ECG Monitor
In Nov’12, number of tenders grew
by 16% MoM to 3,770 tenders - all
sectors except roadways declined
Our monthly check on the health of Engineering & Capital Goods sector
After 2 subdued months, order
announcements improved sharply
by 246% MoM to Rs174.7 bn
Production of capital goods largely
increased except for high value
equipments
Emkay Commodity Price Index
bound between - down 0.8% MoM to
194.2
Monthly Update - Dec’12
Engineering & Capital Goods
Monthly Update
Contents
Synopsis .................................................................................................................................................................................................3
Cover feature – Tendering in Power Projects .............................................................................................................................................5
Section 1 - Tendering Activity ....................................................................................................................................................................9
Section 2 - Project Awards ......................................................................................................................................................................19
Section 3 - Production Statistics .............................................................................................................................................................23
Section 4 – Cost index ............................................................................................................................................................................27
Section 5 – Macro Indicators ..................................................................................................................................................................28
Section 6 - News updates........................................................................................................................................................................30
Section 7 – Valuations............................................................................................................................................................................ 32
Section 8 – Financials ............................................................................................................................................................................ 37
Emkay Research
December 18, 2012
2
Engineering & Capital Goods
ECG Monitor – December’12
Your success is our success
December 18, 2012
BHEL
CMP: Rs228
Blue Star
CMP: Rs192
Cummins India
CMP: Rs498
Elecon Engineering
CMP: Rs50
Greaves Cotton
Hold
Target: Rs220
Buy
Target: Rs500
Target: Rs56
Punj Lloyd
Accumulate
CMP: Rs58
Target: Rs74
Voltas
CMP: Rs104
Tendering activity in power sector (comprising both distribution and equipments) has
fallen to below average levels since the month of Jul’12 – indicative of possible fall in
order inflows momentum in ensuing months.
In the current month ECG monitor, we have analysed the nature of power sector
tenders to gauge benefiting companies from the ongoing tenders in the power sector.
Our analysis of tenders (opened since Oct’ 12) indicates:
§
Hold
Target: Rs110
CMP: Rs224
YTD power sector (excluding distribution) has seen healthy order inflows at Rs242.6
bn (comprised 30% of YTD total order inflows). Correspondingly, companies exposed
to power sector witnessed healthy order inflows in H1FY13 (up 4% yoy). But the
asking rate for H2FY13E remains high at 26% yoy (ranges from -51% to +202% at
company level).
Target: Rs1,759
CMP: Rs95
TRF
§
Buy
Accumulate
CMP: Rs614
§
Hold
Larsen & Toubro
Thermax
§
Accumulate
Target: Rs90
McNally Bharat
Tendering in Power Sector
Target: Rs215
CMP: Rs76
CMP: Rs1,627
In the current month’s update on the Engineering & Capital Goods (ECG) sector, we have
put across a study of tendering in the power sector along with our usual assessment of
tracking trends in project tenders, project awarding, production statistics, etc.
All of the tenders were in the public sector (either standalone or in PPP mode)
(See Exhibit 4)
§
Sell
Key trends observed during the month
§
Target: Rs180
Accumulate
§
Target: Rs121
Source: Bloomberg
Tenders for Material handling Equipment (MHE) - healthy at 42 tenders (including
sub-contracting works) – This augurs well for companies in the MHE space which
are likely to witness healthy order inflow momentum. (See Exhibit 5)
Of the above, only 2 tenders were from private developers. BHEL has issued 9
tenders for sub-contracting MHE work.
Hold
Target: Rs505
Tenders for BTG equipment or development of power plant itself - Remain
healthy at 9,245 MW (6 tenders). But all the projects are in their initial planning
stages and are yet to receive clearances (both environmental and coal) in most
cases – leading to increased probability of delay in project commencement in
current times.
§
§
§
§
In Nov’12, number of tenders increased by 16% MoM to 3,770 tenders (up 103% YoY
on low base). In value terms, tenders grew 42% MoM and 57% YoY to Rs391.4 bn.
MoM growth was led by roadways, while all other sectors declined.
Tendering activity has remained healthy since past twelve months – largely range
above 3,000 tenders per month. But benefits of low base expected to cease from
Dec’12, expect muted growth on YoY basis in ensuing months.
After 2 months of muted activity, order announcements improved sharply by 246%
MoM to Rs174.7 bn – though growth on YoY basis was muted at 5.6% YoY. Strong
growth was driven by Process sector (witnessed finalization of few large orders).
Power equipments, water and railways also witnessed healthy order finalizations.
Production data of capital goods equipment was largely increasing during the month
of Oct’12 in case of low value capital goods equipment, power T&D equipment and
construction equipment – grew on YoY basis (or remained stable in few cases). Only
high value capital goods equipment declined on YoY basis.
Emkay Commodity Price Index remains range bound between 194-196 levels. In
Nov’12, Emkay commodity price index fell by 0.8% MoM to 194.2 (up by 0.9% YoY).
Rubber prices have now declined for the 13th consecutive month on YoY basis.
The domestic ECG sector largely under-performed the broader markets by 3.5%. But
the international ECG sector witnessed strong price rise – stock prices rising +10% in
10 out of 19 companies tracked.
3
Emkay Global Financial Services Ltd.
3
Monthly Update
Emkay
©
Engineering & Capital Goods
§
§
Monthly Update
Absolute ‘Sell’ ratings (as a % of total ratings) continued to rise… now stand at 40% Vs
35% ratings in favour of “Buy”.
After minimal changes in consensus earnings estimates witnessed in the past 6
months, consensus earnings estimates were cut by 3.3% MoM for FY13E and by 2.7%
MoM for FY14E.
Top picks from EMKAY ECG universe
We maintain that stock selection should be purely driven by visibility, cash flows and ROIC
of the business models. Few companies appear to be richly valued (on relative basis).
These should be viewed in conjunction to strength of the business model. Our top picks in
the ECG sector are (1) Larsen & Toubro (2) Cummins India and (3) Greaves Cotton.
Emkay Research
December 18, 2012
¡
Larsen & Toubro - Strong order book cover with diversified business model and top
quartile earnings growth amongst peers. We have Accumulate rating with price target
of Rs1759/Share.
¡
Cummins India – Technology intensive business model with near-term earnings
catalysts and ROIC of +40%. We have Accumulate rating with price target of
Rs500/Share.
¡
Greaves Cotton – Though we expect muted earnings growth in near term, FCF yield
of +8% gives reasonable comfort. We have BUY rating with price target of Rs90/Share.
4
Monthly Update
Engineering & Capital Goods
Cover feature – Tendering in Power Sector
§
§
§
§
§
YTD power sector (excluding distribution) has seen healthy order inflows at Rs242.6
bn (comprised 30% of YTD total order inflows) – largely led by finalizations and
awarding of NTPC bulk tenders (11x660 MW and 9x800 MW).
Correspondingly, companies exposed to power sector witnessed healthy order inflows
in H1FY13 (up 4% yoy). But the asking rate for H2FY13E remains high at 26% yoy
(ranges from -51% to +202% at company level).
Tendering activity in power sector (comprising both distribution and equipments) has
fallen to below average levels since the month of Jul’12 – indicative of possible fall in
order inflows momentum in ensuing months.
In the current month ECG monitor, we have analysed the nature of power sector
tenders to gauge benefiting companies from the ongoing tenders in the power sector.
Our analysis of tenders (opened since Oct’ 12) reveals that
§
Tenders for BTG equipment or development of power plant itself - Remain healthy
at 9,245 MW (6 tenders). But all the projects are in their initial planning stages and
are yet to receive clearances (both environmental and coal) in most cases –
leading to increased probability of delay in project commencement in current
times.
All of the tenders were in the public sector (either standalone or in PPP mode)
(See Exhibit 4)
§
Tenders for Material handling Equipment (MHE) - healthy at 42 tenders (including
sub-contracting works) – This augurs well for companies in the MHE space which
are likely to witness healthy order inflow momentum. (See Exhibit 5)
Of the above, only 2 tenders were from private developers. BHEL has issued 9
tenders for sub-contracting MHE work.
400,000
Exhibit 1: Order finalizations in power equipments at Rs243 bn YTD – Led by NTPC bulk finalizations
Oct-11
Jan-12
Apr-12
Pow er Equipments
Jul-12
Oct-12
In Rs Mn
200,000
YTD w itnessed Rs243 bn orders
in pow er equipments - equivalent
to 30% of total orders
-
100 200
0
-200 -100
Jul-11
YoY Growth (%)
In Rs Mn
80,000
160,000
Power Equipments
Jul-11
Oct-11
YOY - Grow th
Jan-12
Apr-12
Pow er Equipments
Jul-12
Oct-12
Total Orders
Source: Company, Emkay Research
Exhibit 2: Order Inflows for Emkay ECG universe (exposed to power sector)
In Rs Mn
Q1FY12 Q2FY12 Q3FY12 Q4FY12 Q1FY13 Q2FY13
BHEL
H1FY13
H1FY12 YoY Gr (%) H2FY13E
H2FY12 YoY Gr (%)
24,710
143,060
-33,877
87,067
75,727
31,530
107,257
167,770
-36.1
160,703
53,190
161,900
160,960
171,290
211,590
195,400
209,670
405,070
322,860
25.5
401,238
382,880
4.8
16,880
12,840
7,452
9,077
14,120
13,368
27,488
29,720
-7.5
23,887
16,528
44.5
300
700
1,930
770
1,480
2,709
4,189
1,000
318.9
3,072
2,700
13.8
McNally Bharat
5,850
4,913
1,419
18,340
4,982
5,576
10,558
10,763
-1.9
9,586
19,759
-51.5
Elecon Engg.
4,833
2,553
2,072
2,506
6,670
2,055
8,725
7,386
18.1
5,459
4,579
19.2
214,473
325,026
150,286
329,350
298,379
264,908
563,287
539,499
4.4
603,945
479,636
25.9
52,573
164,066
-21,004
117,760
102,979
55,238
158,217
216,639
-27.0
202,707
96,756
109.5
L&T
Thermax
TRF
Total
Total (Ex L&T)
202.1
Source: Company, Emkay Research
Emkay Research
December 18, 2012
5
Monthly Update
Engineering & Capital Goods
Jul-11
Jul-11
Oct-11 Jan-12 Apr-12
Jul-12
Oct-12
Thermal Pow er
YOY - Grow th
YoY Growth (%)
200
100
-100
0
In Rs Mn
2,000
YoY Growth (%)
-
-
-100
0
100
No. of Tenders
100
Tendering in past months
has been below average
4,000
200
200
Exhibit 3: Tendering activity has been lower in past few months
Oct-11 Jan-12 Apr-12
Jul-12
Oct-12
Thermal Pow er
YOY - Grow th
Source: Emkay Research
Exhibit 4: Tenders for Power plant development or BTG equipment
Issuer Name
District
State
Chhattisgarh
Surguja
Power Ltd.
Power
plant
Ultra Mega
Power
(Surguja)
Surguja
Chhattis
garh
Gujarat State
Electricity
Corpn. Ltd.
Coal Based
Power
(Wanakbori)
Kheda
Gujarat
Karnataka
Power Corpn.
Ltd.
Supercritical
Thermal
Power
(Godhna)
Thermal
Power
Station
(Neyveli)
Coal Based
Thermal
Power
(Meghalaya)
Thermal
Power
(Tuticorin )
JanjgirChampa
Chhattis
garh
Cuddalor
e (South
Arcot)
Tamil
Nadu
Others
Unalloca
ted
BOO
Tamil
Nadu
EPC
Neyveli
Lignite Corpn.
Ltd.
Power
Department,
Meghalaya
SEPC Power
Pvt. Ltd.
Tuticorin
Contract Tender description
type
BOO
Pre-qualification was invited for selection of
developer for setting up of 4000 MW Ultra Mega
Power Project on BOO basis in Surguja district of
Chhattisgarh.)
EPC
Selection of EPC contractor for design, engineering,
procurement, construction, supply, installation,
testing & commissioning of coal based supercritical
power plant (800 MW) at Wanakbori in Kheda district
of Gujarat on turnkey basis.
JV
EoI invited for participation in JV for 2x800 MW coal
based Super Critical Thermal Power Plant at Godhna
in Jajgir Champa district of Chhattisgarh.
Remarks
The power project is being
developed by KPCL in a 50:50 JV
with L&T. Environmental clearance
and coal allocation pending
Tender for steam generator & auxiliaries package
(NTA1) for Neyveli New Thermal Powet Project
(2x500 MW) located at Neyveli, Cuddalore, Tamil
Nadu.
Selection of joint venture for setting up a 1320 MW
(2x660MW) coal based supercritical thermal power
plant on BOO basis.
Pre-qualification for EPC contractors for setting up 1x
525 MW Tuticorin thermal power project, Stage-IV
(Unit-1) on BOO basis in Tamil Nadu.
Source: Emkay Research
Exhibit 5: Tenders in the Material Handling Equipment (MHE) space
Issuer Name
Tender Name
District
State
Bharat Heavy
Electricals Ltd.
Meja Thermal
Power Project
Thermal Power
(Atchutapuram)
Project
Multiple projects
Allahabad
Uttar Pradesh
Visakha
patnam
Andhra
Pradesh
Multi States
Contract
Tender Info
Model
CHP civil, structural, pilling & architectural works package-2 x 660 MW
coal handling plant package for Meja Thermal Power Project, Meja
Material handling work of boiler & aux, TG & aux, electrical system, C&I
system, Non-BHEL system, steel etc. for 1x300 MW Abhijeet Kaizen
Thermal Power Project
Various bought out items for thermal power projects namely plate heat
exchangers for 2x600 MW Singareni Thermal Power Project, plate heat
exchangers for 2x195 MW Muzaffarpur Thermal Power Project,
hydrogen generation plant for 4x250 MW Nabinagar Thermal Power
Project, control valves for 2x800 MW Yermarus Thermal Power Project,
Anubar (Delta tube) for 1x700 MW for Bellary-3 Thermal Power Project,
mill reject handling system (Pneumatic type) for 3x660 MW Lalitpur
Super Thermal Power Project, vibration isolation system for TG
foundation, BFP foundation and fan foundation for 1x500 MW
Vindhyachal Stage-V, gas chlorination plant for 2x250 MW Sikka
Thermal Power Station extn Units-3&4, VIS packages for 2x660 MW
Mouda Stage-II Super Thermal Power Project.
Source: Emkay Research
Emkay Research
December 18, 2012
6
Engineering & Capital Goods
Exhibit 5: Tenders in the Material Handling Equipment (MHE) space (Cont’d…)
Contract
Issuer Name
Tender Name
District
State
Model
Bharat Heavy
Thermal Power
Begusarai
Bihar
Electricals Ltd.
Station (Barauni)
Project
Damodar Valley
Corpn.
Hinduja National
Power Corpn. Ltd.
Madras Aluminium
Co. Ltd.
Maharashtra State
Power Generation
Co. Ltd.
NTPC Ltd.
Thermal Power
Station (Obra)
Project
Vizag Thermal
Power Project
Sonbhadra
Uttar Pradesh
Visakha
patnam
Andhra
Pradesh
Thermal Power
(Raghunathpur)
Project
Vizag Thermal
Power Project
Captive Power
Plant (Mettur
Dam) Project
Bhusawal
Thermal Power
Station Project
Purulia
West Bengal
Visakha
patnam
Salem
Andhra
Pradesh
Tamil Nadu
BOOT
Jalgaon
Maharashtra
EPC
Lara Super
Thermal Power
(Raigarh) Project
National Capital
Power Station
(Dadri) Project
Raigarh
(CHHAT)
Chhattisgarh
Gautam
Budh Nagar
Uttar Pradesh
Super Thermal
Power (Kudgi)
Project
Bijapur
Karnataka
Super Thermal
Power (Mouda)
Project
Super Thermal
Power
(Nabinagar)
Project
Nagpur
Maharashtra
Aurangabad
(BIH)
Bihar
Monthly Update
Tender Info
Design, engineering, manufacturing, supply / delivery, erection,
commissioning, trial run, handing over to customer etc. of fuel oil
unloading and storage system package for 2x250 MW Barauni
Extension Project
Design, engineering, supply, E&C etc. of water treatment plant
packages for 2x250 MW Barauni Extn. Project
Design, engineering, manufacturing, supply, testing, erection,
commissioning etc. for two nos. induced draft cooling tower for 2x250
MW Barauni extension project Unit 8 and 9 in Begusarai district of
Bihar.
Erection and commissioning, testing of ash handling system pertaining
to R&M for BOP of Obra thermal power station, Units-10-13
Erection, testing and commissioning of C&I system for 2x250 MW STG
HNPCL Vizag U#1&2 Project in Andhra Pradesh.
Design, engineering, manufacture, testing, inspection, supply and
erection & commissioning of AWRS clarifier package for Ash handling
Plant of HNPCL Vizag Thermal Power Project (2x520 MW)
Main plant civil works and chimney & chimney elevator package for
2x60 MW Raghunathpur Thermal Power Station (Phase-II)
Others
Bids were invited for desalination system for 1040 MW Vizag Thermal
Power Plant
EoI for design, supply, erection & commissioning of 2 cells of each
1300-cum-RCC cooling tower & 7 MW steam turbine generator
package & its accessories in power plant at Mettur Dam
Design, engineering, procurement, supply, installation, construction,
testing and commissioning of all civil, electrical, mechanical and
instrumentation woks for sewage treatment plant of capacity 1000
cum/day of colony sewage with comprehensive operation and
maintenance of the entire plant for a period of two years at New
Bhusawal Thermal Power Station Expansion Project (2x500 MW)
Ssh handling system & ash water recirculation package for Lara Super
Thermal Power Project, Stage-I (2x800 MW).
Procurement of conveyor belt for CHP Stage-1&2 for National Capital
Power Station, Dadri
Procurement of conveyor belt for AHP for National Capital Power
Station, Dadri
Procurement of conveyor idler frames & idlers for CHP Stage-1&2 for
National Capital Power Station, Dadri
CW system and make up water system civil works package for Kudgi
Super Thermal Power Project, Stage-I (3x800 MW) at Kudgi
CW system equipment package for Kudgi Super Thermal Power
Project, Stage-I (3 x 80 MW) at Kudgi
Water treatment plant package for Kudgi Super Thermal Power Project,
Stage-I (3x800 MW)
Induced draft cooling tower package for Kudgi Super Thermal Power
Project, Stage-I (3x800 MW) at Kudgi
Ash handling system and ash water recirculation package for Kudgi
super thermal power project, Stage-I (3x800 MW)
Coal handling plant package for Kudgi Super Thermal Power Project,
Stage-I (3x800 MW) in Bijapur
Cooling towers package for Mouda super thermal power project, StageII (2 x 660 MW)
Bids were invited for air conditoning system package for Nabinagar
Super Thermal Power Project (3x660MW)
CW system equipment package for Nabinagar Super Thermal Power
Project (3x660 MW)
Fire detection and protection system package for Nabinagar super
thermal power project (3x660 MW)
Source: Company, Emkay Research
Emkay Research
December 18, 2012
7
Engineering & Capital Goods
Exhibit 5: Tenders in the Material Handling Equipment (MHE) space (Cont’d…)
Contract
Issuer Name
Tender Name
District
State
Model
NTPC Ltd.
Super Thermal
Bilaspur
Chhattisgarh
Power (Sipat)
(CHHAT)
Project
Super Thermal
Maharashtra
Power (Solapur
& Mouda)
Project
Talcher Super
Angul
Orissa
Thermal Power
Station Project
Tanda Thermal
Ambedkar
Uttar Pradesh
Power Station
Nagar
Project
Thermal Power
Allahabad
Uttar Pradesh
(Meja) Project
Thermal Power
Station
(Badarpur)
Project
Vindhyachal
Super Thermal
Power Project
West Bengal Power Sagardighi
Devp. Corpn. Ltd.
Thermal Power
Project
Thermal Power
Station (Bandel)
Project
Delhi
Delhi
Sidhi
Madhya
Pradesh
Murshidabad
West Bengal
Hooghly
West Bengal
Turnkey
Monthly Update
Tender Info
Area development work around cooling tower (Stage-I) for Sipat Super
Thermal Power Project
Air conditioning system package for Solapur super thermal power
project (2x660 MW) and Mouda super thermal power project, Stage-II
(2x660 MW)
Ash handling plant of Stage-I for Talcher Super Thermal Power Station
at Kaniha
Supply, erection and commissioning of fire detection and fire protection
system for stacker reclaimer & coal conveyors for Tanda Thermal
Power Station
CW system and make up water system civil works package for Meja
thermal power project (2x660 MW)
CW system equipment package for Meja Thermal Power Project (2x660
MW)
Air conditioning system package for Meja Thermal Power Project
(2X660 MW)
Procurement of pipes for cooling tower 1, 2, 3 hot water duct at
Badarpur Thermal Power Station
Design, supply, erection and commissioning of fire detection and
protection system at Badarpur Thermal Power Station, Delhi.
Refurbishment of cooling tower of Stage-I for Vindhyachal Super
Thermal Power Project, Stage-I
CW system equipment package for Vindhyachal super thermal power
project Stage-V (1x500 MW) at Vindhyanagar
Ash handling system & ash water recirculation package for Vindhyachal
Super Thermal Power Project Stage-V (1x500 MW)
Plant water system package for Phase-II (2x500 MW) Units 3&4 of
Sagardighi Thermal Power Extension Project on turnkey basis.
Ash handling plant package under energy efficiency and renovation &
modernisation of Unit No 5 (210 MW) of Bandel Thermal Power Station
Source: Company, Emkay Research
Emkay Research
December 18, 2012
8
Monthly Update
Engineering & Capital Goods
Section 1 - Tendering Activity
§
Tendering activity has remained healthy since the past twelve months – ranged above
3,000 tenders per month.
§
In Nov’12, number of tenders increased by 16% MoM to 3,770 tenders (up 103% YoY
on low base). In value terms, tenders grew 42% MoM and 57% YoY to Rs391.4 bn.
§
Increase in tendering activity was led by central government – up 47% MoM to
Rs183.7 bn while tenders by state government increased by 5% MoM to Rs206.9 bn.
§
Benefits of low base (on YoY basis) are unlikely to be available from next month
onwards, expect muted growth on YoY basis from ensuing months.
Jul-11
Oct-11
State Government
Jan-12
Apr-12
Jul-12
Central Government
-
-100
0
c
Oct-12
Jul-11
Grow th Rate MoM
MoM Growth (%)
200
100
250,000
Rs Million
MoM Growth (%)
50
100
500,000
Exhibit 7: In value terms, tenders published grew by a strong 42%
MoM to Rs391 bn in Nov’12
-50
0
2,000
-
No. of Tenders
4,000
Exhibit 6: Number of tenders remained at healthy level – up 16% MoM
to 3,770 tenders in Nov’12
Oct-11
State Government
Jan-12
Apr-12
Jul-12
Central Government
Oct-12
Grow th Rate MoM
Source: Emkay Research
Exhibit 8: On YoY basis, number of tenders grew by 103% on low base
Exhibit 9: In value terms, growth in tenders was healthy at 57% YoY
Jan-12
Apr-12
Jul-12
Oct-12
0
100
200
Oct-11
Jul-11
Oct-11
Jan-12
Apr-12
Jul-12
Oct-12
-100
Jul-11
YoY Growth (%)
60
30
0
-60 -30
YoY Growth (%)
90 120
Source: Emkay Research
Source: Emkay Research
Source: Emkay Research
Exhibit 10: YTD, number of tenders growth stands at 44% to 27,051
Exhibit 11: YTD, growth in value of tenders stands at 31% YoY
2,500,000
2,000,000
25,000
In Rs Mn
No. of Tenders
30,000
20,000
1,000,000
500,000
15,000
-
10,000
YTDFY12
YTDFY12
YTDFY13
YTDFY13
Source: Emkay Research
Source: Emkay Research
Emkay Research
1,500,000
December 18, 2012
9
Monthly Update
Engineering & Capital Goods
Sector wise break-up for tenders
§
Sharp growth in tendering activity was skewed in favour of roadways (on MoM basis)
while all the other tenders witnessed declining activity
§
Roadways grew sharply (both value terms and in numbers) on MoM basis.
Sequentially, community services and power distribution witnessed sharp increase in
number of tenders but declined in value terms. Rest all sectors witnessed sequential
decline in both value and number terms.
§
The road sector remained the highest contributor with 1,841 tenders (49%) followed by
community services (553, 15%), water supply (215, 6%), irrigation (207, 5%), power
distribution (199, 5%), railways (187, 5%) and power equipments (88, 2%).
Exhibit 12: Sector-wise details of tenders published in the month of Nov’12 – In numbers
In Numbers
Nov-11 Dec-11
Jan-12 Feb-12 Mar-12
Apr-12 May-12
Jun-12
Jul-12
Aug-12
Sep-12
Oct-12
Nov-12
Roadways
701
1,232
1,066
1,787
1,167
1,555
1,108
1,557
1,093
1,022
2,137
1,459
1,841
Community Service
207
569
414
363
542
510
719
624
472
339
552
384
553
Irrigation
207
356
264
268
362
396
315
264
272
172
408
226
207
80
174
154
187
257
157
204
363
213
194
261
265
215
Water Supply
Railways
99
204
197
282
244
223
315
263
263
226
190
229
187
Power Distribution
131
183
141
125
152
148
147
128
154
148
120
125
199
Power Equipment
89
172
129
124
143
82
104
106
63
90
89
125
88
-
61
52
57
52
62
48
97
-
61
70
76
34
Hospitals
Real Estate
32
96
61
34
41
44
36
58
85
62
51
37
-
Storage & Distribn
67
104
57
-
63
43
62
68
46
44
73
80
79
Total
1,856
3,572
2,809
3,551
3,361
3,539
3,291
3,877
2,908
2,613
4,248
3,255
3,770
Growth YoY (%)
-46.9
-10.6
-23.3
-4.7
4.4
11.5
3.3
83.7
19.2
7.9
94.1
93.9
103.1
Growth MoM (%)
10.5
92.5
-21.4
26.4
-5.4
5.3
-7.0
17.8
-25.0
-10.1
62.6
-23.4
15.8
Source: Emkay Research
Exhibit 13: Sector-wise details of tenders opened in the month of Nov’12 – In value terms
In Rs mn
Nov-11
Dec-11
Jan-12
Feb-12
Mar-12
Apr-12
May-12
Jun-12
Jul-12
Aug-12
Sep-12
Oct-12
Nov-12
Roadways
177,050
156,070
45,920
81,590
98,610
110,230
146,740
102,090
71,950
96,290
186,150
153,170
243,390
6,410
19,170
17,350
16,710
15,950
11,740
14,170
16,850
15,580
14,460
26,280
17,837
15,660
Community Service
Irrigation
14,540
16,980
22,550
14,110
30,720
13,270
27,890
15,460
12,880
12,280
19,700
28,953
44,310
Water Supply
5,900
16,600
5,150
17,240
22,440
7,260
16,510
23,390
16,790
16,490
26,090
13,290
11,350
Railways
8,440
10,450
18,750
30,900
72,230
39,830
19,760
26,160
15,030
237,340
16,190
15,123
13,920
Power Distribution
22,700
5,160
2,620
3,020
29,800
2,800
20,020
4,680
43,610
4,460
3,130
21,341
11,440
Power Equipment
2,170
2,680
1,300
1,400
1,800
3,350
1,460
550
950
3,750
410
638
760
-
1,500
2,730
2,500
2,950
3,740
2,250
2,900
-
730
1,780
1,408
800
Real Estate
6,500
28,210
25,010
2,960
9,000
12,740
5,110
6,170
10,410
6,780
6,850
5,029
-
Storage & Distribn
1,170
1,300
340
-
510
830
1,740
830
1,290
980
1,350
303
1,800
Hospitals
Total
248,800
284,130
153,390
183,230
308,130
237,470
277,920
232,890
202,970
422,120
301,620
276,010
391,390
Growth YoY (%)
-16.4
37.5
-5.6
-20.5
77.3
46.9
31.7
-0.9
6.5
-19.2
42.6
171.1
57.3
Growth MoM (%)
144.4
14.2
-46.0
19.5
68.2
-22.9
17.0
-16.2
-12.8
4.5
42.2
-8.5
41.8
Source: Emkay Research
Exhibit 14: Break-up of number of tenders in Nov’11
Thermal Hospitals
0%
Pow er
6%
Pow er
Distribution
8%
Real Estate
2%
Other Storage
& Distribution
4%
Exhibit 15: Break-up of number of tenders in Nov’12
Roadw ays
43%
Irrigation
13%
Source: Emkay Research
Emkay Research
Thermal Hospitals
1%
Pow er
3%
Real Estate Other Storage
0%
& Distribution
2%
Water Supply
6%
Railw ays
6%
Water Supply
5%
Pow er
Distribution
6%
Railw ays
5%
Community
Services
13%
Irrigation
6%
Community
Services
16%
Roadw ays
55%
Source: Emkay Research
December 18, 2012
10
Monthly Update
Engineering & Capital Goods
Jul-11
Oct-11
Jan-12 Apr-12
Jul-12
Oct-12
Roadw ays
YOY - Grow th
0
-200
YoY Growth (%)
200
400
280,000
In Rs Mn
140,000
YoY Growth (%)
Exhibit 17: Value of roadways tenders increased by a strong 59% MoM
and 38% YoY to Rs243.4 bn
-
-
-150
50
250
450
No. of Tenders
1,000 2,000 3,000
Exhibit 16: Roadways – Tendering activity is on an uptrend… number
of tenders grew 163% YoY and 26% MoM to 1,841 tenders
Jul-11
Oct-11
Jan-12 Apr-12
Jul-12
Oct-12
Roadw ays
YOY - Grow th
100 200 300
0
In Rs Mn
25,000
YoY Growth (%)
Jan-12
Irrigation
Apr-12
Jul-12
Oct-12
YOY - Grow th
-
Oct-11
-100
-200
0
200
No. of Tenders
200
400
Jul-11
YoY Growth (%)
Exhibit 19: Value of irrigation tenders continued to rise – Grew by 53%
MoM and by 205% YoY to Rs44.3 bn
50,000
Exhibit 18: Irrigation – After a brief spurt in Sep’12, number of tenders
remained low at 207 tenders (stable YoY and down 8% MoM)
400
Source: Emkay Research
600
Source: Emkay Research
Jul-11
Oct-11
Jan-12
Irrigation
Apr-12
Jul-12
Oct-12
YOY - Grow th
Exhibit 21: Value of water supply tenders fell by 15% MoM but grew by
92% YoY to Rs11.4 bn (on low base)
Oct-11 Jan-12 Apr-12
Jul-12
Oct-12
Water Supply
YOY - Grow th
YoY Growth (%)
400
200
-
-200
0
In Rs Mn
15,000
YoY Growth (%)
-200
0
200
No. of Tenders
200
Jul-11
30,000
Exhibit 20: Water Supply – Number of tenders fell by 19% MoM to 215
tenders (grew 169% YoY on low base)
400
Source: Emkay Research
400
Source: Emkay Research
Jul-11
Oct-11 Jan-12 Apr-12
Jul-12
Oct-12
Water Supply
YOY - Grow th
Oct-11
Jan-12
Railw ays
Apr-12
Jul-12
Oct-12
YOY - Grow th
Source: Emkay Research
Emkay Research
200 400 600
0
-200
YoY Growth (%)
In Rs Mn
40,000
-
-100
0
100
No. of Tenders
200
Jul-11
YoY Growth (%)
Exhibit 23: Value of railway tenders in value terms – falls marginally
by 8% MoM and up 65% YoY to Rs13.9 bn
80,000
Exhibit 22: Railways – Number of tenders declined 18% MoM to 187
tenders (up 89% YoY on low base)
200
Source: Emkay Research
400
Source: Emkay Research
Jul-11
Oct-11
Jan-12
Railw ays
Apr-12
Jul-12
Oct-12
YOY - Grow th
Source: Emkay Research
December 18, 2012
11
Monthly Update
Engineering & Capital Goods
Jul-11
500
0
-500
-
Oct-11 Jan-12 Apr-12
Jul-12
Oct-12
Pow er Distribution
YOY - Grow th
YoY Growth (%)
1000
60,000
Exhibit 25: Tendering in power distribution remained volatile in value
terms – down 46% MoM and 50% YoY to Rs11.4 bn
In Rs Mn
30,000
100
50
0
-50
-
-100
YoY Growth (%)
No. of Tenders
100
200
300
Exhibit 24: Power Distribution - Number of tenders increased sharply
by 59% MoM and 52% YoY to 199 tenders
Jul-11
Oct-11 Jan-12 Apr-12
Jul-12
Oct-12
Pow er Distribution
YOY - Grow th
Exhibit 26: Power Equipments – Tendering remained weak during the
month at 88 tenders (down 30% MoM and 1% YoY)
Exhibit 27: Value of power equipment tenders remained weak – grew
19% MoM but declined by 65% YoY to Rs760 mn
Jul-11
100
0
-100
-
Oct-11 Jan-12 Apr-12
Jul-12
Oct-12
Thermal Pow er
YOY - Grow th
YoY Growth (%)
200
4,000
In Rs Mn
2,000
100
0
-
-100
YoY Growth (%)
No. of Tenders
100
200
Source: Emkay Research
200
Source: Emkay Research
Jul-11
Oct-11 Jan-12 Apr-12
Jul-12
Oct-12
Thermal Pow er
YOY - Grow th
Exhibit 29: Real Estate – No new tenders were published during the
month of Nov’12
Oct-11 Jan-12 Apr-12
Jul-12
Oct-12
Real Estate
YOY - Grow th
YoY Growth (%)
400
200
-
-200
0
In Rs Mn
15,000
0
-100
-200
YoY Growth (%)
No. of Tenders
50
100
Jul-11
30,000
Exhibit 28: Real Estate – No new tenders were published during the
month of Nov’12
100
Source: Emkay Research
150
Source: Emkay Research
Jul-11
Oct-11
Jan-12 Apr-12
Jul-12
Oct-12
Real Estate
YOY - Grow th
Exhibit 30: Community Services – Number of tenders increased 44%
MoM and 167% YoY to 553 tenders
Exhibit 31: Value of community service tenders declined 12% MoM
and grew by 144% YoY to Rs15.7bn
Source: Emkay Research
Emkay Research
Jul-12
Oct-12
YOY - Grow th
YoY Growth (%)
400
200
-200
0
In Rs Mn
15,000
-
200
100
Oct-11 Jan-12 Apr-12
Community Services
YoY Growth (%)
0
-100
Jul-11
30,000
Source: Emkay Research
No. of Tenders
500
1,000
Source: Emkay Research
Jul-11
Oct-11 Jan-12 Apr-12
Community Services
Jul-12
Oct-12
YOY - Grow th
Source: Emkay Research
December 18, 2012
12
Monthly Update
Engineering & Capital Goods
st
th
Exhibit 32: Details of major tenders expected to close between 1 Dec’12 and 15 Jan’13
Issuer Name
Tender
Close Date
Estimated Completion
Cost
Period
(Rs mn)
(Months) Ownership
Tender Type
Sector
10-Dec-12
1,146
20 Central
Original general
6-Dec-12
1,825
24 State
Original general
6-Dec-12
1,365
24 State
Bharat Coking
Coal Ltd.
13-Dec-12
1,414
Central
Original general
Original general
Bihar Urban
Infrastructure
Devp. Corpn.
Ltd.
7-Dec-12
4,300
State
Airways
Balance work of construction of new integrated terminal
(Aviation
building at Tirupati Airport, Chittoor, Andhra Pradesh.
Infrastructure)
Water &
Construction of storm water drains including cross
Sewerage
drainage works in Unit-II at Navanagar in Bagalkot,
Pipeline &
Karnataka.
Distribution
Roadways
Construction of roads in Unit-II at Navanagar in Bagalkot,
Karnataka.
Coal
Hiring of HEMM for removal of OB, extraction and
transportation of coal in Kumarijore Patch of AKWM
Colliery of Katras, Dhanbad, Jharkhand.
Real Estate Pre-qualification for development of 13656 dwelling units
at 10 districts of low cost housing project in Bihar under
JNNURM scheme.
7-Dec-12
7,000
15 State
PreQualification
3-Jan-13
1,395
24 Central
Corrigendum Railways
6-Dec-12
1,380
24 Central
Original general
12-Dec-12
2,196
State
3-Dec-12
2,196
State
8-Jan-13
1,170
24 Central &
State
Corrigendum Water &
Sewerage
Pipeline &
Distribution
Original Water &
general
Sewerage
Pipeline &
Distribution
Original Railways
general
4-Jan-13
2,400
36 Central &
State
Original general
Railways
17-Dec-12
1,013
30 State
Revised
Tender
Power
Distribution
14-Dec-12
1,037
24 State
Original general
Roadways
11-Dec-12
1,170
State
Airports
Authority of
India
Bagalkot
Town Devp.
Authority
Central
Organisation
for Railway
Electrification
Delhi Jal
Board
Delhi Metro
Rail Corpn.
Ltd.
Department of
Power,
Arunachal
Pradesh
Ghaziabad
Devp.
Authority
Gujarat
Maritime
Board
Original general
Real Estate
Railways
Corrigendum Other
Shipping
Infrastructure
Tender Description
Pre-qualification for design, build, operate & transfer of
low cost housing project in Bihar under JNNURM
scheme.
Design, supply, erection, testing & commissioning of 25
kV, 50 Hz, single phase over head equipment including
TSS, SCADA, electric general & civil engineering works
in Dhanbad division on turnkey basis.
Design, supply, erection, testing & commissioning of 25
kV, 50 Hz, single phase over head equipment including
TSS, SCADA, electric general & civil engineering works
in Dhanbad division on turnkey basis.
Providing sewerage facility in Mohan Garden Group of
Colonies Falling under Nilothi WWTP Catchment Area in
Delhi.
Providing sewerage facility in Mohan Garden Group of
Colonies Falling under Nilothi WWTP Catchment Area in
Delhi.
Construction of depot-cum-workshop including plumbing,
drainage, external development works, road works and
boundary wall at Vinod Nagar, Line-7 of Phase-III Delhi
MRTS.
Supply, installation, testing and commissioning of
ballastiess track of standard gauge, Part-2 corridor of
sections of Janakpuri West-Kalindi (Line-8) and Central
Secretariat-Kashmere Gate (Line-6 Extn.) in elevated and
underground sections along with ballasted / ballastiess
tracks in Kalindi Kunj Depot of Delhi MRTS Project of
Phase-III.
Construction of 132 kV single circuit transmission line
from Khuppi to Tawang including 132/33 kV substation at
Bomdila and Tawang with construction of 132 kV bay in
Arunachal Pradesh.
Construction of six-lane link road and ROB for connecting
NH-24 to NH-58 (excluding Delhi-Howrah railway line
portion) in Ghaziabad, Uttar Pradesh.
Capital & maintenance dredging for two years for RO
PAX ferry services at Dahej & Gogha in Gujarat.
Source: Emkay Research
Emkay Research
December 18, 2012
13
Monthly Update
Engineering & Capital Goods
st
th
Exhibit 32: Details of major tenders expected to close between 1 Dec’12 and 15 Jan’13 (Contd…)
Issuer Name
Gujarat State
Road Devp.
Corpn. Ltd.
Karnataka
Neeravari
Nigam Ltd.
Tender
Close Date
Estimated Completion
Cost
Period
(Rs mn)
(Months) Ownership
Tender Type Sector
Tender Description
24-Dec-12
1,143
11 State
Corrigendum Roadways
Construction of Sanand bypass road in Gujarat.
3-Dec-12
1,550
18 State
Roadways
24-Dec-12
1,100
18 State
Original general
Original general
Original general
Construction of four-laning of Surat-Bardoli road in
Gujarat.
Construction of Maliyasan-Bedi Ring road at Rajkot in
Gujarat.
Survey, investigation, design, civil works, 220 kV
electrical substation with mechanical works under the
Yettinahole Project, operation and maintenance for a
period of 5 years of Yettinahole Diversion Scheme,
Package-3 on turnkey basis in Karnataka.
Survey, investigation, design, civil works such as
construction of receiving chamber (DC-1), pump house,
M.S. rising main etc. 220 kV electrical substation with
mechanical works including operation and maintenance
for a period of 5 years after successful commissioning of
the scheme and obtaining environment and other
statutory clearances from competent authorities of
Yettinahole Diversion Scheme, Package-2 on turnkey
basis in Karnataka.
Survey, investigation, design, civil works such as
construction of weir-1, pump house, delivery chamber-3
(DC-3), M.S. rising main etc. 220 kV electrical substation
with mechanical works under the Yettinahole Project of
Yettinahole Diversion Scheme, Package-1 on turnkey
basis in Karnataka.
Survey, investigation, design and construction of weir-3,
4 and 5 (5.50, 3.50 and 6.00 cumeces) and jack wellcum-pum house, M.S. rising mains at three different
locations and connecting to common delivery chamber-2
(DC-2) and DC-3 by MS gravity main under the
Yettinahole Project of Yettinahole Diversion Scheme,
Package-5 on turnkey basis in Karnataka.
Survey, investigation, design and construction of weir-2,
6, 7 and 8 (4.00, 5.00, 30.00 and 9.00 cumeces) and jack
well-cum-pum house, M.S. rising mains at four different
locations and connecting to common delivery chamber-1
(DC-1) and DC-5 from weir-2 etc., 110 kV electrical
substations with mechanical works under the Yettinahole
Project of Yettinahole Diversion Scheme, Package-4 on
turnkey basis in Karnataka.
Development of existing road to two-lane from Jath to
Jamboti (SH-31) from km 25.00 to 101.00 in Belgaum,
Karnataka on DBFOT basis.
Development of SH-96 road from Devanahalli to Kolar via
Vijayapura, Vemgal from Ch 0.00 km to Ch 49.052 km in
Karnataka.
RFQ for development of container terminal facility at
Diamond Harbour and operations of Berth No 4 & 5 N S
Dock, KDS and No 11 at HDC through PPP.
Roadways
2-Jan-13
8,439
36 State
2-Jan-13
5,025
36 State
Original general
Irrigation
2-Jan-13
3,372
36 State
Original general
Irrigation
2-Jan-13
3,152
36 State
Original general
Irrigation
2-Jan-13
6,711
36 State
Original general
Irrigation
2-Jan-13
3,030
State
Revised
Tender
Roadways
7-Jan-13
1,480
State
Revised
Tender
Roadways
Kolkata Port
Trust
7-Jan-13
20,050
Central
Krishna
Bhagya Jala
Nigam Ltd.
14-Jan-13
3,957
Corrigendum Other
Shipping
Infrastructu
re
Original Irrigation
general
Karnataka
Road Devp.
Corpn. Ltd
14-Jan-13
3,730
18 State
18 State
Original general
Irrigation
Irrigation
Design, supply, installation, testing & commissioning,
operation, maintenance, training and transfer of Ramthal
(Marol) IInd stage Package-2 (East side-12300 Ha)
automated drip irrigation system on BOMT basis
including operation and maintenance of the system for
five years on turnkey basis in Hungund taluka of Bagalkot
district in Karnataka.
Design, supply, installation, testing and commissioning
operation, maintenance training and transfer of Ramthal
(Marol) IInd stage Package-1 (west side-11700 ha)
automated DRIP irrigation system on BOMT basis
at Hungund, Bagalkot, Karnataka on turnkey basis.
Source: Emkay Research
Emkay Research
December 18, 2012
14
Monthly Update
Engineering & Capital Goods
st
th
Exhibit 32: Details of major tenders expected to close between 1 Dec’12 and 15 Jan’13 (Contd…)
Issuer Name
Tender
Close Date
Estimated Completion
Cost
Period
(Rs mn)
(Months) Ownership
Tender Type Sector
Tender Description
11-Dec-12
6,279
State
Revised Pre- Roadways
qualification
Pre-qualification for four-laning of Rewa-Sidhi (NH-75-E)
length 71.56 km on BOT basis in Madhya Pradesh.
21-Dec-12
2,855
State
Original general
Power
Distribution
21-Dec-12
1,440
State
Original general
Power
Distribution
21-Dec-12
2,810
State
Original general
Power
Distribution
21-Dec-12
1,922
State
Original general
Power
Distribution
20-Dec-12
1,207
State
Original general
Power
Distribution
20-Dec-12
2,044
State
Original general
Power
Distribution
20-Dec-12
1,323
State
Original general
Power
Distribution
20-Dec-12
1,629
State
Original general
Power
Distribution
20-Dec-12
2,877
State
Original general
Power
Distribution
Maharashtra
State
Electricity
Distribution
Co. Ltd.
MOIL Ltd.
6-Dec-12
1,000
State
Revised
Tender
Wind
Based
Power
Rural electricity infrastructure and rural household
electrification (3342 Mazaras) under RGGVY Phase-II for
Unnao district in Uttar Pradesh on turnkey basis.
Rural electricity infrastructure and rural household
electrification (1653 Mazaras) under RGGVY Phase-II for
Hardoi district in Uttar Pradesh on turnkey basis.
Rural electricity infrastructure and rural household
electrification (3033 Mazaras) under RGGVY Phase-II for
Lakhimpur district in Uttar Pradesh on turnkey basis.
Rural electricity infrastructure and rural household
electrification (1994 Mazaras) under RGGVY Phase-II for
Shahjahanpur district in Uttar Pradesh on turnkey basis.
Rural electricity infrastructure and rural household
electrification (1432 Mazaras) under RGGVY Phase-II for
Behraich district in Uttar Pradesh on turnkey basis.
Rural electricity infrastructure and rural household
electrification (2240 Mazaras) under RGGVY Phase-II for
Ambedkar Nagar district in Uttar Pradesh on turnkey
basis.
Rural electricity infrastructure and rural household
electrification (1583 Mazaras) under RGGVY Phase-II for
Faizabad district in Uttar Pradesh on turnkey basis.
Rural electricity infrastructure and rural household
electrification (1836 Mazaras) under RGGVY Phase-II for
Gonda district in Uttar Pradesh on turnkey basis.
Rural electricity infrastructure and rural household
electrification (2806 Mazaras) under RGGVY Phase-II for
Barabanki district in Uttar Pradesh on turnkey basis.
Setting up of 10-12 MW wind farm with supply, erection,
testing, commissioning and operation and maintenance
on turnkey basis at Deogad in Sindhudurg, Maharashtra.
17-Dec-12
1,870
Central
Corrigendum Manganese
Ore
Municipal
Corpn. of
Greater
Mumbai
3-Dec-12
1,275 12
3-Dec-12
1,485 12
3-Dec-12
1,373 12
3-Dec-12
1,173 12
11-Dec-12
8,924
Local
Bodies
Local
Bodies
Local
Bodies
Local
Bodies
Central
Original general
Original general
Original general
Original general
Corrigendum
10-Jan-13
8,238
Central
Corrigendum Roadways
26-Dec-12
14,561
Central
Corrigendum Roadways
18-Dec-12
10,899
Central
PreRoadways
Qualification
Madhya
Pradesh Road
Devp. Corpn.
Ltd.
Madhyanchal
Vidyut Vitran
Nigam Ltd.
Roadways
Roadways
Roadways
Roadways
Roadways
Designing, construction, furnishing & equipping of a
vertical shaft on turnkey basis at Balaghat Mine in
Madhya Pradesh.
Improvement of various roads in asphalt in Zone-II,
Division-I in Mumbai.
Strengthening & improvement of various roads in
asphaltic treatment in Zone-I, Division-I in Mumbai.
Improvement of roads in cement concrete in Zone-II,
Division-I in Mumbai.
Improvement of roads in cement concrete in Zone-I,
Division-I in Mumbai.
Pre-qualification for four-laning of Jorhat to Demow
section from km 453.000 to km 534.800 of NH-37 in
Assam on BOT (Annuity) basis.
Pre-qualification for four-laning of Solapur-Yedeshi
section of NH-211 from km 0.000 to km 100.000 in
Maharashtra to be executed as BOT (Toll) on DBFOT
pattern under NHDP-IV.
Pre-qualification for four-laning / two-laning with paved
shoulder of Gadu-Dwarka section of NH-8E from km
263.000 to km 473.000 in Gujarat through PPP on
DBFOT (Toll) basis.
Pre-qualification for four-laning of Dimapur-Kohima
section of NH-39 from km 124.100 to km 172.900 in
Nagaland on BOT (Annuity) basis.
Source: Emkay Research
Emkay Research
December 18, 2012
15
Monthly Update
Engineering & Capital Goods
st
th
Exhibit 32: Details of major tenders expected to close between 1 Dec’12 and 15 Jan’13 (Contd…)
Issuer Name
Municipal
Corpn. of
Greater
Mumbai
Tender
Close Date
Tender Type Sector
Tender Description
10-Dec-12
8,238
Central
Corrigendum Roadways
18-Dec-12
18,713
Central
GT/PreRoadways
qualification
17-Dec-12
16,249
Central
GT/PreRoadways
qualification
Pre-qualification for four-laning of Solapur-Yedeshi
section of NH-211 from km 0.000 to km 85.000 in
Maharashtra to be executed as BOT (Toll) on DBFOT
pattern under NHDP-IV.
Pre-qualification for development and operation /
maintenance of four-laning of Yedashi-Aurangabad
section of NH-211 from km 100.000 to km 290.200 in
Maharashtra to be executed as BOT (Toll) on DBFOT
pattern under NHDP-IV B.
Pre-qualification for development and operation /
maintenance of the four-laning of Aurangabad (km
290.200) to Dhule (km 452.800) road section of NH-211
(New NH-52) excluding Autram ghat section from km
376.000 to km 390.000 in Maharashtra under NHDPIVB on DBFOT (Toll) basis.
Widening and strengthening of existing highway section
to two-lane with paved shoulder of Parsoli-Gulabpura
section from km 33.000 to km 69.267 of NH-148D in
Rajasthan.
Widening and strengthening of existing highway section
to two-lane with paved shoulder from Bheem to Parsoli
including Parsoli bypass from km 00.000 to km 33.000 of
NH-148D in Rajasthan.
Pre-qualification for four-laning of Baharagora-Sambalpur
section of NH-6 from km 200 to km 566.200 to be
executed as BOT (Toll) on DBFOT basis under NHDP-IV.
Construction of 1000 capacity boys hostel No 9 &
construction of new library building at National Institute of
Technology Silchar in Cachar, Assam.
17-Dec-12
1,138 24
Central
Original general
Roadways
17-Dec-12
1,003 24
Central
Original general
Roadways
Central
GT/PreRoadways
qualification
20-Dec-12
National
Institute of
Technology,
Silchar
Northern
Coalfields Ltd.
Estimated Completion
Cost
Period
(Rs mn)
(Months) Ownership
29,486
11-Jan-13
1,280 36
Central
Corrigendum Other
Community
Services
11-Jan-13
5,290 60
Central
Revised
Tender
4-Jan-13
7,530 60
Central
Northern
Railway
14-Dec-12
1,000
Central
Panchayath
Raj
Engineering
Department,
Karnataka
19-Dec-12
1,156
State
19-Dec-12
1,455
State
Paschimanch
al Vidyut
Vitran Nigam
Ltd.
15-Dec-12
1,224
State
4-Dec-12
1,355
State
4-Dec-12
1,224
State
Coal
Excavation of overburden of first dig (Solid) & overburden
re-handling by hiring of equipment such as excavators,
dumpers/tippers, drills, dozers, graders & water sprinklers
for composite work as per instruction of Engineer
Incharge at specified places at Khadia OCP of NCL.
Original Coal
Excavation of overburden of first dig by hiring of
general
equipment such as excavators, dumpers / tippers, drills,
dozers, graders and water sprinklers for composite work
as per instruction of Engineer-in-Charge of specified
places of Amlohri OCP of NCL in Sidhi, Madhya Pradesh.
Expression Railways
EoI for construction of RCC wal along railway boundary
of Interest
from Hazrat Nizamuddin to Palwal stations on both side
(EoI)
along the railway boundary to prevent trespassing.
Revised
Water &
Providing surface water scheme for 131 village including
Tender
Sewerage
their maintenance for 5 years under Multi Village
Pipeline &
Scheme,
Gundlupet
taluka
in Chamarajanagara,
Distribution Karnataka on DBOT basis.
Revised
Water &
Providing surface water scheme for 166 village including
Tender
Sewerage & their maintenance for 5 years under Multi Village Scheme
Distribution in Chamarajanagara, Karnataka in DBOT basis.
Corrigendum Power
Construction of new 11 kV substations, 11 kV works, LT
Distribution works and releasing of service connection to BPL
households under RGGVY (1392 No of villages / mazras)
in Bulandshahr, Uttar Pradesh on turnkey basis.
Original Power
Construction of new 11 kV substations, 11 kV works, LT
general
Distribution works and releasing of service connection to BPL
households under RGGVY (2140 No of villages / mazras)
in Bijnor, Uttar Pradesh on turnkey basis.
Original Power
Construction of new 11 kV substations, 11 kV works, LT
general
Distribution works and releasing of service connection to BPL
households under RGGVY (1392 No of villages / mazras)
in Bulandshahr, Uttar Pradesh on turnkey basis.
Source: Emkay Research
Emkay Research
December 18, 2012
16
Monthly Update
Engineering & Capital Goods
st
th
Exhibit 32: Details of major tenders expected to close between 1 Dec’12 and 15 Jan’13 (Contd…)
Issuer Name
Tender
Close Date
Estimated Completion
Cost
Period
(Rs mn)
(Months) Ownership
Tender Type Sector
Tender Description
Revised
Tender
Developing Azhikkal port in Kannur, Kerala.
Port
Department,
Kerala
Public Health
Engineering
Department,
Rajasthan
15-Dec-12
1,520
State
3-Jan-13
1,101
30 State
Public Works
Department,
Chhattisgarh
20-Dec-12
6,613
State
PreRoadways
Qualification
20-Dec-12
3,098
State
PreRoadways
Qualification
4-Jan-13
3,222
State
Original general
Roadways
20-Dec-12
3,847
24 State
Original general
Roadways
10-Dec-12
1,061
10 State
11-Dec-12
4,642
24 State
4-Dec-12
1,560
State
Original Roadways
general
Original Roadways
general
PreRoadways
Qualification
4-Dec-12
1,370
State
PreRoadways
Qualification
4-Dec-12
1,345
State
PreRoadways
Qualification
4-Dec-12
1,530
State
PreRoadways
Qualification
4-Dec-12
1,450
State
PreRoadways
Qualification
4-Dec-12
1,820
State
PreRoadways
Qualification
23-Dec-12
2,008
State
PreRoadways
Qualification
Public Works
Department,
Delhi
Public Works
Department,
Punjab
Road
Construction
Department,
Bihar
Original general
Other
Shipping
Infrastructure
Water &
Sewerage
Pipeline &
Distribution
Work of regional water supply scheme of 191 villages of
Niwai tehsil & 8 villages of Tonk tehsil and their NRVs &
dhanies in Tonk district on transmission main-II under
Bisalpur Niwai Tonk Water Supply Project in Rajasthan
on turnkey basis.
Pre-qualification for the construction of Two-lane with
paved shoulders of old NH- 200 (new NH-130) from km
127.650 to km 311.740 on Bilaspur-Urdawal section
through PPP on DBFOT basis in Chhattisgarh.
Pre-qualification for the construction of two-lane with
paved shoulders of old NH- 216 (new NH-153) from km
3.800 to km 90.460 on Raigarh-Sarangarh-Saraipali
section through PPP on DBFOT basis in Chhattisgarh.
Comprehensive development of corridor (Outer Ring
road) between Mangolpuri to Madhuban Chowk in Delhi.
Construction of elevated road over Barapulla nalla
starting from Saraj Kale Khan to Aurobindo marg near
INA Market, New Delhi Phase-II from Jawaharlal Nehru
Stadium to Aurobindo Marg with construction at Ring
Road, Lala Lajpat Rai Marg and Aurobindo Marg.
Strengthening & widening of MDR 138 from Ghevra More
to G T Road (Singhu Border) under PWD MZ-3 in Delhi.
Comprehensive development of corridor (Outer ring road)
between Vikaspuri & Meera Bagh in Delhi.
Pre-qualification for development, construction /
upgradation, operation and maintenance of Tanda-SriHargobindpur-Amritsar road in length of 72.15 km in
Punjab through PPP on DBFOT basis.
Pre-qualification for development, construction /
upgradation, operation and maintenance of KapurthalaNakodar-Phillaur road in length of 65.98 km in Punjab
through PPP on DBFOT basis.
Pre-qualification
for development,
construction
/
upgradation, operation and maintenance of Rayya (NH-1)
to Khara (NH-15) road along various canals in length of
42.12 km in Punjab through PPP on DBFOT basis.
Pre-qualification
for development,
construction
/
upgradation, operation and maintenance of Nidampur
(NH-64) to Lehra-Ghagga road crossing NH-71 along
various canals in length of 49.00 km in Punjab through
PPP on DBFOT basis.
Pre-qualification
for development,
construction
/
upgradation, operation and maintenance of Manpur
Headwork (Doraha near NH-1) to Raikot-Barnala road
corridor along various canals in length of 47.44 km in
Punjab through PPP on DBFOT basis.
Pre-qualification for development, construction /
upgradation, operation and maintenance of Manpur
Headwork (Doraha near NH-1) to Jagraon-Raikot road
corridor along various canals in length of 53.51 km in
Punjab through PPP on DBFOT basis.
Pre-qualification for construction of Bhagalpur by-pass of
NH-80 in length of 16.73 km in Bihar.
Source: Emkay Research
Emkay Research
December 18, 2012
17
Monthly Update
Engineering & Capital Goods
st
th
Exhibit 32: Details of major tenders expected to close between 1 Dec’12 and 15 Jan’13 (Contd…)
Issuer Name
Tender
Close Date
Estimated Completion
Cost
Period
(Rs mn)
(Months) Ownership
Tender Type Sector
Tender Description
28-Dec-12
1,064
State
Original general
Roadways
Construction of Two-lanes on Nayabazar-Legship road in
West Sikkim.
28-Dec-12
1,054
State
Roadways
14-Dec-12
1,050
Central
Original general
Original general
Tamil Nadu
Road Devp.
Co. Ltd.
5-Dec-12
9,855
State
THDC India
Ltd.
27-Dec-12
1,095
Central &
State
Roads &
Bridges
Department,
Sikkim
Singareni
Collieries Co.
Ltd.
Construction of Two-lanes on Tarku-Damthang-Namchi
road in South Sikkim.
Coal
Blasthole drilling excavation, loading, transportation,
dumping, spreading & leveling etc of 262.00 LBCM of
over burden at Manuguru OC-II Extension Project of PK
OC, Manuguru Area in Khammam, Andhra Pradesh.
Original Roadways
Development of Chennai Outer Ring Road Phase-II from
GT
Nemilicheri in NH-205 to Minjur in Thiruvottiyur-PoneeriPanchetti (TPP) road on DBFOT (Annuity) basis at
Chennai in Tamil Nadu.
PreHydel Based Pre-qualification for civil works of Dhukwan Hydro Power
Qualification Power
Project (3x8 MW) which is located about 37 km from
Jhansi in Uttar Pradesh.
Source: Emkay Research
Emkay Research
December 18, 2012
18
Monthly Update
Engineering & Capital Goods
Section 2 - Project Awards
Though on YTD basis, orders announced remain low at Rs795.8 bn – down 36% YoY.
On YoY basis, growth is expected to remain muted for the next few months owing to
high base effect.
Exhibit 34: In value terms, orders announced increased sharply by
246% MoM – led by Process sector
Jul-11
Oct-11
Jan-12
Indian
Apr-12
Overseas
Jul-12
300
400,000
100
Rs Million
-
-
-100
No. of Awards
25
50
-50
0
50
In % Terms
75
100
Exhibit 33: Number of orders announced declined marginally from 39
in Oct’12 to 35 in Nov’12
Jul-11
Oct-12
In % Terms
§
§
The total number of orders finalized declined marginally from 39 orders in Oct’12 to 35
orders in Nov’12.
-100
§
After 2 months of muted activity, order announcements improved sharply by 246%
MoM to Rs174.7 bn – though growth on YoY basis was muted at 5.6% YoY. Strong
growth was driven by Process sector (witnessed finalization of few large orders).
200,000
§
Grow th Rate MoM
Oct-11
Indian
Jan-12
Apr-12
Overseas
Jul-12
Oct-12
Grow th Rate MoM
Exhibit 35: Number of orders declined by 45% YoY – declined for the
th
4 consecutive month
Exhibit 36: In value terms, orders announced increased marginally by
6% YoY to Rs174.7 bn
Apr-12
Jul-12
Oct-12
100
0
Jan-12
Jul-11
Oct-11
Jan-12
Apr-12
Jul-12
Oct-12
-100
YoY Growth (%)
50
0
Oct-11
-50
Jul-11
-100
YoY Growth (%)
200
Source: Emkay Research
100
Source: Emkay Research
Source: Emkay Research
Exhibit 37: YTD order announcements are down 23% YoY in numbers
Exhibit 38: YTD decline in value terms is higher at 36% to Rs796 bn
500
1,400,000
450
1,200,000
400
In Rs Mn
In Numbers
Source: Emkay Research
350
300
800,000
600,000
250
400,000
200
YTDFY12
YTDFY12
YTDFY13
YTDFY13
Source: Emkay Research
Source: Emkay Research
Emkay Research
1,000,000
December 18, 2012
19
Monthly Update
Engineering & Capital Goods
100%
0%
50%
50%
Value break-up
100%
Exhibit 40: In value terms, international contribution was higher
0%
No. of orders break-up
Exhibit 39: Order finalizations in international markets remained weak
Jul-11
Oct-11
Jan-12
Apr-12
Indian
Jul-12
Oct-12
Jul-11
Oct-11
Overseas
Jan-12
Apr-12
Indian
Source: Emkay Research
Jul-12
Oct-12
Overseas
Source: Emkay Research
Sector wise order break-up
Order announcements improved during Nov’12 – led by process, power equipments, water
and railways. Ordering in the other sectors remained weak during the month of Nov’12,
especially in the sectors of roadways (despite strong tendering witnessed in the past few
months), power distribution (continues to disappoint – ordering was dismal at Rs0.9 bn)
and real estate.
Composition of orders announced for the month of Nov’12 was led by Process (46%),
followed by power equipments (24%), water (13%), railways (8%), infrastructure (5%) and
irrigation (2%).
Exhibit 41: Sector-wise details of project awards during Oct’12
In Rs Mn
Nov-11 Dec-11
Jan-12 Feb-12 Mar-12
Apr-12
May-12
Jun-12
Jul-12
Aug-12
Sep-12
Oct-12
Nov-12
Roadways
42,780
94,430
36,700
82,120
63,950
59,410
4,690
1,510
4,430
17,350
9,190
7,800
1,310
Power Distribution
14,000
44,920
10,430
2,630
18,100
4,580
8,340
18,530
9,140
33,760
3,620
16,080
850
Power Equipments
47,800
2,920
6,780
98,640
19,170
52,630
77,610
17,080
16,630
10,580
23,170
2,850
42,090
Railways
11,480
7,100
4,210
3,830
5,910
2,190
4,740
4,430
10,900
16,340
34,600
5,350
14,560
Real Estate
12,250
10,870
13,590
6,040
2,860
5,310
990
560
4,020
6,580
-
7,140
730
Process
6,090
210
8,120
330
20,670
2,170
360
230
7,550
8,710
600
5,200
80,300
Pipeline
-
1,130
-
12,650
-
5,700
-
-
-
-
-
780
-
Infrastructure
Water
-
2,000
2,250
23,470
-
1,990
650
-
-
1,580
1,300
-
7,900
14,530
11,490
30,270
7,800
10,030
-
2,640
5,140
460
5,240
11,380
380
22,280
-
-
1,230
-
-
-
9,200
-
3,250
120
4,720
130
3,780
13,870
-
450
330
5,930
-
-
-
-
13,020
-
-
-
Irrigation
Mining
Others
2,640
5,200
1,610
1,430
290
4,510
2,970
4,310
-
9,090
740
4,860
910
Total
165,440
180,270
115,640
239,270
146,910
138,490
112,190
51,790
56,380
122,370
89,320
50,570
174,710
Growth YoY (%)
10.6
-35.2
-24.4
57.0
-49.3
39.1
-13.1
-75.2
-46.1
39.9
-72.9
-58.7
5.6
Growth MoM (%)
35.2
9.0
-35.9
106.9
-38.6
-5.7
-19.0
-53.8
8.9
117.0
-27.0
-43.4
245.5
Source: Emkay Research
Exhibit 42: Project awards in month of Nov’11
Water Irrigation
0%
Infrastructure 9%
Mining
8%
Exhibit 43: Project awards in month of Nov’12
Others
2%
Roadw ays
26%
0%
Pipeline
0%
Process
4%
Real Estate
7%
Railw ays
7%
Pow er
Equipments
29%
Source: Emkay Research
Emkay Research
Pow er
Distribution
8%
Water
13%
Irrigation Mining
2%
0%
Others
1%
Roadw ays
1%
Pow er
Distribution
0% Pow er
Equipments
24%
Infrastructure
5%
Railw ays
8%
Pipeline
0%
Process
46%
Real Estate
0%
Source: Emkay Research
December 18, 2012
20
Monthly Update
Engineering & Capital Goods
Roadw ays
Jul-12
Oct-12
2000
1000
0
Oct-11 Jan-12 Apr-12
Jul-12
Oct-12
Pow er Distribution
YOY - Grow th
Source: Emkay Research
Source: Emkay Research
Exhibit 46: Power Equipments – Ordering was healthy at Rs42.1 bn
(down 12% YoY)
Exhibit 47: Railways – After a blip in Oct’12, ordering in railways
resumed to a healthy Rs14.6 bn (+27% YoY)
Oct-11
Jan-12
Apr-12
Pow er Equipments
Jul-12
500
40,000
0
In Rs Mn
20,000
YoY Growth (%)
Oct-12
Jul-11
YOY - Grow th
Oct-11 Jan-12
Railw ays
Apr-12
Jul-12
YOY - Grow th
Oct-12
-500
Jul-11
Railways
-
-
-200 -100
0
100 200
In Rs Mn
80,000 160,000
Power Equipments
YoY Growth (%)
60,000
30,000
Jul-11
YOY - Grow th
YoY Growth (%)
Apr-12
Power Distribution
-1000
Jan-12
In Rs Mn
2000
0
Oct-11
-2000
Jul-11
Exhibit 45: Power Distribution – Continues to disappoint as orders
decline 95% MoM and 97% YoY to Rs0.9 bn
4000
Roadways
YoY Growth (%)
In Rs Mn
50,000
100,000
Exhibit 44: Roadways – After strong ordering in H2FY12, has remained
subdued for past 8 months – down 83% MoM and 97% YoY
Exhibit 48: Real estate – Activity was negligible in Nov’12, orders
stood at Rs0.7 bn
Exhibit 49: Process – Remained volatile - ordering increased sharply
to Rs80.3 bn
Jul-11
Oct-11 Jan-12 Apr-12
Jul-12
Oct-12
Real Estate
YOY - Grow th
Source: Emkay Research
0
Oct-11
Jan-12
Roadw ays
Apr-12
Jul-12
Oct-12
-2000
Jul-11
YoY Growth (%)
4000
2000
50,000
25,000
In Rs Mn
YoY Growth (%)
Process
-
-
-200
0
In Rs Mn
8,000
200
Real Estate
400
Source: Emkay Research
16,000
Source: Emkay Research
YoY Grow th
Source: Emkay Research
Note: Above project awards are based on all orders and projects secured by engineering and capital goods companies as announced in the public domain.
The above covers bulk of the orders finalized domestically and is considered to be representative & reflective of macro activity – hence considered suitable
for analyzing macro trends
Emkay Research
December 18, 2012
21
Engineering & Capital Goods
Monthly Update
Exhibit 50: Details of major contracts finalized during Novt’12
Awardee
Awarder
Sector
Scope of Work
ThyssenKrupp
CF Industries Holdings,
Process
Construct an ammonia plant with a daily capacity of 2,200 tonne, a
Industries India Pvt.
Inc.
Completion
Value
(in months)
(Rs mn)
-
69,500
-
19,850
24
18,900
30
18,000
-
12,520
-
10,800
30
7,900
urea plant (3,500 tpd) and a urea granulation plant (3,500 tpd) in
Ltd.
Port Neal, Iowa, USA.
L & T Construction
Va Tech Wabag Ltd.
GVK Power &
Power
Major infrastructure work for the 850 MW Ratle hydroelectric power
Infrastructure Ltd.
Equipments
project located on the Chenab, Kishtwar, Jammu & Kashmir.
Oman Power & Water
Water
SWRO desalination project in Al Gubrah,Muscat. The project will be
Procurement Co.
modelled on BOO basis as an independent water project to be
SAOC
developed by a consortium of Malakoff International (Malaysia),
Sumitomo Corporation (Japan), and Cadagua (Spain).
Regen Powertech
Mytrah Energy Ltd.
Pvt Ltd.
L & T Construction
Delhi Metro Rail Corpn.
Power
Supply and installation of 67 WEC turbines for 100.5 MW wind
Equipments
based power project. .
Railways
Design and construct a tunnel between Shankar Vihar and Hauz
Ltd.
Khas and underground stations at Vasant Vihar, Munirka,
R.K.Puram, IIT and Hauz Khas.
ThyssenKrupp
Vietnam National Coal
Process
Industries India Pvt.
- Mineral Industries
Basic engineering, detail engineering, supply of all equipment and
materials, construction and commissioning for a 500 tpd nitric acid
Ltd.
Holding Corpn. Ltd.
plant in Vietnam. Awarded to a consortium consisting of
ThyssenKrupp Uhde, Toyo-Thai Corporation Public Company, Toyo
Vietnam Corporation and Lilama 69-1 Joint Stock Company.
KNR Constructions
KNR Walayar Tollways
Ltd.
Pvt. Ltd.
Infrastructure
Four laning of the Walayar-Vadakkancherry section in Kerala.
Source: Emkay Research
Exhibit 51: Details of major contracts awarded to Emkay ECG universe during Nov’12
Awardee
Awarder
Sector
Scope of Work
L&T
GVK Power &
Power
Major infrastructure work for the 850 MW Ratle hydroelectric power project located
Construction
Infrastructure Ltd.
Equipments
on the Chenab, Kishtwar, Jammu & Kashmir.
L&T
Delhi Metro Rail
Railways
Design and construct a tunnel between Shankar Vihar and Hauz Khas and
Construction
Corpn. Ltd.
L&T
Krishna Bhagya
Construction
Jala Nigam Ltd.
L&T
Rail Vikas Nigam
Construction
Ltd.
L&T
Public Health
Construction
Engineering
Completion
Value
(in months)
(Rs mn)
-
19,850
-
12,520
-
3,710
-
1,580
underground stations at Vasant Vihar, Munirka, R.K.Puram, IIT and Hauz Khas.
Irrigation
To design and construct a lift irrigation system at Hanamapur, Karnataka. The
order is a part of cumulative order worth Rs 371 crore.
Railways
For railway construction works consisting of doubling of lines between Villupuram
and Dindigul section in the Madurai division of the Southern Railway.
Water
Water supply works in Fatehpur – Laxmangarh, Rajasthan.
-
1,210
Water
For a water supply system in the Bankura District of West Bengal. The order is a
-
-
-
910
Department,
Rajasthan
L&T
Public Health
Construction
Engineering
part of cumulative orders bagged worth Rs 371 crore.
Department, West
Bengal
McNally
Backward Regions
Bharat Engg.
Grant Fund
Others
Construction of educational infrastructure facility under BRGF in the districts of
Purba Medinipur and Paschim Medinipur disricts of West Bengal.
Co. Ltd.
Source: Emkay Research
Emkay Research
December 18, 2012
22
Monthly Update
Engineering & Capital Goods
Section 3 - Production Statistics
§
§
§
Production data of capital goods equipment was mixed during the month of Oct’12.
Low value capital goods equipment, power T&D equipment and construction
equipment have largely witnessed YoY growth in production (or remained stable in few
cases)
Only high value capital goods equipment witnessed decline on YoY basis.
Note: Traditionally, production of power equipments is highest in the month of March in a
year – It typically ranges 2-3X the 11 month average monthly production, hence a sharp
MoM drop in production is visible in subsequent month.
High value capital goods equipment
Boilers Production
50
100
20000
-50
0
10000
0
In Rs Million
50
0
YoY Growh In % Terms
-50
May-11 Aug-11 Nov-11 Feb-12 May-12 Aug-12
May-11 Aug-11 Nov-11 Feb-12 May-12 Aug-12
Grow th
Steam and Hydro Turbines Production
Source: CMIE, Emkay Research
Exhibit 54: Material handling equipment production – Was stable on
YoY basis but fell by 51% MoM in Oct’12
Exhibit 55: Major companies
50
0
-50
YoY Growh In % Terms
2000
0
Grow th
Major companies producing above equipment:
100
4000
Source: CMIE, Emkay Research
In Rs Million
YoY Growh In % Terms
Exhibit 53: Steam and hydro turbines production – Declined by 33%
MoM and by 10% YoY in Oct’12
100
20000 40000 60000
0
In Rs Million
Exhibit 52: Boiler production – Fell by 15% YoY and by 26% MoM in
Oct’12
BHEL, L&T, Thermax, Cethar Vessels, McNally Bharat, TRF, Elecon
Engineering, Tecpro Systems, BGR Energy
Source: Emkay Research
May-11 Aug-11 Nov-11 Feb-12 May-12 Aug-12
Material Handling Equipment Production
Grow th
Source: CMIE, Emkay Research
Emkay Research
December 18, 2012
23
Monthly Update
Engineering & Capital Goods
Low value capital goods equipment & consumables
Engines Production
100
50
0
May-11 Aug-11 Nov-11 Feb-12 May-12 Aug-12
-50
YoY Growh In % Terms
90
70
50
In '000 Numbers
110
Exhibit 57: Gears production – High volatility on MoM basis remains…
production down 8% MoM and 16% YoY in Oct’12
30
0
-20
YoY Growh In % Terms
40
20
140
120
100
In '000 Numbers
160
Exhibit 56: Engines production – Continued to increase sequentially
(up 4% MoM) and grew by a robust 27% YoY in Oct’12
May-11 Aug-11 Nov-11 Feb-12 May-12 Aug-12
Grow th
Gears Production
Grow th
Exhibit 59: Pumps production – Increased marginally by 2% MoM but
grew by a strong 28% on YoY basis in Oct’12
Feb-12 May-12 Aug-12
Bearings Production
40
20
-40
-20
0
250000
In Numbers
175000
Nov-11
YoY Growh In % Terms
30
20
-10
0
10
Million nos.
60
70
50
May-11 Aug-11
May-11 Aug-11 Nov-11 Feb-12 May-12 Aug-12
Grow th
Pumps Production
Source: CMIE, Emkay Research
Exhibit 60: Valves production – Witnessed strong growth in Ovt’12…
Up 190% YoY and by 105% MoM in Oct’12
Exhibit 61: Major companies
0
India,
Kirloskar
Oil,
Greaves
Cotton,Caterpillar,
Elecon
Engineering, Hi-tech Gears, Shanthi Gears, Kirloskar Brothers, Jyothi, KSB
Pumps, Dynamatic Tech, SKF Bearings, FAG Bearings, ABG Bearings
Source: Emkay Research
0
-200
YoY Growh
200
4000
Cummins
2000
Grow th
Major companies producing above items:
400
6000
Source: CMIE, Emkay Research
In Rs. Million
YoY Growh In % Terms
Exhibit 58: Bearings production – Increased by 3% MoM and by 6%
YoY in Oct’12
325000
Source: CMIE, Emkay Research
80
Source: CMIE, Emkay Research
May-11 Aug-11 Nov-11 Feb-12 May-12 Aug-12
Valves Production
Grow th
Source: CMIE, Emkay Research
Emkay Research
December 18, 2012
24
Monthly Update
Engineering & Capital Goods
Power transmission & distribution (T&D) equipment
Jul-11
Oct-11
Jan-12 Apr-12
Production for Power Transformers
0
-40
-20
4000
2000
In MVa
Jul-12
Apr-11
Growth
Jul-11
Oct-11
Jan-12
Apr-12
YoY Growh In % Terms
20
6000
Exhibit 63: Production of distribution transformers – Fell sharply by
19% YoY but grew by 30% MoM in Sep’12
50
0
-50
Apr-11
YoY Growh In % Terms
20000
0
In MVa
40000
Exhibit 62: Production of power transformers – Grew by 49% on MoM
basis though down by 15% YoY in Sep’12
Jul-12
Production for Distribution transformers
Growth
Exhibit 65: Production of relays, fuses and switchgears – Production
grew by 18% on MoM basis and by 10% YoY in Oct’12
Oct-12
Grow th
60
30
3000
-30
0
2000
1000
Jul-11 Oct-11 Jan-12 Apr-12 Jul-12
Production of Air break sw itches / Circuit breakers
In '000 Numbers
-1 0 10 20 30 40 50
0 Growh In % Terms
YoY
8000
In '000 Numbers
6000
Apr-11
Apr-11
Jul-11 Oct-11 Jan-12 Apr-12 Jul-12
Production of Relays, fuses and sw itchgears
Source: CMIE, Emkay Research
Exhibit 66: Production of transmission tower lines – Grew by 9% YoY,
and by 6% MoM
Exhibit 67: Major Companies
Grow th
YoY Growh In % Terms
ABB, Alstom T&D, Bharat Bijlee, BHEL, Crompton Greaves, Emco,
TRIL, Indo Tech, Legrand, MDS Switchgear, Kirloskar Electric,
Easun Reyrolle, Salzer
Source: Emkay Research
-25
0
Oct-12
Major companies producing above items:
50
25
100
50
0
In '000 tonne
150
Source: CMIE, Emkay Research
YoY Growh In % Terms
Exhibit 64: Production of air break switches and circuit breakers –
Declined Improved by 7% MoM and 11% YoY in Oct’12
4000
Source: CMIE,, Emkay Research
10000
Source: CMIE,, Emkay Research
Apr-11
Jul-11
Oct-11
Jan-12
Apr-12
Production for Transmission Lines Statistics
Jul-12
Growth
Source: CMIE, Emkay Research
Emkay Research
December 18, 2012
25
Monthly Update
Engineering & Capital Goods
Construction equipment
May-11 Aug-11 Nov-11 Feb-12 May-12 Aug-12
Cranes Production
50
0
-50
May-11 Aug-11 Nov-11 Feb-12 May-12 Aug-12
Grow th
Loaders Production
Exhibit 70: Earth moving machinery production – Witnessed strong
growth at 51% MoM and by 31% YoY in Oct’12
Exhibit 71: Major Companies
100
50
1200
0
1000
-50
800
YoY Growh In % Terms
Source: CMIE, Emkay Research
1400
Source: CMIE, Emkay Research
In Numbers
YoY Growh In % Terms
2000
In Numbers
4000
Exhibit 69: Production of Loaders – Stable production on MoM basis
continues, down 2% YoY and up 4% MoM in Oct’12
0
200
100
0
-100
YoY Growh In % Terms
2000
0
In Tonnes
4000
Exhibit 68: Production of Cranes – Grew by 6% MoM but declined by
3% YoY in Oct’12
Grow th
Major companies dealing in above items:
Sanghvi Movers, Action Construction, BEML, Hitachi, Komatsu, Caterpillar
Source: Emkay Research
May-11 Aug-11 Nov-11 Feb-12 May-12 Aug-12
Earth Moving Machinery Production
Grow th
Source: CMIE, Emkay Research
Emkay Research
December 18, 2012
26
Monthly Update
Engineering & Capital Goods
Section 4 – Cost index
YoY rubber has now declined
for 13th successive month (12%). Cement (-14%) and
aluminium (-6%) also down
250
150
On YoY basis, price rise was
led by – steel (+11%), copper
(+10%) and crude (+7%).
50
In Nov’12, Emkay commodity
price index declined 0.8% MoM
to 194.2 – up by 0.9% YoY
Exhibit 72: EMKAY commodity price index marginally by 0.8% MoM
Index
Emkay Commodity Price Index
remains plateaued at 195 levels
Apr-04
Apr-05
Apr-06
Apr-07
Apr-08
Apr-09
Apr-10
Apr-11
Apr-12
EMKAY Commodity Price Index
Source: Emkay Research, Capitaline, Bloomberg
On MoM basis, prices of index
constituents varied in +/-2%
band except for rubber (-7%0
150
50
Index
Ex-cement, EMKAY commodity
price index fell by 1.2% MoM
but increased by 3.2% YoY to
211.5
250
Exhibit 73: EMKAY commodity price index (ex-cement) declined by 1.2% MoM
Apr-04
Apr-05
Apr-06
Apr-07
Apr-08
Apr-09
Apr-10
Apr-11
Apr-12
EMKAY Commodity Price Index (Ex-cement)
Source: Emkay Research, Capitaline, Bloomberg
180
80
130
The CRY commodity index fell
by 3.0% MoM and by 6.2% YoY
to 129.9 in Nov’12
230
Exhibit 74: CRY commodity price index fell on both MoM and YoY basis
Apr-04
Apr-05
Apr-06
Apr-07
Apr-08
Apr-09
Apr-10
Apr-11
Apr-12
CRYTR Index
Note:
(1)
Source: Emkay Research, Bloomberg
EMKAY
commodity
index
comprises of steel, cement, copper,
aluminium, crude oil and rubber
with 50%, 20%, 10%, 10%, 5% and
5% weightage respectively
(2) EMKAY commodity index (excement) comprises of steel, copper,
aluminium, crude oil and rubber
with 50%, 20%, 15%, 5% and 10%
weightage respectively
Emkay Research
December 18, 2012
27
Monthly Update
Engineering & Capital Goods
Section 5 – Macro Indicators
Apr-12
Credit to Infrastructure
Aug-12
0
Apr-11
YoY Grow th
In bps
-400 -200
Dec-11
32%
Aug-11
30%
Apr-11
30%
Growth
200
400
34%
50%
Exhibit 76: As a proportion of total credit, infrastructure fell marginally
by 20 bps YoY and increased by 10 bps Mom to 32.5%
10%
5,750
5,000
In Rs Billion
6,500
Exhibit 75: Credit to infrastructure sector increased 1.3% MoM and
14.6% YoY to Rs6.59 tn in Oct’12
Aug-11
Dec-11
Apr-12
Infrastructure as a % of total credit
Aug-12
YoY change in bps
Exhibit 77: Power continued to witness strong growth – up 18.4% YoY
to Rs3.58 tn in Oct’12
Exhibit 78: As a % of total credit, power increased by 50 bps YoY to
17.6% (but fell by 30 bps MoM)
10%
Aug-11
Dec-11
Apr-12
Credit to Pow er
Aug-12
300
150
In bps
0
-150
50%
30%
Growth
3,200
In Rs Billion
2,700
Apr-11
15% 16% 17% 18% 19%
Source: Emkay Research
3,700
Source: Emkay Research
Apr-11
YoY Grow th
Aug-11
Dec-11
Pow er as a % of total credit
Apr-12
Aug-12
YoY change in bps
Exhibit 79: Credit to roads sector also grew by a strong 18.9% YoY to
Rs1.25 tn in Oct’12
Exhibit 80: Proportion of road credit to total credit increased by 20 bps
YoY to 6.1% (up 10 bps MoM)
Credit to Roads
Aug-12
50
25
In bps
-25
0
6.0%
Apr-12
5.5%
40%
Dec-11
20%
30%
Growth
Aug-11
10%
1,100
900
In Rs Billion
Apr-11
6.5%
Source: Emkay Research
1,300
Source: Emkay Research
Apr-11
Aug-11
Dec-11
Roads as a % of total credit
YoY Grow th
Apr-12
Aug-12
YoY change in bps
Exhibit 81: Credit to other infrastructure increased 1.6% MoM and
15.7% YoY to Rs864 bn
Exhibit 82: Proportion of other infrastructure credit remained stable
on YoY basis but increased 30 bps MoM to 4.3% in Oct’12
In bps
50
0
-50
Apr-11
Aug-11
Dec-11
Apr-12
Other Infrastructure as a % of total credit
Aug-12
YoY change in bps
Source: Emkay Research
Source: Emkay Research
Emkay Research
Aug-12
YoY Grow th
4.0%
Apr-12
3.5%
Dec-11
20% 30%
Growth
Aug-11
Credit to Other Infrastructure
10%
900
800
700
In Rs Billion
600
Apr-11
4.5%
Source: Emkay Research
40%
Source: Emkay Research
December 18, 2012
28
Monthly Update
Engineering & Capital Goods
Exhibit 84: IIP index – After declined for past 12 months improved by
7.5% YoY in Oct’12
80
60
10
0
20
Index
40
14
12
In % Terms
16
Exhibit 83: After falling by 50 bps in Apr’12, interest rates have
remained unchanged since
Oct07
Jul- Apr- Jan08
09
10
Interest Rates
Oct10
Jul11
Apr12
Source: Emkay Research
Source: Emkay Research
100
Index
50
1600
0
Index
15
Rate (%)
20
2400
Exhibit 86: Relation of IIP and BSE CG Index
CG Index
0
May- Aug- Nov- Feb- May- Aug- Nov- Feb- May02
03
04
06
07
08
09
11
12
-50
10
0
Apr-06
Jul-07
Interest Rates (R)
Oct-08
Jan-10
CG Index
Jul-12
IIP (R)
Source: Emkay Research
Index
50
0
PER X times
Rate (%)
50
20
Exhibit 88: Relation of IIP and 1-year forward PER for capital goods
sector
1Yr Fw d PER
Apr-06
Jul-07
Interest Rates (R)
Source: Emkay Research
Emkay Research
-50
May- Aug- Nov- Feb- May- Aug- Nov- Feb- May02
03
04
06
07
08
09
11
12
0
0
10
20
15
40
60
Exhibit 87: Relation of interest rate and 1-year forward PER for capital
goods sector
100
Source: Emkay Research
Apr-11
25
Index
1000 2000 3000
Exhibit 85: Relation of interest rates and BSE CG Index
PER X times
IIP: Capital goods (w t 88.25)
800
Jan07
-40 -20
Apr-06 Feb-07 Dec-07 Oct-08 Aug-09 Jun-10 Apr-11 Feb-12
Apr06
Oct-08
Jan-10
1Yr Fw d PER
Apr-11
Jul-12
IIP (R)
Source: Emkay Research
December 18, 2012
29
Engineering & Capital Goods
Monthly Update
Section 6 – News updates
Industry News
§
§
§
§
§
§
§
§
§
§
Emkay Research
December 18, 2012
The Central Government has approved the setting up of 21 integrated textiles parks
envisaging a total investment of Rs8.2 bn during the 12th Five Year Plan (2012-17).
The Chhattisgarh Government signed MoUs for investments worth Rs1,220 tn. The
state government signed 260 MoUs during the Global Investors Meet. These MoUs
include (1) Rs500 bn pact with Jindal Steel and Power (JSPL) and (2) Rs50 bn
agreement with SAIL. (3) Vedanta Resources for capacity expansion.
Reliance Power has received stage-I forest clearances for the coal mine at Chhatrasal
in Madhya Pradesh allotted in 2006 and the clearance was pending since 2009. The
block has a reserve of over 160 mn tonne that will fuel the 4,000 MW Sasan and 4,000
MW Chitrangi ultra mega power projects.
Indian Oil Corp (IOC) is planning to setup a 15 mn tonne refinery in Gujarat as part of
its plans to raise the total capacity to 100 mn tonne by 2021-22. Also, plans are afoot to
expand its Koyali refinery to 18 mn tpa, Panipat refinery from 18 to 21 mn tpa and the
under construction Paradip refinery (which will be operational by December 2013) from
15 to 20 mn tpa.
OIL on 28 October 2012 began drilling operations for hydrocarbon exploration in
Gabon, South Africa. Punj Lloyd Upstream has been given the contract for rig service
for the exploration project. The onshore block in Shakthi was obtained from the Gabon
Government for hydrocarbon exploration in April 2006.
The Ministry of Home Affairs has given permission to Essar Ports and Adani Ports to
bid for the Rs40 bn mega container terminal project in Chennai, with a capacity of 4 mn
TEU (Twenty foot equivalent units). Earlier, in 2011, the Chennai Port Trust rejected a
lone bid by Adani Ports, which offered just 1.5 per cent revenue share to the port.
Companies such as the Dubai-based DP World, Port of Singapore Authority (PSA) and
L&T, which bid in the initial stage, withdrew later due to various reasons. PSA could not
participate due to the monopoly clause.
The Central Government is planning to invite bids for laying power transmission lines
worth over Rs69 bn. The Ministry of Power has asked state-run Power Finance
Corporation (Rs30 bn) and Rural Electrification Corporation (Rs39 bn) to invite bids for
transmission lines. The contracts include setting up transmission lines and
strengthening network connecting power generation projects in states like Bihar,
Rajasthan, Tamil Nadu, Karnataka and HP with national grid.
Lanco Infratech has signed an MoU with China Development Bank (CDB) to arrange
debt for Anpara Phase II and Himawat in Uttar Pradesh. The company will arrange $2
bn (approx Rs108 bn) debt for two power projects each having capacity of 2 x 660 MW
with super-critical boiler technology. Of the total amount, $600 mn will be contributed
by CDB and it will syndicate the balance from Chinese banks and FIs.
NTPC accorded the investment approval for the Stage-I (2 X 800 MW) of Lara super
thermal power project in Chhattisgarh at an appraised current estimated cost of
Rs118.5 bn subject to environmental clearance of MOEF. NTPC is also planning to
start construction work of 1600 MW (2x800) coal based power at Darlipalli in
Sundergarh district of Orissa from January 2013 soon after getting possession of land
from the state government.
The MoEF has cleared the 10-km-long sea bridge will cut down the distance from
Bandra to Versova in Mumbai. The environment nod for the bridge comes with a few
conditions for the Maharashtra State Road Development Corporation (MSRDC), the
nodal agency for the project. MSRDC has to provide noise barriers, consult fishermen,
get clearance from the forest department and the high court as required and not carry
out dredging or reclamation.
30
Engineering & Capital Goods
§
§
Monthly Update
Dedicated Freight Corridor Corporation of India (DFCCIL) has signed a loan agreement
with Japan International Cooperation Agency (JICA) for its western corridor for the two
routes comprising Vadodara to Jawaharlal Nehru Port (JNPT) and Rewari to Dadri in
the Western Dedicated Freight Corridor. The value of the proposed loan is JPY 295 bn
(approx Rs200 bn), which is a soft loan with the repayment period of 40 years.
Gammon Infrastructure has emerged as the top bidder for developing and operating a
mechanized coal import terminal in Mormugao Port, Goa. The company offered a
revenue share of 33.66% to the Port Trust to mechanize and operate the coal berth
terminal of 2 mn tpa capacity. The coal terminal project, estimated to cost about Rs2
bn is to be developed on PPP basis with a concession period of 30 years.
Company News
§
§
§
§
§
Emkay Research
December 18, 2012
Tata Motors is planning to raise the capacity of ace small trucks and vans to meet
growing demand in India. The company will add 0.5 mn units to its annual capacity
within a couple of years, taking its total small commercial vehicle production capacity to
over a mn. The capacity addition will be in its plant in Dharwad, Karnataka, and will
focus on expanding passenger van portfolio. The 90,000-unit plant in Dharwad for the
half-tonne truck Zip and van Iris has been commissioned recently.
BHEL has signed an agreement with Shell, the Netherlands based global energy and
petrochemicals company for supply of gas turbines and generators over the next five
years. Under the Enterprise Framework Agreement (EFA), BHEL will supply Gas
Turbine Generator (GTG) packages to Shell in select locations including Asia-Pacific,
Middle-East, Central Asia, Eastern Europe and Africa. The agreement covers supply of
GTG packages in three categories - Frame 5 (26 MW), Frame 6E (42 MW) and Frame
9E (126 MW) - for power generation and includes installation and commissioning
services.
Crompton Greaves is setting up a greenfield plant in Jigani Industrial Area, Bangalore
for making intelligent electronic devices (IEDs) which are critical in control and
monitoring of power systems. Also, the company has set up a high-efficiency, lowvoltage rotating machines (LVRM) plant at Goa. This integrated JIT line has a TAKT
time of three minutes per motor and a lead time of 130 minutes, which represents a
gain of 98 per cent over a batch mode. (TAKT time is the rate at which the customer
buys your product.) The new plant capacity has been set at 10,000 additional units
each month. The unit will handle a three-phase production of induction motors from
0.37 to 9.3 kW.
L&T Hyderabad Metro Rail is planning to take up transit oriented real estate
development in a phased manner. The SPV will take up development of 18.5 mn sq ft.
It has completed a feasibility study of the real estate component along the proposed
72-km rail network. The state government has decided to allot 269 acre for the metro
project, including two land parcels of about 100 acre at the terminal points.
Saab, Swedish defence and security company signed an agreement with Pipavav
Defence and Offshore Engineering Company. Saab will invest 250 mn Swedish Kroner
(approx Rs2 bn) in Pipavav for 3.5% share in Pipavav. The finalisation of the
investment is expected to be made within three months under the condition it meets
the necessary approval of the shareholders meeting of Pipavav and government
approvals.
31
Monthly Update
Engineering & Capital Goods
Section 7 – Valuations
Valuation Charts
Exhibit 89: ECG sector trading at 15.1X 1 year forward earnings
ECG
sector
valuations
improved from recent lows of
13.1X to 15.1X currently… Vs
long term average of 16.0X
50
ECI Industry -1yr Fw d PE (x)
Capital Goods Cycle
40
Lehman crisis
Low at 11.5X
30
20
10
0
Apr-95
Currently trading
at 15.1X...
Apr-97
Apr-99
Apr-01
Apr-03
Apr-05
Apr-07
1yr Fw d PE (x)
Average PE FY04-08
Apr-09
Apr-11
Average PE
Average PE FY06-08
Source: Bloomberg, Capita Line, Emkay Research
Exhibit 90: ECG sector’s premium to Sensex remains below long-term average
Premium to Sensex for the
ECG sector has now remained
in low single digits (1-7%) since
May’12
80%
60%
ECI Industry - Prem/Dis to Sensex PE
40%
20%
0%
-20%
-40%
-60%
Aug-01
Aug-03
Aug-05
Prem/ Disc Over Sensex PE
Aug-07
Aug-09
Long term average
Aug-11
Average FY04-08
Source: Bloomberg, Capita Line, Emkay Research
Exhibit 91: ECG sector continues to underperform the Sensex over the past year
However, under-performance of
the ECG sector to broader
markets continues
350
BSE - CG - Price Perf ormance
300
250
200
150
100
50
0
Aug-01
Nov-02
Feb-04 May-05 Aug-06
BSE - CG Index
Nov-07
Feb-09 May-10 Aug-11
Nov-12
Sensex
Source: Bloomberg, Capita Line, Emkay Research
Emkay Research
December 18, 2012
32
Monthly Update
Engineering & Capital Goods
Price performance
§
Domestic companies – The domestic ECG sector largely under-performed the
broader markets in the past one month by 3.5%. The sector on the whole saw
negligible returns over the past one month with divergent performance witnessed
amongst constituents.
Significant under-performers were Voltas, Engineers India, Elecon Engineering and
McNally Bharat. Out-performers were Punj Lloyd, Cummins India and Kalpataru
Power.
Exhibit 92: Price performance of domestic ECG companies
Bloomberg
Code
(In INR terms)
ABB IN
ABB
ALST IN
Alstom India
408
ATD IN
Alstom T&D India
196
BGRL IN
BGR Energy Systems
BHE IN
Bharat Electronics
BHEL IN
Bharat Heavy Elec.
BLSTR IN
Blue Star
CU IN
Carborundum Uni.
CRG IN
Crompton Greaves
112
KKC IN
Cummins India
498
ELCN IN
Elecon Engineering
50
ENGR IN
Engineers India
222
-3.4
GRV IN
Greaves Cotton
76
-3.3
GWN IN
Grindwell Norton
272
KPP IN
Kalpataru Power
KECI IN
KEC International
KKB IN
KOEL IN
LT IN
Larsen & Toubro
MCNA IN
McNally Bharat Engg
95
-1.0
PUNJ IN
Punj Lloyd
58
12.9
SIEM IN
Siemens
681
1.7
0.2
4.7
1.0
5.3
0.7
-3.4
-0.7
-11.8
-15.0
TPRO IN
Tecpro Systems
156
-1.9
-2.9
3.4
-0.4
2.5
-2.9
-6.4
-1.9
-13.0
-17.3
TMX IN
Thermax
614
2.0
4.0
20.2
33.2
42.8
1.0
0.2
14.1
16.4
15.3
TRF IN
TRF
224
-3.1
-1.8
1.4
-20.2
-0.6
-4.0
-5.3
-3.8
-30.2
-19.7
VATW IN
VA Tech Wabag
538
0.4
-1.4
18.8
20.1
61.3
-0.6
-5.0
12.7
4.9
30.2
VOLT IN
Voltas
104
Company name
Absolute Performance (%)
Rel to Nifty Performance (%)
CMP
15d
1m
3m
6m
1y
15d
1m
3m
6m
1y
699
-0.8
-3.6
-6.5
-9.4
21.6
-1.7
-7.1
-11.3
-20.8
-1.9
-2.2
-1.7
11.4
16.1
26.9
-3.1
-5.2
5.7
1.5
2.5
-0.8
-0.3
6.8
7.8
31.1
-1.7
-3.9
1.3
-5.8
5.8
259
-3.4
-2.2
-2.5
-12.6
15.4
-4.3
-5.8
-7.5
-23.6
-6.9
1,182
-2.5
-2.0
0.1
-4.4
-20.9
-3.4
-5.5
-5.1
-16.5
-36.2
228
1.2
-2.9
9.8
2.9
-9.6
0.3
-6.4
4.2
-10.0
-27.0
192
1.2
-0.5
16.0
19.3
12.3
0.3
-4.1
10.0
4.3
-9.4
151
1.1
1.5
-0.7
2.1
5.4
0.2
-2.1
-5.8
-10.7
-14.9
-1.1
-0.3
3.9
-3.7
-9.7
-2.0
-3.9
-1.5
-15.8
-27.1
5.6
5.8
11.0
19.2
50.1
4.6
1.9
5.3
4.2
21.2
0.5
-6.7
7.5
-11.8
-14.1
-0.4
-10.1
2.0
-22.9
-30.7
-4.9
-6.6
-0.1
11.5
-4.3
-8.3
-11.4
-12.7
-10.0
-0.8
13.3
9.5
-1.4
-4.2
-4.4
7.4
-4.3
-20.4
0.0
3.1
8.0
9.7
20.8
-0.9
-0.7
2.5
-4.1
-2.5
89
8.6
6.0
20.8
12.6
-6.5
7.6
2.1
14.6
-1.6
-24.5
64
2.3
3.9
12.9
20.3
85.6
1.4
0.1
7.1
5.1
49.9
Kirloskar Brothers
160
-1.3
-0.4
24.0
42.4
38.6
-2.2
-4.0
17.6
24.5
11.9
Kirloskar Oil Engines
200
6.6
3.5
25.2
32.6
60.6
5.6
-0.3
18.7
15.9
29.7
1,627
-1.4
2.0
10.2
24.3
45.4
-2.3
-1.7
4.5
8.6
17.4
-6.7
4.4
10.3
8.8
-1.9
-10.0
-0.9
-3.6
-12.2
15.8
21.4
26.9
43.4
11.9
11.6
15.2
10.9
15.7
-2.4
-7.3
-10.0
2.5
25.7
-3.3
-10.6
-14.6
-10.4
1.5
ECG Sector
0.0
0.1
7.6
10.8
17.3
-0.9
-3.5
2.1
-3.2
-5.3
NIFTY INDEX
0.9
3.8
5.4
14.4
23.9
0.0
0.0
0.0
0.0
0.0
Source: Bloomberg, Emkay Research
Emkay Research
December 18, 2012
33
Monthly Update
Engineering & Capital Goods
§
International companies – After price correction witnessed for the past two months,
the international ECG companies delivered superior returns in the past one month.
Companies where price rise was in excess of 10% were ABB, Alstom, Cummins,
Daikin, Harbin Electric, Hitachi Construction, Hitachi Ltd, Hyundai Engineering,
Mitsubishi Heavy and Samsung Engineering.
LG Electronics has corrected by +10% for the second consecutive month. Drake &
Scull and Shanghai Electric were the only other companies to have witnessed price
correction.
Exhibit 93: Price performance of international ECG companies
(In USD terms)
Bloomberg Code
Company name
ABBN VX Equity
ALO FP Equity
Absolute Performance (%)
15d
1m
3m
6m
1y
ABB Ltd-Reg
4.3
12.4
1.2
27.4
14.2
Alstom
6.3
13.7
4.2
34.9
40.8
CAT US Equity
Caterpillar Inc
2.4
9.0
-5.1
1.9
1.9
CMI US Equity
Cummins Inc
5.6
11.8
2.6
10.2
19.7
6367 JP Equity
Daikin Industries Ltd
3.4
19.3
19.8
25.8
18.8
600875 CH Equity
Dongfang Electric Corp Ltd-A
14.7
4.3
-6.6
-35.0
-39.6
034020 KS Equity
Doosan Heavy Industries
11.5
6.7
-21.5
-8.1
-29.2
DSI UH Equity
Drake & Scull International
-0.6
-8.9
-17.8
-9.7
-9.1
ELUXB SS Equity
Electrolux Ab-Ser B
0.0
5.6
-2.5
42.7
74.8
1133 HK Equity
Harbin Electric Co Ltd-H
8.3
10.1
7.0
-5.6
4.0
6305 JP Equity
Hitachi Construction Machine
6.4
13.5
4.7
-2.0
10.4
6501 JP Equity
Hitachi Ltd
1.3
11.9
-6.2
-3.2
11.7
000720 KS Equity
Hyundai Engineering & Const
6.8
19.7
5.2
20.8
12.6
066570 KS Equity
LG Electronics Inc
-5.1
-11.0
-0.9
22.7
4.0
7011 JP Equity
Mitsubishi Heavy Industries
0.5
14.4
5.4
12.7
9.8
028050 KS Equity
Samsung Engineering Co Ltd
9.3
15.7
-14.1
5.4
-8.1
2727 HK Equity
Shanghai Electric Grp Co L-H
6.6
-1.2
-6.3
-18.8
-26.1
SIE GR Equity
Siemens Ag-Reg
4.3
7.7
-0.9
22.7
10.9
600089 CH Equity
Tbea Co Ltd-A
9.5
4.0
2.8
-13.9
-19.4
INDU Index
Dow Jones Indus. Avg
1.1
4.8
-3.1
3.2
11.0
SX5E Index
Euro Stoxx 50 Pr
1.8
6.3
1.3
20.5
18.1
UKX Index
FTSE 100 Index
0.9
3.5
0.1
8.1
9.7
HSI Index
Hang Seng Index
3.1
5.4
9.6
17.5
25.4
NKY Index
Nikkei 225
3.6
12.4
6.3
13.6
16.2
SPX Index
S&P 500 Index
0.2
4.7
-3.2
5.7
16.8
FSSTI Index
Straits Times Index STI
4.0
6.4
3.2
12.7
20.2
Source: Bloomberg, Emkay Research
Emkay Research
December 18, 2012
34
Monthly Update
Engineering & Capital Goods
Trend in ratings & recommendations
§
§
§
Absolute ‘Sell’ ratings remain higher than ‘Buy’ ratings – as given by Sell side analysts.
Absolute Buy for the ECG sector (all companies put together) stood at 35% Vs 40%
Sell ratings in Nov’12.
The steady decline in outlook follows lack of government policy initiatives, slow revival
of investment cycle, subdued order inflows and pressure on EBITDA margins.
0
0%
200
50%
400
100%
600
Exhibit 94: Proportion of Buy ratings (35%) now lower than Sell ratings (40%)
Jan01
Jul02
Jan04
Jul05
Total Buy
Jan07
Jul08
Total Hold
Jan10
Jul11
Jan01
Total Sell
Jul02
Jan04
Total Buy
Jul05
Jan07
Jul08
Total Hold
Jan10
Jul11
Total Sell
Source: Bloomberg, Emkay Research
Exhibit 95: Summary view of company specific ratings as on 30 Nov’12
Nov’12
Company
Oct’12
Sep’12
Buy
Hold
Sell
Buy
Hold
Sell
Buy
Hold
Sell
Change
MoM
Clear Favourites
Bharat Electronics
10
2
2
11
2
1
13
0
1
Downwards
Carborundum Universal
9
1
3
10
0
2
10
0
2
Downwards
Engineers India
7
3
4
6
3
4
8
2
3
Steady
Greaves Cotton
9
1
0
8
1
0
7
2
0
Steady
Grindwell Norton
4
0
1
3
0
1
4
0
0
Steady
Kalpataru Power
16
3
0
15
4
0
15
3
0
Upwards
KEC International
18
7
4
18
7
2
22
3
1
Downwards
4
1
0
5
0
0
4
0
0
Downwards
27
17
11
27
18
10
30
15
12
Downwards
McNally Bharat
4
1
0
3
2
0
5
1
0
Upwards
Tecpro Systems
11
1
0
12
1
0
12
1
0
Steady
VaTech Wabag
10
1
0
7
4
0
6
4
1
Upwards
Kirloskar Oil Engines
L&T
Clear Avoids
ABB
0
5
33
0
4
33
0
5
34
Steady
BGR Energy
4
10
18
3
10
19
3
12
20
Upwards
Steady
Bhel
10
16
35
10
15
35
11
20
30
Kirloskar Brothers
2
0
2
0
0
2
0
0
2
Upwards
Punj Lloyd
1
2
10
1
1
13
2
1
14
Upwards
Siemens
1
5
17
1
4
19
1
5
20
Upwards
Thermax
6
10
28
6
11
27
4
13
27
Downwards
TRF
0
0
4
0
1
3
0
1
3
Downwards
Alstom India
1
0
1
1
0
1
1
0
1
Steady
Alstom T&D
2
3
3
2
4
3
2
5
3
Steady
Blue Star
4
1
5
4
1
5
2
2
6
Steady
Crompton Greaves
9
17
25
15
17
18
14
19
18
18
14
6
17
15
5
16
16
5
Upwards
Upwards
Mixed Outlook
Cummins India
Elecon Engineering
Voltas
1
4
2
2
4
1
3
4
1
10
11
12
12
10
11
14
9
11
Downwards
Downwards
Source: Bloomberg, Emkay Research
Emkay Research
December 18, 2012
35
Monthly Update
Engineering & Capital Goods
Change in earnings estimates
§
§
§
After minimal changes in consensus earnings estimates witnessed in the past 6
months, consensus earnings estimates were cut by 3.3% MoM for FY13E and by 2.7%
MoM for FY14E.
Empirically, we have witnessed highest change in earnings in H1 of a particular year
followed by muted change in earnings in H2 – See our ECG sector update titled “At
crossroads” dated Mar’11.
Since Mar’12, earnings estimates for the ECG sector have been cut by 8.7% and
10.9% for FY13E and FY14E respectively and by 26.4% and 29.2% respectively since
Apr’11.
Exhibit 97: FY14E consensus earnings estimates fell by 2.7% during
Nov’12
75
65
85
75
65
Index
95
Index
85
95
105
105
Exhibit 96: FY13E consensus earnings estimates fell by 3.3% during
Nov’12
May-10 Sep-10 Jan-11 May-11 Sep-11 Jan-12 May-12 Sep-12
Apr-11
Aug-11
FY13E consensus estimates
12%
8%
0%
4%
Growth (%)
16%
10%
4%
Growth (%)
22%
Exhibit 99: Earnings growth for FY14E improves to 5.6% (on low base)
Apr-11
May-10 Sep-10 Jan-11 May-11 Sep-11 Jan-12 May-12 Sep-12
Aug-11
FY13E consensus estimates
Apr-12
Aug-12
Source: Bloomberg, Emkay Research
Exhibit 100: Cut in consensus earnings estimates (over the past 12
months) has been higher for FY14E Vs FY13E
30
Dec-11
FY14E consensus estimates
Source: Bloomberg, Emkay Research
Exhibit 101: Consensus estimates factor muted earnings growth
during FY12-14E period
6
29.2
5
In % terms
29
In % terms
Aug-12
Source: Bloomberg, Emkay Research
Exhibit 98: Earnings growth for FY13E down to mere 2.8%
28
26.4
26
5.6
4.7
4
2.8
3
2
1
25
0
FY13E
FY14E
Cut in Consensus Earnings Estimates
Source: Bloomberg, Emkay Research
Emkay Research
Apr-12
FY14E consensus estimates
Source: Bloomberg, Emkay Research
27
Dec-11
December 18, 2012
FY12
FY13E
Earnings Grow th
FY14E
Source: Bloomberg, Emkay Research
36
Monthly Update
Engineering & Capital Goods
Section 8 – Financials
Emkay universe
Exhibit 102:
In Rs mn
Sales
Company
BHEL
FY12
FY13E
EBITDA
FY14E CAGR
APAT
FY12
FY13E
FY14E
CAGR
FY12
FY13E
FY14E
CAGR
-6.7% 100,067
-18.0%
472,279
466,404
410,811
90,698
69,942
-16.4%
70,553
62,211
47,388
Blue Star
27,003
27,933
31,252
7.6%
-308
1,668
2,505
NA
-882
964
1,431
NA
Cummins India
40,522
43,307
50,764 11.9%
7,157
8,021
9,436
14.8%
5,170
6,261
7,370
19.4%
Elecon Engineering
13,317
12,982
14,174
3.2%
2,111
1,906
2,077
-0.8%
819
612
695
-7.9%
21,489
9.6%
2,367
2,468
2,861
9.9%
1,302
1,462
1,709
14.6%
828,921 13.5%
87,700
92,644 106,503
10.2%
46,369
52,349
57,972
11.8%
Greaves Cotton
17,893
19,124
Larsen & Toubro
643,131
728,008
26,432
27,632
103,183
121,247
Thermax
60,313
56,455
60,618
TRF
13,274
12,441
14,266
51,857
56,843
62,491
McNally Bharat Engineering
Punj Lloyd
Voltas
Total
30,748
7.9%
1,592
2,015
2,258
19.1%
397
552
591
22.1%
129,710 12.1%
7,852
11,494
12,318
25.2%
-968
129
562
NA
0.3%
5,936
4,890
5,493
-3.8%
3,949
3,282
3,770
-2.3%
3.7%
645
599
892
17.6%
132
-26
204
24.1%
9.8%
3,563
2,979
4,503
12.4%
3,129
2,290
3,143
0.2%
6.1% 218,681 219,384 218,789
0.0%
129,970
130,086
124,835
-2.0%
1,469,204 1,572,377 1,655,244
Source: Emkay Research
Exhibit 103:
EBITDA Margin (%)
Company
BHEL
Gross Margin (%)
APAT Margin (%)
FY12
FY13E
FY14E
Change
FY12
FY13E
FY14E Change
FY12
FY13E
FY14E
Change
20.9
19.1
16.7
-410 bps
49.8
48.7
48.5 -130 bps
14.7
13.1
11.3
-340 bps
780 bps
Blue Star
-1.1
6.0
8.0
920 bps
22.8
27.5
29.0 630 bps
-3.3
3.5
4.6
Cummins India
17.4
18.2
18.3
90 bps
34.7
36.5
36.6 190 bps
12.6
14.2
14.3
170 bps
Elecon Engineering
15.9
14.7
14.7
-120 bps
37.6
36.4
36.4 -120 bps
6.1
4.7
4.9
-120 bps
Greaves Cotton
13.2
12.9
13.3
10 bps
30.3
30.5
30.5
20 bps
7.3
7.6
8.0
70 bps
Larsen & Toubro
-10 bps
13.6
12.7
12.8
-80 bps
37.5
37.5
37.5
0 bps
7.2
7.2
7.1
McNally Bharat Engineering
6.0
7.3
7.3
130 bps
50.7
50.2
49.7 -100 bps
1.5
2.0
1.9
40 bps
Punj Lloyd
7.6
9.5
9.5
190 bps
70.0
73.0
73.2 320 bps
-0.7
0.3
0.6
140 bps
Thermax
9.7
8.7
9.1
-70 bps
33.7
35.3
35.5 180 bps
6.3
5.6
6.0
-30 bps
TRF
4.9
4.8
6.3
140 bps
26.0
25.6
26.2
20 bps
1.0
0.0
1.5
50 bps
Voltas
6.9
5.2
7.2
30 bps
27.1
26.5
28.4 130 bps
6.0
4.0
5.0
-100 bps
Total
14.9
14.0
8.8
8.3
7.5
-130 bps
13.2 -170 bps
Source: Emkay Research
Exhibit 104:
In Rs mn
Net Working Capital
Company
Gross Debt
Capital Employed
FY12
FY13E
FY14E
CAGR
FY12
FY13E
FY14E
CAGR
FY12
FY13E
FY14E CAGR
178,443
227,181
267,665
22.5%
1,234
1,234
1,234
0.0%
239,504
285,865
321,178 15.8%
Blue Star
4,584
4,185
2,705
-23.2%
3,432
3,182
1,682
-30.0%
8,171
7,939
6,607 -10.1%
Cummins India
9,388
11,108
11,577
11.1%
147
147
147
0.0%
20,509
23,893
28,244 17.4%
Elecon Engineering
4,803
5,635
6,157
13.2%
4,729
5,154
5,154
4.4%
9,624
10,499
11,032
Greaves Cotton
2,495
3,317
4,343
31.9%
330
330
330
0.0%
6,941
7,815
8,835 12.8%
359,179
404,582
530,701
21.6% 472,285 493,099 561,925
9.1%
775,908
832,647
956,620 11.0%
BHEL
Larsen & Toubro
McNally Bharat Engineering
7.1%
6,321
8,138
9,024
19.5%
6,526
8,026
8,526
14.3%
10,834
12,853
13,900 13.3%
46,816
57,463
58,776
12.0%
49,444
59,444
59,444
9.6%
81,062
91,058
91,486
Thermax
7,190
10,077
12,998
34.5%
2,704
2,704
2,704
0.0%
20,491
22,680
25,348 11.2%
TRF
3,587
4,530
4,633
13.6%
4,557
5,557
5,457
9.4%
6,203
7,129
15.1%
2,234
2,234
2,234
0.0%
16,940
18,502
Punj Lloyd
Voltas
10,885
12,249
14,428
Total
633,691
748,465
923,007
20.7% 547,623 581,111 648,837
7,206
6.2%
7.8%
20,850 10.9%
8.8% 1,196,188 1,320,878 1,491,306 11.7%
Source: Emkay Research
Emkay Research
December 18, 2012
37
Monthly Update
Engineering & Capital Goods
Emkay universe (cont’d)
Exhibit 105:
In Rs mn
Free Cash Flow
Company
Order Backlog
FY12
FY13E
FY14E
-12,809
27,070
35,295
Blue Star
2,120
731
2,247
Cummins India
2,753
3,110
-131
NA
NA
NA
NA
NA
NA
NA
587
329
1,017
31.6%
12,120
12,964
13,453
5.4%
11,965
14,184
30.3%
NA
NA
NA
NA
NA
NA
NA 1,476,636 1,643,103 1,908,736
13.7%
705,740
806,308
896,096 12.7%
9.8%
21,492
25,790
27,596 13.3%
BHEL
Elecon Engineering
Greaves Cotton
Larsen & Toubro
McNally Bharat Engineering
Punj Lloyd
Thermax
TRF
Voltas
Total
860
2,099
1,460
-118,379
-8,532
8,145
-1,156
-424
288
-10,131
-10,998
47
2,402
CAGR
FY12
FY13E
Order Inflows
NA 1,340,682 1,119,702
2.9%
19,170
17,779
CAGR
FY12
FY13E
892,593 -18.4%
FY14E
220,960
267,960
203,550
-4.0%
13,793 -15.2%
26,653
26,541
27,266
1.1%
NA
NA
NA
40,200
44,568
48,487
7,693
NA
272,760
293,997
314,250
7.3%
146,822
141,412
4,172
846.2%
43,935
39,363
40,291
-4.2%
46,248
51,374
FY14E CAGR
15,055 12.2%
NA
148,892
NA
0.7%
61,649 15.5%
511
-329
171
-42.1%
9,953
10,143
10,501
2.7%
3,700
7,261
7,924 46.3%
-1,667
-458
-2,196
14.8%
42,920
38,886
37,281
-6.8%
25,872
29,495
33,919 14.5%
-137,264
14,998
58,160
NA 3,258,377 3,220,504 3,279,384
0.3% 1,209,451 1,370,326 1,421,946
8.4%
Source: Emkay Research
Exhibit 106:
ROE (%)
Company
BHEL
RoCE (%)
DER (x)
Book Value (Rs/Share)
FY12
FY13E
FY14E
FY12
FY13E
FY14E
FY12
FY13E
FY14E
FY12
FY13E
FY14E
137.0
31.0
22.5
14.9
45.5
32.2
20.7
0.0
0.0
0.0
103.7
122.6
-16.9
20.3
29.6
-6.0
18.5
31.7
0.7
0.7
0.3
52.7
52.9
54.8
Cummins India
26.9
28.3
28.4
39.2
39.5
38.5
0.0
0.0
0.0
52.6
85.9
101.6
Elecon Engineering
19.5
13.1
13.5
18.9
15.1
15.3
1.1
1.1
0.9
47.9
52.7
58.5
Greaves Cotton
23.1
21.8
22.3
32.5
28.9
29.9
0.1
0.0
0.0
25.7
29.2
33.4
Larsen & Toubro
17.2
16.7
16.1
11.7
11.1
11.1
1.6
1.5
1.5
472.9
549.1
628.1
McNally Bharat Engineering
11.6
14.2
13.4
14.9
15.7
15.4
1.8
1.9
1.8
116.7
133.2
150.5
Punj Lloyd
-3.3
0.4
1.9
6.9
9.7
9.8
1.7
2.0
2.0
87.9
87.9
89.2
Thermax
26.8
18.8
18.9
33.4
23.6
23.8
0.2
0.1
0.1
136.7
156.1
179.4
8.6
-1.7
12.6
10.4
7.6
11.0
2.8
3.6
3.2
74.3
139.9
154.4
Voltas
22.0
14.7
17.9
25.1
20.4
25.1
0.2
0.1
0.1
44.7
49.4
56.5
Average
20.1
17.4
14.8
19.6
18.1
16.4
0.8
0.8
0.8
-
-
-
Blue Star
TRF
Source: Emkay Research
Exhibit 107:
Order Book to Sales (X)
Company
Net Working Capital Days
Interest coverage
(EBIT/Interest)
FY12
FY13E
FY14E
FY12
FY13E
FY14E
FY12
FY13E
BHEL
2.8
2.4
2.2
138
178
238
13.7
Blue Star
0.7
0.6
0.4
62
55
32
-0.1
Cummins India
NA
NA
NA
85
94
83
Elecon Engineering
0.9
1.0
0.9
132
158
Greaves Cotton
NA
NA
NA
51
Larsen & Toubro
2.3
2.3
2.3
204
McNally Bharat Engineering
1.5
1.6
1.6
87
Punj Lloyd
2.6
2.4
2.4
166
Thermax
0.7
0.7
0.7
44
TRF
0.7
0.8
0.7
99
Voltas
0.8
0.7
0.6
77
Average
2.2
2.0
2.0
157
Sales to Capital Employed
FY14E
FY12
FY13E
FY14E
14.8
13.5
2.0
1.6
1.3
-4.5
-12.2
3.3
3.5
4.7
-139.0
-155.0
-182.2
2.0
1.8
1.8
159
-4.4
-3.8
-4.1
1.4
1.2
1.3
63
74
-71.5
-239.2
-290.0
2.6
2.4
2.4
203
234
-8.5
-8.8
-9.0
0.8
0.9
0.9
107
107
-2.0
-2.2
-2.1
2.4
2.1
2.2
173
165
-1.9
-1.9
-2.1
1.3
1.3
1.4
65
78
-52.4
-22.3
-50.6
2.9
2.5
2.4
133
119
-2.2
-1.5
-2.2
2.1
1.7
2.0
79
84
-12.0
-8.2
-12.4
3.1
3.1
3.0
174
204
-20.9
-15.1
-13.9
1.2
1.2
1.1
Source: Emkay Research
Emkay Research
December 18, 2012
38
Monthly Update
Engineering & Capital Goods
Emkay universe (cont’d)
Exhibit 108:
CMP
Company
Target Price
(Rs/Share)
Average PER (X)
PER (X)
P/BV (X)
(Rs/Share)
Rating
year
5-year
1-year
FY12
FY13E
FY14E
FY12
FY13E
FY14E
BHEL
228
Hold
220
14.1
20.3
11.7
7.9
9.0
11.8
2.2
1.9
1.7
Blue Star
192
Buy
215
-2.2
-21.1
-146.8
-19.6
17.9
12.1
3.6
3.6
3.5
Cummins India
498
Accumulate
500
16.1
18.0
20.5
37.4
22.0
18.7
9.5
5.8
4.9
Elecon Engineering
50
Hold
56
5.8
14.9
8.4
5.6
7.5
6.6
1.0
0.9
0.8
Greaves Cotton
76
Buy
90
9.1
14.4
13.6
14.3
12.8
10.9
3.0
2.6
2.3
1,759
20.5
24.4
17.8
21.5
19.0
17.2
3.4
3.0
2.6
110
15.9
14.1
7.6
7.4
5.3
5.0
0.8
0.7
0.6
Larsen & Toubro
1,627
McNally Bharat Engineering
Punj Lloyd
Accumulate
95
Hold
58
Accumulate
74
-2.2
-8.5
-32.5
-19.9
149.0
34.2
0.7
0.7
0.6
Thermax
614
Hold
505
14.0
19.8
16.7
18.5
22.3
19.4
4.5
3.9
3.4
TRF
224
Sell
180
3.2
13.3
-16.8
37.3
-94.2
12.1
3.0
1.6
1.5
Voltas
104
Accumulate
121
9.0
17.8
14.1
11.0
15.1
11.0
2.3
2.1
1.8
Source: Emkay Research
Exhibit 109:
EV / Sales (X)
Company
EV / EBITDA (X)
Dividend Yield (%)
Free Cash Flow Yield (%)
FY12
FY13E
FY14E
FY12
FY13E
FY14E
FY12
FY13E
FY14E
FY12
FY13E
FY14E
BHEL
1.0
1.0
1.1
4.9
5.2
6.3
2.0
2.8
2.2
-43.6
20.6
15.8
Blue Star
0.7
0.7
0.6
(65.6)
12.4
7.9
3.6
4.7
6.2
8.2
23.7
7.7
Cummins India
4.6
3.0
2.6
26.0
16.1
13.9
1.2
2.1
2.2
50.2
Elecon Engineering
0.7
0.7
0.7
4.4
5.0
4.5
3.0
3.0
3.0
7.8
14.0
4.5
Greaves Cotton
1.0
0.8
0.7
7.4
6.5
5.3
2.9
2.7
3.2
21.7
8.9
12.8
Larsen & Toubro
2.1
1.9
1.7
15.4
14.8
13.0
1.0
1.0
1.2
-8.4
-117.2
122.8
McNally Bharat Engineering
0.3
0.4
0.4
5.6
5.1
4.9
1.1
1.4
1.8
-2.6
-7.0
10.2
Punj Lloyd
0.6
0.6
0.6
7.5
6.7
6.2
0.7
0.7
0.7
-1.9
-1.7
2.5
Thermax
1.1
1.2
1.0
11.2
13.4
11.4
0.1
0.1
0.1
1570.3
30.5
17.5
TRF
0.7
0.6
0.5
13.6
11.7
8.2
0.9
1.8
1.8
4.8
-7.5
14.4
Voltas
0.6
0.6
0.6
8.9
10.9
7.8
1.9
2.1
2.3
-20.7
-75.3
-15.7
Average
1.5
1.4
1.3
10.3
10.1
10.0
-
-
-
-13.6
124.6
32.1
44.4 -1051.0
Source: Emkay Research
Note: Standalone à BHEL, Blue Star, Cummins India, Elecon Engineering
Consolidated à Greaves Cotton, L&T, McNally Bharat, Punj Lloyd, Thermax, TRF, Voltas
Emkay Research
December 18, 2012
39
Monthly Update
Engineering & Capital Goods
Others - Domestic
Exhibit 110:
In Rs mn
Sales
Company
EBITDA
APAT
FY12
FY13E
FY14E
CAGR
FY12
FY13E
FY14E
CAGR
FY12
FY13E
FY14E
CAGR
ABB
74,889
79,910
89,717
9.5%
3,930
4,517
6,503
28.6%
2,226
2,664
3,987
33.8%
Alstom T&D
41,292
34,074
40,608
-0.8%
4,527
3,316
4,096
-4.9%
2,022
1,226
1,835
-4.7%
BGR Energy
34,656
35,342
43,265
11.7%
4,762
4,270
4,769
0.1%
2,210
1,770
1,959
-5.8%
Bharat Electronics
59,294
63,105
69,746
8.5%
8,235
7,966
9,437
7.1%
8,058
8,091
9,120
6.4%
Carborundum Universal
19,570
21,666
24,672
12.3%
3,901
3,519
4,263
4.5%
2,143
1,923
2,420
6.3%
114,044
124,293
139,759
10.7%
8,639
7,321
10,911
12.4%
4,450
3,091
5,652
12.7%
36,027
35,186
38,403
3.2%
7,657
7,356
7,994
2.2%
6,432
6,595
7,131
5.3%
9.3%
Crompton Greaves
Engineers India
Grindwell Norton
8,924
9,924
10,840
10.2%
1,265
1,539
1,741
17.3%
987
1,051
1,178
Kalpataru Power
49,960
64,114
72,193
20.2%
5,062
5,391
6,271
11.3%
2,037
1,865
2,196
3.8%
KEC International
54,884
68,793
75,795
17.5%
4,602
4,909
5,965
13.9%
1,765
1,801
2,339
15.1%
Kirloskar Brothers
26,491
26,447
27,938
2.7%
2,184
1,962
2,276
2.1%
978
707
1,065
4.4%
19.3%
Kirloskar Oil Engines
23,630
24,877
28,582
10.0%
3,104
3,263
3,886
11.9%
1,643
1,913
2,339
131,372
144,831
-
NA
11,877
14,215
-
NA
7,244
8,706
-
NA
Tecpro Systems
22,058
28,778
32,790
21.9%
3,669
4,175
4,734
13.6%
1,475
1,276
1,473
-0.1%
VA Tech Wabag
13,738
16,529
19,026
17.7%
1,277
1,596
1,874
21.1%
688
951
1,087
25.7%
736,057
777,869
713,333
-1.6%
76,805
75,314
74,719
-1.4%
45,762
43,629
43,781
-2.2%
FY14E
Change
FY12
FY13E
FY14E
Change
FY12
FY13E
FY14E
Change
33.0%
Siemens
Total
Source: Bloomberg, Emkay Research
Exhibit 111:
EBITDA Margin (%)
Company
ABB
FY12
FY13E
APAT Margin (%)
EPS (Rs/Share)
5.2
5.7
7.2
200 bps
3.0
3.3
4.4
150 bps
10.6
12.8
18.8
Alstom T&D
11.0
9.7
10.1
-90 bps
4.9
3.6
4.5
-40 bps
6.8
5.3
7.7
6.3%
BGR Energy
13.7
12.1
11.0 -270 bps
6.4
5.0
4.5 -180 bps
31.2
24.6
27.2
-6.6%
Bharat Electronics
13.9
12.6
13.5
-40 bps
13.6
12.8
-50 bps
99.3
101.1
114.0
7.1%
Carborundum Universal
19.9
16.2
17.3 -270 bps
7.6
5.9
7.8
Engineers India
21.3
20.9
Grindwell Norton
14.2
15.5
Kalpataru Power
10.1
KEC International
8.4
Crompton Greaves
Kirloskar Brothers
Kirloskar Oil Engines
Siemens
13.1
10.9
8.9
9.8 -110 bps
20 bps
3.9
2.5
4.0
11.3
9.5
12.3
4.0%
10 bps
7.0
4.9
8.9
12.8%
20.8
-40 bps
17.9
18.7
16.1
190 bps
11.1
10.6
18.6
70 bps
19.1
19.9
20.6
3.7%
10.9
-20 bps
17.9
19.7
22.6
12.5%
8.4
8.7 -140 bps
4.1
7.1
7.9
-50 bps
3.2
2.9
3.0 -100 bps
2.6
3.1
13.2
12.3
14.4
4.6%
-10 bps
6.9
7.1
9.2
16.1%
8.2
7.4
8.1
-10 bps
3.7
2.7
3.8
10 bps
12.5
8.9
13.4
3.8%
13.1
13.1
13.6
50 bps
7.0
7.7
8.2
120 bps
11.3
13.3
16.1
19.4%
NA
80 bps
5.5
6.0
NA
40 bps
21.2
25.1
-
NA
14.4 -220 bps
6.7
4.4
4.5 -220 bps
29.0
26.5
30.3
2.3%
9.0
9.8
Tecpro Systems
16.6
14.5
VA Tech Wabag
9.3
9.7
9.8
60 bps
5.0
5.8
5.7
70 bps
26.0
36.1
40.9
25.5%
Total
5.2
5.7
7.2
200 bps
3.0
3.3
4.4
150 bps
10.6
12.8
18.8
33.0%
Source: Bloomberg, Emkay Research
Emkay Research
December 18, 2012
40
Monthly Update
Engineering & Capital Goods
Others - Domestic (cont’d)
Exhibit 112:
Company
Market Cap
Asset
PER (x)
P/BV (x)
RoE (%)
CMP
Rs Mn
Turnover (x)
FY12
FY13E
FY14E
FY12
FY13E
FY14E
FY12
FY13E
FY14E
ABB
699
148,188
1.2
65.9
54.7
37.2
5.7
5.4
4.8
9.1
9.9
13.4
Alstom T&D
196
46,769
-
28.8
37.1
25.5
-
4.7
4.1
-
15.4
18.2
BGR Energy
259
18,668
0.6
8.3
10.5
9.5
1.7
1.5
1.3
20.9
14.4
14.6
1,182
94,520
0.4
11.9
11.7
10.4
1.7
1.5
1.4
14.5
13.4
13.6
Carborundum Universal
151
28,386
1.2
13.4
16.0
12.4
3.0
2.6
2.2
24.4
16.6
18.5
Crompton Greaves
112
71,623
1.4
16.0
22.6
12.6
2.0
1.9
1.7
13.0
9.0
14.1
Engineers India
222
74,867
1.0
11.6
11.2
10.8
4.0
3.3
2.7
37.4
29.8
26.8
Grindwell Norton
272
15,030
1.4
15.2
13.8
12.0
-
2.9
2.5
22.0
21.7
21.6
Kalpataru Power
89
13,612
1.0
6.7
7.2
6.1
0.7
0.7
0.6
11.6
9.8
10.7
KEC International
64
16,556
1.1
9.4
9.1
7.0
1.6
1.4
1.2
17.6
15.5
17.7
Kirloskar Brothers
160
12,678
1.0
12.8
18.0
11.9
1.3
1.4
1.3
11.9
7.2
8.7
Kirloskar Oil Engines
200
29,155
1.4
17.7
15.0
12.4
3.3
2.5
2.2
22.1
18.1
19.5
Siemens
681
239,611
1.2
32.1
27.1
NA
5.1
4.6
-
16.6
17.7
-
Tecpro Systems
156
7,897
-
5.4
5.9
5.2
1.0
0.9
0.8
18.8
16.3
16.8
VA Tech Wabag]
538
14,276
0.9
20.7
14.9
13.2
2.2
2.0
1.8
11.3
13.7
14.3
Bharat Electronics
Source: Bloomberg, Emkay Research
Note: Above are consensus estimates
Standalone à ABB, Kirloskar Oil Engines, Tecpro Systems
Consolidated à Alstom Projects, Alstom T&D, BGR Energy, Bhart Electronics, Carborundum Universal, Crompton Greaves, Engineers India,
Grindwell Norton, Kalpataru Power, KEC International, Kirloskar Brothers, Siemens India, VA Tech Wabag
Emkay Research
December 18, 2012
41
Monthly Update
Engineering & Capital Goods
Others – International
Exhibit 113:
In USD mn
Sales
Company
EBITDA
APAT
FY12
FY13E
FY14E
CAGR
FY12
FY13E
FY14E
CAGR
FY12
FY13E
FY14E
CAGR
ABB Ltd-Reg
37,599
39,378
41,559
5.1%
5,803
5,653
6,290
4.1%
3,419
3,090
3,468
0.7%
Alstom
26,067
27,528
28,647
4.8%
2,439
2,588
2,778
6.7%
1,183
1,251
1,418
9.5%
Caterpillar Inc
57,942
65,563
65,277
6.1%
9,155
11,443
11,170
10.5%
4,528
6,109
5,823
13.4%
Cummins Inc
17,890
17,095
17,805
-0.2%
2,818
2,575
2,738
-1.4%
1,690
1,592
1,678
-0.4%
Daikin Industries Ltd
15,373
15,272
17,256
5.9%
1,541
1,610
1,879
10.4%
481
420
658
17.0%
Dongfang Electric Corp Ltd-A
7,088
7,170
7,629
3.7%
773
746
795
1.4%
503
464
491
-1.2%
Doosan Heavy Industries
7,818
9,069
9,780
11.8%
863
745
874
0.6%
303
380
500
28.5%
Drake & Scull International
821
871
964
8.4%
73
59
74
0.9%
56
38
48
-8.0%
14,970
16,386
16,674
5.5%
985
1,204
1,436
20.8%
398
487
646
27.4%
Harbin Electric Co Ltd-H
4,815
4,553
4,811
0.0%
292
325
340
8.0%
172
207
203
8.6%
Hitachi Construction Machine
9,977
9,122
9,313
-3.4%
1,209
1,076
1,134
-3.1%
295
359
295
0.0%
Electrolux AB-Ser B
Hitachi Ltd
118,624
109,844
113,108
-2.4%
10,368
10,136
11,159
3.7%
3,482
2,489
3,059
-6.3%
Hyundai Engineering & Const
10,544
12,289
13,831
14.5%
787
771
954
10.1%
579
523
666
7.2%
LG Electronics Inc
48,486
47,511
49,457
1.0%
1,439
2,395
2,680
36.5%
-279
706
1,191
NA
Mitsubishi Heavy Industries
35,036
36,388
38,607
5.0%
3,015
3,093
3,459
7.1%
323
666
882
65.3%
Samsung Engineering Co Ltd
7,895
10,719
11,627
21.4%
640
731
793
11.3%
448
500
549
10.7%
Shanghai Electric Grp Co L-H
11,127
11,804
12,638
6.6%
804
936
999
11.4%
503
566
592
8.4%
103,307
107,119
111,439
3.9%
12,653
14,986
16,225
13.2%
6,865
8,408
9,243
16.0%
2,945
3,230
3,747
12.8%
313
302
379
10.0%
214
202
257
9.8%
538,325
550,912
574,167
3.3%
55,969
61,371
66,157
8.7%
25,164
28,457
31,666
12.2%
Siemens AG-Reg
Tbea Co Ltd-A
Total
Source: Bloomberg, Emkay Research
Exhibit 114:
EBITDA Margin (%)
Company
APAT Margin (%)
EPS (USD/Share)
FY12
FY13E
FY14E
Change
FY12
FY13E
FY14E
Change
FY12
FY13E
FY14E
CAGR
15.4
14.4
15.1
-30 bps
9.1
7.8
8.3
-70 bps
1.5
1.4
1.5
1%
9.4
9.4
9.7
30 bps
4.5
4.5
5.0
40 bps
4.0
4.2
4.6
7%
Caterpillar Inc
15.8
17.5
17.1
130 bps
7.8
9.3
8.9
110 bps
6.8
9.1
8.7
13%
Cummins Inc
15.8
15.1
15.4
-40 bps
9.4
9.3
9.4
0 bps
8.7
8.4
9.0
1%
Daikin Industries Ltd
10.0
10.5
10.9
90 bps
3.1
2.8
3.8
70 bps
1.7
1.4
2.3
17%
Dongfang Electric Corp Ltd-A
10.9
10.4
10.4
-50 bps
7.1
6.5
6.4
-70 bps
0.3
0.2
0.2
-2%
Doosan Heavy Industries
11.0
8.2
8.9
-210 bps
3.9
4.2
5.1
120 bps
3.2
3.7
4.9
23%
Drake & Scull International
8.8
6.7
7.7
-120 bps
6.8
4.4
4.9 -190 bps
0.0
0.0
0.0
-8%
Electrolux AB-Ser B
6.6
7.3
8.6
200 bps
2.7
3.0
3.9
120 bps
1.4
1.7
2.3
26%
Harbin Electric Co Ltd-H
6.1
7.1
7.1
100 bps
3.6
4.5
4.2
60 bps
0.1
0.1
0.1
9%
12.1
11.8
12.2
10 bps
3.0
3.9
3.2
20 bps
1.4
1.7
1.4
0%
Hitachi Ltd
8.7
9.2
9.9
110 bps
2.9
2.3
2.7
-20 bps
0.8
0.5
0.7
-7%
Hyundai Engineering & Const
7.5
6.3
6.9
-60 bps
5.5
4.3
4.8
-70 bps
5.1
4.6
5.9
8%
LG Electronics Inc
3.0
5.0
5.4
250 bps
-0.6
1.5
2.4
300 bps
-1.8
4.0
6.8
NA
Mitsubishi Heavy Industries
8.6
8.5
9.0
40 bps
0.9
1.8
2.3
140 bps
0.1
0.2
0.3
64%
Samsung Engineering Co Ltd
8.1
6.8
6.8
-130 bps
5.7
4.7
4.7 -100 bps
11.5
12.6
13.9
10%
Shanghai Electric Grp Co L-H
7.2
7.9
7.9
70 bps
4.5
4.8
4.7
20 bps
0.0
0.0
0.0
7%
Siemens AG-Reg
12.2
14.0
14.6
230 bps
6.6
7.8
8.3
160 bps
8.1
9.8
10.8
16%
Tbea Co Ltd-A
10.6
9.3
10.1
-50 bps
7.3
6.3
6.9
-40 bps
0.1
0.1
0.1
-2%
Total
15.4
14.4
15.1
-30 bps
9.1
7.8
8.3
-70 bps
1.5
1.4
1.5
1%
ABB Ltd-Reg
Alstom
Hitachi Construction Machine
Source: Bloomberg, Emkay Research
Emkay Research
December 18, 2012
42
Monthly Update
Engineering & Capital Goods
Others – International (cont’d)
Exhibit 115:
Company
CMP
Market Cap
Asset
PER (X)
P/BV (X)
(USD/Share)
(USD mn)
Turnover
ABB Ltd-Reg
20.3
47,024
0.9
13.7
15.0
13.3
2.8
2.7
2.5
20.9
18.2
19.2
Alstom
39.6
12,184
0.7
9.8
9.4
8.6
1.9
1.7
1.5
19.2
19.4
19.5
Caterpillar Inc
88.4
57,782
0.8
13.0
9.7
10.2
4.3
3.2
2.6
36.1
37.2
28.9
Cummins Inc
105.5
20,048
1.5
12.1
12.5
11.8
3.4
3.0
2.5
29.3
27.1
24.1
32.5
9,533
1.1
19.4
23.1
14.3
1.5
1.5
1.4
7.9
7.0
10.0
2.1
4,126
0.5
8.2
9.0
8.5
1.8
1.6
1.4
24.0
18.2
16.8
42.9
4,540
0.7
13.4
11.5
8.8
1.0
1.0
0.9
8.2
8.3
10.1
Daikin Industries Ltd
Dongfang Electric Corp Ltd-A
Doosan Heavy Industries
Drake & Scull International
Electrolux AB-Ser B
Harbin Electric Co Ltd-H
Hitachi Construction Machine
Hitachi Ltd
FY12 FY13E FY14E
RoE (%)
FY12 FY13E FY14E
FY12 FY13E FY14E
0.2
444
0.5
7.5
11.4
8.8
0.6
0.6
0.5
8.1
5.3
6.2
26.2
8,089
1.4
18.2
15.0
11.5
2.3
2.4
2.3
11.7
14.3
18.3
0.9
1,226
0.5
7.2
6.0
6.1
0.7
0.7
0.6
10.7
11.2
10.1
18.4
3,959
0.9
13.1
10.8
13.1
1.0
1.0
0.9
7.9
8.5
6.5
5.6
26,573
1.0
7.5
10.7
8.6
1.3
1.1
1.0
16.8
10.1
11.0
Hyundai Engineering & Const
66.8
7,438
1.0
13.2
14.5
11.3
1.9
1.7
1.5
16.5
12.6
14.2
LG Electronics Inc
67.2
10,991
1.1
-37.5
16.6
9.8
1.0
0.9
0.9
-2.2
5.7
9.0
4.6
15,363
0.7
47.4
23.5
17.7
1.0
1.0
0.9
2.3
4.2
5.6
Samsung Engineering Co Ltd
161.9
6,474
2.2
14.1
12.8
11.7
4.9
3.8
3.1
42.0
34.6
29.9
Shanghai Electric Grp Co L-H
0.4
7,398
0.7
10.9
9.9
9.5
1.2
1.1
1.0
11.1
11.1
10.7
107.1
94,380
0.7
13.3
10.9
10.0
2.2
2.0
1.8
15.8
18.5
18.6
1.0
2,664
0.6
9.5
10.6
9.9
1.2
1.1
1.0
-
9.4
10.4
Mitsubishi Heavy Industries
Siemens AG-Reg
Tbea Co Ltd-A
Source: Bloomberg, Emkay Research
Emkay Research
December 18, 2012
43
Engineering & Capital Goods
Monthly Update
Emkay Global Financial Services Ltd.
7th Floor, The Ruby, Senapati Bapat Marg, Dadar - West, Mumbai - 400028. India
Tel: +91 22 66121212 Fax: +91 22 66121299 Web: www.emkayglobal.com
DISCLAIMER: Emkay Global Financial Services Limited and its affiliates are a full-service, brokerage, investment banking, investment management, and financing group. We along with our affiliates
are participants in virtually all securities trading markets in India. Our research professionals provide important input into our investment banking and other business selection processes. Investors may
assume that Emkay Global Financial Services Limited and/or its affiliates may seek investment banking or other business from the company or companies that are the subject of this material and that the
research professionals who were involved in preparing this material may participate in the solicitation of such business. Our salespeople, traders, and other professionals may provide oral or written market
commentary or trading strategies to our clients that reflect opinions that are contrary to the opinions expressed herein, and our proprietary trading and investing businesses may make investment decisions
that are inconsistent with the recommendations expressed herein. In reviewing these materials, you should be aware that any or all of the foregoing, among other things, may give rise to real or potential
conflicts of interest. Additionally, other important information regarding our relationships with the company or companies that are the subject of this material is provided herein. This report is not directed to,
or intended for distribution to or use by, any person or entity who is a citizen or resident of or located in any locality, state, country or other jurisdiction where such distribution, publication, availability or use
would be contrary to law or regulation or which would subject Emkay Global Financial Limited or its group companies to any registration or licensing requirement within such jurisdiction. Specifically, this
document does not constitute an offer to or solicitation to any U.S. person for the purchase or sale of any financial instrument or as an official confirmation of any transaction to any U.S. person unless
otherwise stated, this message should not be construed as official confirmation of any transaction. No part of this document may be distributed in Canada or used by private customers in United Kingdom.
All material presented in this report, unless specifically indicated otherwise, is under copyright to Emkay. None of the material, nor its content, nor any copy of it, may be altered in any way, transmitted to,
copied or distributed to any other party, without the prior express written permission of Emkay. All trademarks, service marks and logos used in this report are trademarks or registered trademarks of
Emkay or its Group Companies. The information contained herein is not intended for publication or distribution or circulation in any manner whatsoever and any unauthorized reading, dissemination,
distribution or copying of this communication is prohibited unless otherwise expressly authorized. Please ensure that you have read “Risk Disclosure Document for Capital Market and Derivatives
Segments” as prescribed by Securities and Exchange Board of India before investing in Indian Securities Market. In so far as this report includes current or historic information, it is believed to be reliable,
although its accuracy and completeness cannot be guaranteed.
Emkay Research
December 18, 2012
44
www.emkayglobal.com