represent the largest component of total assets.CONCLUSIONS &RECOMMENDATIONS

ConclusionAt Tata, innovation is a critical vector for improving quality, performance and competitivenessTata companies look at innovation as a strategic approach to growth and leadership. The Tata group has adopted a three-pronged strategy to encourage and enhance innovation across business sectors, companies and regions.The three key drivers are:better communication and recognition of innovative ideas and effortsfacilities and initiatives that enable learning from other companies andsupport for collaborative research and partnerships with academia

RecommendationsSince, the focus is on international geographies, the issues with respect to capacity addition in generation or distribution should be addressedIdentify countries which say they need investment and are willing to provide opportunities and reasonably good returns at lesser riskBibliographyhttp://www.ibef.org/industry/infrastructure/power-sector-india.aspx http://www.indianpowermarket.com/2011/05/indian-power-sector-snapshot.htmlhttp://www.tatapower.com/http://timesofindia.indiatimes.com/business/india-business/Electricity-generation-to-grow-by-5-7-in-2013-14-CMIE/articleshow/22077100.cmshttp://www.moneycontrol.com/

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NameRoll No. Ashish Pachpute73Dhanesh Palshetkar74Deepak Parsani75Khyati Patel76