DG market is expected to revive by recovery in datacentre, infrastructure and rental.

Alternative sources of energy continue to gain traction in the back-up power market.

- Babu Nagarajan, VP - Sales & Marketing, Cummins India Ltd

The Cummins power generation business comprises of integrated generator sets in the range of 7.5 kVA to 3750 kVA including transfer switches, paralleling switchgear and controls for use in standby, prime and continuous rated systems. All generators are supported with prompt service capabilities across by service and solutions from over 120 dealership branch offices and 450 service touch points providing parts, batteries, services and customer support solutions to products manufactured by Cummins. Babu Nagarajan, VP - Sales & Marketing, Cummins Power Generation Business, Cummins India Ltd shares his views on the genset market.

How the current crisis due to the pandemic and the ensuing lockdown has impacted the DG segment?

The lockdowns imposed to contain the pandemic for nearly three months, disrupted most businesses. While financial strain and shortage of labour has caused slowdown in construction, and real estate sectors, safety and health concerns are causing a slump in hospitality and travel sectors. Few segments such as agriculture, pharma and healthcare and other essential services which continued to grow during the lockdown period. Cummins actively supported such segments. Overall the DG market too observed a decline due to the lockdown, but is expected to revive in the coming quarters driven by recovery in datacentre, infrastructure and rental.

How do you foresee the growth trends given the stimulus packages announced by the state / central governments?

The stimulus package announced is expected to drive growth in agriculture, dairy and farm gate infrastructure. Initiatives announced by the government such as collateral free loans, debt provision, focus on indigenization is expected to alleviate MSMEs and attempt to push them on a faster recovery path

What are the major constraints in today's context?

As the lockdown eased in June 2020, market recovery was expected to begin. However, the recurrence of lockdown in few states continues as a precautionary measure leading to limited business resumption. Production and supplier readiness is being ramped up to meet existing and future market demands. We are ensuring backup power availability to all customers while following state and central government guidelines.

Post Covid, what do you think the major growth drivers will be?

With work from home becoming a viable choice of working for many organizations to ensure safety of the workforce, demand for remote working and video conferencing expected to drive growth for datacentre and IT enabled services. Pharma and healthcare sectors will continue to expand to fight the pandemic situation, along with rental generators - catering to small and medium businesses.

How do you assess the shift towards gas-based DG sets?

The market landscape stands at a cusp with the new emission norms at the horizon for diesel gensets. Alternative sources of energy such as solar and energy storage solutions (batteries, fuel cells etc.), gas gensets continue to gain traction in the back-up power market, addressing the niche market demand. The diesel genset market remains the key product in the back-up power segment, owing to the ease of availability, dependability, maintenance and familiarity with the products. With continuous improvements being made in the products - on enhancing fuel efficiency, footprint reduction, remote monitoring technology and cleaner exhaust -diesel gensets remain one of the largely opted products for back-up power in key segments.

How does the rental scenario look like?

In the current climate most industries including small and medium businesses are facing financial constraints and subdued business growth. Rental generators might provide respite for backup power requirements by reducing initial capital investment. With the resumption of infrastructure and construction sectors in the upcoming quarters, we expect rental segment to grow at a faster pace.

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