MAGAZINE SECTION
EDITORIAL
UPS Industry Records 5.7% Growth...
COVER STORY
Power Electronic Industry Analysis Year Ending March 2019...
SPECIAL
Classification of UPS Battery - a Costly interruption?...
MID-YEAR ANALYSIS
Softdisk Findings: Growth Projections for March 2021...
SOFTWARE
WINDOWS 7 : Too good a software...
BUSINESS
Retailing Market : Now making a statement...
FEATURE
Gender Equity : Not an even match...
TECHNOLOGY
Technology : The new education Enabler...
NETWORKING
Evolution and Direction of Intelligent Network Architecture...
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Wireless IP-based communications architecture...

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MID-YEAR ANALYSIS
Softdisk Findings: Growth Projections for March 2021

Softdisk which has the history of constantly upgrading its information thru various surveys, has been monitoring the Power Electronic Industry for well over twenty seven years. We have become synonymous with the UPS Industry and are constantly on the lookout for data. According to our latest findings, the Indian UPS market which is currently growing at just over 1.72%. However, this is temporary phase due to Covid-19 pandemic, as unlock begins, businesses will start moving & purchases will start and growth will pick up.

With Modi Government aiming for ATMANIRBHAR BHARAT, and assurances from many countries promising to shift their manufacturing facilities from China to India, the Indian Power Electronic Industry may just cross 6500 crore mark by March 2021. A drop in revenue by over 7% from 2019-20. Indian economy will definitely get a boost by 2022. Indian Power Electronic Industry will have over 9% growth in the year 21-22.These are conservative estimates.

When we celebrate 75th year of Indian Independence, the benefit accrued by various companies depends solely on their approach. Most SPCU manufacturers will flourish & will boost growth by 2022. Companies looking for bottom line will have to face pressure form companies looking to improve top line. However, if we consider survey as an indicator then private sector will open up post pandemic making it more 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 and explained them that service is related to purchase price, when companies sell at very low margins they find it difficult to serve 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 and more UPS companies are experimenting with solar enabled UPS & SPCUs. This is happening more at the level of smaller companies. It is not about acquire or take-over but about co-exisitance. This time a lot of emphasis was given on low key players who are in search of different market share like Cosmic, Powernet, Vespra, E&C, Micron, Elent, Nexsus, Total Power Controls etc. to name a few.

ACHIEVING 6500 MARK WILL BE A GREAT FEAT DURING PANDEMIC SCENARIO.

This 6500 Crore is exclusive figure for UPSs (Sales, Services & Maintenance) & Power Electronic Devices, including SPCUs, home UPSs excluding cooling solutions, and other add-ons with GST. This is suggestive of the fact that India’s growth engine which slowed down due to Pandemic will start as there is a stable government supportive of building businesses in the nation to become self-reliant. Also encouraging is the fact that businesses entities worldwide are targeting the Indian market. Thus, development of infrastructure is certain. As more and more entities establish facilities in India, the need of having a pure and un-interrupted power further increase.

These estimates have been generated by a survey when the industry was seemingly at the midst of lookdown and unlock, 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 to 3 % aberration.

Softdisk believes that the current expected rate of increase by approximately 9.5% & overall turnover by March 2022 will touch 7200 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 7000 crore mark even at the worst of its performance. We expect the industry to come out of the dent created due pandemic not exactly in 2021 but by 2022 and flourish. In March 2021, industry revenue will be lower (expected 7% low) than current March 2019 levels.

More Modular UPS will be in demand and line interactive market will slowly decline. It will be 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 systems 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 250 companies under various vertical and talking to over 700 people who are direct decision makers. All 250 plus companies we talked to had over 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, the share of Modular UPSs is about 35%. Demand for Industrial UPSs will rise slowly. 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 systems 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 new models for the next wave of emerging economies.

The report indicates that the regional growth will be as follows:

NORTH : Last year the over all Northern market had grown by 5%, we expect it to go up by 8%. Leave apart power continuity, availability of Power especially in certain seasons has been a point of concern. There will a marked raise in Government purchase in the north. (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. Overall North will contribute 24 to 26% of expected 6500 plus crore
by March 2021.

SOUTH : Here a surge of nearly 5% is expected in coming two years. South is expected to grow at a rate of 31 to 33% and will contribute over 2100 crore INR to the industry revenue of the country by March 2021. Off this Karnataka, Tamilnadu & Kearla will be the major contributor. However a new state of Andhra & Telangana will not lag behind but for this support from the center will be one big factor. In this Andhra 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 of revenue will be generated by the sales of power electronic equipments in the East by March 2021. Govt. buying will dominate, many a planned projects will start getting executed. In the overall scenario East will be contributing somewhere between 19 to 21% of total revenues by March 2021.

WEST : In the west overall contribution will be some where between 22 to 24% of the total industry revenue. West will pocket over 1600 crores of the total revenue of 6500 plus crore by March 2021. Major contributor will be Govt. buying will contribute 31% of West revenue, Gujarat & Corporate buying and IT / ITES, BPO's & Services & Industrial Process Automation will be major contributor nearly 25% of revenue will be churned out by this sector. SMB will be a major contributor in the state of Madhya Pradesh.

Vertical wise bifurcation:

This indicates that the financial year 2020-21: Banking, Insurance & Finance sector contributing 8% approximately 524.00 crore INR. Other major contributor being the Government sector with expected contribution being nearly 1572.00 (Direct & thru SI) Crore, nearly 24% of the total industry revenue. IT / ITES & BPO sector contribution is expected to net 917.00 Crores, a share of nearly 14% in the overall industry revenue.

While Corporate buying shows the results as last year in percentages terms & is expected to grow at the rate of approximately 7% netting revenue of above 458.50, an decrease of nearly 200 crore in revenue terms, primarily due to modular UPS which can upgrade & avoid fresh new purchases. 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 decrease from the last year levels in revenue terms. 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 nearly 327.50 crore. Hospitality sector will have there own share of the pie. SMB segment contributing nearly 917 crore nearly 14% 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. We expect the total revenues to be nearly 6550 crore by March 2021, i.e. dip of nearly 7% in revenue terms over March 2020 levels.

Softdisk is proud of the fact that the SMB segment will be contributing over 900 crores indicating that our effort to educate the masses over the period of last two & half decades, has finally started paying dividends.

-SAI KRISHNAN

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SD's Power Electronic Industry Analysis, year ending March 2019
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SD's Top 10
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