Mahindra Powerol, the power generation unit of Mahindra & Mahindra Ltd, is diversifying into the infrastructure sector in a bid to de-risk a business currently heavily dependent on the telecom sector. As part of the strategy, the company on Monday launched two high-capacity diesel generators (250 and 320 kVA) to address the power needs of large infrastructure projects such as mining, ports, metro railways, and road-building.
The telecom sector contributed about 48% of the company’s revenues in fiscal 2016-17, said Hemant Sikka, president, Powerol and spares business at the firm, as per news reports. Mahindra Powerol reported a revenue of Rs1,250 crore during the period against Rs1,125 crore the previous year, Sikka added.
A majority of the company’s offerings now are in the sub-75 kVA category. The company has already received two orders, one each from the mining and road construction sectors, Sikka said, without disclosing details. Mahindra Powerol has spent Rs160 crore on developing the generators at Mahindra’s R&D facility in Chennai. The 9.3 litre engines used in the generators were developed in collaboration with the US-based Navistar International Corp.
Reports added, though the generators would mostly be used as a secondary source of power, Mahindra Powerol is looking to corner a double-digit market share within the next 12 months, Sikka said. He estimated the market opportunity for generators to be worth Rs500 crore.
Sikka said the government’s increased focus on infrastructure building, in addition to higher GDP growth will spur manufacturing and private investment. He estimates the genset industry to grow at an annual average rate of more than 10%. This will be driven by higher offtake in medium and high-capacity generators. “This is where our new launches are placed. We also plan to manufacture gensets with much higher capacities as demand rises”, he added.
Mahindra’s engine-making unit is also looking at a deeper penetration into the export markets. It plans to ship the generators to Africa, South Asia and the Middle East. Over the last three years it has exported a total of 5,000 units of the sub-75 kVA generators, said Palaniappan P., business head, Mahindra Powerol.