Revival post lockdown

As India is lifting its prolonged lockdown, experts expect the demand in the distribution transformer industry to gradually pick up.

For any nation, consumption of electricity is one of the most important indicators in deciding development level. With a population of 1.3 billion, India is the second most populous country in the world and the third-largest economy. The aim to provide each household access to electricity, round the clock through ‘Power for All’ programme is a major step in this direction. With a growth target of 9 per cent, India is on a growth trajectory. India’s sustained economic growth is placing an enormous demand on its energy resources, energy systems and infrastructure which will help in keeping the momentum going. Experts believe that India can reach $5 trillion by 2024-25. Increase in generation capacity of both conventional and non-renewable sources due to increase in per capita consumption of electricity and new avenues like electric vehicle charging stations etc. will become one of the major growth drivers for the transformer industry, Atul Agrawal, Managing Director, Uttam (Bharat) Electricals Pvt. Ltd.

Pradeep Dixit, CMD, Urja Techniques (India) Pvt. Ltd. also acknowledges that the per capita electricity consumption in India is low as of now and once the Unlock 2.0 is implemented effectively, there will be a gradual rise in electricity consumption as industries and commercial activities will reopen. “We are expecting a revival in demand for our distribution transformers post normalization of activities,” he anticipates.

Latest innovations in distribution transformers
According to Agrawal, the latest ongoing/upcoming technologies in transformer segment are energy efficient transformers, smart transformers, 3D core transformers, dry type transformers, slim transformers, skid type transformers, ester oil transformers, amorphous core transformers, bigger rating transformers up to 10MVA in aluminium winding etc. According to Agrawal, a smart design mix of permutations and combinations of the above shall be required to enhance the efficiency of the distribution transformers while maintaining the quality and cost trade intact.

COVID-19 impact on distribution transformer market
COVID-19 has affected both domestic and international economies very badly, observed Agrawal. “Due to lockdown, industries of all sizes are affected. Amongst them, MSMEs are the ones who are badly hit.”

In India, most of the power and distribution industries come under medium and small enterprise and the pandemic impact is huge on them. The sector was already reeling under tremendous financial crisis before COVID-19 and now, in Agrawal’s opinion, companies are battling with challenges such as working capital issues, demand stagnation along with limited financial capacity etc. “Exodus of migrant workers returning back to their native places added fuel to the situation. This movement led to dearth of skilled labours in the factory,” he adds.

Dixit said, “At URJA, our optimism helped us to maintain our order book even during lockdown. Talking about the industry, the central and state government spending on expansion/upgradation of electricity network should be prioritized which would stabilize growing demand for equipment like distribution transformers.”

He suggests, “The industry need to work on out of the box solutions to sustain and be competitive in the market. Success will depend on quality, quantity and punctuality across the business ecosystem.”

Steps to revive growth
In past, the agriculture sector contributed around 15 percent to the country’s GDP and whereas the service sector’s contribution stood at 60 percent and industry contributed about 25 percent. Services sector’s operation remained ‘normal’ during the lock-down period as it effectively implemented work from home culture. So, according to Dixit, a good monsoon this year and the services sector’s continued operation and revival of industry may help to maintain the momentum of economic activities.

Experts believe that, the recent announcement of packages by the finance minister is a well thought out plan for stimulating the economy. “With plans in releasing the overdue payments and returning of bank guarantees fully/partially is seen as good step towards revival,” Agrawal said. “Boost in exports continue to be one of the major revival strategies for the country. All reforms should be carried with a specific time bound and effective manner.”

He adds, “The move like government’s initiative on introducing liquidity to the economy must significantly help in improving India’s competitiveness with wide ranging implications for each sector, including our industry.”

Due to lockdown, industries of all sizes are affected. Amongst them, MSMEs are the ones who are badly hit.
Atul Agrawal, Managing Director, Uttam (Bharat) Electricals Pvt. Ltd.

We are expecting a revival in demand for our distribution transformers post normalization of activities.
Pradeep Dixit, CMD, Urja Techniques (India) Pvt. Ltd.