The Aftermarket Landscape

The growth potential of the aftermarket segment is undisputed. Prateek Pardeshi gets in touch with the community to understand the grass root challenges.

- Prateek Pardeshi

The aftermarket segment has continued its upward trajectory. Valued at an estimated Rs.42,007 crore, the segment registered an eight per cent growth. The fiscal (FY23) gone by has given the stakeholders of the organised industry good momentum to carry into the next fiscal (FY24). The largely unorganised segment, albeit, has the smaller stakeholders tackling challenges.

Profitability a challenge

R. B. Electronics from Mumbai is thriving hard to turn profitable. Today the turnover is pegged at Rs.200 lakh (purchase of Rs.80 lakh and sale of Rs.120 lakh). The revenue gets further eroded by fixed expenses. That leaves room for profitability at an estimated 25 per cent. Founder, Rambriskh Yadav, informed, “The heavy reliance on semiconductors has translated to heavy losses. He explained, “We are heavily dependant on imports and have to shell out heavy taxes in the range of 18-28 per cent”. The reversal of import duty and higher local procurement is crucial, he opined.

He urged the government for policy interventions that impact not only the bigger players but smaller stakeholders like itself. The controller is a spare part and not a finished product, but still, the government imposes 28 per cent as an import duty, he said. Of the opinion that if the government were to encourage the local production of controllers and then levy a 30 per cent tax, it would be more feasible. He urged the government to extend support and reverse the heavy taxes eating into profitability. This in turn would help bring down finished goods prices.