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PROJECTPROJECT

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INDIAN INDUSTRY ANALYSISINDIAN INDUSTRY ANALYSIS

(CONSTRUCTION)(CONSTRUCTION)

PRESENTED BY :

GOURAV GANGULIKUSHAL GHOSHRUDRANIL GHOSHNABARUN GHOSHPRITHWIJIT GUHAPRITAM GHOSHSATANIK DUTTA

REVENUE FIGURES & TRENDSREVENUE FIGURES & TRENDS

From the above diagram we can track the falling trend in the revenue of From the above diagram we can track the falling trend in the revenue of construction industry in the last three quarters. construction industry in the last three quarters.

1. Booming Indian economy

2. Growing housing and commercial space (like malls, multiplexes) requirements

3. Govt. thrust on infrastructure, infrastructure outlay etc.

4. Rapid Urbanization

5. Growth in IT/ITES sector at 30% annually (source: NASSCOM)

6. Burgeoning middle class with increasing disposable income

7. Government investment in infrastructure creation

8. Retail sector facilitating real estate growth

1. 1. Commercial market is expected to grow at CAGR of 20% to 22% from Rs 408 billion to Commercial market is expected to grow at CAGR of 20% to 22% from Rs 408 billion to Rs 1179 billion over the next 5 yearsRs 1179 billion over the next 5 years

2. IT/ITES sector expected to require in excess of 250 million sq. ft. of commercial office 2. IT/ITES sector expected to require in excess of 250 million sq. ft. of commercial office space by 2012-13.space by 2012-13.

3. Overall investment in construction activities is expected to double in the period 3. Overall investment in construction activities is expected to double in the period 2006-07 to 2010-11 as compared to 2001-02 to 2005-062006-07 to 2010-11 as compared to 2001-02 to 2005-06

4. Infrastructure, industrial and real estate demand of Rs. 26,473 billion is expected to 4. Infrastructure, industrial and real estate demand of Rs. 26,473 billion is expected to materialize in the next five yearsmaterialize in the next five years

5. The government is targeting an investment of US$ 20.38 billion over the next two

years in the infrastructure sector.

Figures are in terms of percentage to GDP The above data is according to the 10th “5- year plans” Information is collected from Construction Industry Development Council Survey

OPERATIONAL PROFIT OF THE INDUSTRYOPERATIONAL PROFIT OF THE INDUSTRY

Gammon India Limited

Hindustan Construction Company Limited (HCC)

IVCRL Infrastructures & Projects Limited (IVRCL)

Larsen & Toubro Limited (L&T)

Nagarjuna Construction Company Limited (NCC)

Simplex Infrastructures Limited

Unitech Limited

ERA Infra Engineering Ltd

Ircon International Ltd

JP Associates

GMR Infrastructure Ltd

Punj Lloyd Ltd

Lanco Infratech

Madhucon Projects Ltd

Nitco Ltd

Major Players in the Construction IndustryCurrent Developments

The construction industry in India is the second largest contributor to the national economy.

The Indian construction industry is the second largest employment generation avenue in the country.

The Planning Commission of India published the 11th Economic Plan in 2007, and set aside $492 billion as investment outlay for infrastructure development.

The Commonwealth Games - 2010 in New Delhi throws mega opportunities for Building Material Companies, Construction Equipments & Technology companies.

Projects are coming up to develop Special Economic Zones worth US $ 2.5 billion.

Upgradation and modernization of airports will require US$ 33 billion investment in the next ten years.

The real estate market is projected to grow to US$60 billion by 2010 at a CAGR of 40%.

In future there will be consciousness about environment safety and health standards. The demand for the green construction, green buildings will become large.

The government’s commitments to infrastructure development, especially in the power and road sectors, are likely to add further impetus to the industry’s growth.

The government anticipates more private sector investments in infrastructure during the Eleventh plan period and expects the investments to grow from around 1.15 per cent of GDP in FY07 to 2.82 per cent by FY12.

Increased investment outlay and higher private investments, apart from the public-private partnership, would prove beneficial in meeting the infrastructure needs of various segments of the economy.

For regulatory efficacy & clarity in policy, Government of India has asked to develop a ‘model’ legislation for infrastructure regulatory regime.

Considering the volume of work in India, sector specific apex regulatory bodies are required with well complementation from economy-wide regulatory and competition authority in the states.

An omnibus Regulatory Appellate Tribunal for all appeals against sectoral infrastructure regulators needs to be established.

Multi-stakeholder participation should be the way forward, which can effectively take care of several concerns with regard to regulatory efficacy and accountability.

Benchmarking followed by an independent review over the years, are highly recommended to hold independent regulators accountable.

Consumer organizations are strengthened with resources for effective advocacy.

Formalized relationships are established between Regulators and Competition Authority to avoid conflicts.

Market Share of Top 3 Companies (as per revenue of 2009 – 3 quarters)

# Approximate Total Revenue of the Industry – 56117.10 crores

Share of Larsen & Toubro – 46.21 % i.e. 25932.29 crores

Share of Punj Lloyd – 10.26 % i.e. 5760.42 crores

Share of IVRCL Infrastructures – 7 % i.e. 3931.11 crores

TOP 3 PLAYERSTOP 3 PLAYERS

Financial Financial YearsYears LARSEN AND TOUBROLARSEN AND TOUBRO PUNJ LLOYDPUNJ LLOYD

IVRCL IVRCL INFRASTRUCTURESINFRASTRUCTURES

PATPAT(Cr.)(Cr.)

Net SalesNet Sales(Cr.)(Cr.)

ROCEROCE (%)(%)

PATPAT(Cr.)(Cr.)

Net SalesNet Sales(Cr.)(Cr.)

ROCEROCE (%)(%)

PATPAT(Cr.)(Cr.)

Net SalesNet Sales(Cr.)(Cr.)

ROCEROCE (%)(%)

March March ‘05‘05

983.85983.85 13189.7113189.71 22.2122.21 8.148.14 1429.431429.43 21.0721.07 56.7156.71 1053.491053.49 15.7715.77

March March ‘06‘06

1012.141012.14 14776.9514776.95 24.8824.88 35.1535.15 1368.211368.21 11.0311.03 92.9692.96 1517.891517.89 13.5913.59

March March ‘07‘07

1403.021403.02 17645.2917645.29 29.8229.82 61.5961.59 2238.852238.85 10.2210.22 141.46141.46 2334.882334.88 14.8314.83

March March ‘08‘08

2173.422173.42 24946.1124946.11 26.7226.72 221.44221.44 4511.104511.10 11.9211.92 210.48210.48 3686.033686.03 17.1217.12

March March ‘09‘09

3481.663481.66 33856.5433856.54 24.1424.14 321.10321.10 6919.876919.87 12.4212.42 225.97225.97 4972.994972.99 17.9917.99

LAST 5 YEARS – PROFIT AFTER TAX (PAT) REVENUE (NET SALES) RETURN ON CAPITAL EMPLOYED (ROCE)

COMPANYCOMPANY↓↓

YEAR YEAR →→

2004-052004-05 2005-062005-06 2006-072006-07 2007-082007-08 2008-092008-09

Larsen & ToubroLarsen & Toubro 37.937.9 11.111.1 19.919.9 41.441.4 36.536.5

Punj LloydPunj Lloyd 2.12.1 -4.3-4.3 63.663.6 100100 54.754.7

IVRCL InfrastructureIVRCL Infrastructure 36.236.2 4444 53.853.8 57.857.8 34.934.9

Comparison of Growth Rates with Changing Trends

Figures in CroresFigures in Percentages

SOURCES OF INFORMATION :

KNOWLEDGE PORTAL : www.cygnusindia.com

OTHER RELEVANT WEBSITES : www.moneycontrol.com

MAGAZINES : Business World (2nd November 2009) Special issue

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