Comments
Demonetisation has impacted the genset industry including Kirloskar Oil Engine Ltd (KOEL). The small and portable genset category has seen a 20-25 per cent decline in sales.
With a 33 per cent market share, KOEL is the largest diesel genset seller in the ₹6,000-crore Indian market.
Small and portable gensets, ranging between 2 kVA and 30 kVA, account for nearly 45 per cent of the market. Demand for these sets is mostly from retail outlets and small stores.
The impact on medium (up to 200 kVA) and high horsepower (200 kVA to 1,000 kVA) sets is minimal. These sets account for 55 per cent of the market and cater to sectors such as roads, commercial establishments, residential complexes and industrial units.
Dealer levelAccording to Sanjeev M Nimkar, Vice-President & Business Head (Power, Industrial & Service), KOEL, the disruption in sales of small and portable gensets is “temporary in nature”. It has been caused mainly at the dealer level, with some customers still preferring cash payments. These gensets are priced upwards of ₹60,000.
However, by April, the sector is expected to be back on track, said Nimkar, who was in the city to launch a new high horsepower genset. “The good thing in our segment is sales are never lost. They get postponed. So, once things settle down, this demand will be back. By April things should normalise,” he said.
Apart from Kirloskar, some of the other major players in the segment include Cummins, Mahindra, Ashok Leyland and Honda. On an average, 150,000 gensets (across categories) are sold in India every year. Another 30,000 units are said to be sold by the unorganised sector.
According to Nimkar, the genset market witnessed growth in beginning of this fiscal, after two years. Growth was led by increased offtake in road projects.
The upward curve made the industry hopeful of clocking a 10 per cent growth in sales.
But, demonetisation has now forced to industry to scale down expectations by at least two basis points, to 8 per cent. Nimkar, however, added that KOEL expects at least 10 per cent growth this fiscal, ahead of market expectations. “We are gaining market share and our growth should be in double digits,” he pointed out.
KOEL clocked a turnover of ₹1,430 crore in the first six months of this fiscal, an increase of over 13 per cent over the same period last fiscal.
Comments
COMMENT NOW
Comments
Comments have to be in English, and in full sentences. They cannot be abusive or personal. Please abide by our community guidelines for posting your comments.
We have migrated to a new commenting platform. If you are already a registered user of TheHindu Businessline and logged in, you may continue to engage with our articles. If you do not have an account please register and login to post comments. Users can access their older comments by logging into their accounts on Vuukle.