Power tools sector grows 10% in H1, cos' stocks soar
TIMES NEWS NETWORK
[ WEDNESDAY, DECEMBER 10, 2003 01:00:36 AM ]

MUMBAI: The electrical equipment industry has reported a 10.4% growth during the first half of the fiscal, driven largely by a robust growth in low tension motors, power cables and distribution transformers.

Even as meters and high tension capacitor segments continue to languish, power cables stole the show with a growth of 36.1% in the first half, versus 5% in the corresponding period last year.

Low tension motors grew by 11.9%, although high tension motors have fallen by 21.2%. Demand for high tension motors, that are primarily used in steel, cement and fertiliser industries, has not picked up, the Indian Electrical & Electronics Manufacturers’ Association (IEEMA) has said. The switchgear segment has slowed down with a growth of 6%, as against 11.8% reported in the corresponding period last year. Power contactors and miniature circuit breakers were the fastest growing in the segment, reporting a growth of 8.6% and 11.8% respectively.

The rotating machines segment has almost doubled its growth to 8% during the first half, while the cable industry group as a whole grew by 28%. Power cables were the main driver reporting a growth of 36.1%, while special purpose cables segment grew by a modest 4.3%.Buoyed by the improved outlook for the industry, frontline electrical equipment manufacturers have been on a roll on the bourses in recent months.

ABB shares shot up from Rs 292 to Rs 608 since the beginning of the current fiscal, while diversified major Larsen & Toubro gained from Rs 185 to Rs 431.5 during the period. Shares of Thapar group company Crompton Greaves surged from Rs 54 to Rs 143.6, while Siemens shot up from Rs 283 to Rs 871 during the last eight months.

The transmission line segment has, however, declined by 0.2% as against a growth of 25% last year. Export and deemed export businesses have dropped substantially resulting in overall negative growth. However, considering the activities in the transmission and distribution sector, it is certain this segment will show good growth by the end of the year, IEEMA has said.

The transformer segment, driven by distribution transformers, grew by 21.5%. Power transformers have remained flat, while distribution performers reported a growth of 33% during the first half of the fiscal.

The electrical equipment sector grew 5.2% during ’02-03, as against 2.7% in the previous year.

The meter segment continues to be adversely hit as volumes shrunk by 18.1% during the first six months. With state electricity boards scaling down purchases, energy meters witnessed a decline of 19.4%. The capacitors segment grew by 13.2%.