The year 2009-2010 saw the industry netting revenues to the tune of INR 3626 crores. This is exclusively the end-user sales figure. However the over all industry revenue was estimated at INR 3905 crores. The reason why the total industry revenue is much higher then the actual end-user sales is because many a companies procure finished products from others & brand them as theirs, and our survey team gets the turnover from both, resulting in duplication. With nearly 620 companies responding to our survey, giving us the information we sought in great detail, knowing fully well how much the company has manufactured with excise paid. And also trying to find out, which companies procure finished products from others & brand them as theirs, an exercise which has been done only thrice before, we did all of it again to give continuity to the process.

Growth wise it has not been a good year for most of the majors with a few exceptions.

Revenue wise : Industry grew by 11 % a raise of over 5% over the last fiscal of 2008-2009.

Volume wise : Industry grew by 20% over previous year. This clearly indicates shrinking margins.

One must be clear in mind that this is a very good performance considering the stiff competition and the squeezed margins in view of hammering the companies got due to the global economic meltdown.

Of the total revenue of 3905 crores, Online UPSs accounted for 89% while Offline / Line interactive UPSs accounted for nearly 11% while other products including Servos accounting for the rest.

Of the total revenue organized sector accounted for nearly 60% while 25% came through semi organized sector while 15% share still remains with the unorganized fly by night operators.

Softdisk went about asking that its prediction in July 2010 that the total industry revenue will cross INR 5000 crore mark by March, 2012 trying to know what the Industry leaders thought. Many had little or no doubt to what Softdisk has predicted earlier, even though this response was at time when the global economies were trying to come out of worst ever economic crises, and Indian market was also shaken by it. According to Mr. N K Agrawal of Delhi based Microtek International Pvt. Ltd., There is a Great Market potential as these products UPS and Inverters have become an essential part of every household, and as the middle class is growing rapidly in India the consumption of these products is also growing at the same pace. We do see sales of these products not only meeting but exceeding by a large number the Softdisk prediction of UPS industry revenues reaching INR 5000 Crore by 2012. (Here it is worth mentioning that Softdisk figure does not include the revenue generated by Inverters). He further adds the UPS segment is connected with the IT/PC/SOHO MARKET, those users buying PC will definitely buy UPS for protection of their system, branded player in this area will be benefitted, and as the rupee has depreciated massively, thereby hitting the trader community, which has been importing cheap product from China, their market share will shrink and the real manufacturer will be able to further increase their market share.

Mr. Dalip Sharma, Managing Director, Delta Energy System Pvt. Ltd. echoed the sentiments according to him the Indian UPS industry is going great guns. There are several factors driving the growth. The country is facing an acute power shortage and organizations are relying on UPS systems to fill the void. The boom in datacenters, ITeS, entertainment, healthcare, and telecom has led to an increase in demand for UPS systems. The future of the UPS market seems quite promising, as it finds application in industries as varied as telecom, process & industrial automation, IT, electronics & electrical, banking, SMBs, and several other industries. Hence, if analyze the market potential we may see UPS industry achieving the predicted heights. However, we can definitely expect global meltdown and the slowing down of the world economics to have an impact on this, he laments.

Mr. R Chellapan of Numeric Power Systems Ltd. feels, Softdisk has more scientific way of evaluating the market for its volume and quality then any other agency and the overall UPS sales by 2012 might cross 5000 Cr mark subject to IT recovery.

NUMERIC, which has been the leader in the UPS industry, has taken larger initiatives with most modern manufacturing infrastructure to address the mass production requirements and geographically expanded to over 240 locations as of now.

With India assuming a key role in Asia, businesses have become attuned to the fact that they need robust infrastructure to attract and retain investors for this having power continuity & quality are paramount. Well Govt. of India, recent singing of Nuclear Deal with the US, more importantly India getting NSG Waiver at Vienna after long deliberations and oppositions from certain countries is a welcome sign as it has opened gates for Nuclear Power Plants, 27 of them stated to be coming up by 2020.

With many new avenues opening up in bio-medics, telecom, process automation and in almost every sphere of life, this also indicates the future is very bright keeping in mind the current utility power scenario of the country. All this augers well for the Indian UPS Industry as Power Quality & Continuity will be the most sought after thing in years to come. So not withholding the resent economic meltdown, the ray of hope for Power Electronic Industry in the country remains unperturbed.

Mr. Christo George, Managing Director, Hykon India Pvt. Ltd. Thrissur also agrees with the Softdisk Survey published in July 2010. According to him as there is a big growth expected in ITES and industrial sector the UPS industry will continue to grow in a steady pace. Also the rural India is yet to grow into its full potential which will add on to the expected growth positively. Due to the technological development and more awareness customers are very critical about the available power and are also equally serious about the protection of their costly electronic products. Another area where India will stand to grow is hospitality industry as well as educational institution. This also will give a positive signal to the UPS industry development. We strongly believe that the Indian UPS industry should touch nearly 5000 crores by 2012-13.

Mr. Pradeep Pimpley Managing Director DB Power Electronics Pvt. Ltd. elaborated on this issue, according to him when we speak about market, we have an enterprise market segment in mind. Most of the top notch UPS companies like APC, Eaton Powerware, PCI to some extent mostly serve this business segment. Earlier when Numeric was associated with Socomec or MGE, was also a part of this market segment, apart from its presence in Banking and Finance segment for lower ratings UPSs. As per our understanding, the market segment revenue (excluding precision A/C, Electrical distribution, etc.) for UPS Systems is close to INR 3000 Cr. Looking at the present market scenario, the revenue collection from this segment shall be within INR 3500 Cr this year.

Even after a year of slump, economic slow down has adversely affected IT and IT infrastructure segment. The expansion plans are put on hold by most of the big names in IT, ITES. Even the aggressive companies in IT infrastructure segment are no exception. There is more emphasis on best utilization of existing IT facilities and also human resource. Even the Data Centers projects in telecom segment with few exceptions are either postponed or put on temporary hold. However we see a shift now, In last six months the demand for high power UPSs above 200KVA has gone up considerably. The situations now is wait and watch and do the things as they unfold. As of DB the economic recession has not affected, Energy, Power, Oil & Gas Segment. We expect more business from these segments and continue to maintain our growth. Apart from this, some business revenue is also expected from specialized products what we manufacture for niche market. This shall also contribute to our growth plan.

Mr. Narayan Sabhahit Managing Director, Techser Power Systems Pvt. Ltd, Bangalore, believes that The average market in enterprise segment (in which we operate) is expected to grow at the rate of 15 -20%. The data center market is expected to see a growth of 20 - 25% as compared to last year. However, the remaining IT market growth is expected to the tune of 10 - 12%. Last few years the growth rate in the market has been encouraging (Leave apart the slowdown period) and UPS shipments taking a cue from the PC market have also witnessed a very significant growth, but since melt down, going has been tough, it will correct itself in a quarter or two, he lament. He further adds, the UPS penetration is now taking place in cities and towns outside the top 20 cities. According to him “Today the development process in every vertical is witnessing a speedy growth. Interpretation of word ‘development’ in its correct form, has been taken seriously by the concerned agencies / authorities. The Infrastructure development required to address the challenges of 21st century is being put in to place. This is a good sign to a certain extent Government is also keen in making efforts towards enduring availability of Power. What we see today may not be looking very rosy form the Govt., but I am sure with nuclear deal and nuclear reactors coming up there will big orders from companies like ECIL, BHEL, BEL and the likes. “We at Techser are fully geared to latch on the opportunities when it presents.” As always, Quality of the product & support package will remain paramount to us.”, he laments. Speaking on the overall scenario of the industry

Mr. Sabhahit believes that all this put together, there is growth pattern happening. These are the areas where continuity of power is very essential, since these companies are facing the Global Challenges. And hence the demand for the UPS and Complete Power solutions is on the rise.

Mr. Ramdin Sangha of WeP Peripherals Ltd. has no different views. There is a reeling power deficit of 17% across Indian sub-continent. And 5 yrs down the line although govt. has plans for alternative energy the concern still rests over making it affordable to the consumer, and rural India. Therefore the predicted potential does hold good.

According to Mr. Anoop Nanda of Eaton Power Quality Power backup market in India is growing at an annual rate of 15-20% varying within the three different segments. With increasing power deficit and about 17% of demand supply gap in power generation, the power backup sector is crucial for business continuity of Indian corporate. Customers are increasingly looking for high quality reliable and efficient power solutions – that comes with environmental responsibility. He further adds In the long term consolidation is inevitable and almost always needed for further growth. Much depends on the market revival in 2010 and if things continue to remain flat, many players will explore the M&A route. Consolidations definitely augur well for India as this will organize the UPS industry, which is largely fragmented.

Tejas Sheth of Asia Powercom Pvt. Ltd. also believes that It is quiet possible for industry to reach 5000 cr. As the automation is increasing & industry is growing quiet possible to reach 5000 cr. And for next couple of years UPS industry should surely grow average at 25 % On the subject of changing business model he laments Now lot of companies want higher warranty period for all the equipments. This is started by computer companies & is being asked in UPS as well. Battery is consumable & not equipment, still companies want more warranty period. This is new change & all companies will have to gear up for this. In lower end UPS AMC revenue will go down if warranty period increases. Battery vendors are also looking at more warranty period & they have initiated to make such products. So this is going to be big challenge for all UPS companies & their revenue model has to change. Also the life of UPS is not like it used to be in earlier time.

According to New Delhi based Uniline Energy Systems Pvt. Ltd., there is slump in the market and d UPS shipments as some of the projects in the telcom sector were held up, expenses were also held up, major tenders of BSNL got scrapped. Further the Government has stopped the purchasing which also effects the demands and growth of the industry, especially in the last quarter of 2009-2010.

But now the case is fast improving as the companies have started purchasing, Govt has also come up with tenders to increase the capacity and started releasing the funds. This will result in all round growth.

UPS industry thrives in growth in industries such as IT/ITeS, Telecom, Banking, Insurance and manufacturing over the last year. What is relevant is that all of these have their typical power conditioning needs and an all round growth is expected, right from entry level products to high-end UPS in the current financial.

However we can hope India with strong fundamentals will be able to tide over the crises. What we called as meltdown is basically market correction, and from past experiences whenever market corrects itself, it usually over corrects and once the recession stops it tend to climb up to correct levels. Same is case this time too, we see an increase of 10-15% in sales taking into consideration the recent market situations. The world cannot ignore an emerging economy like India and hope fully things will settle down for the better. “On our part Uniline is fully prepared with Modular UPS Systems and Three phase UPS Systems with touch screen operations & all set to garner the larger pie of the increasing UPS market.”, he lament.

According to Mr. I B Rao & Mr. M R Rajesh of Powerone Micro Systems, Bangalore, India’s Today Indian power conditioning market is getting more sensitive and mature to the evolving needs of the businesses. With India assuming a key role in the Asian economy, businesses have become attuned to the fact that they need to be robust in terms of infrastructure to attract and retain investors. Hence, Business Critical Continuity is being viewed strategically and upcoming businesses are realizing the importance of factoring and aligning it as key component in the overall business model.

In India, the five cities of Mumbai, New Delhi, Chennai, Kolkata and Bangalore have been the largest markets for power products. However, there has been a shift towards B & C Class cities such as Pune, Chandigarh, Lucknow, Hyderabad, Jaipur to name a few. These locations are fast becoming global hubs in terms of R&D, ITES & BPO, Retail, and Manufacturing and given the criticality of operations undertaken in these sectors, there is an increasing need for comprehensive network uptime solutions, Besides, given the upward spiral in terms of PC penetration in these cities, these cities have been showing a marked growth, they laments

Talking on fluctuating prices of base material of the UPS Systems, Mr. R Chellappan of Numeric believe that price hike in base material is past its peek, while the cause of concern has shifted to adverse foreign exchange rates. Mr. Chellappan believes this Financial year will educate us about recovering a disaster apart from managing the competition.

According Ramesh S, Managing Director of Powertronix Pvt. Ltd., Bangalore, ”The metal price fluctuation is definitely disturbing the business. Every time the change in the price takes place, it takes 2 to 3 months to settle down our

business from the disturbance. But now Powertronix has already came out with some of the Transformer less UPS Technologies , which solves to some extent to keep us independent from this impact. Off-course right now the lead price is impacting our sales for which we are unable to do any thing right now.

According to Mr. Ramdin Sangha of WeP Peripherals, there is no other alternative than to explore alternate technology. This can be in the area of battery & transformers. We also need to revisit feature-value equations for customers to try and optimize wherever possible.

Mr. Sumanth Kumar of Bangalore based Powernet Solutions Pvt. Ltd. was very empathetic when he says “GOI introduced VAT to create a uniform taxation, currently 4% but we find some state Govt.’s not ready to implement. This is ridiculous. He further adds “Duty free imports should be avoided as it would totally kill the domestic industry. At least a minimum duty should be levied on imports of all sorts as it would help survive and sustain the domestic industry.”

He also does not believe that today UPS industry is healthy According to him, strangely in today's scenario, greater turnover can be achieved by compromising many activities of the company like the manufacturing process. The manufacturing process including design is out-sourced to countries like China which thrive on such activities.

According to Mr. Vinod Kumar, Managing Director Arvi Systems & Controls Govt. should encourage indigenous manufacturing by reducing the ED. It should also appoint a general body to regulate the quality of products being imported, as it has direct impact on country’s economy. Although there is a definite reduction in the excise duty the threat we may face in the future will be MNC directly entering and targeting the end customers. US & UK companies may come up as a major threat in the next 2 years as things stand today. Here the government should think of giving an edge to the Indian manufacturers by way of imposing duties and levies to MNC products. We agree that more players (both abroad & indigenous) will do better choice for the customers but should come out with definite plans for encouraging the Indian manufacturers.

According to Mr. Anil Munjal, VP of PCI Limited power is an essential requirement for all facets of our life and has been recognized as a basic human need. It is the critical infrastructure on which the socio-economic development of the country depends. The growth of the economy and its global competitiveness hinges on the availability of reliable and quality power at competitive rates. The demand of power in India is enormous and is growing steadily. Though the government is quite conscious of the power scenario in the country, yet it

seems that all the new addition to the installed capacity do not give us the comfort of continuous power even by the year 2012. Despite this grave situation, there are no special incentives or support for the UPS installations except in a very limited way. Considering the importance of UPS systems in a growing economy and keeping in view the power Scenario what it is, the Govt. should certainly exempt all UPS systems from import duties Customs Duties, excise duties etc.

After all, what will an importer or manufacturer do with UPS systems or batteries except to use them for ensuring continuous good quality power and help to generate more affordable and help cut cost for our manufacturing.

For the past two-three years the Indian UPS industry has been facing stiff competition from Taiwanese/Chinese players who by virtue of mass production have advantage on pricing on smaller UPS where as in larger UPS, European players will fight the Indian manufacturers and that too with plants located in China. According to Mr. Rajaram Rammoorthy, Managing Director of Bangalore based Electronic & Controls The need for power conditioning is ever expanding across all business sectors, which is a direct reflection on the market potential available for UPS requirements. Large single location business houses well as rural markets have always seen upward treads. Similarly BFSI segments in B&C class cities further fuel the potential.

Currently the market being infused with Chinese makes by most players. We feel that this may not carry on for long for UPS requirements over 5kva range, in the Online space. The Chinese products, though sleek are very sensitive to Indian conditions and thereby more service intensive in comparison to the rugged Indian products. However, in the Offline space, the Chinese products are here to stay.

Mr. Deepak Sharma of Eaton Power Quality is very clear in his views according to him globalization, like outsourcing, is here to stay. Today, businesses can source

goods from around the world, produce their product wherever it makes economic sense, and sell it anywhere. International trade is forecasted to grow at twice the rate of the world gross domestic product (GDP). The economic impacts of globalization are enormous.

Rather than fight globalization and market forces, it is prudent to adapt oneself to changing circumstances, focus on low cost, high quality products backed up with a good service network, to take advantage of the market reality.

All the MNC with manufacturing facilities in China express similar views. They talk of globalization and give logical reasons to support their point of view.

Shankar C Nagali of Bangalore based Cosmic Power Solutions Pvt. Ltd. believes, today’s UPS units should be capable of supplying non-linear type loads without de-rating or degradation in total harmonic distortion (THD).

This would require the computation of critical electrical loads, before selecting the UPS capacity, considering the power requirements of each piece of equipment to be protected. An ideal UPS system should take care of the output voltage and frequency regulation.

Finally, a good UPS should also allow for 25 to 30 percent future expansion. In addition, the service capabilities of the UPS manufacturer also matter greatly in case of mission-critical applications.

According to Mr. R Chellappan of Chennai based Numeric Power Systems Ltd : The high-end UPS segment is a value-driven his solution is that it can also be used in parallel with existing battery bank or new battery bank to reduce extra stress on batteries. This solution shall eliminate requirement of large battery banks, space, battery related maintenance, battery related safety issues like fire hazard, etc. The estimated life of these DC modules is 15-20 years. The maintenance is practically NIL, and the operating cost over life is reasonably low, he laments.

However from what Softdisk has experienced is that of all these Dynamic UPS, Batteryless UPS installations only PCI Limited with its Pillar brand of Dynamic UPS System has been successful.

Taking of collaborations most of the company in top 20 list have a foreign collaboration. Either these foreign companies are directly present in India thru 100% subsidiary or thru JV, technical tie-ups or a distribution arrangement. Only exception to this list is Delhi based Tritronics India Pvt. Ltd., headed by Mr. Rajeev Chatrath, which too has strategic tie-up with Luminious, a giant Inverter manufacturer, Numeric breaking relations with Socomec, it is another company which can be excluded from this list, however there international presence makes it connect to many a foreign companies. Techser too is an exception to this list.

Softdisk has seen it all over the past 19 years, more often then not some of the companies use a lot of word jugglery in there promos, it must be the same thing which some one else must be offering without making lot of noise and at a better price. It is one area where customers need to be watchful.

Green technology

High efficiency machines reducing operating expenses

Less harmonics from UPS resulting in low pollution of utility

Highest power to footprint ratio which will lower real estate costs

Softdisk believes it was just an over-correction & Power Continuity being critical for all sectors, things have already started to get normalized, It is only a matter of time before UPS industry starts witnessing rosy days again, but they cannot think of lavish margins anymore.