Market Research Report : Wind power market in india 2014 - Sample

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Wind Power Market – India
May 2014

2WIND POWER MARKET IN INDIA 2014.PPT
Executive Summary
Market
Drivers &
Challenges
Government
Competitive
Landscape
 Wind energy has emerged as the fastest growing renewable energy sector in the country
 With a cumulative installed capacity of over ‘m1’ GW as of FY 2013, wind power currently accounts for
almost 70 % of the total installed capacity in the renewable energy sector
 This sector is expected to grow at a CAGR of x2% to reach ‘h2’ GW by FY 2019e
 In recent years the market slumped due to the withdrawal of the AD & GBI schemes by the Government
 Major Government Bodies
 Policy and Regulatory Incentives
 State wise Comparison Of Feed-in-tariff Policy For Wind Power (Top Five States)
Drivers
– Huge Untapped Wind Power Potential
– India Remains Energy Deficient
– Global Drive towards Clean Energy
– Volatile Oil Prices
– Depleting Coal Reserves
Challenges
– Withdrawal of Accelerated Depreciation
Scheme
– Issues of Grid Integration
– Land Acquisition Problems
Major Players
Company 1 Company 2 Company 3
Trends
 Potential of Off-Shore Capacity
 Vertical Integration
 Hybrid Generators
 Major Investments in the Wind Sector

3
•Economic Indicators
•Introduction
•Market Overview
•EXIM
•Drivers & Challenges
•Trends
•Government Participation
•State Specific Issues
•Competitive Landscape
•Strategic Recommendations
•Appendix
WIND POWER MARKET IN INDIA 2014.PPT

4
Economic Indicators (1/3)
11
12
13
14
15
b2
a2
Q1
d1
c1
b1
a1
Q4
c4
b4
a4
Q3
c3
b3
a3
Q2
d2
c2
INR tn
2013-142012-132011-122010-11
GDP at Factor Cost: Quarterly
Inflation Rate: Monthly
-2
-1
0
1
2
q
Jul 2013 - Aug 2013
p
%
Nov 2013 - Dec 2013
t
Oct 2013 - Nov 2013
s
Sep 2013 - Oct 2013
r
Aug 2013 - Sep 2013

5
Renewable energy is gaining prominence within the power
sector in India
• Principal sources of renewable energy are:
 Segment 1
 Segment 2
 Segment 3
 Segment 4
• Renewable energy capacity presently accounts for x%
of the total installed power capacity in India
• India plans to more than double its renewable energy
capacity by 2017
• The Government of India plans to generate an
additional ‘y’ GW of renewable energy in the 12th
Plan Period, more than double the ‘z’ GW added
during the 11th Five Year Plan
• The Ministry of New and Renewable Energy (MNRE)
plans to take the total renewable energy capacity to
more than ‘v’ GW during 2012-17
• Wind energy accounts for 70% of the total renewable
energy capacity in India currently
Renewable Energy Market Segmentation
s%
r%
q%
p%
a%
d%
b%
c%
Renewable Energy Scenario Energy Market Segmentation
Jan, 2013
Jan, 2013
Segment 4
Segment 3
Segment 2
Segment 1
Segment A
Segment C
Segment D
Segment B
Total installed
capacity of power is
‘m’ GW
Total installed
capacity of
renewable energy is
‘n’ GW

6
Wind energy accounts for the largest share of India’s
renewable energy capacity
Market Overview (1/2)
• Wind energy is one of the fastest growing renewable energy sectors in India and accounts for nearly p% of the installed
grid-connected renewable capacity
• Cumulative wind power capacity of India stands at ‘u’ GW as on Oct 31, 2013
• More than ‘t’% of the nation’s wind installations till date are concentrated in just five states in southern and western
India – Tamil Nadu, Andhra Pradesh, Karnataka, Maharashtra, and Gujarat
• Growth slowed down in 2012-13, when the sector witnessed capacity expansion of only ‘y’ GW, way below the
targeted ‘z’ GW for the year
 This was primarily due to the withdrawal of two key policy initiatives, Accelerated Depreciation (AD) and Generation Based Incentive
scheme (GBI)
• However, with the GBI scheme being reinstated in Aug 2013, growth in the sector is likely to pick up again
Market Size: Historical (FY 2003 – FY 2013)
4
3
2
1
0
2010
j1
2009
i1
2008
h1
2007
g1
2006
f1
Upto 2002
a1 m1
2012
l1
2011
k1
x1%
2003 2013
c1
2004
GW
d1
2005
b1

7
Wind power market is poised to grow with the revamp of
the Generation Based Incentive scheme
Market Overview (2/2)
• Reinstating the GBI scheme will provide the sector the much needed boost for capacity addition in the latter half of the
12th Five Year Plan, for which a target of ‘q’ GW has been set
• Launch of the INR ‘z’ bn Green Energy Corridors project, which involves the development of dedicated transmission
infrastructure for renewable energy integration, is another positive development
 The Green Energy Corridors project will address the issues related to grid integration due to growth in installed capacity and infirm
nature of the resource which the sector is currently facing
• Several states have also increased wind power tariffs by ‘m’% - ‘n’% to attract investments
 This has led to a shift in new wind power development from resource-rich states such as Tamil Nadu and Gujarat to low-wind density
states such as Rajasthan. Madhya Pradesh and Maharashtra
• In future, the Renewable Purchase Obligations (RPOs) and the Renewable Energy Certificate (REC) mechanism will be
the key growth drivers for the sector
Market Size: Forecasted (FY 2013 – FY 2014)
0
2
4
6
GW
x2%
2019e
h2
2018e
g2
2017e
f2
2016e
d2
2015e
c2
2014e
b2
2013
a2

8
Exports have declined steadily over the past four accounting
years
Export of Wind Mills and Turbines (Value-Wise)
Exports (Country-Wise: 2012-13)
0
500
1,000
1,500
q s
u%
2009-10 2011-12
r
2012-132010-11
p
INR mn
Exports (Country-Wise: 2011-12)
g1%
d1%
f1%
h1%
a1%
b1%
c1%
Country 6
Others
Country 5
Country 2
Country 3
Country 1
Country 4
c2%
g2%
h2%
d2%
f2%
a2%
b2% Country 10
Country 11
Others
Country 12
Country 7
Country 9
Country 8
Domestic
consumption
accounts for
almost the
entire
production of
the Indian
wind energy
sector

9
Drivers & Challenges – Summary
Drivers
Huge Untapped Wind Power Potential
India Remains Energy Deficient
Global Drive towards Clean Energy
Volatile Oil Prices
Depleting Coal Reserves
Challenges
Withdrawal of Accelerated
Depreciation Scheme
Issues of Grid Integration
Land Acquisition Problems

10
Trends – Summary
Potential of Off-Shore
Capacity Vertical Integration
Major Investments in the
Wind Sector Hybrid Generators
Key
Trends

11
Government Participation – Summary
Government
Participation
Major Government Bodies
and Associations
State-Wise Wind Power
Tariff
Policy and Regulatory
Incentives

12
State Specific Issues – Top Five States (1/5)
GUJARAT
Achievements
and Targets
Tariff Control
Identification of
Land
Power Evacuation
Purchase of Land

13
Market Competition – Porter’s Five Forces Analysis
• x• x • x
• x
• x
Bargaining Power of Suppliers
Threat of New Entrants
Competitive Rivalry Bargaining Power of Buyers
Threat of Substitutes
Impact
X
Impact
X
Impact
XImpact
X
Impact
X

14
Competitive Benchmarking (1/5)
Public Trading Comparables
Market Capitalization (INR bn)
Share Price (INR)
EV/EBITDA (x)
EV/Revenue (x)
PE Ratio

15
• Company 4 recorded operating margin of a4%, higher than that of Company 1, Company 2 and Company 3 which
recorded operating margin of negative a1%, negative a2% and negative a3% respectively
• Net margin for Company 4 stood at b4% while the other three companies Company 1, Company 2 and Company 3
recorded net margin of negative b1%, negative b2% and negative b3%
Key Ratios of Top 4 Companies – Operational Basis (FY 2013) (1/3)
Competitive Benchmarking (2/5)
-40
-20
0
20
40
Company 4Company 3
%
a4
b4
-b2-a2
Company 1
-b1
-a1
-b3-a3
Company 2
Net MarginOperating Margin

16
Public: Domestic Company – Company 1
(1/4)
Key People
Products and Services
Company Information Offices and Centres – India
Corporate Address
Tel No.
Fax No.
Website
Year of Incorporation
Ticker Symbol
Stock Exchange
Category Products/Services
Wind Sector
Project Services
Others
Name Designation
Person 1 Chairman
Person 2 Director
Person 3 Director
Person 4 Director
Mumbai
Head Office

17
Financial Snapshot Key Ratios
Financial Summary
• Company earned a net profit of INR XX mn in FY 2013, as compared to net
profit of INR Y mn in FY 2012
• It reported total Income of INR XX mn in FY 2013, registering an increase of
X per cent over FY 2012
• It earned an operating margin of X.X per cent in FY 2013 an increase of X.X
percentage points over FY 2012
• The company reported debt to equity ratio of X.XX in FY 2013, an increase
of X.X per cent over FY 2012
Key Financial Performance Indicators
Indicators Value (19/03/2014)
Market Capitalization (INR bn)
Total Enterprise Value (INR bn)
EPS (INR)
PE Ratio (Absolute)
Particulars
y-o-y change
(2013-12)
2013 2012 2011 2010
Profitability Ratios
Operating Margin
Net Margin
Profit Before Tax Margin
Return on Equity
Return on Capital Employed
Return on Working Capital
Return on Assets
Return on Fixed Assets
Cost Ratios
Operating costs (% of Sales)
Administration costs (% of
Sales)
Interest costs (% of Sales)
Liquidity Ratios
Current Ratio
Cash Ratio
Leverage Ratios
Debt to Equity Ratio
Debt to Capital Ratio
Interest Coverage Ratio
Efficiency Ratios
Fixed Asset Turnover
Asset Turnover
Current Asset Turnover
Working Capital Turnover
Capital Employed Turnover
Improved Decline
Net Profit/LossTotal Income
0
-20
-40
-60
300
200
100
0
INR bn
2013
-d2
d1
2012
INR bn
-a2
a1
-c2
c1
2011
-b2
b1
2010
(2/4)

18
Key Business Segments Key Geographic Segments
Business Highlights
Description News
Overview • Company 1 has operations across Asia, Australia, Europe, Africa and North and South America
• It is the largest wind turbine manufacturer in India
Expansion
• It added ‘m’ MW in FY 2011-12 that ensured the company’s leadership in India for the 14th time
• Suzlon powered ‘XY Wind Plant’ resulted in crossing of 1000 MW (1 GW) of installation capacity in 2011-
12
• In 2012-13, the company crossed ‘n’ GW in global installations
Achievements
• It was awarded "6th Integrated Marketing Effectiveness Awards (UA&P Tambuli Awards)" award for “Best
Insights and Strategic Thinking” and “Best Innovative and Integrated Media Campaign” in 2012-13
• Ranked 6th in ‘Global Transnational companies Survey’ by the Indian School of Business, Hyderabad and
Brazil's Fundacao Dom Cabrall
0%
50%
100%
2010
a4%
a1%
a2%
c3%
2011
b1%
a3% c2%
b3%
d2%
2012
c1%
b2%
d1%
d3%
2013
Segment 4Segment 2
Segment 3Segment 1
0%
50%
100%
2013
s4%
s5%s3%
s2%
2012
s1%
r5%
r6%
r4%
r3%
r1%
r2%
q6%
q5%
2011
s6%
p1%
p6%
p3%
q1%
q4%
p4%
2010
p5%
q2%
p2%
q3%
OthersRegion 4
Region 5
Region 2
Region 3Region 1
(3/4)

19
TO
WS
Public: Domestic Company – Company 1 – SWOT Analysis
(4/4)

20
Private: Foreign Company – Company 2
(1/5)
Key People
Products and Services
Company Information Offices and Centres – India
Corporate Address
Tel No.
Fax No.
Website
Year of Incorporation
Products/Services
Name Designation
Person 1 Director
Person 2 Director
Person 3 Director
Mumbai
Head Office

21
Name No. of Shares held
100.00%
Segment 1
Shareholders of the Company as on 30/09/2013 Ownership Structure
(2/5)

22
Financial Snapshot Key Ratios
Financial Summary
• Company earned a net profit of INR XX mn in FY 2013, as
compared to net profit of INR Y mn in FY 2012
• It reported total Income of INR XX mn in FY 2013,
registering an increase of X per cent over FY 2012
• It earned an operating margin of X.X per cent in FY 2013
an increase of X.X percentage points over FY 2012
• The company reported debt to equity ratio of X.XX in FY
2013, an increase of X.X per cent over FY 2012
Improved Decline
Net Profit / LossTotal Income
5
0
-5
-10
-15
-20
-25
30
25
20
15
10
5
0
INR bnINR bn
2013
d2
d1
2012
c2
c1
2011
b2
b1
2010
a2
a1
Particulars
y-o-y change
(2013-12)
2013 2012 2011 2010
Profitability Ratios
Operating Margin
Net Margin
Profit Before Tax Margin
Return on Equity
Return on Capital Employed
Return on Working Capital
Return on Assets
Return on Fixed Assets
Cost Ratios
Operating costs (% of Sales)
Administration costs (% of
Sales)
Interest costs (% of Sales)
Liquidity Ratios
Current Ratio
Cash Ratio
Leverage Ratios
Debt to Equity Ratio
Debt to Capital Ratio
Interest Coverage Ratio
Efficiency Ratios
Fixed Asset Turnover
Asset Turnover
Current Asset Turnover
Working Capital Turnover
Capital Employed Turnover
(3/5)

23
Business Highlights
Description News
Overview
• Company 1 is a wholly-owned subsidiary of the ‘A’ group based in Country 1
• It is a world leader in the design, manufacture, installation and maintenance of wind turbines, having
installed more than ‘p’ MW in over 20 countries
Expansion Plans
• It will invest INR ‘q’ mn to set up a wind turbine factory in Chennai, with an annual production capacity of
‘r’ MW
• With this, it would have invested around INR ‘s’ mn in India to set up wind turbine manufacturing
facilities
Recent Contracts
• It recently bagged an order from Company B, a subsidiary of Company C for commissioning ‘t’ MW of
wind turbines
• It has signed an Engineering, Procurement and Construction (EPC) contract to build the project and
supply ‘u’ MW to a wind farm from Company D, in District 1, State 1
(4/5)

24
TO
WS
Private: Foreign Company – Company 2 – SWOT Analysis
(5/5)

25
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