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On behalf of our Board of Directors, it’s my pleasure to share an update on your Company’s performance for FY19. During the year, our focus continued to be on strengthening the core of our business, creating a portfolio for the future and investing in improving our people and process capability. These, we feel, will hold us in good stead in the long run.
India’s GDP grew by 6.8% in FY19, a five-year low. Flagging growth is expected to be addressed by the Government and the Reserve Bank of India (RBI) through appropriate monetary measures and other stimulus programs.
Key Growth Drivers
Consistent economic growth and urbanisation has led to an increase in disposable incomes and aspiration levels of consumers. This has been a key value driver for the consumer electrical market. There has been a clear progressive shift in consumer demand for upgraded technologies, improved aesthetics, energy efficiency, and health and lifestyle product and service offerings. The improvement in consumer’s discretionary spend is contributing to growth. India has taken a huge leap towards 100% electrification, with more than 45,000 households being electrified every single day over the past 18 months.
During the year, our Total Income stood at Rs. 4,478.91 crore, growing by 11.1%, against comparable revenues last year. Profit After Tax stood at Rs. 402.52 crore, compared with Rs. 323.79 crore in the previous year. We continued our strong growth in the Electrical Consumer Durables (ECD) segment, with comparable revenues growing 15.9%. Growth was strong across all key product lines of the ECD segment. Fans continued to demonstrate growth, driven by several key initiatives of the past few years. With focus on premiumisation and delivering superior consumer value, we launched a new range of decorative fans like Air 360 Deco, Calibre and Aura 2.0. Under Pumps, the Mini Crest range of products, launched a year ago continued to drive growth. Under Consumer Appliances, we revamped our entire range of Water Heaters during the year, which led to our total Water Heater volumes growing 25%.
In Lighting, the core LED business, excluding sales to EESL, grew 13% in value terms. This was despite continuing price erosion across the range. We are building value in the LED business through products with meaningful consumer benefits. The launch of ANTI-BAC bulb, a truly unique innovation, is one example of this approach. The bulb kills up to 85% germs, providing a healthy and safe home environment.
Five-Dimensional Growth Strategy
Our growth strategy is based on five pillars and we continued to make good progress on each of these:
- We have widened the media ambit for our communication to straddle more touchpoints while continuing to target the younger consumers. Highlighting differentiation in our offerings has served to build preference for our brand among these discerning consumers.
- Consumer-relevant innovation remains at the heart of our Product Excellence drive. In line with this, we launched wider air-cone Air 360 fan, ANTI-BAC lamps, value range pumps and an aesthetically and technologically improved water heater range.
- Go-to-market excellence program has been extended to more markets across geographies, after calibration in pilots. Technology will play a key part through improved data capture and real time assistance in decision making.
- The focus of Operational Excellence is on ensuring that we deliver the best quality in market and keep improving upon it, while managing costs and we have been successfully running specific program for each.
- In Organisational Excellence, the focus is on attracting and retaining talent and on training and developing our people to deliver on the stated objectives.
With confidence in our chosen path, we look to step up our investment in manufacturing capabilities and in strengthening our brand. Energy efficiency, delivering greater value to consumers and improved usability will be the product themes in focus. We are also exploring suitable growth opportunities in adjacent categories through organic and inorganic routes. Moving ahead, we will continue to pursue our three-fold objectives - to grow revenues faster than market; to grow profits at least in line with sales; and to convert all our profits into cash.