Research on India_Manufacturing and Construction Sector in India Monthly Update_December 2012

Manufacturing and Construction Sector in India

Monthly Update

December 2012

Manufacturing and Construction – Monthly Update

Top Story

Coal India Limited (CIL) to sign MOU with South Africa CIL has announced plans to sign a MOU with the South African government to float a wholly owned subsidiary in the country. The new subsidiary will play a key role in exploration and mining of coal blocks that will be obtained through government dealings in South Africa. Since 2010, CIL has been unable to secure any overseas assets despite holding several negotiations with companies such as Massey Energy and Peabody Energy based in the US and Indonesia based Sinar Mas. Company is relying on bilateral economic relation between the two countries in acquiring coal assets in the country. The new subsidiary will be the sole channel of routing Indian investments in the South African coal sector. News Update

General India has the potential to emerge as the third largest polymer consumer in the world India is expected to be the third largest market for polymer in terms of consumption demand. India plans to invest INR 1,960 mn in the polymer sector to meet the growing demand from the plastic processing industry. Indian Plastics Foundation has announced plans to set up academic centers in Dungara and Gujarat to impart training to the employees. Rise in disposable income and growing awareness among consumers are the major drivers for this market. However lack of clarity in regulations presents a challenge to the players operating in the market. Coal India to invest in mining equipment CIL has plans to dilute a fraction of its INR 595 bn cash reserve in order to increase its production capacity by 180 mn tonne over the next five years. Company is considering tenders for the purchase of 77 dumpers of 190 tonne each. It also has plans to purchase 30 dumpers with a capacity of 240 tonne each , around 15 wheel dozers, 70 dumpers of 190 tonne for Northern Coalfields, 20 high‐capacity 320‐360 tonne dumpers for South Eastern Coalfields and Mahanadi Coalfields and 150‐tonne dumpers for Eastern Coalfields.


The equipment purchase will be covered under a 11 year maintenance and repair contract. The purchase of the dumpers alone is expected to cost the company around INR 50 bn. Rajasthan to allot land for ceramic zone Rajasthan government is planning to allocate around 750 acre of land in Gilot for the development of glass and ceramic industry. Price of the land is fixed at INR 2,500 per sq meter. However discounts will be given to companies setting up projects on bigger plots. The state is also slated to host the four‐day CeraGlass India, a business‐to‐business trade fair, to promote the latest production of the ceramic and glass industry. Around 80% of the raw material used in the ceramic and glass sector is available in Rajasthan and the development of such a dedicated zone will boost the Indian ceramic industry. India faces acute coal shortage Thermal power stations are operating below capacity and factories are running on expensive diesel generators owing to the lack of coal to generate power. India depends heavily on coal and it has the fifth‐largest reserves in the world. However mining activities in India are falling below the target. Inadequate railway network hinders the delivery of even imported coal. Land acquisition for mining purposes and complex regulations are major deterrents in the development of the Indian mining sector. Paper industry to face more competition India is expected to witness a slowdown in demand for paper and paper board. India consumes barely 2 per cent of the global paper output with per capita consumption at only 9 kg against global average of 55 kg. Indian paper and paperboard industry is projected to grow at about 8 per cent a year aided by the growth of the value added product segment. Along with growing demand, the competition in the country is also increasing with the entry of global players and the possibility of further consolidation. Such developments is likely to have an adverse impact on the overall profitability of players in the industry due to increasing competition.


News Update

Expansion Plans Mitsubishi sets up new joint venture in India Mitsubishi Electric Corporation has entered into a joint venture with UAE‐based ETA Ascon Holding LLC and has established Mitsubishi Elevator ETA India Private Limited. The joint venture company will manufacture, sell, install and provide maintenance services for escalators and elevators in India. Earlier Mitsubishi Electric operated in the Indian market through a local agent. In order to expand its business in India the company plans to take over the business of the local agent, expand sales in the premium segment and enter the residential segment. Gerresheimer AG acquired majority shareholding in Pharma Plastic Packaging Manufacturer Triveni Gerresheimer AG acquired the majority shareholding in the Indian company Triveni to accelerate its growth in the emerging markets. Global expertise of the company coupled with the excellent local manufacturing capabilities of Triveni will help the company to expand its footprint. Triveni Polymers is a leading producer of pharmaceutical plastic packaging in India and was established in 1979. Gerresheimer has acquired a 75% stake in the company and the acquisition is expected to close by the end of December. Industry Expert Speak Rajasthan allots land for ceramic zone – Naveen Mahajan, Managing Director, Rajasthan State Industrial Development and Investment Corporation “Recently we have fixed prices for the land which is Rs 2,500 per sq metre. However, we will give discounts to companies setting up projects on bigger plots. Allotment of land is expected to start from June next year,” Indian paper industry to face stiff competition– Yogesh Agarwal, Managing Director and CEO, Ballarpur Industries Ltd “The changes in the last 3‐4 years in the global market and in India will have far reaching impact on the sector as competition is likely to intensify. The ability to read and understand how the paper industry will shape up by 2020 will set apart those who can meet challenges and others who do not have the capability to manage and adapt to changes,"


Transaction Detail (Oct – Dec 2012)

Date Buyer Target Deal Size (INR mn)

% stake

Deal Status

Type of Transaction

10th Nov 2012

Formica Laminates

(India) Private Limited

Well Pack Papers & Containers Limited.

NA NA Expected PE

9th Nov ‐ Hindusthan National Glass 3,000 N.A. Expected PE

15th Oct 2012

Blackstone Group

International Tractors Ltd 5493.8 12.5 Completed PE

Annual Financial Results – Revenue (INR mn)

Company FY ‘09 FY ‘10 FY ‘11 FY ‘12

Oil and Natural Gas Corp. Ltd. 1,052,756.6 1,026,655.8 1,201,955.1 1,463,705.6

Hindalco Industries Ltd. 659,629.5 607,079.2 720,778.7 808,213.7

Coal India Ltd. 412,035.7 467,840.0 526,334.8 624,154.3

Gail India Ltd. 247,818.0 270,353.0 351,066.5 440,578.2

Sterlite Industries (India) Ltd. 212,636.6 244,903.0 302,472.0 412,063.0

Grasim Industries Ltd. 184,316.9 200,870.8 214,612.3 251,470.9

Aditya Birla Nuvo Ltd. 138,939.7 157,699.4 183,839.4 220,732.5

Pantaloons Retail (India) Ltd. 76,690.4 97,869.4 122,117.9 130,713.9

NMDC Ltd. 75,640.3 62,390.9 113,689.4 112,605.3

Ashok Leyland Ltd. 59,810.7 72,447.1 111,771.1 128,419.9


Crompton Greaves Limited 87,372.6 91,408.7 100,051.1 112,485.8

Welspun Corp Ltd. 57,395.3 73,636.7 80,236.4 89,765.8

Alok Industries Ltd. 30,907.8 44,243.4 66,149.0 89,008.6

JBF Industries Ltd. 43,099.1 49,409.1 64,655.7 71,673.6

National Aluminium Co. Ltd. 52,112.2 51,745.1 60,554.9 65,002.7

Havells India Ltd. 54,774.9 51,625.7 56,126.3 65,182.0

Voltas Ltd. 43,259.0 47,574.7 51,913.8 51,857.4

Jindal Saw Ltd NA* 56,947.1 45,948.9 60,263.9

Jain Irrigation Systems Ltd. 28,695.2 34,348.0 41,745.6 NA

DCM Shriram Consolidated Limited (DSCL)

35,580.7 35,704.5 41,678.3 50,062.1

Annual Financial Results – Income (INR mn)

Company FY ‘09 FY ‘10 FY ‘11 FY ‘12

Oil and Natural Gas Corp. Ltd. 197,953.4 194,035.3 224,559.3 281,436.1

Hindalco Industries Ltd. 4,838.9 39,254.7 24,563.7 33,969.5

Coal India Ltd. 19,675.0 96,224.5 108,673.5 147,882.0

Gail India Ltd. 28,263.5 33,278.3 40,209.7 44,436.1



Aditya Birla Nuvo Ltd. (4,357.3) 1,545.6 8,221.0 8,901.3


Pantaloons Retail (India) Ltd. 100.7 674.9 1,212.1 880.8

NMDC Ltd. 43,723.8 34,472.6 64,992.2 72,653.9



Welspun Corp Ltd. 2,135.1 6,104.0 6,330.3 2,385.4

Alok Industries Ltd. 740.5 1,377.1 3,115.4 3,805.3



Havells India Ltd. (1,601.6) 695.6 3,035.7 3,699.2

Voltas Ltd. 2,514.0 3,809.9 3,572.4 1,620.6

Jindal Saw Ltd NA* 5,495.3 4,421.8 1,891.1

Jain Irrigation Systems Ltd. 1,294.4 2,475.9 2,807.1 NA

DCM Shriram Consolidated Limited (DSCL)

842.5 (142.7) 119.2 NA

*change in financial year Quarterly Financial Results – Revenue (INR mn)

Company OctDec 2011

Jan Mar 2012

MarJun 2012

JulSep 2012

Oil and Natural Gas Corp. Ltd. 185,171.3 NA NA NA

Hindalco Industries Ltd. 66,469.7 NA NA NA

Coal India Ltd. 153,492.8 194,189.9 165,005.9 145,725.4

Gail India Ltd. 112,597.8 NA NA NA





Pantaloons Retail (India) Ltd. 31,748.0 32,772.8 35,524.5 35,428.4

NMDC Ltd. 28,219.5 25,936.5 28,379.0 26,118.4



Welspun Corp Ltd. 24,496.8 27,466.9 25,497.2 20,606.3

Alok Industries Ltd. NA NA 16,448.9 NA



Havells India Ltd. 16,596.0 17,777.0 17,778.0 NA

Voltas Ltd. 11,538.8 15,841.8 16,766.5 11,601.0

Jindal Saw Ltd 10,967.1 NA NA NA

Jain Irrigation Systems Ltd. 7,711.1 NA NA NA

DCM Shriram Consolidated Limited (DSCL) 13,996.9 13,312.8 NA NA

Quarterly Financial Results – Income (INR mn)

Company OctDec 2011

Jan Mar 2012

MarJun 2012

JulSep 2012

Oil and Natural Gas Corp. Ltd. 67,414.1 NA NA NA


Hindalco Industries Ltd. 4,506.9 NA NA NA

Coal India Ltd. 40,377.6 40,134.1 44,692.6 30,780.8

Gail India Ltd. 10,914.2 NA NA NA




Pantaloons Retail (India) Ltd. (79.6) (0.6) 227.1 2,579.0

NMDC Ltd. 18,588.1 16,422.8 19,060.0 16,786.2

Ashok Leyland Ltd. 669.0 2,587.4 669.4 1,426.0

Crompton Greaves Limited 771.4 1,003.2 859.0 420.5

Welspun Corp Ltd. (701.9) 1,185.5 74.7 43.6

Alok Industries Ltd. NA NA 577.7 NA

JBF Industries Ltd. 711.8 234.4 337.0 494.3

National Aluminium Co. Ltd. 512.2 2,821.0 2,230.8 47.8

Havells India Ltd. 886.0 1,208.2 713.0 NA

Voltas Ltd. (1,154.1) 1,038.1 640.1 429.3

Jindal Saw Ltd 365.4 NA NA NA

Jain Irrigation Systems Ltd. 115.7 NA NA NA

DCM Shriram Consolidated Limited (DSCL) (252.0) 494.9 NA NA


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Research on India_Manufacturing and Construction Sector in India Monthly Update_December 2012