Growth predictions for March 2018
Softdisk which has the history of constantly upgrading its information thru
various surveys has been monitoring the UPS industry for well over two decades
now. We have become synonymous with the UPS Industry and are constantly on the
lookout of data. According to our latest findings, the Indian UPS market which
is currently growing at just over 6.10% is expected to cross 6100 crore mark by
March 2018. This include around 200 crores of sales coming through unorganized
sector. By March 2018 the industry is expected grow by 7.36 % which is higher in
comparisons with overall market growth which grew by 6.37% in the previous
fiscal. A growth of over 1% over last year. For sure 17-18 has outperformed the
previous two fiscals. How individual companies benefit depends solely on their
approach.
Companies looking for bottom line will have to face pressure form companies
looking to improve top line. How ever if survey is a an indicator than private
sector will open up during & post festive season making it little suitable for
those looking for bottom line. Banking sector will be a cause of concern as they
insist on lowest bid.
I had lot of complaints of not getting proper service, I met DIT purchase of
many banks explained them that service is related to purchase price, when
companies sell at very low margins they find it difficult to service after 2
years.
There is further scope of consolidation, with big companies not hotly
pursuing lower kVA products. Also the amount of consolidation taking place in
the Industry, probably is due to fact the more & more UPS companies are
experimenting with solar enabled UPS & SPCUs. This time a lot of emphasis was
given on low key players who are in search of different market share for example
like Cosmic, Powernet, TPC, Arrow, Suvik, Vespra, ARVI to name of few. In
financial year 2017-18 the total end user sales should at around 6100 Crore.
A GREAT ACHIEVEMENT IN THIS RECESSIVE TIMES.
This is exclusive figure for UPSs (Sales, Services & Maintanence) &
Power
Electronic Devices, excluding cooling solutions, home UPSs and other add-ons.
This is suggestive of the fact that India’s growth engine has started
functioning, at a bit faster then previous financial.
To counter the increasing prices of batteries many a companies have started
sourcing the batteries through OEMs, although still the quality conscious
customer insists on branded batteries.
These estimates have been generated by a survey when the industry was
seemingly at the end of a tough phase post demonetization, where we had mixed
reaction form manufacturers and customers alike, through a tough phase after
experiencing a tremendous drop in Rupee against the US$ and hence might have a
2% aberration.
A sign of Asian dominance as American & and the European market are going
thru a sluggish period during these times. It will be a great opportunity for
the US & European countries to focus on India. The report calls this slow growth
as a consolidating factor in the Indian UPS market. We advice the US and
European markets to now recognize India as a consumer of UPSs and become
complete solution providers rather than just being a supplier.
Softdisk believes that the current expected rate of increase by approximately
7.36% & overall turnover by March 2018 including unorganized sector will touch
6100 crore mark. However nearly 200 crore of this will be through unorganized
sector surely indicating that end user consumption of organized companies
product will in all probability will cross 5800 crore mark even at the worst of
its performance.
BIS compliance is another key factor, in reducing the competitions and
increasing margins.
More Modular UPS will be in demand and line interactive market will slowly
decline it will difficult for companies to maintain the current sales level.
Modular UPS allows end user to invest according to their actual load, and to
upgrade their systems while their business grows, without hampering uptime,
reliability, availability. The market demands UPS system with high efficiency
even at partial load to reduce the operating cost and to be a part of green
revolution.
The report has been generated by talking to more then 700 companies under
various vertical and talking over 350 people who are direct decision makers. All
700 plus companies we talked to had near 200 employee strength and have presence
in almost all the regions in the country. There is an indication for more demand
for single phase up to 20 kVA (around 60 %) & Three phase UPSs (around 40%).
Off
all this Modular UPSs share is about 30%. Demand for Industrial UPSs will slowly
rise. Rest of the revenue being accountable for services and other equipments.
Survey shows that this shift towards Modular UPS is primarily due to the hot
swapping features & the flexibility they offer in terms of redundancy. But this
trend is mainly for Corporate, IT & ITES companies. The market demands UPS
system with high efficiency even at partial load to reduce the operating cost
and to be a part of green revolution. The firms in India will have to make great
leaps in application integration. In addition, India's cultural diversity,
corporative federalism, and socio-economic disparities make it a microcosm of
the broader South Asia region.
Softdisk expects, smart vendors to use India as a testing ground for new
business models and strategies to try out models for the next wave of emerging
economies. Though India & South East Asian economies are closely connected to
each other through trade and cross investment, they differ enormously in their
levels of economic development and the state of their IT infrastructure.
The report indicates that the regional growth will be as follows :
NORTH : Last year the over all Northern market had grown by 6%,
we
expect it to go up by 8%. Leave apart power continuity, availability of
Power especially in states of UP & Bihar has been a point of concern. There
will a marked raise in Government purchase in the north. Post Bihar
Elections. (Allready visible) Followed closely by IT, ITES and BPO segment.
SMB will also be a significant contributor especially in the state of UP,
Rajasthan & Bihar if given a special status. Overall North will contribute
24 to 26% of expected 6100 crore
by March 2018.
SOUTH : Here a surge of nearly 4% is expected in coming two
years.
South is expected grow at a rate of 31 to 33% and will contribute over 1900
crore INR to the UPS revenue of the country by March 2018. Off this
Karnataka, Tamilnadu & Kearla will be the major contributor. However a
new
state of Semandhra & Telangana will not lag behind but for this supports
from the center will be one big factor. In this Semandhra seems to be at an
advantage. Other then Banking, one can expect Corporate business to be
contributing more and IT / ITES, BPO's to contribute revenue in these
states. Education, will be another major contributor.
EAST : Nearly 1300 crore revenue will be generated by the sales of
UPSs in the East by March 2018. Govt. buying will dominate, many a planned
projects will start getting executed. In the overall scenario East will be
contributing somewhere between 20 to 22% of total revenues by March 2017.
WEST : In the west overall contribution will be some where
between
24 to 26% of the total national UPS revenue. West will pocket over 1500
crores of the total revenue of 5800 crore by March 2018. Major contributor
will be Govt. buyings will contribute 31% of West revenue, Gujarat &
Corporate buying and IT / ITES, BPO's & Services & Industrial Process
Automation will be major contributor nearly 600 crore of revenue will be
churned out by this sector. SMB will be a major contributor in Madhya
Pradesh.
Vertical wise bifurcation:
This indicates Banking, Insurance & Finance sector contributing 11%
approximately 638 crore INR. Other major contributor being the government sector
which is expected contribution being well over 1265 Crores, nearly 22% of the
total UPS revenue. indicating a gain of 1% over previous year. IT / ITES & BPO
sector contribute as last year The sector is expected to net 809 Crores, a share
of nearly 13% in the overall UPS revenue. While Corporate buying shows the
increase of 1% in percentage terms & is expected to grow at the rate of
approximately 11% netting revenue of above 684 crores.
Another
major contributor this year will be Industrial process automation with high
capacity CNC Machines being installed high end UPS systems which can use
regenerative load as in put source will be more popular. A clear increase from
the last year level. The trend indicates that those selling higher kVA ratings
will be the one to watch out for as they may clinch the CNC deals.
Those coming up with cutting edge technology will be at an advantage.
Companies selling to Govt. concerns will be at a benefit. Research & Educational
Institutions will be a key area of interest to those catering to their needs,
this sector will contribute over 638 crore. Hospitality sector will have there
own share of the pie. SMB segment contributing nearly 750 crore nearly 12%
augers well for the small players with the small UPS systems, there is still a
lot to vie for, if they have commitment to quality.
Softdisk is proud of the fact that the SMB segment will be contributing
nearly 700 crore indicating that its effort to educate the masses over the
period of last two decades, has finally started paying dividends. You pat us or
not, we are certainly patting our back.
BY :
Dr. S Sai Krishnan
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