Moneycontrol
Apr 10, 2017 12:07 PM IST | Source: CNBC-TV18

Will remain focussed on air-conditioner and air-purifier space: Whirlpool

"We are right now focused on three big categories for expansion. Air-treatment, water purification and cooking led by built-in. Air treatment is one of our big categories. Right now, we have got enough space to play in air-purifiers and air-conditioners, we are focused on that", Sunil D'souza, MD, Whirlpool of India told CNBC-TV18.

According to Indian Meteorological Department (IMD) many parts of India will be wilting under a heat wave conditions, which is expected to cover major part of India next week as well.

One sector which may be cheering this news is air-conditioner and air-cooler makers. Sunil D'souza, MD, Whirlpool of India shared his views on industry's growth as well as his expectations on opportunities for acquisitions.

"We are right now focused on three big categories for expansion. Air-treatment, water purification and cooking led by built-in. Air treatment is one of our big categories. Right now we have got enough space to play in air-purifiers and air-conditioners, we are focused on that", he said.

He further added that the business had good growth for roughly four quarters coming into December quarter. December quarter was a bit of a blip because of demonetisation. But the company has come out quite well of that.

Below is the verbatim transcript of the interview.

Latha: First up what is it that you are hearing from your retailers and stockists, more footfalls and in which cities?

A: Before I come specifically to this quarter and heat wave etc. that you are talking about I would just like to emphasise that we had seen good growth in our business for roughly four quarters coming into December quarter. December quarter was a bit of a blip because of demonetisation. But, I think we have come out quite well and we were targeting high double digit growth coming into March quarter and we are quite happy with the numbers we are seeing there.

Going forward and this is not only the heat wave, we have always maintained that all the positives which played into economy just prior to demonetisation the good monsoon, pay commission, One Rank One Pension (OROP) and then the small budget stimulus that the government had all of that has yet to play off. We are a discretionary space, as discretionary spends goes up in line with gross domestic product (GDP) we are in the sweet spot. That coupled with the heat wave conditions which are being forecast makes us feel good.

We are right now seeing growth coming across all our categories and that is not only for cooling; we are seeing growth not only in the cooling categories of refrigeration and air conditioning, but also in washers, in cooking, in built-in appliances and very thing. So, the GDP is bearing out and the heat wave will only add to that.

Penetration market, first time buyer’s lot of them will be coming into the market. Good monsoon therefore we are seeing broad based growth coming in. We are seeing substantially higher growth coming in out of a tier II, tier III cities, so we feel good about going into the summer.

Sonia: You had mentioned earlier that you are looking to double your revenues by FY20. Will that only be through newer products like invertor ACs etc. or are you looking at some inorganic acquisitions as well?

A: Let me say that we are looking to get aggressive numbers on the topline and bottomline in the future. That comes from growth in our existing categories. The big categories for us today are refrigeration and washers. We are seeing industry growth as well as share opportunity in those spaces as well as expanding into adjacencies which includes air conditioning, water and cooking led by built-in appliances. So we are not only looking at strengthening the portfolio that we have in refrigeration and washers and expanding both at the premium and mass ranges; we are expanding aggressively into air-conditioning.

This year our air-conditioning range we have not only strengthened the entry and the value premium segments, but also we have launched our 3D cool range of invertors -- I mean industry first humidity sensor. The feeling that you have in our air-condition room is a mix of both temperature and humidity. We are the first in the industry to play on this and make sure we have got energy efficient and comfortable air-conditioning out there.

So, you will see both focus on growing our existing portfolio as well as aggressive stances on expanding the portfolio.

Latha: Is the industry also growing and what might it be in the fourth quarter and in the quarter underway?

A: I would say we are seeing signs of industry growth coming back. That said I think we have got far bigger opportunities to grow beyond industry that is by gaining share and that is in all segments that we are play in.

Latha: I am just wanting to know what is your sense of the industry growth in Q4 and QA1 of this year?

A: I would say the industry did see probably mid to high single digit growth in quarter four. Going forward into the June quarter I think we will see acceleration as we see the impact of higher GDP and as I mentioned both on the urban side as well as rural side both the Pay Commission, the good monsoon and all the other infrastructure stimulus which the government is doing.

Sonia: You spoke about expanding in the air conditioning segment. You are not present in the cooler space just yet would you look to increase your presence there may be by buying into companies like Kenstar?

A: We are right now focused on three big categories for expansion. We call it air-treatment, water purification and cooking led by built-in. Air treatment is definitely one of our big categories. Right now, we have got enough space to play in air purifiers and air conditioners. We are focused on that. We will continue to look for opportunities for expansion with a very clear caveat that we are able to create differentiation, add value to our stakeholders; as long as we can do that we will continue to look at categories. As of now we are not looking at air coolers and focused on pure air treatment.

Latha: You said, if I remember right water as well, you will be open for inorganic expansion in that space?

A: We are looking at both organic and inorganic expansion. We have got cash on our balance sheet. We are looking at making sure that we have got the best return to our stakeholders that includes all options on the table. As and when we have good options we will get back to our board and our shareholders and make the right proposals.

Latha: Is Kenstar good value?

A: I would not comment on Kenstar being a good value or not. As of now we are looking at all different options and if we have options, we will put them on the table.
Sections
Follow us on
Available On