India can overtake China in finished goods market: Ajanta-Orpat Group MD Nevil Patel

The COVID-19 pandemic is likely to make India an alternative to other countries for procuring finished goods, said Nevil Patel, MD, Ajanta-Orpat Group.

In an interaction with Moneycontrol, Patel said that the company has now started receiving enquiries from other countries as they are reluctant to buy from China. Ajanta-Orpat exports to 45 countries.

"While we are not being able to service these requests currently, I am sure there is going to be a separate market that opens up for India for countries that are going against buying from China. This depends on when things get to normal. But there will be an export benefit for India," said Patel.

Ajanta-Orpat manufacturers an array of products under the Orpat brand, ranging from wall clocks, calculators to home appliances like fans, heaters, iron, mixer grinders and sandwich toasters. The company has a staff strength of 5,000 of which 95 percent are women. It is part of the Ajanta Group.

Revenue growth

Patel said the company had a revenue of Rs 1,200 crore in FY19 and saw a 20 percent growth in FY20, with product categories like room heaters powering growth.

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At present, home appliances contribute 20-30 percent of the company’s revenue explained that by FY25 home appliances would contribute 50 percent of the company’s revenue. Ajanta-Orpat Group is eyeing revenue of Rs 2,400 crore by FY25.

Product expansion

As far as products are concerned, Patel said that the company is looking to add newer devices in the home appliance category.

"We have a prototype ready of a device which have now taken into manufacturing. This appliance will enable Indian homes to make ice creams, smoothies an soups. No Indian manufacturer is offering this product and the ones imported from abroad cost almost Rs 50,000,” he added.

While Patel did not specify the price of this product, he added that it would be affordable for Indian customers.

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Similarly, he added that the company is also looking to launch smart home appliances. Smart appliances have technology like artificial intelligence being used to enable lesser manual intervention in the device.

“We have a fan with technology that will enable customers to save 80-85 percent of the energy consumption. The idea is to add more unique products in the home appliances category and thereby expand the revenue pie,” he added.

The company distributes 97 percent of its products through its offline partners. While Ajanta-Orpat has launched an e-commerce platform for its products three months back, Patel added that physical distribution would still rule.

While the government has allowed manufacturing units in non-containment zones to begun production activities from April 20 with adequate safety precautions, Patel said that normalcy will take time in areas like workers coming back to manufacturing units and distributors getting back to business.

“I am of the view that it is only by the first week of June 2020 when things could get normal. There will be a lot of these phase-wise recovery and it would take time for our distributors to settle down and place new orders,” he explained.

Currently, the company is in discussions with Indian startups who want to make use of their manufacturing facilities for products related to COVID-19.

"These startups have the designs approved but don’t have production capacities. Hence, they are seeking access to our manufacturing facilities so that they can achieve scale. We are open to helping to offering our help in making products that could help battle COVID-19," he added.

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