Shakti Pumps (I) Ltd is one of India’s leading manufacturers of 100 per cent stainless steel pumpsets. The company is renowned for producing stainless steel products like pumps, energy saving submersible motors, SRN booster pumps and Solar Pumping Solutions in India.
Dinesh Patidar, CMD – Shakthi Pumps told Sandeep Menezes that the main demand will come for industrial process pumps which are largely used for special and unique applications.
Excerpts from the interview:
What is the current market-size of India’s pumps sector? Going forward, how much growth do you foresee?
With growing population, the per capita water availability has reduced to about one third since 1940, resulting into growing demand for water and water pumps. Demand wise agriculture and domestic water pump are the leading segments. Pump market in India is estimated to be worth Rs. 10,000 crores and growing at 10-15 per cent per annum. Apart from agriculture and domestic markets, growing urbanization, development of infrastructure and industrialization especially in water & waste water, oil & gas sectors, are driving the water pumps business in India. Economic development coupled with urbanization has been witnessing strong growth. The world population is forecasted to reach 8 billion by the end of 2020, creating demand for water and water pumps in both domestic and export segments, both of which are growing steadily.
Although the water and waste water pump segment will witness steady growth in future. Do you feel main demand drivers will continue to remain government investment in urban and rural infrastructure development?
Agriculture segment accounts for major share of the pump market in India. It will remain as a thrust market as government adds more significance to farm sector to enhance agricultural production and ensure food security. This will ensure steady growth in demand of pumps from agriculture and rural market. Waste water treatment segment is gaining importance as government has realized the importance of recycling and treatment of waste water in the wake of water scarcity everywhere in the country. These are certain measure which will give a fillip to the growth of pump market in the years to come.
The market for industrial pumps has been growing at over 10-12% every year. Tell us about the main growth drivers?
Industrial process pumps are largely used for special and unique applications in the industry, the market of which is growing steady with industrial expansions, setting up of new units and replacement market which will positively impact on demand of industrial pumps. Continuous research and development for technological improvement in product performance and quality is an ongoing process for sustainable growth to remain competitive in the market.
Rising cost of oil has positively influenced the demand for energy conservative pumps and pumps driven by renewable energy sources. Tell us about it?
Energy efficiency has been the buzz word in every segment. Equipment like motor, AC, Fridge, TV, electrical lamps is rated for energy efficiency by Bureau of Energy Efficiency (BEE). Now it assumes more significance in the wake of higher cost of fuel and environmental factors. Keeping these factors in mind, it is right time to opt for energy efficient products and equipment and systems using renewable energy. These measures will help us to safeguard environment to a great extent. Identifying these trends early on, our company pioneered the development of stainless steel submersible pumps and motors in India. Lately we have also developed a duel power solar water pumps which operate on solar energy as well as power from the grid. This is an innovative move with technological support which was not possible few years ago. Now Shakti provides complete and integrated water pumping systems which can operate on solar energy independently and also on grid supply. The advantage of solar pumping system is that it can operate as an off grid standalone system at the remotest un-electrified locations of rural India that proved to be a great blessing to farmers there.
Recently Shakti Pumps reported a sharp 44% year-on-year decline in net profit. Comment.
Net profit decline by 44 per cent was due to sharp dip in top line from Rs.76 crore in last year to Rs.55 crore in this Q2 FY15. This was due to a significant slope in top-line proportion of the fixed cost, increased HR, Admin and finance cost so that profit came down. Operating level margins improved because of effective planning and execution.
Now with the new governments focus on infrastructure development and optimism in the Indian economy, how do you foresee future growth scenario for Shakti Pumps?
Allocation of huge amount of funds by the government to various urbanisation and industrialisation projects will surely bring opportunities for pumps for various applications. The focus on farm sector will revive the agricultural production in turn creating greater demand for agri pumps and solar water pumping systems. In the wake of positive market dynamics and positive economic indicators, we are confident and optimistic on our growth plans.
Going forward, does Shakti Pumps intend to focus on any particular product segment or foray into new business areas?
We are focused on our core product competencies like Pumps for Agricultural and Domestic Applications, Solar Pumps and Pumping Systems. We have been working on these three segments particularly Solar Pumps & Pumping Systems as it assumes greater importance as a sustainable renewable energy pumping solution. Union Government has also introduced various schemes to tap renewable energy effectively and come up with schemes for solar water pumping systems.