Godrej Locking Solutions eyes 50% of revenue from other verticals in 3 yrs

The company is focusing on various categories such as architectural hardware and kitchen systems

Godrej Locking Solutions and Systems, which has a 45 per cent share in the organised locks market in the country, is expecting its non-locking solutions business to grow to almost 50 per cent of the total business in the next three years. 

The company is expecting Rs 10 billion in revenue by FY22, betting on the premium segment and focusing on various categories, especially architectural hardware and kitchen systems. Kitchen systems are expected to account for 20 per cent of the architectural hardware business by that time.      

"For kitchen systems alone, we are targeting a CAGR (compound annual growth rate) of 50 per cent, which will lead to the Rs1 billion target in three years, almost four-five times the size that the company is in kitchen systems today," said Shyam Motwani, EVP and business head, Godrej Locking Solutions and Systems. 

Architectural hardware such as door closers, floor springs, furniture fittings, panic bars, automatic doors, shower fittings and glass hardware was added to its portfolio in 2013 and kitchen systems, including tools and solutions such as ergo boxes, baskets, tall units and corner solutions, in 2015. With mass urbanisation, affordable housing and several government initiatives across urban and rural parts of the country, the company is expecting these businesses to grow faster.

"For FY18-19, the company is looking at an overall revenue of Rs 7.2 billion to 7.5 billion. Around 30 per cent of our revenue is expected to come from architectural hardware and 10 per cent of this will come from kitchen systems," he added.

At present, the company has more than 2,200 wholesale dealers and over 18,000 retail outlets for its architectural hardware business. Dorma, Ozone, Enox and Hafele are some of the other players in this category.

The kitchen systems segment has a market size of around Rs 30 billion and is expected to grow at a CAGR of 20-25 per cent till 2020. The company, with a network of over 100 dealers and distributors and around 500 retailers, is expecting the business to grow by 50 per cent. It is betting on innovative designs and products and a stronger network to win the market.  

Regarding the locks industry, he said that the total market in India is valued at around Rs 50 billion, of which the organised sector accounts for 40 per cent. Godrej Locks has a market share of 45 per cent in the organised sector. After the implementation of the goods and services tax (GST), there is a lot of consolidation happening in the industry and the new tax regime offers consumers a price advantage that was not there prior to GST due to lack of compliance from unorganised companies.  

"We have seen the fact that the retailers now want to deal with top two-three brands only and don't want to keep sundry brands from the unorganised part of the category. Keeping top brands also makes their lives easier as they don't have to explain to the consumers as to why there is a price difference between brands from an unorganised kind of organisation as compared to a leading brand like Godrej," said Motwani.