Final Report On Leypower Rentals

Office : 19, Rajaji Salai,
Chennai - 600001
Reporting: 3-A/1 & A/2, North Phase,

SIDCO Inds. Estate,
Ambattur,
Chennai - 600098
Ph – (044) 25342493,
Summer Internship Report
LEYPOWER RENTALS AND

LEYPOWER BUSINESS
Submitted To:-
Mr. C. G. Belsare
General Manager – Engines
Ashok Leyland Limited
UNDER GUIDANCE OF
Mr. Abhilekh Mathur
Astt. Manager (Engines)
Ashok Leyland Limited
Submitted By:-
Sumit Gupta
MBA, Batch of 2007- 2009
Institute Of Management,
Nirma University
Ahmedabad
Summer Report: Leypower Rentals & Leypower Business
EXECUTIVE SUMMARY
Ashok Leyland has been a highly reputed firm with more than 8,000 crores turnover in
India. Ashok Leyland Limited (ALL), in the flagship company of the Hinduja Group, is a
manufacturer of commercial vehicles in India. In 1955, the company entered into an
agreement with Leyland Motors, UK, to manufacture Leyland vehicles and laid root to
Ashok Leyland trucks and vehicles.
AL’s main emphasis was on automotive section, which kept them providing higher
margins and better growth rate. However, Engines as a different product has been on a slow
growth rate and slowly gained its significance. Now with the Launch of their new product
“Leypower DG sets” which are completely sold under the name of AL they are planning
for expansion and consider rentals as one of their plans. This report on “Leypower Rentals
and Leypower Business” has been prepared to provide them a brief feedback of the project.
Rentals Business in the prevailing scenario has huge margins and profits. Due to regular
shortage supply of power and non-ability of government to fulfill demand it is currently
having a better growth rate. To extract maximum profits out of the business Ashok Leyland
needs to develop a better and highly effective network with dealers, OEM’s and local
vendors. This network is an actual base on which this business can prosper.
The report on this project provides them an analysis of the complete rental business. This
analysis has been completed under many sections. Rental Business section gives them a
brief idea of the business working and its major issues. Market Analysis gives them an idea
of the players and their strengths that should be kept in mind to prosper. Rental profits
provide an idea of the actual profits and earnings they can have. Business structure section
gives them an outlook to the roadmap of following this business. In addition, the last
section of proposal is one, which tells what can be their Break-even period for the
Business.
Considering the recommendations and limitations we recognize this sector to be highly
profitable and in 4 years of time they can achieve their Break even if they start with a fleet
size of 35 sets in the prescribed cities.
Prepared By: Sumit Gupta, MBA Batch of 2007-2009 1

Institute of Management, Nirma University
PART 1:
ORGANIZATION OVERVIEW
ASHOK LEYLAND IN INDIA

1. ORGANIZATION OVERVIEW
1.1 COMPANY PROFILE

Company Ashok Leyland Limited
Head quarters Chennai
2007 Sales 83,477,000,000 Rs.
Subsidiaries Gulf-Ashley Motors Limited
Ashley Holdings Limited
Ashley Investments Limited
Ashok Leyland Project Services Limited
Major Industry AUTOMOTIVE
Sub Industry TRUCK & TRAILER MANUFACTURERS
Country INDIA
Employees 12,125
Annual capacity 84,000 Units
1.2 BUSINESS PROFILE

Ashok Leyland Limited (ALL), in the flagship company of the Hinduja Group (an
England-based transnational conglomerate), is a manufacturer of commercial vehicles in
India. Ashok Leyland Limited, incorporated in 1948 as Ashok Motors started business as
an assembler of Austin car parts in India. In 1955, the company entered into an agreement
with Leyland Motors, UK, to manufacture Leyland vehicles and changed its name to Ashok
Leyland.
Early products included the Leyland Comet bus chassis, which sold in large numbers to
many operators, including Hyderabad Road Transport, Ahmedabad Municipality,
Travancore State Transport, Bombay State Transport and Delhi Road Transport Authority.
By 1963 the Comet was operated by every State Transport undertaking in India, and over
8,000 were in service. The Comet has joined in production by a version of the Leyland
Tiger.

The company’s principal activity is to manufacture commercial vehicles and spare parts.
It also manufactures special vehicles and engines for industrial, generator set (genset’s),
marine requirements and automobile spare parts. Ashok Leyland vehicles have built a
reputation for reliability and ruggedness. The 500,000 vehicles being put on the roads have
considerably eased the additional pressure placed on road transportation in independent
India. Eight out of ten metro state transport buses in India are from Ashok Leyland
The company has six plants having a total installed capacity of commercial vehicles and
ferrous castings of 84,000 nos. and 36,000 Tonns (T) respectively. The company is the
second largest manufacturer of Commercial Vehicles i.e. bus and truck in India. ALL and
Sundaram Industries have together joined hands with Irizar of Spain, a luxury bus
manufacturer, to float a joint venture company, Irizar TVS. This new joint venture will
manufacture bus bodies in India. ALL plans to invest Rs 5,500 million in the next two
years on capacity expansion for all its commercial vehicles. This will include setting up of
a unit in Dubai to build bodies of buses, a bus-manufacturing factory in north India and a
unit to manufacture gears for export.
The plan is to take the capacity to 100,000 units. The company also has plans to enter the
small vehicle segment i.e., small trucks of less than nine tons. The company is setting up a
new Plant in the North Indian state of Uttarakhand at Pant Nagar at an investment outlay of
Rs. 1200 crores. This plant is expected to go on stream in the year 2008. The Plant will
have a capacity to produce around 40,000 commercial vehicles and is expected to cater
mainly to the North Indian market taking advantage of the excise duty and other tax
concessions. The company has signed an agreement with Ras Al Khaimah Investment
Authority (RAKIA) in UAE for setting up a new manufacturing base in the Middle East.
The company also announced that it might set up a manufacturing base in South Africa.
The company was involved in exporting vehicles to the Sudan against UK government
export restrictions to the region.
Last year; the company acquired Czech-based Avia's truck business. The newly acquired
company has been named Avia Ashok Leyland Motors s.r.o. The company has recently

announced a joint venture with Japanese auto giant Nissan (Renualt Nissan Group) which
will share a common manufacturing facility in Chennai, India.
1.3 QUICK FACTS

Founder Mr. Raghunandan Saran
Year of Establishment 1955
Industry Manufacture of Commercial Vehicles
Business Group Hinduja Group
Listings & Its codes BSE: 500477
Collaborations • Land Rover Leyland International Holdings Ltd.
(LRLIH) - UK based, jointly with IVECO. (Hinduja
Group is 100% holder of LRLIH since July 2006.)
• In-house R&D with world leaders such as Hino Motors
and ZF
Head Office 19, Rajaji Salai
Chennai 600 001
India
Tel.: +(91)-(44)-25342141
Fax: +(91)-(44)-25342493
Website www.ashokleyland.com
1.4 COMPANY FLASHBACK

Ashok Leyland has been the technology leader in the country's commercial vehicle industry
for more than five decades. It has molded India's commercial vehicle profile with
technologies and product ideas that have become the industry norms.
The company took shape when Pandit Jawaharlal Nehru, the then and first Prime Minister
of India, persuaded an industrialist, Mr. Raghunandan Saran to manufacture automotive
vehicles in India. In 1948 the concept was implemented in Madras for the assembly of
Austin Cars. It was known as British Leyland. Soon, in 1955 it was changed to its current
name and commenced the manufacturing of commercial vehicles.

Today, Ashok Leyland is the first automobile company in India to win the ISO 9002
certification. It was the year 1993. In 1994, the company became an ISO 9001 certified, in
1988 QS 9000 and in 2002 ISO 14001 for all vehicle manufacturing units. The company
has also grabbed the credit of becoming the first Indian auto company to receive the latest
ISO/TS 16949 Corporate Certification. This certificate is specific to the auto industry.
1.5 MILESTONES
1966 Introduced full air brakes
1967 Launched double-decker bus
1968 Offered power steering in commercial vehicles
1979 Introduced multi-axle trucks
1980 Introduced the international concept of integral bus with air
suspension
1982 Introduced vestibule bus
1992 Won self-certification status for defense supplies
1992 Launched vestibule buses
1993 India’s first automobile industry to receive ISO 9002
1997 India's first CNG powered bus joined the BEST fleet
2001 Received ISO 14001 certification for all manufacturing units
2002 Launched hybrid electric vehicle
2006 India’s First Auto industry to receive TS16949 Corporate
Certification.
1.6 PRODUCTS
The major Products of Ashok Leyland can be categorized as
Buses
Trucks
Defense & Special Vehicles
Engines
Diesel Generator Sets

The company manufactures a wide range of products, which can be differentiated under
Non-Exhaustive and Goods carrying Segment. They are
Non-Exhaustive
Luxura
i-bus
Viking BS-I - city bus
Viking BS-II - city bus
Viking BS-III -city bus
Cheetah BS-I
Cheetah BS-II
Panther
12 M
Stag Mini
Stag CNG
222 CNG
Lynx
Double Decker
Vestibule
Airport Tarmac Coach
Double-decker buses
Goods Carrying Segment
Bison Haulage
Tusker Super 1616
Comet CO 1611
1613 H
Comet Gold 1613
Comet Tipper (4X2)
Taurus 2516- 6 X 4 Tipper
2214
Bison Tipper
Tusker Super 2214 - 6 X 2
Tusker Gold 2214 (6X2)
Taurus 2516 - 6X4
2516 H (6X2)
Taurus 2516 - 6 X 2
4018 Tractor
Artik 30.14 Tractor
Tusker Turbo Tractor 3516
ecomet 912
ecomet 111i
4921
Boosted by higher production and sales in the last quarter, Ashok Leyland (ALL) reported
an all-time sales high of 54,740 vehicles for the just-ended fiscal, 12.5 percent more than

last year's sales of 48,654 vehicles. At 6,812 vehicles, exports grew by 80 percent in
comparison to 3,782 vehicles last fiscal. Overseas markets accounted for one out of every
eight vehicles sold. Out of the total domestic sales of 47,928 vehicles, the goods segment
contributed 37,137 numbers, up 10.9 percent from 33,471 vehicles last fiscal.
Sales in the passenger segment were 10,469 units, as against 11,025 last fiscal. Total
production during the year grew 10.9 percent from 49,148 to 54,524 vehicles. Reflecting
the hike in installed capacity from 50,000 units to 67,000 units, ALL's monthly production
has stayed over the 5,000 mark since December 2004. Consequently, production in the last
quarter was up 15.8 percent and sales rose 15.9 percent, on a year-on-year basis.

PART 2:
BRIEF THEORY ON DIESEL GENERATOR
WHAT’S IMPORTANT IN DIESEL GENERATORS?

2. BRIEF THEORY ON DIESEL GENERATOR
2.1 WHAT IS A DIESEL GENERATOR?

A diesel generator is the combination of a diesel engine with an alternator to generate
electric energy. Diesel generators are used in places without connection to the power grid
or as emergency power-supply if the grid fails. Small portable diesel generators range from
about 1KVA to 10KVA, while the larger industrial generators can range from 8KVA—
30KVA for homes, small shops & offices up to 2000KVA used for large office complexes,
factories and power stations. These generators are widely used for not only emergency
power, but also many have a secondary function for providing back up power to utility
grids.
Figure 1: Ashok Leyland Generator

Ships often also employ diesel generators, sometimes not only to provide energy for
electric systems, but also for propulsion. The use of diesel generators for propulsion is
actually becoming more common due to the fact that in this arrangement the generators do
not need to be close to the propeller and instead they can be placed in better positions,
usually allowing more cargo to be carried. Such a diesel-electric arrangement is also used
in some very large land vehicles.

Power generators are selected based on the load they are intended to supply power for,
and that load's "mission critical" needs (e.g. a hospital needs to have 100% redundancy and
up-time, a backyard standby unit to keep a hot tub warm isn't nearly as critical). Diesel
generators can be operated together (in parallel). The use of parallel running generators
provides the advantages of more capacity, efficiency and redundancy. A power plant driven
by diesel generators will typically include between three and six machines.
There are internationally agreed definitions of the rating levels for diesel engines.
Standby - Output available with varying load for the duration of the normal source of
electrical supply. In essence it is the "prime overload" condition with no time limit for an
engine which is normally not operated.
Prime - Output available with varying load between 25% and 100% of the rating for an
unlimited time. The unit can be overloaded to 110% of the rating for one hour in twelve.
Continuous - Output available without varying the load for an unlimited time.
If the standby rating were 1000 kW, then a Prime Power rating might be 850 kW, and the
continuous rating 800kW (Taking unit power factor).
Generally to gain the maximum of product life cycle for diesel genset it requires various
cost considerations. A diesel generator need a fuel running cost, maintenance costs and
may even involve an employee working on it. Also various law governing noise pollution,
air pollution and area for use should be considered by manufacturer as well a customer
before using it.
Diesel fuel is a form of light fuel oil, very similar to kerosene, but diesel engines,
especially older or simple designs that lack precision electronic injection systems, can run
on a wide variety of other fuels. One of the most common alternatives is vegetable oil from
a very wide variety of plants. Some engines can be run on vegetable oil without
modification, and most others require fairly basic alterations. Biodiesel is a pure diesel-like
fuel refined from vegetable oil and can be used in nearly all diesel engines. The only limits
on the fuels used in diesel engines are the ability of the fuel to flow along the fuel lines and
the ability of the fuel to lubricate the injector pump and injectors adequately. In general

terms, inline mechanical injector pumps tolerate poor-quality or bio-fuels better than
distributor-type pumps. Also, indirect injection engines generally run more satisfactorily on
bio-fuels than direct injection engines. This is partly because an indirect injection engine
has a much greater 'swirl' effect, improving vaporization and combustion of fuel, and also
because (in the case of vegetable oil-type fuels) lipid depositions can condense on the
cylinder walls of a direct-injection engine
2.2 DIESEL GENERATOR’S AS PER REQUIREMENTS
Selection of a generating set is not merely adding all the loads to arrive at the set rating.
Following points need special consideration while selecting a genset.
Generator for rapidly fluctuating loads:

Loads such as welding loads, compressors, furnaces etc. are ones which fluctuate under wide
limit. These fluctuations can lead to change in output voltage and frequency of generator. This
will affect other connected loads. It is better to use oversized generator rated 30% to 40% higher
than the estimated steady continuous load, as this functions satisfactorily. A detailed study is
always required to calculate the set ratings.
Wave form and Radio/Telephone Interference:

Most of the industrial generators meet the requirements of the wave from deviation (with
respect to ideal sinusoid) as per the standards. Instruments like computer are said to be sensitive
to wave forms and the standard generator may not be suitable for the same. Hence there is a
need to design special generators for them. The distortions which are generally created in
industries are due to non liner loads like thyristor converters. They result in malfunction of the
motor due to malfunction of the excitation control of the generator. Generally proper filters are
used for such kind of loads.
Radio interferences caused by rubbing contacts at slip rings can be largely suppressed if
desired by fitting suppressor capacitors.
Number of Sets required:

Distribution of loads, sizes and types of loads, available sizes of generator and the study of
economics of a set used in parallel should be done before installation. If the loads are not

concentrated at a single point its always advised to use different no of sets instead of using a
single generator as this gives a chance to overcome the difficulties of failure if occurred in a set.
These different sets can be easily maintained and serviced without affecting the total load. The
only disadvantage is the additional complications and the cost involved in introducing parallel
generators.
Environment in which generator is used:

It plays an important role and determines the type of enclosure and the degree of protection for
the generator which in turn affects the rating that can be obtained for a given machine. For
example if the set is running in chemical and corrosive environment special treatment for
winding and other parts, and special materials are required while manufacturing the generator
set.
2.3 PARTS OF DIESEL GENERATORS

There are many components, which are required in running for generator. The major segments
under which it can be analyzed are:
1. Engine: A diesel engine is an internal

combustion engine, which operates using the
Diesel cycle. Invented in 1892 by German
engineer Rudolf Diesel, it was based on the hot
bulb engine design. A diesel engine relies upon
compression ignition to burn its fuel, instead of
the spark plug used in a gasoline engine. If air
is compressed to a high degree, its temperature
will increase to a point where fuel will burn
upon contact. This principle is used in both four-stroke and two-stroke diesel engines to
produce power. A diesel's compression ratio is usually between 16:1 and 25:1. This
extremely high level of compression causes the air temperature to increase to 700 to 900
degrees Celsius (1300 to 1650 degrees Fahrenheit).

Problems and solutions with Diesel Engines

In cold weather, diesel engines can be difficult to start because the mass of the cylinder
block and cylinder head absorb the heat of compression, thus preventing ignition. Spark
ignition engines undergo the same problem, though they have the added benefit of a spark
plug to help cause ignition. The main reason diesel engines take a long time to warm up in
cold weather is the lack of a throttle. Spark ignition engines are throttled, so only the right
amount of air comes in at a time. This is less efficient, but spark plugs only work near the
stoichiometric, or the proper ratio of air to fuel for complete and most efficient combustion,
mixture of fuel and air. Diesel engines accept a cylinder full of air and measure in the right
amount of fuel. So each time the intake valve on a diesel opens, a full charge of cold air
enters the cylinder. This cools the cylinder back down. The heat gained from each
combustion process therefore can only cause a gain in temperature that is much, much
smaller than it would be in a spark ignition engine.
Glazing occurs due to low combustion temperatures and pressures in the engine cylinder.
Running an engine under low loads low cylinder pressures and consequent poor piston ring
sealing – these rely on the gas pressure to force them against the oil film on the bores to
form the seal. Low initial pressure causes poor combustion and resultant low combustion
pressures and temperatures. This poor combustion leads to soot formation and unburnt fuel
residues which clogs and gums piston rings. This causes a further drop in sealing efficiency
and exacerbates the initial low pressure. Glazing occurs when hot combustion gases blow
past the poorly-sealing piston rings, causing the lubricating oil on the cylinder walls to 'flash
burn', creating an enamel-like glaze which smoothes the bore and removes the effect of the
intricate pattern of honing marks machined into the bore surface. Un-burnt fuel leaks past
the piston rings and contaminates the lubricating oil. At the same time the injectors are being
clogged with soot, causing further deterioration in combustion and black smoking. This
cycle of degradation means that the engine soon becomes irreversibly damaged and may not
start at all and will no longer be able to reach full power when required. To remove this
problem an engine should be loaded correctly, the load resists the movements of the
crankshaft and piston during combustion. This causes the combustion pressure to rise as the
volume of the cylinder cannot increase directly in line with the increase in pressure during
combustion.

2. Alternator: An alternator is an electromechanical device that converts mechanical energy

to alternating current electrical energy. Most alternators use a rotating magnetic field but
linear alternators are occasionally used. In principle, any AC electrical generator can be
called an alternator, but usually the word refers to small rotating machines driven by
automotive and other internal combustion engines.
It's mainly a mechanical device, concealing a pulley, wheels, brushes and wires, which
hooks to the crankshaft and runs to the battery. This way, the gasoline powers the engine to
turn the crankshaft, which in turn connects to the alternator. The alternator converts that
motion into current. The resulting electricity operates the cooling fan, headlights, windshield
wipers, radio, defogger, and air conditioning.
To be more specific, an alternator is very efficient at producing a constant, high voltage,
even when the car is idle, because of how it works. The belt (from the crankshaft) connects
to a pulley system, called the rotor, such that when the belt is turning, it moves magnets
across a special surface, called a conductor. Moving magnets, in the stator, generate an
electrostatic field, otherwise known as electricity. This alternating current is controlled by a
voltage regulator to keep the voltage steady. Another part, called the diodes, convert
alternating current into direct current that flows on to the battery and other components.
The output frequency of an alternator depends on the number of poles and the rotational
speed. The speed corresponding to a particular frequency is called the synchronous speed
for that frequency.
3. Control Panel: The Manufacturing of AMF Panels and Standard Control Panels are
fabricated from the best raw materials to ensure effectiveness and hence the reliability of the
products. Generally we have two types of panels as:
Automatic Panels: A complete range of AMF control Panels are fabricated our of 16
SWG thickness, high grade CRCA Sheet steel. Control Panels are suitable for
240/415V, Single/three phases, 2/4 wire 50 Hz. AC supply. The quality materials used
to manufacture the control Panels make them dust and vermin proof. They are
meticulously wired as per international standard and powder coated to ensure a long life.

Standard Panels: We also fabricate Standard control Panels our of 16 SWG CRCA sheet
steel suitable for 240/415V, single/three phase/ 2/4 wire 50Hz AC electric supply. The
standard Panels are well engineered and leave no scope for errors.
4. Acoustic Enclosures/Canopies: Silent D.G Set container is of modular construction with

the provision to assemble and dismantle easily as per site condition. The structure is
fabricated using CRCA (cold rolled cold-annealed) sheets. 14/16 SWG perforated sheets of
22 gauge with 6mm diameter are used to support the panels and roof. Rock wool slabs of
suitable thickness and high density is used for acoustic purpose to reduce the sound level to
permissible limits, i.e. as per pollution control norms. The doors are gasket with high quality
EPDN gaskets to avoid leakage of sound. The door handles are lockable type. These
Enclosures are made keeping in mind the following points:
Adequate ventilation for genset cooling air requirement.

Absorbent / insulating material used is fire radiant.
Suitable thermal lagging to avoid localized heating of adjoining part of exhaust.
Easy access to service points on genset’s.
The acoustic enclosure is designed with the help of CAD software. The enclosure can be
tailor made as per the requirement and depending upon the capacity of D.G. Set. The
enclosure is ideal for all locations of installation.
For Acoustic purpose Rock wool slabs with
high density 64kg/m3 and confirming to IS-
8183 are used. Also a high-density fiber glass is
used for clear view and better prevention
purpose. To increase the life of acoustic
material, resin coated fiberglass cloth is
provided on exposed surface of rock wool. For
modifying reverberations, sound absorbent and
sound reflecting materials are used. Thickness of Acoustics will be nearly 100mm,
confirming to sound level of 75 db at 3mtr distance from acoustic enclosure. Excellent

results of acoustic enclosures are achieved by creating the proper balance between sound
absorbing and sound reflecting materials.
The enclosure is painted with polyurethane epoxy paint with zinc oxide primer base, for
the longer life and to make it weather proof. The paint is highly resistant to acids, alkali’s,
salt spray, halogens, solvents, lubricants etc. It has very good dielectric properties and
resistant to abrasion and cracking. This surface treatment is 100% non-yellowing aliphatic
polyurethane which provides heavy-duty long-term protection for equipment. For the proper
ventilation and to maintain the temperature inside the enclosure, exhaust fans are used.
Some Enclosures may also be naturally aspirated. Air volume required for ventilation is
calculated keeping in view the combustion, cooling air, & alternator cooling air as per the
specifications given by the engine and alternator manufacturer. If required a blower (Co-
axle flow fan) is used to meet total air requirement & air charges. Temperature of enclosure
does not exceed beyond 7 degree of ambient temperature difference.
These enclosures provide wide features as:
Guaranteed performance
Complete size flexibility
Sturdy construction
Access doors from all sides
Ventilation options include acoustic louvers ad attenuates if required.
Proper surface treatment for longer life and better aesthetics.
Proper designed to achieve best acoustic qualities.
Consistent quality, dimensions and performance.
5. Base: Base frame is fabricated either in ISMC channel or in sheet metal. The base frame is
generally primer coated and painted.
6. Battery: It is another important part of DG, which helps to start DG and provide power to
client. A generator battery charger is different from the battery chargers for car. A generator
battery charger is meant to keep your battery charged by supplying a precise "float" voltage
to it. This voltage should be neither too low, nor too high.

PART 3:
RENTAL BUSINESS
WHAT’S IMPORTANT IN RENTAL BUSINESS?

3. RENTAL BUSINESS
3.1 PRESENT POWER SCENARIO

India is the world’s sixth largest energy consumer, relying on coal as the primary energy source
for over half of its total energy needs. Thermal power plants produce more than three quarters of
India’s electricity, taking advantage of India’s position as the third largest producer of coal in the
world. The electricity sector has long experienced capacity shortfalls, poor reliability and quality
of electricity (voltage fluctuation, etc.) and frequent blackouts. Industry cites electricity supply
as a major impediment to economic growth. Despite reforms introducing private participation
during the 1990s, the India’s electricity sector has remained dominated by the state since India’s
independence in 1947. The Electric Supply Act of 1948 integrated smaller fragmented utilities
into 19 state electricity boards. SEBs remains the dominant institutions within India’s electricity
industry, controlling well over half of the electricity supply and the vast majority of distribution.
The SEBs fall under the jurisdiction of individual state governments. Currently, the financial
losses of the SEBs total to nearly US$ 6 billion, amounting to 1.3% of India’s GDP.
Graph 1: Demand Supply Gap Source: EIA 2006-07

Because India could not adequately address the country-wide shortage in electricity supply
through state and federal deficit spending, federal and state reforms aimed at minimizing the role
of cash-strapped and inefficient state electricity boards (“SEBs”) and empowering independent
regulators across the country. States were given wide latitude to pursue their own reform plans.
Some states privatized distribution, others unbundled their SEB, and a few opted against
structural reform, keeping the SEBs intact and reforming internally. With the introduction of
independent regulators in 1998, independent electricity regulatory commissions at the state level
have primary responsibility for setting retail electricity tariffs and approving tariffs between IPPs
and the state SEBs.
From 1990 to 2000, annual electricity generation and consumption nearly doubled and India’s
projected annual rate of growth in energy consumption (2.6% to 4.5%) is the highest of any
major country. Estimates of the current electricity supply shortage for peak capacity range from
11% to 18%. A summary of electricity generation, by project type, and electricity consumption
during the period under review in the IPP study is set forth below in Table 1.
TABLE 1: ELECTRICITY GENERATION AND CONSUMPTION 1990-2001
1990 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005
Net
Generation 275.5 395.8 412.7 441.2 470.7 503.7 512.0 533.3 545.4 560.9 565.9 570.3
hydroelectric 70.9 72.0 68.4 73.9 82.2 79.9 73.7 77.4 78.4 87.4 88.4 86.4
Nuclear 5.6 6.5 7.4 10.5 10.6 11.5 14.1 18.2 19.2 21.2 23.4 25.2
geo/solar/
wind/biomass 0.0 0.1 0.8 1.0 1.1 1.4 1.6 1.8 2.0 2.3 2.6 2.8
conventional
thermal 198.9 317.2 336.1 355.8 376.8 410.8 422.6 435.8 445.8 449.8 451.8 455.8
Net
consumption 257.1 369.7 385.4 411.7 439.1 469.4 477.5 497.2 505.2 515.6 530.5 548.8
Imports 1.0 1.7 1.7 1.6 1.5 1.4 1.5 1.5 1.5 1.5 1.5 1.5
Exports 0.1 0.1 0.1 0.1 0.2 0.3 0.2 0.3 0.3 0.3 0.3 0.3
Note : generation components may not add to total due to rounding
Source: DOE/EIA
Thus it is clear from the data that the lack of electricity in India is high and causes a huge
influence on its development. Thus this deficiency is due to two reasons, one due to shortage of
supply during peak period (Also known as period of high demand) and second due to lack the of
regular supply shortage. Looking at the consumer prospects there are very less options in front
of them to gain electricity either for a short term or for a period of high use. This available

electricity can thus be further differentiated in two categories. These can be said as 1) Grid
Power and 2) Capative power.
The grid power electricity has many options like:
a) State Electricity Board
b) Own Power Plants (Could be of coal, Nuclear Fuel, Hydro power, Wind power)
The second one is of capative power, which again can provide power for a short duration or as
per high utility, they are:
a) Uninterrupted power supplier (UPS): It is a device, which automatically starts ones
the power goes off. There is a huge use of these machines in Information technology and
Telecomm industry. They are short load bearers and can offer there service for a short
time period only.
b) Inverter: They are also one of the sources, which provide electricity within no time of
the power loss. They can be used to carry high loads as compared to UPS and can
actually be used for longer time duration. They are highly effective for residential
purpose and for offices/business with limited use of power work.
c) Natural gas sets: These are Natural Gas generator sets, which have very low emission
of NOx. While these versatile new generator sets are very fuel efficient, they also serve a
high output to the user. Another important feature of these series is that it has been
designed for extended maintenance intervals. Less required maintenance means lower
operating expenses. They are also the biggest threat to substitution to the DG sets
prevailing in market.
d) Diesel Generators: Working part of DG has been already explained. These can be used
for high load carrying purpose. They are not only used under power failures but also
used for peak period of power requirement.
3.2 WHY “RENTAL BUSINESS” – MARKET OPPORTUNITIES

Genset Providers gain a huge margin on rentals then on sales of there generators. Still there is
huge profit to the customer who prefers to use Generators on rentals. All starting entrepreneurs
or even the bigger organizations need genset’s on rentals to make a full-fledged use of it and get
their job done without interruptions. Renting genset’s make a lot of sense owing to these
factors:

For Establishing a new enterprise and which is going to take some time to reach the full
capacity
Organization under expansion and the power requirement is growing
Process industry requires backup for critical loads
If customer does not want to make capital investments in captive power facilities.
Customer inadequate to fulfill his seasoned demand and need short term additional
power.
Customer is setting up a new project site where SEB supply is not immediately available.
Customer is in a new industrial area, where SEB supply is yet to be streamlined.
The client has seasonal requirements of additional power.
Client is experiencing inconsistent and poor quality SEB power.
Client needs to limit his maximum demand with SEB.
Client needs limited power during his planned plant shut downs.
3.3 WHAT IS “RENTAL BUSINESS”?
Rental business works on certain principle and predefined norms formed by organizations to
follow. Generally an advance for 2 months is taken and a contract agreement is signed between
the company and the client, which includes the details of Pricing, Time period and other minute
details about expenses. These expenses can be given as
a) Loading and Unloading: These expenses are born by client or are as agreed in
agreement. This may also depend on DG set to be used. The costing may be based on
the location; availability of transfer and no of times the loading or unloading needs to be
done.
b) Transportation: DG’s upto 250KVA may or may not be trolley mounted, which is
done strictly based on the client needs and requirements. DG’s of higher KVA are
loaded on trailers for transportation and are taken to the customer place. The costing
done here is again based as per the availability of resources.
c) Installation and commissioning: This can be further divided as
i) Foundation: Generally born by customer.
ii) Earthing: A DG set needs four earthings are per requirement. Two for DG body and
two for the neutral.

iii) Cabling: It is done from alternator to control panel. Company provides this cabling
service, which costs as per their charges, and client need.
iv) Exhaust pipe: For the removal of flue gases pipes should be raised around 5 meters
above the nearby buildings.
v) Temporary shed: This is an essential requirement for the DG, which keeps it
prevented from environmental hazards.
*A few certifications are required from CPCB, Electricity inspectorate and PWD. Megatest and
Earthtest are to be done for this purpose. The responsibility of these tests lies onto the customer;
organizations just give test certificates of their company.
3.4 USER BASED RENTAL CLASSIFICATION

The Rental Business of the Generators provides huge margins to the businessman. These
Generators are generally taken from daily basis to yearly basis. These generators have a huge
variation in their usage and hence their usability differs from every customer to customer.
The major classification of the business can be done in two categories as:
1) Duration of Generator Rent
The major classification of these durations are done as:
a) Short Term: These periods of rentals are actually the ones, which can vary from daily
basis to 2-3 months basis.
b) Long Term: These are the ones, which vary from 2-3 months to 1-year basis. They give
a better usage to Generators and hence more earnings to the rental provider.
c) Project Work: These are the ones, which give maximum utility to the diesel generators
and provide a better payback to the investment made on the generator sets. These
generator sets are generally of high KVA and requires a huge customer satisfaction
before they are taken.
2) Type of Generator Used
a) Residential/Single Room Generators: These are the ones, which are below 15KVA
power capacity and are taken for a seasonal period or on hourly periods for low power
supply. This category of generators is the one, which give lower return and also for a
shorter duration. The major players in this category are Honda, Birla, Kirloskar, Greaves
etc..., whose engines are highly utilized by unorganized sectors for rentals.

b) Commercial/Small Business Generators: These are the ones, which range from
15KVA to 125KVA. They are taken from hourly period to monthly period basis. These
DG’s provide better margins if rented for a shorter period. The Major Players in this
category are unorganized sector like local players and some of the players like National
hiring which provide all range requirements. Other players have less fleet in this section.
c) Medium Firm Generators: These are the ones, which range from 125KVA to
1000KVA. They are generally taken from monthly basis to yearly basis. These
generators are the ones, which carry major organized sector, and Cummins hold the
highest market share in it. They provide a huge margin rate to the players. The major
players in this segment are Cummins, Caterpillar, Nityanand, Modern Hiring, National
Hiring, Marco and Powermak.
d) Large Firm Generators: These are the ones, which range from 1MW to 10MW. These
generators are generally taken for project works. They involve a huge service network
for proper running of the generator. The major players are Cummins and Caterpillar.
3.5 ADVANTAGES OF RENTAL BUSINESS OVER OTHERS

There are many advantages of using a genset either on rentals or preferring to buy your own set.
However Genset Providers offer following advantages:
Guaranteed availability
Immediate delivery
Quality power
Zero Capital Investment
Mobility of available Power
Total service support
One phase relationship for services.
3.6 CUSTOMER EXPECTATIONS FOR RENTAL DG

Service is the most important aspect for any heavy equipment. Moreover, when it comes to
Rentals it becomes even more important because people go for rented DG mostly to overcome
disruption or lack of power availability. They expect it to be free from problem and even if
problem comes they expect it to be corrected within 4-5 hours or at most 1 day.

Depending on the type of usage dealer might even need to keep a back up generator. For
example in case of marriage, an exhibition, or religious processions it is quite possible that a
genset failure could occur. In that condition it is certain that you will not get paid anything for
the rental. Those in the field tell that even violent scenes erupt in such critical cases.
People generally don’t want to take any headache regarding DG and expect the company to do
the maintenance activities according to their convenience.
3.7 CONSIDERATION IN RENTAL BUSINESS
There are some major and minor issues involved with rental business, which an organization
needs to look for profitability and working. These issues are:
1) Costing Issues: Here organization needs to look after the negotiation that they can
undergo with there clients for rentals of DG sets.
a) Transportation
b) Loading/Unloading
c) Fuel costing
d) Octri, MVAT and Service tax cost
e) Other outstanding costs
2) Maintenance and Services Issues: Organization needs to provide regular
maintenance to their customers and need to have a proper network to provide better
response in case of failures. The issues basically here are
a) No of vendors available
b) Dealers Availability and powers to them
c) Battery and its maintenance issues during working
d) Services provided on Breakdown
3) Features issues: Customer may need some specific features or services that must be
fulfilled to provide better scope of work.
a) Acoustics size and requirements
b) Mobility features
c) Earthing issues
d) Base Making and preparation
e) Exhaust considerations

4) Authority with the Team: Every section of an organization needs to work on

independent basis. Therefore there must be a complete devoted team for rental business,
which can fulfill and look after customer needs and demand. The concern here should be on.
a) Rentals as a different business group.
b) Negotiation Power.
c) Clearing bills on spot decision.

PART 4:
MARKET ANALYSIS
RENTAL MARKET IN INDIA

4. MARKET ANALYSIS
4.1 LEADING PLAYERS IN RENTAL BUSINESS

1. Cummins: Cummins India Limited (CIL) is a 51 percent subsidiary of Cummins Inc. USA,
the world’s largest independent diesel engine designer and manufacturer above 200 HP. Set
up in 1962 . Today, CIL is India’s leading manufacturer of diesel engines with a range from
205 hp to 2365 hp and value packages serving the Power Generation, Industrial and
Automotive Markets. CIL also caters to the growing market for gas and dual fuel engines.
Cummins Power Generation Business is the market leader in the Diesel and Gas power
systems. They are a single window provider for complete energy and power solutions,
offering top-of- the-line products (diesel & gas) and services.
CIL is one of the leading and major players in rental business with DG range of 125KVA to
1500KVA spread across India. The reason for Cummins being a strong player in this field is
their strong network and their own manufactured diesel generators. This gives them a
chance to use their own customer base (of diesel generators), as a rental client.
2. Gmmco (Caterpillar): For more than 80 years, Caterpillar Inc. has been building the
world's infrastructure and, in partnership with its worldwide dealer network, is driving
positive and sustainable change on every continent. With 2005 sales and revenues of $36.34
billion, Caterpillar is a technology leader and the world's leading manufacturer of
construction and mining equipment, diesel and natural gas engines and industrial gas
turbines. As a leading power systems supplier, Caterpillar and the worldwide Cat® Dealer
Network are committed to supplying client with the electric power solutions he need to
operate his business at maximum efficiency. Caterpillar Electric Power Systems —
generator sets, automatic transfer switches (ATS), uninterruptible power supply (UPS) and
switchgears — are all engineered to work together to offer them the convenience of a single-
source provider. Caterpillar generator sets have a powerful reputation in a variety of electric
power markets - and they have it for a reason. Cat has been into the business of rentals
through GMMCO from past 10 years. They are also one of the major players who are
successfully earning profits from this segment. GMMCO Limited is the largest distributor of
Earthmoving, Mining, Construction Equipment and Diesel Engines / Generating Sets in

India. They have been in this business from the last three decades. GMMCO is the dealer of
products from leading companies like Hindustan Motors Ltd. (Power Products Divisions),
Caterpillar and Hindustan Powerplus (a joint venture between Caterpillar and CK Birla
Group of Companies). The company operates in the Southern, Western and Central parts of
India, having 28 offices and over 800 committed employees. They have arrange from
60KVA to 2500KVA in offering for genset’s. There being manufacturer adds to there
strength.
3. Nityanand: It has Twenty-Eight years experience in supplying Power Generators on rentals

all over India with a list of Reputed Clients. They are the acknowledged specialist in
temporary power generation packages all over India, which ensure quick response in even
the most inaccessible location to huge spectrum of industries from Refineries to Factories,
Onshore to Offshore; Construction to emergency under the name of Nityanand
Infrastructure Limited.
Nityanand Infrastructure Limited has been established specifically to provide readymade

power Rental Solution for all type of projects regardless of the application, size, duration,
industry / location, which includes consultation, design, installation, operation &
maintenance, emergency repairs & replacement without much time loss at remote places.
They have a range from 30KVA to 1500KVA in offering which generally works on the
diesel engines of Cummins (even older sets of KCL). There Major strength has been better
dealer network.
4. National: National Hiring, the No.1 power generators hiring company of India is a trusted
name in the Genset’s hiring industry. They provide perfect solutions to all power needs with
a complete range of generators from 2.5 K.V.A to 1250 K.V.A for varied commercial and
consumer’s application. 25 years in the service, it has emerged as a major suppliers of
Genset’s on hire to various segments of industry such as small to large scale industry. They
are having Genset’s of latest models and if there is a long-term project they are ready to
supply brand new Genset’s. They are preparing hiring scheme as per client’s requirement.
They have provided Genset’s in the very difficult situation like recent rain flood in Mumbai
for which they have received award from Government of Maharashtra. They have supplied
to reliance energy in those flood days in which they were helpless for which they have

received their certificate of thanks, for good services and apprehension. They have even
supplied to Gujarat, Kutch earthquake when there were blackout in that region and had
supported them by their Genset’s supply.
5. Marco: MARCO has been successfully providing power to various industries for the past
five decades. Not withstanding their high performance level in the market, they are
constantly striving to upgrade their services and technology to meet the stringent demands
of their esteemed customers. Their present strength of Diesel Generator Sets of capacities
ranging from 60 KVA to 1250 KVA and in multiple units is being augmented accordingly
to meet the ever-growing demand of power all over India. Rental power is made available at
short notice as they have service centers with DG sets stationed in most of the major cities.
This ensures power supply any where in India whether at client’s factory premises or project
sites as per clients schedule. Their range of various capacities of DG sets ensures that
client’s have the choice of meeting their exact requirements without incurring huge
investment in the purchase of the Generator sets and recurring expenditure for repairs,
maintenance and operation.
6. Modern hiring: Modern Hiring Service (MHS) is a reputed Mumbai-based Company that
offers need-based quality services & solutions in the area of Rental Power. They provide an
extensive range of Power Generating (PG) Sets to match varying client needs, right from 30
KVA to 1250 KVA. With a solid expertise and a diverse experience of 20+ years in this
domain, MHS has a focused, problem-solving approach. Clients can also avail the flexibility
of ‘dual fuel option' (LDO/HSD) for their PG sets.
They rent out only premium quality, eco-friendly DG sets of Cummins make, that are
known for their excellent performance. The Company has a conveniently located, well-
equipped Service Center at Rabale in Navi Mumbai. They also provide guidance to the
required type of PG on the client’s site. This value added consultancy service on their part,
empowers their clients with knowledge about the precise KVA ratings, which helps them,
tune in to their needs.
7. Powermak: Powermak has been in this business for the last 20 years. It provides Diesel
Generators from 62.5KVA to 1500KVA to industrial units on short-term lease. The
company gains its success, mainly due to its reliable service and efficient management. It is

associated to major companies in India to execute contracts on turnkey basis. At present it

possesses 50,000KVA capacities of Diesel generator sets and is in growing phase. They
provide their genset’s both on trolley and truck mounted basis. They have a huge no of
employees consistently working on the project to improve their market creditability and
networking. They specifically provide their operators to handle their sets and look after it for
which arrangements have to be made from the customer side. They also have their own
manufacturing section for their home acoustic and sound proofing systems.
4.2 ENVIRONMENT ANALYSIS – “PORTER MODELS”
I - THREAT TO ENTRY
The threat to entrance in this industry is very evenly biased. Many engine producers in India
(like Greaves, Koel, Mahindra, Eicher, and many more) provide a very large range of
engines for manufacturing of DG. These DG’s can very from lower KVA segment (of lesser
then 15KVA) to 1,000KVA or above. Now for rental business an entrant would require a
high capital and network to gain profits. It’s easier for the engine producers to enter the
market as they can easily capitalize on their pre-nurtured network. Present players in this
segment (like Cummins and Caterpillar) are already providing huge range of engines on
basis of KVA. This gives them enough chance to attain a better economics of scale then a
new entrant. The product differentiation from customer prospects is not much. For him it’s
just a DG providing him power backup. Still Ashok Leyland provides a better quality DG’s
with low maintenance and less operating cost. The major players in the segment have a high
experience and better fleet arrangement; they lead the business with an experience of above
15 years. This shows that other engine manufacturers can easily enter the market; still the
need of capital and network is concern as it makes the segment competitive for new bees.
Thus the threat to entry is limited.
II - BARGAINING POWER OF BUYERS
The bargaining power of buyers is dependent on the type of DG required by him. The higher
KVA requirement the lesser the players and hence the bargaining power decreases. The
negotiation can be completely based on the understanding of the supplier and the client,
infact this is completely based on the assignment given by the client to supplier i.e, the size

of DG set required. The presence of experienced players gives them better chance to achieve
economy of scale at lower prices also. Hence the rental prices can only negotiated with
better services and other facilities.
III - POWER OF SUPPLIERS:
The power of suppliers completely depends on the Fleet strength they have. The higher the
fleet strength the better options of negotiations. This fleet strength needs to have depth and
width to attain negotiations. The depth with involve higher range availability of that product
while the width will account for the no of DG sets and the various features that can be given
to the customer for better satisfaction. The power of suppliers can also be accounted from
their network and services that they can provide to satisfy their customers. However the
market is lead by monopoly of Cummins engines as they manufacture the highest range of
diesel engine sets with varied fuel run and dual fuel work availability.
IV - PRESSURE FROM SUBSTITUTE PRODUCTS:
The substitutable products could be Inverter, UPS, Natural Gas generators and SEB. The
pressure of substitution is not much. Inverter, UPS and Diesel generators are not efficient
enough to deal the complete demand for the client. NG sets can deal it but the constraint of
gas availability remains for its working. Now SEB is a very easily available substitute
product but in cases of industrial charges (which are very high as compared to running a DG
set) and in non-available zones this is the best available product.
V - INTENSITY OF RIVALRY AMONG EXISTING PLAYERS:
Industry Growth for rentals is quite high. Due to lack of availability of electricity and high
growth of electric demand the scarcity can be fulfilled with DG sets. The Competitors
diversity is growing at a high rate with higher technological advances and regular research
and development work. This makes the competition intense. Ashok Leyland provides a
better engine quality with lower operating cost and overall costing. In this business the
customer loyalty is not dependent on the type of engines used by the supplier. Clients only
need backup power without interruption. This is the main base of the business.

4.3 FLEET AVAILIBILITY WITH MAJOR PLAYERS

Total market distribution of rentals is done in many pockets. These pockets are generally
divided under the KVA distribution range. Now the major players of this segment have different
pockets and different no of sets in each pocket. The complete market pocket distribution can be
given by following table 2.
DG National Modern
(KVA) Caterpiller Cummins Hiring Nityanand Marco Hiring Powermak
2.5 -- --
5 -- --
7.5 -- --
10 -- --
20 -- --
30 -- --
50 -- --
62.5 -- --
75 1 --
82.5 2 --
100/110 -- --
125 2 15
140 -- 1
160 -- 7
180 -- 8
200 1 3
250 8 13
320 1 9
380 6 15
500 10 23
625 2 1
750 3 8
1000 4 12
1250 -- 16
1500 -- --
Total 40 131
% above
250 KVA 85% 74.05%
Table: 2
In the above table it is as clear that the complete market leadership belongs to Cummins who
has the highest feet size. Still the best option is to go for the sets of higher KVA as they give
them better margins and the demand is high here.

4.4 PRESENT MARKET RENTALS (ORGANIZED PLAYERS)

The approx market rentals for the prevalent section can be segregated in two parts. The first is
from 30-125KVA and other is for 125 above range. These contracts are given generally on a
minimum of 1-month duration. The basic rental charges of these genset’s are classified for
240Hrs, 360Hrs, 480Hrs and 600Hrs for a period of 1-month. For longer periods and less usage
the rental charges decreases. The charges for Lower Segment from 30-125KVA is shown in
Table 3:
KVA ratings 30 40 50 62.5 75 82.5 100 125

240 hrs 16,000 17,000 19,000 20,000 24,000 25,000 31,000 34,000
360 hrs 22,000 23,000 25,000 27,000 33,000 34,000 42,000 45,000
480 hrs 25,000 27,000 30,000 31,000 40,000 41,000 50,000 52,000
600 hrs 30,000 31,000 35,000 36,000 47,000 48,000 58,000 62,000
1 Mths-100 hrs 20,000 21,000 24,000 25,000 30,000 31,000 39,000 41,000
2 Mths (monthly) 15,000 16,000 18,000 20,000 24,000 23,000 30,000 31,000
3 Mths(monthly) 14,000 15,000 17,000 17,000 21,000 22,000 27,000 29,000
>3 months 13,000 14,000 16,000 16,000 20,000 21,000 25,000 27,000
Table: 3
However, the longer the period of rent the rent charge is decreased and hence the margin rate
decreases. By long term utility of set is high and improves relationship. The complete market of
above 125 has lesser players (comparative) and their approx. rentals are shown in Table 4:
KVA
ratings 140 160 180 200 250 320 380 500 625 750 1000 1250
240 hrs 38,000 40,000 43,000 51,000 61,000 75,000 88,000 115,000 137,000 170,000 235,000 330,000
360 hrs 51,000 53,000 56,000 67,000 80,000 97,000 116,000 150,000 176,000 220,000 300,000 385,000
480 hrs 61,000 63,000 66,000 80,000 93,000 115,000 136,000 175,000 205,000 255,000 345,000 440,000
600 hrs 72,000 74,000 77,000 94,000 110,000 140,000 165,000 205,000 235,000 300,000 400,000 510,000
1 month 47,000 50,000 53,000 62,000 75,000 90,000 106,000 145,000 170,000 210,000 305,000 380,000
2 Months 36,000 39,000 41,000 48,000 58,000 70,000 82,000 110,000 135,000 160,000 235,000 290,000
3
months 33,000 35,000 38,000 44,000 53,000 64,000 75,000 100,000 120,000 145,000 215,000 265,000
>3
month 31,000 33,000 35,000 42,000 50,000 61,000 71,000 95,000 115,000 140,000 205,000 253,000
Table: 4

4.5 PLAYERS IN CHENNAI

The Details of present players [only in Chennai (T.N.)] with the persons contacted during
training period from the Rental players is shown in Annexure 2. In addition, some of the
contracts as provided by these players for DG hiring are enclosed in Annexure 3.
It is requested to refer the Annexure attached with the report.

PART 5:
RENTAL PROFITS
HOW CAN AL MAKE PROFITS IN RENTAL BUSINESS…

5. RENTAL PROFITS
5.1 PRESENT RANGE OF ENGINES WITH AL

Looking into the fact that rental prospers ones a proper network is used with availability of
fleet of DG sets. Ashok Leyland has strength of having its own diesel generators.
However the range of their DG sets varies from 10KVA-500KVA. The availability is
shown in Table 5.
Fuel Power
Electrical Consu- O/P Cylinde
Power mption Engine rs of Base Price (Single
Model no KVA/ KW Phase L/Hr Aspiration (BHP) engine List Phase)
LP 10 BA3 10, 8 1, 3 2 NA 24.8 4 159000 164000
LP 15 BA 3 15, 12 1, 3 2.9 NA 24.8 4 167000 177000
LP 20 BA 3 20, 16 1, 3 3.6 NA 44.3 4 205000 217000
LP 25 BA 3 25, 20 1, 3 4.4 NA 44.3 4 211000 226000
LP 30 BA 3 30, 24 1, 3 5.3 NA 44.3 4 274000 N /A
LP 30 BA 3 30, 24 1, 3 5.4 NA 46.7 4 278000 N/A
LP 40 BA3 40, 32 1, 3 6.9 NA 52.5 4 283000 N/A
TC
LP 50 BA3 50, 40 1, 3 8.5 Intercooled 81.9 4 N/A N/A
TC
LP 55 BA3 55, 44 1, 3 9.4 Intercooled 81.9 4 N/A N/A
TC
LP 63 BA3 62.5, 50 1, 3 10.7 Intercooled 81.9 6 343000 N/A
LP 75 BA3 75, 60 1, 3 12.8 TC 113.3 6 N/A
LP 82.5 BA3 82.5, 66 3 14.1 TC 113.3 6 396000 -
TC
LP 100 BA3 100, 80 3 17.6 Aftercooled 131.3 6 435000 -
LP 125 BA 3 125, 100 3 23.1 TC 163.8 6 524000 -
TC
LP 140 BA 3 140, 112 3 24.4 Aftercooled 188 6 N/A -
TC
LP 160 BA 3 160, 128 3 27.8 Aftercooled 215.3 6 N/A -
LP 180 BA 3 180, 144 3 30.7 TC 234.5 6 N/A -
LP 200 BA 3 200, 160 3 34.1 TC 264 6 N/A -
TC
LP 250 BA 3 250, 200 3 39.9 Intercooled 327.8 6 936000 -
TC
LP 500 BA 3 500, 400 3 82 Intercooled 601 8 2200000 -
Table 5 N/A= Not Available

5.2 COSTING CALCULATION

Diesel generator has its own capital cost and its own operating costs. These costing are
generally divided in two categories:
1. Costs incurred by Clients:
1.1. Loading and Unloading Charges
1.2. Transportation
1.3. Operator Charges
1.4. Installation and Commissioning Charges (Earthing and additional Features)
1.5. Fuel Charges per Hour.
1.6. Incidental Expenses (Recouped)
2. Costs incurred by Owner:
2.1. Incidental Expenses faced by owner
2.2. Operators charges
2.3. Acoustic Enclosures
2.4. Dealers Commission (Assuming AL enters through Dealers Network)
2.5. Running cost per hour
2.6. Interest Payment to the capital invested.
The section of running cost is studied with the availability and experience in particular
engines (those that have been sold in past and are running) with various checks and cost
analysis of it. The Running cost accounts for
• Oil Costs for running
• B check cost
• Air Cleaner Total cost
• Serv. Engineer Cost (Who goes for checks)
• Alternate cost of Electrical spares
• Control panel Cost
• Abnormal Costs
• E check Cost
• Overhaul Cost
• Total Miscellaneous Cost
To conclude to the total costing; keeping in mind the market analysis and looking after the
available DG sets by Ashok Leyland , only sets of 30, 40, 62.5, 100, 125, 250 and 500 KVA
where taken for further analysis part.

There are various others features that a rental player needs to take care before providing his
DG on rent. He needs to charge some of the incidental expenses and provisions on
guarantee and fuel efficiency. These cost once considered can help a player to known his
returns from the complete project invested in.
5.3 RUNNING COST OF SETS (As mentioned above)

The Detailed Analysis of the Costing of sets is shown in the Annexure 1. These are the
costs, which any DG buyer will have to face once he buys an available DG set of Ashok
Leyland. As a customer (buyer/owner) of DG only first few services provided by the
dealers are free, rest is paid. Hence the total running costs of some sets is shown in Table 6.
LP 30 LP 40 LP 63 LP 100 LP 125 LP 250 LP 500

Model BA 3 BA3 BA3 BA3 BA 3 BA 3 BA 3
Ratings (KVA) 30 40 62.5 100 125 250 500
1 Oil Cost per hour 6.56 6.56 6.56 13.67 13.67 20.50 19.68
2 B check cost per hour 3.00 3.00 3.00 3.00 3.00 3.00 3.00
3 Air Cleaner Total cost 1.05 1.05 1.05 1.49 2.66 2.66 3.00
Per Hour
4 Serv. Engr. Cost / hour 1.67 1.67 1.67 3.33 3.33 3.33 3.33
Alternate Electrical
5 spares Cost/hr 1.67 1.67 1.67 1.77 2.69 3.27 3.40
6 Control panel Cost/hour 0.8 0.8 0.8 1 1.2 1.2 1.2
7 Abnormal Costs Rs /hr 0.75 1.25 2.00 3.00 3.25 4.00 5.00
8 E check Cost per Hour 3.97 3.18 3.18 2.57 4.50 4.79 5.39
9 Overhaul Costper Hour 2.18 2.18 2.18 2.76 3.12 3.72 4.41
Total Miscellaneous
10 Cost per Hour 2.59 5.99 6.10 7.99 9.72 11.75 11.89
TOTAL Running Cost

per hour 24.22 27.34 28.19 40.58 47.13 58.23 60.30
Table :6

These maintenance services are classified as A, B, C, D and E checks. Each of the checks
has their own costs and maintenance type. These checks, which are done for the DG
clients, now have to be beared by DG players also.
5.4 CUSTOMER’S PROFIT IN RENTALS

If we take the running cost of the DG set into consideration, which will be same for the
rental player with the DG set capital cost. The total break even for the customer while
giving the rent will occur as shown in Table 7:
Table: 7 30 KVA 40 KVA 62.5 KVA 100 KVA 125 KVA 250 KVA 500 KVA
Capital cost 361680 373560 452760 574200 691680 1235520 2904000
Running Cost 27.34 27.34 28.19 40.58 47.13 58.23 60.30
Break Even @
240 hrs rent 38 36 34 27 30 26 29
360 hrs rent 30 28 27 21 25 21 23
480 hrs rent 30 27 26 19 24 19 20
600 hrs rent 27 26 24 17 21 16 17
1 month rent 27 26 25 20 23 20 22
2 month rent 43 40 34 28 35 28 30
3 month rent 49 44 44 33 39 32 34
Break-Even is in months
It is evident from the market report that higher utility sets have higher breakeven points
like those that 125KVA set has higher break even as compared to others. These rentals are
based more on market equations and the negotiation that the team can undergo with the
client for the most of their benefit.
The capital cost considered here are completely different from those considered in the
margins due to the fact that these costs are the ones, which are beared at the time of buying
the DG set, by the consumer.

5.5 CONTRACT COSTING SHEET
This Contract Costing sheet will actually help to calculate the monthly margin and margin
rate that a DG owner can earn from his set. The sheet made for the project is worked
considering the sets 30, 40, 62.5, 100, 125, 250 and 500 KVA. Here the user first needs to
put the DG range for which he wants to calculate margin rate then he needs to fill hours of
contract and for months of usage and at last the rental he is going to take for the client.
These all blocks are highlighted with orange colour. The rest values highlighted with
yellow are based on the contract made. This sheet will take care of rest costs as the blocks
are linked with the other sheets making it more users friendly. This sheet will give the
margin rate and the monthly margins earned from the rental contract per month. If the
owner wants to provide any discounts to the client he can even show and the total margin
will be calculated.
The most important part for concern here is that, these rentals are based more on the
duration for which they are taken. Therefore the team should have the skills enough to
handle the costing and then calculate their profits as per the need. The decision taken are
strictly taken by the team from their past experience.
5.5 MONTHLY MARGINS FROM RENTALS
Every set has its own margin and margin rate for different hours and usage. This margin
gives us a clear view about the contract, and tells which one is beneficial for the DG set and
which increases its utility. The following margins shown are strictly based on the
assumption that these sets are given for on rent for a period of 1 month and follow the
above mentioned rental charges.
240 hrs 360 hrs 480 hrs 600 hrs

Margin Margin Margin
Dg Per Margin Per Margin Margin Margin Per Margin
Range Month Rate Month Rate Per Month Rate Month Rate
30
KVA 10,104 38% 13,194 41% 13,765 39% 16,015 40%
40
KVA 10,301 37% 13,120 39% 14,259 38% 15,398 37%
62.5
KVA 11,943 39% 15,539 41% 16,614 40% 18,530 40%
100
KVA 18,032 43% 23,987 46% 27,422 45% 30,857 42%
125
KVA 18,352 41% 23,762 43% 32,533 46% 30,384 42%
250
KVA 34,043 48% 45,254 50% 51,426 50% 60,957 51%
500
KVA 63,305 50% 87,807 55% 103,910 56% 124,212 58%

If the client goes for a higher period of need obviously the total rental taken will change as
mentioned before. The monthly margin will therefore reduce heavily. But these contracts
are signed with a 240 hrs usage only. If the clients have higher usage the rentals may
further differ as per negotiations. The 240 hrs usage of the sets for longer contract period
has margins as shown below:
2 Month 3 Month >3 Month

Margin Per Margin Margin Per Margin Margin Per Margin
Dg Range
Month Rate Month Rate Month Rate
30 KVA 9,264 36% 8,424 34% 7,584 32%
40 KVA 9,461 34% 8,621 32% 7,781 30%
62.5 KVA 11,943 37% 9,423 32% 8,583 30%
100 KVA 17,192 40% 14,672 37% 12,992 35%
125 KVA 15,882 36% 14,152 34% 12,472 31%
250 KVA 31,523 44% 27,323 41% 24,803 39%
500 KVA 59,105 48% 50,705 45% 46,505 43%
As we can see that the greater the period the lesser margins we get but the utility of the
complete DG is improved.

PART 6:
BUSINESS STRUCTURE
ROADMAP TO RENTAL BUSINESS…

6. BUSINESS STRUCTURE
6.1 BUSINESS DEVELOPMENT FOR RENTALS

To start with their market development plan AL needs to follow some roadmap and then try
to proceed to achieve their goals. For expansion it is important for AL to formulate their
complete business strategy. The new segment of rentals can be formulated with the shown
roadmap.
This roadmap can be easily followed by analyzing the 7-S framework and SWOT analysis
of Ashok Leyland in the rentals section.
6.2 7-S FRAMEWORK FOR RENTALS

The 7-S framework depicts the combination of basic parameters on the basis of which the
organization is completely studied. It further describes organization’s ability to change, and
its proper mode of change. All these factors
are interdependent and it is impossible to
make significant progress in one area without
making a progress in the others as well.
There's a lot more to the 7S framework of
course, especially how the company applies it
in practice. The Traits in 7-S framework
depicts the following important issues for
working.

Strategy A set of actions that you start with and must maintain
Structure How people and tasks / work are organized.
Systems All the processes and information flows that link the organization
together
Style How they handle their issues and Clients
Staff How you develop managers (current and future)
Super-ordinate Longer-term vision, and all that values stuff, that shapes the destiny
Goals of the organization
Skills Dominant attributes or capabilities that exist in the organization
STRATEGY
Strategy is a way by which an organization aims to execute its business and further plan its
working to achieve its target.
Ashok Leyland is one of the leading players in heavy transport automotive vehicles. It
manufactures a wide range of products, which can be differentiated under Non-Exhaustive
and Goods carrying Segment. Their main plants at Ennore & Hosur are producing diesel
engines and other required parts, their assembly plants are at Alwar and Bandra.
Being advanced and competitive in the field of Engines they have entered in various
market segments like Marine Engines, Diesel generators and other Industrial application.
Now with their current product of Diesel Generators they want to enter new market of
Diesel Generators rental and hence they need to apply Market Development Strategy. They
need to develop their market by following a proper structure as suggested.
STRUCTURE
The structure of an organization helps coordinate various tasks of the organization and hence
enhance efficiency. Ashok Leyland has been working as a single working unit and hence the
centralized working of the organization has not enhanced the efficient working of the
complete organization. They have different

To plan for this new business unit we need to follow the following structure to know the
performance and the area of improvement on regular basis. The rental unit of the
organization should have a separate team or may act as a different business unit to start with.
The proposed unit for this segment for the proper flow of information and processing could
be as:
GM-Engines
Marketing and Sales
Sr. Manager
(Rentals)
Area / Divisional /
Business Development ACCOUNTANT
Manager
Crew of 2-3 Members Working

For Divisional Rentals
Here the Sr. Manager should be directly reporting to GM-Engines for the goal formulation
and profit results. This complete team can be installed for all India basis at most profitable
centers.
SYSTEMS
Systems of an organization include all the formal and informal procedures that make the
organization run efficiently. The working of the whole organization should be executed by
proper coordination between the Dealers, Area Offices, Zonal Offices and the Corporate
Office through computer network. The jobs to be performed, the skills required and
responsibilities should be fixed. The Area Heads work in consultation with the Sr. Manger to
make profits.

STYLE
Freedom of work and speech is the most important aspect of the organization. The employees
should have direct access to any level of the organization. There should be no intervention by
the Heads in the work being done by the subordinates. The organization should offer
complete flexibility of working by achieving the ends by any means. Complete support at
any point should be provided. The delegation of work at main offices should be at the
discretion of the Area Head.
STAFF
Staff presently in Ashok Leyland is a combination of technical and marketing individuals.
The sales force has a degree or diploma in engineering as the basic qualification and
professional training or degree in management as an added advantage. Therefore the
privilege of holding a good staff can be easily enchased in this department also.
SKILLS
Ashok Leyland should be divided in strategic business units mainly for Engines and
Automotive division. Due to the continuous expansion plans and regular improvements in
different segments of product line this decentralization will enhance their efficiency and
effectiveness. Area manager should be responsible for the development and recruitment at
the regional level, where as executive level appointments should be done from head office.
SUPER ORDINATE GOALS
Super ordinate goals of the Rentals Business should be reflected in its Mission and Vision
statements, which are as follows:
Vision: To enter World market for power solutions after capturing Indian Market.
Mission: To Provide complete Power solution to the growing Indian Market.
6.3 SWOT ANALYSIS
STRENGTHS: Ashok Leyland has recently entered the market of Diesel Generators.
However they have developed a better network in last 50 years in the field of engines.
There major strength is their pre-developed network in this field. They can also give
competition to their counter parts in the scale of economics due to their better engine
performance under various conditions. They can also use their goodwill of past
performance to enter this field.

WEAKNESS: They have no experience in this field and are new-bees in this segment.
They would require vendors and dealers in large numbers to provide the services and other
facilities that their competitors are providing in this segment. They don’t have the higher
range DG’s which provides a better margin and could help to expand business. As being
late entrant the economics of scale will be low. Ashok Leyland is stringent with its policies
and rules, whereas their new Business Unit (as Rentals) could demand some strategic steps
for execution. This hurdle can be dealt successfully with some policy changes.
OPPORTUNITIES: With the Entrance in this segment they can actually advance to
develop a complete range of DG sets available for rentals. For the clients who can’t buy
new DG’s because of high investment, Ashok Leyland can also provide them older sets
with the specifications required. These older sets can also be further used for research and
development section for further improvement and development. They can also enter to
Resale and Buy of DG sets business as their resale value is high.
THREAT: The segment is highly unorganized and thus the lower segment can attract
many players for rentals. The initial investment is high and so as the switching cost if AL
decides to switch from it. The major threat to AL could be the rising prices of Diesel,
which may make the rentals costlier then the SEB.
6.4 NETWORK SUPPORT
Local Rental To gain more clients

Players for and contracts
Support
Providing immediate
help and service. Rental
Player
(AL)
Local Vendors Dealers
and service Support
providers System
To maintain your DG set for

which you provide commission

To expand into this business and gain better margins the need of local support is very
necessary. The above shown network diagram shows the exact need of getting help and
from the person you need. When we are into a local market we will need to grab the
maximum contracts out of it. This will keep our fleet’s utility high and will help us gain
better profits. This can only be possible once we are tied up with the local Rental players.
Not only this we need to build up a strong bond with our own dealers so that they can take
care of our sets and maintain them. For this purpose we need to give them some amount of
share from the rentals gained and we should train their team to use it in best efficient way.
The other important thing is to develop relations with local vendors and maintenance
players of the prevalent market. This is done so that if in emergency there is non-
availability of our own dealer we can solve the problem by their help. These persons will
also help us in brand building with their word of mouth. AL should get into these detailed
analyses before stepping in the business.

PART 7:
BUSINESS PROPOSAL
STARTING RENTAL BUSINESS…

7. BUSINESS PROPOSAL
7.1 CITIES TO START WITH

DELHI:
Energy is a critical input for economic development and one of the vital needs of every
citizen. Globally, the per capita consumption of energy is often used as a barometer to
measure the level of economic development. All forms of economic activity, be it
agriculture, industry or services, is reliant on the uninterrupted supply of power. Delhi has
the highest per capita power consumption among the States and Union Territories of India,
with a consumption of 1265 KWH per capita per annum in 2004-05 as compared to the
national average of 606 KWH. The power demand in Delhi is growing at the rate of 5-6% per
annum. From a peak demand of only 27 MW in 1951, Delhi's power demand crossed 3600
MW on 23 June 2005.
As per the projections made by the Seventeenth Power Survey Committee of Central
Electricity Authority (CEA), Ministry of Energy, Govt of India, the maximum demand of
Delhi will grow to 6961 MW by the end of 11th Five Year Plan.
While demand has been growing rapidly, capacity addition

has remained relatively stagnant.

The net cost of generating power from Delhi’s own plants is high due to low capacity
utilization and high fuel consumption by the plants. Delhi’s own generation installed capacity
is 994.5 MW but availability is only around 750 MW. Nearly 38% of Delhi’s power needs
are met by its own plants, BTPS, remaining 62% by import from NTPC, and other sources.
Delhi Being capital of India is one of the major attractions for MNC’s and other coming
Industries. All these large or small Scale industries have been looking forward to come in the
National Capital Region (NCR) to gain the most for their business. New and growing SEZ’s
like Gurgauon, Greater Noida and Ghaziabad are in shortage of supply with electricity. The
Pattern of the Electricity Usage can be shown as…
We can see that Industrial usage being less due to the fact of Industrial Development
occurring majorly at the outskirts of Delhi.
MAHARASTRA (PUNE AND MUMBAI)
The Prayas (Energy Group) Report on Maharashtra State Electricity Board suggests that
MSEB operates as one of the largest SEBs in India (and the largest as of 2002-03). With
nearly 13,000 MW of capacity on its grid as of 2002-03 (including 728 MW of offline
capacity from the Dabhol Project), with 9771 MW of that capacity owned and operated by

the MSEB. Private generation capacity in 2002-03 represented only a 12 percent increase in
total statewide capacity on the grid since 1996-97. The MSEB’s own capacity increased 26
percent over this same six-year period. Tata Electric Company (now Tata Power) and the
Bombay Suburban Electric Supply Company (now Reliance Energy) have also provided
additional capacity to the grid through licensed generating units.
Through the 1990s, the MSEB had a reputation as one of the best managed SEB’s in the
country. In 2002-03, the MSEB reported its peak demand at 13,418 MW, which outstripped
its ability to supply, particularly when factoring in the several thousand megawatts of load
shedding occurring at the time of peak demand. As for the predicted Growth rate of
Electricity demand in Maharashtra is as high as in Delhi. The state is facing severe power
deficit and energy shortage. As per the data published by CEA, the power deficit is as high as
19.8 per cent or 2,718 MW against a peak demand of 13,697 MW and 13.4 per cent energy
shortage or 11,680 million units during the period 2002-03. This shortfall is so significant
that the state cannot ignore the power supply position from the perspective of development.
The power Growth of Maharashtra is shown below…
As indicated above, the present peak demand is 13,697 MW and only 10,979 MW is met
during the period 2002-03. Including the present deficit and projected growth rate, about
18,759 MW shall be added till the end of 12th Plan Period. Considering the immediate
requirements of energy and till the end of the present 10th Plan Period of 2006-07, about
5,737 MW shall be installed during the next four years. Another 5,632 MW shall be added
during 11th Plan period ending 2012. This Even leaves a shortage of 2500MW of Peak
power. In total there is a huge shortage of power in Maharashtra State even being the best
SEB managed state.

7.2 PROPOSED FLEET DISTRIBUTION

Taking into account the supply shortage and present fleet of major competitors into the
above-mentioned regions, we need to start with smaller fleet. This will also give us a chance
to gain more experience and once the business is gripped with good network AL can expand
its Fleet size and focus more Pockets in India.
The Proposed fleet for 4his business as whole Indian market is shown below.
DG Range No of Sets
30 KVA 4
40 KVA 6
62.5 KVA 3
100 KVA 4
125 KVA 6
250 KVA 8
500 KVA 4
Total 35
This Fleet can be divided into two pockets as Delhi and Maharashtra region. The Division of
the Fleet for these Segments is as shown
Delhi Maharashtra (Pune And Mumbai)
DG Range No of Sets DG Range No of Sets
30 KVA 2 30 KVA 2
40 KVA 2 40 KVA 4
62.5 KVA 1 62.5 KVA 2
100 KVA 2 100 KVA 2
125 KVA 2 125 KVA 4
250 KVA 4 250 KVA 4
500 KVA 2 500 KVA 2
This is what the total fleet should be there for the development of the complete business.
Now with no of Fleet the total Initial Investment that Ashok Leyland needs to do will be as
shown below…
DG Range No of Sets Cost of 1 Set (In Rs) Capital Invested (In Rs)
30 KVA 4 2,74,000 10,96,000
40 KVA 6 2,83,000 16,98,000
62.5 KVA 3 3,43,000 10,29,000
100 KVA 4 4,35,000 17,40,000
125 KVA 6 5,24,000 31,44,000
250 KVA 8 9,36,000 74,88,000
500 KVA 4 22,00,000 88,00,000
Total 35 Rs 2,49,95,000

7.3 EXPENSES OF TEAM CONSIDERED

As suggested the team of this segment should have at least 10 members. These members can
be segregated as shown below…
Sr. Manager 1
Divisional/ Area/ BD Manager 2
Crew under BDM 6
Accountant 1
Divisional Managers should be divided under Delhi and Maharashtra region. In addition, the
crew of six Persons under them should be divided region wise. Assuming that Sr. Manager
Reporting to GM-Engines under whom this new business unit can work the further total
expenses of the complete department will be as shown…
Name No Expense Total (In Rs)
Sr. Manager 1 800,000 800,000
BDM 2 650,000 1,300,000
Crew under BDM 6 275,000 1,650,000
Accountant 1 275,000 275,000
Telephone (Monthly) 12 17,000 204,000
Department Expenses
(Monthly) 12 50,000 600,000
Total 10 - 48,29,000
Hence the total yearly expenses of the team will occur nearly as 48,29,000Rs.
7.4 BREAK EVEN PERIOD FOR BUSINESS
Taking into consideration the Initial investment of Rs. 1,17,52,000 with yearly expenses of
Rs. 45,20,000 the breakeven for the complete Business should be deduced. Assuming that an
set is on hire at an average period of 10 months in an year and at an average it is given at
240hrs usage and not considering the capital cost interest which was shown previously.
Hence the yearly income will be…
Dg Range Margin Per Month Margin Rate Yearly Income

30 KVA 13,541 51% 541,640
40 KVA 13,838 50% 830,280
62.5 KVA 16,231 53% 486,930
100 KVA 23,470 57% 938,800
125 KVA 24,902 56% 1,494,120
250 KVA 45,763 64% 3,661,040
500 KVA 90,805 72% 3,632,200
Total Yearly Income Rs.1,15,85,010

This achieved margin and margin rate is strictly considering Investment cost zero as shown in
contracting sheet to the AL.
For the Break Even of the project we have formula as…
Break Even = (Total Initial Investment) / (Yearly Income – Yearly Investment)
Break Even = (2,49,95,000) / (1,15,85,010– 48,29,000) (All in Rs.)
Hence the Break Even of the complete project can occur in a minimum of 3.7 years or 4
years approximately.
7.5 LIMITATIONS OF REPORT
1. The Market rentals taken are most from tele-conversation and 1-2-1 conversation
basis. These data where however confirmed by competitors but may be misleading.
2. Running cost of DG calculated is more of the information delivered by dealers and
OEM’s. These data may not be highly true due to approximations and business
details.
3. Monthly margins taken are assumed on approximation of 240hrs and 10 months
utility, this might or might not be the exact utility of DG.
4. Expenses of the team and department may vary as per usage and hence the total
breakeven of the project may be varied.
5. Investment required to be done in this new project needs to follow organization
policies and hence may vary. If investment is decreased the breakeven will increase
while if investment is increased the breakeven decreases.
6. A complete and proper analysis of Indian market could not be done due to non-
touring facilities.
7.6 WHY NOT CHENNAI?
The survey being done in Chennai does inclines for the option to select it as one of the
starting pockets. However, there are some reasons due to which the choice of Chennai was
not preferred. They can be stated as;
1. Non-availability of actual Leypower DG sets near Chennai.
2. Load shedding in less in T. N. region.
3. No. of genset players are lesser in Chennai as compared to Delhi and Maharashtra.
This shows less demand here.

4. The fleet size with the players is also less. These fleet of DG are used in Chennai and
nearby region which also deflects less demand.
7.7 RECOMMENDATIONS
The implementation of the project should be done keeping the following recommendations in
mind.
1. The network should have strength with all dealers and vendors given proper share.
2. The DG sets on rentals should have the tag of Ashok Leyland’s “Leypower”, and not
the tag of the OEM assembling it.
3. The study of Maharashtra and Delhi market should be done properly before entering
into it.
4. Ashok Leyland needs to properly link with the local players who can use their DG for
rehire purpose.
5. The team should be trusted and given free hand to deliver their best for the
organization.
7.8 CONCLUSION
The complete project is quite lucrative and gives good margin to the DG rental player. As the
Power demand will remain unfulfilled for at least 8-10 years from now, this project is certainly a
good option to look for expansion, which could be implemented considering the recommendations
and limitations of the work.


Final Report On Leypower Rentals

Diunggah oleh

Informasi Dokumen

Deskripsi Asli:

Judul Asli

Hak Cipta

Format Tersedia

Bagikan dokumen Ini

Bagikan atau Tanam Dokumen

Opsi Berbagi

Apakah menurut Anda dokumen ini bermanfaat?

Apakah konten ini tidak pantas?

Hak Cipta:

Format Tersedia

Final Report On Leypower Rentals

Diunggah oleh

Hak Cipta:

Format Tersedia

Office : 19, Rajaji Salai,

Reporting: 3-A/1 & A/2, North Phase,

Summer Internship Report

LEYPOWER RENTALS AND

Prepared By: Sumit Gupta, MBA Batch of 2007-2009 1

ASHOK LEYLAND IN INDIA

Prepared By: Sumit Gupta, MBA Batch of 2007-2009 2

1.1 COMPANY PROFILE

1.2 BUSINESS PROFILE

Prepared By: Sumit Gupta, MBA Batch of 2007-2009 3

Prepared By: Sumit Gupta, MBA Batch of 2007-2009 4

1.3 QUICK FACTS

1.4 COMPANY FLASHBACK

Prepared By: Sumit Gupta, MBA Batch of 2007-2009 5

Prepared By: Sumit Gupta, MBA Batch of 2007-2009 6

Prepared By: Sumit Gupta, MBA Batch of 2007-2009 7

Prepared By: Sumit Gupta, MBA Batch of 2007-2009 8

BRIEF THEORY ON DIESEL GENERATOR

WHAT’S IMPORTANT IN DIESEL GENERATORS?

Prepared By: Sumit Gupta, MBA Batch of 2007-2009 9

2. BRIEF THEORY ON DIESEL GENERATOR

2.1 WHAT IS A DIESEL GENERATOR?

Figure 1: Ashok Leyland Generator

Prepared By: Sumit Gupta, MBA Batch of 2007-2009 10

Prepared By: Sumit Gupta, MBA Batch of 2007-2009 11

Generator for rapidly fluctuating loads:

Wave form and Radio/Telephone Interference:

Number of Sets required:

Prepared By: Sumit Gupta, MBA Batch of 2007-2009 12

Environment in which generator is used:

2.3 PARTS OF DIESEL GENERATORS

1. Engine: A diesel engine is an internal

Prepared By: Sumit Gupta, MBA Batch of 2007-2009 13

Problems and solutions with Diesel Engines

Prepared By: Sumit Gupta, MBA Batch of 2007-2009 14

2. Alternator: An alternator is an electromechanical device that converts mechanical energy

Prepared By: Sumit Gupta, MBA Batch of 2007-2009 15

4. Acoustic Enclosures/Canopies: Silent D.G Set container is of modular construction with

Adequate ventilation for genset cooling air requirement.

Prepared By: Sumit Gupta, MBA Batch of 2007-2009 16

Prepared By: Sumit Gupta, MBA Batch of 2007-2009 17

WHAT’S IMPORTANT IN RENTAL BUSINESS?

Prepared By: Sumit Gupta, MBA Batch of 2007-2009 18

3.1 PRESENT POWER SCENARIO

Graph 1: Demand Supply Gap Source: EIA 2006-07

Prepared By: Sumit Gupta, MBA Batch of 2007-2009 19

TABLE 1: ELECTRICITY GENERATION AND CONSUMPTION 1990-2001

Prepared By: Sumit Gupta, MBA Batch of 2007-2009 20

3.2 WHY “RENTAL BUSINESS” – MARKET OPPORTUNITIES

Prepared By: Sumit Gupta, MBA Batch of 2007-2009 21

Prepared By: Sumit Gupta, MBA Batch of 2007-2009 22

3.4 USER BASED RENTAL CLASSIFICATION

Prepared By: Sumit Gupta, MBA Batch of 2007-2009 23

3.5 ADVANTAGES OF RENTAL BUSINESS OVER OTHERS

3.6 CUSTOMER EXPECTATIONS FOR RENTAL DG

Prepared By: Sumit Gupta, MBA Batch of 2007-2009 24

Prepared By: Sumit Gupta, MBA Batch of 2007-2009 25

4) Authority with the Team: Every section of an organization needs to work on

Prepared By: Sumit Gupta, MBA Batch of 2007-2009 26

RENTAL MARKET IN INDIA

Prepared By: Sumit Gupta, MBA Batch of 2007-2009 27

4.1 LEADING PLAYERS IN RENTAL BUSINESS