Viswanath Pilla Moneycontrol News Siemens India is trying to reinvent itself from being a pure electrical hardware supplier to providing end-to-end digital solutions to companies across business verticals to help them improve efficiency and cut costs.
“It has been a difficult 3-4 years. We are not of the woods yet. Large tenders that usually come from the Centre are not happening,” said Sunil Mathur, Siemens India Managing Director and CEO on Monday.
Mathur said the company has started focusing on moving from electrification to automation to digitalisation.
“Having faced a tough market in the last couple of years - the reality is that we have grown way above the market level at 10 percent CAGR. This has come not only by delivering plain hardware that we were always doing, which is the motors and drives, but in reinventing our business model using financing and digitilisation as a tool and working with our customers to answer their end-to-end problems,” Mathur said.
To push its digitilisation business further, the company launched an open platform called MindSphere - a cloud-based, open internet of things (IoT) operating system to help its customers embrace digitalisation.
Companies like Siemens, ABB, Rockwell Automation and Schneider Electric, which started out as industrial equipment suppliers, are now helping clients or companies in their transformation towards digitalisation.
Digitalisation involves deploying a network of tools like software, sensors, camera and actuators to capture every possible data point on the shop floor seamlessly. Using data analytics and artificial intelligence, companies are now able to analyse the data to improve efficiency, cut costs and have better control over their operations.
Siemens India, which follows an October-September financial year, posted its best ever financial performance. The company reported 14.6 percent increase in revenue to Rs 12,293 crore. Net profit rose 26.3 percent to Rs 1,391 crore.
New orders for financial year 2018 stood at Rs 12,740 crore. The order backlog as of September 30 stood at Rs 12,352 crore. The government alone contributed around 50 percent of those orders, the company said.
Mathur said he is seeing a private capex picking up and is finding a lot of activity in sectors such as automotive, food and beverages, pharmaceuticals and power transmission and distribution where customers are looking for solutions to enhance efficiency.
In the power sector, Siemens India said the sub-large orders are being tendered and their volumes are high. But in terms of ticket size they are still at the lower-end, or less than Rs 100 crore, mostly coming from captive power plants of cement, fertiliser and sugar industries.
Mathur said he expects large order to kick in over the next 3-4 years as 30-40 gigawatt (GW) of capacities at large power plants are reaching the end of their life cycles and need to be replaced
“A lot of these plants at some point of their time start performing or have to comply with COP 21 norms. Their efficiency levels have to improve. Many operators are beginning to talk to us - on how we can make these plants more efficient and turn them around,” Mathur said.
“There only two ways to do it. You either install pollution control devices or get super critical technologies to make these plants more efficient if the economy is to reach 7-8 percent, which means huge amount of capex,” he said.
In the transmission and distribution segment, Mathur said investments are taking place and this business is seeing double-digit growth. “We are growing at 10-13 percent CAGR on the back of these small businesses,” he added.
The focus is now shifting from high value 765 KV to 400-220 KV. There have been substantial tendering at the distribution company level as states opt for efficient substations.
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