Even though the demand-supply is not in balance and rental rates have dipped, I am hopeful that market will open up and new cranes will be more in demand as against old cranes, says Hitesh Obhan, Proprietor, Ishardas & Sons. Excerpts from the interview.

What is the current status of hiring and rental industry?
At present, the market has improved tremendously. However, the problem of demand and supply still prevails. Rates are not good. I am hopeful that market will open up in future. Newer range of cranes will be more in demand as compared to older ones.

How much is the industry size for heavy crane rental in India?
In India, the estimated market size for heavy crane would be around Rs 2,000 to Rs 5,000 crore per year.

Do you expect this market to grow?
Yes, I [certainly] expect this market to grow provided more corporates enter this market. However, they need to provide better services and should have control over the entire operation as against the present loose manner in which small companies operate.

What are the major challenges?
The major challenges faced in the industry are taxation, delayed payment realisation over 180 days from the date of billing, and many more. In the meantime, we also have to pay salaries, EMIs, etc. from our funds. We are accorded the last priority for release of payment by our customers but they expect our services to be of the highest standard.

Many people say that the market situation for rental industry is very bad on the ground. Is it true?
It largely depends on the market reach of a rental company. If the reach exists the business is available. Today even in tier-II cities there are heavy crane suppliers?catering to the local customers?who for obvious reasons choose to take their services. This adversely effects the business of the many Mumbai-based hiring companies.

Could you specify three areas which can help to revive the market?
The three areas would be: recognition by financing sector, standardisation of taxes and prompt payments by our customers.

Which industry sectors drive the growth of your business?
Looking at the current market conditions, metrorail, steel, power, wind mills and cement sectors will drive the growth of our business.

Who are your major customers?
Our major customers are Larsen & Toubro and BGR Energy.