Havells India is a billion dollar plus organisation. It is one of the largest and fastest growing electrical and power distribution equipment manufacturers. With 91 branches/representative offices and over 8,000 professionals across 50 countries, the group has achieved rapid success in the past few years. It has recently ventured into domestic appliances, and is planning a big foray into household lighting.
Sujay Mehdudia spoke to Anil Gupta, Joint Managing Director, Havells India, on future plans of the company. Excerpts:
How is the Sylvania acquisition doing? How do you see the market in Europe zone?
The integration process at Havells-Sylvania is over, and the company is working smoothly. This year, Havells-Sylvania has made a profit. We expect to grow steadily going forward. While the overall European economy is bit flat, our aim is to remain stable and improve on our margins through a combination of product mix, rationalisation of low margin businesses and moving up the value chain from products to services.
How do you see the domestic market behaving in the wake of slowdown in the economy? Will it impact your company?
The current domestic market in the industrial segment has shown some slowdown but the consumer segment continues to grow. We grew by 22 per cent, and would maintain a growth of 18-20 per cent this fiscal as well. We have introduced new products and new divisions. We will continue to invest in our brands. A few months back, we introduced domestic appliances, and we are doing extremely well in the segment. We have introduced new products within our Crabtree portfolio, which has received good response from customers. Overall, we are buoyant about our growth.
How has the rupee depreciation impacted your global business and commitments?
Rupee depreciation has not impacted us greatly as we are more in the eurozone and Latin America. Our exports are limited. Hence, the impact isn’t much. However, rupee depreciation is bringing inflationary trend in the domestic market which is generally not positive for the economy, and we are hopeful that the government will be taking appropriate steps to stem this depreciation.
What kind of investment and expansion plans do you have for Havells and Sylvania?
Our investments in Havells-Sylvania are now showing results. Last fiscal, our profits grew by about 46 per cent despite European slowdown. We will continue to work on our margins, and invest in new markets such as Eastern Europe, Turkey, Southeast Asia, Latin America, the U.S. and African region. These markets will be strong growth areas for us, and we will focus on strengthening our brand presence in these markets. At Havells, our profit after tax grew by 17 per cent, and we hope to grow at the same pace this year as well. In the last few years, we have made capex to the tune of Rs.700 crore. Now, we are looking at consolidating our capacities and utilising them. We will further strengthen our distribution network and open 60 more ‘Havells Galaxy’ in the current fiscal.
Today, Havells has become a household name. We have been associated with IPL and T20 in Cricket, and will continue to explore opportunities that will help strengthen our brand further. Our path-breaking ads have already made this category alive.
Will your focus shift to appliances and lighting for domestic markets? What new products are in the offing?
We will continue to focus on all our existing businesses that include FMEG (fast-moving electrical goods) and power distribution equipment. We introduced domestic appliances earlier this year, and have received overwhelming response from the market. We would strengthen this category as the market potential is huge. We are strong in the lighting business, and have major plans for lighting fixtures business. We will continue to invest in R&D to develop right products that are expected from a market leader. Recently, we introduced premium range of Crabtree switchgears, including miniature circuit-breakers (MCB), distribution boards, residual current circuit-breakers (RCCB) and a range of time switches with features that are currently not available in the market. We will continue to launch such innovative products going forward.
What is your take on the increasing competition in the electrical industry?
We are very pleased with the growing competition as it gives consumers more options. We are well poised to grow around 17-20 per cent going forward. Our products across segments are known for their superior quality, and are well accepted by the consumer today. Our focus on providing high quality and innovative product each time has helped us grow faster, and ensure continuous demand for our products.
Are you planning any acquisition or joint venture to increase the company’s reach and product portfolio?
We are not actively looking for any acquisition or joint venture currently. However, if we come across an opportunity, which is strategic to our business, we are open to that. At present, we are more focussed on expanding markets, strengthening brand presence and enhancing our distribution network.