Market Research Report: Lead Acid Battery Market in India 2014 - Sample

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Lead Acid Battery Market India

December 2014
Executive Summary
Market
Drivers &
Challenges
Government
Regulation
Competitive
Landscape
Lead-acid battery market in India was pegged at INR x bn in 20-- and is expected to grow at a
CAGR of y% till 20- There are two types of batteries available in the market, automotive batteries and industrial
batteries, with the former having a significantly higher market share
Drivers:
Challenges:
Growing Automotive Industry

Increasing Demand for Power Backup
Booming Renewable Energy Sector
Recycling Efficiency
Lucrative Replacement Market
Polluting and Toxic Nature of Lead

Threat From Other Types Of Batteries
Volatility in Lead Prices
Large Unorganized Segment
Batteries (Management and Handling) Rules, 2001

Customs clearance of imports of new lead acid batteries
Responsibilities of dealer
Responsibilities of manufacturer, importer, assembler and
re-conditioner
Procedure for registration/renewal of registration

of recyclers
Responsibilities of recycler
Responsibilities of auctioneer
Responsibilities of consumer or bulk consumer
Major Public Players
Major Private Players
Company A
Company C
Company E
Company B
Company D
Company F
LEAD-ACID BATTERY MARKET IN INDIA 2014.PPT
Macro Economic Indicators

Introduction
Market Overview
EXIM
Drivers & Challenges
Government Regulation
Competitive Landscape
Strategic Recommendations
Appendix
Macroeconomic Indicators (1/3)

GDP at Factor Cost: Quarterly
INR tr
16
15
d1
14
c1
b1
a1
13
c4
b4
a4
c3
b3
a3
c2
b2
a2
12
Q1
Q2
2011-12
2012-13
Q3
2013-14
Q4
2014-15
Inflation Rate: Monthly

%
2
1
0
-1
-2
Jul 2013 - Aug 2013
Aug 2013 - Sep 2013
Sep 2013 - Oct 2013
Oct 2013 - Nov 2013
Nov 2013 - Dec 2013
Modern lead-acid batteries are made up of four basic

components
SAMPLE
Lead-Acid Battery Components
Factor 1
Factor 3
Factor 2
Factor 4
XX
XX
XX
XX
True deep cycle dry cell lead-acid batteries come in three

main construction types
SAMPLE
Types of Dry Cell Batteries
Type 1
XX
XX
XX
XX
Type 2
XX
XX
XX
XX
Lead-acid battery market in India is progressing at a steady

rate due to growing demand across sectors
SAMPLE
Market Overview Lead-Acid Batteries

Lead-acid battery market in India has been exhibiting
steady growth rates for the past few years
Market comprises two major segments, automotive
batteries and industrial batteries
Automotive batteries constitute a larger share of the
overall market
However, industrial batteries which are currently exhibiting
a better growth rate than automotive are expected to
narrow the gap within a few years
Indian market is duopolistic in nature with the top 2

players, Exide Industries Ltd. and Amara Raja
Batteries Ltd., controlling x% of the organized market
Market Size and Growth (Value Wise)

INR bn
C
B
x1
x4
x3
x2
A
0
2014
2015e
2016e
2017e
2018e
Market Segmentation (Value Wise)

A
Industry enjoys strong pricing power due to its inherent

duopolistic nature
Passenger vehicle space is dominated by Exide and Amara
Raja due to their strong tie-ups with recognized
international players
x5
Unorganized players dominate the lower end of the

replacement market (commercial vehicles and tractors)
due to the price sensitive nature of the segment
2014
2018e
7
Industrial batteries are exhibiting a higher growth rate than

automotive batteries
SAMPLE
Market Overview Automotive Batteries

Automotive battery market has been growing owing
to the high demand for automobiles and increasing
vehicle production in the country
Branded batteries comprise ~x% of the automotive
battery market with the rest being unbranded
batteries
Exide is the clear leader in this space, followed by

Amara Raja
Market Overview Industrial Batteries

Growth of industrial batteries is being driven by the
increasing demand for inverters and UPS due to the
shortage in power supply
South India has witnessed the strongest growth for
these batteries due to the high demand for inverters
in this region
Although demand from the telecom space remained
flat in the previous year, increasing demand for UPS
has helped this segment grow steadily
Automotive Batteries (Value Wise)

INR bn
D
x5
D
C
x1
x2
x3
x4
B
A
0
2014
2015e
2016e
2017e
2018e
Industrial Batteries (Value Wise)

INR bn
D
Y
C
B
y1
y2
y5
y4
y3
A
0
2014
2015e
2016e
2017e
2018e
Lead Acid Battery Import

Lead Acid Battery Import (850710)
Volume
INR mn
y1
Value
Major Importing Nations Value Wise
000 Kg
B
A
x1
x3
x2
2012
2013
y4
2014
Volume
y1
B
A
x1
x2
x3
Others
Major Importing Nations Value Wise
C
y4
x4
JAPAN
x2
2014
D
y3
x3
000 Kg
y2
x5
x7
x8
CHINA P RP
VIETNAM SOC REP
x3
MALAYSIA
x1
x2
2013
2014
2015
(Apr-Aug)
SRI LANKA DSR

GERMANY
Others
0
2012
CHINA P RP
THAILAND
2015
(Apr-Aug)
Value
x1
GERMANY
Lead Acid Battery Import (85072000)

INR mn
BANGLADESH PR
x5
x4
x4
x6
y3
y2
SAMPLE
2014
Note: HS Code - 850710 (Lead acid accumulators of a kind used for starting piston engines); HS Code - 85072000 (Other lead-acid accumulators)
READY TO EAT MARKET IN INDIA 2014.PPT
Battery market will profit considerably as various sectors

where
SAMPLE
Increasing Demand for Power Backup (2/3)

Demand from Telecom Towers
Demand from Hospitals
Rapidly growing telecom sector is one of the largest

customer segments and after the 3-G spectrum auction,
telecom towers have increased considerably
Tower industry witnessed growth rate of beyond x% for
the five years post 2006, expanding the telecom tower
base to over 354,000 towers by the end of 20- Network management facilities and significant network
expansion will drive demand for backup power
Need for power backup in the healthcare market is

absolutely important
Be it a storm or a general blackout, people need to be
assured that the hospital will be able to sustain power
and derive it from an alternate source
Private hospitals have been growing at a phenomenal
rate and the demand for power backup has kept
increasing
Rise in Telecom Towers

000 Nos.
INR tn
400
300
Private Hospital Market
x2
x3
x4
x1
200
100
0
2009
2011
2013
2014
y7
6
y1
2012
y2
y3
2013e 2014e
y4
2015e
y5
y6
2016e 2017e 2018e

10
Constant development of new and more efficient types of

batteries challenge lead-acid batteries
SAMPLE
Threat from Other Types of Batteries
Impact
A serious challenge faced by the market for lead-acid batteries is the rapid advancement in the
overall battery technology
Continuous development of other types of batteries serve as a challenge to the growth of lead-acid batteries
Lead-acid batteries have been around for over hundred years, but still suffer from certain
problem areas where they can be challenged by other types of batteries
Nickel-cadmium, nickel-metal hydride and lithium-ion batteries are the main challengers to lead-acid
batteries
Bulky and heavy nature of lead-acid batteries compared to other batteries is an area of concern
Lead-acid batteries fare poorly when it comes to the Gravimetric energy density which is measured in the
unit, kilowatt per kilogram (KW/KG), and is an important parameter to compare different battery packs
Comparative Analysis of Different Types of Batteries

Parameter
Gravimetric Energy Density
(KW/KG)
Nominal Voltage (V)
Lead-Acid
NickelCadmium
Nickel-Metal
Hydride
Lithium-Ion
a-b
c-d
e-f
gh
x1
x2
x3
x4
11
Volatile nature of lead prices has adverse effects on

manufacturing costs, thereby affecting growth
SAMPLE
Volatility in Lead Prices
Impact
Lead is the most important constituent of a lead-acid battery and constant changes in its price
can adversely affect the market
Prices of lead have remained extremely volatile over the years
This volatility creates uncertainty in procurement of raw materials for manufacturing batteries
It also has a major impact on the manufacturing costs of lead-acid batteries
Lead Prices
INR/Metric Ton
140,000
120,000
x5
x1
100,000
x7
x2
x8
x9
x10
Jan-12
Jul-12
x11
x12
Jan-13
Jul-13
x13
x14
Jan-14
Jul-14
x6
x4
80,000
x3
60,000
40,000
20,000
0
Jan-08
Jul-08
Jan-09
Jul-09
Jan-10
Jul-10
Jan-11
Jul-11
12
Batteries (Management and Handling) Rules, 2001 is the law

governing lead-acid batteries in India
SAMPLE
Batteries (Management and Handling) Rules, 2001 is the law governing battery regulation
in India and it is limited to only lead-acid batteries
Batteries (Management and Handling) Rules, 2001

The Batteries (Management and Handling) Rules, 2001 was issued by the Ministry of Environment and Forests
(MoEF) and provided regulations for the management and handling of lead-acid batteries
It set up an extensive reporting system for manufacturers, dealers, importers, recyclers and others in the supply
chain of lead-acid batteries and stated the responsibilities of each
Compliance of the rules

Compliance of the provisions of these rules are ensured by the state level Pollution Control Boards and they have
to file annual compliance status reports to the Central Pollution Control Board by 30th April each year
Data received from the state boards each year has to be compiled and published by the Central Pollution Control
Board and it also has to review the compliance of the rules from time to time to improve the collection and
recycling of used lead-acid batteries
All records and returns must be computerized
The Ministry of Environment and Forests or an agency designated by it tracks:
Distribution and sale of batteries
Collection, auction, transport and re-processing of used batteries
Sale of re-processed lead by registered recyclers
Sale of lead from all domestic producers or importers
13
SAMPLE
Market Competition Porters Five Forces Analysis

Threat of New Entrants
Impact
X
XX
Impact
X
Bargaining Power of Suppliers
Competitive Rivalry
Impact
X
Impact
X
Bargaining Power of Buyers
XX
XX
XX
Threat of Substitutes
Impact
X
XX
14
SAMPLE
Competitive Benchmarking (1/5)

Public Trading Comparable (FY 2014)
Company A
Company B
Company C
Market Capitalization (INR mn)
Share Price (INR)
EV/EBITDA (x)
EV/Revenue (x)
PE Ratio
Note: Top 3 Public companies based on the Market Capitalization; Market Capitalization and PE ratio is as on 20/11/2014 and Share Price is as on 19/11/2014
15
SAMPLE
Competitive Benchmarking (2/5)
Key Ratios of Top 3 Companies Operational Basis (FY 2013) (1/x)

Operating Margin
Net Margin
Gross Margin
40
x3
30
20
x1
10
x2
z3
y3
y1
y2
z1
z2
0
Company A
Company B
Company C
XX
XX
XX
XX
XX
16
SAMPLE
Public: Domestic Company Company A (1/4)

Company Information
Corporate Address
XX
Tel No.
XX
Fax No.
XX
Website
XX
Year of Incorporation
XX
Ticker Symbol
XX
Stock Exchange
XX
Offices and Centres India
Hyderabad
Head Office
Products and Services

Category
Products/Services
Electrical
Components
XX
Key People
Name
Designation
XX
XX
XX
XX
XX
XX
XX
XX
17
SAMPLE

Financial Snapshot
Total Income
INR bn
40
30
20
10
0
1.48
17.66
2011
2.15
23.85
2012
Key Ratios
Net Profit/Loss
INR bn
3.67
4
2.87
3
2
34.76
30.02
1
0
2013
2014
Financial Summary
Particulars
y-o-y change
(2014-13)
2014
2013
2012
2011
0.97
14.86%
13.89%
12.76%
12.60%
1.02
10.57%
9.55%
9.02%
8.39%
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
1.39
15.44%
14.05%
13.36%
12.48%
-0.09
26.96%
27.05%
26.12%
22.93%
-0.63
34.30%
34.92%
32.42%
29.79%
16.39
77.67%
61.28%
57.78%
61.22%
0.58
24.14%
23.56%
22.51%
19.94%
-23.50
67.57%
91.07%
79.34%
63.54%
-0.93
84.96%
85.90%
87.12%
87.36%
0.47
12.50%
12.04%
13.03%
14.26%
0.01
0.02%
0.01%
0.06%
0.08%
Cost Ratios
The company earned a net profit of INR 3.67 bn in FY 2014, as

compared to net profit of INR 2.87 bn in FY 2013
The company reported total income of INR 34.76 bn in FY
2014, registering an increase of 16% over FY 2013
The company earned an operating margin of 14.86% in FY
2014, an increase of 0.97 percentage points over FY 2013
The company reported debt to equity ratio of 0.06 in FY 2014,
a decrease of 24.77% over FY 2013
Key Financial Performance Indicators
Operating costs (% of Sales)

Administration costs (% of
Sales)
Interest costs (% of Sales)
Liquidity Ratios
Current Ratio
Cash Ratio
-6.05%
2.05
2.18
2.28
1.99
-33.83%
0.49
0.74
0.59
0.17
-24.77%
0.06
0.08
0.10
0.14
Leverage Ratios
Debt to Equity Ratio
Debt to Capital Ratio
Interest Coverage Ratio
-23.32%
0.06
0.08
0.09
0.12
-61.19%
770.79
1986.18
225.40
153.47
-30.40%
4.49
6.46
6.16
5.02
-3.89%
1.61
1.67
1.75
1.58
12.40%
2.64
2.35
2.52
2.40
18.89%
5.17
4.34
4.49
4.84
-7.94%
2.37
2.58
2.60
2.39
Efficiency Ratios
Indicators
Value (20/11/2014)
Market Capitalization (INR mn)

Total Enterprise Value (INR mn)
EPS (INR)
PE Ratio (Absolute)
45,384.9
42,307.2
21.99
33.30
Fixed Asset Turnover

Asset Turnover
Current Asset Turnover
Working Capital Turnover
Capital Employed Turnover
Improved
Decline
18
SAMPLE

Key Business Segments
Key Geographic Segments*
Lead Acid Storage Batteries
India
100%
50%
100%
100%
0%
Lead Acid Storage Batteries is

the only business segment
from where the company has
earned revenue for last four
years
2014
50%
100%
India is the only geographic

segment in which the company
has been operating for the last
five years
0%
2012
Business Highlights
Description
News
Overview
XX
Collaborations
XX
Expansion Plans
XX
Note: Due to lack of critical data, geographical segments graph could not be generated
19
SAMPLE
XX
XX
XX
T
XX
20
SAMPLE
Private: Domestic Company Company B (1/5)

Company Information
Corporate Address
XX
Tel No.
XX
Fax No.
XX
Website
XX
Offices and Centres India
Jalandhar
Chandigarh Dehradun
Gurgaon Delhi Lucknow
Jaipur Ghaziabad
Patna Guwahati
Ranchi
Indore
Ahmedabad
Cuttack
Mumbai Pune
Secunderabad
Products and Services

Category
Products/Services
Batteries
XX
UPS
XX
Bangalore
Thrissur Chennai
Head Office
Branch Office
Key People
Name
Designation
XX
XX
XX
XX
XX
XX
XX
XX
21
SAMPLE

Shareholders of the Company
Name
Ownership Structure
No. of Shares held
Simpson & Co. Ltd.
280,495
Tractors & Farm Equipment Ltd.
49,500
Amalgamation Pvt. Ltd. and Simpson

& Co. Ltd.
A. Krishnamurty and Simpson & Co.

Ltd.
S. Ramanujachari and Simpson & Co.

Ltd.
S. Sreenivasa Raghavan and Simpson

& Co. Ltd.
P. S. Rajamani and Simpson & Co. Ltd.
Total
330,000
Corporate bodies
100.00%
Note: Details of shareholders as on AGM dated 26th Aug, 2014

22
SAMPLE

Financial Snapshot
Total Income
Key Ratios
Net Profit/Loss
Particulars
INR mn
INR mn
3,000
46.2
-25.7
-73.7
50
2,000
1,000
100
2,196.5
2,371.6
2,513.7
2,484.3
0
-50
79.5
0
-100
2011
2012
2013
2014
Financial Summary
2014
2013
2012
2011
-2.16
-5.17%
-3.02%
2.35%
4.50%
-1.94
-2.97%
-1.02%
1.95%
3.62%
-2.55
-4.48%
-1.93%
3.08%
5.37%
-8.89
-12.87%
-3.98%
6.84%
12.48%
-10.72
-22.45%
-11.74%
8.25%
15.51%
-22.21
-40.54%
-18.33%
9.15%
16.29%
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
-4.28
-9.50%
-5.22%
4.29%
7.33%
-57.66
-117.41%
-59.75%
50.47%
86.67%
2.16
105.21%
103.05% 97.63%
95.46%
N.A.
N.A.
N.A.
N.A.
N.A.
N.A.
N.A.
N.A.
N.A.
N.A.
-7.16%
1.41
1.52
2.37
2.18
6.53%
0.53
0.50
0.81
0.67
N.A.
N.A.
N.A.
N.A.
N.A.
N.A.
N.A.
N.A.
N.A.
N.A.
N.A.
N.A.
N.A.
N.A.
N.A.
15.06%
22.54
19.59
21.32
19.10
6.58%
1.82
1.71
1.81
1.62
10.33%
2.27
2.06
2.23
1.95
29.46%
7.78
6.01
3.87
3.59
11.99%
4.31
3.85
3.48
3.42
Cost Ratios
Operating costs (% of Sales)
Administration costs (% of
Sales)
Interest costs (% of Sales)
The company incurred a net loss of INR 73.7 mn in FY 2014, as

compared to net loss of INR 25.7 mn in FY 2013
Liquidity Ratios
The company reported total income of INR 2,484.3 mn in FY

2014, registering an decrease of 1% over FY 2013
Leverage Ratios
The company earned an operating margin of -5.17% in FY

2014, a decrease of 2.16 percentage points over FY 2013
y-o-y change
(2014-13)
Current Ratio
Cash Ratio
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
23
SAMPLE

Business Highlights
Description
News
Overview
XX
Battery Products
XX
24
SAMPLE
XX
XX
XX
T
XX
25
Thank you for the attention

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Lead Acid Battery Market India

Growing Automotive Industry

Polluting and Toxic Nature of Lead

Batteries (Management and Handling) Rules, 2001

Procedure for registration/renewal of registration

Major Public Players

Major Private Players

LEAD-ACID BATTERY MARKET IN INDIA 2014.PPT

Macro Economic Indicators

Macroeconomic Indicators (1/3)

Inflation Rate: Monthly

Jul 2013 - Aug 2013

Aug 2013 - Sep 2013

Sep 2013 - Oct 2013

Oct 2013 - Nov 2013

LEAD-ACID BATTERY MARKET IN INDIA 2014.PPT

Nov 2013 - Dec 2013

Modern lead-acid batteries are made up of four basic

Lead-Acid Battery Components

LEAD-ACID BATTERY MARKET IN INDIA 2014.PPT

True deep cycle dry cell lead-acid batteries come in three

Types of Dry Cell Batteries

LEAD-ACID BATTERY MARKET IN INDIA 2014.PPT

Lead-acid battery market in India is progressing at a steady

Market Overview Lead-Acid Batteries

Indian market is duopolistic in nature with the top 2

Market Size and Growth (Value Wise)

Market Segmentation (Value Wise)

Industry enjoys strong pricing power due to its inherent

Unorganized players dominate the lower end of the

Industrial batteries are exhibiting a higher growth rate than

Market Overview Automotive Batteries

Exide is the clear leader in this space, followed by

Market Overview Industrial Batteries

Automotive Batteries (Value Wise)

Industrial Batteries (Value Wise)

LEAD-ACID BATTERY MARKET IN INDIA 2014.PPT

Lead Acid Battery Import

Major Importing Nations Value Wise

Major Importing Nations Value Wise

SRI LANKA DSR

Lead Acid Battery Import (85072000)

READY TO EAT MARKET IN INDIA 2014.PPT

Battery market will profit considerably as various sectors

Increasing Demand for Power Backup (2/3)

Demand from Hospitals

Rapidly growing telecom sector is one of the largest

Need for power backup in the healthcare market is

Rise in Telecom Towers

Private Hospital Market

LEAD-ACID BATTERY MARKET IN INDIA 2014.PPT

2016e 2017e 2018e

Constant development of new and more efficient types of

Threat from Other Types of Batteries

Comparative Analysis of Different Types of Batteries

LEAD-ACID BATTERY MARKET IN INDIA 2014.PPT

Volatile nature of lead prices has adverse effects on

Volatility in Lead Prices

LEAD-ACID BATTERY MARKET IN INDIA 2014.PPT

Batteries (Management and Handling) Rules, 2001 is the law

Batteries (Management and Handling) Rules, 2001

Compliance of the rules