Dalal Street Investment Journal Interview with Raman Bhatia, Founder and Managing Director of Servotech Power Systems Limited
Servotech has begun indigenous manufacturing of EV charger components, aligning with the Make in India initiative, further enhancing our role in India’s clean energy and sustainable infrastructure sectors, articulates Raman Bhatia, Founder and Managing Director of Servotech Power Systems Limited.
Q1: What were the key factors behind the company’s strong 41 percent year-on-year revenue growth in Q1FY25? With net profit growth at 9 percent, what strategies can be implemented to further enhance profitability?
The strong revenue growth was an amalgamation of many factors. However, key factors among them were the growing demand for EV chargers and renewable energy solutions, supported by government initiatives like the FAME scheme, PM Surya ghar muft bijli yojana, etc. The company’s strategic focus on expanding its presence across new markets, coupled with partnerships for large-scale EV infrastructure projects, also contributed significantly to revenue growth.
Additionally, continuous innovation and the introduction of high-tech products in the EV and solar segments helped capture a larger market share. Despite this strong revenue growth, there is room for improving profitability. Strategies to enhance margins include cost optimization through streamlining operations and improving supply chain efficiency, diversification into high-margin product lines, and expanding service offerings such as maintenance or subscription-based models. Furthermore, investing in automation and digital tools can help improve operational efficiency, reduce costs, and enhance overall profitability.
Q2: Could you provide insights into the company’s product portfolio and the contribution of each segment?
The company’s product portfolio majorly includes technologically advanced EV chargers which include a high range of both AC and DC EV Chargers and solar solutions like solar panels, solar inverters, and solar batteries. The company’s major source of revenue comes through EV chargers and solar solutions which are in high demand due to the shift toward sustainable energy.
We want to further capitalize on the growing market by expanding its offerings and scaling its operations in both the EV charging and solar energy sectors, solidifying its position as a key player in the green energy industry.
Q3: What is the company’s current order book, and how is it distributed among clients, particularly Oil Marketing Companies (OMCs)?
Servotech Power Systems Ltd. has a strong and diversified order book, demonstrating high demand for EV charging and solar solutions, especially from Oil Marketing Companies (OMCs). In 2024, the company secured an order for approximately 5,100 units of DC Fast EV chargers from BPCL, IOCL, HPCL, and other EV charger OEMs. Additionally, Servotech has an order for 52 EV charging stations from nodal agencies and DISCOMs.
The company also continues to work on solar projects, including a 1.2 MW Solar Energy Storage and Grid-connected System order from UPNEDA, expanding its presence in the renewable energy sector by promoting solar power solutions nationwide.
Q4: Is the company planning any capital expenditures? Additionally, what are its current top three strategic priorities?
Yes, the company is planning capital expenditures to support its growth in both EV charging infrastructure and renewable energy solutions. Investments will focus on expanding manufacturing capabilities, enhancing R&D for product innovation, and scaling the deployment of solar and EV charging systems.
The company’s top three strategic priorities include:
– Expanding Manufacturing Facility to meet the growing demand for EV chargers and solar energy solutions efficiently handling larger volumes of orders, reducing lead times, and maintaining high-quality standards across its product portfolio.
– R&D and Product Development through investing heavily in research and development to introduce new technologies, such as faster-charging solutions, smart energy management systems, and advanced solar inverters, catering to both domestic and international markets.
– Investment and In-house Development of EV Charger Components to reduce reliance on imports but also enhance the company’s control over product quality, supply chain resilience, and cost efficiencies.
Q5: What is your outlook for India’s electric equipment industry? Also, how does the company plan to leverage opportunities from government initiatives such as Make in India, the FAME Scheme, and the PM Suryodaya Yojana?
The future of India’s electrical equipment industry looks highly promising. According to reports, the market is projected to grow at a CAGR of 11.68 percent from 2023 to 2027, reaching a value of USD 52.98 billion, with the industry expected to double in size by 2030, achieving a market valuation of USD 130 billion.
Key drivers of this growth include the increasing number of residential and commercial building projects, rising power generation from renewable energy sources, and growing investments in the power sector. Servotech is well-positioned to capitalize on these opportunities, leveraging government initiatives like the PM Suryodaya Yojana. As an authorized vendor, the company has partnered with 62 DISCOMs to deliver cutting-edge solar solutions.
Additionally, Servotech has begun indigenous manufacturing of EV charger components, aligning with the Make in India initiative, further enhancing its role in India’s clean energy and sustainable infrastructure sectors.
Originally Published on: https://www.dsij.in/dsijarticledetail/interview-with-raman-bhatia-founder-and-managing-director-of-servotech-power-systems-limited-id004-43026
