Calcutta, Dec. 23: The sale of diesel generator sets, specifically in the small and portable segment, has taken a hit following the government's decision to withdraw Rs 500 and Rs 1,000 currency notes.

The Rs 6,000-crore industry is expecting an 8 per cent growth in the ongoing fiscal, lower than the estimates prior to demonetisation.

"The industry was growing at around 10 per cent. But retail sales have dropped after the (demonetisation) announcement. For the full year, the growth is expected to be around 8 per cent," said Sanjeev M. Nimkar, vice-president and business head (power, industrial & service) of Kirloskar Oil Engines Ltd.

With a 33 per cent market share, the company is the largest player in the domestic diesel generator market.

On an average 1,50,000 generators (across categories) are sold in India every year. Another 30,000 units are estimated to be sold by the unorganised sector.

Besides Kirloskar, other major players include Cummins, Ashok Leyland and Mahindra.

"At the same time the power supply situation has improved, which means lower demand, specially for smaller generator sets," he said.

Small generators with a capacity of up to 30kVA are used primarily by small retail outlets, showrooms, small residential and commercial buildings. These are priced upwards of Rs 60,000.

Medium (up to 200kVA) and high horse power (200-1,000kVA) generators - accounting for the bulk of sales in sectors such as roads, large commercial establishments, residential complexes and industrial units - are mostly unaffected.

Nimkar, however, said the industry would be able to recover some of the lost sales once the cash flow situation improved.

"The good thing in our segment is sales are never lost. They get postponed. So once things settle down, demand will be back. By April things should normalise," he said.

Nimkar was in the city to launch the company's new high-horse power generators.

Kirloskar on its part is expecting at least 10 per cent growth in this fiscal, ahead of market expectations.

"We have introduced new products and we are gaining market share and our growth should be in double digits," he said.