In an attempt to keep Infraline Energys’ readers abreast with the key issues and challenges engulfing the sector, Infraline Energy tries to bring forth the opinion of key personnel whose decisions and opinion play a vital role in shaping the sector. Please find below excerpts from the interview that Infraline Energy conducted-
Coimbatore-based Salzer Electronics, a leading name in global electrical equipment industry, is tweaking its business strategy as the Indian energy market goes through a transformative phase, with the government pushing industry towards cleaner energy consumption. While the country’s overall business have been adversely affected by the economic slowdown, it has also benefited from increased public spending in the power transmission and distribution (T&D) sector. In an exclusive interview to Infraline Plus, Salzer Electronics , Joint Managing Director and CFO, Rajesh Doraiswamy discusses his company’s business plans. Excerpts:
The Indian GDP has dipped in recent quarters. Has it impacted your sales and if so, how far?
As far as Salzer is concerned, our 75-80% business is from Indian market and we have been seeing slowdown for nearly last one year. The recent dip that we see is also not transient but looks more structural. The overall economic scenario in India is not very bright. Our business has been flat for the last one year or so. We have been struggling for growth and all the growth (5-6%) that we got was due to additional market share and some new product introductions.
Coal-fired generation capacity addition has nearly stalled in India. Has it affected demand for your electrical products?
To some extent. Though there have been no new additional projects in coal-based power, there has been maintenance business that we are getting. Alternatively, we have been getting business from renewable as well as other infrastructure projects undertaken by utilities Power Grid and Nuclear Power Corporation.
How is the demand in the transmission and distribution (T&D) segment?
This is one sector where the Government spending is high and we have been seeing good traction for our businesses. We have been doing good business in the last two years in T&D. This continues to grow.
India plans to move to electrical vehicles. How do you plan to capitalize on the proposed shift?
Move towards Electrical Vehicles is inevitable. We were not a supplier to automotive industry except for certain products. However, a shift towards EV will largely benefit us as we have products that can be used in EVs. We have already started to contact some companies in India to start selling relays, wire harnesses and power cords. Apart from supplies to EV manufacturers, we are also looking at getting into manufacturing or assembling of EV charging stations. This will be a future product for us.
The NDA government has worked hard to improve the 'Ease of Doing Business'. Do you feel any change in the investment climate here during the last three years?
Over the last three years, we have seen many reforms taking place – all that are yet to give tangible results in terms of business. Though ease of doing business has got better, there is a lot more to do. Particularly in terms of import and exports policies, customs and other clearances, which continue to remain time-consuming.
How is your medium-term outlook on the growth of Indian economy and power and automobile sectors?
Automobile and white goods are a couple of sectors that have been growing. Apart from that, I feel the economy has not been doing well. In the medium term –6 months to one year from a macro perspective, I feel the Indian economy will struggle and companies like ours will have to fight for growth. However, in a longer term perspective, I feel the country has a lot of potential and glorious times will return soon.
Infraline Energy would like to thank the contributor for his/her valuable time and opinion shared on the topic.