Godrej Appliances eyes Rs4,000 crore turnover in FY18
Mumbai: Godrej Appliances, the consumer durables division of the Godrej Group, is eyeing a turnover of Rs4,000 crore this fiscal, at growth of over 20%.
“We are targeting Rs4,000 crore for the year 2017-18. April was good and after that May, June, July have got impacted because of goods and services tax (GST). With the declaration of GST rates in May, we saw a dip in demand, largely purchases by trade partners.
“We saw a good purchase by trade partners in anticipation of festive season. We expect this momentum to continue now and at an overall level, by the end of the year, we should be able to deliver a growth of over 20%,” Godrej Appliances business head and executive vice president Kamal Nandi told PTI.
The company is also expecting 30% growth in sales during the current festival season. “We have plans to launch a lot of products. We have already launched front-load washing machines, now we will be launching microwaves. With all the new launches and good consumer offers, together this should help us to drive a growth of about 30% during this festive season,” Nandi said.
Refrigerator segment contributes around 55% to the turnover, followed by air conditioners (20%), washing machines (15%), microwaves (3%) and service revenue about 5%. Currently, metro cities account for 35% of sales, while non-metros contribute the remaining 65%.
“We will see good demand coming in from tier II, tier III and R1, R2 given that monsoon deficit is only 3%. That should result in good agricultural output, therefore these markets should do well in festive season,” he said.
The company, which spends 5% of its turnover on marketing, enjoys a market share of 15% in the overall Rs12,000 crore refrigerator industry and 10% share in the estimated Rs5,000 crore washing machine market. Godrej Appliances is betting big on the premium space.
“Premium segment is the fastest growing category, therefore, the focus is more on developing premium portfolio and cover all segments in the premium category,” he said. “There are gaps in our premium portfolio and we are bridging those gaps. By 2018, all our launches will be over, which will cover the entire premium portfolio range for all categories,” he added.
The company had forayed into premium home appliances segment with the launch of NXW brand two years ago. “Currently NXW contributes to about 10% of the overall business and our target is to take it to 30% over three years,” Nandi said.
E-commerce accounts for 7-8% of the sales and the company expects it to grow in the future. The company entered Maldives last month with a range of environment-friendly air-conditioners and is also looking at exporting them to Nepal.