Plan to outperform industry growth ahead: Wipro Consumer

In an interview to CNBC-TV18, Vineet Agrawal, president-consumer care & lighting, Wipro says, the year has gone well for the company largely because ‘Santoor’ has done well. “We would like to outperform the industry growth going forward,” he adds.

Below is an edited transcript of his interview on CNBC-TV. Also watch the accompanying video. Q: Last year was a heavy year for your company. You have clocked in a sales growth of about 23%. Is that likely to continue into FY13 as well? A: Our year has gone out well, largely on the face of the fact that ‘Santoor’ has done well, a volume growth about 14%. ‘Yardley’ continues to outperform our expectations. It grew about 60% plus in India with deos doing very well. Commercial lighting and modular furniture business grew very well on the back of our LED foray, single-minded focus on LEDs. We have the largest range of LEDs in the commercial lighting space in India today. Our modular chairs continue to do well with a 40% growth. We would like to outperform the industry growth going forward. Q: Your Q4 margins are at 12.5%. The full year margins are a little south of 12%, 11.8%. So, clearly Q4 has been better than the yearly average. How will your margins pan out in the current year? We have seen some price hikes being taken by a lot of your peers. We have seen a lot of soaps and detergents getting priced higher. Should we expect that you will be able to pass on price hikes or take price hikes in these six months? A: At the start of the year, in April 2011, the price of palm oils was fairly high. It is a major ingredient for soaps. Over the year, it actually cooled down. Therefore, that got reflected into our margins with our exit margins of quarter 4 being at 12.5%. Going forward, April suddenly has seen a spike of palm oil of about 20%. It was reasonably unexpected from a cooling down which was happening over time. Going forward, if this price of palm oil remains as firm as we have seen it, we would have to look at a price increase. However, we bought well before this price hike and we maybe able to take some amount of price increases. But going forward if this continues, we will have to look at a price increase. Q: One of the common macro stories is the rural demand probably boosted by cash transfers like NREGS (National Rural Employment Guarantee Scheme). You have posted a 25% sales growth for fourth quarter and almost that much for the full year. What’s your estimate of this so called rural demand? Is it buoyant enough? Do you see it continuing in FY13? A: We are seeing a very good buoyant rural demand. ‘Santoor’ has done well. We have crossed over Rs 1,000 crore largely because of the fact that our rural market shares have jumped up. Our rural market shares have jumped up to 11% compared to an all India market share of about 8.4% for ‘Santoor’. We are banking on rural demand. From an NREGA perspective, from the fact that last two years monsoons have been good and hopefully if monsoon can support us and the rural demand continues, it will help ‘Santoor’ a lot. Q: Any kind of acquisitions planned in FY13 because your previous acquisitions like ‘Yardley’ were very successful? A: The good news is that our acquisitions have been very successful, whether it was ‘Yardley’, whether it was ‘UNZA’ in Southeast Asia, whether it was ‘Glucovita’ earlier or a ‘Chandrika’ or a NorthWest. Our acquisitions have been good. But the interesting part is the growth that we have had of 25% in quarter four and 23% for the full year is organic growth. Going forward, we will look at acquisitions if it fits into our strategy.