This story first appeared in DNA Money edition on Thursday November 03, 2011.
Havells India, electrical and power distribution equipment manufacturer, plans to double its branded retail outlets in a bid to grow household appliance business four-fold.
The company currently has 103 branded outlets — Havells Galaxy Stores — which it plans to ramp up to over 200 in the next 12 months.
“The initial response to the home appliances range has been very encouraging, both from the end-users as well as the distributor fraternity,” Anil Gupta, joint managing director, Havells India said on a second-quarter analyst call.
The company had forayed into the home appliance business in August this year.
“A lot of our channel partners operating multi-brand outlets have expressed interest in converting to Havells branded exclusive outlets. The process has been kick-started already and we should easily achieve the targeted numbers,” he said.
Havells’ current offerings in the domestic appliance segment include products for food preparation, garment care, home comfort, cooking and brewing.
The company has earmarked a capital expenditure of `150 crore for this fiscal, of which `70-80 crore will be spent towards marketing and research and development for its small appliances range in the next 24-36 months.
“The market response during the festive season has been very positive and we are envisaging sales of Rs50-60 crore from our domestic appliances line this fiscal. The target for next fiscal will be Rs200 crore, and Rs500 crore in the next four years,” he said.
Sanjaya Satapathy, research analyst with Bank of America-Merrill Lynch, said Havells’ product expansion including the recent foray into home appliance products will help the company sustain 15-20% growth despite the adverse macroeconomic environment.
“The company has also launched new products in industrial switchgears and lighting fixtures in the first half of the current fiscal. It currently has a 6% share in the Rs3,000 crore industrial switchgear market and an 11% share in the Rs2,500 crore lighting fixture segment. Havells’ market share in these segments is below potential and these segments are also more profitable,” Satapathy said in his recent report on the company.
To enhance its penetration in Tier III markets, the company will increase its dealer network to over 6,000 from 4,000 now in a year.
The company’s net profit for the second quarter grew 16% to `81 crore as compared to Rs69.5 crore in the corresponding quarter previous year.
Consolidated net revenues grew 19% to Rs1,585 crore in July-September as against to Rs1,335 crore in the corresponding quarter last year.
Havells India, electrical and power distribution equipment manufacturer, plans to double its branded retail outlets in a bid to grow household appliance business four-fold.
The company currently has 103 branded outlets — Havells Galaxy Stores — which it plans to ramp up to over 200 in the next 12 months.
“The initial response to the home appliances range has been very encouraging, both from the end-users as well as the distributor fraternity,” Anil Gupta, joint managing director, Havells India said on a second-quarter analyst call.
The company had forayed into the home appliance business in August this year.
“A lot of our channel partners operating multi-brand outlets have expressed interest in converting to Havells branded exclusive outlets. The process has been kick-started already and we should easily achieve the targeted numbers,” he said.
Havells’ current offerings in the domestic appliance segment include products for food preparation, garment care, home comfort, cooking and brewing.
The company has earmarked a capital expenditure of `150 crore for this fiscal, of which `70-80 crore will be spent towards marketing and research and development for its small appliances range in the next 24-36 months.
“The market response during the festive season has been very positive and we are envisaging sales of Rs50-60 crore from our domestic appliances line this fiscal. The target for next fiscal will be Rs200 crore, and Rs500 crore in the next four years,” he said.
Sanjaya Satapathy, research analyst with Bank of America-Merrill Lynch, said Havells’ product expansion including the recent foray into home appliance products will help the company sustain 15-20% growth despite the adverse macroeconomic environment.
“The company has also launched new products in industrial switchgears and lighting fixtures in the first half of the current fiscal. It currently has a 6% share in the Rs3,000 crore industrial switchgear market and an 11% share in the Rs2,500 crore lighting fixture segment. Havells’ market share in these segments is below potential and these segments are also more profitable,” Satapathy said in his recent report on the company.
To enhance its penetration in Tier III markets, the company will increase its dealer network to over 6,000 from 4,000 now in a year.
The company’s net profit for the second quarter grew 16% to `81 crore as compared to Rs69.5 crore in the corresponding quarter previous year.
Consolidated net revenues grew 19% to Rs1,585 crore in July-September as against to Rs1,335 crore in the corresponding quarter last year.
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