Power Backup Market - India February 2009

Executive summary SAMPLE Drivers Chronic power deficit; widening supply-demand gap Demand from telecom sector Growth in desktop user base Market Drivers & Challenges Competition Large unorganized sector across all three product segments Generators: Few leading organized players; unorganized sector comprise of OEAs In portable segment, Company A and B are leaders while in the stationary segment Company C and D are some of the major players UPS: Company X, Y and Z account for x% of low-capacity UPS Inverters: AA, BB and CC are leading companies Challenges Increasing cost of raw materials Competition from unorganised sector Lack of consumer awareness Devices: Generators or Genset, battery-based Inverters and Uninterrupted Power Supply (UPS) End-user segments: Commercial (generators, inverters, UPS) and Residential (inverters and UPS) Wide range of products manufactured domestically India developing as an exporter of generators and inverters Introduction CAGR (2004-07) Value (2007) CAGR (2008-12) Size (2008) z% INR – bn z% INR – bn Inverter y% INR – bn y% INR – bn UPS x% INR – bn x% INR – bn Generator Exports Domestic Categories

Drivers

Chronic power deficit; widening supply-demand gap

Demand from telecom sector

Growth in desktop user base

Large unorganized sector across all three product segments

Generators: Few leading organized players; unorganized sector comprise of OEAs

In portable segment, Company A and B are leaders while in the stationary segment Company C and D are some of the major players

UPS: Company X, Y and Z account for x% of low-capacity UPS

Inverters: AA, BB and CC are leading companies

Challenges

Increasing cost of raw materials

Competition from unorganised sector

Lack of consumer awareness

Devices: Generators or Genset, battery-based Inverters and Uninterrupted Power Supply (UPS)

End-user segments: Commercial (generators, inverters, UPS) and Residential (inverters and UPS)

Wide range of products manufactured domestically

India developing as an exporter of generators and inverters

Market Overview Segments Drivers & Challenges Competition Key Developments

Market Overview

Segments

Drivers & Challenges

Competition

Key Developments

Power backup devices comprise generators, UPS and inverters SAMPLE Generator / Gen-set Combination of an electrical generator and engine, which run on fuels like diesel or gasoline, to generate back up power Industrial and large residential complexes while portable gen-sets are used by smaller establishments like shops INR -- bn UPS Battery-based device providing immediate power backup in case of power failure. Typically used for IT equipment. PC users like SME & SOHO setups, shops, home users, BPOs, retail chains, server rooms etc. INR -- bn Inverter Electric or electro-mechanical device converting DC (direct current) from batteries to AC (alternating current). SME & SOHO setups, shops, home users, BPOs, retail chains, hospitals etc. INR -- bn Device Description End-use Size (2008) Generators are the largest product segment in India.

Stationary generators, which are largely used in industrial and large commercial locations, are driving generator sales Market size (2008): INR XX bn Expected growth rate : x% p.a up to 2012 Generator sales are declining as inverters gain preference since the latter are: More efficient & cost effective Pollution-free Easy to operate and do not require fuel SAMPLE Stationary : Primarily run on diesel <125 KVA used in large residential & commercial complexes, hotels, hospitals >125 KVA used in large core sector industries, process industries Portable (0.5-6KVA) run on: Petrol Diesel Kerosene Product sub-segments Segment share Stationary x% Portable y% Generator market overview Market size & growth 2008 B 2012 +x% A INR bn Source:

Market size (2008): INR XX bn

Expected growth rate : x% p.a up to 2012

Generator sales are declining as inverters gain preference since the latter are:

More efficient & cost effective

Pollution-free

Easy to operate and do not require fuel

Stationary : Primarily run on diesel

<125 KVA used in large residential & commercial complexes, hotels, hospitals

>125 KVA used in large core sector industries, process industries

Portable (0.5-6KVA) run on:

Petrol

Diesel

Kerosene

Demand for UPS for desktops Demand from telecom operators Power shortages and demand supply gap in India Drivers Competition from unorganised sector Lack of consumer awareness Rising input costs – battery; packaging Challenges

Unorganized sector comprising of assemblers dominates the market with few, large players in the organized sector Fierce competition from unorganized players, which compete on price, and Chinese imports In stationary generator segment: Leaders: AA, BB, CC Others: X, Y, Z Few organized players in portable gensets A and B Power are market leaders ABC entered the market in 2008 instead of supplying through assemblers Unorganized segment comprises Original Equipment Assemblers (OEAs) Have exclusive understanding for sourcing engines from manufacturers Buy engines and alternators for assembly and sale to customers Major OEAs are dominate their respective regions: Mumbai: Powerica Delhi: Jakson, Sudhir and Bhaskar Chennai: Power Electrics Bangalore: DPK SAMPLE Generator competition Portable Genset Sales (Organized) Stationary Generators (Organized) Source: India Markets ” Generators :Industry “; Religare Technova Company Financials Database; Company Annual Reports X Y 2006 X Y 2007 X Y 2008 A B No. of Units Sold More than x% of organized market is accounted for A and B combined * Production figures; sales data unavailable 1,023 Units Sold ( sales in INR mn ) D (d) D (d) Z C (c) C (c) Y B (b) B (b) X A (a) A (a) W 2008 2007 Company

Fierce competition from unorganized players, which compete on price, and Chinese imports

In stationary generator segment:

Leaders: AA, BB, CC

Others: X, Y, Z

Few organized players in portable gensets

A and B Power are market leaders

ABC entered the market in 2008 instead of supplying through assemblers

Unorganized segment comprises Original Equipment Assemblers (OEAs)

Have exclusive understanding for sourcing engines from manufacturers

Buy engines and alternators for assembly and sale to customers

Major OEAs are dominate their respective regions:

Mumbai: Powerica

Delhi: Jakson, Sudhir and Bhaskar

Chennai: Power Electrics

Bangalore: DPK

Thank you for the attention About Netscribes Netscribes is a knowledge-consulting and solutions firm with clientele across the globe. The company’s expertise spans areas of investment & business research, business & corporate intelligence, content-management services, and knowledge-software services. At its core lies a true value proposition that draws upon a vast knowledge base. Netscribes is a one-stop shop designed to fulfil clients’ profitability and growth objectives. The Power Backup report is a part of Research on India’s Power Industry Series. For more detailed information or customized research requirements please contact: Disclaimer: This report is published for general information only. Although high standards have been used the preparation, Research on India, Netscribes (India) Pvt. Ltd. or “Netscribes” is not responsible for any loss or damage arising from use of this document. This document is the sole property of Netscribes (India) Pvt. Ltd. and prior permission is required for guidelines on reproduction. Natasha Mehta, CFA Phone: +65 8448 0449 E-Mail: [email_address] Gagan Uppal Phone: +91 98364 71499 E-Mail: [email_address] Research on India is a product of Netscribes (India) Pvt. Ltd. Research on India is dedicated to disseminating information and providing quick insights on “hot” industries in India and other emerging markets. Track our new releases and major updates in these industries on