SUDHIR GENSETS

Makes power generators using know-how from Cummins. Promoter Sudhir Seth is transforming the business into a service-driven one.

Secret Sauce Extensive range of electricity generators powered by know-how from a three-decade-old "marriage" with Cummins, all put together at six manufacturing plants

Financial Dashboard Net sales - Rs.900 crore; Net profit margin – between 11-12 percent. Net sales CAGR over the last five years 21 percent. Goldman Sachs and GE Investments together invested Rs.300 crore in 2007 for a 10 percent stake, valuing the company at Rs.3000 crore.

What the Smart Set Saw An efficient, stable and profitable market solution to India's perennial power woes.

More than three decades after Sudhir Seth decided to manufacture power generators to address the electricity shortfall faced by small and medium Indian businesses, the energy shortage hasn't abated. Meanwhile, Sudhir Gensets has become a Rs.1,000 crore company with over 40,000 customers across India.

With a 60 percent share in the segments that he operates in, Sudhir is today buys giving his business a services touch. The company has now started to rent out gensets to real estate and infrastructure projects. The company expects this new revenue stream to account for 5 to 7 percent of revenue.

Sudhir's rapid growth over the last few years was powered to a large extent by the telecom and real estate sectors, both of which were building cell sites, homes and offices at a furious pace. As growth for both sectors got broad-based towards middle India, where power was unreliable at best or absent at worst, Sudhir became the de-facto power utility.

But with telecom and real estate growth rates much slower than earlier, the company started looking for newer sources of revenue. The services business has emerged as one answer.

 

Till now Sudhir Gensets was only interested in making the sale, with post-sale servicing being done by local dealers. But after realising the importance of steady maintenance revenue, it has started offering its own maintenance services to customers in Punjab to begin with. Seth says the pilot has been extremely promising, even helping it grow its marketshare by 5-6 percent in the state due to a better understanding of customer needs born from frequent service interactions.

 

Offering turnkey project management and implementation services around power projects and electricity contracts is another area of growth. "Rather than selling our products to contractors, we become the contractors," says Seth's son, Rahul, who is also the company's joint managing director. "The response has been so overwhelming that we are setting up a new manufacturing plant in Manesar to address this additional demand," says Seth.