Letter to Shareholders
On behalf of our Board of Directors it's my pleasure to share anupdate on your Company's performance for FY19. During the year our focus continuedto be on strengthening the core of our business creating a portfolio for the future andinvesting in improving our people and process capability. These we feel will hold us ingood stead in the long run.
India's GDP grew by 6.8% in FY19 a five-year low. Flagging growthis expected to be addressed by the Government and the Reserve Bank of India (RBI) throughappropriate monetary measures and other stimulus programs.
Key Growth Drivers
Consistent economic growth and urbanisation has led to an increase indisposable incomes and aspiration levels of consumers. This has been a key value driverfor the consumer electrical market. There has been a clear progressive shift in consumerdemand for upgraded technologies improved aesthetics energy efficiency and health andlifestyle product and service offerings. The improvement in consumer's discretionaryspend is contributing to growth. India has taken a huge leap towards 100% electrificationwith more than 45000 households being electrified every single day over the past 18months.
During the year our Total Income stood at र 4478.91 crore growing by11.1% against comparable revenues last year. Profit After Tax stood at र 402.52 crorecompared with र 323.79 crore in the previous year. We continued our strong growth in theElectrical Consumer Durables (ECD) segment with comparable revenues growing 15.9%. Growthwas strong across all key product lines of the ECD segment. Fans continued to demonstrategrowth driven by several key initiatives of the past few years. With focus onpremiumisation and delivering superior consumer value we launched a new range ofdecorative fans like Air 360 Deco Calibre and Aura 2.0. Under Pumps the Mini Crest rangeof products launched a year ago continued to drive growth. Under Consumer Appliances werevamped our entire range of Water Heaters during the year which led to our total WaterHeater volumes growing 25%.
In Lighting the core LED business excluding sales to EESL grew 13%in value terms. This was despite continuing price erosion across the range. We arebuilding value in the LED business through products with meaningful consumer benefits. Thelaunch of ANTI-BAC bulb a truly unique innovation is one example of this approach. Thebulb kills up to 85% germs providing a healthy and safe home environment.
Five-Dimensional Growth Strategy
Our growth strategy is based on five pillars and we continued to makegood progress on each of these:
We have widened the media ambit for our communication to straddle moretouchpoints while continuing to target the younger consumers. Highlighting differentiationin our offerings has served to build preference for our brand among these discerningconsumers.
Consumer-relevant innovation remains at the heart of our ProductExcellence drive. In line with this we launched wider air-cone Air 360 fan ANTI-BAClamps value range pumps and an aesthetically and technologically improved water heaterrange.
Go-to-market excellence program has been extended to more marketsacross geographies after calibration in pilots. Technology will play a key part throughimproved data capture and real time assistance in decision making.
The focus of Operational Excellence is on ensuring that we deliver thebest quality in market and keep improving upon it while managing costs and we have beensuccessfully running specific program for each.
In Organisational Excellence the focus is on attracting and retainingtalent and on training and developing our people to deliver on the stated objectives.
With confidence in our chosen path we look to step up our investmentin manufacturing capabilities and in strengthening our brand. Energy efficiencydelivering greater value to consumers and improved usability will be the product themes infocus. We are also exploring suitable growth opportunities in adjacent categories throughorganic and inorganic routes. Moving ahead we will continue to pursue our three-foldobjectives to grow revenues faster than market; to grow profits at least in linewith sales; and to convert all our profits into cash.
|Hemant Nerurkar |