HSIL, India’s top sanitaryware maker with a 40% share of the organised market, expects to double its revenue from consumer business to more than ₹250 crore in the current financial year on increased sales in the e-commerce platform and a rising demand for water and air purifiers and coolers, Rakesh Kaul, president and chief, consumer business, said in an interview.
“Consumer business as of last year was contributing to almost 7-8% of the total HSIl business but is growing handsomely, in the sense, for the last two odd years we have been growing consecutively 128% and 129%,” Mr. Kaul said.
“This year also we are expected to double up the business, so the contribution of the consumer business is growing up significantly. Last year we clocked at ₹129 crore and this year we are expected to do plus ₹250 crore. We are already in line for the same,” he said.
HSIL, which was primarily in the sanitaryware business, was set up in 1960 as Hindustan Twyfords with a technical collaboration with Twyfords of the U.K. In 1967, it was renamed as Hindustan Sanitaryware & Industries and later to HSIL. In 2007, the company expanded its business by incorporating Home Retail and four years later, the firm added PET bottles to its portfolio through a fully-owned subsidiary named as Garden Polymers.
“Bathroom business is our mainstay as it contributes to almost 50% of the revenue,” Mr. Kaul said. “We have been in this business for the last 57-odd years and we have the glass business as well where we are number two as far as market share is concerned.”
“Then after that from 2012 onwards, we felt the need to expand into other categories also where we felt there was a possibility of the brand....and trust of more than 60 million consumers. We realised that we had the opportunity to touch the lives of the consumers outside the bathroom space, which is kitchen space, the living room space, bedroom space. That is where we thought of the consumer business came into existence,” he said.
“In the last few years, the company got into air coolers, water purifiers, air purifiers and water heaters. In July 2015, an association with France’s Atlantic Group saw the company selling water heaters suited for Indian conditions,” Mr. Kaul said. “So, that is almost seven odd categories where we are present in the consumer business.”
In the consumer business, Mr. Kaul wants to grab a pie of a market worth about $3 billion by 2022.
“So, it is still a substantially large field to play in. So currently, we will just focus on these big categories. Water purifier itself is expected to be around $2 billion in the next four years.”
The company’s expansion plans are acting as a drag on profits. HSIL’s net profit fell to ₹103.2 crore for the year ended March 31, 2017 from ₹116.73 crore a year earlier. The company’s first quarter profit fell to ₹11.76 crore from ₹30.75 crore the previous quarter.
“I think if you see the investments in market condition, the top lines have grown. So we are in control of the overall business, so the next two-three years we will see positive movement.”
‘Top on portals’
“For us, e-commerce grew at about 500% last year. It has been phenomenal. So much so that in kitchen space, in the chimney segment, we are the undisputed number one on most of the e-commerce portals like Flipkart, Amazon, etc. So, we have established a very strong brand presence out there.“ “For consumer business, currently, 21% is coming from e-commerce.”
By the end of the current financial year, the company plans to have 100 exclusive kitchen galleries and plans to sharpen its focus on business-to-business and institutional sales. HSIL will soon introduce a water purifier Oceanus 3000 to handle “dirty”water up to parts per million of 3,000 total dissolved solids (minerals, salts, metals, anions dissolved in water), he said.
