An important player in four major electrical verticals, i.e. switchgear, metering, lighting, and wires, HPL’s wire segments relied heavily on housing wires only till recently when it entered successfully in solar and specialty cable range. The diversification of cable range complements well with its other verticals, making HPL move towards becoming a solution based company.
“For solar segment, we were already doing net meters and cables and have now come into switchgear too. We do the array junction boxes and a large amount of AC/DC distribution boards. From the product view-point, we are therefore moving towards becoming more of a complete solution based company on the solar side in which the wires and cables form an essential part,” said Mr. Gautam Seth, Jt. Managing Director, HPL Electric & Power Ltd.
Wire & Cable India: Housing wire has been the leading contributor among your product range. Tell us something about its recent position and growth of your other offerings on the market side.
GS: We have four product verticals in HPL – switchgear, metering, lighting, and wires. In wire vertical, we have focused a lot on the domestic and flexible wiring till now. For the last two years, HPL however has started to put more focus on specialty cables. The domestic wires, of course, have been growing a lot in the trade. In fact, we have been expanding in almost every city through our dealers and distributor channel as domestic wire is an ever-growing segment. Alongside, our specialty cables are also picking up. Solar cables are also doing fairly well now. Besides, we are manufacturing certain specialized cables for telecom applications. The way our business is growing, we see that specialty cables have become a strong part of HPL within a few months.
About a year back, we were operating at almost 60 percent capacity, which has scale up to 85-90 percent now. HPL has witnessed considerable improvements in capacity utilization and product baskets in the past few months. However, in the 2nd quarter 2017-18, we have seen a slowdown in the trade market due to GST implementation. In fact, it started from June itself where there was less buying from the dealers and distributors. Sales suffered because people at that time were taking time to understand the GST. The market however has picked up from the last couple of months and is going very well on a month-to-month basis.
For HPL, we oversee the complete B2C channel. We supply through our retail channel, which has really grown in time. Although the building segment is not buoyant overall, the affordable housing is one segment which is doing pretty well. Our focus to grow on the retail market is gaining better results. Our spend on advertising and publicity has been increasing tremendously and has become almost twofold from the last year. The advertising efforts are now showing results as our main focus has been on the point of sale publicity, which is a BTL activity. We are seeing some traction on sales with volumes picking up. Post-GST, not only retail has picked up, but the specialty segment targeted to institutional buyers has also gained some momentum. We have been able to get some high volume orders. Overall, we see a good pickup in our wire and cable segment from the last one year.
WCI: Can you tell us more about the big contracts that you mentioned about?
GS: I won’t name the customers and would only say that these are highly specialized cables that go into specific telecom applications. We are all aware that India is rolling out 4G in a very big way. A lot of related infrastructures are being built. HPL envisions enormous opportunity of growth in the segment and is focused a lot on supplying to wherever the telecom infra development is happening. All our products, viz. meters, switchgear, lighting, and wires (cables) appeal to that segment. We have been able to leverage the customers for switchgears and other products for pushing our wires and cables in a big way. A lot of infrastructure development is being done with the wires that we are supplying.
Apart from this, we are also focusing on the data and elevator cables. The solar is another segment which is getting recognition in a very big way. We have been studying newer technologies. Besides, we are evaluating on how we can adopt those kinds of technologies because the way renewable energy is growing, there is going to be a great attention towards the kinds of cables we are manufacturing right now.
WCI: HPL was awaiting the TUV certification for solar cables. Have you already got the certification and started manufacturing?
GS: We haven’t got the TUV certification as yet. But we do have certain certifications which are allowing us to manufacture solar cables and to go to various markets. We have in fact taken a couple of orders, including few larger projects, where the solar cable is going. Looking at our various segments, we have now expanded into the solar products in a bigger way. For solar segment, we were already doing net meters and cables and have now come into switchgear too. We do the array junction boxes and a large amount of AC/DC distribution boards. From the product view-point, we are therefore moving towards becoming more of a complete solution based company on the solar side in which the wires and cables form an essential part.
WCI: You are pushing solar cable in a big way. Please throw some light on the future of solar segment.
GS: When you see the entire renewable opportunity, it is based basically on the solar energy. Even a solar association has been constituted recently to give a push to this kind of renewable energy. India is playing a very important role in boosting the solar segment. Looking at these opportunities, we have expanded our product range. We have started to build our capability not just from a product point of view but also as a solution provider. We have, in fact, got our registrations for doing smaller projects on rooftop solar and other related work. It is just the start and we would be committing ourselves more to this direction.
I would say a lot has been done to boost the solar energy in our country. We are probably not able to see the results which are there but we will see a lot of things happening on the solar side in times to come. We are an organized player and a completely indigenous manufacturer in the country with a pan India presence of marketing. We have a very big opportunity to exploit the solar cable area. That’s how we look forward to going ahead in the sector.
WCI: As a maker of complete electrical range, you may contribute significantly to a project on a turnkey basis. What do you have to say about that?
GS: Whatever components are required in any of the solutions or smaller projects, we provide that. Although we are not doing large turnkey projects, we are providing certain solutions which you can call as small projects. Since most of the individual components coming into the system are already manufactured by HPL, it gives us a big advantage. Our dependence on an outside supplier for these components is also very less. Also, getting orders for these kinds of solutions gives us an opportunity to supply our own products. It is however too early to say how the market would evolve and what will be the final strategy, but we are focusing on these segments and already seeing certain success in our efforts.
WCI: Is there any capacity expansion plan in offing?
GS: We are currently focusing on exploiting the capacity which we already have. The certain capacity calculations that we do are either on single shift or on double shift. There are also certain elements or modifications that do not involve big capex and we can certainly consider them to enhance our production even further. In the next 2-3 years however, we don’t have any major capex plan to happen. Right now, the team is working on utilizing the capacities better which will give us a better absorption of overheads. We will eventually look to have better margins in our wire and cable business.
WCI: Within the cable portfolio, is there a plan to add any new product in the near future?
GS: We are covering most of the products in the market. However, if any new product comes in any segment, we have the flexibility to make it because we have our own R&D team. In specialty cables, we have been studying certain other kinds of cables as well. So, it is a continuous process which our team is adopting. I don’t have any specific names to give right now, but teams are working continuously to upgrade and come up with new products.
WCI: Is there any plan to venture into the medium voltage or high voltage in recent times?
GS: No, we don’t have any such plan. In fact, we have evaluated those industries and felt that our customers and the consumers are spaced out in all our four verticals. The need currently was to come out with connected products in all our four verticals. In other words, the need was to fill the gap and come out with domestic wires because they move very well with our domestic switchgears, MCBs, switches, consumer lightings, LED bulbs, etc. and also the trade which has a retail focus with all these products. That was a gap which we filled with coming out with domestic cables. Looking at the industrial side where we have the metering and the switchgear, there was a demand for the specialized cables, which we expanded into later on with our existing capability and skill set.
WCI: What are your views on the Indian wire and cable industry and how do you see its growth in the coming years?
GS: We see a big demand happening on the wire and cable side because of bigger spending by the government on infrastructures planning in the next couple of years. Despite the housing part being quite slow, there is going to be a lot of demand in the industry in the long run as it is all set to pick up. It may take some time but it will surely pick up. On the infrastructure side, we are seeing the smart cities coming in a big way. The government schemes, whether it is IPDS, Deendayal Upadhyaya Gram Jyoti Yojna or the Saubhagya Yojna, have in them wires and cables in some form or the other. In terms of demand, I see a very good demand in the medium and long term.
From the government side, we would like a better compliance system or better standards to be set so that the consumers can benefit from the better quality which the manufacturers can offer. As HPL we are always upgrading our technology, coming out with newer products, and looking at specialized products. That is something that we are doing to gather a substantial market share going forward.
We are already working for smart cities and have done India’s first project for smart lighting in Bhopal using cutting-edge technology; the project is near completion. At present, HPL has many products to cater to the smart city projects.
WCI: Any final words?
GS: Relationships play a very important role whether it is with a supplier or a customer. As a group, we have been there for almost 60 years now. We have been maintaining and nurturing the relationships. As we see the customers’ demands and choices are shifting, we are accordingly realigning our product range.
