Ceinsys Tech Management Discussions


Global & Domestic Economic

Outlook

The global economy is expected to experience a gradual recovery from the socio-political events and the pandemic of the past years. According to the International Monetary Fund (IMF), global growth is projected to reach 2.8 percent this year, with a modest increase to 3.0 percent in 2024. Global inflation is predicted to decrease, albeit at a slower pace than initially anticipated, from 8.7 percent in 2022 to

7.0 percent this year and further down to 4.9 percent in 2024. Notably, emerging economies are set to witness relatively higher growth, with a jump from 2.8 percent in 2022 to 4.5 percent (fourth quarter over fourth quarter) this year. In contrast, the European Unions growth is expected to decline to 0.7 percent (fourth quarter over fourth quarter) this year before rebounding to 1.8 percent in 2024.

Indias growth, on the other hand, is anticipated to surpass most economies, with a projected growth rate of 6.2 percent and 6.4 percent in 2023 and 2024, respectively. Although these figures are lower than previous estimates for 2023, they indicate that India is contributing around 15 percent to global growth in 2023. Factors such as rapid digitalization, the governments commitment to increase capital expenditure, increased foreign direct investment (FDI) momentum, and a rising share of manufacturing in the countrys GDP are driving this growth. These factors create a conducive environment for Ceinsys growth.

Global economic outlook

The COVID-19 pandemic continued to cause disruptions in CY2022, with the emergence of the new variant having a significant impact on Asian economies such as Japan and China. The disruption of the supply chain, particularly in the semiconductor industry, led governments and businesses to reconsider their supply chain strategies.

Russias surprise war against Ukraine continues to overshadow the world economy. The uncertainty generated by the war is likely to weigh heavily on economic activity, and downside risks are expected to predominate. While there have been some recent signs of improvement, the recovery over the next two years is likely to be moderate. Trade tensions are also high and could worsen, adding to the challenges faced by the global economy. Financial vulnerabilities have also increased, including in financial institutions, housing markets, and low-income countries. These vulnerabilities could exacerbate any negative impacts from the war or trade tensions. In addition, while headline inflation has started declining, it remains elevated, which could also contribute to economic uncertainty and volatility. The persistence of high inflation could have implications for central bank policies and the cost of borrowing. The global economy appears poised for a gradual recovery from the past years socio-political events and the pandemic. The focus of Governments and organizations alike on digital technologies and digitalization is contributing to increased inclusive, resilient overall development by spurring innovation, generating efficiencies, and improving services. Innovative digital solutions to complex development challenges present a unique opportunity for countries to accelerate economic growth and connect citizens to services and jobs.

Overall, the outlook for the global economy remains fragile, and the risks are weighted to the downside. Continued attention and cooperation will be necessary to mitigate the negative impacts of the ongoing conflict and other economic challenges.

Indias economic outlook

The Russia-Ukraine conflict, combined with other looming factors has led to a global economic slowdown, and Indias overall growth prospects have also been affected. However Rapid Digitalization, the governments commitment to increase capital expenditure, increased FDI momentum, & increasing share of manufacturing in the countrys GDP are some of the major factors driving this growth during this period.

Indias economy has grown from being the tenth largest to the fifth largest in the past ten years. India is currently the President of the G20 nations and has been the fastest-growing major economy for three consecutive years. The ongoing conflict may have significant direct and indirect impacts on Indias economy, trade, and foreign policy. Despite these global issues, the country has a robust and diverse technology ecosystem that is driving further growth, with a talented and entrepreneurial workforce that prioritizes ethical tech and governance, environmental and social responsibility, and corporate social responsibility.

Domain wise Business Performance & Outlook

Water

The water management industry is adopting digitalization, material science advancements, and hydrological engineering to efficiently preserve and reuse water. Trends like Digital Water Management, Wastewater Processing, Advanced Filtration, Water-saving Technology, and Desalination are enhancing accessibility, sustainability, and economic viability. The smart water management market is expected to grow at a rate of 13.89% annually due to increasing IoT adoption and smart city initiatives. Smart meters play a key role by integrating advanced technology with communication solutions like SCADA and GIS to address challenges in billing and water management for utilities, residents, and industries.

The Infrastructure Investment and Jobs Act (IIJA) presents an incredible opportunity for US utilities with USD 55 billion in new funding for water and wastewater infrastructure from 2022 to 2026. In India, the government is also prioritizing infrastructure development through initiatives like the National Infrastructure Pipeline (NIP), Jal Jeevan Mission (Rural), Jal Jeevan Mission (Urban), and the Namami Gange program. These programs will receive substantial funding. The union budget for 2023-2024 proposes a budget of approximately 15 Billion USD for water-related projects across ministries such as Jal Shakti, Agriculture and Farmers Welfare, Rural Development, and Housing and Urban Affairs. This budget is a 15% increase from the previous year, with a significant portion allocated to Jal Jeevan Mission (JJM) to provide functional household tap connections (FHTC) in rural areas. The goal for the upcoming year is to deliver an additional 40 Million FHTCs.

We remain confident in strong growth across this vertical with increasing demand for solutions that integrate water management into the overall development, of public and industrial infrastructure and capacities, planning, and management practices. We are investing in interactive technology solutions and methodologies that enable easy adoption of best practices and informed decisions involving activities with environmental and community impacts.

Energy

The power and utilities industry is embracing trends like grid modernization, ESG reporting, grid flexibility, and transportation electrification to drive innovation and growth.

The global energy industry will be driven by global energy consumption, set to grow by 1.3% in 2023 compared to 0.9% growth in 2022. In India, significant progress has been made in achieving energy sustainability by expanding access to electricity, implementing energy market reforms, and integrating renewable energy sources into the grid.

India, with an installed power capacity of 411.64 GW, ranks fourth globally in renewable capacity. The country aims to add over 340 GW of renewable capacity by 2030 which will require a substantial investment of USD 223 billion between 2022 and 2029.

In the Union Budget of India 2022-23, USD 885 million was allocated for solar power projects, including grid, off-grid, and PM-KUSUM initiatives. The Green Energy Corridor projects facilitate the evacuation of renewable power and enhance the grid for future requirements. Additionally, the National Hydrogen Mission aims to produce 5 MMt of green hydrogen annually with a budget of USD 2.4 billion.

The Ministry of Powers Task Force on OSOWOG is exploring the interconnection of regional grids to exchange renewable power. Initial interconnections with Sri Lanka, Myanmar, and Maldives are being considered to further the objective of OSOWOG, which aims to connect Southeast Asia, South Asia, the Middle East, Africa, and Europe for renewable power exchange.

The outlook for this segment for FY24 remains highly positive, with a strong sentiment that we forecast strong growth in this business segment. This growth will be driven by the growth opportunities in the areas of grid modernization, transmission capacity, Intelligent Asset, Management (IAM), and the integration of smart & microgrids.

Transportation

The transportation and logistics industry is confronting immense change: digital transformation, new market entrants, changing customer expectations, and evolving business models., the global transportation infrastructure market is expected to hit USD 3,606.8 billion by 2031, registering a CAGR of 7.2% from 2022 to 2031.

India plans to invest a substantial 1.7% of its GDP in transport infrastructure this year, surpassing most European countries and the US. The government has increased its capital outlay to USD 122 billion for infrastructure development. USD 3 Billion has been allocated for railway capital expenditure, focusing on new tracks, coaches, electrification, and station development. Road infrastructure will receive USD 3.3 Billion, a 36% surge for the fiscal year 2023-24. The government aims to revitalize 50 airports, heliports, water aerodromes, and landing grounds to enhance regional air connectivity.

In FY22, road construction covered a distance of 10,457 km. The National Infrastructure Pipeline (NIP) comprises 8,964 projects. Indian Railways experienced an 8.3% increase in revenue-earning freight traffic during FY22-23, carrying over 976 million tonnes. Capital expenditure on railway infrastructure has consistently increased, with a 29% rise from the previous year.

The FY24 outlook remains positive, and we are confident in surpassing pre-pandemic performance levels.

Mobility & Manufacturing Engineering Services

In 2022, global technology spending reached USD 4.39 trillion as Enterprise software and IT services surpassed USD 2 trillion, growing 4.5% YoY. The Engineering, Research, and Development (ER&D) sector is rapidly expanding, driven by increased client engagement. Global 1000 companies have increased R&D intensity as a percentage of revenue from 3.8% in 2010 to 4.5% in 2022. The automotive mobility industry is a significant contributor to ER&D spending, forming 16% of overall expenditure. Global ER&D spending stands at approximately USD 781 billion, with the automotive sector accounting for USD 125-160 billion, growing at a CAGR of 10.6%.

Executives expect ER&D spending to increase by 10% annually until 2026, fuelled by investments in digital engineering. Investments in digital engineering capabilities are projected to grow even faster, with a CAGR of 19% between 2022 and 2026, nearly double the pace of overall ER&D spending.

The European automotive industry leads the global landscape, contributing USD 79 billion (50% of total ER&D spending), followed by the Asia-Pacific region with USD 55 billion (35%), and North America with USD 24 billion (15%). Factors driving higher investments in ER&D within the automotive industry include electrification, autonomous vehicles, infotainment, connected cars, and standardization.

The Government of India anticipates USD 8-10 billion in investments in the automobile sector by 2023. R&D spending in India, particularly in prototyping and designing, is expected to be lucrative due to rapid design changes and the shift towards electric vehicles. The growing demand for smart manufacturing and advancements in automotive design will contribute to a prosperous market for automotive design services.

The Industrial Manufacturing sector is poised for significant growth, surpassing expectations despite challenges like supply disruptions and labor shortages. Major corporations worldwide are expected to increase investments in high-quality production and productivity enhancements. The industrial automation market is projected to reach a valuation of USD 81.4 billion by 2033, with a CAGR of 7.2% during the period. Asian countries manufacturers will drive the markets growth.

Over the next five years, automated systems are expected to account for 25% of capital spending globally.

Manufacturing automation trends include broadening capabilities with robotics, AI, and machine learning; protecting profitability through agile technologies and digitalization; centralizing access to strategic tech; redefining markets with Industry 4.0.

Indias R&D services exports grew rapidly, making it the largest provider of outsourced ER&D services through GICs and third-party vendors. The countrys focus on innovation and R&D has improved its Global Innovation Index ranking and attracted MNCs, supported by a skilled workforce, IT innovation, EV development, a large domestic market, policy support, and a thriving startup ecosystem. Indias ER&D talent pool of 1 million people is expected to grow by another million in the next 5 years, positioning it as the third-largest R&D destination.

Ceinsyss Mobility and Manufacturing Engineering services business unit saw a 25% YoY growth and is pacing itself for a year of exponential growth. The outlook for the next fiscal is positive with the continued growth potential in the EV ecosystem and Manufacturing automation.

Geospatial

The integration of digital twins with BIM software enhances precision in virtual building replicas, while VR and AR improve communication. Data-driven automation and parametric modeling simplify customization in the AEC industry. The geospatial industry in 2023 will include data acquisition, software providers, analytics, consulting, training, and hardware companies. Indias geospatial market is projected to grow at a CAGR of 13.5% by 2025, with a focus on GIS, spatial analytics, and Earth Observation. Defense, urban development, and utility sectors dominate Indias geospatial market.

It is projected that the Geospatial Industry is estimated to be USD 512 billion, with a market cap of USD 1.7 trillion, and a direct socioeconomic impact of USD 7.5 trillion in 2023. The demand for geospatial data and analytics is being fuelled by various industries, such as transportation, logistics, agriculture, defense, and smart cities. The development of novel geospatial tools and platforms, such as remote sensing, geospatial visualization, and location-based services, is making it simpler to acquire, process, and analyze geospatial data. The location-based intelligence and analytics industry is expected to grow from USD 15.7B in 2021 to around USD 30B in 2026 driven by advancements in machine learning, artificial intelligence, and big data analytics.The adoption of geospadal technologies is expected to rise in 2023 as more companies and governments become aware of the significance of geospadal data and analydcs. This could lead to greater investment in geospadal technology and the development of new applications and use cases. The Asia-Pacific region is predicted to have the highest growth in the geospatial industry, propelled by increased investment in infrastructure and smart city initiatives.

Overall, the geospadal industry is projected to experience continuous growth and transformation in 2023. Ceinsys, with its continued focus on new technologies, applications, and collaborations driving innovation and expansion is perfectly positioned to adapt and provide innovative solutions in the geospatial marketplace.

Trends impacting Geospatial Industry

AR, VR, 3D reconstruction or 3D modelling.

In 2023, the digital revolution will continue to advance, driving significant changes in reality capture, 3D modelling, surveying, mapping, lidar, and AEC digitization. AR and VR technologies are transitioning from theory to practical applications, enabling the implementation of 3D designs in the physical world and facilitating interactive collaboration across different locations. These advanced visualization tools are already delivering immense value to the AEC industry, with ongoing improvements in hardware, modelling, and capture processes enhancing their benefits. The integration of gaming engines with geospatial data is unlocking realistic 3D modelling capabilities and fostering partnerships between geospatial and gaming companies. This integration allows for realistic simulations and valuable insights, potentially enabling a seamless transition between the physical and virtual worlds and paving the way for future metaverse development.

Spatial Analytics

AI-powered geospatial intelligence tools are revolutionizing sustainable supply chains, traceable supply chains, and climate risk management. GeoAI offers solutions for automation, resource monitoring, risk management, and disaster preparedness. By integrating location data with entities, it enables faster decisionmaking. Geospatial analytics involves collecting, transforming, and analysing data to reveal insights. AI enhances the value of geospatial data by extracting information and providing real-time insights. For instance, AI algorithms predict wildfire risks and assess environmental risks for energy pipelines. As geospatial technology advances, AI-led analytics will transform industries, improving efficiency and safety.

Sustainability

Timely high-frequency satellite imagery is a valuable tool for supporting sustainability initiatives like agriculture, energy transformation, and supply chain tracking. It also aids financial services in market trend identification and climate risk assessment, while assisting defense and intelligence organizations in energy and food security decision-making. GIS technology visualizes carbon dioxide levels in relation to location and time.

Digitizing construction and AEC workflows allow for visualizing project carbon footprints. The integration of Geospatial and BIM technology enables real-time data incorporation into digital twins, easing impact measurement.

In the face of worsening climate change and stakeholder demands for transparency, strong ESG initiatives are crucial for businesses. Robust ESG propositions are linked to higher value creation, and companies are ramping up ESG reporting requirements. Geospatial AI can help businesses assess and confirm their ESG initiatives, providing tangible evidence of energy use, resource stewardship, cybersecurity, conservation practices, and employee treatment. It also aids in understanding the environmental impact of commercialization and holding partners accountable with reliable data.

Spatial Planning Platforms

As cities encounter various challenges linked to sustainable development, climate change, and infrastructure management, the significance of Spatial Planning Platforms is on the rise. Spatial Platforms, integrate multiple sources of GeoSpatial data to create high-value visualizations, such as maps, graphs, statistics, and cartograms. These platforms can enable workflows and information exchange for engineers, project managers, and c-suite leaders in a variety of organizations ? including government agencies, construction firms, utilities, telecom providers, smart cities, and mining companies.

Quantum Computing

Recent news about developments in quantum computing is exciting for the geospatial community. Geospatial AI with quantum computing has immense applications. Quantum positioning and Quantum Computing as a Service (QCaS) is expected to revolutionize the industry.

Trends impacting mobility industry.

Vehicle Autonomy

By 2025, passenger vehicles in Europe and North America are expected to have a significant increase in level-three and level-four automation features, enabling them to become highly automated or capable of self-driving on highways. Shared autonomous vehicles could potentially thrive in major urban areas.

Micro-mobility

Currently valued at around USD 180 billion, the global micromobility market is projected to more than double by 2030, reaching approximately USD 440 billion, according to McKinsey analysis.

Intermodal Applications

The development of intermodal applications involves utilizing multiple modes of transportation for a single journey. There are already emerging platforms that integrate various mobility options for specific routes, making it easier for travelers to plan their trips. For example, Jelbi displays potential routes that combine different modes of transportation, along with information on time and cost.

Shared Mobility

The shift towards shared or pooled zero-emission vehicles is regaining momentum as consumers seek transportation options that are convenient, cost-effective, and environmentally friendly. Shared mobility, including ride-hailing services, is becoming increasingly popular in this regard.

ElectricVehicles

The Electric Revolution is gaining momentum. In 2022, electric vehicles (EVs) captured 11% of the global market share, a significant increase from 6.5% in 2021. Major automotive manufacturers have set ambitious electrification goals, ranging from a modest 20% penetration by 2025 to an aggressive 100% by 2030. By 2030, it is projected that battery electric vehicles (BEVs) will reach a 40% penetration rate, while xEVs (including hybrids) will achieve 80% by 2035. The regionalization of EV production and supply chains will result in duplicated efforts and increased costs for OEMs, but it will also create immense growth opportunities for specialized suppliers, particularly those with strong R&D capabilities and expertise in software/hardware integration.