Railway, e-mobility key growth drivers in India: Hitachi ABB Power Grids

The company has seen its capacity returning to 90% of the pre-Covid-19 level and already received orders totalling 60 per cent of that in the January-March period

Hitachi ABB Power Grids India, whose operations were impacted in the April-June 2020 quarter due to a shutdown of over 30 days, has seen its capacity returning to 90 per cent of the pre-Covid-19 level. The company has already received orders totalling 60 per cent of that in the January-March period.

The company’s order book stands at Rs 5,134 crore, with a visibility of 14-15 months. “We are taking action to mitigate production loss. Orders during the period were driven by the rail sector, utilities and exports. Eighteen per cent of the orders were for exports to countries like Indonesia, Bhutan and Nepal and some African countries,” Hitachi ABB Power Grids India Managing Director N Venu told Business Standard in an interview.

After the company’s factories and project sites were closed for over 30 days, the resumption was slow due to supply-chain disruption for factories and labour exodus for projects. Besides, orders worth Rs 250 crore where the company was L1 were deferred by customers.

While the company has deployed remote technology to address issues and connect with its customers, it has also continued hiring, with over 300 new employees joining the workforce in the April-June 2020 period.

Once transport restrictions were lifted, service engineer mobility and new service orders would also come in, said Venu. “Service orders have a quick turnaround. Most customers are working from home right now, and our engineers cannot travel to the location where the installed products need service. Typically, services account for 15 per cent of our orders.”

The pace of execution of projects may have been impacted by Covid-19 outbreak, which can affect the rate at which new opportunities are generated in the short term. Going forward, however, the company expects growth in the rail segment. “In the 2020-21 Budget, Rs 70,000 crore was allocated to railways. That is three per cent more than in 2019. Our scope will be between Rs 1,500 crore and Rs 2,000 crore. With the government’s focus on completely electrifying the remaining 27,000 km by 2023, we will continue to see opportunity,” he said.

Besides, regional and high-speed rail also offer opportunity. “In 2020, we look forward to opportunities in regional transport ventures like NCRCTC (Delhi-Meerut) and high-speed rail opportunities (Ahmedabad-Mumbai),” Venu said.

Another area of growth would be electric mobility. Venu pointed out that there were around 2 million buses on Indian roads, each emitting 48 tonnes of CO2 per year on average – amounting to 100 million tonnes per year. Public transport operators, which ply about 16 per cent of the total buses on road, plan to have 5,500 electric buses by 2024, mostly under FAME 2, which could lead to a potential saving of over 200,000 tonnes of CO2 emissions per year. “However, when we speak of e-mobility, we must understand the entire ecosystem. The adoption doesn’t only mean front-end changes. It also means grid modernisation happening in tandem to support changing consumption patterns.”

The growth of EV market is dependent on large-scale charging, for which the company has developed DC fleet charging solution Grid eMotion Fleet. Grid-eMotion Fleet is a full grid-to-plug, DC-DC EV charging system, for public transport and commercial operators.

By implementing the AC/DC rectification at a central location, Grid eMotion solution reduces physical footprint by 60 per cent in depots and optimises energy consumption from the grid through an integrated digital ecosystem. It is containerised, fully assembled and tested, sharply reducing the effort by operators and the installation time required. It can easily connect to the existing DC grid for customers that is already operating tram, metro or trolleybus networks.

On July 1, 2020, Hitachi and ABB announced the formation of Hitachi ABB Power Grids, in which Hitachi has an 80.1 per cent stake. The joint venture has enabled expansion opportunities for the power grids business in areas like mobility, industry and energy storage, besides providing financial muscle to support ambitious projects and enabling access to Japan.