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Porter's Five Forces in Infrastructure Sector

The analysis of Porter's five forces in the transport infrastructure sector indicates medium competitive rivalry, low threat of substitutes and new entrants, high bargaining power of buyers (the Government), and low bargaining power of suppliers. The document also presents financial data for various companies in the sector, highlighting investment opportunities due to low debt-to-equity ratios and potential for growth. Overall, the sector shows promise despite current low returns compared to other stocks.

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Avinaw Kumar
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8 views1 page

Porter's Five Forces in Infrastructure Sector

The analysis of Porter's five forces in the transport infrastructure sector indicates medium competitive rivalry, low threat of substitutes and new entrants, high bargaining power of buyers (the Government), and low bargaining power of suppliers. The document also presents financial data for various companies in the sector, highlighting investment opportunities due to low debt-to-equity ratios and potential for growth. Overall, the sector shows promise despite current low returns compared to other stocks.

Uploaded by

Avinaw Kumar
Copyright
© All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as TXT, PDF, TXT or read online on Scribd

Porters five forces analysis

Competitive Rivalry-Medium – In the past, competition in this sector was high in


terms of bidding for Government projects. However, in the more recent years,
bidding has rationalised and the competition between players has become stable.

Threat of substitutes-Low – Threat is low as there aren’t substitutes for transport


infrastructure like roads and railways, for airports etc. However, if technology
like Hyper Loop becomes functional, it can possess some threat to traditional modes
of transport.

Threat of new entrants-Low - Threat is low due to the capital intensive nature of
the industry; all the capable players have already entered in the sector. Also,
there aren’t much foreign players involved in infrastructure projects in India

Bargaining power of buyers-High – Buyer here is the Government, therefore there is


high bargaining power, as it is the Government that makes the final decision about
whom the tender for a project goes to

Bargaining power of suppliers- Low – Bargaining power of suppliers is low as the


order quantity by buyers is in bulk.

Company Price [Link] ROE% Debt to Debt Net Profit Year Close
Price
NCC 74.6 4549.46 5.18 0.34 281 2011 33.35
GR-INFRA 1896.45 18336.59 55.18 0.34 281 2012 57.65
PNC infratech 307 7897 16329 1.23 492 2013 33.25
Rail Vikash 34.85 7266 15.56 1.02 922 2014 81.45
2015 77.75
2016 80.45
2017 133.8
2018 88.1
2019 56
2020 57.65
2021 74.7

Low-debt to equity ratio along with less price make it good investment
opportunities as we consider the growth in this sector the ROE will also increase
at the same time other stock are providing a return of 16 % It has opportunities as
it is giving a return of 5.18% only

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