[英文調查報告書] 印度建設產業：2008年10月

Abstract

Construction industry expected to witness effective investment over Rs. 10,000 bn during the 11th five year plan.......

Construction is the second largest economic activity in the country next to agriculture. With its backward and forward linkages, Construction industry has generated employment for 33 mn people in the country. In FY 08, Construction sector contributed about 8.5% to the country' s GDP. Over past 3 years, construction as a percentage of GDP has increased from 8.0% in FY 06 to 8.5% in FY 08. The multiplier factor between growth rates of construction and GDP has been about 1.5X-1.6X.

Construction industry in India is highly fragmented. There are number of unorganised players in the industry which work on the subcontracting basis. Construction activity being labour intensive, construction companies have been focusing on mechanisation over past few years. Consequently, growth in quantum of labourers required has declined from 1.6% in FY 04 to 0.9% in FY 08. Mostly all projects in Construction industry are working capital intensive.

Construction project can be materialised through number of small contracts which mainly depend upon size of the project and diversified nature of activities to be carried out in the project. As a result, subcontracting is a common phenomenon in the construction industry. Some complex infrastructure and industrial projects call for specific expertise which a single contractor may be inept to execute. As a result, industry is witnessing rising joint ventures which help contractors to share professional and technological expertise.

Cost structure of the construction industry is dominated by raw material cost and subcontracting cost. Raw material cost which is the major cost accounts for 30-50% of the total cost and subcontracting cost accounts for about 20-40%. Cost structure of a particular construction company also depends on its order mix. This is because construction projects from different sectors require varied level of raw materials and subcontracting work. Major raw materials consumed by construction industry mainly include cement and steel. Almost all domestic cement consumption is attributed to the construction industry.

Steel requirements of the construction industry prominently includes long products like reinforcement bars/rods, structurals and galvasnized steel. Consumption of steel by construction industry has grown at a CAGR of 16.1% over past 5 years whereas cement consumption has registered a CAGR of 9.6%. Unprecedented rise in prices of these two raw materials has a direct impact on the cost of the project and in turn margins of construction companies. Profitability also depends upon the diversity of the projects a company can execute. Companies having strong presence in segments like power and industrial segment which are complex to execute, tend to enjoy higher margins.

Construction industry to a great extent is dependent on the investments in infrastructure, industrial and real estate sector. Planning Commission has envisaged an outlay of about US$ 500 bn during 11th five year plan for infrastructure development in the country. These investments in different sub segments of infrastructure would be achieved through a combination of Public, Public-Private-Partnerships. This total investment would ultimately translate into an effective construction investment of about Rs. 10,000 bn in next 4-5 years. Similarly, during the same period, construction industry could also witness order inflow above Rs. 1,500 bn on the back of investments planned by various manufacturing sectors. Real Estate segment also, throws opportunity of effective construction investment above Rs. 1,000 bn over next five years. Reflection of the same can be seen in bulging order book position of construction companies.

Strong multiple of order book to sales projects a decent revenue growth for construction companies. But the actual growth would be dependent on government infrastructure spending, scheduling of proposed expansion projects by manufacturing sectors and macroeconomic factors which govern investments in real estate sector. Going forward, construction companies will also have to tackle key challenge of input cost pressure.

With rise in input cost for Cement and Steel industries, prices of these commodities are expected to remain firm in the year FY 09. Alongwith this, delay in awarding of projects by government can also hamper the revenue growth and margins of construction companies.

For in-depth analysis and CARE' s view on the future of this sector, please refer to the exhaustive Report on Indian Construction Industry, October 2008 by CARE Research.

Executive Summary

1. Overview & Introduction

1.1 Construction component
1.2 Overview of broad sectors

2. Industry Characteristics

2.1 Linkages with economy
2.2 Fragmentation
2.3 Labour intensive
2.4 Highly customised projects
2.5 Varied profitability
2.6 Varied gestation periods of construction projects
2.7 Rising joint ventures (JVs)
2.8 Working-capital intensive
2.9 Rising net worth

3. Introduction to Contracts

3.1 Different entities in a Contract
3.2 Process of a Contract
3.3 Types of contracts
3.4 Private participation
3.5 Risks in construction industry

4. Demand Drivers

4.1 Infrastructure sector
4.2 Industrial sector

5. Cost Structure

5.1 Raw material cost
5.2 Subcontracting cost
5.3 Aggregate income & operating profit margin

6. Outlook & Challenges

6.1 Influence of Infrastructure sector
6.2 Influence of Real Estate sector
6.3 Influence of Industrial sector
6.4 Challenges for Construction industry

7. SWOT Analysis

8. Players

8.1 Hindustan Construction Company Ltd. (HCC)
8.2 Larsen & Toubro Ltd. (L & T)
8.3 Punj Lloyd Ltd. (Punj Lloyd)
8.4 Nagarjuna Construction Company Ltd. (NCC)
8.5 Gammon India Ltd. (Gammon)
8.6 IVRCL Infrastructure & Projects Ltd. (IVRCL)

FIGURES:

Fig. 1.1 Broad classification of construction sector
Fig. 1.2 Construction Component
Fig. 1.3 Investment in Infrastructure Sector
Fig. 1.4 Trend of Index of Industrial Production (IIP)
Fig. 2.1 Growth rates - Construction Vs GDP
Fig. 2.2 Trend of labourers employed
Fig. 2.3 Trend of net working capital requirement
Fig. 3.1 Flowchart of Process of Contract
Fig. 3.2 Comparison of different types of contracts
Fig. 4.1 Trend of Investment in Industrial Sector
Fig. 5.1 Overall Cost structure
Fig. 5.2 Raw material cost of different players in FY 07
Fig. 5.3 Trend of domestic consumption of cement
Fig. 5.4 Average price trend of cement per bag
Fig. 5.5 Trend of steel consumption by construction sector
Fig. 5.6 Price trend of long and galvanized steel products
Fig. 5.7 Subcontracting Cost of different companies
Fig. 5.8 Total income & operating profit margin
Fig. 5.9 Trend of WPI and Raw Materials prices in FY 08
Fig. 6.1 Infrastructure Outlay - 11th Five Year Plan
Fig. 6.2 Operating rates of some major industries
Fig. 6.3 Bifurcation of investments planned in industrial sector
Fig. 6.4 Order book position of Construction companies
Fig. 8.1 HCC - Share Price Trend
Fig. 8.2 HCC -Cost Structure
Fig. 8.3 HCC - Order Book position as on March 31, 2008
Fig. 8.4 L&T - Share Price Trend
Fig. 8.5 L&T - Cost Structure
Fig. 8.6 L&T - Order Book position as on March 31, 2008
Fig. 8.7 Punj Lloyd - Share Price Trend
Fig. 8.8 Punj Lloyd - Cost Structure
Fig. 8.9 Punj Lloyd - Order Book position as on March 31, 2008
Fig. 8.10 NCC - Share Price Trend
Fig. 8.11 NCC - Cost Structure
Fig. 8.12 NCC - Order Book position as on March 31, 2008
Fig. 8.13 Gammon - Share Price Trend
Fig. 8.14 Gammon - Cost Structure
Fig. 8.15 Gammon - Order Book position as on March, 2007
Fig. 8.16 IVRCL - Share Price Trend
Fig. 8.17 IVRCL - Cost Structure
Fig. 8.18 IVRCL - Order Book position as on March 31, 2008

TABLES:

Table 2.1 GDP and construction at factor cost (at current prices)
Table 2.2 Herfindahl Index of Concentration
Table 2.3 Profit margins of construction projects
Table 2.4 Joint Ventures
Table 2.5 Net working capital requirement
Table 2.6 Trend of networth (NW)
Table 2.7 Funds raised by construction companies
Table 3.1 Discription of different entities in a Contract
Table 4.1 Different Phases of NHDP
Table 4.2 Countryswise comparison of air passengers density
Table 4.3 Bifurcation of power generation capacity
Table 5.1 Break-up of different costs
Table 5.2 Overall cement demand-supply position
Table 5.3 Total production of long steel products
Table 5.4 Total consumption of long steel products
Table 5.5 Production and consumption of galvanised steel products
Table 6.1 Effective construction investment from Infrastructure sector
Table 6.2 Opportunities for Construction industry from some
infrastructure sub-sectors
Table 6.3 Effective construction investments from Real Estate sector
Table 6.4 Effective construction investments from from Industrial sector
Table 6.5 Order book to sales multiple
Table 6.6 Estimates of resource requirement for the construction industry
Table 7.1 SWOT Analysis
Table 8.1 HCC - Financials
Table 8.2 HCC - Key Projects Under Execution
Table 8.3 L & T - Financials
Table 8.4 L & T - Key Projects Under Execution
Table 8.5 Punj Lloyd - Financials
Table 8.6 Punj Lloyd - Key Projects Under Execution
Table 8.7 NCC - Financials
Table 8.8 NCC - Key Projects Under Execution
Table 8.9 Gammon - Financials
Table 8.10 Gammon - Key Projects Under Execution
Table 8.11 IVRCL - Financials
Table 8.12 IVRCL - Key Projects Under Execution