Through a vast range of products, Havells India has established itself as a leading fast moving electrical goods company. The growing rural market and its Lloyds portfolio are its key focus areas, its chairman and managing director Anil Rai Gupta tells Jyoti Mukul in an interview. Edited Excerpts:
Has the market for electrical and consumer goods improved?
Overall the market had slowed down, but after GST settled down, things started to improve. In the last three-four months, however, things slowed down again because of the liquidity squeeze due to the NBFC crisis. House builders and the construction industry faced problems. Besides, winters were extended so there was a slowdown in the last quarter. Things should start getting better with the demand for fans and air-conditioners improving. It should be a better summer and the coming year should be a better year.
Is the impact of liquidity crisis still continuing and do you expect the coming of new government to lift sentiments?
The liquidity crisis impact is still there. We could see that in the power business. Overall, government spends have been quiet good in infrastructure. They generally slow down just before the elections because of the model code of conduct, but things should be getting back to normal.
How far has the slowdown in the power sector impacted your business?
Our business is more related to building sector. In the last five years, there has been more focus on last mile electricity connections. All the programmes for access to electricity help us. The slowdown is on the generation side, but our main focus is electrifying smaller towns. The focus has been to get electricity to rural markets.
But the Saubhagaya programme is about giving basic power connections. How does it help your company?
Initially, it might give us demand for B2B business wherein we supply cables and other equipment to contractors, but over a longer period of time, when demand for electricity increases and supply improves, then demand for our kind of products will also increase.
There is lot of buzz around energy efficiency and solar products. How are you focussing on them?
Right from the beginning, our focus as a company has been on efficiency, whether electrical or consumer products–from fans to lighting. We were fast mover to LED. The government has put in a lot of focus through EESL programme. Even after we acquired Lloyds, and when the energy rating changes happened, we moved towards to it
Have you looked at the manufacturing of solar equipment?
It is something which we will not like to do. Ours is more brand and distribution-oriented business. We don’t want to get into generation but in the distribution side, we into solar street lighting, solar inverters rooftops. This is the second year of our operation and we have touched around Rs 100 crore in solar. This means we are in the right direction.
What are the prospects of solar products and how far technology is changing for them?
These are evolving technologies. As the efficiency of panels and investors increases, the cost to consumers will be better. Over a period of time, cost per unit of output will come down.
Is the Lloyd business now fully integrated with the company?
The business is fully integrated. We are into modern format retail. It was shorter summer last year which was tough. Prices moved up because of invertor technology and higher ratings.
What are the prospects for the coming years?
We see good growth in the next two years. We are moving to B and C class cities. We see 40 percent growth in export business which is currently valued at about Rs 400 crore. We are present in SAARC, Middle East, Africa. Export currently constitute 4 percent of our total revenue.
What are your expansion plans? Have you been conservative after the acquisition of Lloyds?
It is not conservative. We are looking at Rs 500-crore market in rural area areas in the next three years. Lloyds was very distributed. There is lot of work happening. We have a separate team for rural market.―Business Standard