Mahindra War Room 2017 Partners - Susten Business Caselet

MAHINDRA PARTNERS SECTOR - SUSTEN BUSINESS:

ACING THE FUTURE THROUGH SOLAR ANALYTICS KPO

Mahindra Partners is the internal incubator of new businesses for the Mahindra Group,
supporting a portfolio of existing businesses across Logistics, Retail, Luxury Boats,
Steel Trading, Clean Energy and Media, while constantly exploring newer avenues for
growth. Over the last 10 years, Mahindra Partners has provided over USD. 1 Billion in
seed and growth capital, to pursue opportunities in new and emerging areas, while
also adapting Mahindras unique strengths in brand, governance, innovation and
creative business modeling. One such venture is Mahindra Susten, established 5 years
ago to address the need of access to energy and to tap into the emerging Solar Energy
Industry in India.

BUSINESS BACKGROUND

Mahindra Susten (short for Sustainability Enabler) was originally founded as Mahindra
EPC in 2011, with the vision to be Indias leading Green Engineering, Procurement and
Construction (EPC) firm. The company oered turnkey execution of utility scale
commercial and industrial rooftop solar PV (Photovoltaic) projects. In addition, the
company also successfully launched a range of productized solutions like Telecom
Tower Solarization, Diesel Generator - PhotoVoltaic (DG-PV) Hybrids, Solar Generator
and Solar Water Pumps, apart from the existing Rooftop Solar PhotoVoltaic solutions.
These products are powered by Sustens indigenously developed and patented
controller units. Susten also subsequently created innovative products such as single
axis solar PV tracker, micro-grid solutions, PV module cleaning robots and allied
services in Engineering, Operations and Analytics of solar plants.

Owing to quality execution and timely delivery of projects, Susten has commissioned
over 1200 MWp of solar plants which it currently operates and maintains, and is on
track to deliver over 1.5GWp of Solar Photovoltaic power plants across India by March
2018. By oering both EPC services in setting up solar power plants, as well as
Operations & Maintenance and Analytics services, Susten is able to serve as a single
window solution to its customers, to ensure maximised returns on solar investments
for its customers. Sustens delighted customers, like SoftBank Energy, Fonroche, First
Solar, Renew Power, Asian Paints, Infosys and Tech Mahindra often realize 2-5%
higher generation in their finest quality solar plants, compared to their competitors.

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Mahindra War Room 2017 Partners - Susten Business Caselet

LIVE CHALLENGE: ACING THE FUTURE THROUGH SOLAR ANALYTICS KPO

Renewables, especially Solar PV, is quietly changing the landscape of power

generation in India. It is also one of Indias fastest growing industries, India quadrupled
its solar capacity from 2.6 GWp in 2014 to 12.5 GWp in 2017. Solar Energy causes
least of the environmental or operational challenges as compared to other renewable
energy sources, such as Hydel or Wind Power. Solar can also be installed across
country owing to India having more than 330 sunny days across major part of the
country. Solar power is modular, economical and quick to deploy, and hence is most
apt to provide solutions to meet the energy requirements of the country, including rural
areas, households and agricultural needs. It is therefore highly relevant to India.
Considering these advantages, the Government of India has set a target to 100GW of
Solar PV, with an expected life of 25 years, by 2022. This is a disruptive opportunity to
be leveraged by the company since the share of renewables driven energy could reach
as high as 20 % of our total energy generation.

Mahindra Sustens developer arm has made a green commitment to set up 1GW of
renewable assets by 2022, which will mean tripling of its current 350MWp of solar PV
assets currently under various stages of development. The Machinepulse division of
Susten focuses on developing M2M (Machine to Machine) and IoT (Internet of Things)
solutions. It has developed an industry leading solar ERP called Solarpulse, which
equips customers to remotely monitor the performance of their solar plant. Similar
solutions for wind farm and factory owners, called Windpulse and Factorypulse
respectively, are also available, oering powerful monitoring and analytics for
renewable energy farm owners. Under the Build solutions vertical, Susten has over 45
Lakh Sq. Ft of green industrial construction at various stages of execution, with 2 early
projects, one a warehouse for the Mahindra Spares Business Unit and second a
fertilizer formulation plant for Mahindra Samriddhi, have been already delivered in the
last financial year.

From the beginning, Susten was conscious that the industry was riding high partly
owing to favourable policies, technology advancements and price reductions. While
more players were entering the solar EPC market (oering Engineering, Procurement
and Construction services), Mahindra seeks to evolve by creating optionality -
benefiting from the positive side of uncertainty that could be caused by many players
entering the market due to low entry barriers, causing an increased need for good
quality O&M services, without serious harm from the negative side of price wars and

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Mahindra War Room 2017 Partners - Susten Business Caselet

commoditization of the oering. Hence, Susten has always focused on building

dierentiation through innovation, to avoid the risk of being a policy driven business.
Over the last few years, the industry has become fiercely competitive. Mission critical
Operations & Maintenance Services have been commoditized to a large extent, simply
based on manpower deployed. In this scenario, Susten would like to dierentiate
through technology, and use data analytics to provide a dierentiated service to the
Industry, thereby empowering the existing Operations & Maintenance (O&M) business.

The table below gives the bouquet of O&M services :

TYPE SERVICE ITEMS

OPERATIONS Plant Operations Performance Monitoring

Security

Manpower

Spare parts management

Reporting Performance

Failures

Safety

MAINTENANCE Plant Maintenance Scheduled, Preventive & Break-down

Services PV Module Cleaning & Weed Removal

ANALYTICS Performance Maximisation & Field Testing Trend Analysis

Underperformance Detection

Onsite Performance Testing

Remote Monitoring Central Command Centre for all 30

plants in operation from HO

Domain Expertise for Machinepulse Logic & Featuers for Solarpulse - the
solar ERP solution

ASSET Technical Asset Management Performance Analysis

MANAGEMENT
Commercial Asset Management Billing & Insurance

Over the last 1 year, the O&M and Analytics SBU has become a separate Profit Centre
and has won several accolades. Today it is one of the market leaders with portfolio of
more than 900 MWp. The secret to its success is a team of 150+ trained personnel,
constant innovation, well established processes, focus on safety and fleet of cutting -
edge testing equipment for on-site testing. In addition, it has recently launched Indias

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Mahindra War Room 2017 Partners - Susten Business Caselet

first on-site Testing Mobile laboratory. The market positioning is of a technology and
innovation driven - performance improvement company, with a goal to become Indias
leading O&M and Analytics company by 2020. It has already secured multiple 3rd Party
orders from reputed clients like NTPC, Macquarie Infra, Hinduja Group, Cleantech
Energy and has a robust growth plan.

With this background, evolve a strategy for Mahindra Susten to become a leader
in oering the Solar Analytics Knowledge Process Outsourcing (KPO) services.
What should be the key oerings of the KPO and what is the detailed roadmap to
establish it globally? How can Susten create a dierentiated oering that is
relevant globally through this KPO centre? What should be the roadmap for
Mahindra Susten to become a market leader in 3rd party O&M services, to
customers for whom Susten has not done the EPC? How can Susten leverage
technology to oer cutting edge O&M Services? What enhanced services can be
oered? What are the adjacent businesses that Susten O&M SBU should target?
How can Susten build Anti-fragility in its business strategy so as to be able to
leapfrog into the next orbit of growth.

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