Rajesh Doraiswamy, Joint Managing Director, Salzer Electronics, speaks on the company's growth, industry outlook, opportunities and challenges.
What accounts for Salzer's sectoral outperformance?
Our outperformance is the result of the amalgamation of high product quality, high-intensive technology, strategic flexibility and organisational responsiveness. In uncertain times there are sudden shifts in demands, making it necessary for product-cum-service providers like us to respond to the changing design and testing compliances with increasing speeds. The bar for quality also has also been continuously increasing from ISO 9001 to ISO 14001 to ISO 18000 and now ISO 26000 (which deals with organisational ethics).
This underlines an evolution in customer needs: from product quality to process integrity to environment compliance to whether the company is managing the business in a holistically ethical manner, to which Salzer has been consistently responding.
What were the highlights of your company's performance during the year under review?
Our company continued with its investments even during sectoral slowdown, thus prioritising the need to be future-ready. During the last quarter of the year under review, the company invested Rs 27 crore in a three phase dry type transformer project with design and technology collaboration with Traformodem, a high technology Austrian company. This, Rs 100 crore investments, represents a decisive step ahead for the company as this cutting-edge technology is largely confined to US and Europe and there are few Indian companies representing a large under-addressed opportunity. This product is used in mission-critical areas i.e urban metro rail transportation systems. We are optimistic of the prospects of this product due to its widening use in solar power, railways and large uninterrupted power systems.
Why is the company optimistic of its prospects?
Much of our optimism comes from the vast potential or the Indian market that appears to be on the verge of a significant take-off. During the last few years, there has been a modest investment in the country's core sectors; even as the government continued to invest we have barely seen any private sector investment transpiring. We believe that this reality will soon change following structural shifts within the economy that could result in larger cash flows for the organised sector leading to larger investments.
At Salzer, we are optimistic for a number of reasons: one, we have chosen to invest ahead of the curve. Two, we are addressing a larger proportion of high-value products and have a robust portfolio that addresses the diverse needs of customers. Three, we have invested in process automation that is enhancing process integrity and product quality. Four, we are a research-cum-knowledge-driven company with the ability to customise products around user needs. Five, we possess a broad product complement that is enhancing our ability to provide a single point service to customers across various sectors including oil & gas, steel, cement, automotive, real estate, construction, chemical, agricultural and power sectors.
I believe that the sectoral turnaround should assert by the second half of the current financial year.
What is the company's outlook for the current financial year?
Salzer, given the reality as it exists at the moment and marked by attractive demand forecast from our customers, is confident of reporting a 15 per cent increase in its revenue. This coupled with profitable growth should enhance value in the hands of our stakeholders.