The Country Report - India - AFSA World · Change in CV Sales April - Dec 2016 over April - Dec...

The Country Report - India

31st March 2017

Economic Indicators

2

(1.50)

2.00

0.30

(1.30)

1.30 2.20

(2.50)

(0.70)

0.70

(1.80)

5.70

0.85

(3.00)

(2.00)

(1.00)

-

1.00

2.00

3.00

4.00

5.00

6.00

7.00

IIP

7.5 7.6

7.2

7.9

7.1

7.3

6.6

6

6.2

6.4

6.6

6.8

7

7.2

7.4

7.6

7.8

8

Q1 2015-16

Q2 2015-16

Q3 2015-16

Q4 2015-16

Q1 2016-17

Q2 2016-17

Q3 2016-17

Q4 2016-17

GDP

5.69

5.26

4.83

5.47 5.76 5.77

6.07

5.05

4.39 4.20

3.63 3.41

3.00

3.50

4.00

4.50

5.00

5.50

6.00

6.50

Inflation Rate

F

NA

F

294338

322557

261886

236561

297285

336578

274071

230308

349059

383906

200000

220000

240000

260000

280000

300000

320000

340000

360000

380000

400000

Q1 2015

Q2 2015

Q3 2015

Q4 2015

Q1 2016

Q2 2016

Q3 2016

Q4 2016

Q1 2017

Q2 2017

Govt Spending

Economic Indicators

3

50

52

54

56

58

60

62

64

66

Diesel Price Rs Per Litre

8.59

10.56

-3.93

3.43

8.16

-6.00

-4.00

-2.00

0.00

2.00

4.00

6.00

8.00

10.00

12.00

Passenger Vehicles (

PVs )

M&HCVs - Passenger

Carriers

M&HCVs - Goods

Carriers

LCVs - Passenger

Carriers

LCVs - Goods Carriers

% C

han

ge

Change in CV Sales April - Dec 2016 over April - Dec 2015

Passenger and Commercial Sales Trend

4 Source: SIAM

25.0 26.3 26.7

25.0 26.0

27.9

6.8 8.1 7.9

6.3 6.1 6.9

-

5.0

10.0

15.0

20.0

25.0

30.0

2010-11 2011-12 2012-13 2013-14 2014-15 2015-16

Passenger Vehicles Commercial Vehicles Linear (Passenger Vehicles) Linear (Commercial Vehicles)

No

of

Veh

icle

s in

Lak

h

5

COMPARATIVE ANALYSIS OF TOP NBFC 2016 (Rs in Cr)

Details STFC BAJAJ CHOLA MMFSL L&T FINANCE SUNDARAM SCUF

AUM 72,761 44,229 29,815 38,011 57,831 17,895 19,576

GROWTH % 23% 36% 17% 9% 52% 10% 17%

REVENUE 10,223 7,384 4,194 5,905 7,289 2,475 3,855

OTHER INCOME 76 427 17 165 489 222 21

INTEREST INC 10,147 6,957 4,177 5,740 6,800 2,253 3,834

INTEREST EXP 5,074 2,927 2,051 2,639 4,124 1,218 1,383

NII 5,073 4,030 2,126 3,101 2,676 1,036 2,451

NIM 7.23% 10.5% 7.7% 8.5% 5.1% 6.1% 13.20%

Expenses 1,309 1,949 845 1,178 1,313 493 1,049

Cost to Income 24.01% 43.7% 39.4% 36.1% 41.5% 39.2% 42.44%

GNPA 3,870 539 981 3,224 1,735 306 980

NNPA 1,144 124 589 1,235 1,154 135 297

GNPA 6.18% 1.23% 3.50% 8.00% 3.05% 2.08% 5.15%

NNPA 1.91% 0.28% 2.10% 3.20% 2.05% 0.92% 1.56%

Coverage 70.00% 77% 40.00% 61.70% 37% 55.77% 70%

Credit Cost 2,009 543 427 1,050 781 81 616

Credit Cost 3.18% 1.20% 1.70% 2.91% 1.5% 0.47% 3.40%

6

(Rs in Cr)

Details STFC BAJAJ CHOLA MMFSL LTFINANCE SUNDARAM SCUF

PAT 1,178 1,279 568 673 857 477 530

EPS 51.93 242.3 36.4 11.9 3.79 43.0 80

Book Value 447 1,360 234.4 107.0 40.38 299 695

Net Worth 10,132 7,325 3,657 6,088 7,078 3,313 4,507

Dividend 100.00% 250% 45% 200% 8.00% 1.1 150%

Dividend 274 163 70 272 140 141 123.51

Dividend % of PAT 23.22% 12.7% 12.3% 40.44% 16% 30% 23.30%

ROA 1.86% 3.50% 2.30% 1.80% 1.47% 2.37% 2.72%

ROE 11.99% 20.90% 16.70% 11.44% 12.6% 15.20% 12.22%

Borrowings 49,791 37,025 22,576 29,440 51,616 12,616 14,408

CRAR 17.56% 19.5 19.68% 17.30% 17.04% 18.40% 26.60%

No. of Shares 22.69 5.39 15.60 56.5 175.3 11.11 6.59

Face Value 10 10 10 2 10 10 10

Share Capital 226.91 54 156 113 1,753 111 66

Employees 19170 7394 13590 15821 - 3465 25000

Branches 853 283 534 1167 - 569 976

HCVs, 46.11%

M&LCVs, 19.50%

Passenger Vehicles,

25.42%

Tractors, 4.70%

SEFCL Equipment Finance, 1.52% Others, 2.75%

STFC- A Snapshot

INR

763bn

Strong track record of operating history and consistent profitability for more than 30 years

Key highlights (as of 31 Dec 2016)

1.40 mn

Customers

15993

Employees

905

Branches

903 Rural Centers

500

Private

financiers

8754

Field Officers

AA+ Long Term Rating1

A1+ Short Term

Rating2

INR 220bn

Market Cap

2 - India Ratings, CRISIL 1 - India Ratings, CRISIL and CARE

AUM Split as on 31st Dec’ 2016

Road Network in India

Roads1 (Total length: 5.23 million Kms)

State highways National Highways District and Rural

roads

Total length: 1,48,256 kilometers Share: 3.0 per cent of the total roads in India



Source: Ministry of Road Transport and Highways (MoRTH)

Key catalysts behind increasing demand for roadways

Rising income leading to

increasing number of vehicle owners

Growing movement of goods within the

country due to economic

integration

Better quality roads makes road travel cheaper and safer

Increasing roadways leading to greater accessibility between different

cities/towns/villages

Growth in small and medium enterprises

in India

Higher road traffic

Source: MoRTH, World Bank, Make in India, TechSci Research Note: 1Including rail and road transport

• Higher individual discretionary spending has led to increased spending on cars, motorbikes and scooters

• Growing domestic trade flows have led to a rise in commercial vehicles and freight movement • Increasing financing on vehicle loans • Road’s traffic share of the total traffic1 in India has grown from 13.8 per cent to 65 per cent in freight

traffic, and from 32 per cent to 80 per cent in passenger traffic over 1951–2015

0 1514 179

4819

158 2869 1902 609

23814

9008

10228

36500

1st 2nd 3rd 4th 5th 6th 7th 8th 9th 10th 11th 12th

Strong growth momentum

Scheme Target

Widening to 2-lane (km) 14,800



Strengthening / Improvement of Riding Quality Programme (IRQP) (km)

8,500

Construction of bridges (in No’s) 50

Construction of bypasses (in No’s) 5

Overall physical target for development of National Highways, as included in the 12th Five-Year Plan

Length of national highway added under various Five-Year Plans (kilometers)

Road additions in the 3rd Five-Year Plan was just 179 kilometers; this increased to 10,228 kilometers in the 11th Plan

Source: NHAI, MoRTH, TechSci Research Note: 12th1 - Estimated

Goods Transportation

Passenger Transportation

Production of Automobiles

Total production of automobiles in India (million units)

• Production of automobiles increased at a CAGR of 9.4 per cent over FY06-16 • During FY06-16, passenger vehicle segment witnessed the fastest growth, at a CAGR of 10.09 per cent,

followed by two wheeler segment, which grew at a CAGR of 9.48 per cent during the same time period.

• During fiscal year 2016-17, passenger vehicle market in India is likely to cross the three million units milestone.

• By February 2017, Suzuki Motors plans to commence production at its Gujarat plant

1.3

1.3

1.6

1.8

2.4

3 3.1

3.2

3.1

3.2

3.4

0.4

0.5

0.6

0.4

0.6

0.8

0.9

0.8

0.7

0.7

0.8

0.4

0.6

0.5

0.5

0.6

0.8

0.9

0.8

0.8

0.9

0.9

0

1

2

3

4

FY06 FY07 FY08 FY09 FY10 FY11 FY12 FY13 FY14 FY15 FY16

Passenger Vehicle Commercial Vehicle Three Wheeler

Source: SIAM, TechSci Research Note: CAGR – Compound Annual Growth Rate

Share in production -Segment wise

72.61%

21.03%

6.36%

Passenger Cars Utility Vehicles Vans

55.90%

44.10%

LCVs HCVs

Share in production of passenger vehicles (FY16)

Share in production of commercial vehicles (FY16)

Source: SIAM, TechSci Research Notes: LCV – Light Commercial Vehicle;

M&HCVs – Medium and Heavy Commercial Vehicles

India Automobile sector- A Snapshot Contd..

Domestic sales of passenger vehicles in India is expected to increase at a CAGR of 12.87 per cent during 2016-26

Domestic sales of commercial vehicles in India is expected to increase at a CAGR of 11.07 per cent during 2016-26

Domestic sale of three wheelers in India increased at a CAGR of 3.79 per cent during 2010-16

2.80%

9.50%

1 2

Domestic sales of passenger vehicles to grow from 2.8 million in 2016 to 9.4 - 13.4 million by 2026

Domestic sales of commercial vehicles to grow from 0.7 million in 2016 to 2.0 - 3.9 million by 2026

Domestic sales of three wheelers will grow from 0.4 million in 2010 to 0.5 million in 2016

2016 2026

0.7

2

1 2

0.4 0.5

1 2

2016

2010

2026

2016

CAGR: 3.97%

CAGR: 11.07%

Source: SIAM, NEMMP 2020 (National Electric Mobility Mission Plan), TechSci Research; Note: E – Estimate

CAGR: 12.87%

Agriculture & Farm Equipment

India- Agriculture Snapshot

Attractive opportunities • Increasing demand for agricultural inputs

such as hybrid seeds and fertilizers. • Promising opportunities in storage

facilities; potential storage capacity expansion of 35 million tonnes under the 12th Five Year Plan

• The government plans to reduce the import duty on wheat from 10 per cent to 0 per cent, in order to boost the domestic availability of wheat in the country.

Robust demand

• A large population is the key driver of demand for agricultural products

• Rising urban and rural incomes have also aided demand growth

• External demand has also been growing especially from key markets like the Middle East

Advantage India

Competitive advantages

• High proportion of agricultural land (157 million hectares)

• Leading producer of spices, jute, pulses; second-largest producer of wheat, paddy, fruits and vegetables

Policy support

• Schemes like Paramparagat Krishi Vikas Yojana (PKVY) helps in developing organic clusters and make available chemical free inputs to farmers.

• Other steps include Pradhanmantri Gram Sinchai Yojana that ensures improved access to irrigation; creation of an unified national agricultural market which would help boost the incomes of farmers

• 100 per cent FDI under automatic route for development of seeds

Source: Ministry of Agriculture, World Bank, FAOSTAT, TechSci Research

FY2016 Food grain

production: 253.16 million tonnes

2020-21 Food grain

production: 280.6

million tonnes

Kharif & Rabi

• There are two major agricultural seasons in India: Kharif and Rabi Kharif season lasts from April to September (summer); rice (paddy) is the season’s main crop Rabi season lasts from October to March (winter); wheat is the season’s main crop

• According to the Ministry of Agriculture, total food grain production in the country in FY16 is estimated to be around 253.16 million tonnes.

• India imported 2.7 million tonnes of wheat in FY 17 (till January 16, 2017). and an additional 1.2 million tonnes are to be imported by February 2017.

Production of food grains (million tonnes) in Kharif and Rabi seasons

12

1

11

8

10

4

12

1

13

1

13

2

12

9

12

6.3

1

12

3.9

9

11

0

11

6

11

4

12

4

12

8

12

4

12

8

12

6.3

8

12

8.2

4

0

50

100

150

200

250

300

FY08 FY09 FY10 FY11 FY12 FY13 FY14 FY15 FY16

Chart Title

Kharif Rabbi

Source: Finance Ministry, Ministry of Agriculture, TechSci Research 1 - Data is 3rd Advance Estimate

CAGR: 1.11%

Trends in Fruit and Vegetable production

• India ranks 2nd in global production of fruits and vegetables, and is a leading exporter of mangoes and bananas. The country also exports grapes in a large quantity across the world.

• National Horticulture Mission, National Horticulture Board, Technology Mission for Integrated Development of Horticulture in North-East are some of the initiatives taken by the Government of India to boost the horticulture sector of the country

• The National Horticulture Board has launched a new capital investment subsidy scheme for construction and expansion of cold storages and storages of horticulture products

• During FY05-16, horticulture production in India grew at a CAGR of 4.91 per cent.

166.9 182.8 191.8 211.2 214.7 223.1 240.5 257.3 268.8 277.3 280.5 282.8

0

50

100

150

200

250

300

FY05 FY06 FY07 FY08 FY09 FY10 FY11 FY12 FY13 FY14 FY15 FY16

Production (Million tonnes)

Indian horticulture area and production

CAGR: 4.91%

Increasing mechanization of Farming

• Mechanisation helps in raising farm income by increasing productivity and limiting post-harvest losses.

• Government of India is focussing on increasing its reach of farm mechanisation to the regions where availability of farm power is low and to small and marginal farmers.

• Allocation of USD223 million was made for the establishment of Farm Machinery Banks and distribution of farm machinery and tools to farmers in various states in FY16.

• The sale of tractors increased from 0.35 million units in FY07 to 0.57 million units in FY16, witnessing growth at a CAGR of 5.5 per cent.

35

28

35

30

00

00

34

28

36

39

38

36

54

44

28

60

85

77

59

14

98

69

76

75

62

68

39

57

12

49

FY07 FY08 FY09 FY10 FY11 FY12 FY13 FY14 FY15 FY16

Source: Department of Agriculture and Cooperation, State of Indian Agriculture 2013-14, ICRA,

A report on ‘Farm Mechanization in India’, TechSci Research

CAGR: 5.5%

Number of tractors sold

Vehicle Sales Projections (Nos)

Mach 17*- Extrapolated, March 18^ onwards Projections

Segment Pass Veh M&HCVs LCVs TRACTORS 3 W PASS 3W Goods

Mar-08 1,549,882 274,582 188,020 346,501 234,774 130,007

Mar-09 1,552,703 183,495 173,747 342,836 268,463 81,264

Mar-10 1,951,333 244,944 253,364 440,230 349,868 90,524

Mar-11 2,501,542 368,765 316,140 545,128 426,943 99,079

Mar-12 2,629,839 398,039 411,460 541,222 406,236 107,015

Mar-13 2,665,015 316,516 476,695 531,891 441,124 97,166

Mar-14 2,503,509 243,417 389,434 634,151 385,384 94,701

Mar-15 2,601,236 277,858 337,090 551,463 432,234 99,693

Mar-16 2,789,678 351,334 334,371 493,764 441,091 97,001

Mar-17 3,015,497 287,101 396,874 493,764 418,846 105,917

Mar-18 3,408,000 319,000 441,000 523,000 427,000 107,000

Mar-19 3,850,000 354,000 489,000 555,000 436,000 108,000

Mar-20 4,351,000 393,000 543,000 588,000 444,000 109,000

Mar-21 4,917,000 436,000 602,000 623,000 453,000 110,000

Mar-21 5,556,000 484,000 669,000 661,000 462,000 111,000

On Road Vehicle Population in India ( Nos)

Mach 17*- Extrapolated, March 18^ onwards Projections

Year Pass Veh M&HCVs LCVs TRACTORS 3 W PASS 3W Goods

Mar-08 26,858,275 5,097,411 2,674,020 4,157,349 3,523,708 1,007,689

Mar-09 28,587,062 5,699,705 2,862,040 4,503,850 3,758,482 1,137,696

Mar-10 28,537,301 5,659,664 2,886,441 4,628,811 3,732,502 1,114,450

Mar-11 29,041,232 5,745,446 2,971,666 4,849,922 3,786,195 1,102,084

Mar-12 29,638,185 5,856,212 3,145,392 5,051,649 3,813,811 1,098,891

Mar-13 30,228,527 5,879,918 3,370,456 5,229,925 3,873,554 1,086,168

Mar-14 30,616,039 5,829,339 3,490,253 5,497,981 3,871,583 1,072,252

Mar-15 31,074,152 5,815,730 3,548,123 5,664,585 3,916,658 1,064,720

Mar-16 31,688,640 5,876,277 3,598,644 5,761,828 3,966,084 1,055,249

Mar-17 32,485,932 5,869,565 3,707,627 5,852,264 3,988,321 1,055,641

Mar-18 33,619,000 5,895,000 3,852,000 5,966,000 4,017,000 1,057,000

Mar-19 35,117,000 5,954,000 4,032,000 6,103,000 4,051,000 1,059,000

Mar-20 37,009,000 6,049,000 4,253,000 6,264,000 4,090,000 1,063,000

Mar-21 39,335,000 6,182,000 4,515,000 6,449,000 4,135,000 1,067,000

Mar-21 42,138,000 6,357,000 4,822,000 6,658,000 4,184,000 1,071,000

Construction Equipment

A Snapshot on Construction Equipment

High revenues and unit sales

Rising infrastructure investments

Increasing private sector involvement

Growth in real estate sector

Construction equipment analysis

• The NITI Aayog estimates total infrastructure spending to be about 9 per cent of GDP by 2017, up from 7.2 per cent during the 11th Five year plan (2007–12)

Construction equipment industry in India is expected to reach USD5 billion by FY20 from USD3 billion in FY16, in value terms. While, volume sale of construction equipment is expected to grow to 96,730 units by 2018 from 76,000 units in FY16.

• Private sector is emerging as a key player across various infrastructure segments, ranging from roads and communications to power and airports

• The real estate market is estimated to grow to USD180 billion by 2020 from USD126 billion in 2015, driven by demand mainly from residential sector

• Construction equipment forms around 7 per cent to 8 per cent of GDP and expected to give employment to more than 3.0 million people in the country by 2020. It also accounts for more than 60 per cent in total infrastructural investment

Construction Equipment

Earthmoving Equipment

Road Building

Equipment

Concrete equipment

Material handling and

cranes

Major segments of construction equipment industry

Construction Equipment- Segment Description

Earth-moving equipments

Material handling and cranes

Concrete equipments

Road building equipments

• Material handling equipments have four categories: storage and handling equipments, engineered systems, industrial trucks, and bulk material handling

• There are 50 units in the organised sector for the manufacture of material handling equipments and many units in the small-scale sector as well

• Earth-moving equipments is the largest segment of the construction equipment sector in India; these equipments primarily find use in mining and construction

• Equipments include backhoe leaders, excavators, wheeled loaders, dumpers/tippers, skid steer loaders

• Concrete equipments are used to mix and transport concrete • They include equipments such as concrete pumps, aggregate crushers, transit

mixers, asphalt pavers, batching plants

• Road building equipments are used in the various stages of road construction • Widely used ones are excavators, diggers, loaders, scrapers, bulldozers etc

• With infrastructure investment set to go up, demand for construction equipment will rise further;

• Sale of construction equipment in India is estimated to grow at a CAGR of 6.18 per cent , in volume terms, and reach to 96,700 units by FY18 from 50,000 in FY07;

• With sale of 76,000 units construction equipments, the industry has witnessed growth at a CAGR of 4.76 per cent during FY07-16.

• With sales of 21,869 units of construction equipment, during January 2016 to May 2016, the industry recorded increase in sales at a rate of 47.6 per cent, over the same period during the previous year.

Construction Equipment- Sales Trend

50 45.5

40.5

59.7

72.2 66.4

55.9 60.7

68.2 76.0

96.7

FY07 FY08 FY09 FY10 FY11 FY12 FY13 FY14 FY15 FY16 FY18E

CAGR: 6.18%

Total no of construction equipment units sold (‘000)

Source: NBM & CW, Mahindra Website, TechSci Research Notes: CAGR - Compounded Annual Growth Rate,

FY - Indian Financial Year (April-March), E – Estimate YoY – Year on Year

Growing housing and construction market

• The burgeoning real estate industry in India gives a fillip to the demand for concrete and building construction equipment

– The residential real estate demand is driven by rising population and growing urbanisation

– Rising income levels leading to higher demand for luxury projects

– Growing demand for affordable housing to meet the demand from lower income groups

• Commercial real estate demand will be driven by growth in IT/ITeS sector and organised retail

• Real estate market is expected to grow at a CAGR of 17.2 per cent over 2011-15 to USD126 billion. India’s real estate market is anticipated to reach USD180 billion by 2020.

• Increasingly construction is becoming more oriented toward mechanisation to reduce project time and control costs – leading to higher demand for advanced construction equipment

• The government is coming up with single window clearance facility to accord speedy approval for construction of buildings

CAGR: 4.64%

65-75

35-40

14-18

4-6

7-10

7-8

140-190

95-120

25-35

10-15

11-14

10-16

(Sales in ‘000 Units)

2016E 2020E

Source: Article from a key construction equipment website (http://www.nbmcw.com/reports/event-report/5914-excon-post-event-reportexhibitor-

profile-and-new-launches.html), TechSci Research, BMI Notes: E – Estimated

Broad Classification of the MSMEs in India

Total Number of MSMEs

29.8 Million

Unorganized Sector

30 Million

Registered MSMEs 1.8 Million

Unregistered MSMEs

28 Million

Source: MSME Census, NCEUS

MSME Finance Demand Flowchart

Overall Finance Demand

Demand by Unorganized Enterprises

Finance Demand by

Registered Enterprises

Finance Demand by

Unregistered Enterprises

Immediately Addressable

Demand


Debt


Equity

INR 32.5 Trillion; USD 650 Billion


INR 30 Trillion; USD 600 Billion

INR 10.6 Trillion; USD 211.4 Billion


INR 0.67 Trillion; USD 13.4 Billion

Estimated population of unorganized enterprises 30 million

Key growth constraints for MSME’s

32%

29%

28%

24%

22%

0% 5% 10% 15% 20% 25% 30% 35%

Inadequate market linkages

Lack of infrastructure

Inadequate finance

Lack of managerial competence

Obsolete technology

(N=76 Percentage of respondents; Respondents include commercial banks, regional rural banks, MSME Associations)

Source: Report of Working Group on Rehabilitation of Sick MSMEs, Reserve Bank of India

Financing opportunities for NBFC’s in India

• Business Loans Ecosystem – Working capital Loans- MSME

– Machinery Funding- MSME

• Business Loans – Other Businesses – Working Capital Loans- MSME

– Machinery Funding- MSME

– Very small/ Small Project Finance

• Revenue Sharing Partner – Franchisee

– Financing the Financier

Segments identified for NBFC financing

Segments

1

▪ Vehicle dealers

– New

– Used

2

▪ Body builders

3

▪ Tyre dealers

– New

– Used

– Vulcanizing and servicing

4

▪ Spare part dealers

– New

– Used

5

▪ Booking offices

7

▪ Petrol pumps

8

▪ Weigh bridge operators

9

▪ Workshops

10

▪ Scrap dealers

6

▪ Accessories

– Batteries

– Glass – Tarpaulin/rope

– Other accessories (seat covers, audio players, etc.)

THANK YOU

The Country Report - India - AFSA World · Change in CV Sales April - Dec 2016 over April - Dec...

Documents

Transcript of The Country Report - India - AFSA World · Change in CV Sales April - Dec 2016 over April - Dec...