Description
It explains about Industry Trends of construction industry, PEST Analysis of construction Industry, Competitor Analysis, SWOT analysis, Company Description, General Information about GMR group, it's Finance performance, SWOT analysis of GMR group and Various Strategies employed by GMR group.
GMR GROUP
(CONSTRUCTION INDUSTRY)
INDUSTRY ANALYSIS PART 1 Industry TRENDS : Indian and global perspectives
The construction sector includes areas such as heavy and civil engineering (highways, bridges, railway tracks, airports, etc.), real estate (both residential as well as commercial) development. Whether it be India or even around the globe , the construction industry has witnessed a boom . Today this industry has shown drastic increase whether it be in terms of the investments (FDI FLOW and the domestic investment) , or their contribution to the GDP of the economy , or their share in the creation of the employment opportunities. This boom in this industry is mainly because of the government policies of development and inclusive growth . to put india on the fast track of growth it is very important to make our infrastructure base strong . Connecting the rural India to the urban India , providing better channels of distribution , construction of dams to generate electricity , power plants .today the Indian government has taken up many infrastructure projects hence bringing this industry at new levels of growth and also this same trend is likely going to flow in the future. Even around the globe the same trend of growth can be witnessed. This is very much evident from the level of the FDI (FOREIGN DIECT INVESTMENT) flows to India. In order to invite such investments the government made some changes in the limit of FDI flows in this sector. The most important change was made in 2005 when the limit on FDI was made to 100% in all areas such as housing, commercial premises, hotels, resorts, hospitals, educational institutions, recreational facilities, city and regional level infrastructure (subjected to conditions).
(2011 -12) DESCRIPTION FIGURES
FDI EQUITY INFLOWS CONTRIBUTION IN GDP GROSS CAPITAL FORMATION EXPENDITURE BY THE GOVT.
RS. 42160 CRORES 5% 78% RS. 802,087 CRORES
GLOBAL STATISTICS
FIGURES
CONTRIBUTION TO WORLD EMPLOYMENT CONTRIBUTION TO WORLD GDP
7% 10%
(Source www. rediff.com)
PART 2
PEST ANALYSES
POLITICAL FACTORS The construction industry is directly affected by the policies drawn by the government .the most prominent example is that in 2005 the government removed the limit on the FDI and invited 100% flow in this sector . This resulted in a boom in the investment that poured into this sector . also many development and infrastructure projects taken up by the government like bridges dams , highways , airports. That have opened up many opportunities of business for this sector .
ECONOMIC FACTORS This industry is directly affected by any change in the prices of its input like cement , iron steel etc . this is bound to affect the demand from the private sector as any increase in the prices makes construction more costlier . Other factors affecting includes the location of the projects. Sometimes few factors of production are found relatively cheaper at few locations and sometimes the geographical features of a location support the timely completion of the project . due to the developmental plans of infrastructure development has ensured that this sector gets enough opportunities for growth .
SOCIAL FACTORS This sector has the social obligation of providing the general public with world class buildings by using top quality inputs. This aspect has significant importance as any negligence taken may result in severe casualties. The recent cases of the bridge collapsing in the Commonwealth games in new Delhi ,the metro bridge falling in New Delhi , many cases of the roads cracking down even before the rainy season ,and the most recent closing of the
airport metro line in new Delhi due to the risk of collapsing of the pillars within very few years of its launch shows the negligence on the part of the companies constructing them . They can not only result in losses but also pose severe danger to the lives of the people .Such companies may invite unwanted law suits and undue regulation by the government in its working.
TECHNOLOGICAL FACTORS In today?s world of information and technology, the construction sector is bound to undergo technological changes with new advance in its techniques . the construction of the sea link in Mumbai servers as the symbol of the new innovations in the art of construction. .innovations are not only taking place in the techniques but also better inputs are being researched . example like rust free cement which enhances the life of the projects.
LEADING COMPETITIOR JAYPEE GROUP (JAI PRAKASH ASSOCIATES) INTRODUCTION JAYPEE group is a n infrastructure conglomerate with other business interest in Cement , real estate ,hospitality , expressways , Sports , power generation . It was founded in the year 1957 . in the recent years it has taken up many key projects in the field of civil engineering , power generation that has made it as a top key player in the sector . also it is the 3rd largest construction company . the company has been assigned “CR 1” GRADE by ICRA indicating VERY STRONG CONTACT EXECUTION CAPACITY with best prospects of timely completion of projects without cost overruns etc for its hydropower projects .
FOUNDER YEAR OF FOUNDATION HEADQUATERS CHAIRMAN EMPLOYEES
Jai Prakash Gaur 1957 Noida , India Jai Prakash Gaur 20000
FINANCIAL FIGURES (2010 -2011) (IN CRORES) PROFIT AFTER TAX There has been almost a decrease of 31 % in profit after tax TOTAL NO OF EQUITY SHARES PUBLIC SHAREHOLDING (mutual funds, UTI, government holdings, Venture capital funds ) FINAL DIVIDEND PAID EARNING PER SHARE(face value of Rs. 2 per share) Rs. 1167.78
994,225,721 1,132,207,461
Rs. 170.12 5.27
SEGMENT WISE REVENUE (year ending 2011) (in lakhs)
Cement and cement products Construction Power Hospitality/hotel/golf course /sports Real estate Investments Infrastructure projects Others Unallocated TOTAL
Rs. 568338 Rs. 604745 Rs. 78442 Rs. 18103 Rs. 171027 Rs . 1741 Rs. 278413 Rs . 1036 Rs. 23387 Rs. 1745232
MAJOR PROJECTS IN DIFFERENT SECTORS CONSTRUCTION – In the recent it has grabbed many important projects among which the most important is the Yamuna Expressway from delhi to agra which will take it to new heights .also it is about 10 months above the schedule.
CEMENT – third largest cement producer in the company . With the ccurrent progress in its working it plans to expand in the cement sector in the country and place itself among the top manufactures in Asia .
ENERGY Jai prakash power ventures Limited (JPPL) is the largest hydro power producer in the country along with this it has also ventured into the thermal power sector as well.the most prominent project is its hydro power plant built on the river Alaknanda in Vishnuprayag in the Himalayas. REAL ESTATE It has launched many residential projects like Jaypee greens in the most prominent parts of several cities . HOSPITALITY Jaypee group has also ventured into hotels and hospitality industry with the chain of Jaypee hotels across different cities like Agra , Mussourie . (source www.jalindia.com)
SWAT ANALYSIS OF THE INDUSTRY
STRENGTH 1. Easily available raw material 2. Easy available skilled labour 3. Government facilitated developmental policies 4. Present boom in the real estate 5. Access to capital through FDI flow
WEAKNESS 1. 2. 3. 4. 5. Training of employees in new techniques Disadvantage of the location of projects Poor staff retention in this sector Undue regulation by the government Stiff competitors
OPPORTUNITIES 1. More new technologies being researched and developed 2. The present boom in the retail sector can be explored 3. More FDI flows coming in this sector 4. More govt. development plans to create more opportunities
THREAT 1. The stiff competition with big players like DLF , Punj Lloyd group ,Larsen &Tuobro Ltd . 2. Direct effect of the input prices on the demand 3. Safety issues are very important and possibility of casualty and law suits
COMPANY ANALYSIS GMR GROUP GMR group is a leading infrastructure enterprise involved with the building of airports , energy ,highways , and urban infrastructure sectors . Besides taking up successful projects in india, today this enterprise has made its global presence felt with projects going on in countries like South Africa , Indonesia , Singapore ,etc . GMR Infrastructure Limited is the infrastructure holding company formed to fund the capital requirements of various infrastructure projects across the sectors. It undertakes the development of the infrastructure projects through its various subsidiaries. The most recent of its projects is the Indira Gandhi international airport , New Delhi . They are also actively involved in community service as a part of corporate social responsibility. The Group?s commitment to inclusive growth is achieved through its corporate social responsibility arm – the GMR Varalakshmi Foundation (GMRVF). GMRVF works with the underprivileged sections of the community in all the locations where the Group has business interests.It works to promote education , health care ,Community Development . GMR grup now has entered into the world of sports also. It has now purchased the franchise of the IPL team Delhi Daredevils . This further helped this group in gaining a fresh identity and provided it an overall boost .GMR has now also entered into the field of aviation as well with its subsidiary as GMR AVIATION . It offers chartered aircrafts for flights within india and overseas too. They also provide consultancy services for business aviation and support for management of aircrafts.
( Source www.wikipedia.com)
HEADQUATERS FOUNDED NO . OF EMPLOYEES TYPE INDUSTRY SHAREHOLDING PATTERN
Bangalore 1978 8500 Private Construction Services
As per the company reports on 30th September 2011 , the total paid up , issued and subscribed equity share capital is Rs. 389,24,32,532 divided into 389,24,34,532 equity shares of Re. 1 each. Also 99.97 % of the issued , subscribed and paid up Share capital of the company are dematerialized . the company as yet has not accepted any deposits from the public . FOUNDER BOARD OF DIRECTOR EXECUTIVE CHAIRMAN MANAGING DIRECTOR G.M.RAO B. V. NAGESWARA RAO Grandhi Mallikarjuna Rao
(source www.gmrgroup.in)
As per the company reports (31March 2011) FINANCIAL PERFORMANCE Sales and other operating income Rs. 6,425.04 crore
This figure has improved since the last year as in ending 2010 it was 5,123 crore . Hence an increase of 25 % since the last period has been noticed . NET PROFIT (LOSS) Rs. ( 1022.77 )crore
In the year ending march 2011 ,the company made a net loss of 1022.77 crore as in the last year it was Rs. 193 crore . it severely affected the company as it brought the company„s earning per share in negative terms.
EPS (Earning per share )Rs.(loss)
(2.40 )
The earning per share of the company was negative to 2.40 to per equity share of Re.1 . in the previous accounting period it was 0.43 Rs. Per equity share TOTAL ASSETS Rs. 41327.45 crores
The total assets of the company have increased by 29.99% as the same figure last accounting period was Rs. 31793.20 crores PROFIT AFTER TAX (PAT)(loss) Rs. ( 929.64) crores
PAT decreased by 686.91% from the last year?s profit of Rs. 158.40 crores The most important reason for the negative returms is that most of the projects that are being undertaken by the company are in the initial stages of operations .and the profits from these projects are yet to incur in the future period . (source www.gmrgroup.com) Sector wise distribution of Net Revenue (FIGURES IN PERCENTAGE) SECTOR AIRPORT POWER ROAD OTHERS TOTAL %ages 46 42 7 5 100%
SECTOR WISE DISTRIBUTION OF EBITDA(figures in percentages) SECTOR %ages
AIRPORT POWER ROAD OTHERS
43 23 20 14
TOTAL
100%
SWOT ANALYSIS OF GMR COMPANY STRENGTH 1. Gained the reputation of a leading player in the infrastructure industry by grabbing the projects such as Rajiv Gandhi international airport , Hyderabad and Indira Gandhi international airport ,new delhi . 2. Rajiv gandhi international airport of Hyderabad was judged as the world?s best airport in terms of the quality of service and also the Indira Gandhi international airport has been appreciated for the service to the passengers .thus enhancing the reputation of the company in this sector making it among the key players in the sector 3. It has also made its presence felt in the road construction sector as well by gaining 3 highway projects and all the projects are in the progressive stage and are headed for a timely completion. 4. Due to constant efforts it has managed to become the forth largest power trader in the country. 5. The company has also made its presence felt in the energy sector by having three operational assets and 13 projects which are in the different stages of the construction projects . besides it also managed to get two energy transmission projects in Rajasthan. 6. It has successfully managed to make its presence felt in the global market as well.it won the bid for the construction of the Male international airport in Maldives .the construction started in 2010 . and they are 4 months ahead of the schedule . it also has 40 % ownership Istanbul Sahiba Gokcen InternationaL airpot in Istanbul . this global presence has further enhanced its reputation as a key player in this sector. 7. It has also won many awards among which some are “best infrastructure award””PPP Project of the year “- KPMG infrastructure award 2010. These recognition has added to the credibility of the company providing world class infrastructure to the country. 8. It has not suffered through any cash losses in the current year
1.
2. 3.
4. 5.
WEAKNESS Many of the assets of the company are exposed to risks which can severely affect the continuity of their business . for that matter indira gandhi international airport , new delhi has being considered as their most sensitive asset and thus in this particular regard the Business Continuity Plans (BCP) has been develop to deal with this scenario . It has received a setback in its power plant projects in Vemagiri and Kakinada leading to losses in the revenue generation It has been facing severe competition from the key players in the infrastructure sector thus leading it to loss in many important bids to some of the key projects in the country It also faces severe competition from the other international companies when it comes to the international projects . During the last fiscal year ,no dividend was provided to the shareholders due to the policy of „ploughing back? of the profits , which at the current scenario may not pose any danger but continuity of this trend may create dissatisfaction in the shareholders
OPPORTUNITIES 1. Due to the government major policy of development of the infrastructure base of the country , many projects are likely to come up in the coming years , thus providing ample opportunities of growth and improvement in the performance of the company 2. There are many other international projects that can be explored and gained which can happen only through its constant efforts and hard work 3. It has received a lot of appraise and accolades for its efforts in its major projects and has also been given a lot of awards for the same ,this is likely going to open up more opportunities for the company in the coming future 4. It has also ventured into other sector as well like the aviation industry , energy transmission , urban development , road and highways construction . the demand in all these sectors are still unexploited and provide better scope of development and growth.
THREATS
1. It has been facing severe competition from the top key players in the infrasture sector like wise Larsen& Tuobro ltd ,Punj Lloyd group , Jai Prakash Associates Ltd , Lanco Infratech Ltd etc .due to this cut throat competition has resulted in loosing many important bids to some key prejects of the government
2. It also has to face competition from other international companies in the infrastructure projects and have to make efforts to match their technology , management , and effectiveness. 3. Since it has also ventured into other sectors such as aviation , road construction , energy transmission and urban development and thus it has to face a all round competition from the key players which have been operating in the respective sectors since a long time. 4. It also has constant accountability towards its shareholders as they have the responsibility for providing them with good returns on the funds being invested by them . zero or no returns over a long period may create distrust among the shareholders leading to severe problems to the existence of the company.
VARIOUS STRATEGIES EMPLOYED BY THE COMPANY HIERARCHAL STRATEGIES 1. CORPORATE GOVERNANCE The company has formed a corporate governance committee in order to review and implement the corporate governance practices in the working of the company . it has developed the framework within which the company is bound to work within. Proper remuneration has been set up for the corporate governance committee. 2. Business Excellence under Malcolm Baldridge framework to make overall improvement in our processes and systems, gathered momentum during the year. 3. We have entered into an agreement with the Schulich School of Business of York University in Toronto, Canada, to develop a Schulich campus in Hyderabad, India. This has been done to provide a platform for the budding mangers to gain world class education in order to strengthen the human resource base of the organisation. 4. The company has also implemented the revised Enterprise risk management (ERM) within the different areas of its functioning. 5. It also providedits employees with risk newsletters and and training programmes to make them aware of the of the risk that may be faced. 6. Bid and opportunities framework has also been developed for the future references . 7. Also the company has profiled different top risks at the Group level , the sector level and the business unit level for the treatment and regular screening of the same. 8. Extended the scope of ERM to build resilience through Business Continuity Planning (BCP) and Disaster Recovery Planning (DRP).the output of the enterprise risk management provides the very essential inputs for the further strategic planning process.
BUSINESS DIVISION 1. GMR group has infrastructure as its core activity . since then it has also ventured into other activities and has progreesed that it has become a key player in that sector as well. Its latest venture would be in the aviation sector . but still it would take time to make its standing in this sector .it has also entered successfully into the energy sector as it bagged 2 major projects in rajasthan . 2. It also ventured into the urban infrastructure by the construction of residential plots in some of the major cities . it is also now actively engaged in the construction of roads and highways with certain projects like the ambala chandigarh highway along with few major in the south as well. 3. Apart from this it has now enetered into the field of education , health , empowerment and livelihood and community service through its foundation GMR Varalakshmi Foundation as a part of the social corporate responsibility. 4. Various business collaborations in different sectors of its working are
ENERGY COMPANY General Electric PURPOSE Suppliers of engines for Mangalore & Rajahmundry plants. We have entered into a Long Term Service Agreement with GE for both plants.
1. Korea Electric Power Corporation
Operations & Maintenance (O&M) partner for the Vemigiri Power Generation Project.
2. Shandong Electric Power Company (SEPCO)
Engineering, Procurement and Construction (EPC) contractor for Kamalanga Power project in Orissa
HIGHWAYS COMPANY United Engineers Berhad PURPOSE Equity partners and the Engineering, Procurement & Construction (EPC) and Operations & Maintenance (O&M) contractors for the Tambaram-Tindivanam and Tuni-Anakapalli road projects.
AIRPORTS COMPANY Malaysia Airport Holdings Berhad PURPOSE Equity Partner and Technical Services Advisor for HIAL at Shamshabad.Also consortium partner in developing the Istanbul Sabiha Gokcen International Airport (ISGIA) at Istanbul in Turkey Eraman Malaysia, the retail arm of the Malaysia Airport Holdings Berhad, is a JV partner involved in the modernization of the Delhi International Airport. MANSB will be the retail service provider Fraport AG Consortium partner in the restructuring and modernisation of Delhi airport. Fraport AG will be the airport operator. Equity Partner in both the Delhi International Airport and Hyderabad Airport projects of the Group. Equity Partner in the Greenfield airport project in Hyderabad Consortium partner in developing the Istanbul Sabiha Gokcen International Airport (ISGIA) at Istanbul in Turkey.
Malaysia Airports (Niaga) Sdn Bhd
Airports Authority of India
Government of Andhra Pradesh Limak Construction
REGIONAL STRATEGIES 1. Agreement signed between Spice Jet & GHIAL to improve & strengthen regional connectivity out of Hyderabad on April 8, 2011. 2. The company would also work in making Hyderabad as the regional hub of south india .also to convert the taxiway as the standby-runway on permanent basis. 3. It has entered into a collaboration with the Andhra bank as they would finance the rural entrepreneurship development institute in Rajam, Andhra Pradesh. 4. Another one of its collaboration is with Voltas in order to provide vocational training course on refrigeration and air conditioning at Hyderabad. 5. Another of its collaboration is with DAV (dayanand anglo vedic society ). It has collaborated wtih the GMRVF to run the Seetha Mahalakshmi DAV Public School at Palakonda, Andhra Pradesh and GMR Varalakshmi DAV in Rajam .
6. Ashok Leyland - Partnership with GMRVF offers vocational training in heavy vehicle repairs at Rajam . (source www.gmrgroup.in)
doc_892250991.docx
It explains about Industry Trends of construction industry, PEST Analysis of construction Industry, Competitor Analysis, SWOT analysis, Company Description, General Information about GMR group, it's Finance performance, SWOT analysis of GMR group and Various Strategies employed by GMR group.
GMR GROUP
(CONSTRUCTION INDUSTRY)
INDUSTRY ANALYSIS PART 1 Industry TRENDS : Indian and global perspectives
The construction sector includes areas such as heavy and civil engineering (highways, bridges, railway tracks, airports, etc.), real estate (both residential as well as commercial) development. Whether it be India or even around the globe , the construction industry has witnessed a boom . Today this industry has shown drastic increase whether it be in terms of the investments (FDI FLOW and the domestic investment) , or their contribution to the GDP of the economy , or their share in the creation of the employment opportunities. This boom in this industry is mainly because of the government policies of development and inclusive growth . to put india on the fast track of growth it is very important to make our infrastructure base strong . Connecting the rural India to the urban India , providing better channels of distribution , construction of dams to generate electricity , power plants .today the Indian government has taken up many infrastructure projects hence bringing this industry at new levels of growth and also this same trend is likely going to flow in the future. Even around the globe the same trend of growth can be witnessed. This is very much evident from the level of the FDI (FOREIGN DIECT INVESTMENT) flows to India. In order to invite such investments the government made some changes in the limit of FDI flows in this sector. The most important change was made in 2005 when the limit on FDI was made to 100% in all areas such as housing, commercial premises, hotels, resorts, hospitals, educational institutions, recreational facilities, city and regional level infrastructure (subjected to conditions).
(2011 -12) DESCRIPTION FIGURES
FDI EQUITY INFLOWS CONTRIBUTION IN GDP GROSS CAPITAL FORMATION EXPENDITURE BY THE GOVT.
RS. 42160 CRORES 5% 78% RS. 802,087 CRORES
GLOBAL STATISTICS
FIGURES
CONTRIBUTION TO WORLD EMPLOYMENT CONTRIBUTION TO WORLD GDP
7% 10%
(Source www. rediff.com)
PART 2
PEST ANALYSES
POLITICAL FACTORS The construction industry is directly affected by the policies drawn by the government .the most prominent example is that in 2005 the government removed the limit on the FDI and invited 100% flow in this sector . This resulted in a boom in the investment that poured into this sector . also many development and infrastructure projects taken up by the government like bridges dams , highways , airports. That have opened up many opportunities of business for this sector .
ECONOMIC FACTORS This industry is directly affected by any change in the prices of its input like cement , iron steel etc . this is bound to affect the demand from the private sector as any increase in the prices makes construction more costlier . Other factors affecting includes the location of the projects. Sometimes few factors of production are found relatively cheaper at few locations and sometimes the geographical features of a location support the timely completion of the project . due to the developmental plans of infrastructure development has ensured that this sector gets enough opportunities for growth .
SOCIAL FACTORS This sector has the social obligation of providing the general public with world class buildings by using top quality inputs. This aspect has significant importance as any negligence taken may result in severe casualties. The recent cases of the bridge collapsing in the Commonwealth games in new Delhi ,the metro bridge falling in New Delhi , many cases of the roads cracking down even before the rainy season ,and the most recent closing of the
airport metro line in new Delhi due to the risk of collapsing of the pillars within very few years of its launch shows the negligence on the part of the companies constructing them . They can not only result in losses but also pose severe danger to the lives of the people .Such companies may invite unwanted law suits and undue regulation by the government in its working.
TECHNOLOGICAL FACTORS In today?s world of information and technology, the construction sector is bound to undergo technological changes with new advance in its techniques . the construction of the sea link in Mumbai servers as the symbol of the new innovations in the art of construction. .innovations are not only taking place in the techniques but also better inputs are being researched . example like rust free cement which enhances the life of the projects.
LEADING COMPETITIOR JAYPEE GROUP (JAI PRAKASH ASSOCIATES) INTRODUCTION JAYPEE group is a n infrastructure conglomerate with other business interest in Cement , real estate ,hospitality , expressways , Sports , power generation . It was founded in the year 1957 . in the recent years it has taken up many key projects in the field of civil engineering , power generation that has made it as a top key player in the sector . also it is the 3rd largest construction company . the company has been assigned “CR 1” GRADE by ICRA indicating VERY STRONG CONTACT EXECUTION CAPACITY with best prospects of timely completion of projects without cost overruns etc for its hydropower projects .
FOUNDER YEAR OF FOUNDATION HEADQUATERS CHAIRMAN EMPLOYEES
Jai Prakash Gaur 1957 Noida , India Jai Prakash Gaur 20000
FINANCIAL FIGURES (2010 -2011) (IN CRORES) PROFIT AFTER TAX There has been almost a decrease of 31 % in profit after tax TOTAL NO OF EQUITY SHARES PUBLIC SHAREHOLDING (mutual funds, UTI, government holdings, Venture capital funds ) FINAL DIVIDEND PAID EARNING PER SHARE(face value of Rs. 2 per share) Rs. 1167.78
994,225,721 1,132,207,461
Rs. 170.12 5.27
SEGMENT WISE REVENUE (year ending 2011) (in lakhs)
Cement and cement products Construction Power Hospitality/hotel/golf course /sports Real estate Investments Infrastructure projects Others Unallocated TOTAL
Rs. 568338 Rs. 604745 Rs. 78442 Rs. 18103 Rs. 171027 Rs . 1741 Rs. 278413 Rs . 1036 Rs. 23387 Rs. 1745232
MAJOR PROJECTS IN DIFFERENT SECTORS CONSTRUCTION – In the recent it has grabbed many important projects among which the most important is the Yamuna Expressway from delhi to agra which will take it to new heights .also it is about 10 months above the schedule.
CEMENT – third largest cement producer in the company . With the ccurrent progress in its working it plans to expand in the cement sector in the country and place itself among the top manufactures in Asia .
ENERGY Jai prakash power ventures Limited (JPPL) is the largest hydro power producer in the country along with this it has also ventured into the thermal power sector as well.the most prominent project is its hydro power plant built on the river Alaknanda in Vishnuprayag in the Himalayas. REAL ESTATE It has launched many residential projects like Jaypee greens in the most prominent parts of several cities . HOSPITALITY Jaypee group has also ventured into hotels and hospitality industry with the chain of Jaypee hotels across different cities like Agra , Mussourie . (source www.jalindia.com)
SWAT ANALYSIS OF THE INDUSTRY
STRENGTH 1. Easily available raw material 2. Easy available skilled labour 3. Government facilitated developmental policies 4. Present boom in the real estate 5. Access to capital through FDI flow
WEAKNESS 1. 2. 3. 4. 5. Training of employees in new techniques Disadvantage of the location of projects Poor staff retention in this sector Undue regulation by the government Stiff competitors
OPPORTUNITIES 1. More new technologies being researched and developed 2. The present boom in the retail sector can be explored 3. More FDI flows coming in this sector 4. More govt. development plans to create more opportunities
THREAT 1. The stiff competition with big players like DLF , Punj Lloyd group ,Larsen &Tuobro Ltd . 2. Direct effect of the input prices on the demand 3. Safety issues are very important and possibility of casualty and law suits
COMPANY ANALYSIS GMR GROUP GMR group is a leading infrastructure enterprise involved with the building of airports , energy ,highways , and urban infrastructure sectors . Besides taking up successful projects in india, today this enterprise has made its global presence felt with projects going on in countries like South Africa , Indonesia , Singapore ,etc . GMR Infrastructure Limited is the infrastructure holding company formed to fund the capital requirements of various infrastructure projects across the sectors. It undertakes the development of the infrastructure projects through its various subsidiaries. The most recent of its projects is the Indira Gandhi international airport , New Delhi . They are also actively involved in community service as a part of corporate social responsibility. The Group?s commitment to inclusive growth is achieved through its corporate social responsibility arm – the GMR Varalakshmi Foundation (GMRVF). GMRVF works with the underprivileged sections of the community in all the locations where the Group has business interests.It works to promote education , health care ,Community Development . GMR grup now has entered into the world of sports also. It has now purchased the franchise of the IPL team Delhi Daredevils . This further helped this group in gaining a fresh identity and provided it an overall boost .GMR has now also entered into the field of aviation as well with its subsidiary as GMR AVIATION . It offers chartered aircrafts for flights within india and overseas too. They also provide consultancy services for business aviation and support for management of aircrafts.
( Source www.wikipedia.com)
HEADQUATERS FOUNDED NO . OF EMPLOYEES TYPE INDUSTRY SHAREHOLDING PATTERN
Bangalore 1978 8500 Private Construction Services
As per the company reports on 30th September 2011 , the total paid up , issued and subscribed equity share capital is Rs. 389,24,32,532 divided into 389,24,34,532 equity shares of Re. 1 each. Also 99.97 % of the issued , subscribed and paid up Share capital of the company are dematerialized . the company as yet has not accepted any deposits from the public . FOUNDER BOARD OF DIRECTOR EXECUTIVE CHAIRMAN MANAGING DIRECTOR G.M.RAO B. V. NAGESWARA RAO Grandhi Mallikarjuna Rao
(source www.gmrgroup.in)
As per the company reports (31March 2011) FINANCIAL PERFORMANCE Sales and other operating income Rs. 6,425.04 crore
This figure has improved since the last year as in ending 2010 it was 5,123 crore . Hence an increase of 25 % since the last period has been noticed . NET PROFIT (LOSS) Rs. ( 1022.77 )crore
In the year ending march 2011 ,the company made a net loss of 1022.77 crore as in the last year it was Rs. 193 crore . it severely affected the company as it brought the company„s earning per share in negative terms.
EPS (Earning per share )Rs.(loss)
(2.40 )
The earning per share of the company was negative to 2.40 to per equity share of Re.1 . in the previous accounting period it was 0.43 Rs. Per equity share TOTAL ASSETS Rs. 41327.45 crores
The total assets of the company have increased by 29.99% as the same figure last accounting period was Rs. 31793.20 crores PROFIT AFTER TAX (PAT)(loss) Rs. ( 929.64) crores
PAT decreased by 686.91% from the last year?s profit of Rs. 158.40 crores The most important reason for the negative returms is that most of the projects that are being undertaken by the company are in the initial stages of operations .and the profits from these projects are yet to incur in the future period . (source www.gmrgroup.com) Sector wise distribution of Net Revenue (FIGURES IN PERCENTAGE) SECTOR AIRPORT POWER ROAD OTHERS TOTAL %ages 46 42 7 5 100%
SECTOR WISE DISTRIBUTION OF EBITDA(figures in percentages) SECTOR %ages
AIRPORT POWER ROAD OTHERS
43 23 20 14
TOTAL
100%
SWOT ANALYSIS OF GMR COMPANY STRENGTH 1. Gained the reputation of a leading player in the infrastructure industry by grabbing the projects such as Rajiv Gandhi international airport , Hyderabad and Indira Gandhi international airport ,new delhi . 2. Rajiv gandhi international airport of Hyderabad was judged as the world?s best airport in terms of the quality of service and also the Indira Gandhi international airport has been appreciated for the service to the passengers .thus enhancing the reputation of the company in this sector making it among the key players in the sector 3. It has also made its presence felt in the road construction sector as well by gaining 3 highway projects and all the projects are in the progressive stage and are headed for a timely completion. 4. Due to constant efforts it has managed to become the forth largest power trader in the country. 5. The company has also made its presence felt in the energy sector by having three operational assets and 13 projects which are in the different stages of the construction projects . besides it also managed to get two energy transmission projects in Rajasthan. 6. It has successfully managed to make its presence felt in the global market as well.it won the bid for the construction of the Male international airport in Maldives .the construction started in 2010 . and they are 4 months ahead of the schedule . it also has 40 % ownership Istanbul Sahiba Gokcen InternationaL airpot in Istanbul . this global presence has further enhanced its reputation as a key player in this sector. 7. It has also won many awards among which some are “best infrastructure award””PPP Project of the year “- KPMG infrastructure award 2010. These recognition has added to the credibility of the company providing world class infrastructure to the country. 8. It has not suffered through any cash losses in the current year
1.
2. 3.
4. 5.
WEAKNESS Many of the assets of the company are exposed to risks which can severely affect the continuity of their business . for that matter indira gandhi international airport , new delhi has being considered as their most sensitive asset and thus in this particular regard the Business Continuity Plans (BCP) has been develop to deal with this scenario . It has received a setback in its power plant projects in Vemagiri and Kakinada leading to losses in the revenue generation It has been facing severe competition from the key players in the infrastructure sector thus leading it to loss in many important bids to some of the key projects in the country It also faces severe competition from the other international companies when it comes to the international projects . During the last fiscal year ,no dividend was provided to the shareholders due to the policy of „ploughing back? of the profits , which at the current scenario may not pose any danger but continuity of this trend may create dissatisfaction in the shareholders
OPPORTUNITIES 1. Due to the government major policy of development of the infrastructure base of the country , many projects are likely to come up in the coming years , thus providing ample opportunities of growth and improvement in the performance of the company 2. There are many other international projects that can be explored and gained which can happen only through its constant efforts and hard work 3. It has received a lot of appraise and accolades for its efforts in its major projects and has also been given a lot of awards for the same ,this is likely going to open up more opportunities for the company in the coming future 4. It has also ventured into other sector as well like the aviation industry , energy transmission , urban development , road and highways construction . the demand in all these sectors are still unexploited and provide better scope of development and growth.
THREATS
1. It has been facing severe competition from the top key players in the infrasture sector like wise Larsen& Tuobro ltd ,Punj Lloyd group , Jai Prakash Associates Ltd , Lanco Infratech Ltd etc .due to this cut throat competition has resulted in loosing many important bids to some key prejects of the government
2. It also has to face competition from other international companies in the infrastructure projects and have to make efforts to match their technology , management , and effectiveness. 3. Since it has also ventured into other sectors such as aviation , road construction , energy transmission and urban development and thus it has to face a all round competition from the key players which have been operating in the respective sectors since a long time. 4. It also has constant accountability towards its shareholders as they have the responsibility for providing them with good returns on the funds being invested by them . zero or no returns over a long period may create distrust among the shareholders leading to severe problems to the existence of the company.
VARIOUS STRATEGIES EMPLOYED BY THE COMPANY HIERARCHAL STRATEGIES 1. CORPORATE GOVERNANCE The company has formed a corporate governance committee in order to review and implement the corporate governance practices in the working of the company . it has developed the framework within which the company is bound to work within. Proper remuneration has been set up for the corporate governance committee. 2. Business Excellence under Malcolm Baldridge framework to make overall improvement in our processes and systems, gathered momentum during the year. 3. We have entered into an agreement with the Schulich School of Business of York University in Toronto, Canada, to develop a Schulich campus in Hyderabad, India. This has been done to provide a platform for the budding mangers to gain world class education in order to strengthen the human resource base of the organisation. 4. The company has also implemented the revised Enterprise risk management (ERM) within the different areas of its functioning. 5. It also providedits employees with risk newsletters and and training programmes to make them aware of the of the risk that may be faced. 6. Bid and opportunities framework has also been developed for the future references . 7. Also the company has profiled different top risks at the Group level , the sector level and the business unit level for the treatment and regular screening of the same. 8. Extended the scope of ERM to build resilience through Business Continuity Planning (BCP) and Disaster Recovery Planning (DRP).the output of the enterprise risk management provides the very essential inputs for the further strategic planning process.
BUSINESS DIVISION 1. GMR group has infrastructure as its core activity . since then it has also ventured into other activities and has progreesed that it has become a key player in that sector as well. Its latest venture would be in the aviation sector . but still it would take time to make its standing in this sector .it has also entered successfully into the energy sector as it bagged 2 major projects in rajasthan . 2. It also ventured into the urban infrastructure by the construction of residential plots in some of the major cities . it is also now actively engaged in the construction of roads and highways with certain projects like the ambala chandigarh highway along with few major in the south as well. 3. Apart from this it has now enetered into the field of education , health , empowerment and livelihood and community service through its foundation GMR Varalakshmi Foundation as a part of the social corporate responsibility. 4. Various business collaborations in different sectors of its working are
ENERGY COMPANY General Electric PURPOSE Suppliers of engines for Mangalore & Rajahmundry plants. We have entered into a Long Term Service Agreement with GE for both plants.
1. Korea Electric Power Corporation
Operations & Maintenance (O&M) partner for the Vemigiri Power Generation Project.
2. Shandong Electric Power Company (SEPCO)
Engineering, Procurement and Construction (EPC) contractor for Kamalanga Power project in Orissa
HIGHWAYS COMPANY United Engineers Berhad PURPOSE Equity partners and the Engineering, Procurement & Construction (EPC) and Operations & Maintenance (O&M) contractors for the Tambaram-Tindivanam and Tuni-Anakapalli road projects.
AIRPORTS COMPANY Malaysia Airport Holdings Berhad PURPOSE Equity Partner and Technical Services Advisor for HIAL at Shamshabad.Also consortium partner in developing the Istanbul Sabiha Gokcen International Airport (ISGIA) at Istanbul in Turkey Eraman Malaysia, the retail arm of the Malaysia Airport Holdings Berhad, is a JV partner involved in the modernization of the Delhi International Airport. MANSB will be the retail service provider Fraport AG Consortium partner in the restructuring and modernisation of Delhi airport. Fraport AG will be the airport operator. Equity Partner in both the Delhi International Airport and Hyderabad Airport projects of the Group. Equity Partner in the Greenfield airport project in Hyderabad Consortium partner in developing the Istanbul Sabiha Gokcen International Airport (ISGIA) at Istanbul in Turkey.
Malaysia Airports (Niaga) Sdn Bhd
Airports Authority of India
Government of Andhra Pradesh Limak Construction
REGIONAL STRATEGIES 1. Agreement signed between Spice Jet & GHIAL to improve & strengthen regional connectivity out of Hyderabad on April 8, 2011. 2. The company would also work in making Hyderabad as the regional hub of south india .also to convert the taxiway as the standby-runway on permanent basis. 3. It has entered into a collaboration with the Andhra bank as they would finance the rural entrepreneurship development institute in Rajam, Andhra Pradesh. 4. Another one of its collaboration is with Voltas in order to provide vocational training course on refrigeration and air conditioning at Hyderabad. 5. Another of its collaboration is with DAV (dayanand anglo vedic society ). It has collaborated wtih the GMRVF to run the Seetha Mahalakshmi DAV Public School at Palakonda, Andhra Pradesh and GMR Varalakshmi DAV in Rajam .
6. Ashok Leyland - Partnership with GMRVF offers vocational training in heavy vehicle repairs at Rajam . (source www.gmrgroup.in)
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