Aim to grow market share; focus on premium fan space:CG Consumer

In an interview to CNBC-TV18, Shantanu Khosla, MD of Crompton Greaves Consumer Electrical said that they want to grow  topline faster than the market. He further said that the company will keep on launching new products in premium fan segment because GDP will be growing and a lot of opportunities will be thrown up because of the emergence of smart cities.Additionally, Khosla said that they will formalise the dividend policy in their October board meet. Below is the verbatim transcript of Shantanu Khosla's interview to Latha Venkatesh, Sonia Shenoy & Anuj Singhal.Anuj: The market is betting big on consumer business of Crompton. Could you tell us what kind of earnings per share (EPS) numbers the company could be able to post over the next two-three years?A: Let me talk about our objectives. Our aim is very simple; we want to grow our topline faster than the market that is to grow market share. We want to make sure that we grow our profit margins at least in line with our topline growth, if not faster, and we want to convert, as much as we can, of our profit into cash. If we do these things consistently especially in such a competitive market, we believe the EPS will take care of itself.Latha: You have done goodish bit in the last numbers that came in at the EBITDA and profit level. It is fairly decent growth but how is business looking like. Would you be able to manage or better this 12 percent topline growth because that is what you are looking at and even margins, is 13.8 a solid margin that can be bettered?A: We see a lot of opportunity in this business; in fact it is almost impossible to predict short-term variations and variability. The reality is the way we look at it, the macros in the long-term are all completely supportive of growth in this business. There is urbanisation, the GDP will grow, there is electrification going on, smart cities, all these things are coming together to make the home electrical business and our business specifically have great opportunities in the long-term.However, coming specifically to how we are seeing our progress continue, our strategic choice is quite simple, we want to invest in a wonderful brand called Crompton. We began doing that. We see ourselves continuing to do that. We want to invest in innovation; innovation which is based on better meeting consumer needs but also innovation that helps drives energy efficiency. You referenced in your comments on our numbers last quarter, we do see continuing opportunities in building productivity, getting more efficient, building quality and efficiency of our entire operations which throws up savings which enable us to invest in the business, drive topline and at the same time drive bottomline. Sonia: Can you tell us a bit more about the fan segment because in the premium fan segment, your volumes have been growing quite well but I want to understand whether market share has also been growing. Compared to the likes of Havells India, where does your market share stand in the premium fan segment and what kind of volume growth can you eke out for the full year?A: We have an opportunity to grow in the premium part of fans. We are market leaders in total fans and as per our latest retail audit data; our total ceiling fan market share is growing. So we are growing faster than the market and within this growth have been driven by premium fans, in fact in the last quarter our premium fan business was up close to 60 percent. However, it is still relatively underdeveloped. It is still only about 10-11 percent of our total fan business. So we see a lot of opportunities for this segment to grow, building both the topline and also our bottomline while we are doing it. We will grow this. We believe, by continuing to introduce consumer meaningful innovations, for example recently we introduced wonderfully innovative fan which automatically senses the temperature and adjust its speed accordingly. This is based on consumer need and we are seeing it perform well in the market. We will continue to innovate in this way.Sonia: Can you give us some number, if possible, because we understand that premium fan is now 10 percent of your overall business. Over the next two-three years, how much do you think you could grow this segment to as a part of the overall business and what is the exact market share now?A: Our retail market share for our total fan business is in excess of 24 percent. How much can we grow the premium fan business significant, for example in the last quarter it grew in excess of 60 percent, so there is a lot of opportunity for growth.Latha: A question from our viewer on whether you have formalised your dividend policy and what is it?A: We are in the midst of working our dividend policy. We will formalise it in our upcoming board meeting in October. The moment we do formalise it, we will communicate it to all stakeholders.