Induction plate market grows 30-40% following cap on LPG

Players hopeful of continuing growth over 3-4 years

The sudden spike in LPG gas (liquefied petroleum gas) prices has led to consumers fishing for alternative choices for domestic fuel, primary being electric induction plates or hot plates or induction cookers.

The segment, branded and unbranded put together has witnessed surge in sales by 30-40 cent, according to analysts tracking companies engaged in manufacturing these appliances.

According to official in Jaipan Industries, one of the induction plate makers, "Last year this time, there was hardly any awareness of the product. But now, people are lapping it up all over India and especially in western region states of Maharastra and Gujarat where there is not much power problem. Jaipan is one of the major localised player in the segment."

Pradeep Patil, Vice President and Head of Kitchen Appliances, Bajaj Electricals said, "Ever since the market was abuzz with talks of cap on LPG cylinders last year, the industry has grown by 30-40 per cent while Bajaj has witnessed more than 50 per cent growth in sales especially since September 2012. The company is gearing up for greater penetration in the markets all over India to target the mass consumers which are mostly affected through this government decision."

The government decided to cap the number of subsidised LPG cylinders per household in September 2012 which has pushed up the prices of LPG beyond RS 900-950 per 14.5 kg gas cylinders as against RS 430-450 per cylinder earlier.

A TTK Prestige official said the growth has been tremendous in last six months. As a pattern, though, the sales has been very aggressive in north and north eastern regions. In south it is yet to catch up. "The demand is particularly high in Tamil Nadu and Kerala but offtake is low since power prices are high accompanied by acute power shortage. The demand is dim in Andhra Pradesh and Karnataka," he added.

Jaipan, which is one of the larger localised players in the category in western India is even witnessing shortage in supply. "If 50,000 units have to be supplied, we could cater to only 30000 at present," said an official.

According to analysts, while the size of the industry is estimated around 6-7 million units, it could grow by 30-40 per cent in coming 3-4 years. "What is happening now is a tip of iceberg as the cap is going to stay," quipped a company official. They added that Prestige is the market leader with 25 per cent share in a Rs 1,200-1,300 crore industry where some of the other major players include Bajaj, Prestige, Philips, Morphy Richards, Khaitan, Usha, Jaipan, Crompton Grieves, Pigeon, Sunflame and Kenwood.

The primary benefit of the induction plate is a huge cut in energy consumption, less pollution and a lower utility and the product choice needs a balance of price and safety since electricity is involved, said officials.

Quite justifiably, the growth in alternative fuel options has resulted in a sharp fall in LPG consumption across the country to the tune of 5-6 per cent both on account of introduction of cap on number of cylinders and consequent high prices of cylinders over and above the cap. According to industry sales review, negative growth in LPG consumption has become a routine since September 2012 when the ministry cracked down on multiple connections of LPG.