NEW DELHI: HPL Electric & Power wants to grab a 10 percent market share in the switchgear segment, said Gautam Seth, joint managing director of the company. According to him, one of the reasons why the company is focusing on the segment is the high-profit margin it offers.
Indian switchgear market size is projected to reach $3.7 Billion by 2022, according to 6Wresearch.
HPL Electric reported revenue of Rs 226.98 crore in FY19, a growth of 14 percent from Rs 199.63 crore it registered in the previous fiscal. Its profit from the segment was Rs 42.92 crore in the said financial year.
Of the total revenue, about 25% comes from switchgears. "We are expecting double-digit growth in the coming financial year as well," said Seth.
The company has two factories dedicated to switchgear products-one is Jabli, Himachal Pradesh and one is Kundli, Haryana. "Currently we are operating at 65-70 percent of our capacity," said Seth.
Seth feels the unorganized segment in switchgears is shrinking thanks to various steps taken by the government. He however adds that the current GST rate of 18% should be brought down to 12% in order for the industry to grow.
He however agrees that the slowdown in the residential segment in the last two-three years has impacted the industry. "The volumes that we were doing 3-4 years back is not the volume we are doing now. There have been some issues of non-payment in the last few years and it has had a slight impact on us as well," said Seth.
As of now, about 25 percent of the revenue in the switchgear segment comes from the residential sector rest comes from the industrial sector, retail, and OEM.
"We also have been cautious because of the sluggishness in the market. Consciously we have diversified our business and are catering to all segments in order to de-risk ourselves," added Seth.
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Media Courtesy : Realty Economictimes Indiatimes