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Transcription:

inum Banking Cement Commercial Vehicle Cotton & Cotton Ya omponent Business Process Management (BPM) Construction Educat arel Chlor-Alkali CRAMS Crude Oil Gems & J oal Natural Gas Pesticides Power Generation Steel Pa anganese Ore Pharmaceutical Refining & Marketing eight Transport Chlor-Alkali Shipping Wheeler Tyre ewable Energy Sources n Made Fibre Banking Housing Finance Passenger Vehicl Hospital Roads & Highways Zinc & L Shipbuilding Aluminum nking Express Service Steel Two Wheeler Gems & Jewellery Express Service Cr Passenger Vehicle CRAMS otel ads Freight Transport ed September 2013 Tractor Reta Sugar Telecom Tower Two Wheeler Gems & Jewelle Telecom-Wireless Seed Cotton & Cotton Yarn Tracto Pesticide Natural Gas

With economies across globe passing through challenging economic and political environment, CARE Research expects demand for steel and plastic pipes industry to witness moderation in growth during the short to medium term period. However, CARE Research expects improvement in demand during the long run, on the back increasing demand arising from oil & gas, infrastructure, water supply and sanitation projects. s industry feels the pressure in short term, long term prospects intact. Time over-run in capex activity across globe to restrain growth steel pipes demand Demand for steel pipes & tubes industry is highly correlated with the expansion activity in the infrastructure development for the global oil & gas industry. significant slowdown in demand for steel pipes industry was largely on account lower exports especially to the European and US markets as well as falling oil & gas output in the domestic market. Going ahead, CARE Research expects the domestic demand for the steel pipes & tubes industry to grow at a modest pace during FY13 to FY18 period. With the industry focused on getting oil & gas to the consumer in more efficient and effective manner, pipeline construction across the world is expected to witness healthy increase. CARE Research expects total pipeline network across the world to witness a slower growth rate during the period CY13 to CY18. Global pipeline network to witness marginal growth Plastic pipes demand to remain steady gradual recovery in the real estate sector coupled with the GoI's dedicated focus on sanitation and agriculture sector is likely to support demand for plastic pipes at both the public and private level. CARE Research estimates the demand for plastic pipes [Poly Vinyl Choride (PVC), High-density polyethylene (HDPE)] etc to increase at a CAGR about 6% during FY13 to FY18 Raw material (RM) cost constitutes about 70-80% the total cost for domestic steel pipe companies. Delay in availability quality RM can be a major concern for the pipe producers delaying their production schedule. Also, any delay in their capex spending or cut back in oil & gas industry capex is expected to significantly impact the demand for SAW pipes. Leading pipe companies are at times subjected to increased competition from the unorganized sector and Chinese-made pipes. Challenges for pipe industry

Table Section- I CARE Research's Outlook Domestic pipe industry to witness moderation in growth... Lower capex activity across globe to restrain growth steel pipes demand Domestic Steel pipe & tube capacity utilization is likely to improve by FY16... Seamless pipes & tubes demand to record even slower growth Domestic order book position to remain subdued during FY14... Increasing in government & private spending to carry DI s demand... Global pipeline network to increase at a CAGR about 1.3%... Global energy outlook remains upbeat, to support pipelines... Plastic s demand to remain robust... Challenges for domestic pipe industry... Overview Overview Definition s Classification pipes Steel s Cast iron & Ductile pipes Cement pipes Plastic s Section- II Section Characteristics Capital Intensiveness and Fragmentation Lower Transportation Losses and Durability Cheap Mode Transport Reputation and Accreditations Working Capital Intensive Duty Structure Quality Raw Material (RM) Availability Range Products Demand Drivers Overview Derived demand Oil & Gas transport Replacement market Domestic Water Supply, Irrigation and Sanitation Projects Oil Exploration Supply & Demand Domestic installed capacity steel pipes & tubes Production and consumption steel pipes & tubes Import & export steel pipes & tubes Ductile iron pipes in India Domestic installed capacity plastic pipes & tubes Production and consumption plastic pipes & tubes Import & export plastic pipes & tubes

Table Pricing Information Steel s PVC s Cost & Margin Analysis Raw Materials (RM) expenses Raw material analysis Steel Polyvinyl Chloride (PVC) High-Density Polyethylene (HDPE) Power and Fuel (P&F) Cost Margins Analytical Model SWOT Analysis Porter's Five Force Model Domestic Player Prile Electrosteel Castings Ltd Finolex Industries Ltd Maharashtra Seamless Ltd Jindal Saw Ltd Welspun Corp Ltd Projected investment in infrastructure projects during the Twelfth Plan Projected steel pipes & tubes demand trend (FY13-FY18) Capacity addition in domestic steel pipes & tubes segment (FY13-FY16) Projected domestic demand for seamless steel pipes & tubes Automobiles production (FY10-Fy18) Trend in order book position key pipe companies Projected investment in irrigation, water supply and sanitation Projected world pipeline demand for oil and gas sector Technically recoverable shale gas SECTION- III Company Section List Graphs SECTION- I CARE Research's Outlook Projected domestic plastic pipes & tubes demand trend (FY13-FY17) SECTION- II Section Overview Trend in contribution industry to GDP(FY01-FY13) Classification s manufacturing Process Demand Drivers Demand Drivers Sector wise break up demand drivers Growth in production steel and plastic pipes v/s GDP growth (FY10-FY13) Total oil & gas pipeline in India (FY09-FY12)

Table World energy consumption by fuel type Historical and Forecasted(2005-2030) Life structure gas pipeline Life structure oil pipeline Urban rural population divide in India (1971-2011) Country-wise Percentage population using improved sanitation Worldwide OCTG market Supply & Demand Steel pipes & tubes installed capacity trend (FY09- FY13) Domestic Installed capacity top steel pipe manufacturers (FY13) Domestic installed capacity by type pipe manufacturers (FY13) Trend in domestic steel pipes & tubes production and consumption (FY09-FY13) Steel pipes & tubes import export scenario (Quantity) (FY09-FY13) Country wise export steel pipes & tubes (Quantity) (FY12-FY13) Major Ductile iron pipes capacity (FY13) Plastic pipes & tubes installed capacity trend (FY09-FY13) Domestic installed capacity top plastic pipe manufacturers (FY13) Plastic pipes & tubes production and consumption (FY09-FY13) Domestic PVC pipes demand break-up Plastic pipes & tubes export-import scenario (Quantity) (FY09-FY13) Country wise export plastic pipes & tubes (Quantity) (FY12-FY13) Pricing Information Trend in growth rate steel pipes prices (FY07-FY13) Trend in growth rate plastic pipes prices (FY07-FY13) Cost Analysis Cost components steel pipes & tubes manufacturer (FY13) Cost components plastic pipes & tubes manufacturer (FY13) and tube companies' raw material expenditure (as % net sales) (FY09-FY13) HR coil production and consumption (FY09-FY13) Steel plates production and consumption (FY09-FY13) Domestic prices- HR coil & plates (FY12-FY13) Domestic prices- PVC (FY12-FY13) Domestic HDPE prices (FY12- FY13) s & tubes companies' power & fuel expenditure (as % net sales) (FY09-FY13) Margins- steel pipes & tubes segment (FY08-FY13) Margins- plastic pipes & tubes segment (FY08-FY13) Interest expense as % operating prit for steel pipes & tubes segment Interest expense as % operating prit for plastic pipes & tubes segment Analytical Model SWOT Analysis Porter's Five Force Model Cost Structure as % net sales (FY13) Sales and PBIDT Margin (%)(FY10-FY12) SECTION- III Company Section

Shareholding Pattern (As on June 30, 2013) Share energy (2010-2040) Overview Table Comparative analysis different categories pipes Characteristics Certifications & Accreditations by major pipe companies RM consumption details (FY11-FY12) Demand Drivers Natural Gas Demand Break-up (FY11-FY17) Oil & gas pipeline mileage in US Existing pipeline in other developed countries Exploratory and Development Drilling activities in India (FY10-FY12) Metreage Drilled (FY07-FY12) Pricing Information Company-wise sales select steel pipes manufacturers (FY08- Fy13) Company-wise sales select plastic pipes manufacturers (FY08- FY13) Cost Analysis Company wise raw material expenses as % total sales (FY09-FY13) PVC India statistics (FY07-FY13) HDPE India statistics (FY07-FY13) Company wise power and fuel expenses as % total sales (FY09-FY13) Company background Financials (FY11-FY13) Corporate actions & remarks List Tables SECTION- I CARE Research's Outlook SECTION- II Section SECTION- III Company Section

Credit Analysis & Research Ltd. (CARE), promoted in 1993 by some the leading banks and financial institutions including Industrial Development Bank India (IDBI), Canara Bank and others is amongst the premier credit rating agencies in India and provides credit rating, research and information services. CARE Ratings is well equipped to rate all types debt instruments including Commercial Papers, Fixed Deposits, Bonds, Debentures, Hybrid Instruments, Preference Shares, Loans, Structured Obligations, Asset Backed Securities, Residential Mortgage Backed Securities etc. CARE's rating methodologies are in line with the best international practices. CARE Research & Information Services (CARE Research)is an independent division CARE. CARE Research services a variety business research needs with credible, high-quality research and analysis on various facets the Economy and Industries. Publications include Reports, Debt Market Review, Budget Analysis and other policy impact analysis and special commentaries on topical issues. CARE Research fers research reports on various industries. reports by CARE Research provide insightful data and analysis on various industry sectors and CARE's outlook on the same. To view list industries under our coverage you can visit https://researchreports.careratings.com/industries For any queries regarding the content & scope the report kindly reach us at careresearch@careratings.com To place an order, please contact: Manish Sukhija Business Development - CARE Research Credit Analysis & Research Ltd. 503, Kaledonia, Sahar Road, Off Western Express Highway, Andheri (E), Mumbai 400069 Cell: 9820353638, Tel.:+91-22-6144 3504 (Direct), +91-22-6144 3456 (Board) CORPORATE OFFICE MUMBAI Credit Analysis & Research Ltd. 4th Floor, Godrej Coliseum, Somaiya Hospital Road, Off Eastern Express Highway, Sion (East), Mumbai - 400 022. Tel: +91-22-6754 3456, Fax: +91-22- 6754 3457, E-mail: care@careratings.com 503, Kaledonia, Sahar Road, Off Western Express Highway, Andheri (E), Mumbai - 400069. Tel.: +91-22-6144 3456; Fax: +91-22-6144 3556 REGIONAL OFFICES AHMEDABAD 32, Titanium, Prahaladnagar Corporate Road, Satellite, Ahmedabad - 380015. Tel: +91-79-40265656 Fax: +91-79-40265657 BENGALURU Unit No.1101-1102, 11th Floor, Prestige Meridian II, No.30, M. G. Road, Bangalore - 560001. Tel: +91-80-41550445, 41654529 Telefax: +91-80-41514599 CHANDIGARH 2nd Floor, S.C.O. 196-197, Sector 34-A, Chandigarh - 160022 Tel: +91-172-5171100 / 09 CHENNAI Unit No. O-509/C, Spencer Plaza, 5th Floor, No. 769, Anna Salai, Chennai - 600002. Tel : +91-44-2849 7812/2849 0811 Fax: +91-44-28490876 HYDERABAD 401, Ashoka Scintilla, 3-6-520, Himayat Nagar, Hyderabad - 500029. Tel: +91-40 40102030 Fax: +91-40-40020131 JAIPUR 304, Pashupati Akshat Heights, Plot No. D-91, Madho Singh Road,Near Collectorate Circle, Bani Park, Jaipur - 302016. Tel: +91-141-4020213 / 14 KOLKATA 3rd Floor, Prasad Chambers, (Shagun Mall Building), 10A, Shakespeare Sarani, Kolkata - 700 071. Tel: +91-33- 40181600 / 02 Fax: +91-33-40181603 NEW DELHI 13th Floor, E-1 Block, Videocon Tower, Jhandewalan Extension, New Delhi - 110055 Tel: +91-11-45333200, Fax: +91-11-45333238 PUNE 9th Floor, Pride Kumar Senate, Plot No. 970, Bhamburda, Senapati Bapat Road, Shivaji Nagar, Pune - 411015. Tel:+91-20-40009000 MALDIVES 4th Floor, CHAMPA Center Point, Chandhanee Magu, Male' Republic Maldives. Tel:+960-3330560 / +9603330561 Mobile: +960-990 9981 / +960 7958107 Fax: +960-3330562 www.careresearch.in CIN: L67190MH1993PLC071691