With a standing of over four decades, Skipper is today one of the largest manufacturer of power T&D structures, globally. Kolkata-headquartered Skipper operates through three divisions – engineering products, infrastructure and polymers. In this exclusive interview, we have Sharan Bansal, Director, Skipper Ltd, giving rich insights into the company’s power T&D business. Bansal asserts that Skipper is well poised for domestic business growth given India’s major thrust on power T&D infrastructure upgrade. In the global supply chain, India is gaining confidence as a trusted Asian supplier, which can have a big positive impact on Skipper, feels Bansal.
What is Skipper’s latest outstanding order book position and what is the respective share of company segments in the revenue mix of H1 FY24? What has been the order inflow of engineering products in the current year FY24, so far?
Skipper Ltd’s closing order book has reached a record all-time high, at Rs.60,740 million. During Q2FY24, the company successfully secured new orders totaling Rs.15,290 million, contributing to its highest-ever first-half inflow of Rs. 27,440 million.
The revenue mix of Skipper for H1FY 24 includes Engineering (76 per cent), Infra (6 per cent) and Polymer (about 18 per cent). Furthermore, the order book to sales ratio for the Engineering & Infra segment is at a robust 3.9 times the FY23 sales, providing substantial revenue visibility for the next 3-4 years.
This solid order book position underscores Skipper’s strong market presence and its ability to meet the demands of the evolving industry landscape.
The commissioning of Skipper’s transmission tower testing facility in Howrah is indeed a significant development for the company and the industry. Tell us more about the facility, mainly in terms of the different types of transmission hardware that it can test.
Skipper’s foresight in recognizing the significance of R&D in its sector sets it apart as one of the few companies making substantial investments in innovation. The company’s involvement extends well beyond manufacturing, offering comprehensive services to its clients.
The company’s dedicated R&D Center, located in Howrah, West Bengal, has earned recognition by the Department of Scientific & Industrial Research (DSIR), Government of India. This research hub boasts of National Accreditation Board for Testing & Calibration Laboratories (NABL) accredited Tower Test Station for Full Scale Towers and Poles testing.
Skipper’s state-of-the-art tower testing facility, spanning 14 acres in West Bengal, ranks among the largest globally. Having this testing facility sets Skipper apart as a fully backward-integrated company, a rare trait among global T&D structure manufacturers.
The test station boasts of: an expert design team with vast experience; and in-house prototype manufacturing facility and other industry-best technical parameters like capacity to handle towers up to 1,200kV with heights of 130m (the highest in the country), and ability to accommodate exceptionally heavy towers with optimal loading capacities (up to 1200 tonnes per leg) and large base widths (up to 35m).
The station employs dual-speed VFD-driven electrical winches for smooth loading and features an automated central loading and supervision system for precise control.
With such world-class technologies at its disposal, Skipper’s facility has become the preferred destination for overhead transmission line (OHTCL) contractors and manufacturers for prototype testing.
Skipper’s tower testing station exemplifies the company’s unwavering commitment to quality and reliability in the realm of transmission towers.
We appreciate that Skipper has been deriving growing revenues from the international markets over the recent past. Is this mainly with respect to engineering products? Please discuss.
Yes, Skipper has been experiencing growing revenues from international markets, and a significant portion of this growth is indeed attributed to its engineering products (power T&D structures).
Exports share in overall engineering revenue stood at 35 per cent in Q2FY24. Skipper currently has a robust bidding pipeline, and actively pursuing projects worth Rs.80,200 million on the international front. We are expecting the international orders to pace up further as post-Covid, India has emerged as a preferred sourcing location vis-à-vis other Asian countries.
The global supply chain now is actively looking for reducing their dependence on China, which is a great positive outcome of the pandemic, bringing more opportunities on our way. The other reason is that majority of new transmission lines are now getting built to cater to renewables, leading to shorter execution cycle and faster supplies to meet project deadlines.
Skipper is now certified by prominent international organizations, enhancing confidence and credibility about the brand. Our international tower marketing team also secured new product approvals in MENA and LATAM market, which holds tremendous power T&D business opportunity.
Currently Skipper exports to more than 65 countries across the globe and with working with 200+ global EPC players.
Speaking only of engineering products how has been Skipper’s export performance in recent years?
We have been receiving initial orders and inquiries from various countries including Europe, Australia, Dominican Republic, Iraq, Kuwait, Canada and others. We feel Skipper is well poised for success with a five-year international bidding pipeline, fuelled by the substantial increase in global T&D spending from $274 billion per year to an impressive $500 billion per year by 2030.
Skipper is actively scouting markets around the world to penetrate newer markets. Our company’s vision is in alignment with the “Make in India” initiative. We focus on manufacturing world-class products and exporting them to the global market. Our vision is to make India the preferred sourcing hub for global manufacturing needs.
Give us an idea of the total manufacturing capacity of Skipper with respect to power T&D-related products.
Skipper is the largest Power T&D structures manufacturer in India and one of the largest in the world with a manufacturing capacity of 3,00,000 MTPA and 3 PGCIL-approved plants. Since its inception in 1981, the company has become a trusted brand both domestically and globally.
Incidentally, do you perceive opportunities for Skipper coming from the Revamped Distribution Sector Scheme (RDSS) – either infrastructure upgrade or smart metering?
RDSS often involves substantial government investment in upgrading the power distribution infrastructure. Power transmission and distribution companies like Skipper stand to gain as they can participate in projects related to the modernization and expansion of distribution networks, substations, and other essential infrastructure components.
With a shift toward renewable energy sources, there’s a growing need to integrate these sources into the distribution grid. Skipper’s products can be used to strengthen the grid’s capacity to accommodate renewable energy generation and distribution.
We also observe Skipper is beginning to derive significant revenue in its engineering products division from non-power T&D products like telecom and railways, among others. Is this shift in line with your corporate plans? Please discuss.
Yes, it’s a strategic move to broaden our product portfolio by increasing the proportion of non-T&D products, such as railways and telecom, has been yielding favorable results, helping to de-risk its exposure in just T&D.
Skipper recently won new order of Rs.2,570 crore for BSNL 4G telecom projects which has led to the share of non-T&D products in the overall order book rise to 42 per cent. Our broad basing strategy is well reflected in our decisions and actions, making us well-positioned to capitalize on opportunities in the fast growing telecom and railway infrastructure sectors while maintaining its commitment to quality and innovation.
Please also elaborate on how India’s plans in the field of power transmission could positively impact Skipper’s business growth. In summary, how do you see the years ahead for Skipper?
India’s ambitious plans in the field of power transmission can positively impact Skipper’s power T&D segment’s growth.
We saw India’s power sector demand peaking at 236.6 GW in August 2023 and reached a record high level of 239.97 GW on September 1, 2023, which critically needs expansion and strengthening of its power transmission network, which is causing a surge in demand for reliable and efficient transmission and distribution solutions.
Government’s supportive policies, regulatory relaxations, and financial incentives for the power sector create a conducive environment for companies like Skipper. The government’s initiatives such as the Integrated Power Development Scheme (IPDS) provide opportunities for Skipper to participate in projects and benefit from the overall sector growth.
India has set an ambitious target to achieve 500 GW of RE capacity by 2030, from 170 GW as of FY23. RE projects are usually located in remote areas, far from the national grid, and hence, pose a significant challenge in setting up the evacuation infrastructure. We expect a transmission opportunity of Rs.2.5 trillion while setting up this RE capacity. This transition not only reduces our carbon footprint but also diversifies our energy mix, ensuring a more resilient and eco-friendly power infrastructure.
Grid modernization initiatives further amplify the industry’s brilliance, paving the way for enhanced flexibility and adaptability. Upgrading aging infrastructure, incorporating advanced control systems, and deploying innovative energy storage solutions contribute to a grid that can seamlessly accommodate the evolving demands of our dynamic society.
In summary, India’s proactive measures in power transmission align with Skipper’s expertise and capabilities, presenting the company with favourable conditions for growth. The emphasis on rural electrification, government support, collaboration opportunities, and the integration of renewable energy collectively contribute to a positive outlook for Skipper in the power T&D business.
