Indian Electronics Industry 2013
Major opportunity lies in the electronics manufacturing industry as demand and supply gap is expected to further increase. Most raw materials are not available locally and need to be imported from China, Taiwan and Korea. As per Department of Electronics & Information Technology (DeitY), demand for electronics hardware in India is Rs.3.4 lakh crores in FY12 and is projected to grow at a CAGR of 25% to Rs 20 lakh crores by FY20. But the estimated production currently at Rs.1.6 lakh crores is expected to grow at a CAGR of 15% to reach only Rs.5.2 lakhs by FY20, creating a gap of Rs.14.8 lakh crores in demand and production. This creates a unique opportunity for electronics companies looking at India as their next manufacturing hub with a large domestic demand.
Major segments within electronics
Segment |
Production (INR Cr) |
Growth FY11-12 |
Products |
Consumer Electronics |
34,500 |
7% |
Mobile phones, Television sets, DVD/MP3 players, |
Industrial Electronics |
18,500 |
10% |
Process control instrumentation, Automation systems, |
Computer Hardware |
16,500 |
10% |
Personal computers, Servers, Workstations, |
Communication & Broadcast Equipment |
40,500 |
14% |
Digital exchanges, Transmission equipment, |
Strategic Electronics |
8,500 |
10% |
Satellite-based communications, Navigation |
Electronic Components |
25,000 |
14% |
Picture tubes, Diodes, Transistors, Power devices, |
Valuation of Electronics Manufacturing Companies
Company |
EV/EBITDA (ttm) |
EV/Sales (ttm) |
Videocon Industries |
5.0x |
0.6x |
MIRC Electronics |
6.6x |
0.1x |
Trend Electronics |
5.8x |
0.3x |
Honeywell Automation India |
15.6x |
1.5x |
Industry Median |
5.8x |
0.7x |
Industry median includes Genus Power Infrastructures, Bartronics India, Zicom Electronic Security Systems, Centum Electronics, PG Electroplast, JCT Electronics, Mobile Telecommunications, Nelco, Avon Corporation, Ashco Niulab Industries, Minal Industries, Zen Technologies, APLAB, Sharp India, Shilchar Electronics, Jasch Industries, BPL, Control Print, Circuit Systems India, Fine, Incap, Gujarat Poly Avx Electronics, Bcc Fuba India, Samtel India, Sparc Systems, Linaks Microelectronics, Integrated Technologies, Samtel Color, Max Alert Systems, Mather & Platt Fire Systems
End Notes
Source: Analyst Reports, Company Press Releases, Yahoo Finance
FY: Financial Year ending March
All multiples are as on Dec 31st 2012
Conversion Rate: 1 USD = 50 INR
ttm: trailing twelve months, or last twelve months
EBITDA: Earnings Before Interest, Taxes, Depreciation & Amortization - a measure of company’s profitability
EV: Enterprise Value - a measure of company’s worth