Relationship between economy & industry Past performance Demand sustainable ? Nature of competition in the industry Change in life styles and social values Government policies and regulations.
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0 Jan-00 May-00 Oct-00 Mar-01 Aug-01 Jan-02 May-02 Oct-02 Mar-03 Aug-03 Dec-03 May-04 Oct-04 Mar-05 Jul-05 Dec-05 May-06 Oct-06 Mar-07 PSU Auto Bank Metal FMCG Oil & Gas
S A L E S
Human genome & health care Mobile phones FMCG Pagers,video tapes
Time
SWOT Analysis
Internal
Strengths
Weaknesses
External
Opportunities
Threats
Industry Cement
Strengths Growing demand from infrastructure and housing sector growing World class products, dominate domestic market
Weaknesses Transportation cost leads to regional supply constraints Cost of power and credit high, capital intensive, infrastructure bottleneck for export
Opportunities Increased demand as country develops, export potential Many products patents expiring , Intellectual property rights can protect new R&D
Threats Coal shortage, possible price control, cost of transportation (petroleum prices) Cheap imports from China etc.
Chemicals
Consumer durables
Seasonal demand, low purchasing power Price of imported crude oil, price controls on finished products High working capital requirement, technology and equipment outdated Fragmented and very competitive, price regulation by govt., low R&D
Huge potential market, increased sales with credit facilities Backward integration for oil exploration in India and abroad Global market
Cheap imports
Energy
Food processing
Availability of raw material, Government support, domestic market Huge untapped domestic demand, low cost of manufacturing,
Pharmaceuticals
Many patents expiring(can produce), new products can be patented growing health care industry Growing global markets, high fashion market
Textiles
Past performance
Profits Analyse revenues future demand , customers and their bargaining power Analyse costs fixed, variable, major inputs and supplier power, industry norms on credit Trends in ratios
Selected industry ratios (March 2007) PBDITA/ Total income Industry sets* % RONW % Current ratio Debt/Equity ratio Price/Book ratio A/C & refrigerators 6.27 15.21 1.21 0.69 4.73 Automobile 10.97 24.22 0.95 0.41 4.01 Cement 27.45 37.05 1.37 0.76 3.9 Cotton textiles 16.69 9.55 1.54 2.04 1.7 Crude oil & natural gas 47.48 25.9 1.07 0.01 2.19 Fertilisers 12.51 9.42 1.37 0.91 1.26 Food products 12.03 18.29 1.15 1.17 2.75 Paints & varnishes 17.18 34.33 1.04 0.28 5.99 Paper 17.98 12.5 1.38 1.19 0.99 Steel 23.64 30.74 1.42 0.96 2.26 Tyres & tubes 7.91 10.38 1.14 0.98 1.55 * predefined sets in the Prowess database
Selected ratios for the Cement industry over time Return on PBDITA/Total Net Current Debt/Equity Price/Book income % Worth % ratio ratio ratio 17.22 4.12 1.19 1.46 1 16.49 3.2 1.19 1.76 1.14 15.83 1.57 0.94 1.67 1.2 16.52 7.68 1.06 1.49 2.52 17.03 12.45 1.1 1.3 3.25 18.35 16.25 1.19 1 5.21 27.45 37.05 1.37 0.76 3.9
Government Policy
Social or political reasons for quotas, price controls, tariffs etc. Prices of petroleum prices Telecom licenses Luxury items, tobacco, liquor Credit policy and special rates