SURVEY HIGHLIGHTS

We had predicted in July 2019 that UPS Industry End-User Sales will cross 7100 crore mark by March 2020 which is including sales by unorganized players. However actual sales was projected at 6900 crore including the unorganized players. Both figures crashed our prediction for the year ending March 2020. The prediction done in July 2019 has come tumbling down, as companies couldn't complete orders in March 2020 because of lock down and also depreciation of Rupee against Dollar etc. This included organized, semi organized & unorganized players.

No companies is in buoyant self even as I write this piece of note which many may take it with a pinch of salt. SPCU’s have come as a big help for smaller units. European markets are tumbling. So is unstable Euro, Indian Rupee getting weaker to the extent over INR 74/- per US$.   However huge untapped market  is very prevalent in the Tier III & Tire IV town & cities. India is not showing signs of coming out of inflation, new projects are on hold as the Government at the center is trying hard for Self Reliance under Make In India & Skill India Project amidst Covid-19 Pandemic and Chinese aggressions. It is imperative that we sustain this phase as once this pandemic ends,  “ATMANIRBHAR BHARAT” vision provided Hon. Prime Minister Shri Narendra Modi Ji, will pick up speed, we need to look inwards and start production/manufacturing locally, and the customers should be “Vocal for Local” rather then being lured by cheap imported once from China. This is time to find ways for “APADA MEY AWSAR” with skill development in manufacturing and maintenance of Power Electronics products & SPV manufacturing facilities and EPC installation for heading towards energy security and make India self-reliant. We constantly await India’s flourishing economy.  Already GST is thru, and Ease of Doing Business increased which has paved the way for FDI inflow. 

All though my personal opinion we are over dependent on foreign products in all spheres of life and Govt. has to come up with Chip & Microprocessors,  PV Cell manufacturing units by supporting private investors with at least 51% stakes and give up management to 49% Indian stake holder. Since these are technology sensitive and the industry will require huge investments,  but if it happens this will bring India to the foreground of Power Electronics and also make it energy surplus. However options for import form friendly countries should remain open, this will enable India’s to have better trade balance with other countries.

TOTAL INDUSTRY REVENUE

It is estimated that the UPSs worth INR 6495.45 crore  was shipped to end-users during the fiscal 2019-20. 

However Overall organized industry revenue was estimated at INR 6745.45 crore approx. There is huge amount of secondary sales involved in this. Since the industry is scattered with over 200 unorganized players it is difficult to pin point the actual sales to end-users. 

Industry performance in 2019-2020 over previous year.

Revenue wise : Industry revenue dropped by 2.00% well below last year indicating a slowdown, Rupee depreciation against dollar, lock down in the month of March 2020 all affecting.

Volume wise : Industry sales also went down, estimated drop being 3.40%  over previous year.

This is a clear indicator of shrinking margins & companies going for bottom line with only a few exceptions, and the companies not able to complete order due to lock down in March 2020, also dollar appreciation caused a big loss. 

  • Online UPS sales has picked up. Online sales account for nearly 95%. Contributing a significant increase in revenue. There is nearly 65% increase in sales of 10kVA to 60kVA UPSs, more growth in 3 phase UPS is visible. However sales in Line Interactive UPS has come down.
  • Offline & line interactive UPS show a drop in growth of 16% in volume terms and not have not been a significant contributor in decrease in revenue terms, it increasingly becoming a low margin a high volume game. In revenue term they contributed nearly 1.6% to the Total Industry revenue. This does not include Inverter sold under the tag of Home UPS. However medium &  regional players making profits are leaning towards Solar Power Control Units (SPCU) which comes with more profits as compared to conventional UPSs. Remaining being sale of Servos and change of batteries not under maintenance and TPM contracts.
  • Exports on rise as compared to previous year. Many leading once aim at exports.
  • Reverse Auction is still haunting the UPS manufacturer, who are already squeezed for margins. Many a companies have stopped participating in these auctions.

Softdisk strongly believes that Good value for money should be preached at all possible levels for the price conscious end-user. This can be achieved only by end-user-education about the quality of product and service priorities, specially for the price conscious once. The end-user should be made to realize the requirement of a quality UPS system for the safety of his equipment.  Industry should deny participation in reverse auctions. Maintenance should be only with original manufacturers, TPM should come when original manufacturer says no to service. This way every company will be assured of their service revenues and concentrate on sales activity. Customers should know that, one snag in the UPS,  and the costly electronic equipment could bid you bye. Maintenance by original equipment manufacturer would mean faulty component will be replaced by the exactly the same new component. There by avoiding undue risks. 

Softdisk  has been the flag bearer in educating the masses about the need for quality UPS system. The industry should come together to teach UPS essentials more so in case of SOHO & SME segment as large and enterprise class is more or less aware of the need to protect their system. UPS manufacturers should look upon themselves as a solution provider and not merely as manufacturers or traders, it is then the entire system will revamp and the small time operators will be pushed out.

 

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Year Ending March 2020
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