Indian Electrical Equipments Sector Switching to Faster Growth

Author: Sunil Sikka
CEO of Havells India Ltd.
The current scenario in the electrical equipment sector is a potential portent for huge growth as the demand for technologicaly better solutions in this sector is growing. Even during the ongoing global slowdown, the overall performance of the industry has so far been good. The industry is investing heavily in upgrading technologies and making improvements in quality systems to cater to the emerging demand.

There have been some initiatives by the government that have helped the industry to grow. Some of them are listed below:

1. No roll back on the Central Excise Duties, which was reduced earlier to combat economic recession, which will be surely very encouraging.

2. A lot of investment is being made through APDRP (Accelerated Power Development & Reform Programme).

3. Sanctioning of pending power projects.

4. Increase in the budget expenditure levels by about 36 percent, which will provide a boost to consumption.

The Ministry of Power has taken a number of legislative and policy initiatives to expedite power sector development. These initiatives provide loads of investment opportunities to FIIs and other investors. The power sector reforms, if implemented as scheduled, will create large business prospects for the power sector equipment manufacturers and service providers. We can expect continued growth for this sector for at least another five to ten years.

Yet another important contributor to the current growth trend of the electrical equipments industry is the spurt in real estate development. It is not only the major metros that have witnessed large scale real estate development, but also the tier-1 and tier-2 cities that fast emerge as centers of business and industry in the country. Further, the lowering of home loan interest rates by banks has fuelled the demand for real estate. Nowadays, real estate developers and contractors demand world class lighting and other eletrical products as they intend to offer complete and ready-to-move-in homes to their buyers.

On an optimistic note, the generation of total electricity is going to increase, which in turn will lead to more consumption and overall growth of the electrical equipment manufacturers. The large nuclear power projects now nearing completion in different parts of the country will start producing power in the next one or two years and, initially, about 4,000 MW of power will start flowing into the national grid. Energy and Infrastructure have a key role to play in building an economy. The development in the construction and infrastructure leads to higher demand and growth for the electrical industry since they form the essence of any development.

Also, with the awareness level of the consumers going up, the marketshare of organized market is expected to expand both horizontally and vertically. Product innovations will also help to boost demand, although pricing competition in the industry will remain intense.

On the same path, Havells has taken numerous steps to further strengthen and consolidate the production capacities along with bettering the quality and performance of the products. Being a pioneer in energy efficiency, human safety, and savings, Havells has always worked towards solutions that lead to the overall benefits for consumers and corporates.

Havells has been a pioneer in the introduction of new products with the use of state-of-the-art technologies and processes. Taking the legacy forward, Havells will continue to offer solutions that will help everyone realize economy in electricity consumption and achieve better results.
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Reader's comments(4)
1: From: Mrs. Mary David

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Posted by: mary lovely david - Monday 26th, September 2011
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Posted by: mounace love love - Thursday 09th, June 2011
3: A concern as pointed out here although in a subtle way is the price war. Its evident amongst bigger player for products of same quality level. But there is a huge market (rural/semi-urban) which doesn't perceive the quality the same way and so the unorganized local players sell products which are cheaper - even unsafe since the regulations are not significantly followed by them.
So, the one challenge for bigger players is to either beat the price of local players with innovative products or create a perception of right quality and safety amongst the rural and semi-urban consumers..
Posted by: Niranjan Rout - Friday 02nd, October 2009
4:  if used keeping in mind the interest of the customer (read, not the marketing), location / context based services can be of great benefit.
Posted by: sanjeev srivastava - Saturday 19th, September 2009
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