Birla Power Sol to grow 25% in 5 yrs

Kalyan Bhattarcharya , MD, Birla Power Solutions , said the company on an average expects to grow 25% in the next five years.

Excerpts from CNBC-TV18’s exclusive interview with Kalyan Bhattarcharya:

Q: How fast is the genset market in India growing? How much of your revenues are expected to come from gensets this year?

A: We have a presence in two segments. One is the portable genset market and the other is the higher KVA genset market. The latter caters to the telecom sector and the growing retail and construction projects. The portable genset market is not growing as fast as we expected it to grow. The inverter market in which we have a presence is also growing.

So, there is a combination of growth in some segments and non-growth in a few segments. The genset business as a whole is growing very fast, primarily because of telecom business, big construction projects, and the retail sector. We have a product range which caters to both the portable as well as the higher KVA genset market.

On an average, we expect to grow by at least 25% in the next five years.

Q: How large is the organised market share within this entire genset business? How does it split up between you and Honda CL ?

A: Honda actually has a presence in portable gensets. our company is equally positioned in the portable gensets and higher KVA gensets. In the portable genset space, Honda has got a market share of about 60-65% while ours will be anywhere between 25-28%.

Q: We have a brokerage report that indicates you might finish off this year with about Rs 10 crore in profits, are you on track to do that? Given the pockets where you are seeing strength, you might better that performance?

A: At this point in time, I would not venture a guess. We are inline with our profit forecast.

Q: How much does the higher KVA genset business contribute in terms of revenues? What kind of margins do you work on in this business?

A: In the telecom sector, margins are under pressure because we do not get very high margins. We receive about 25% of our revenue share from the higher KVA business. The contribution is around 25-28% on the net sale price.

Q: The rest of the sales comes from? 

A: The rest of the sales comes from portable gensets. We are also a big manufacturer of pumps. Our focus is rural India. Today, rural India no longer wants to remain left behind. As I visit rural markets in India, I find there is big demand for modern pumps and irrigation equipments and portable gensets.

Our range is extremely exhaustive. Our portable gensets are actually at whisper levels. They do not produce any noise and are very compact. They are built from Japanese designs and are very economically priced. The market for this is huge. We are trying to capitalize on this dormant demand.