Industry Analysis Report Electricity Michenary

Electrical Machinery Industry
Electrical Machinery profile:
• Electrical machinery industry accounts for nearly 6% of the total output of the
manufacturing sector
• Industry caters to most of the domestic demand, except for highly sophisticated
equipment
• Electrical machinery market estimated Rs. 10,200 crores (crs) - US $ 2,370
million
• Switchgear sector the fastest growing segment
Electrical Machinery
Electrical Electric
Transformers Switchgear Capacitors
Generators Motors
Power Portable HT Power FHP
Distribution Stationary LT Electrolytic Flameproof
Motor Induction Squirrel
Instrument
Starters,Contractors Furnance,etc. Cage
Slipring
DC Motors
Transformer Industry : Features
Industry
APGCCS, Rajampet 1
• Market estimated at Rs. 1400 crs. (US $ 325 mn)

• One of the most essential components in transmission and distribution of
electricity
• 36 units in the organised sector manufacturing power and distribution
transformers. Over 400 units all India manufacturing distribution transformers
• Industry capable of supplying generating transformers upto 500 MW unit
• Special type of transformers for welding, traction, etc. also produced in India
• Fully developed industry
• Many players have technical collaboration with world majors
• Affected by the fall in growth rate in power including the fast track projects
Products :
Distribution transformers:
• REC range - 25, 63 and 100 kVA

• 200 kVA to 2500 kVA mainly for urban and industrial areas
• 33 kV class from 3.15 MVA to 15 MVA
Power transformers:
• In the range of 15 MVA to 500 MVA of Cband 132 kV

• Above 50 MVA and upto 400 kV class
• New technologies being developed - amorphos core transformers for the REC
range. SFC gas and vacuum technologies being considered
Instrument transformers :
• Current transformers and voltage transformers both indoor and outdoor of various
classes manufactured
• Upto & including 660 V and above 660 V
User Segments :
APGCCS, Rajampet 2
• Electricity Boards, Power distribution companies major users

• Demand proportional to the addition in generating capacity and investment in
transmission & distribution sector
• Major players - BHEL, GEC Alsthom, Andrew Yule, NGEF, Crompton Greaves,
Vijay Electricals, Bharat Bijlee and Kirloskar Electric Co (KEC)
Transformer Industry : Trends
Power Transformers
Industry passing through a bad phase -

delay in implementation of power
projects
Imports around Rs. 47 crs.

(US $ 10 mn) and exports around Rs. 16
crs. (US $ 3.7 mn)
Distribution Transformers
Industry closely linked to the

investments in the transmission
& distribution sector
Imports - Rs. 30 crs. (US $ 6.9 mn)
Exports - Rs. 2.90 crs. (US $ 0.7 mn)
APGCCS, Rajampet 3
Instrument Transformers
Production
Current transformer
Order book and price levels showing a

downward trend. However, current
transformers appear to have fared
better
Voltage Transformer
Generators : Industry
Industry
• Large number of players especially in the lower kVA generators

• Organised sector accounts for 33%
• Generators assembled by Original Equipment Assemblers (OEAs) - buy engines
and alternators and assemble the generator and sell to customers
APGCCS, Rajampet 4
• Dominated by Shriram Honda and Birla Yamaha.

Other Players - Greaves, Kubato 3 to 15 kVA
• Simple technology hence dominated by the small scale sector. Most alternators
use slip rings hence easily assembled by dealers
• Units concentrated mainly in Agra - market either unbranded or local brand
generators
• Other SSI centres - Delhi, Rajkot, Kolhapur, Mumbai and Calcutta
• Major brands in the organised sector for engines - Kirloskar Electric and
Crompton Greaves
15 - 125 kVA
• Use brush type and brushless alternators. Quality control higher. Original
Equipment Assembler (OEA) has to invest in factory infrastructure
• No prominent brands here. Brands in diesel engines & alternators
> 125 kVA
APGCCS, Rajampet 5
• OEA’s have exclusive understanding with engine manufacturers
Major OEAs - Powerica, Mumbai; Jakson, Sudhir and Bhaskar, Delhi; Power Electrics,
Chennai and DPK, User Segments
• Portable gensets used mainly by shops, restaurants, small offices and business
establishments
• Stationary generators < 125 kVA used in large residential & commercial
complexes, hotels, hospitals
• > 125 kVA - large core sector industries, process industries
Bangalore User Segments :
• Portable gensets used mainly by shops, restaurants, small offices and business
establishments
• Stationary generators < 125 kVA used in large residential & commercial
complexes, hotels, hospitals
• > 125 kVA - large core sector industries, process industries
Capacitors : Industry
Products :
• Capacitors are used for correcting power factor at the consumer end. This
improves the efficiency of the system, reducing unwanted looses
• LT capacitors, HT capacitors, Starting running capacitors, Electrolytic motor,
starter capacitors, Induction furnace capacitors are some of the capacitors
manufactured in India
Industry
APGCCS, Rajampet 6
• Market estimated at Rs. 300 crs. (US $ 69 mn)

• Major design factors for capacitors are application area, rated voltage, voltage
variation, presence of harmonic frequencies
• Around 30 - 35 players in the organised sector account for nearly 85% of the
market
• Imports for the balance
User Segments :
• Usage wide and varied

• Used by utilities, panel board manufacturers, industries, etc.
Production
Units MW/MVA
Particulars 96 -97 97 -98 98 -99

LT Capacitors 2,760 2,559 2,133
HT Capacitors 5,505 5,887 6,986
Electrolytic Motor Start 975 870 776
Capacitors 7,990 7,591 14,636
Starting / Running
Capacitors
Imports in 98 -99 around Rs.65 crs. (US $ 1.5 mn)
Major Players :
• Asian Electronics, Bharat Heavy Electricals Ltd., Asea Brown Boveri, Keltron
Component Complex, Punsumi India, India Nippon Electricals, CTR
Manufacturing Industries, Elnet Saha Keil, Crompton Greaves, GEC Alsthom
Switchgear Industry : Features
Industry
APGCCS, Rajampet 7
• Around Rs. 3,000 crore (US $ 698 mn) market

• Three types of product markets - HT circuit breakers, LT circuit breakers, Motor
controllers & Contactors
• Switchgear are devices used to regulate transmission and distribution of power
both at the generation as well as consumption end
• India produces the entire range of circuit breakers from bulk oil, minimum oil, air
blast, vacuum to SF6 circuit breakers
• In the low tension category MCB, Air circuit breakers, switches, HRC fuses are
produced in different versions
• Industry caters to the demand of the domestic market and is in the process of
establishing itself in overseas markets
• Over 30 players in the market
• Small scale sector activity high in LT switchgear, motors, starters & contactors
User Segments :
• State Electricity Boards, Industries major user segments

• Panel board industry a major user of LT switchgear
• Non electrical machinery another large user of LT switchgear
Major Players :
• High tension circuit breakers - Bharat Heavy Electricals Ltd.(BHEL), Asea

Brown Boveri (ABB), Crompton Greaves, GEC Alsthom
• Low tension circuit breakers - Larsen & Toubro(L&T), Siemens, GEC Alsthom,
ABB, Crompton Greaves, MDS Switchgear, Havells, Indo Asian, Bhartia Cutler
Hammer, Telemechanique
• Motor, Starter & Contractors : Siemens, L&T, GEC Alsthom, Andrew Yule; L&T
the market leader
Switchgear Industry : Trends

Particulars 96 -97 97 -98 98 -99
APGCCS, Rajampet 8
• Relays
o Aux Relays & timers 132,889 165,517 150,043
o Over Current & Earth Fault Relays 26,178 29,208 76,451
o Measuring & Protection Relays 69,166 79,894 57,981
• Motor Controlgear
975,361 851,979 890,114
o Starters
535,347 417,771 358,534
o Aux Contactors
1979,123 1683,085 1702,719
o Power Contactors
252 400 325
o HT contactors
• LT Switchgear
o MCB 10872,054 13102,999 13597,470
o Other circuit breakers 349,650
o Switchfuse / Fuseswitch units 323,052 312,436 598,714
o Power switches 459,343 528,932 174,688
• HT Switchgear Circuit Breakers 266,799 208,362
o 0.66 KV - 36 KV
21,946
o above 36 KV
20,818 20,833 2,112
• Isolating switchers
1,902 2,157
o 0.66 KV - 36 KV
1,179
o above 36 KV
1,376 910 1,678
• HRC Fuses 2,018 2,158
o Upto & incl. 1000 V
o Above 1000 V 7012,857
• Overload Relays 8276,217 7785,154 49,809
41,733 47,661
o Upto & incl. 1000 V 1315,163
1517,070 1419,249
Electric Motors : Features

User Segments:
APGCCS, Rajampet 9
• Major market for lower HP motors is in the agricultural sector - used in irrigation
pumpsets
• FHP used in Water coolers, ACs, Deep freezers, Pumps, Washing machines, Wet
grinders, Garage compressors, Sewing machines, etc.
• Other motors - used primarily in the industrial sector
Major Players :
• FHP motors : Crompton Greaves, DLF major players. Also manufactured by

compressor and fan manufacturers. Unorganised sector activity high.
• Flame proof motor : ABB, Bharat Bijlee, Crompton Greaves, BHEL, NGEF,
Kirloskar, Electric
• Squirrel cage motors : BHEL, Crompton Greaves, GEC Alsthom, Kirloskar
Electric, Jyoti Ltd.,ABB, Bharat Bijlee
• Slipring motors : GEC Alsthom, Jyoti Ltd., BHEL, NGEF, Siemens
DC Motors : Crompton Greaves, Kirloskar Electric, NGEF, BHEL, Oxford Engineering

Industries
Electric Motors : Trends

Trends
• Marginal growth in the production of small motors and HT squirrel cage motors.
• Substantial decline in production of large and medium sized motors - market
diverted to squirrel cage motors because of availability of AC drives for speed
control.
• FHP motors showing positive growth.
• Affected by the inverted duty structure
Production
(Units MW/MVA)
Particulars 96 -97 97 -98 98 -99
APGCCS, Rajampet 10
AC Motors 4913 4732 4654

Flame Proof 175 147 159
DC Motors 32 32 25
Imports in 98 -99 around Rs.95 crs (US $ 2.2 mn) and

exports around Rs. 50 crs (US $1.2 mn)
Electrical Machinery : Characteristics

User segments :
• Electricity Boards single largest user of most products. Others used both by the
utility sector and industries
• Panel board manufacturers large users of switchgear products
Distribution :
• Generators, Switchgear, distribution driven businesses

• High end equipment machinery sold directly - power, distribution transformers
and high rating motors
Prices:
• Prices of unorganised sector manufacturers quite lower than those of organised

sector manufacturers. Eg. 5 kVA generators cost Rs. 4,500, 20 kVA around Rs.
11,000
• Duty structure : Basic - 25%; Surcharge -10% (on basic); CVD - 16%; SAD - 4%
Key Success Factors :
• Technology and product quality key success factors
APGCCS, Rajampet 11
• Need to re-engineer businesses in order to counter imports

• Need to offer business solutions better than products
Business Concerns:
• Additions to power generation has slowed down and this has adversely affected
the electricals sector
• Slowdown in the industrial sector as a whole during 1997-99 had also affected
this sector
• Switchgear industry affected by the spurious market
Demand Drivers:
• Demand for most products dependent on the additions to power generating

capacity and industrial expansion
• Demand for products like switchgear also driven by the replacement demand
EXPORTS AND IMPORTS OF ELECTRICAL MACHINERY
Exports of electrical machinery from India have registered continuous growth

over the period FY’01-05. A key driver for exports has been increasing outsourcing of
manufacturing goods from India, in addition to other factors like low labor costs and
improvements in capability and technology of domestic players. The following charts
depict in detail the exports of electrical machinery from India. The overall exports have
increased at a CAGR of about 42 per cent. Exports of transmission equipment had dipped
till 2002-03, but have been since been growing at a 27 per cent CAGR. Exports of wires
and cables have gone up over four times during 2000-05, at a CAGR of 45 per cent.
Automobiles etc. While India produces a range of furnaces, significant volume of imports
in this segment indicate gaps in domestic capacity and capability. Apart from meeting
domestic demand, electric furnaces are also exported from India. Exports and imports of
electrical furnaces have increased in the FY’03-05 period. Exports have increased at a
CAGR of 79 per cent, while imports have grown significantly from US$ 6.59 million in
FY’03 to US$ 36.08 million in FY’05 (CAGR of 233 per cent). In 2005-06, imports and
APGCCS, Rajampet 12
exports of electrical furnaces have further gone up to around US$ 42 million and US$ 25
million, respectively.
Exports of electrical machinery from India have registered continuous growth over the
period FY’01-05. A key driver exports has been increasing outsourcing of
manufacturing goods from India, in addition to other factors like low labor costs and
improvements in capability and technology of domestic players.
Industrial Units manufacturing large plant and machinery required for powerf generation,
transmission, distribution and utilisation are covered under the category "Heavy
Electrical Industry". These include turbo-generators, boilers, various types of turbines,
transformers, motors switchgears and other such items.
Electrical equipments such as motors, transformers, switchgears etc. are used by all
sectors of the Indian Economy. Some major areas where these are used are the multi-
crore projects for power generation including nuclear power stations, petrochemical
complexes, chemical plants integrated steel plants, non-ferrous metal units etc. The
industry has been upgrading the existing technology and is now capable of taking up
turn-key contracts also for export markets. The Industry has been delicensed.
The existing installed capacity in the industry is of the order of 4500 MW of thermal,
1345 MW of Hydro and about 100 MW of gas based power generation equipment per
annum. There also exists capability for manufacture of equipment for nuclear power
plants in the country. The share of domestic equipment is about 66% in the country’s
power generation capacity.
The Heavy Electrical Industry is capable of manufacturing transmission and distribution

equipment up to 400 KV AC and high voltage DC. Steps have also been taken to upgrade
the technology to the next higher system voltage level of 800 KV. Large electrical motor
used in Steel plants, Petrochemical complexes and other such heavy industries are also
being manufactured in the country.
APGCCS, Rajampet 13
The domestic Heavy Electrical equipment manufacturers are making use of the
developments in the global market with respect to product designs and upgrading of
manufacturing & testing facilities.
Year Imports Exports
2000-01 0.43 2.70

2001-02 0.19 9.90
2002-03 3.28 5.00
2003-04 0.10 7.70
2004-05 0.05 7.22
2005-06 14.60 20.00
2006-07 4.0 21.0
Future Outlook:
• Most electrical industries have recorded growth rates of over 15% per annum
during 1998 - 99
• But power sector prospects likely to determine future growth - at the moment,
long term policies for the power sector continue to be in a flux
• Hence, electrical industry likely to grow at 6 - 7 % per annum (compounded)
during the next few years
• Talks of revival in the power sector likely to boost demand further
• Companies likely to focus on technology.
Raw Materials Required:

Other ways exist as well. The commodities expert says an aggregated buying technique
used by automotive OEMs and large diversified manufacturers has "started to trickle
down" to some of Ariba's midmarket clients (companies with annual sales of $500
million to $2 billion). That is, companies' own central procurement departments are
trying to lock in raw material prices not only on their own behalf, but also on behalf of
suppliers that make parts for them. Not only does it aggregate buying power, but it is also
APGCCS, Rajampet 14
"locking in the raw material portion of the suppliers' price so you don't have to worry
about your supplier coming to you every four months saying, 'I got another increase in
steel, so I need to increase your prices on the stampings accordingly,'" Furey says.
Today's extreme price volatility also has spawned creative clauses regarding raw material
prices in quote requests and contract language. Prompting this language is suppliers'
desires not to commit to long-term, fixed priced contracts at a time when their raw
material costs could skyrocket, as well as manufacturers' desires not to lose or scare off
desirable supply sources.
Alternative Materials
Then there is simply designing products with the specific goal of introducing less-
expensive materials. Goodyear Tire & Rubber Co., for example, reports that it has
increased its ability to substitute synthetic rubber for natural rubber, thus taking
advantage of the price differential between the two materials. The Akron, Ohio-based
manufacturer says it can replace more than 15% of its natural rubber usage without
affecting performance.
Goodyear's efforts to increase its substitution flexibility date back to 2004, when
escalating prices for natural rubber already were making their presence felt.
VISION
APGCCS, Rajampet 15
To be the first option for everyone who wants to study Electrical Engineering in
Puerto Rico and the Caribbean due to its outstanding recognition and
educational achievements.
MISSION
To provide educational and practical experience that prepares individuals for

graduate studies and to practice engineering in a competitive environment. The
program provides a curriculum with fundamental and advanced topics in
Electrical Engineering, mathematics, science and humanities with the
development of analytical, experimental and computational skills. The curriculum
provides graduates with the skills and competencies necessary to understand
today’s technology trends and become leaders in designing tomorrow’s
technologies.
Assets
Rs. Crore (Non-Annualised) Mar-03 Mar-04 Mar-05 Mar-06 Mar-07 Mar-08
APGCCS, Rajampet 16
Gross fixed assets 16692.83 16920.79 17572.22 18669.93 20441.39 21869.23

Land & building 4117.23 4254.92 3410.6 3698.73 4169.18 4738.63
Plant & machinery 10859 10933.37 11432.37 12010.04 12531.56 13031.65
Transport & comm. equipment/infrastructure 194.97 223.33 218.71 218.35 270.75 304.77
Furniture,amenities & other fixed assets 749.68 754.32 860.22 917.34 844.77 915.88
Capital work-in-progress 477.8 453.83 740.52 846.08 1592.31 1863.13
Intangible assets 165.64 196.33 938.09 993.19 1066.68 1051.56
Net pre-operative expenses pending allocation 128.26 91.97 2.96 16.1 47.6 55.56
Net lease reserve adjustment -1.86 0 0 0 0 0
Less: Cumulative depreciation 6943.46 7578.62 8110.81 8590.24 8576.46 8888.6
Less: Arrears of depreciation 0.29 0.18 0 0.58 0.62 0.67
Net fixed assets 9747.22 9341.99 9461.41 10079.11 11864.31 12979.96
Investments 1508.03 1528.87 1835.36 2467.99 2852.79 3760.81

Equity shares 945.83 877.08 1039.48 1532.79 1855.03 2197.24
Preference shares 107.3 110.69 108.33 96.26 67.28 48.97
Mutual funds 265.94 380.73 422.84 527.79 658.36 1080.12
Debt instruments 68.8 218.09 281.06 330.11 303.28 292.73
Approved securites (slr/statutory req.) 0 0 0 0 0 0
Assisted companies 0 0 0 0 0 0
Others 174.11 33.09 32.22 34.74 49.52 209.84
Less: Provision for dimunition in value of
investments 53.95 90.81 48.57 53.7 80.68 68.09
Group companies 935.55 959.78 1094.08 1516.06 1827.84 2145.01
Non-group companies 451.4 625.92 740.69 954 1039.4 1457.34
Market value of quoted investments 449.68 641.18 807.32 1364.06 1324.12 1656.01
Deferred tax assets 627.2 633.42 619 617.25 653.81 627.87
Current assets 14536.68 15762.29 18314.54 24176.93 30687.63 38677.8
Cash & bank balance 1598.03 1975.83 2242.75 3373.28 3523.44 3999.72
Inventories 4029.7 4298.48 5139.1 6613.64 8300.57 10277.35
Receivables 7908.44 8324.09 9638.8 12627.62 16940.55 21792.08
Expenses paid in advance 1000.51 1163.89 1293.89 1562.39 1923.07 2608.65
Loans & advances 725.89 718.93 481.62 533.39 718.82 996.48
Deferred revenue expenditure 382.34 219.5 146.42 134.29 97.26 51.9
Total assets 27556.49 28205 30858.35 38008.96 46874.62 57094.82
No of companies 283 296 298 281 250 220
Liabilities
Net worth 6413.87 5857.81 6351.99 9264.64 14395.38 18706.83

Authorised capital 4651.55 4767.98 5182.44 5433.24 4414.85 4162.92
Issued equity capital 3102.4 3186.88 3487.6 3661.31 2988.58 2670.39
Paid up equity capital (net of forfeited capital) 3086.49 3168.49 3469.61 3646.01 2976.85 2662.97
Forfeited equity capital 4.34 5.35 10.35 20.7 3.68 1.07
Paid up preference capital (net of forfeited capital) 408.84 430.28 492.11 657.82 388.15 379.61
Capital contibution, suspense and application money 90.06 94.5 74 104.3 100.87 69.22
APGCCS, Rajampet 17
Reserves & surplus 2824.14 2159.19 2305.92 4835.81 10925.83 15593.96

10341.3
Free Reserves 6504.46 6945.34 7859.03 2 14020.63 18023.93
Security premium reserves (Net of deductions) 2070.07 1882.15 1929.85 2585.16 3506.74 4267.55
Other free reserves 4434.39 5063.19 5929.18 7756.16 10513.89 13756.38
Specific Reserves 657.98 628.96 720.97 704.15 698.17 646.94
Revaluation Reserves 1006.34 1013.34 733.38 720.21 575.05 542.4
Less Accumulated losses 5344.64 6428.45 7007.46 6929.87 4368.02 3619.31
10527.8 10364.6
Total borrowings 10289.44 10159.62 6 2 10896.39 11211.13
Bank borrowings 5109.17 5264.75 4716.18 5563.75 6418.24 7016.2
Short term bank borrowings 3805.63 3857.94 3600.61 3974.04 4300.74 4866.55
Long term bank borrowings 1303.54 1406.81 1115.57 1589.71 2117.5 2149.65
Financial institutional borrowings 1423.51 1289.24 1270.01 1025.33 752.08 692.78
Central & state govt. (usually sales tax deferrals) 172.24 186.17 372.58 391.8 199.53 156.03
Debentures / bonds 1145.46 748.91 544.11 499.08 408.94 277.25
Convertible 18.58 20.28 16.37 0.84 7.96 0.64
Non-convertible 1126.88 728.63 523.97 456.23 366.23 159.68
Fixed deposits 240.86 178.47 163.93 105.04 73.49 67.73
Foreign borrowings 165.77 294.21 1289.65 1008.43 1347.84 1225.1
Of which : euro convertible bonds 0 0 0 0 183.57 168.18
Borrowings from corporate bodies 591.3 690.47 465.96 467.32 438.07 718.54
Group / associate cos. 349.93 397.99 142.02 112.35 61.17 76.09
Borrowings from promoters / directors 55.68 124.12 473.21 248.68 235.7 98.95
Commercial paper 70 0 50 0 0 0
Hire purchase borrowings 19.78 22.69 12.81 10.86 10.59 12.55
Deferred credit 659.04 570.59 462.37 488.28 488.3 493.81
Other borrowings 636.63 790 707.05 556.05 523.61 452.19
Secured borrowings 7959.2 7620.02 7646.33 7662.97 8233.23 8777.69

Unsecured borrowings 2330.24 2539.6 2881.53 2701.65 2663.16 2433.44
Current portion of long term debt 636.36 381.32 457.17 552.36 592.98 585.76
13109.9 17536.4
Current liabilities & provisions 10036.05 11318.4 4 8 20685.72 26275.79
Sundry creditors 5114.3 5405.33 6162.63 8632.52 10084.17 12995.52
Acceptances 632.91 728.98 897.91 1097.61 1416.07 1821.47
Deposits & advances from customers & employees 986.02 1158.13 1425.49 2294.76 2526.84 2868.48
Interest accrued 872.48 1081.03 1344.68 1491.8 1376.72 1336.85
Share application money 0.61 0.93 0.49 1.15 2.2 3.64
Other current liabilities 1016.11 1123.04 1216.64 1322.64 1883.78 2591.35
Provisions 1413.62 1820.96 2062.1 2696 3395.94 4658.48
Deferred tax liability 817.13 869.17 868.56 843.22 897.13 901.07
30858.3 38008.9
Total liabilities 27556.49 28205 5 6 46874.62 57094.82
Net worth (net of reval & DRE) 5025.19 4624.97 5472.19 8410.14 13723.07 18112.53
Contingent liabilities 3795.26 4342.62 3867.25 5625.76 7037 7992.83
No of companies 283 296 298 281 250 220
APGCCS, Rajampet 18
Income & expenditure
Total income 25696.41 28766.49 35805.82 46023.83 62556.6 75850.88

Sales 24691.07 27711.14 34915.62 44842.8 61202.29 74276.96
Industrial sales 22548.94 24482.53 30553.62 39864.26 54068.42 65104.28
Income from non-financial services 2142.13 3228.61 4362 4978.54 7133.87 9172.68
Income from financial services 373.26 375.47 312.07 409.43 570.81 797.56
Interest 190.45 136.48 115.01 161.95 201.92 270.18
Dividends 57.83 79.38 110.52 150.55 102.45 62.28
Treasury operations 95.63 144.28 76.2 87.86 254.75 442.74
Other income 127.12 140.72 154.43 140.01 143.04 166.78
Prior period income & extraordinary income 504.96 539.16 423.7 631.59 640.46 609.58
Change in stock 4.68 -85.34 473.78 847.67 1032.74 1222.84
Total expenses 26261.35 29259.06 35716.24 45162 60173.05 72618.29
APGCCS, Rajampet 19
Raw material expenses 11740.54 13040.01 17159.33 22238.23 29861.7 36178.91

Packaging expenses 115.47 124.4 159.67 223.01 229.75 291.46
Purchase of finished goods 2219.57 3260.09 4349.98 5280.47 6787.82 9049.69
Power, fuel & water charges 592.73 579.59 595.67 703.12 790.6 851.82
Compensation to employees 2286.72 2397.99 2340.57 2640.59 3033.37 3608.61
Indirect taxes 2426.5 2597.17 3327.36 4142.44 5378.97 6607.44
Royalties, technical know-how fees, etc. 49.03 48.78 61.87 89.7 147.74 202.76
Lease rent & other rent 133.68 119.81 117.96 137.27 146.35 198.97
Repairs & maintenance 229.84 239.83 255.7 293.71 342.01 394.3
Insurance premium paid 62.73 65.83 68.79 82.14 108.73 113.21
Outsourced mfg. jobs (incl. job works, etc.) 228.33 245.97 290 281.48 412.75 502.79
Outsourced professional jobs 117.35 135.33 136.87 188.93 255.14 348.77
Directors' fees 0.72 0.82 1.16 1.31 2.78 3.27
Selling & distribution expenses 1400.06 1518.58 1661.16 2009.87 2483.69 2985.14
Travel expenses 301.75 333.97 364.42 426.8 486.98 586.42
Communication expenses 94.84 96.11 103.84 109.54 122.11 129.72
Printing & stationery expenses 26.11 27.53 30.4 35.06 40.72 46.54
Miscellaneous expenses 435.52 474.77 516.6 623.92 708.55 801.38
Other operational exp. of indl. enterprises 647.62 707.31 1194.17 2081.41 4846.28 4766.57
Other oper. exp. of non-fin. service enterprises 17.56 32.85 33.49 1.43 1.79 3.35
Share of loss in subsidiaries/JVs,etc. 0.75 0.68 0.33 0.3 0 0.27
Lease equalisation adjustment 1 0.81 0 0 0 0
Loss on securitisation of assets/loans 0 0 0 0 0 0
Fee based financial service expenses 119.99 112.67 125.84 142.23 183.39 215.16
Treasury operations expenses 37.44 29.48 51.14 33.4 34.25 184.78
Total provisions 167.2 152.05 103.47 196.14 126.28 145.77
Write-offs 127.71 171.29 153.95 177.95 151.13 211.92
Less: Expenses capitalised 13.83 7.27 13.04 19.75 66.76 106.27
Less: DRE & expenses charged to others 1.19 1.36 5.53 7.85 26.58 41.86
Prior period & extraordinary expenses 211.38 326.48 78.33 175.23 79.54 62.65
PBDITA 1923.97 1849.58 3016.1 4583.42 6920.26 8730.18

Interest paid 1243.26 1115.01 1005.29 1042.74 1034.09 1250.39
Financial charges on instruments 1.52 0 0.42 0 0 0
Expenses incurred on raising deposits/debts 0.02 0 0.03 0.03 0 4.66
PBDTA 679.17 734.57 2010.36 3540.65 5886.17 7475.13
Depreciation 852.22 847.53 859.22 900.72 917.11 964.31
Amortisation 70.25 73.89 37.11 36.81 23.56 6.06
PBT -243.3 -186.85 1114.03 2603.12 4945.5 6504.76
Provision for direct taxes 316.96 391.06 550.67 893.62 1529.21 2049.33
PAT -560.26 -577.91 563.36 1709.5 3416.29 4455.43
No of companies 283 296 298 281 250 220
APGCCS, Rajampet 20
Profits
PBDITA 1923.97 1849.58 3016.1 4583.42 6920.26 8730.18

Depreciation 852.22 847.53 859.22 900.72 917.11 964.31
Amortisation 70.25 73.89 37.11 36.81 23.56 6.06
PBIT 1001.5 928.16 2119.77 3645.89 5979.59 7759.81

Interest paid 1243.26 1115.01 1005.29 1042.74 1034.09 1250.39
Financial charges on instruments 1.52 0 0.42 0 0 0
Fee based financial services expenses 0.02 0 0.03 0.03 0 4.66
PBT -243.3 -186.85 1114.03 2603.12 4945.5 6504.76

Provision for direct tax 316.96 391.06 550.67 893.62 1529.21 2049.33
Corporate tax 268.71 327.07 529.27 842.02 1378.28 1926.2
Deferred tax 76.18 86.07 65.73 89.82 137.19 158.82
Less: Deferred tax assets / credit 29.02 23.48 48.83 99.83 52.59 111.28
Other direct tax 1.09 1.4 4.5 61.61 66.33 75.59
Fringe benefits tax 0 0 3.51 60.29 65.16 74.51
PAT -560.26 -577.91 563.36 1709.5 3416.29 4455.43

PAT (as reported by the Co.) -574.86 -591.05 567.41 1715.29 3373.55 4444.15
Prior period & extra-ordinary income 504.96 539.16 423.7 631.59 640.46 609.58
Prior period & extra-ordinary
expenses 211.38 326.48 78.33 175.23 79.54 62.65
Net prior period & extraordinary
transactions -293.58 -212.68 -345.37 -456.36 -560.92 -546.93
PBDITA net of P&E 1630.39 1636.9 2670.73 4127.06 6359.34 8183.25

PBIT net of P&E 707.92 715.48 1774.4 3189.53 5418.67 7212.88
APGCCS, Rajampet 21
PBT net of P&E -536.88 -399.53 768.66 2146.76 4384.58 5957.83

PAT net of P&E -853.84 -790.59 217.99 1253.14 2855.37 3908.5
Distribution of profits (%)

PBDITA 100 100 100 100 100 100
47.946173 13.592986
Depreciation & Amortisation 8 49.8177965 29.7181791 20.4548132 4 11.1151202
64.699553 14.942935
Financial charges 5 60.284497 33.3457113 22.7509153 7 14.3759922
16.474269 22.097580
Tax 3 21.1431785 18.2576838 19.496795 1 23.4740864
29.119996 49.366497
PAT 7 -31.2454719 18.6784258 37.2974766 8 51.0348011
Non--provisions for: 152.08 227.29 186.86 186.13 248.1 221.86

Diminution in investement 0.59 0.35 0.08 0 0 0
Sundry debtors 16.61 38.49 23.49 24.06 16.81 3.87
Loans & advances including NPAs 21.04 15.96 13.34 4.63 6.4 5.79
Loans & advances to group cos. 0 66.02 65.96 65.96 65.96 0
Interest expenses 107.25 99.44 79.76 87.5 157.72 211.39
Power expenses 0 0 0 0 0 0
Gratuity 0.6 1.77 1.34 0 0 0
Others 5.99 5.26 2.89 3.98 1.21 0.81
No of companies 283 296 298 281 250 220
TOOLS OF ANALYSIS
1. Cost Structure:
Cost structure shows the percentage of cost incurred to a
product. It is the relationship between fixed charges and value added. Here value added
means sales-(raw material expenses + power, water& fuel consumption).Fixed charges
means compensation paid to employees, interest paid and depreciation.
Cost Structure = Fixed Charges

Value Added
2. Operating Performance:
Operating performance shows the relationship between operating profit and net
assets.
Operating Performance = EBIT X 100

Net Assets
3. Financial Performance:
APGCCS, Rajampet 22
Financial performance shows the relationship between profit after tax and net
worth.
Financial Performance = PAT X100

Net Worth
4. Growth Rate:
Growth rate of sales represents how much percentage of sales are increased or
decreased in a year as compared to the previous year.
5. Trend analysis:
Trend analysis is used for estimating the future value of the industry or company.
Straight line trend is represented by the equation.
Y= a+bx
In order to determine the values of the constants a and b the following normal equations
are to be solved.
ΣY=Na+bX
Σ XY=aΣX+bΣX2
6. Coefficient of correlation:
Correlation is the degree of association between two variables and it represented in
terms of a coefficient known as coefficient of correlation. The range of correlation
coefficient is-1and+1.If the coefficient is negative, then the variables are inversely
proportional and maximum when it is -1. If it is 0, there is no association between the
variables. If the coefficient is positive then the variables are associated directly and it is
maximum when it is =1.
APGCCS, Rajampet 23
7. Return on investments (ROI):

This ratio is called as overall profitability ratio or return on capital employed. It
measures the sufficiency or other wise of profit in relation in capital employed.
Operating profit
ROI = ------------------------------ x100
Capital employed
1.Cost Structure:
The Cost structure indicates that how much cost had incurred for obtaining the
output. On awareness of the cost structure of the industry we can able to take further
steps to decrease the cost structure in the coming years. The cost structure had established
with the relationship of fixed charges and value added.
Fixed charges
COST STRUCTURE = --------------------------------
Value Added
Table:1
S.no particulars 2003 2004 2005 2006 2007 2008
1. Sales 24691.07 27711.14 34915.62 44842.8 61202.29 74276.96
2. Raw materials 11740.54 13040.01 17159.33 22238.23 29861.7 36178.91
3. Power& fuel 592.73 579.59 595.67 703.12 790.6 851.82
4. Compensation 2286.72 2397.99 2340.57 2640.59 3033.37 3608.61
to employees
5. Interest paid 1243.26 1115.01 1005.29 1042.74 1034.09 1250.39
6. Depreciation 852.22 847.53 859.22 900.72 917.11 964.31
7. Value added 12357.8 14091.54 17160.62 21901.45 3054.99 37246.23
8. Fixed charges 4382.2 4360.53 4205.08 4584.05 4984.57 5823.81
9. Cost Structure 0.354 0.309 0.245 0.209 0.631 0.156
APGCCS, Rajampet 24
Graph:1
Cost structure
0.8 0.631
0.6
0.354 0.309
0.4 0.245 0.209
0.156
s
eV
lu
a
0.2
0
2003 2004 2005 2006 2007 2008
Years
I
nterpretation:
From the above table it is observed that the fixed cost as a proportion of value
added has come down year by year from 35.4% in the year 2003 to 15.6% in the year
2008 (expect in the year 2004 it was 2007 it was 63.1%). The value addition is increased
because of more increase in sales & less increase in the costs of power fuel & water
charges the fixed charges year by year due to the increase in compensation to employees,
interest paid & depreciation of electrical machinery industry as a result the ratio fixed
charges / value added decreased.
2. Operating Performance:
The Operating performance had established with the relationship of Earning
before interest and tax (EBIT) and Net assets. It convays the operating performance of
the industry which means the moving capabilities of the industry are appropriate or not. It
represents how much net assets are contributed for obtaining that particular PBIT.
PBIT
OPERATING PERFORMANCE = ---------------------
Net Assets
Table .2
YEAR PBIT TOTAL ASSETS OPERATING
PERFORMANCE
2003 1001.5 27556.49 0.036
2004 928.16 28205 0.032
2005 2119.77 30858.35 0.068
2006 3645.89 38008.96 0.095
2007 5979.59 46874.62 0.127
2008 7759.81 57094.82 0.135
Graph:2
APGCCS, Rajampet 25
Interpretation:
From the above table it is observed that Operating Performance of electrical
machinery industry is showing fluctuations during the study period of is showing
fluctuations during the study period of 2003-2008. This is due to the fluctuations in
EBIT. In the year 2008 it was very high (0.135) due to increase in total assets & EBIT. In
the year 2004 it was very low, due to the decrease in EBIT.
3. Financial Performance:
The Financial performance had established with the relationship of profit after tax
(PAT) and Net worth. It represents how much net worth is lying for acquiring the profit
after tax (PAT), and we can able to aware the financial performance of the industry.
PAT
FINANCIAL PERFORMANCE = ---------------------
Net worth
Table: 3
YEAR PAT NET WORTH FINANCIAL
PERFORMANCE
2003 -560.26 6413.87 -0.087
2004 -577.91 5857.81 -0.098
2005 563.36 6351.99 0.088
2006 1709.5 9264.64 0.184
2007 3416.29 14395.38 0.237
2008 4455.43 18706.83 0.238
APGCCS, Rajampet 26
Graph:3
Interpretation:
From the above table it is observed that Financial Performance of electrical
machinery industry is showing fluctuations during the study period 2003-2008. This is
due to the fluctuations in PAT & Net worth. In the year 2008 it was very high (0.238) due
to increase in PAT, Net worth. In the year 2003 it was very low, due to the decrease in
PAT of electrical machinery industry.
4. Growth Rate of sales:
Growth rate of sales represents how much percentage of sales are increased or
decreased in a year as compared to the previous year.
Current Year
Growth Rate =-------------------------- -1
Previous Year
Table.4
year Total sales Growth Trend

2003 24691.07 ----
2004 27711.14 12.23
2005 34915.62 25.99
2006 44842.8 28.43
2007 61202.29 36.48
2008 74276.96 21.36
APGCCS, Rajampet 27
Graph.4
Interpretation:
From the above table it is observed that growth rate in Sales of Electrical
Machinery Industry year by year during the study period of 2003-2007 due to the
increasing sales in the year 2008 it was decreasing due to change in Total Sales.
Trend analysis of Sales:

Trend analysis is used for estimating the future value of the industry or company.
Straight line trend is represented by the equation. Y= a+bx
In order to determine the values of the constants a and b the following normal equations
are to be solved. ΣY=Na+bX
Σ XY=aΣX+bΣX2
Table:5
Year Sales
2003 24691.07
2004 27711.14
2005 34915.62
2006 44842.8
2007 61202.29
2008 74276.96
2009* 92044.95
APGCCS, Rajampet 28
2010* 115877.73
2011* 145881.42
Graph:5
Trend Values of Sales
160000
140000
120000
100000
Value
80000
60000
40000
20000
0
2003 2004 2005 2006 2007 2008 2009* 2010* 2011*
Years
Years
Interpretation:
From the above table it is observed that trend analysis electrical machinery
industry was increased year by year during the study period of 2003-2011 because of the
increase of sales.
Correlation between income &expenses:

Correlation is the degree of association between two variables and it is
represented in terms of a coefficient known as correlation. The range of the correlation
coefficient it is in between -1and+1. If the correlation coefficient is negative, then the
variables are inversely proportional and maximum when it is-1;if the coefficient is 0,
there is no association between the variables. If the coefficient is positive then the
variables are associated directly and it is maximum when it is+1.
Table : Calculation of income &expenses during 2003-2008. (Rs in Crores)
APGCCS, Rajampet 29
Year Income Expenses

2003 25696.41 26261.35
2004 28766.49 29259.06
2005 35805.82 35716.24
2006 46023.83 45162.0
2007 62556.6 60173.05
2008 75850.88 72618.29
Co-efficient of correlation: 0.999
Interpretation:
From the above table, it is observed that there is a strong relationship between
income& expenses. Because 1% change in total expenses that must be lead to 0.999%
change In income. It is showing positive relationship between income and expenses.
Correlation between Sales & Total assets:

Correlation is the degree of association between two variables and it is
represented in terms of a coefficient known as correlation. The range of the correlation
coefficient it is in between -1and+1. If the correlation coefficient is negative, then the
variables are inversely proportional and maximum when it is-1;if the coefficient is 0,
APGCCS, Rajampet 30
there is no association between the variables. If the coefficient is positive then the
variables are associated directly and it is maximum when it is+1.
Table : Calculation during sales& total assets 2003-2008. (Rs in Crores)
year Sales Total assets

2003 24691.07 27556.49
2004 27711.14 28205
2005 34915.62 30858.35
2006 44842.8 38008.96
2007 61202.29 46874.62
2008 74276.96 57094.82
Co-efficient of correlation: 0.995
Interpretation:
From the above table, it is observed that there is a strong relationship between
Sales & Total assets is 0.995 because 1% changes in total assets that must lead to 0.995
changes in sales. It is showing positive relationship between Sales & Total assets.
APGCCS, Rajampet 31
7.Return on investments(ROI):
This ratio is called as overall profitability ratio or return on capital employed. It
measures the sufficiency or other wise of profit in relation in capital employed.
Operating profit
ROI =------------------------------- x100
Capital employed
Table : Calculation during ROI during the year 2003-2008. (Rs in Crores)
Years Operating profit Capital employed ROI

2003 1001.5 6413.87 15.6145
2004 928.16 5857.81 15.8448
2005 2119.77 6351.99 33.3717
2006 3645.89 9264.64 39.3527
2007 5979.59 14395.38 41.5382
2008 7759.81 18706.83 41.4811
Graph.
Interpretation:
From the above table it is observed that the return on investment ratio is shown
continuously increasing from the year 2003-2008 due to increase in operating profit &
increases in capital employed
APGCCS, Rajampet 32
SWOT ANANLAYSES
Strengths:
A strength mentioned was the presence of leading global players in the
Philippines. These leading firms such as Intel, Texas Instruments, etc. provide a unique
and strong foundation for the future of the industry. Another strength cited is the
abundant Filipino manpower resources. The highly skilled and English speaking
manpower resources in the Philippines still make it attractive to invest in the country. The
SWOT-analysis was based on interviews with CEOs of the top 10 firms in the industry.
Weaknesses:
A number of weaknesses have been stressed. The number one weakness is the
high cost of power in the country. IT describes current electricity charges of the
Philippines including its important neighbors. Apart from the high costs of electricity,
poor infrastructure is seen as one of the major difficulties in the further development of
the industry. Furthermore, the image of the Philippines is also noted as a hindrance to the
advancement of the industry.
The lack of government funds to support industry initiatives was also a major
factor including the lack of engineers in the Philippines with higher and advanced studies.
These weaknesses should be on the high note of a major industry roadmap if the industry
would want a responsive and efficient guide to its further improvement and constant
development.
APGCCS, Rajampet 33
Opportunities:
Among the opportunities cited were the following: 1) Higher-valued activity
through the industry’s center of excellence; and 2) United and solid electronics industry.
SEIPI has established the Advanced Research and Competency Development Institute
(ARCDI) to address the widening gap between engineers’ skills and the industry’s needs,
and increase the availability of skilled manpower for high technology industry. This is
only one of SAPI’s initiatives in creating higher-valued activities in the industry.
Furthermore, the current state of the electronics industry provides a great opportunity for
the industry’s advancement. A recent deal that was announced as a bellwether in the
electronic industry is seen as a big boost for the industry.
Threats:
The growing role of China as the manufacturing capital of the world in recent
years is cited as a major threat to the Philippine electronics industry. China was said to
have affected investments in the Philippine electronics industry in 2001 to 2004 (See
Table 1). Indeed, China is a huge force to reckon with in the industry’s bid to further
develop and improve.
OBSERVATIONS
APGCCS, Rajampet 34
o Cost structure observed that the fixed cost as a proportion of value added has
come down year by year from 35.4% in the year 2003 to 15.6% in the year 2008
(expect in the year 2004 it was 2007 it was 63.1%). The value addition is
increased because of more increase in sales & less increase in the costs of power
fuel & water charges the fixed charges year by year due to the increase in
compensation to employees, interest paid & depreciation of electrical machinery
industry as a result the ratio fixed charges / value added decreased.
o The Operating Performance of electrical machinery industry is showing
fluctuations during the study period of 2003-2008. This is due to the fluctuations
in EBIT.
o The Financial Performance of electrical machinery industry is showing
fluctuations during the study period 2003-2008. This is due to the fluctuations in
PAT & Net worth. In the year 2008 it was very high (0.238) due to increase in
PAT, Net worth. In the year 2003 it was very low, due to the decrease in PAT of
electrical machinery industry.
o The growth rate of sales has been increased from 2003 to 2007. It is 12.23% in
2003 and it is gradually increased up to 2007 with 36.48%. It is increased for rates
to the base year 2003.
o The trend analysis of electrical machinery industry was increased year by year
during the study period of 2003-2008, because of the increase of sales.
o The Correlation shows the strong relationship between income& expenses.
Because 1% change in total expenses that must be lead to 0.999% change In
income. It is showing positive relationship between income and expenses.
o The Correlation shows the strong relationship between Sales & Total assets is
0.995 because 1% changes in total assets that must lead to 0.995 changes in sales.
It is showing positive relationship between Sales & Total assets.
o The return on investment ratio is shown continuously increasing from the year
2003-2008 due to increase in operating profit increases in capital employed
CONCLUSION
APGCCS, Rajampet 35
The Growth rate of Sales and estimated values of Sales are increasing when
compared to the present value of Sales and from the cost structure is also it is observed
cost of the industry is minimising during the period 2003-2006.
Hence it can be concluded that the domestic demand for Electrical Machinery
industry is increasing in India.
APGCCS, Rajampet 36

Industry Analysis Report Electricity Michenary

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Electrical Machinery Industry

Electrical Machinery profile:

Transformer Industry : Features

• Market estimated at Rs. 1400 crs. (US $ 325 mn)

• REC range - 25, 63 and 100 kVA

• In the range of 15 MVA to 500 MVA of Cband 132 kV

• Electricity Boards, Power distribution companies major users

Transformer Industry : Trends

Industry passing through a bad phase -

Imports around Rs. 47 crs.

Industry closely linked to the

Order book and price levels showing a

• Large number of players especially in the lower kVA generators

• Dominated by Shriram Honda and Birla Yamaha.

> 125 kVA

• OEA’s have exclusive understanding with engine manufacturers

Bangalore User Segments :

• Market estimated at Rs. 300 crs. (US $ 69 mn)

• Usage wide and varied

Particulars 96 -97 97 -98 98 -99

Imports in 98 -99 around Rs.65 crs. (US $ 1.5 mn)

Switchgear Industry : Features

• Around Rs. 3,000 crore (US $ 698 mn) market

• State Electricity Boards, Industries major user segments

• High tension circuit breakers - Bharat Heavy Electricals Ltd.(BHEL), Asea

Switchgear Industry : Trends

Electric Motors : Features

• FHP motors : Crompton Greaves, DLF major players. Also manufactured by

DC Motors : Crompton Greaves, Kirloskar Electric, NGEF, BHEL, Oxford Engineering

Electric Motors : Trends

Particulars 96 -97 97 -98 98 -99

AC Motors 4913 4732 4654

Imports in 98 -99 around Rs.95 crs (US $ 2.2 mn) and

Electrical Machinery : Characteristics

• Generators, Switchgear, distribution driven businesses

• Prices of unorganised sector manufacturers quite lower than those of organised

Key Success Factors :

• Technology and product quality key success factors

• Need to re-engineer businesses in order to counter imports

• Demand for most products dependent on the additions to power generating

EXPORTS AND IMPORTS OF ELECTRICAL MACHINERY

Exports of electrical machinery from India have registered continuous growth

The Heavy Electrical Industry is capable of manufacturing transmission and distribution

Year Imports Exports

2000-01 0.43 2.70

Raw Materials Required:

To provide educational and practical experience that prepares individuals for

Gross fixed assets 16692.83 16920.79 17572.22 18669.93 20441.39 21869.23

Net fixed assets 9747.22 9341.99 9461.41 10079.11 11864.31 12979.96

Investments 1508.03 1528.87 1835.36 2467.99 2852.79 3760.81

Net worth 6413.87 5857.81 6351.99 9264.64 14395.38 18706.83

Reserves & surplus 2824.14 2159.19 2305.92 4835.81 10925.83 15593.96

Secured borrowings 7959.2 7620.02 7646.33 7662.97 8233.23 8777.69

Deferred tax liability 817.13 869.17 868.56 843.22 897.13 901.07

Income & expenditure

Total income 25696.41 28766.49 35805.82 46023.83 62556.6 75850.88

Total expenses 26261.35 29259.06 35716.24 45162 60173.05 72618.29

Raw material expenses 11740.54 13040.01 17159.33 22238.23 29861.7 36178.91

PBDITA 1923.97 1849.58 3016.1 4583.42 6920.26 8730.18

No of companies 283 296 298 281 250 220

PBDITA 1923.97 1849.58 3016.1 4583.42 6920.26 8730.18

PBIT 1001.5 928.16 2119.77 3645.89 5979.59 7759.81