Foundry market in india 2017 - Sample

Foundry Market – India
May 2017
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Foundry Market in India 2017
Executive Summary
Market Overview
Drivers and
Challenges
Government
Initiatives
Competitive
Landscape
• The growth in production of light vehicles is expected to create increased demand for new cast metal parts globally
• In 2015, the global casting production reached a value of X mn metric tonnes
• Currently, India is the second largest manufacturer of metal castings globally in terms of production volume, after China, producing ~X mn tonnes of
castings in various metals such as grey iron, ductile iron, steel and aluminum alloys for various applications
• The Indian foundry industry is a major feeder to various sectors, automobile sector accounting for the largest share
Drivers
 Improving Technology and Modernization
 Low Cost of Labor
 Growing Micro, Small and Medium Enterprises (MSME) Sector
 Increasing Investment in Infrastructure Construction
Challenges
 Rising Costs of Inputs
 Low Capacity Utilization
 Market Constraints
• Trends 1
• Trends 2
2
Major Players
Company A Company B Company C Company D

Socioeconomic Indicators
Market Overview
Market Influencers
Competitive Landscape
Appendix
3
Trade Analysis
Growth in Other End-User Segments
Government Initiatives

Socioeconomic Indicators
Total Population
4
Population Density
1,500
1,000
500
0
X%
2020
k
2019
j
2018
i
2017
h
2016
g
2015
f
2014
e
2013
d
2012
c
2011
b
2010
a
0
100
200
300
400
500
2019 2020
k1
Y%
2015
f1
2014
e1
2013
d1
2012
c1
2011
b1
2010
a1
h1
2016
i1
2017
j1
2018
g1

Types of Casting Processes
5
Casting Processes
Expendable Moulds Permanent Moulds Special Processes
XXX XXX
XXX
Low Pressure Pressure Die Gravity Die
Centrifugal Vacuum
XXX
XXX
XXX XXX XXX
XXX XXX
XXX XXX

Market Overview – Global
6
Top Casting Producing Countries (2015)
0
10,000,000
20,000,000
30,000,000
40,000,000
50,000,000
Country J
X9
Country I
X8
Country H
X7
Country G
X6
Country F*
X5
Country E
X4
Country D
X3
Country C
X2
India**
X1
Country A
X
Global Foundry Market – Product-wise Segmentation (2015)
Total production = X MT
• Increasing production of light vehicles worldwide is acting as a key growth driver for the
global foundry market
 The growth in production of light vehicles is expected to create increased demand for new cast
metal parts globally and will also lead to the replacement of old metal casting products with
more energy efficient metal casting solutions
• In 2015, the global casting production reached a value of X mn metric tonnes compared to
Y mn metric tonnes in 2014, which reflects a ~A% growth in production between the two
years
• However, the world’s top two casting producing nations, Country A and Country B
witnessed a minimal decrease in their overall production in 2015
• Country A’s total casting production decreased by ~A% from X mn metric tonnes to Y mn metric
tonnes and Country B’s production dropped by ~A% to X mn metric tonnes from Y mn metric
tonnes
• In 2015, Country A accounted for ~A% of the total global casting production and India and
the Country B combinedly accounted for ~B% of total production
x8
x7
x6
x5
x4
x3
x2
x1
x
Others
Segment 8
Segment 7
Segment 6
Segment 5
Segment 4
Segment 3
Segment 2
Segment 1

Foundry Market in India 2017 7
Top Gray Iron Producing Countries
0
5,000,000
10,000,000
15,000,000
20,000,000
25,000,000
MT
Country 5
X4
Country 4*
X3
Country 3
X2
Country 2
X1
Country 1
X
Top Ductile Iron Producing Countries
Top Malleable Iron Producing Countries Top Steel Producing Countries
0
5,000,000
10,000,000
15,000,000
MT
Country 5
X4
Country 4
X3
Country 3
X2
Country 2
X1
Country 1
X
0
200,000
400,000
600,000
MT
Country 5
X4
Country 4
X3
Country 3
X2
Country 2
X1
Country 1
X
0
2,000,000
4,000,000
6,000,000
MT
Country 5
X4
Country 4*
X3
Country 3
X2
Country 2
X1
Country 1
X
Market Overview – Global (Contd.)

Market Overview – India
8
Production of Castings in India & Growth Forecast
0
5
10
15
20
25 A%
X2
FY 2013
X1
FY 2012
X
FY 2022e
X10
FY 2021e
X9
FY 2020e
X8
FY 2019e
X7
FY 2018e
X6
FY 2017e
X5
FY 2016
X4
FY 2015
X3
FY 2014
Current Market Scenario
• India is the nth largest manufacturer of metal castings globally in terms of production volume, after Country 1, producing ~X mn tonnes of castings in various metals such as grey iron,
ductile iron, steel and aluminum alloys for various applications, in 20--
• The Indian foundry industry is valued at INR X bn
• India currently has over A number of foundries in the small, medium and large scale sectors with around X units having international quality accreditation
 Major foundry clusters in India are located in Batala, Jalandhar, Ludhiana, Agra, Pune, Kolhapur, Sholapur, Rajkot, Mumbai, Ahemdabad, Belgaum, Coimbatore and West Bengal
• The Indian foundry or metal casting industry is a key component feeder for various other sectors such as auto, auto components, railways, agro, tractors, textile, electrical machinery,
earthmoving machinery, power equipment, defence equipment, and aero and space industry
• Some of the notable companies in the foundry industry producing metal castings in India include, Company A, Company B, Company C and Company C, among others
• Production of casting reached a value of X mn MT and is expected to reach a value of Y mn MT by 2022, growing at a CAGR of ~`A% from 2015

Market Segmentation – India
9
Production of Castings in India – Product-wise Segmentation
e
d
c
b
a
e
d
c
b
a
FY 2015 FY 2016
SG Iron Malleable SteelGrey C.I. Non Ferrous
a
d
c
e
b
FY 2014
Total Production = X mn MT Total Production = Y mn MT Total Production = Z mn MT
Consumption of Castings – Sector-wise Segmentation (FY 2016)
n
j
mk
a
l
i
h
g
f
e d
c
b
Others
Segment 13
Segment 12
Segment 1
Segment 2 Segment 10
Segment 11
Segment 9
Segment 8
Segment 7
Segment 6
Segment 5
Segment 4
Segment 3

Foundry Clusters in India
10
Overview
• XXX
• XXX
• XXX • XXX
• XXX
• XXX

Export : HS Code
11
Export (Value)
0
5,000
10,000
15,000
X3
FY 2014
X4
FY 2015
X5
FY 2016
B%
FY 2016-2017 (Apr-Jan)
X2X1
FY 2013
Export (Volume)
0
1,000
2,000
3,000 X2
FY 2014FY 2013
X3
X1
FY 2016 FY 2016-2017 (Apr-Jan)
X
FY 2015
A%
X4

Export Segmentation based on Country: HS Code
12
Value-Wise Segmentation
FY 2016 FY 2017 (Apr-Jan)
G%
A%
F%
B%
D%
C%
E%
Country 7
Country 6
Country 4
Country 3
Country 2
Country 1
Country 5
D%
E%
G%
F%
C%
B%
A%
Country 6
Country 5
Country 7
Country 4
Country 3
Country 2
Country 1
Volume-Wise Segmentation
G%
E%
F%
A%
B%
D%
C% Country 6
Country 7
Country 5
Country 1
Country 3
Country 2
Country 4
A%
C% B%
D%
F%
E%
G%
Country 2
Country 1
Country 3
Country 5
Country 4
Country 6
Country 7

Import : HS Code
13
Import (Value)
0
5,000
10,000
15,000
FY 2016-2017 (Apr-Jan)
B%
X2
X3
FY 2013
X4
FY 2014 FY 2015
X1
FY 2016
X5
Import (Volume)
0
1,000
2,000
3,000
FY 2014
A%
X3
FY 2016
X4
X X1
FY 2015FY 2013 FY 2016-2017 (Apr-Jan)
X2

Import Segmentation based on Country: HS Code
14
Value-Wise Segmentation
D%
G%
E%
F%
B%
A%
C%
Country 7
Country 5
Country 6
Country 4
Country 1
Country 2
Country 3
A%
F%
D%
G%
E%
B%
C%
Country 1
Country 2
Country 7
Country 5
Country 6
Country 3
Country 4
Volume-Wise Segmentation
E%
A%
G%
B%
F%
C%
D%
Country 6
Country 5
Country 3
Country 1
Country 2
Country 4
Country 7 C%
F%
B%
E%
G%
A%
D%
Country 3
Country 6
Country 2
Country 4
Country 1
Country 7
Country 5

Market Drivers
15
• Foundries across India are presently undergoing up gradation of facilities and technology in a bid to improve their productivity and increase capacity
 To cater to the growing demand, the industry is embarking on major expansion and technology initiatives with investments of over INR X bn being made from 2011 onwards
• Growing concerns regarding the quality and quantity of castings has induced foundries in India to produce larger casting facilities over the next few years
• XXX
Improving Technology and Modernization
• India has one of the world’s lowest labor compensation costs in the manufacturing sector
• Total labor cost in the foundry sector accounts for ~X% and India has major competitive advantage over the foundry industries in the developed countries
• XXX
Low Cost of Labor

Market Drivers (Contd.)
16
Number of Working Enterprises Growth in EmploymentMSME Establishments (Top 10 Indian States)
• Majority of the foundry units in India fall under the micro, small and medium enterprises (MSME), which have registered consistent growth over the years
 There are ~X mn MSME units spread across the country
• About Y% of the MSMEs are based out of rural areas, which indicates the deployment of significant rural workforce in the MSME sector
• XXX
Growing Micro, Small and Medium Enterprises (MSME) Sector
0
20
40
60 e
FY 2015
A%
FY 2012
ca
FY 2013
d
FY 2011
b
FY 2014
c
d
e
a
b
i
g
k
h
j
f
State 3
State 4
Pradesh
State 5
State 6
State 1
State 2 State 8
State 10
Pradesh
State 7
State 9
State 11 0
50
100
150
FY 2015
e
b
FY 2011 FY 2013
c
B%
FY 2014FY 2012
d
a

Market Challenges
17
• Increase in cost of raw materials has resulted in rising production costs, which is a major cause of concern for the small foundry units
 During Aug to Oct 2016, prices of pig iron went up from INR X per kg to INR Y per kg,
 During Aug 2016 to Jan 2017, prices of lam coke went up from INR X per kg to INR Y per kg
• XXX
Rising Costs of Inputs
• Medium capacity utilization of foundry units arises from idle time of workers due to power cuts and lack of trained manpower to handle the production
processes
• India has an installed capacity of producing X mn MT of casting annually
Medium Capacity Utilization

Growth in Other End-User Segments
18
Automotive
Total Automobiles Production in India Growth in Auto Component Turnover
0
5
10
15
20
a
c1 c2b1
d
b
a1
b2
FY 2014
d1
FY 2015
c
d2
FY 2016
Two WheelersCommercial Vehicle Three WheelersPassenger Vehicle
0
500
1,000
1,500
2,000
2,500
3,000
FY 2016
A%
X3
X2X
FY 2013 FY 2014
X4
FY 2015
• Foundry market is directly linked with the development of the overall automotive sector
 Growth in the automobile industry is expected to generate huge order inflows for casting producers
• High growth of automotive sector has also led to the strong growth of other subsidiary industries like the auto component industry, indicating huge demand for the casting market
• XXX

Competition
19
List of Major Players
Name Website
Company A
Company B
Company C
Company D
Company E
Company F
Company G
Company H
Company I
Company J

Public: Domestic Company – Company A
Company Information
Products and Services
Category Products/Services
Pipes Ductile Iron Pipes
Fittings Ductile Iron Fittings
TMT Bars Steel Bars
Others Billets, Pig Iron, Technical Services
Key People
Name Designation
XXX XXX
Business Description
• Company A. was incorporated in 19-- and is headquartered in State A, India
 The company was formerly known as Company C
• Company A manufactures and supplies ductile iron (DI) pipes, ductile iron fittings,
and cast iron (CI) pipes in India and abroad
• Its products include DI pipes, such as DI socket and spigot pipe with push-on
joints, plain-ended barrel pipes, and flanged pipes and DI fittings comprising
socketed DI fittings with push-on joints, flanged DI fittings, DI fittings with push-on
type restrained joints, DI mechanical joint fittings with rubber gasket and follower
glands, and fabricated and custom made DI fittings
• The company was the first to set up a ductile iron pipe plant in the country and
has been a pioneer in the manufacture of alloy steel castings in India
Corporate Address Company A
Tel No. +91-xx-yyyy-zzzz
Fax No. +91-xx-yyyy-zzzz
Website www.xyz.com
Year of Incorporation 19--
Stock Exchange : Ticker XXX

Public: Domestic Company – Company A (Contd.)
Key RatiosFinancial Snapshot
Key Financial Performance Indicators
Indicators Value (21/04/2017)
Market Capitalization (INR mn)
Total Enterprise Value (INR mn)
EPS (INR)
PE Ratio (Absolute)
b
c
a
g
f
e
d
f
e
d
c
b
a
X
A
FY 2013
X3
A3
FY 2016
INR mn
X2X1
A2A1
FY 2015FY 2014
Total Income Net Profit/Loss Particulars 2013 2014 2015 2016
Profitability Ratios
Gross Margin %
Net Income Margin %
EBITDA Margin %
EBITA Margin %
EBIT Margin %
Return on Assets %
Return on Capital %
Return on Equity %
Return on Common Equity %
Liquidity Ratios
Current Ratio
Quick Ratio
Leverage Ratios
Total Debt/Equity
Total Debt/Capital
Interest Coverage
Efficiency Ratios
Total Asset Turnover
Fixed Asset Turnover
Accounts Receivable Turnover
Inventory Turnover

Public: Domestic Company – Company A (Contd.)
Key Business Segments Key Geographic Segments
Company A has been operating solely
in the business of manufacturing
pipes over the last few years
a
b
c
d
e
f
FY 2016
X%
Pipes
a
b
c
FY 2016
h
g
FY 2015
f
e
FY 2014
d
c
FY 2013
b
a
India Outside India

Private: Domestic Company – Company B
Company Information Business Description
• Company A , was incorporated in 19-- and is headquartered in State A, India
 The company was established as a joint venture between Company C and
Company D
• It is the largest component manufacturing company within Company C group
• The company has three main divisions namely Division 1, Division 2 and Division 3
• The product portfolio includes calipers, actuation, drum brakes, valves, hose ABS
and brake fluid for passenger vehicles, S-cam, hydraulic drum brakes, disk brakes
and electro magnetic retarders for commercial vehicles and dry and wet multiple
plate disk brakes for agricultural tractors
• XXX
Products and Services
Category Products/Services
Permanent Mould
Foundry
Automotive, refrigeration and air-conditioning and other
components
Sand Foundry
Brake components, heavy braking components, turbo
charger components, engine and chassis parts and other
components
Key People
Name Designation
XXX XXX
Corporate Address Company A
Tel No. +91-xx-yyyy-zzzz
Fax No. +91-xx-yyyy-zzzz
Website www.xyz.com
Year of Incorporation 19--

Government Initiatives
24
Vision Plan 2020 for Foundry Industry
• A Vision Plan 2020 for the foundry industry has been initiated by The Institute of Indian Foundrymen (IIF) to recommend the needed initiatives for strong growth and emerge as a
leading supplier of quality castings to the global market by 2020
• xxx
Need for the Plan
• Although India is the second highest producer of castings in the
world, it is not able to keep up with the local demand both in
terms of quantity and quality
• xxx
Project Plan and Total Investment
• The project has been planned in two phases of five years each
• xxx
Impact of the Plan
• Proposed interventions are expected to help the industry to reach a level of ~X mn tonnes per annum (MTPA)
• xxx

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