Expect to outperform industry ahead: Wipro Consumer

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Expect to outperform industry ahead: Wipro Consumer

In an interview to CNBC-TV18, Vineet Agrawal, president--consumer care & lighting, Wipro says, all businesses have done well. “Going forward, we expect that we should be able to outperform the industry,” he adds.

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Excerpts from Markets Midday on CNBC-TV18 Watch the full show » ALSO READ See latest News about Wipro See previous management interviews See what other Experts & Brokerages are saying about Wipro

Wipro Consumer Care & Lighting is the FMCG arm of Wipro. The company has declared its third quarter results.

In an interview to CNBC-TV18, Vineet Agrawal, president--consumer care & lighting, Wipro says, all businesses have done well. "Going forward, we expect that we should be able to outperform the industry," he adds.

From a margin perspective, he says, the company would like to keep our operating margin anything between around 12%.

Below is the edited transcript of his interview with CNBC-TV18's Ekta Batra and Latha Venkatesh . Also watch the accompanying video.

Q: Can you take us through the key highlights in this quarter, especially on the margin front and as well as the market share for your key brands?

A: Our business has done well this quarter. We did about Rs 879 crore with a growth of 26%. All our three businesses fired, whether it was our international business with China, Indonesia and Vietnam doing very well, whether it was our institutional business with commercial lighting and furniture doing well or whether it's our domestic personal care business with Santoor and Yardley doing very well.

From a margin perspective, our operating margin grew from 11% in quarter two this year to 11.9%, largely because in commercial lighting space we have focused a lot more on LEDs. That's a place which we have launched multiple ranges. We think that the consumer is expecting that.

On top of it, in our furniture business, our chair business has done well. Our whole range of the premium furniture has done well in spite of all the talk about the slowdown. That helped our margins also.

Q: What do you expect you can do as a run-rate on sales? It's a fairly impressive 20% or plus that the year-on-year sales have grown by. Is that the clip that one can expect in the fourth quarter as well in FY13, do you see that strength? Your profit growth in the third quarter is better than the pace at which it grew in the second quarter. Is that a maintainable pace?

A: We don't really give a guidance. We would like to grow faster than the industry. So today let's say in furniture business we are arguably the number two brand there, we have just launched about six years back.

In a commercial lighting space, we are number three. In Santoor, we continue to be number three. In our deodorants or in our Yardley business, which is a big challenge given the fact that it was a old brand so to say, contribute to about 60% of our business. So, to that extent, the transformation has been good.

Going forward, we expect that we should be able to outperform the industry. From a margin perspective, we would like to keep our operating margin anything between around 12%. That's something that we would really plan for. In the short run, we don't expect too much of volatility in the commodity prices to impact it.

Q: Should we hear of a brand acquisition anytime soon?

A: Acquisition is something that we will always look for. Unza has done well for us. International business has done well. Yardley has outperformed our expectation. To that extent, our confidence on acquisition is high.

We talked about an acquisition that we made about six months back of Aramusk Soap. We are pleased to announce that we launched the Aramusk Soap in Calcutta just a couple of days back. We will be rolling that out to the other parts of the country in a short while.

Q: We understand that you are concentrating a lot in terms of Southeast Asia as well as the MENA region. Can you give us a sense of what the capex would be what the investment would be within this region? How much of a growth or contribution do you expect going forward?

A: If I look at our business, 60% of our business comes from India and 40% comes outside of India. So, India remains a clear focus, especially in the institutional business because we have big stakes in the modular furniture and commercial lighting space. We it can grow well. We have gained market share. Everytime there has been a slowdown or talk of a slowdown, we have actually gained market shares.

Outside of India, our focus has been on Indonesia, we have grown 28%, Vietnam and China. The MENA region, Middle East and North Africa region, has had a little bit of hiccups largely because of political issues in various countries there. But the countries, which are relatively unaffected, we continued to do well there. So, the impact of the political uprising or issues there will continue on business in a short run till those issues get sorted out. But our focus on developing countries would remain.