Solar UPS will contribute to green world: Numeric Power

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Solar UPS will contribute to green world: Numeric Power

In an exclusive interview to CNBC-TV18, managing director of Numeric Power Systems, R Chellappan, said that the company is planning on using its existing infrastructure to integrate solar power systems across the country.

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Numeric Power Systems , manufacturer of UPS systems, inverters and power conditioning products has recently decided to foray into the renewable energy space. In an exclusive interview to CNBC-TV18, managing director R Chellappan, said that the company is planning on using its existing infrastructure to integrate solar power systems across the country.

"Everyone is very upbeat about converting their UPS into a green UPS. That is where Numeric has an inbuilt opportunity, a great opportunity to convert or to modify the existing UPS systems into solar UPS systems, thereby contributing to the green world" he said. He goes on to add that he expects this business vertical to grow up to Rs 100 crore by the next fiscal year.

In terms of capital expenditure, Chellapan says that the company has sufficient reserves and surplus currently. "But we are keeping our options open to go for funding externally, depending on the speed of growth of the project" he added.

Below is an edited transcript of his interview with Ekta Batra and Reema Tendulkar. Also watch the accompanying video.

Q: We understand that you are increasing your focus on renewable power system integration. Can you just take us through the details and what sort of capex you have lined up?

A: Numeric has been a leading uninterruptible power supply (UPS) player with over 250 locations to provide customer support and then customer care. All along, we have been working on providing power continuity and that was leading to business continuity to many enterprises. Having established a countrywide network of offices for tech support and technical activities, we are using that infrastructure for solar power system integration across the country.

Right now we have about quarter million of online UPS systems being used by various clients in the SME segment, BFSI, industrial corporates, process automation and various government projects. Most customers are looking at converting their existing UPS systems into solar UPS systems, making use of their own roof space. Everyone is very upbeat about converting their UPS into a green UPS. That is where Numeric has an inbuilt opportunity, a great opportunity to convert or to modify the existing UPS systems into solar UPS systems, thereby contributing to the green world.

Q: How much does it already contributed in terms of revenues for you currently and what do you expect to scale it up to in FY12?

A: Last year we have done about 1000 sites. The remarkable one is in Rajasthan - we did 503 sites in one state. This account for banking, insurance and various corporate clients is spreading all over now.

If you look the revenue side, last year was about Rs 5-10 crore. This year we have lined up quite good projects and that can account up to Rs 50 crore for the financial year 2011-12. With this kind of a pace, we are all set to take this particular vertical to about Rs 100 crore next year.

Q: Could you tell us for this renewable system power integration what kind of margins do you enjoy?

A: Right at this moment the margins are pretty neat. At least we can say EBIT of about 10-12% right now. By operational efficiencies and handling proper logistics I think it can be maintained or sustained.

Q: Since you do plan to scale up - last year it contributed just about Rs 5-10 crore, this fiscal you expect that to go up to about Rs 50 crore. Would you require any kind of investment, any kind capital expansion plans for the company?

A: At this moment the company has quite a bit of accruals as our reserves and surplus and we are right now using our own funds. But we are keeping our options open to go for funding externally, depending on the speed of growth and how fast we can ramp it up.

Q: What kind of deal pipeline do you currently enjoy in this particular segment and how is that expected to scale up?

A: It depends on how fast we can convert customer's think of renewable. Many customers are in line and I would say it could be pretty fast.