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Pickup in Growth Momentum in Electrical Equipment Industry, Switchgear Industry leads the pack (HY 2010-11)
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Indian electrical equipment industry has witnessed a pickup in its growth momentum by registering a 16.60% growth in the first half of  fiscal (H1 2010-11)
Buoyancy in demand from Power Grid, IPPs and big utilities for HV and EHV Switchgear like AIS, GIS has resulted in a 39.9% growth.

Medium voltage breakers are in huge demand for substation projects and have clocked a growth of more than 45%.

Low voltage products like Contactors, MCBs, MCCBs etc. continue to attract a growth of more than 35% due to sustained demand from cement, steel, OEMs, construction and infrastructure sectors.

Effect of Star Labelling for Distribution Transformers

Transformer industry has witnessed an improved growth momentum, with an overall growth of 20%. Domestic demand (growing at more than 25%) is supporting the overall growth since exports have declined by 15%, mainly in the Power Transformer segment.

Distribution Transformers segment has been major driver for this growth, having grown by 24.3% in H! 2010-11. There appears to be a revival in the interest of organized sector to participate in this segment which may be due to BEE star labelling programme, R-APDRP programme and CEA`s recent recommendations for utilities to procure minimum 3 star rated Distribution Transformers.

Growth of Power Transformers is steadily increasing as seen from the healthy order book position of almost 1.4 times of annual production. Till H1, a growth of 14.1% has been registered.

Cable sector has grown by 10.8%, with Power Cables growing by 16.8%. A positive sign has been the huge rise of more than 50% in HV Cables supplied in the domestic market.

Rotating Machines have overall clocked 17.2% growth, led by Alternators (33.6%) and LT Motors (18.9%).

In LT Motors, high end motors (above 355mm Frame size) have witnessed a good demand from power and cement sectors, as an alternative for HT Motors. Share of energy efficient motors is also increasing in this segment as sectors like paper, textiles and pharmaceuticals are sensitive to energy efficiency. IEEMA perceives that some overseas countries will pose a threat, as they will offer cheap energy efficient motors whose production will be made mandatory from April 2011 in China. On export front, Europe and other major destinations are not accepting motors below energy efficiency level (‘Eff1’). The domestic industry, therefore, needs to urgently upgrade to meet global standards.

Alternators for above 30 kVA have shown a good growth, indicating a thrust for uninterrupted power for commercial, industrial and power generation station units.

Capacitor industry growth of 25.4% has been largely driven by global demand and domestic demand orders through Rajeev Gandhi Grameen Vidyutikaran Yojna (RGGVY)
Energy Meter sector has more than doubled its growth from Q1 to Q2 due to a huge rise in orders for single phase static meters. Modest growth of poly phase meters is supported by a rise in export orders.

The growth of Transmission Line sector, however, has slipped to 4.9% mainly due to decline in growth of 7.4% for the Conductors segment. However, ascertaining accurate growth in this sector is a challenge due to presence of many small and unorganized players in this sector. Transmission Line Towers, however, continue to be in demand due to domestic orders led by Power Grid; especially for high voltage transmission network.

In short, Indian electrical equipment industry is expecting good times ahead, however, it needs to overcome the challenges posed to ride on the sustained demand growth in the medium term.

Growth Indices for Electrical Industry

Cumulative Growth Compared to Same Period of Previous Year

Product Weightage Half Year 2010-11
Rotating Machines 10.8 17.2
Switchgears 15.2 34.1
Cables 24.4 10.8
Transformers 25.3 20.0
Capacitors 0.8 25.4
Energy Meters 3.1 21.5
Transmission Lines 20.4 4.9
TOTAL 100.0 16.60
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