© 67% subsidiary of Honda Motor Corporation (HMC), Japan, HSPP manufactures portable generators, water pumping sets, general purpose engines (GPE), lawn mowers and brush cutters. Company benefits from rich experience of HMC, 2nd largest engine manufacturer in the world, because of their strong emphasis on R&D and in-house technical innovation. India’s first LPG based generator along with super silent key start generator, portable kerosene generators are some of the products which exemplify Honda’s pursuit of technological excellence.
© Continuing Power deficit in various parts of the country, coupled with increased infrastructure spending and computerization will lead to significant growth in power back-up solutions such as gensets. Need for good stable, quality power will increase with new opportunities like power for ATMs, higher capacity gensets for running air conditioners, etc., auguring well for the company. Towards this end, HSPP plans introduce 5 KVA genset for home & commercial use in Q1 FY 2009. It may also go for multi-fuel i.e. kerosene, gasoline, LPG, CNG gensets.
© Focus of government on agriculture and waiver of farmers’ loans will provide big thrust to demand for its water pumps. With increased mechanization in agriculture and horticulture / floriculture, demand for engines, water pumping sets, harvesting rippers, sprayers, planters, etc. will escalate.
© Significant investments in infrastructure development projects will perk up demand for engine–based construction equipments. HMC is in engines for auto, aeroplane, agri products etc. To start with, company will import products and then start manufacturing in India when volume rises.
© With a view to improve its profitability, HSPP has been has been continuously undertaking indigenization program. Besides, it has started relocating its manufacturing facilities from Rudrapur to Greater Noida (expected to be completely over by Q2 FY 2009) so as to consolidate its operations under one roof and thus save cost. Once, this restructuring is over, there will be considerable reduction in cost of production which will in turn improve margins. Besides, Rudrapur plant land (40 acres) will be available for disposal once relocation is over.
© To take advantage of emerging opportunities, company plans to expand capacity to ~ 300,000 units (175,000 units) once the restructuring is over. With all these initiatives, HSPP hopes to double its size in next 3-4 years.
HSPP has put up commendable performance for FY 2008. Net Sales were up by 10.1% to Rs. 252.36 crore. OPM% improved slightly to 11.4% (11.1%). Higher sales coupled with improved margins and substantially higher other income of Rs. 15.55 crore, led to 35% spurt in PBT (before extraordinary items) of Rs. 38.85 crore. Further aided by lower extraordinary expenses of Rs. 58 lakh (Rs.1.75 crore), PAT spurted up by 42.3% to Rs. 24.73 crore. Company hopes to double its size in next 3-4 years
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