Lighting products and appliances maker Bajaj Electricals Ltd on Wednesday announced a strategic alliance with Italy’s Nardi Elettrodomestici S.p.a to sell the latter’s range of premium gas appliances in India.
“We are aiming for a 25 percent market share in the top-end segment in a span of three to five years,” Executive Director R. Ramakrishnan said.
To be sold under the Bajaj Nardi range, these stoves retail at upwards of 10,000 rupees.
“Right now this segment is small but it is growing fast.”
Bajaj Electricals sold 3.2 million units of appliances in 2007/08 translating into revenue of 3.75 billion rupees, P.S. Tandon, president of the appliances business unit, said.
The unit makes a range of home products including food processors, water heaters, irons and gas stoves and contributes about 30 percent to revenues and 40 percent to net profit.
Bajaj entered the gas stove segment recently and sold 75,000 units in 2007 and expects to double that in 2008 on the strength of its alliance with Nardi.
“It will be our major focus area in the coming year.”
The exclusive alliance in the first phase would sell stoves and chimneys, ovens and microwaves in the second phase, and will look for tie-ups for modular kitchens in the last phase.
The premium segment has only four percent of the 11 billion rupees Indian gas stove market, Tandon said.
About 35 percent of the market is organised and the remainder unorganised and extremely fragmented, he added.
Nardi, with annual revenues of about 75 million euros (4.79 billion rupees), specialises in household appliances and sells products in 80 countries worldwide.
In 2006/07, Bajaj Electricals reported net profit of 385.3 million rupees on net sales of 10.8 billion rupees.
Shares in Bajaj were trading up 2 percent at 437.90 rupees in a weak Mumbai market.