Air-conditioning industry major Johnson Controls-Hitachi Air Conditioning India is eyeing a 15 percent growth in the AC business in FY20.
In an interaction with Moneycontrol, Gurmeet Singh, Chairman and MD, Johnson Controls-Hitachi Air Conditioning India, said that the company is eyeing a growth of 5-7 percent above the market rate of growth.
For the March quarter, Johnson Controls-Hitachi Air Conditioning India posted a 6 percent growth in revenue at Rs 665.4 crore. The net profit was up by 4.5 percent at Rs 42.3 crore in Q4FY19.
The company is also slowly moving towards having 100 percent inverter-ACs in their portfolio.
Singh said that at present, they have a share of 20-80 for commercial and residential. He added that there is a scope for improvement of the commercial segment share.
The company has also undergone a brand revamp to cater to young and savvy customers.
"The emphasis of our new campaign will be store-led. Customers walking into our partner stores can get a look and feel of our entire product portfolio," he added.
The company has 122 models as of now. Going forward, Singh said that the emphasis will be on energy efficiency and ease of access across the different segments.
For instance, the company has a product where the internal AC coil has a self-cleaning feature that is triggered whenever the product is switched off.
Air-conditioners are among the few products that are taxed at 28 percent under the goods and services tax (GST) regime.
Singh said that he is hopeful of the rates coming down once the GST Council meets under the new government.
"AC is a residential product but has a penetration of 5-6 percent in India. Its ticket-value is comparable to large to medium sized TVs, refrigerators or washing machines. It continues to be an aspirational product for Tier II and III towns. We have been making several representatives on the reduction of GST in the product. GST reduction will help us," he said.
The company manufactures almost 95 percent of their products and components in India. Singh said that the emphasis will be on Make-in-India. Johnson Controls-Hitachi has a large manufacturing facility on the outskirts of Ahmedabad, Gujarat.
In terms of pricing, the company is looking to have more thrust on better pricing.
"From a brand of few we have become a brand of many. We have also brought the cost of the products down and in line with the competition. The idea is that we shouldn’t be 5-7 percent more the market index," added Singh.