Revenue was boosted by government-led projects for several players in the third quarter.
The non-appliance businesses of consumer durables firms have seen a higher rate of growth in the December quarter. White goods firms saw segments like electro-mechanical projects, EPC and cables see a higher rate of growth.
Take Bajaj Electricals for instance. The firm saw a 157 percent year-on-year (YoY) increase in its revenue in the Engineering, Procurement and Construction (EPC) business in Q3 to Rs 1,401.18 crore. Consumer products saw a 27 percent YoY jump in revenue to Rs 760.58 crore in Q3.
Anant Purandare, CFO, Bajaj Electricals said that EPC grew substantially because of the execution of the Uttar Pradesh orders. He added that the bottom-line growth (73 percent rise in net profit) was driven primarily by the power distribution projects in UP.
Bajaj Electricals sells an array of products including water heaters, fans, lighting solutions as well as kitchen appliances.
Large order backed by government agencies have led to strong revenue growth for consumer durables firms operating in this segment.
Air-conditioning major Voltas posted a 22.3 percent YoY drop in its December quarter net profit at Rs 78.08 crore. For Voltas, electro-mechanical projects and services segment was the largest business. The revenue for this segment stood at Rs 875 crore, showing a 16.2 percent YoY growth.
The company said that the segment profit was also higher at Rs 69 crore as compared to Rs 53 crore last year, reflecting a better quality of orders, efficient execution both in domestic and international business. The carry forward order book of the segment stood at Rs 5,000 crore.
The appliances segment is considered among the most competitive businesses in India with both Indian and international players racing to capture market share. South Korean majors Samsung and LG and Japan’s Sony and Panasonic are considered the largest players in the industry.
Several appliance makers have originally been niche companies who have now expanded their operations.
Take V-Guard for instance. The South-based company was known for its stabilisers and electrical products. While it entered the appliance market a few years ago, electricals still constituted 43 percent of the revenue (in Q3) at Rs 257.9 crore. Consumer durables contributed 31 percent to the revenue in the third quarter.
While product launches in the appliance segment has led to revenue accretion, the others continue to be the largest for some of the players.
For white goods major Havells, their electric consumer durables segment saw a 33.5 percent year-on-year (YoY) growth in revenue to Rs 555.23 crore. This put together with Lloyd Consumer accounted for Rs 912.4 crore which accounted for 36.2 percent of the quarter’s revenue from operations.However, cables was their largest standalone revenue segment saw a 31.1 percent YoY growth in Q3 to Rs 820.31 crore.