Market Research Report : Railway Transport Market in India 2012

7/31/2019 Market Research Report : Railway Transport Market in India 2012

1/24

Insert Cover Image using Slide Master ViewDo not distort

Rail

Transport

Market

IndiaJune2012


2/24

2

SAMPLE

RAILTRANSPORTMARKETININDIA2012.PPT

ExecutiveSummary

Market

Drivers&

Challenges

Competition

IndianRailways

has

generated

INR

xx

bn

freight

earning

in

the

first

9months

(Apr

Dec)

of

2011

12

with

xx%

CAGRovertheperiod200910and201112

IndianRailwayshasloadedyy MTfreightloadinginthefirst9months(Apr Dec)of201112withyy%CAGR

overtheperiod200910and201112

Drivers

ShiftfromRoadtoRailbyPrivatePlayers

IncreasingExportImport

DynamicTariffPolicy

OpportunityinEmergingSector

Challenges

ServiceQuality

IncreaseinRailFreightRates

ProblemswithConnectivity

MajorPlayers

ContainerCorporationofIndiaLtd.

(Concor)

GatewayRailFreight

Ltd(GRFL)

HindTerminalsLtd.

(MSCGroup)

IndiaInfrastructure&LogisticsPvt

Ltd(APL)

ContainerRailRoadServicesPvt.

Ltd(DPW)

ArshiyaRail

InfrastructureLtd.

Operational

Strategy

Marketingfor

Freight

FreightBusiness

Infrastructure

InformationTechnology

Rollingstock(Electrical)

RollingStock(Mechanical)


3/24

3RAILTRANSPORTMARKETININDIA2012.PPT

IntroductionMarketOverview

RevenueGeneration

Zone

Wise

IncomeCommodityWiseIncome

FreightServicesInitiatives

FreightMarketingSchemes

Vision2020

OperationalStrategy

DriversandChallenges

Competition

FutureRequirements&Investments

StrategicRecommendation

Appendix


4/24

4

SAMPLE


IndianRailways BasicStatistics

Basic

Statistics

of

Indian

Railways

(as

of

Feb,

2012)No.ofrailwaystations 7,083

No.ofrailwaybridges 1,31,205

No.oflocomotives 9000

No.offreightcars 2,19,931

No.of

route

kilometers 63,974

No.oftrainseachday 19,000

No.offreighttrainsperday 7,000

Freighttrafficperday 2.65MT

No.ofemployees 1.36mn

Annualrevenue

base INR

1,

060

bn

FreightRates

From1st Apr2010,InflationConcession ofINR100perwagonisapprovedonbookingoffoodgrainsfordomesticuseand

KeroseneOil

From27th Dec2010,thetaperoftheBaseClass100wasrationalizedresultinginincreaseinfreightratesrangingfrom0.15%to

3.95%

from

101

to

500

kms

and

4%

beyond

500

kms which

did

not

increase

in freight

rates

of

food

grains

and

chemical

manures

RevisionofclassificationofsugaranddeoiledcakesfromClass110toClass120

IndianRailways(IR)istheworlds4thlargestrailnetworkandthe2ndlargestinAsia

IRalso

happens

to

be

the

worlds

fourth

largest

freight

carrier

RailfreightinIndia,particularlycontainerrailoperationswhichwasprimarilycontrolledbygovernmenthasbeenopenedto

privateoperatorssince2006inordertobringcompetitionintherailfreightmarket

EntryofprivateandpublicsectoroperatorsispermittedbyMinistryofRailwaystogetlicensesforrunningcontainertrainson

theIRnetwork


5/24

5

SAMPLE


RailTransport(Freight)Market ValueChain

RailInfrastructure

Manager

RailFreight

Operator

LogisticCompanyFreightForwarder

FreightModeTransfer

DestinationTerminal

Buyers

OtherModesof

FreightTransport(eg.Road)

Distributor


6/246

SAMPLE


FreightearningbyIndianRailwaysgrewatabout8%CAGRovertheperiod200910and201112

INRbn

a

b

cd

e

0

Xx%

201112201011200910

MarketSize FreightEarning(ByValue)

7.3%

5.1%

5.3%

6.2%

6.4%

9.6%

11.8%

5.7%

1.7%

41.0%j

i

h

g

f

e

d

c

b

a

Note:YearscorrespondtoAprDecperiod Datatakenforrawmaterialsforsteelplants doesnotincludeironore

RailTransport

Market

Overview

Earningsfromfreighttraffic(includingOtherGoodsEarnings suchaswharfage,demurrage,etc.)byIndianRailways

increasedtoINRxxbninthefirst9months(Apr Dec)of201112upbyINRyybnfromtheearningsinthe

correspondingperiodofthepreviousyear

Ninemajorcommoditygroups,namelycoal,ironandsteel,ironore(bothforexportanddomesticsteelplants),other

rawmaterials

for

steel

plants,

cement,

food

grain,

fertilizer,

petroleum

products

and

container

traffic

dominates

the

freightbasketofIndianRailways

Bulkfreightlikecoal,pigironandfinishedsteel,ironore,cement,foodgrains,fertilizersandPOLproductscontributed86% ofthetotalgoodsearningsinthefirst9months(AprilDecember)of201112,whilecommoditiesotherthantheaboveaccountedfor14%

MarketSplit FreightEarning


7/247

SAMPLE


EfficiencyIndices FreightOperation

EfficiencyIndices

of

Freight

Operation

Description 2007

08 2008

09 2009

10 2010

11

NettonnekilometresperwagonperdayBG(BroadGauge)

MG(MeterGauge)

Wagonkilometres

per

wagon

per

day

BG

MG

Nettonnekilometresperenginehour

Diesel BG

Diesel MG

Electric BG

Nettonnekilometresperenginedayon

line

Diesel BG

Diesel MG

Electric BG

+

in

terms

of

8

wheelers*revised


8/248

SAMPLE


CentralRailway

EastCentralRailway

EastCoastRailway

EasternRailway

NorthCentral

Railway

NorthEasternRailway

NorthWesternRailway

NortheastFrontierRailway

NorthernRailway

SouthCentralRailway

SouthEastCentralRailway

SouthEasternRailway

SouthWestern

Railway

SouthernRailway

WestCentralRailway

WesternRailway

IndianZonalRailways Snapshot


9/249

SAMPLE


CentralRailwaycoversalargepartofthestateofMaharashtraandpartsofNorthEasternKarnatakaandSouthern

MadhyaPradesh

Itcovers3905.47kmofroutenetworkwith5975.33kmoftracklinking477stations

Itis

divided

into

five

divisions:

Mumbai,

Pune,

Bhusawal,

Nagpur

and

Solapur

Freightbusiness majorcommoditiescarriedarecoal,importedcoal,cement,petroleumproducts,indigenous

fertilizers,sugar,containers,andonionetc.

CentralRailway

Overview

FreightRevenueEarningProfile(ByValue)

0.17

b

c

d

e

f

0

201112

3.90

6.36

2.52 1.500.60

3.380.00

8.84

201011

2.89

2.201.520.592.45

0.34

9.53

200910

2.79

6.65

2.001.470.532.44

0.37

9.76

INRbn

a

6.36

j

i

h

g

f

e

d

c

b

a

Note:YearscorrespondtoAprDecperiod

0.840.800.63

0.02 0.18

0.00

d

e

0

201112

3.69

8.05

2.691.91

5.37 0.01

17.34

b

3.00

8.09

2.481.93

4.180.30

18.76

200910

2.97

8.74

2.241.80

4.22

20.03

a

MT

c

201011

0.00.3

FreightLoadingProfile(ByVolume)

ZonalRailwaysinIndia(x/x)


10/2410

SAMPLE


xxx

Coal Overview

In201112(Apr Dec),IRcarriedxxMTofcoal,65%of

thequantitybeingforthermalpowerstations,11%for

steelplantsandtherestforotherindustriesandpublic

use

MaximumcoalisloadedbySouthEastCentralRailwaysfollowedbyeastCentralrailwaysin201112assources

ofcoalwouldbeevermorerestrictedtoSoutheastern

CoalfieldandMahanadiCoalfields

Note:YearscorrespondtoAprDecperiod

MT

a

b

c

d

e

East

Central

Central

f

g

0

TotalWesternSouthernSouth

Western

South

Eastern

SouthEast

Central

South

Central

NorthernNortheast

Frontier

EasternEastCoast

23.7% 0.4%

65.4%

10.5%

CoalUsage

Segments

(2011

12)

CoalLoading(ByVolume) (201112)

a

db

c


11/2411

SAMPLE


InitiativesforFreightServices(x/x)

Segregationoffreightand

passengercorridors

Costefficienciesinbulktransport Improvingthetransitspeed

Constructionof

dedicatedfreightcorridors

Meeting customersneedsin

servicedelivery,logistics

services,transittime&tariff Initiatives

forFreight

Services


12/2412

SAMPLE


SchemesforFreightMarketing(x/x)

SpecialFreight

Train

OperatorScheme(SFTO)Terminal

Development

Scheme(TDS)Wagon

Investment

SchemeWagon

Leasing

Scheme(WLS)

xxx xxx xxx xxx


13/2413RAILTRANSPORTMARKETININDIA2012.PPT

Drivers&Challenges Summary

Drivers

ShiftfromRoadtoRailbyPrivate

Players

IncreasingExportImport

DynamicTariffPolicy

OpportunityinEmergingSector

Challenges

ServiceQuality

Increasein

Rail

Freight

Rates

ProblemswithConnectivity

f i hi h k h il f i h i


14/2414

SAMPLE


Entryofprivateplayersincontainerrailbusinesshasintensifiedthecompetitionandimproved

theefficiencyincontainerrailservices

Privatizationofcontainerrailoperationshasattracted16players

With500rakesexpectedtobeoperationalby2013andfullutilizationlevelcontainerrailoperatorsexpects

toachieve

3%

of

the

overall

freight

market

by

trying

to

shift

volumes

from

road

to

rail

Containerrailindustryhasacapacityofabout300rakes,ofwhichConcoraccountsfor220rakeswhilethe

restarewithprivateplayers

Privateplayerswithhugeinvestmentsinthecontainerrailbusinessareplanningforfurther

investments

Operatorsneedtoinvestheavilyinhardinfrastructuresuchasrakes,terminals(ICDs/railsidings),

containers,container

handling

equipment

(reach

stackers,

etc)

as

also

truck

related

and

software

investmentsinordertoofferintegrated,valueaddedlogisticssolutionswithlastmileconnectivitytoshift

volumesfromroadtorail

Toearneconomiesofscaleandprofitabilityoperatorsneedappropriateassetturnaroundtimeand

utilizationlevels

Shiftfrom

Road

to

Rail

by

Private

Players

(1/2)

Scopeforcapturinghighermarketshareasrailfreightgainspopularity

Impact

ShareofFreighthandled(201112)

Onlyabout28%ofthe

freightistransportedby

IndianRailways,while

theremaininggets

transportedvia

road,

air

andsea

Hugescopeinrail

freightduetoits

cheapermodeof

transportationand

lowerpenetrationlevel

AirFreight

0.1%

SeaFreight

15.6%

RoadFreight

56.2%

RailFreight

28.1%

I i il f i h h lik l i i


15/24

15

SAMPLE


Increaseinservicetaxrateto12.3%from10.3%inthe201213budgetbringsahugeburdenon

railfreightwithanexpectedriseofabout3.6%inrailfreight ratesfromJuly,2012 Servicetaxwillbeimposedon30%ofthevalueofinputgoodsandservices

Commoditiessuchascoal,cement,gypsum,steelandironcomprising70%ofthefreighttrafficwillbecome

expensive

following

the

additional

levyIncreaseinrailfreightisadverselyaffectingthestateslikePunjabwhichisawayfromthecoasts

Punjabindustrywhichisfarfromthecoastsandalsofromtherawmaterialisfacingfiercecompetition

fromtheotherstateswhicharenearthecoasts

ProductsmadeinPunjabwillbecomehighlyexpensivefortheotherstatesasitisanetexporter

sellingalmost80%ofitsproductiontootherstates Steelpriceswillriseby2%

Exportersarealsoadverselyaffectedwiththeincreaseinthefreightratesinallcommodities

IncreaseinrailfreightratesbyRailwayMinistry

Increasein

Rail

Freight

Rates

Increasein

rail

freight

charges

likely

to

put

negative

impact

onthemanufacturingsectorinIndia

Impact

Increasein

coalfreight

Increaseinthepower

pricesinPunjab

Adverseimpact

on

future

thermalpowerplantsinPunjab

Increasein

manufacturingcost

Losingcompetitiveness

inmanufacturinginIndia

Steel

Coal

&

Cement

DomesticIronOre15%

18%

50%37%

24%

Foodgrains&

Fertilizer 20% 35%


16/24

16

SAMPLE


Public:DomesticCompany PlayerA(1/3)

KeyPeople

ProductsandServices

CompanyInformation OfficesandCentres India

CorporateAddress

TelNo.

FaxNo.

Website

YearofIncorporation

TickerSymbol

StockExchange

Category Products/Services

Name Designation

NewDelhi

HeadOffice


17/24

17

SAMPLE


FinancialSnapshot KeyRatios

FinancialSummary

ThecompanyearnedanetprofitofINR8,800mninFY2011,as

comparedtonetprofitofINR7,800mninFY2010

ThecompanyreportedtotalincomeofINR40,900mninFY2011,

registeringanincreaseof4.6%overFY2010

Thecompanyearnedanoperatingmarginof21.77%inFY2011,an

increaseof0.34percentagepointsoverFY2010

Thecompanyreporteddebttoequityratioof0.17inFY2011,a

decreaseof18.96%overFY2010

KeyFinancialPerformanceIndicators

Indicators Value(dd/mm/yyyy)

MarketCapitalization(INRmn) 113,300

TotalEnterpriseValue(INRmn) 91,000

EPS(INR) 69.13

PERatio

(Absolute)

8th June,

201212.62

Particularsyoychange

(201110)2011 2010 2009 2008

ProfitabilityRatiosOperatingMargin 0.34 21.77% 21.43% 22.56% 22.04%

NetMargin 1.54 21.45% 19.91% 21.35% 20.85%

ProfitBeforeTaxMargin 0.36 25.91% 25.56% 27.80% 26.42%

ReturnonEquity 0.35 17.74% 18.10% 2 0.88% 23.19%

ReturnonCapitalEmployed 1.29 17.10% 18.39% 2 0.71% 22.90%

ReturnonWorkingCapital 2.38 38.22% 40.59% 5 0.73% 54.32%

ReturnonAssets 0.20 15.19% 14.99% 16.94% 18.64%

ReturnonFixedAssets 0.37 32.82% 32.46% 35.08% 39.34%

CostRatiosOperatingcosts(%ofSales) 0.42 77.14% 77.57% 7 6.15% 76.93%

Administrationcosts(%of

Sales) 0.68 2.32% 3.00% 2.99% 2.09%

Interestcosts(%ofSales) 0.00 0.00% 0.00% 0.00% 0.00%

LiquidityRatiosCurrentRatio 26.33% 5.06 4.00 3.46 3.46

CashRatio 28.71% 4.41 3.43 3.10 2.99

LeverageRatiosDebttoEquityRatio 18.96% 0.17 0.21 0.23 0.24

DebttoCapitalRatio 48.04% 0.01 0.02 0.04 0.05

InterestCoverageRatio N.A. N.A. N.A. N.A. N.A.

EfficiencyRatiosFixedAssetTurnover 6.37% 1.46 1.56 1.55 1.80

AssetTurnover 6.17% 0.67 0.72 0.75 0.85

CurrentAssetTurnover 6.79% 1.36 1.46 1.60 1.77

Working

Capital

Turnover12.84% 1.70 1.95 2.25 2.49

CapitalEmployedTurnover 9.22% 0.79 0.87 0.93 1.06

Improved Decline

TotalIncome

NetProfit/Loss40862.4

39053.836490.635213.1

0

20000

40000

60000

0

5000

10000

2008 2009

INRmn

2010 2011

INRmn



18/24

18

SAMPLE


KeyBusinessSegments KeyGeographicSegments

BusinessHighlights

Description News

Overview

CostRise

Partnerships

22%22%20%21%1%1% 0%

0%

50%

100%

2011

38,281

78%

0%

2010

37,057

78%

2009

34,524

79%

2008

33,645

79%

INRmn

0%

50%

100%

2011

100%

India

Indiaistheonlygeographic

segmentinwhichthe

companyhas

been

operating

forthelastfiveyears


a b c


19/24

19

SAMPLE


MajorPrivateCompanies Summary

Size

of

the

Bubble

represents

Total

Assets

inINRmn

Note:AllfiguresareinINRmnandarebasedonthelatestfinancialsavailable

5,370

7,197

1,875

2,778

2,3691,666

1,200

1,000

800

600

400

200

0

200

400

600

0 500 1,000 1,500 2,000 2,500 3,000 3,500 4,000 4,500

Totalincome

NetProfit/Loss

3,574

2,581

4,693

3,344

7,015

l

k

jfdbihgeca


20/24

20

SAMPLE


Private:DomesticCompany PlayerB(1/3)

KeyPeople

ProductsandServices

CompanyInformation OfficesandCentres India

Category Products/Services

Name Designation

CorporateAddress

TelNo.

FaxNo.

Website

YearofIncorporation

Gurgaon

HeadOffice


21/24

21

SAMPLE


FinancialSnapshot KeyRatios

Particularsyoychange

(201110)2011 2010 2009 2008

ProfitabilityRatiosOperatingMargin 11.33 158.76% 147.43% 85.78% 85.47%

NetMargin 2.84 39.51% 42.35% 34.24% 12.04%

ProfitBeforeTaxMargin 14.83 3.54% 18.36% 33.73% 13.47%

ReturnonEquity 1.56 17.44% 15.88% 13.03% 2.17%

ReturnonCapitalEmployed 6.47 32.09% 25.62% 10.24% 8.61%

ReturnonWorkingCapital 9.23 47.77% 38.55% 14.12% 32.91%

ReturnonAssets 0.61 7.75% 7.14% 3.95% 1.20%

ReturnonFixedAssets 0.73 11.84% 11.11% 19.23% 544.86%

CostRatiosOperatingcosts(%ofSales) 3.12 84.18% 81.06% 13.85% 14.36%

Administrationcosts(%of

Sales) 0.29 4.97% 5.27% 5.22% 1.90%

Interestcosts(%ofSales) 24.46 8.02% 32.48% 0.00% 0.00%

LiquidityRatiosCurrentRatio 10.05% 6.57 7.31 9.15 3.87

CashRatio 3.39% 6.02 5.82 8.58 2.69

LeverageRatiosDebttoEquityRatio 4.88% 1.25 1.19 2.31 0.81

DebttoCapitalRatio 2.17% 0.56 0.54 0.70 0.45

InterestCoverageRatio 311.83% 22.96 5.57 N.A. N.A.

EfficiencyRatiosFixedAssetTurnover 20.93% 0.26 0.21 0.56 45.17

AssetTurnover 23.15% 0.17 0.14 0.11 0.10

CurrentAssetTurnover 38.14% 0.88 0.64 0.37 2.02

Working

Capital

Turnover40.63% 1.04 0.74 0.41 2.73

CapitalEmployedTurnover 24.62% 0.38 0.31 0.38 0.18


Improved Decline

FinancialSummary

ThecompanyincurredanetlossofINR543.89mninFY2011,

ascomparedtonetlossofINR495.22mninFY2010

ThecompanyreportedtotalincomeofINR1,376.65mninFY

2011,

registering

an

increase/decrease

of

17.7%

over

FY

2010 Thecompanyearnedanoperatingmarginof158.76%inFY

2011,anincreaseof11.33percentagepointsoverFY2010

Thecompanyreporteddebttoequityratioof1.25inFY2011,

anincreaseof4.88%overFY2010

NetProfit/LossTotalIncome

1376.6

1169.3

559.6

222.9

0

500

1000

1500

600

400

200

0

INRmnINRmn

2011201020092008


22/24

22

SAMPLE


BusinessHighlights


Description News

Overview

InvestmentPlans

Projects


23/24

23

SAMPLE


ModernizationInitiatives&InvestmentRequirements

Basedonthefiveprongedstrategy15focusareas were identifiedinordertodrivemodernization

CoreAssets1.0Track

AndBridgesSignaling RollingStock

Stations&

Terminals

RevenueModels PPPs LandDedicatedFreight

Corridors

HighSpeed

Trains

Projects ReviewofexistingandproposedProjects

Enablers ICT IndigenousDevelopment Safety

Resources Funding HumanResource15.0

Organization

TotalInvestmentRequirementsforModernization

17.3%

36.4% 0.1%

0.2%

3.0%

19.6%

12.9%

6%

i

h

g

f

e

d

c

b

a

5

4,000

5,603

3,000 13 170

2,000

5,000

970

1,100

2,040

6,000

1,000

0

INRbn

725

330250


24/24

24RAIL TRANSPORT MARKET IN INDIA 2012 PPT

Thankyoufortheattention

AboutNetscribes

Netscribesis

aknowledge

consulting

and

solutions

firm

with

clientele

across

the

globe.

The

companys

expertise

spans

areas

of

investment

&

businessresearch,business&corporateintelligence,contentmanagementservices,andknowledgesoftwareservices.Atitscoreliesatrue

valuepropositionthatdrawsuponavastknowledgebase.Netscribesisaonestopshopdesignedtofulfilclients profitabilityandgrowth

objectives.

TheRailTransportMarket IndiareportispartofNetscribes Transport&LogisticsSeries.

Formoredetailedinformationorcustomizedresearchrequirementspleasecontact:

Disclaimer:Thisreportispublishedforgeneralinformationonly.Althoughhighstandardshavebeenusedinthepreparation,Netscribes isnot

responsible

for

any

loss

or

damage

arising

from

use

of

this

document.

This

document

is

the

sole

property

of

Netscribes

and

prior

permissionisrequiredforguidelinesonreproduction.

Phone: +913340646214

EMail: [email protected]

Followuson:
http://www.linkedin.com/groups?gid=3280715&trk=myg_ugrp_ovrhttps://twitter.com/#!/ResearchOnIndiahttp://www.facebook.com/researchonindia

Documents

Market Research Report : Railway Transport Market in India 2012