The market for UPS, demand for which predominantly comes from the industrial and manufacturing segments in India, is projected to reach Rs 82 billion by FY’2019, expanding at a CAGR of 9.8 per cent in FY 2014-2019, says Harsh Mittal of Ken Research.

 

The exponentially growing demand for electric power, recurrent power cuts and supply of low quality power in India have led to a rapid expansion of UPS market over the last few years. Additionally, rapidly expanding IT/ITES, industry and plant automation, pharmaceutical and hospitality sectors have fuelled the demand for UPS systems. The growing consciousness among the Indian masses to safeguard their electrical appliances from damages caused by voltage fluctuation has also contributed to the growth of this market. The overall power deficit in India has been declining over the years mainly due to government’s emphasis on power generation, yet states including Himachal Pradesh, Uttar Pradesh and Jammu & Kashmir will continue to face power outages.

 

Market dynamics

Increasing penetration of IT/ITES and banking segments in tier II and tier III cities is expected to amplify the demand for UPS systems in the coming years. Overall the Indian UPS market is expected to grow at a CAGR of 9.8 per cent during FY’2014-FY’2019. Additionally, due to continuously increasing demand from industrial and manufacturing segment, high end UPS systems with power rating of above 50 KVA will continue to dominate the market in volume as well as value terms. 

 

UPS systems also contribute a significant part of the Indian battery industry segment which is estimated at Rs 13 billion for FY’2014. Apart from the demand for batteries coming from automotive OEMs, organized and unorganized replacement and telecom sector, the demand for UPS batteries is intensifying. It has been observed that home UPS comprised of 12 per cent of the demand for batteries in India, while industrial UPS contributed 12 per cent of the demand for batteries in India during FY’2014.

 

The demand for UPS systems in India predominantly comes from the industrial and manufacturing segments. Additionally, the increasing awareness among people to prevent damage of electronic equipments resulting from voltage fluctuations has played an important role in further expansion of the India UPS market. The Indian UPS market has been estimated to be consistently expanding. The market has grown from Rs 35 billion in FY’2010 to Rs 51 billion in the financial year ended March 2014 at a CAGR of 9.9 per cent during review period. 

 

The Indian UPS market witnessed a decent double digit growth till FY’2012, after which the industry grew only by 5.7 per cent in FY’2013. The country was recovering from economic slowdown and depreciation of Indian currency was a major concern in FY’2013. IT and telecom business experienced a flat growth due to which the UPS market also slowed down. However, during FY’2014, both telecom and IT industries witnesses an impressive growth leading to a healthier growth in Indian UPS market.

 

Due to its high cost, online UPS are used by large business consumers and this segment occupies a massive 85 per cent share in the overall market. The relatively less costly and simpler versions of UPS occupy hold only 15 per cent markets share. Online UPS systems majorly derive their demand from 1 KVA and above capacities while line interactive and offline UPS are mostly used in low power range UPS systems. The share of line interactive systems is on a decline due to the fall in sale of desktop computers. Line interactive systems cater to need of small office home office (SOHO) and home users, which are now getting overshadowed by notebooks and netbooks. However, Line Interactive systems are still sold in tier II and tier III cities where desktops are still popular.

 

Leading players 

The inverter market in India is highly competitive and dominated by a few leading brands including Luminous, Microtek and Su-Kam. Luminous 

is the market leader with a share of 28 per cent in terms of revenue in India Inverters market in FY’2014. The reason behind the popularity of Luminous is its wide range of Inverters. The brand has a variety of Inverters under each price bracket, giving the customers ample of choices. 

 

Microtek was the second largest brand of the inverters market in India with a revenue contribution of 23 per cent in FY’2014. The company focuses towards the needs and wants of its customers along with providing them high quality products at a wide range of competitive prices so as to achieve maximum customer satisfaction. This positions the company with high revenue of INR 5,438.2 million in FY’2013 in India inverters market.

 

Harsh Mittal is associated with Ken Research as a Senior Research Analyst and has 5 years of experience in research and consulting domain. He can be reached on email: harsh@kenresearch.com