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Wind Turbine Market – India March 2013


Executive Summary

Market

 Wind Energy has been the fastest growing renewable energy sector in the country till FY2012  With a cumulative installed capacity of over -- GW (by Dec 2012) wind power currently accounts for almost -% of the total installed capacity in the renewable energy sector  The wind turbine sector is forecasted to grow at a CAGR of --% to reach -- GW by 2017  The market has slumped p currentlyy due to withdrawal of the flagship g p AD & GBI scheme byy the Government

Drivers

Drivers & Challenges

Trends Regulatory B di Bodies

Challenges

– Huge Untapped Wind Power Potential – India Remains Energy Deficient – Global Drive towards Clean Energy – Volatile Oil Prices – Depleting Coal Reserves

– Withdrawal of GBI and AD Schemes – Rise in Raw material Prices – Land Acquisition Problems

 Potential of Off-Shore Capacity  Vertical Integration g  Hybrid Generators  Advent of Small Wind Turbines  Major Regulatory Bodies & their roles  Policy and Regulatory Incentives Major Players

Competitive L d Landscape

Company A

Company B

Company C

Company D

Company E

Company F

WIND TURBINE MARKET IN INDIA 2013.PPT

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•Macroeconomic Indicators •Introduction •Market Overview • Indian Market • EXIM

•Drivers & Challenges •Trends •Regulatory Bodies •Competitive Landscape •Market Entry •Appendix WIND TURBINE MARKET IN INDIA 2013.PPT

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Economic Indicators (1/3) GDP at Factor Cost: Quarterly

SAMPLE

INR tn 14

13.06 12.39

12

11.47

12.94 12 94 12.29 11.52

11

10.58

10.70

13

13.95 13.24

13.40 12.62

12.13

11.66

10 Q1

Q2 2009-10

2010-11

Q3 2012-13

2011-12

Q4

Inflation Rate: Monthlyy % 1.0

0.94

0.93

08 0.8 0.6

0.47

0.46

0.46

Oct 2012 - Nov 2012

Nov 2012 - Dec 2012

0.4 0.2 0.0

Jul 2012- Aug 2012

Aug 2012 - Sep 2012

Sep 2012 - Oct 2012

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Wind turbines consists of twelve distinct and vital components Wind Turbine Generator (WTG)

1

2

3

4

5

6

7

8

9

10

11

12

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Wind turbine market is poised to grow with the potential revamp of the Generation Based Incentive scheme Market Overview • Wind Energy has been the fastest growing renewable energy sector in the country till FY2012 • This sector is forecasted to grow at a CAGR of --% to reach --GW by 2017 • Cumulative C l ti iinstallations t ll ti off wind i d tturbine bi generators t stands t d att -- GW by b 2012 end d • India has a manufacturing capacity of -- GW annually • More than --% of the nation’s wind installations to date is concentrated in just five states in southern and western India – Tamil Nadu, Andhra Pradesh, Karnataka, Maharashtra, and Gujarat • The market has slumped currently due to withdrawal of the flagship Accelerated Depreciation & Generation Based Incentive scheme by the Government • However, the Ministry of New and Renewable Energy have indicated that the GBI scheme might be reinstated in the 2013 Union Budget

Market Size: Historical & Forecast (2007-2017) GW x11

yy xx x1

x3

x5

x2

x4

x6

2007

2008

2009

2010

2011

2012

x7

2013e

WIND TURBINE MARKET IN INDIA 2013.PPT

x8

2014e

x9

2015e

x10

2016e

2017e 6


Drivers & Challenges – Summary

Drivers

Challenges

Huge Untapped Wind Power Potential

Withdrawal of GBI and AD Schemes

India Remains Energy Deficient

Rise in Raw material Prices

Global Drive towards Clean Energy

Land Acquisition Problems

Volatile Oil Prices Depleting Coal Reserves

WIND TURBINE MARKET IN INDIA 2013.PPT

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Roll back of incentive schemes have led to an ebb in the wind turbine manufacturing sector Withdrawal of GBI and AD Schemes

Impact

• Wind turbine installation has registered slow growth in FY2013, in sharp contrast to the past year’s growth • Tamil T il N Nadu, d the h windiest i di state, capacity i addition ddi i h has ffallen ll b by more than h h half lf while hil R Rajasthan j h has witnessed a drastic decline • Withdrawal of generation-based incentive (GBI) and accelerated depreciation (AD) schemes have emerged as the main reasons behind this debacle • The GBI scheme ((launched in 2009)) was in addition to the ggovernment’s p promotional scheme,, AD, launched in the 1990s • Accelerated depreciation (AD) was withdrawn from April 1st, 2012 • GBI also lapsed in March 2012 and was not renewed

GBI Scheme

Accelerated Depreciation Scheme

• It entitled the wind energy producer to get INR 0.50/unit (over and above the tariff) of electricityy produced for the first 4 to 10 years of project life subject to maximum cap of INR 6.2 mn/MW • The scheme could be availed only if AD Scheme had not been availed

• Wind energy producer were entitled to claim up to 80 % AD in the 1st yyear itself (against g the normal rate of 15%) • Over the years AD was the major driver for the development of the wind industry in the country

However, the Ministry of New and Renewable Energy has given hope to wind power developers and turbine manufacturers that the GBI scheme may be reinstated in the near future WIND TURBINE MARKET IN INDIA 2013.PPT

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Trends – Summary

Potential of Off-Shore Capacity

Vertical Integration

Key Trends Advent of Small Wind Turbines

Hybrid Generators

SAMPLE WIND TURBINE MARKET IN INDIA 2013.PPT

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Bigger wind farm developers are slowly moving towards vertical integration along the industry value chain Vertical Integration

Wind Power – Line of Business’

1

2

3

4

5

6

7

8

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Company A’s share of Indian wind-turbine market continues to be on the decline Wind Turbine Market – Market Share • The number of turbine suppliers in India almost doubled to -- in 2012 as compared to FY2010

x6 x5 x1 x4

x3

a

b

c

d

e

f

x2 FY2012

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Competitive Benchmarking (2/5) Key Ratios of Top 5 Companies – Operational Basis (FY 2012) (1/3) Operating Margin

%

A

B

Net Margin

C

D

E

• A recorded operating margin of --%, higher than that of B, C and E which recorded operating margin of --%, --% and --% respectively but lower than that of D which recorded operating margin of --% • Net margin for all the five company’s are negative, however, A recorded the highest net margin of --%

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Company A (1/5) Company Information Corporate Address

Street A Maharashtra

T l No. Tel N

+91-22-12345678 91 22 12345678

Fax No.

+91-22-12345679

Website

www.xyz.com

Year of Incorporation

19--

Ticker Symbol

--

Stock Exchange

BSE

Offices and Centres – India

Mumbai Head Office

Products and Services Category

Products/Services

Wind Sector

Wind turbine generators, wind power systems and related components such as drive d i systems, t annular l generators t etc. t

Project Services

Land sourcing and permitting, wind resource assessment and installation and commissioning services

Others

Sale/sub-lease of land; infrastructure d l development; t sale l off ffoundry d and d fforging i components; generation and sale of power

Key People N Name

D i ti Designation

Person A

Founder, Chairman, MD

Person B

CFO

Person C

Global Head of Public Relations

Person D

Chief Economist 13


Company A – Shareholding Pattern (2/5) Shareholders of the Company as on 28.09.2012 Name

Ownership Structure

No. of Shares held

Foreign Holdings Corporate p Bodies

P

-b

Q

--

R

--

S

-Total

-a

Note: AGM as of 28th Sep 2012 WIND TURBINE MARKET IN INDIA 2013.PPT

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Company A (3/5) Financial Snapshot Total Income

Key Ratios Particulars

Net Profit/Loss

INR bn

INR bn

2009

2010

2011

2012

Financial Summary

y-o-y change (2012-11)

2012

2011

2010

2009

Profitability Ratios Operating Margin Net Margin Profit Before Tax Margin Return on Equity Return on Capital Employed Return on Working Capital Return on Assets Return on Fixed Assets

Cost Ratios

• The company incurred a net loss of INR -- bn in FY 2012, as compared to net loss of INR -- bn in FY 2011 p y reported p total income of INR -- bn in FY 2012, • The company registering an increase of --% over FY 2011 • The company earned an operating margin of --% in FY 2012, an increase of -- percentage points over FY 2011 • The company reported debt to equity ratio of -- in FY 2012, an increase of --% over FY 2011

Key Financial Performance Indicators Indicators

Value (26/12/2012)

Market Capitalization (INR mn) Total Enterprise Value (INR mn) EPS (INR) PE Ratio (Absolute)

-----

Operating costs (% of Sales) Administration costs (% of Sales) Interest costs (% ( of Sales))

Liquidity Ratios Current Ratio Cash Ratio

Leverage Ratios Debt to Equity q y Ratio Debt to Capital Ratio Interest Coverage Ratio

Efficiency Ratios Fixed Asset Turnover Asset Turnover C Current tA Assett Turnover T Working Capital Turnover Capital Employed Turnover Improved

Decline

15


Company A (4/5) Business Highlights Description

News • -- is promoted by the -- and was incorporated in -- for the manufacture/assembly of wind turbine generators (WTGs)

Overview

• -- group acquired a controlling stake in --, an established -- design and consulting house in the wind energy business in 2007 , through a holding company --

• It has two full-scale full scale production facilities in -- and -- with a total annual capacity of 950 MW. Network

• The Indian manufacturing plant serves the Asia-Pacific market

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SWOT Analysis: Company A (5/5) • Point 1

• Point 2

• Point 3

S

W

T

O

• Point 4

SAMPLE WIND TURBINE MARKET IN INDIA 2013.PPT

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Market Entry

SAMPLE

Market Entry Strategies – Indian Wind Turbine Industry (1/2)

Header 1

Header 2

Header 3

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Market Research Report : Wind Turbine Market in India 2013