Monday, November, 18, 2013: HBL Power Systems Ltd is planning to provide electric cells for two-wheelers, and home backup power systems. The company aims to more than double its sales in four years with this initiative.
Commenting on the same, T Venugopal, executive director told Bloomberg, “Sales at the company, in which Citigroup Inc. holds a 6.6 per cent stake, may climb to Rs 30,000 million ($473 million) by March 2017, boosted by the additional products. It will spend Rs 1,000 million over the next 12 months to set up facilities to make automobile and home power backup batteries.”
Hurt by the slow expansion of India’s phone networks because of graft allegations and regulatory hurdles, the company is looking at avenues that is least impacted by the low growth in the segment. By implementing its plan, it will be directly competing with firms like Exide Industries Ltd and a unit of Schneider Electric SA.
“Conventional segments are not showing growth for us, so much so that our share in telecom has fallen to 50 per cent from 70 per cent,” said Venugopal. “We see inverter and two-wheeler autos as the new engines of growth.”
According to a report compiled by Bloomberg, HBL’s revenue, excluding units, rose 10 per cent to Rs 12,000 million in the year that ended 31 March, with telecommunications and industrial applications accounting for 65 per cent. Net income more than doubled in the year to Rs 204 million.
To implement its plan successfully, it is important that the firm has a strong dealer network to grab a good share of the market. This segment is already dominated by Amara Raja and Exide in the automotive segment and Su-Kam Power Systems Ltd and Schneider’s unit Luminous Power Technologies Pvt., which are leaders in inverters, Rajasekhar R., an analyst at Cholamandalam Securities Ltd in Chennai shared with Live Mint.
According to Venugopal, the company will be doubling its distributors to 1,000 in a year, compared with about 21,000 for Amara Raja and 50,000 for Exide.
