Easing of competition in transmission tower space:KRChoksey

PGCIL order disbursement was strong during 9MFY13 on back of planned outlay of Rs 1,00,000 cr for the 12th plan. Order outflow during 9M FY13 stood at Rs 13,924 cr v/s Rs 11,384 cr in 9MFY12. PGCIL awarded contracts worth Rs 3,252 cr in Dec 12 v/s Rs. 2,340 cr in Dec 11. We believe PGCIL order outflow would be at least Rs 20,000 cr for FY13.

Breakup of disbursement
During 9M FY13 Transmission line orders constituted major portion i.e. 44% of the total orders tendered (54% excluding 800KV HVDC Order), while substation orders constituted for 15% of the order outflow.

Transmission Orders
Transmission order disbursement was healthy as PGCIL awarded order worth Rs 6,132 cr in 9M FY13 v/s Rs 4,883 cr in 9M FY12. For Dec 12 it awarded Rs 2,500 cr of orders v/s Rs. 1,750 cr in Dec 11.

Competition Analysis in Transmission orders
Competition seems to have eased as number of participant were 23 players in tenders opened so far v/s 50 players approximately participated in FY12, which is a considerable fall.

Average Participants per tender have reduced from 9 participants in FY13 to 6 participants in 9MFY13. In FY12, 67% of the total tenders awarded had 6 to 9 participants’ v/s 4 to 7 players participating in 65% of the tenders in 9MFY13, which shows sign of easing competition.

As in past, maximum bids were made by established players like KEC, Kalpataru, Jyoti and L&T. Gammon India has continued participation in the PGCIL transmission tenders

KEC has won max order (~29%) from PGCIL followed by Kalpataru (21%), L&T (13%) and GIL (9%).

KEC won 5 contracts and its bid success ratio of 30% so far is on higher side considering historically it bid success ratio was in range of 5% to 10% (FY12 5.5%, FY11- 15%, FY10 -3%)

EMC, which from FY12, on its own (i.e. without J/Vs) won large size of orders (9%) with a bid success ratio of 27% has shown limited participation in tenders opened so far in the current fiscal. It participated only in 3 tenders.

Substation Order Disbursement
PGCIL substation order outflow stood at Rs 2,073 cr for 9MFY13 v/s 2,238 cr in 9MFY12. Although on a YoY basis there is decline in order outflow, current year order outflow is almost equal to full year order outflow in FY11 and FY10.

Substation - Competition Analysis
During 9MFY13, competition remained intense as ~ 35+ players participated in the PGCIL tenders. As in past, maximum bids were made by established players like ABB , Areva T&D, Siemens and Crompton

New Northeast Electric Group High voltage switchgear co won max number of orders (24%) followed by Siemens (15%), L&T (12.5%), Crompton (9%).

New Northeast Electric Group High voltage switchgear has bid aggressively in current fiscal capturing 24% of the orders with a bid success ratio of 100%. Siemens which won 15% of the orders had a bid success ratio of 57%.

BHEL, L&T, Jyoti Structures - less known in substation space, which had started bidding from FY12 continued participation in tender in 9MFY13 also, with L&T bagging Rs 260 cr (12.5%) of the orders awarded with bid success ratio of 31%.

Competition continued to remain intense as bid success ratio of majority of the players were on higher side.

Bodies Corporate holding more than 50% in Indian cos

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