According to manufacturers of power backup systems, this was a unique season where prices remained stable, despite input costs of copper and lead increasing due to rupee’s depreciation.
By Srabani Sen
The delayed monsoon and the power grid failure in north India saw the UPS and inverter market booming this month. Sales of inverters and batteries jumped about 30 per cent for the quarter that closed on June 30. Manufacturers of power backup systems expect good profits this year, as the increase in sales will offset the rise in input costs due to a weak rupee.
Grid failure—a boon?
There was a 15-20 per cent rise in demand and revenues in the two days when the north Indian power grid failed, particularly for household inverters and new batteries. Local dealers of inverters in the national capital region also reported a rise in demand for these backup products. From receiving an average of five-six queries a day, retail shops were soon bombarded with 20-25 queries. A Panipat based inverter and battery dealer, Ahuja Electronics, had an 80-85 per cent increase in the number of queries, while its sales grew by 60 per cent in just two days.
Growth in the power backup market was also driven by higher consumption in southern India. According to the manufacturers of power backup systems, this was a unique season where prices remained stable, despite input costs of copper and lead increasing due to rupee’s depreciation.
Companies register growth
Although Exide Industries suffered a loss in the same quarter due to reduced demand in the automotive industry, its spokesperson said that overall, growth was robust despite a 4-5 per cent rise in product prices.
Inverter manufacturer Luminous Power Technologies’ first quarter sales grew manifold and the company plans to double its capacity at its Baddi and Gagrit facilities in Himachal Pradesh.
This summer season, sales were also good for Microtek International as the company grew by about 25 per cent.
Further growth expected
Currently, the power backup market in India is worth about Rs 36 billion, which represents a growth of around 9 per cent over the previous year. “With India’s economy set to grow at a brisk pace and with the continued power deficit situation, the demand for backup power solutions in the form of inverters, UPS systems and batteries is expected to witness a healthy growth in the coming years,” says Suhas Joshi, director, sales, UPS systems, Delta Power Solutions.
With the overall market size increasing, a widespread shift has taken place from the organised to the unorganised sector, points out an ASSOCHAM report. The report says that the growth ratio between the unorganised sector vis a vis the organised sector is 60:40. As a result, large players in the inverter and UPS segment will face tough competition in view of the price differential of
Rs 2000-3000 per inverter in the NCR. “Manufacturers are battling to keep prices of UPS systems and inverters stable owing to inflationary pressures, higher import duties and the devaluation of the rupee against the dollar. However, demand has not been affected yet,” explains B Venkat Rao, country manager for medium and large UPS systems, Emerson Network Power, India.