Started by an ex-engineering professor, this Delhi family business grew into a Rs 200 Cr turnover solar brand
At the Mohanka household in Delhi, the topic of conversation during breakfast and dinner is usually business. More specifically, it is about how the family’s solar firm, Gautam Solar, is doing.
Started by BK Mohanka (an ex-professor at NIT, Patna) in 1993 as a polymer brand, the solar business was incorporated in 1997.
Since then, the founder’s son, Gautam Mohanka, and various other family members joined the company, and worked to take it from a company with Rs 1 crore turnover in 2002 to Rs 200 crore turnover in 2020.
“As a Marwari family, we’ve accepted it is not possible to stop talking about business, even at home. At weddings and other family gatherings, our relatives have no second thoughts about directly asking us our latest turnover and profit figures,” says Gautam, who is the MD at Gautam Solar, in an exclusive interview with SMBStory.
The family business today manufactures a range of solar products, including panels, pumps, lights, fans, batteries, and more. Various government organisations, corporate companies, and individual buyers form its customer base, which it services from its four Haridwar-based factories of 250 MW capacity in total.
Building the product portfolio
Recalling the early days of the business, Gautam says, “We shifted to Delhi from Patna in 1992 as there was a lot of criminal activity in Bihar. In Delhi, my ex-professor father ran a polymers business. He soon found a business opportunity in plastic moulding and casings for solar lanterns. From thereon, we got fully involved in the solar segment.”
As a young boy, the founder’s son grew interested in his father’s business. At the age of 14, he began assisting his father, spending his Sundays and summer holidays on factory visits. In 2002, he joined the family business on a full time basis after finishing his MBA from MDI, Gurugram.
Passionate about innovation and product development, Gautam oversaw the business’ foray into various solar products - a form of horizontal integration.
“Our customers want an entire solar solution. They need special structures, electronics, and sometimes batteries so that the energy captured by the panels can be converted into usable electricity. Their requirements also keep changing between panels, pumps, etc. So we manufacture and sell all these products under one roof,” he explains.
Gautam Solar panels
While this model makes it challenging for the business to keep track of various raw materials and troubleshoot a range of issues, it offers a major advantage.
Gautam Solar products are all compatible with each other, and the MD says the firm offers a singular point of service, making it more efficient for customers to buy from them instead of a Chinese supplier.
“It’s like walking into a trusted clothing store looking for a formal shirt, and ending up buying trousers, a belt, shoes, and some accessories in addition to the shirt,” he says, adding:
“As solar products should come with a 25-year warranty, it makes sense for customers to buy from us. There is no guarantee when a Chinese supplier might shut down, whereas we, like some other Indian solar businesses, are a family-run establishment who are in it for the long run.”
Imports vs local manufacturing
Gautam Solar primarily deals with small and medium-scale solar installations for homes, farmers, offices, etc.
However, for large-scale installations, Gautam says developers have been importing from China as they marginally reduced cost of two to four percent on Chinese solar products makes a big difference at scale.
“Margins are better for us in individual installations. At the large scale, almost 80-90 percent of the market is serviced by Chinese suppliers. But now, the government is actively looking to reduce this dependency and support Indian solar products,” he adds.
While the Mohanka family business sources raw materials locally, it also imports some components from China to produce the finished products in India.
As there are few solar cell makers in India, they are often imported. Other components such as glass, aluminium frames, ribbons, and plastic sheets are easily available in India.
“Now the supply chain in India for solar manufacturing is becoming robust. The nation is becoming prominent in the space as more players are coming up, and customers are realising it is not easy to claim warranty and replacements from China, especially for small and medium-scale installations,” Gautam says.
A solar panel installation by Gautam Solar
Future plans amidst a competitive landscape
As the Indian government aims to achieve 114 GW of solar capacity by 2022, solar firms in India are looking to increase their capacities and grab a larger slice of the pie. Gautam Solar plans to reach 2.5GW capacity in a few years.
Despite the presence of the likes of Waaree and Vikram Solar in the panels market, and Tata Power and Shakti Pumps in the pumps market, Gautam remains optimistic about the future of the Mohanka’s business.
“We are a risk-averse family, and as we make many components and products, we can walk away from certain product orders or sectors where the risk is too high or the margins are low. We can simply say no. This is difficult for a company that makes only one or two types of solar products,” Gautam explains.
He admits that the market is competitive, but the leading players maintain a level of trust with one another, often supplying each other with components that are not made in-house at the buyer’s end.
Besides the competitive nature of the industry and presence of Chinese alternatives, the impact of COVID-19 and national lockdowns posed a challenge for Gautam Solar.
As solar is a labour and capital intensive industry, lockdowns pose difficulties in manufacturing, sales, installation, service, etc.
“Government clients were worried if they could fund solar projects, and held back from approving them. This affected the whole industry. Supply chain issues, rising prices of raw materials meant our margins reduced as well,” he says.
But now, the Mohanka’s business is back on track, and as demand returns, it plans to stock more raw materials and finished products so it can avoid any future backlogs.
“Apart from planning to boost our capacity, we’ve also been requesting our government customers to free up our cash flows, and they’ve been doing their best,” he says.
YourStory’s flagship startup-tech and leadership conference will return virtually for its 13th edition on October 25-30, 2021. Sign up for updates on TechSparks or to express your interest in partnerships and speaker opportunities here.
For more on TechSparks 2021, click here.
Applications are now open for Tech30 2021, a list of 30 most promising tech startups from India. Apply or nominate an early-stage startup to become a Tech30 2021 startup here.