Softdisk has monitored the evolution of the Power Electronic Industry over a span of three decades, witnessing its progression from its early stages to its present state. In the industry`s nascent phase, the emergence of the UPS Industry played a crucial role in stabilizing the Computing Industry, with even the prominent UPS companies of today being in their infancy at that time. Nevertheless, Softdisk remained dedicated to tracking the industry`s advancement.

With the Modi Government emphasizing self-reliance through its ATMANIRBHAR BHARAT initiative gaining momentum, coupled with several countries committing to relocating their manufacturing operations from China to India, the Indian Power Electronic Industry is expected to exceed the 8900 crores milestone by March 2024-25.

The surge in revenue signifies a remarkable growth rate of over 11.60% compared to the  preceding year (2023-24). The economic boost experienced in 2023-24, standing at 9.7%, is anticipated to elevate further to 11.60% according to Softdisk`s projections.

Additionally, The Indian Power Electronic Industry is anticipated to grow by well over 11.6% in 2023-24 and exceed the 8900 crores revenue mark by March 2024.

Should the Free Trade Agreements (FTAs) currently under negotiation be finalized either before September 24 or even by November, it wouldn`t be unexpected for the revenue to surpass 9000 crores by March 2024-2025.

Businesses emphasizing their bottom line may encounter competition from those prioritizing their top line. However, according to surveys, the private sector is expected to expand further. Nonetheless, significant government contracts will likely be undertaken by SMEs, while new startups might evolve into unicorns, presenting favorable prospects for those focused on their bottom line.

The banking sector`s focus on selecting the lowest bid may raise concerns due to complaints about insufficient service quality. Our discussions with the DIT purchase departments of several banks and government agencies have highlighted the correlation between service quality and purchase price. Companies offering products at extremely low margins may struggle to deliver satisfactory service after two years. Additionally, bundling orders with system purchases can make it financially unsustainable to provide service within the initial two-year period. The downward trend in prices is directly attributable to intense competition among UPS majors, which disproportionately impacts smaller manufacturers.

The growing trend of consolidation within the UPS industry could be attributed to the rising number of companies exploring solar-enabled UPS and SPCUs (Solar Power Conditioning Units). This phenomenon appears to be particularly pronounced among smaller companies.

Enabling smaller companies with niche expertise to collaborate with larger counterparts possessing extensive resources and market reach facilitates market expansion. There`s a newfound focus on under-the-radar players who are actively exploring diverse market opportunities.

Achieving the near 9000 crore mark would indeed be a significant accomplishment amidst this global economic downturn.

The anticipated revenue estimate surpassing 7900 crores is specifically allocated for the sales, services, and maintenance of UPSs and power electronic devices, encompassing SPCUs and home UPSs (excluding cooling solutions) along with additional add-ons inclusive of GST. This estimate is subject to a potential variation of up to 2%. Moreover, it is promising to observe that global business entities are increasingly focusing on the Indian market, signaling a growth trajectory in infrastructure development.

As more entities set up facilities in India, there`s an anticipated rise in demand for reliable and uninterrupted power supply. Consequently, there may be an increased demand for three-phase and modular upgradable UPS systems, while the market for line-interactive systems might experience a decline. This shift could create opportunities for long backup UPS systems with capacities of up to 3 kVA to gain prominence in the market.

This report was compiled through interviews conducted with more than 241 companies spanning various industries, along with discussions involving over 592 direct decision-makers. All 241 companies interviewed had a workforce of over 200 employees and maintained a presence across nearly all regions of the country. According to the findings, there is a noticeable surge in demand for single-phase UPS systems of up to 10 kVA, constituting approximately 20% of the demand, as well as for three-phase UPS systems, which represent around 35% of the total demand. Modular UPS systems contribute to approximately 35% of the demand. Although the demand for industrial UPS systems is projected to increase gradually, services and other equipment account for the remaining revenue.

Softdisk has noted that the UPS industry played a crucial role in stabilizing the computing sector during its emergence, with significant players in the UPS industry being in their early stages.

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

NORTH: Last year the overall Northern market had grown by 5%, we expect it to go up by 6 % this year. Leave apart power continuity, availability of power has certainly improved over the last five years. There will a no marked raise in Government purchase in the north. (Already visible) Followed closely by IT, ITES and BPO segment. SMB will also be a significant contributor especially in the state of UP, Rajasthan, Bihar and Jharkhand. Overall North will contribute 24 to 26% aroud 2250 crore  plus crore by March 2025.

SOUTH: By March 2025, the southern region of India, specifically Karnataka, Tamil Nadu, Telangana, and Kerala, is expected to experience a growth rate of 25% to 27%, resulting in a contribution of nearly 2350 crore INR approx to the country`s industry revenue. Andhra Pradesh appears to have an advantage in this regard. Corporate business is expected to be a major contributor to the revenue, along with the IT/ITES and BPO sectors in these states. Education is also expected to be a significant contributor to the revenue.

EAST: It is estimated that the sales of power electronic equipment in the Eastern region of India will generate approximately 1600 crore in revenue by March 2025, with government purchases dominating the market as many planned projects are expected to be executed. In the bigger picture, the East is expected to contribute around 17% to 19% of the total revenue by March 2025 amounting to over 1600 crore.

WEST: The Western region of India is expected to contribute approximately 31% to 33% of the total industry revenue by March 2025, with a revenue estimate of nearly 2900 crore out of the total of 7600 crore plus. The major contributor to this revenue will be SME buying, accounting for 31% of the West`s revenue. Gujarat and corporate buying, IT/ITES, BPOs, IT services, and industrial process automation are also expected to be significant contributors, generating approximately 25% of the revenue. Additionally, SMB and SOHO will be major contributors in the state of Madhya Pradesh.

Vertical wise Bifurcation: 

It is projected that in the financial year 2024-25, the banking, insurance, and finance sector will contribute around 8%, which is approximately 712.40 crores INR, to the industry revenue. The Government sector is expected to be another major contributor, with a projected contribution of nearly 1781.00 crores (directly and through System Integrators), accounting for nearly 20% of the total industry revenue.

The IT-ITES & BPO sector is expected to make the largest contribution, netting revenue of approximately 1246.00 crores, which is a share of nearly 14% in the overall industry revenue. Corporate buying is expected to grow at a rate of approximately 8%, generating revenue of above 623.35 crores. The low purchase rate is primarily due to modular UPS, which can be upgraded and 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 that can use regenerative load as an input source will be more popular. They will generate 14% of the revenue, which is around 1424 crores. The trend indicates that those selling higher kVA ratings will be the ones to watch out for as they may clinch the CNC deals. Companies selling to government concerns will be at a benefit. Research and educational institutions will attract non-modular UPSs to cater to their needs, and this sector will contribute nearly 623.35 crores. The hospitality sector will have a low share of the pie.

Small UPS systems with large backups will be in demand as more and more corporates encourage a work-from-home culture. We expect the total revenues to be nearly 8900 crores by March 2025.

Softdisk is proud to announce that the SMB & SOHO segment will contribute nearly 1250 crores approx indicating that our effort to educate the masses over the past three decades have finally started paying dividends.

Dr. SAI KRISHNAN

Editor in Chief, SOFTDISK