T&M Industry in India : A precursor to FY14.....

As we discussed in the previous few blog postings ,the T&M industry revenues in the year winding down today have seen tepid growth. Overall the revenues growth was tepid with few bright spots and the odd big deals closing on the Mega Defence and Telecom Sectors. The Defence particularly the Army and Naval units were able to procure large no. of handheld and portable instruments,even though there was this cutback on huge budget of approx 193 K Cr. Likewise some deals on the 4G deployment were squeezed into this FY . Some of these deals came really by the skin of the teeth and had a long suspense of uncertainty!

Now what could be the prospects and outlook for the FY 14  ahead of us,just the week starting Monday? We have also to remember the crucial nature of this decade we anticipated right in the beginning of  FY11. And the churning is happening as we write this post.Many small acquisitions are being done by top 4 companies Globally and more is expected. I reckon that more than the M&A activity what is likely to happen change of architectures,standards evolution and fusion of Digital Techniques and FPGA in a wider range of frequency instruments. This off course will lead to smaller blade size in the modulars, new formats of ATEs and progressive use of USB and super-USB in portables.

We will see yet another change in the market place and channel realignment. And this will be through productivity increase with numbers of feet on the street and technology both.Now that has lot of consequences for manpower development and deployment. Propelling online sales will happen because we in general are facing lot of logistics issues on global delivery and connectivity. E-Commerce will be catching on in our very protected ( rather insular market of T&M) space. I expect at least 1-2 international chains sprucing up the chain to handle portable deliveries this way.More than probable will be one of them will be an European chain. Watch this space for FY 14 . Bye for now FY13.    

T&M Industry in India : What can be learned as we move ahead?

The T&M industry in India is very forward looking,as the way they have taken to new approaches in the organisation design, development of processes and commercial systems and adoption of Global Best practices it is safe to assume it is much to look ahead. The main issue seems to be reaching a revenue base which is critical for taking off,as most of  the T&M boxes businesses are highly concentrated in few cities, few customers and few end use sectors as such. The reason why it is so concentrated is perhaps because the two sectors which could have gone long way  - Education and Manufacturing  could not.

Be it that may, Here we are ! We need to see what can we learn with the Global trend in T&M technologies and development of new architectures and platforms besides making sure that the portables type of T&M products also  are with the modern trend elsewhere.On portables first,there is clear emphasis  on developing  MINIMALIST  features which have sufficient attributes but stripped of loaded Costs and prices. We do find lot of very low cost products developed for the Field Service applications eg  Low Cost Signal Generators and Spectrum Analysers in the Global market. Another interesting feature is the hooking to the keyboard with the USB or even Super-USB connectors.Also there is abundant miniaturisation by nano-technology or newer lithographic  techniques to reduce platform size.

New architectures are also emerging which is driven by standardisation to PXI modules.This helps many times the ATE design more compact and suits test OEMs immensely. Along with the switches and other accessories the ATE becomes more compact and economical.I think the T&M architecture in immediate future is heading in PXI way going by the Dollar figures accrued to this format year over year.

I think both these major trends internationally will support the needs of the Indian market. Our markets in emerging fields of Aerospace / Defense and also the other field service markets of Commercial communication and broadcasting require these type of formats extensively.Let us see if the local industry tunes into these forms and architectures to develop volumes here!

T&M Industry in India : Can Cloud Testing & Mobile Data be our growth trigger?

The T&M industry is  providing enough signals how a tech intensive business can stagnate and we are not finding a growth mechanism? The industry is supposed to be laced with all the complex modern techniques and processes,but for its own growth it remains hamstrung with its user Industries , like Defense and Telecom, Semiconductors etc . If these industries stagnate we in T&M stagnate too. So, what can we do under the circumstances. Perhaps the newer technologies of Big Data , Analytics and Mobile Apps can be the answers!

We can try and use our Marketing campaigns through Mobile Data Apps as we know the populations of Smartphones as percentage of  Total is increasing day by day.This is also encouraged by the large 15-35 yrs population who are increasingly accessing net on their Smartphones.If we use the power of this mobile data and reach users of T&M equipment ( known thru Analytics and other resources,and other Unknown too) we can create lot of qualified and hot leads of the users intending to buy T&M equipment!

The industry figures estimate India to have 360-370 million users of internet in 2015.The penetration of internet and Smartphones in our society needs to be leveraged for growing the T&M Pie in the Country.At a larger level we can even aim for T&M $ per capita of Indian population at large! I am sure this will interest every well wisher of T&M industry everywhere particularly in India.
 

T&M Industry in India : Some feeble signs Mega activity

As usual the T&M Industry in India is highly erratic being still driven by large scale Government Policy frame work and how Global money will travel in sunrise investments here.Yet the signs are "positive" notwithstanding gloom because of Current Account Deficit,Inflation and not much growth on the investment pick up. But we need to understand the dynamics of growth from the policy point of view as well.Growth on overall basis is dependent on our Labour and Capital Productivity and right now the inflow of Capital investment and its Productivity needs stimulation.So, the Government needs to incentivise the potential investors ( Domestic and Foreigners) to invest in sectors which have large consumption story as well as possibilities of Value Addition and thus provide boost to its exports too.

We are therefore a little fortunate to see the large Business Houses are getting interested in two main markets (hitherto untouched by them : Defense & Security and now Semiconductors Fab).It appears that the programs of couple of Big Corporates are seriously rolling out.This augurs well because these sectors within the gambit of Electronics are not only going to be Capital intensive,but specifically big booster to T&M systems spending and investment.At least the process is seen to begin and this time around we can see " This time is going to be different" syndrome.If right choice of Vendor and incentives are there,we hope to see some big ticket sector opening for private participation. Let us all hope India triggers a new front opening and we are able to attract investment and IP both.More than any other segment, T&M Industry in India stands to get a Booster!

T&M Industry in India : Are green shoots started appearing?

Finance Minister presented a "please-all" very bland budget. He tried to simulate the investment in the Economy by announcing innovative index-linked saving bonds too.He made a point that importing Gold through the drainage of Foreign Exchange is not only not in the interest of nation but the individuals as well.But it may sound only preachy to the common man,as there are no opportunity to save and protect the Funds, except buying speculative bullion,or the real estate in the cities! The current account deficit and inflation all around ( CookingGas,Fuel,Power and Water) is eroding the financial savings and so investment elsewhere!

Some external investor institutions are trying to see optimism in this budget.For one thing they see the FM with good track record in liberalisation,and Expenditure cutter. So they feel India has potential to grow and projects will take off. Well in the Defense sector there is cut on the expenditure and in the Telecom,particularly in the 4G area there are a ripple of deals getting signed.Looks like the LTE deployment is going to happen and we definitely see the few mega T&M businesses getting done before Mar 31 ! Will it lead to a positive turnaround? Jury is still out.