NTL Electronics, a ₹750-crore lighting electronics manufacturer based out of Noida, supplies electronic control gears, ballasts, luminaires, retrofit CFLs, LED drivers and LED lamps to industry leaders such as Crompton Greaves, Philips, Osram, Wipro, Bajaj, Surya Roshni, Orient, Finolex, HPL and Eveready. Sister company NTL Lemnis, a joint venture between NTL Electronics and Lemnis Lighting of Netherlands, specialises in designing and manufacturing energy-efficient LED lighting solutions for both domestic and global markets. Arun Gupta, Managing Director, NTL Electronics, interacted with Business Line through an e-mail interview and shared the industry’s growth prospects. Excerpts:

Now with a new Government set to take over at the Centre, what are your expectations from the administration for the industry?

As the new government is set to take over, most probably by the end of this month, my expectations from it that would immensely help the industry are: (1) Uniform and zero VAT rates across States for CFLs and LEDs to promote the use of energy-efficient and environment-friendly products, (2) Export incentives for all electronic-based products in the range of 5-10 per cent, particularly for emerging technology like LEDs, and (3) Provision of 50 per cent depreciation every year to spur faster adoption of LED technology – this has the potential to halve light consumption and decrease the carbon footprint.

What are the challenges faced by the domestic lighting industry and what are the growth triggers now?

Some of the major challenges faced by the domestic lighting industry are a lack of awareness, the presence of sub-standard Chinese products, lack of technical standardised norms, and the high cost of manufacturing due to low volumes. Hence, the price for the consumer is still high.

I believe the Government can play an important role in creating awareness and propelling the use of LED in India by offering subsidies as well as creating the change from within – the Government is a huge consumer of electricity. Private players have already started becoming adopters and high-energy consumers have started to convert to LED lighting.

Converting the influencers – town planners, architects, designers and others – will go a long way in creating the changeover to energy-efficient lighting.

Return on investment, low maintenance costs, power saving and environment friendliness are the main growth triggers for LED. Currently, the conversion is driven by the amount of usage (12-24 hour applications are most preferred) due to the immediate return on investment. LED lighting has broken price barriers, which hitherto were prohibitively high. But there still is some distance to cover vis-à-vis other lighting sources.

The LED market is poised to multiply 10 times in the next five years. According to Frost & Sullivan, the overall LED lighting market in India earned revenues of more than $142.8 million in 2012 and is estimated to reach $1,278.6 million in 2018.

You develop and manufacture a range of products. What are the strengths that set you apart from other manufacturers?

Our strength has been our strong R&D and innovation. All our products are adapted to meet local conditions, which make them highly reliable.

In 2010, CX Partners, a leading private equity player, invested $20 million in our shares. They picked up approximately 20 per cent of the total equity share capital of the company. At that time, we were the largest and one of the fastest growing lighting electronics company with a client list consisting of the who-is-who of the industry. We have been consistent in our growth and follow ethical practices. CX Partners saw these strengths in us while investing. When CX Partners invested in us, our turnover was around ₹400 crore. Today, it is in excess of ₹750 crore. We have tried hard to justify the faith that CX Partners has reposed in us.

Tell us about your growth plans.

Our seven facilities today have an installed capacity of 15 million units a year for CFL. In terms of financials, we are expecting the group's sales to reach around ₹2,500 crore in the next five years, from the current ₹750 crore.

We propose to increase our offerings, especially in the LED segment, where we are already producing over 100 types of products, targeted at all categories — home lighting, industrial lighting, professional lighting, street lighting, etc.

The company has already laid out plans to expand the capacity of its LED lights to 15-20 million units annually in the next five years, from the current seven million. We hope that we will capture five per cent market share in the next five years.

We are constantly enhancing our R&D capabilities. Today, we have a 75-strong R&D team in place at Noida and are planning to add 25-30 more people to the team this year.

Do you have any global plans?

The parent company, NTL Electronics, is a preferred choice for global players and we are working with the most renowned names in the global arena. We have a very fruitful working relationship with them and they have trusted us to produce quality products for many years now. In fact, NTL is the largest producer of lighting electronics globally, outside China.

We are a well-recognised player in the global arena and our products have generated a lot of consumer interest. In April 2012, NTL entered into a joint venture with Lemnis Lighting of Netherlands. The new company, NTL Lemnis, is a total LED lighting solutions company in the B2C space. NTL Lemnis has products and solutions for the European, African and Indian markets and we are also exploring the West Asian markets.

Now that the markets are looking up, do you have any plans to launch an IPO?

A fast growing company always has the requirements for funds and NTL is no exception. We are already in talks with a couple of private equity players for investments. We feel the markets will remain robust over the next three to five years. In this time frame, we would also have grown to ₹2,000-₹2,500 crore. NTL intends to go public in this time horizon, unless there are compelling reasons not to do so.

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