Learning lessons from the slowdown, most of peers of HPP resorted to export growth as well as increasing the revenues from services. Increasing the level of indigenisation was also resorted by most of the companies to increase their cost effectiveness and counter competition. HPP faltered on this front also. The company also faltered in the export front. High dependence on imports result in the company faltering in the service front.
Services contribute marginally to the company's topline.
The most industrialized state in India, Maharashtra is planning to allow companies to set up captive power plants to the companies operating in the state. Many more states are expected to follow. This may lead to an upward revision in our estimates. Apart from the Indian market, there is also a huge export markets to which the Indian companies can leverage on cost advantage. The extent to which HPP can benefit from the same depends largely upon the company's strategies.