Godrej Appliances targets 30% growth this festive season
Bengaluru: Godrej Appliances, a division of Godrej and Boyce Mfg Co. Ltd, is targeting 30% growth in sales this festive season as compared to the same period last year.
It expects overall revenue for the financial year 2017-18 to grow more than 20% on a year-over-year basis, according to a top executive at the firm.
The company’s entry into the front-load washing machine segment, announced on Saturday, is targeted at the festive season. It is also planning to launch new microwaves and refrigerators during the season.
“Overall, all signs are indicating a positive festive (season) in the coming months,” said Kamal Nandi, business head and executive vice-president at the firm. The festive season for Godrej begins with Onam, which means it has already begun, and ends with Diwali in end-October.
Consumers have been postponing purchases since the government’s demonetisation move and that pent-up demand should translate into consumption in the festive season, Nandi said, in a telephone interview with Mint. The hit from demonetisation remained until March-April, he added.
After demonetisation, the implementation of the goods and services tax (GST) on 1 July hit consumption from mid-May until July, except for a brief week in June, when there was a rush among consumers to buy before GST came into effect.
But the momentum has picked up in August, and business has stabilized in most parts of the country, said Nandi.
“There is also very clear indication that the monsoon right now is almost at normal levels—it’s just a 3% deficit, so more or less normal. That should give good agricultural output, and in anticipation of good agricultural output there is a lot of purchase in the agricultural economy markets,” Nandi said.
Nandi expects overall revenue growth of more than 20% in 2017-18 and total revenue of about Rs4,000 crore. Over half of its total revenue currently comes from refrigerators, but that product category is growing the slowest at about 10-15% year-over-year, he added.
Air conditioners, which account for roughly 20% of total sales, are the fastest growing at rates of over 30%. Washing machines make up 15% of Godrej Appliances’ overall revenue and are growing at more than 20% annually.
The company also announced its entry into Maldives in mid-August with a range of air-conditioners, which it says are more environment-friendly than regular ones, and is in talks to enter other countries like Bhutan and Afghanistan. It has been exporting to countries like Sri Lanka and Nepal for more than a decade. Still, exports account for hardly 2% of its total sales.