Market Research Report : Nutraceuticals market in india 2014

Nutraceuticals Market – India

April 2014

2 NUTRACEUTICALS MARKET IN INDIA 2014.PPT

Executive Summary

Market

Drivers & Challenges

Trends

Competition

Market valued at INR x bn in 2011-12 and is estimated to grow at a CAGR of y % over the next six years

Comprises three segments, dietary supplements, functional foods and functional beverages

India accounts for a mere z% of the total world market for nutraceuticals

Drivers: – Faulty Lifestyles Leading to related Disorders

– Increasing Disposable Income

– Rise in Ageing Population

– Growing Awareness towards Preventive Care and Self Medication

– Expanding Sales Channels

– Ideal Manufacturing Destination

Challenges: – Lack of Standardization

– High Product Price

Fortified foods Ayurvedic nutraceuticals Foreign tie-ups

Initiatives by players to educate consumers Encapsulation Cosmeceuticals and Nanoceuticals

Probiotic Market

Probiotics in India generally comes in two forms : Drugs and Packaged foods and beverages

Major pharmaceuticals companies have become active in this space and are devising newer drugs and products, however current drugs are predominant in the area of gastroenterology

Amway India Enterprises Yakult Danone Ranbaxy Laboratories Abbott India

Herbalife International India Himalaya Drug Dr. Reddy's Laboratories Dabur India

Major Private Players Major Public Players

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•Macro Economic Indicators •Introduction •Market Overview •Drivers & Challenges •Value Chain Analysis •Trends •Government Regulations •Competitive Landscape •Strategic Recommendations •Appendix


4

SAMPLE Economic Indicators (1/3)

GDP at Factor Cost: Quarterly

Inflation Rate: Monthly

-2

-1

0

1

2

Aug 20-- - Sep 20--

b2

Jul 20-- - Aug 20--

b1

%

Nov 20-- - Dec 20--

b5

Oct 20-- - Nov 20--

b4

Sep 20-- - Oct 20--

b3

11

12

13

14

15

a14

Q1

a1 a5 a9

a13

a7

a11

Q2

a2 a6

a10

INR tn

Q4

a4 a8

a12

Q3

a3

2013-14

2011-12

2012-13

2010-11

NUTRACEUTICALS MARKET IN INDIA 2014.PPT



Nutraceutical – Definition and Segments

•The term Nutraceutical comes from the words “nutrition” combined with “pharmaceutical”, and implies a food or food product that reportedly provides health and medical benefits, including the prevention and treatment of diseases

• It comprises extracts of food having a medicinal impact on human health and comes in the form of food, dietary supplements, and medical foods

Dietary Supplements Functional Foods Functional Beverage

• xx • yy • zz



Increasing shift towards preventive therapies and increasing disposable income has led to a growing market

• India accounts for only x% of the world nutraceuticals market

•Nutraceuticals market in India is growing at a fast pace and is expected to be almost y in size by 20--

•Growing consciousness among Indians about health and how they look and feel is resulting in greater demand for product 1, product 2 and product 3 Product 2 segment is witnessing sizeable demand Product 4 will be a rapidly growing category until 20--

followed by dietary supplements • Several pharmaceutical companies are entering this

space, realizing that nutraceutical products can act as a supplementary product for their y products There is a rising penetration of pharmaceutical companies in

nutraceutical segment in the form of x1 and x2 supplements • There are more Indian players than multinationals in

the market as it is a relatively low technology section compared to pharmaceuticals

• Product 6 is one of the most emerging and nascent segments in this market with increasing consumer acceptance and greater player attention expected to drive its growth

Nutraceuticals – Market Overview Market Size and Growth

0

100

200

300

400

INR bn

20--e

+x% a6

20--e

a5

a3

20--e 20--

a7

a1

20--e

a4

a2

20-- 20--e

Market Segmentation (20--)

x2%

x1%

x3%

Segment 3 Segment 2 Segment 1



Drivers & Challenges – Summary

Drivers

Faulty Lifestyles Leading to related Disorders

Increasing Disposable Income

Rise in Ageing Population

Growing Awareness towards Preventive Care and Self Medication

Expanding Sales Channels

Ideal Manufacturing Destination

Challenges

Lack of Standardisation

High Product Price



Faulty Lifestyles Leading to Related Disorders Impact • xx

Prevalence of Chronic Lifestyle Diseases in India

0

50

100

150

200

250

300

x4

x7

Hypertension

x6

Cardiovascular Diseases

mn

x5

x2 x8

x3

x1

Diabetes Cancer

20-- 20--e

Rise in chronic diseases is encouraging people to move towards preventive treatment



Nutraceuticals Market – Value Chain

X1

X7

X4

X2

X5

X6

X3


10

SAMPLE


Trends – Summary

`

Fortified Foods

Ayurvedic Nutraceuticals

Cosmeceuticals and Nanoceuticals

Encapsulation

Trends Foreign Tie-ups

Players Educating Consumers



Fortified foods are emerging as the new growth segment for the nutraceuticals industry

•yy

Advantages

•xx

Fortified Foods

• zz

Examples



Genesis of Food Safety and Standards Act, 20--

• xx • yy • zz

Pre 20-- 20-- -20-- Post 20--

Conclusion


13

SAMPLE


Market Competition – Porter’s Five Forces Analysis

Bargaining Power of Suppliers

Threat of New Entrants

Competitive Rivalry Bargaining Power of Buyers

Threat of Substitutes

Impact Low

Impact Low

Impact Low Impact

Medium

Impact Medium


14

Competitive Benchmarking (1/5)

Public Trading Comparables (FY 20--)

Company A Company B Company C Company D Company E

Market Capitalization (INR bn) -

Share Price (INR)

EV/EBITDA (x)

EV/Revenue (x)

PE Ratio (04/04/2014)



15

Key Ratios of Major Public Companies – Operational Basis (FY 20--) (1/3)

Competitive Benchmarking (2/5)

-20

0

20

40

60

80

x8

x7

Company E Company B

x4

Company D

x9 x12

x5 x6

x10

x11

%

x1

x2

Company A

x3

Gross Margin Net Margin Operating Margin

• xx


SAMPLE


16

Public: Domestic Company – Company A (1/4)

Key People

Products and Services

Company Information Offices and Centres – India

Category Products/Services

Segment Product 1, product 2, product 3,………………….

Others Product 1, product 2, product 3………

Name Designation

Person 1 Designation




Head Office

Corporate Address Company Address

Tel No. +91-xx- yyyyyyyyy

Fax No. +91-ww-zzzzzzzz

Website www.companyA.com

Year of Incorporation 19--

Ticker Symbol ------

Stock Exchange Exchange Name



17

Financial Snapshot Key Ratios

Financial Summary

• The company earned a net profit of INR x4 mn in FY 20--, as compared to net profit of INR x3 mn in FY 20--

• The company reported total Income of INR y4 mn in FY 20--registering an increase of x% over FY 20--

• The company earned an operating margin of p% in FY 20--, a decrease of y percentage points over FY 20--

• The company reported debt to equity ratio of q in FY 20--, an increase of r% over FY 20--

Financial Summary

Indicators Value Market Capitalization (INR) z1

Total Enterprise Value (INR) z2

EPS (INR) z3 PE Ratio (Absolute) z4

Profit / Loss

Total Income

20--

d

Profit INR mn

f

g

h

Total Income INR mn

a

b

y4

x4

y3

20--

x3

20-- c

y2

x2

20--

y1

x1


Particulars y-o-y change

(20-----) 20-- 20-- 20-- 20--

Profitability Ratios Operating Margin -3.31 7.37% 10.69% 11.63% 14.80%

Net Margin -6.73 4.02% 10.75% 12.08% 7.61%

Profit Before Tax Margin -5.22 6.52% 11.74% 15.66% 11.00%

Return on Equity -7.25 5.51% 12.76% 13.22% 9.02%

Return on Capital Employed -2.22 8.50% 10.73% 12.11% 16.70%

Return on Working Capital -7.92 20.82% 28.74% 28.25% 56.05%

Return on Assets -1.89 6.67% 8.56% 10.77% 14.08%

Return on Fixed Assets -4.90 26.02% 30.92% 33.44% 41.15%

Cost Ratios Operating costs (% of Sales) 3.47 92.50% 89.03% 87.70% 84.70%

Administration costs (% of Sales)

5.78 33.11% 27.33% 22.91% 25.64%

Interest costs (% of Sales) -0.24 0.82% 1.06% 1.21% 1.74%

Liquidity Ratios Current Ratio 0.43% 2.49 2.48 4.42 2.60

Cash Ratio -14.77% 0.53 0.63 1.76 1.09

Leverage Ratios Debt to Equity Ratio 7.22% 0.32 0.30 0.01 0.02

Debt to Capital Ratio 5.46% 0.24 0.23 0.01 0.02

Interest Coverage Ratio -12.08% 9.10 10.35 10.14 8.78

Efficiency Ratios Fixed Asset Turnover 23.09% 3.47 2.82 2.72 2.69

Asset Turnover 14.00% 0.89 0.78 0.88 0.92

Current Asset Turnover 6.29% 1.66 1.56 1.78 2.26

Working Capital Turnover 5.98% 2.78 2.62 2.30 3.66

Capital Employed Turnover 14.65% 1.02 0.89 1.02 1.13



18

SAMPLE

Key Business Segments Key Geographic Segments

Business Highlights (1/2)

Description News

Overview • xx

Nutraceutical Products

• yy

Product Launch • zz

Expansion Plans •ww

76% 88% 85% 65%

0%

20%

40%

60%

80%

100%

20--

13% 2%

19%

20--

4% 1%

11%

20--

0% 1%

11%

20--

3%

21%

Segment 4

Segment 3

Segment 2

Segment 1

13%0%

20%

40%

60%

80%

100%

20--

5%

95%

20--

3%

97%

20--

3%

97%

20--

87%

Country 2 Country 1




19

SAMPLE

S W

T O


•Opportunity 1 •Opportunity 2 •Opportunity 3

•Threat 1 •Threat 2 •Threat 3

• Strength 1 • Strength 2 • Strength 3

•Weakness 1 •Weakness 2 •Weakness 3




Private: Foreign Company – Company B (1/5)

Key People

Company Information Offices and Centres – India

Corporate Address

Company Address

Tel No. +91-xx- yyyyyyyyy

Fax No. +91-ww-zzzzzzzz

Website www.companyA.com

Year of Incorporation 20--

Products and Services Head Office

Category Products/Services

Segment Product 1, product 2, product 3,………………….

Others Product 1, product 2, product 3………

Name Designation






21

Shareholders of the Company as on xx/yy/20-- Ownership Structure


Name No. of Shares held

Total

x%

Type 1



22

Financial Snapshot Key Ratios

Financial Summary

• The company earned a net profit of INR x4 mn in FY 20--, as compared to net profit of INR x3 mn in FY 20--

• The company reported total Income of INR y4 mn in FY 20--registering an increase of x% over FY 20--

• The company earned an operating margin of p% in FY 20--, a decrease of y percentage points over FY 20--

• The company reported debt to equity ratio of q in FY 20--, an increase of r% over FY 20--

Profit / Loss

Total Income

20--

d

Profit INR mn

f

g

h

Total Income INR mn

a

b

y4

x4

y3

20--

x3

20-- c

y2

x2

20--

y1

x1

Particulars y-o-y change

(20-----) 20-- 20-- 20-- 20--

Profitability Ratios Operating Margin -3.31 7.37% 10.69% 11.63% 14.80%

Net Margin -6.73 4.02% 10.75% 12.08% 7.61%

Profit Before Tax Margin -5.22 6.52% 11.74% 15.66% 11.00%

Return on Equity -7.25 5.51% 12.76% 13.22% 9.02%

Return on Capital Employed -2.22 8.50% 10.73% 12.11% 16.70%

Return on Working Capital -7.92 20.82% 28.74% 28.25% 56.05%

Return on Assets -1.89 6.67% 8.56% 10.77% 14.08%

Return on Fixed Assets -4.90 26.02% 30.92% 33.44% 41.15%

Cost Ratios Operating costs (% of Sales) 3.47 92.50% 89.03% 87.70% 84.70%

Administration costs (% of Sales)

5.78 33.11% 27.33% 22.91% 25.64%

Interest costs (% of Sales) -0.24 0.82% 1.06% 1.21% 1.74%

Liquidity Ratios Current Ratio 0.43% 2.49 2.48 4.42 2.60

Cash Ratio -14.77% 0.53 0.63 1.76 1.09

Leverage Ratios Debt to Equity Ratio 7.22% 0.32 0.30 0.01 0.02

Debt to Capital Ratio 5.46% 0.24 0.23 0.01 0.02

Interest Coverage Ratio -12.08% 9.10 10.35 10.14 8.78

Efficiency Ratios Fixed Asset Turnover 23.09% 3.47 2.82 2.72 2.69

Asset Turnover 14.00% 0.89 0.78 0.88 0.92

Current Asset Turnover 6.29% 1.66 1.56 1.78 2.26

Working Capital Turnover 5.98% 2.78 2.62 2.30 3.66

Capital Employed Turnover 14.65% 1.02 0.89 1.02 1.13





Description News

Overview • xx

Network • yy

Nutraceutical Products

• zz

Expansion Plans •ww

Business Highlights


SAMPLE


24

SAMPLE

S W

T O •Opportunity 1 •Opportunity 2 •Opportunity 3

•Threat 1 •Threat 2 •Threat 3

• Strength 1 • Strength 2 • Strength 3

•Weakness 1 •Weakness 2 •Weakness 3





Strategies that can help players penetrate deeper into the market

`

• xx

Strategic Recommendations

• yy

• zz

•ww


26

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Market Research Report : Nutraceuticals market in india 2014