While most companies have lost business on account of the pandemic, Roca Bathroom Products has managed to increase its market share at the national level by 1% and is confident of a 25% growth in revenue in 2021. The company is also planning a new greenfield project either in Tamil Nadu or Gujarat by 2024, says MD K.E. Ranganathan. Edited excerpts.
How did you manage to post growth during the pandemic year?
The year 2020 for everyone turned out to be not-so-good in terms of performance as COVID-19 destroyed lives and livelihood across the world. We laid greater focus on meeting customer needs and this helped the company to gain market share at the national level by 1% to 35% among the organised sector players. In Tamil Nadu, our market share among organised players is 65% and 45% in the South.
We look at the year 2020 in two ways. One as the learning year and other as ‘missing-page-in-a-book year’. Learning on ‘new normal’ and challenging ‘status-quo’ was phenomenal. We phased the year 2020 in terms of January-March quarter as high growth, April-June as survival, July-September as revival and October-December as back-to-growth.
How has been the business in 2021?
As we moved to growth momentum during the October-December 2020 quarter, we could plan something interesting for 2021. The COVID cases were much under control during December/January and everything was looking promising.
We designed and executed a ‘Helicopter’ (vertical) take off during January-March 2021 quarter. We planned higher production, launch of new products, rural market thrust, loyalty programme focus and huge market pull actions. All these resulted in the business doing a ‘vertical take-off’ in terms of revenue. We recorded a robust revenue growth of more than 30% during January-March 2021.
April 2021 continued the dream run with a record revenue of ₹120 crore for the company against a total washout in April 2020. May 2021 began with the shock of COVID 2.0 hitting the country in a big way, leading to lockdowns across many cities. In spite of this, the company delivered encouraging results compared with May 2020 with 40% growth.
How do you see the rest of the year 2021?
As we speak today, COVID 2.0 is losing steam. The caseloads across the country have started coming down. I guess from July 2021 we can expect to go back to February/March 2021 conditions. As a company, Roca Parryware, is ready for the second helicopter take-off during June/July 2021. All our eight factories continue to run at full capacity. We are building good inventory.
Tell us about your order book position
Our order book is very healthy at the current levels. We have more than two months of retail orders on hand to deliver. On the institutional front, we see good traction as many construction sites are allowed to continue work even during lockdown. The demand surge in this segment is very much visible. We have more than 18 months’ revenue order book in the institutions segment.
Any expansion plans?
With the huge growth in business since January 2021 across faucets and plastic bathroom products like seat covers and cisterns, we have reached over 90% capacity utilisation across our factories.
Given this momentum and expected surge in demand post-COVID curbs easing, we are taking action to expand our faucets and plastics manufacturing capacities in India. We are planning to set up a new factory either in Gujarat or Tamil Nadu by 2024-25.
On the sanitary ware front also, we are committing huge investments to modernise our factories to enable production of high quality products. Overall, we have planned for ₹50 crore capex investments in 2021 and actions are already under way.
Has the spiralling input material prices affected your revenue?
There has been an inflation spiral since January 2021. In the last three to four months, all input material costs have gone up by 40-50%. Though, we lost few points on our profitability so far, we have not considered to pass on the inflation to market. But given the worsening situation, it looks inevitable in the near future. We are also working on cost reduction measures and efficiency improvement measures to stem the financial impact.
What is the targeted revenue for 2021?
We have done pretty well so far from January to May 2021 and assuming the lockdowns get lifted soon, we are confident of recording a robust 25% growth in revenue over 2020 to about ₹1,600 crore.
What about exports?
Today, even during pandemic times, our exports continue to grow in a big way. We export our products to 12-13 countries. Currently, it constitutes 3-4% of total sourcing and will grow to 20% in four years.
