Indian Infrastructure Sector - Will Momentum In Roads & Highways Segment Continue?

Published by: CRISIL Ltd.

Published: Sep. 1, 2007 - 212 Pages

Table of Contents

Sections

Indian IT industry: Moving up the value chain

Executive summary

1.0 Outlook (2005-06 to 2010-11)

Global IT industry: Stable future growth

Indian IT: Growth expected to be moderate

Indian IT: Moving from volume to value game

2.0 Infrastructure Management Services (IMS)

What is IMS?

IMS value chain

3.0 Performance review

Geographic mix: Europe continues to garner share

Vertical mix: Retail, healthcare and transportation emerging

Short-term indicators: Signs of a slowdown in the US

4.0 Profitability of Indian IT industry

Wage inflation in India

Impact of currency change

Boxes

1.0 Outlook

01 Research methodology

2.0 Profitability of Indian IT industry

01 Employee demand-supply model: Research methodology

Charts

1.0 Outlook

01 India’s share in offshore IT services market

02 Demand model

2.0 Infrastructure Management Services (IMS)

01 IMS composition

02 IMS value chain

4.0 Profitability of Indian IT industry

01 Employee demand-supply model

Figures

1.0 Outlook

01 Growth of Indian IT services exports

02 Share of service lines in IT services exports

03 Share of high-end services expected to increase

2.0 Infrastructure Management Services (IMS)

01 Indian IMS market: Share of players

3.0 Performance review

01 Indian IT industry exports - Key geographies

02 Percentage of revenues from Europe

03 Indian IT industry exports - Key verticals (2002-03)

04 Indian IT services exports - Key verticals (2005-06)

05 Client profile of large Indian players

06 Revenue per active client for large Indian players

07 US corporate profitability (PBT) annualised

08 Tech future growth index (TFGI) and IT budget increase

09 Employee additions and revenue growth for the IT services industry

10 Employee additions by large Indian players

4.0 Profitability of Indian IT industry

01 Wage inflation and operating margins of the industry

02 Average revenue per employee for large Indian players

03 Exchange rate movement

Tables

1.0 Outlook

01 Global IT industry

02 Indian industry export revenues

03 Share of India in global IT spend by service lines

2.0 Infrastructure Management Services (IMS)

01 Offshorability of IMS sub-segments

02 Revenues from IMS

3.0 Performance review

01 Summary of trends in global IT - ITES contracts

4.0 Profitability of Indian IT industry

01 IT services: Wage inflation

Sections

1.0 Global IT industry

Overview

Hardware industry

Software products industry

Global IT services industry

2.0 Indian IT Industry

Overview

Key trends

Risks faced by an IT company

3.0 Evolution of the Indian IT Industry

Phase I (1985-95) — Early development stage

Phase II (1995-2000) — Industry moves on growth track

Phase III (2001 onwards) — IT companies attain global scale

4.0 Domestic market

Overview

Domestic hardware market

Domestic IT services market

5.0 Export markets

Introduction

Exports by key vertical markets

Exports by service lines

6.0 Policy framework

Information Technology Act

Policies relating to inbound and outbound investments

Incentives for units located in a STP/EOU/SEZ

Other policy-related aspects

Fringe benefit tax (FBT) and its impact on IT-ITeS

State incentives and subsidies

Customs/Excise duty for hardware products

Reservations in the private sector

7.0 Human resources and infrastructure

Human resources

Infrastructure

Box

2.0 Indian IT Industry

01 Risks faced by an IT company

Charts

1.0 Global IT industry

01 Global IT service lines

02 IT services - Key business drivers

Figures

1.0 Global IT industry

01 Worldwide spend on IT and related business services

02 Spending on equipment and software in the US (quarterly)

03 Worldwide Hardware Spending

04 Movement of one USDollar vs one unit of base currency (2006)

05 Percentage change in R&D and SG&A expenses of major players

06 Worldwide spend on packaged software

07 World-wide IT services spending by foundation market

2.0 Indian IT Industry

01 Revenues of large Indian players

02 Man months billed of large Indian players

03 Cost structure and operating margins of large Indian players

04 Operating margins of large Indian players

4.0 Domestic market

01 Domestic IT-ITeS market

02 Domestic IT-ITeS market (2005-06)

03 Domestic IT industry - Key verticals

04 Domestic IT services market

05 Domestic software products market

06 Key segments of the domestic software products industry (2005-06)

07 Revenues of the domestic ITeS market

08 Key segments of the domestic ITeS market

5.0 Export markets

01 Indian IT-ITeS exports by geography

02 India's exports to Americas

03 Americas IT spending- 2005

04 Americas IT spending - 2005

05 India's exports to Europe

06 European IT services segment-wise spending (2005)

07 European IT spending by region (2005)

08 Asia Pacific IT spending (2005)

09 Asia Pacific - Growth in IT spending

10 Key verticals of Indian IT-ITeS industry (2006)

11 Worldwide financial services industry- IT spend

12 Indian IT services exports

Tables

1.0 Global IT industry

01 Worldwide IT spending forecasts

02 Hardware players - Revenue growth

03 Growth in worldwide GDP

04 Major players in the software industry

05 SG&A costs of major players

06 R & D costs of major players

07 Region-wise piracy rates

08 Worldwide IT, IT-services spending by region

09 Revenues of Major Players

10 MNC hiring in India

2.0 Indian IT Industry

01 Indian IT industry revenues

02 IT Services: Financials of large Indian players (2001-02 to 2005-06)

3.0 Evolution of the Indian IT Industry

01 SEI Quality Assessment

4.0 Domestic market

01 Volumes

02 Value

5.0 Export markets

01 Percentage of revenues from financial services

02 Percentage of revenues from telecom

03 Percentage of revenues from manufacturing

04 Percentage of revenues from healthcare

05 Percentage of revenues from utilities

06 Percentage of revenues from retail

07 Percentage of revenues from transportation and logistics

08 Indian IT services exports - Key service categories

6.0 Policy framework

01 Incentives offered to units located in a SEZ/STP

02 IT - Hardware tariffs

7.0 Human resources and infrastructure

01 Knowledge professionals employed by the Indian IT sector

02 Graduate labour pool in India

03 IT services — Wage inflation

04 Power tariffs

Section

1.0 Domestic players

2.0 International players

Tables

1.0 Domestic players

01 Tata Consultancy Services

02 Infosys Technologies Limited

03 Wipro Limited

04 Satyam Computer Services

05 Patni Computers

06 i-flex Solutions

07 Mphasis BFL

08 Polaris Software Laboratories

09 Hexaware Technologies

10 iGATE Global Solutions

11 Mastek Limited

2.0 International players

01 Oracle Corporation

02 Sun MicroSystems Inc

03 Unisys Limited

04 Capgemini Ernst & Young

05 Accenture Limited

06 Computer Science Corporation

07 Electronic Data Systems

08 Getronics Ltd

09 Hewlett-Packard Company

10 CA, Inc

11 Computacenter Plc

12 Logica CMG

13 CGI Group

14 DST Systems

15 Perot Systems

16 Atos Origin

17 Affiliated Computer Services

18 Dell Inc

19 Microsoft

20 IBM

Section

1.1 Sponge iron: Executive summary

1.2 Sponge iron: Margins and prices

Margins not expected to improve

Prices to increase marginally during the next 2 years

Iron ore drives the cost of raw materials

Over-capacity will limit the rise in prices

1.3 Sponge iron: Demand-Supply

Demand to remain strong in the short term

Scrap shortage fuels demand growth of sponge iron

Growth in consumption to move into a negative territory

Construction boom to drive steel demand - long products

Shortage of scrap expected to continue

Large integrated players to add capacity in long products

Large players to marginalise small IF/EAF operators

Over-capacity to continue dogging the industry

1.4 Sponge iron: Input prices

Iron ore expected to propel input costs

Prices of iron ore to remain firm

Delayed projects restrict supply growth

Miners still have the bargaining power

Coal will continue to remain in short supply

Natural gas deficit will remain

1.5 Sponge iron: Key success factors

Ensuring access to raw materials at low costs

Proximity to inputs and market

Financial structure

Economies of scale

Assured offtake

Extent of forward integration

2.1 Pig iron: Executive summary

2.2 Pig iron: Margins and prices

Operating margins are expected to remain stable for the next

2 years

Prices are expected to increase

Buoyant demand to improve the demand-capacity ratio

Iron ore prices will propel input prices

2.3 Pig iron: Demand-supply

Demand to remain buoyant

Demand from castings industry to remain firm

Effective demand-capacity ratio of pig iron industry impressive

Sections

2.4 Pig iron: Raw materials

Iron ore prices to drive up input costs

What it means to India in the long term?

2.5 Pig iron: Key success factors

Ensuring access to raw materials at low costs

Proximity to inputs and markets

Financial structure

Economies of scale

Extent of forward integration

Assured offtake

Figures

1.1 Sponge iron: Executive summary

01 Sponge iron: Demand-capacity ratio

1.2 Sponge iron: Margins and prices

02 Sponge iron (coal-based): Operating margins to remain stable

03 Sponge iron (coal-based): Price trend

04 Input cost to push up price levels

1.3 Sponge iron: Demand-Supply

05 A jump in sponge iron consumption

06 Landed price of scrap

07 Increasing share of sponge iron in the metallic pool

08 Sponge iron: Demand scenario

09 Production of long products

10 Russian exports of scrap declining

11 Market share of steel products (longs)

12 Sponge iron: Demand-capacity ratio

1.4 Sponge iron: Input prices

13 Iron ore: Trade dominated by three producers

14 Steel products: Low level of consolidation (per cent share of

production during 2005)

2.1 Pig iron: Executive summary

01 Pig iron: Demand-capacity ratio

Figures

2.2 Pig iron: Margins and prices

02 Operating margins to remain steady

03 Pig iron prices

04 Cost to support price levels

2.3 Pig iron: Demand-supply

05 Pig iron: Demand-capacity ratio

2.4 Pig iron: Raw materials

06 Coke prices

Tables

1.3 Sponge iron: Demand-Supply

01 Capacity additions in long products by integrated players

02 Capacity scenario

03 Cost structure of steel producers using the BF route

04 Cost structure of steel producers using the IF route

1.4 Sponge iron: Input prices

05 Some iron ore projects under implementation

06 Natural gas: Demand-supply forecast

2.4 Pig iron: Raw materials

01 Coke: Cost of production per tonne

Sections

1.0 Pig iron: Review

Margins improve by 50 basis points during the first 9 months

of 2006-07

Debt-servicing ratios improved

2.0 Pig iron: Player profiles

Kirloskar Ferrous Industries Ltd

Jayaswals NECO Ltd

KIC Metaliks Ltd

Sathavahana Ispat Ltd

Tata Metaliks Ltd

Lanco Industries Ltd

3.0 Sponge Iron: Review

Margins continue to move southwards

The topline increased by 35 per cent due to…

Squeeze in margins due to higher input costs

Industry sees red during the first 9 months of 2006-07

4.0 Sponge iron: Player profiles

Vikash Metal and Power Ltd

Tata Sponge Iron Ltd

Bihar Sponge Iron Ltd

Orissa Sponge Iron Ltd

Vikram Ispat (Grasim Industries Ltd)

Figures

1.0 Pig iron: Review

01 Margins improve marginally during April-December 2006

02 Prices and consumption

03 Domestic pig iron prices

04 Growth in automobile production

05 Growth in apparent consumption

06 Domestic demand-capacity ratio

07 Pig iron imports and exports

08 Prices and production

09 Pig iron cost build-up

10 Global coke prices

11 Coke inports and exports

12 Interest coverage ratio

Figures

3.0 Sponge Iron: Review

01 Margins fall during the first 9 months of 2006-07

02 Aggregate yearly financials

03 Higher volumes result in revenue growth

04 Finished steel production on the rise

05 Operating rate continues to be weak

06 International scrap prices on an upward trend

07 Global iron ore prices

08 Natural gas prices along the HVJ pipeline system scaling up

09 Capital charges as a per cent of net sales

Table

3.0 Sponge Iron: Review

01 Share of BF and IF/EAF route

Sections

1.0 Pig iron

2.0 Sponge iron

Tables

1.0 Pig iron

01 Pig iron: Growth rate forecast

02 Cast iron castings: Growth rate forecast

03 Pig iron: Capacity forecast

04 Pig iron: Production forecast

05 Pig iron: Demand-supply forecast

06 Pig iron: World apparent consumption

07 Pig iron: Consumption pattern

08 Cast iron castings: Consumption pattern

09 Pig iron: Domestic apparent consumption

10 Pig iron: Producer-wise capacity

11 Pig iron: Producer-wise production

12 Pig iron: Producer financials (April-December 2006-07)

13 Steel intermediates: Tariffs

2.0 Sponge iron

01 Sponge iron: Capacity forecast

02 Sponge iron: Production forecast

03 Sponge iron: World production

04 Sponge iron: Domestic apparent consumption

05 Sponge iron: Producer-wise capacity

06 Sponge iron: Producer-wise production

07 Sponge iron: Producer financials (April-December 2006-07)

Abstract

• What does National Highway Development Programme (NHDP) encompass?
• How are NHDP implemented?
• How is NHAI funding its projects?

• Expected NHAI’s Implementation schedule for next 5 years.
• Expected Investments in Roads sector in next five years.
• Other sectoral issues pertaining to the sector.

• Investment Managers
• Venture Capitalists
• Management Consultants
• Research Companies
• Private Equity Managers
• Market intermediates
• Banks
• Infrastructure industry participants
• Analyst
• Other Industry Professionals

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