Usha International expects to close FY 2022-23 with a revenue of approximately Rs 3700-3800 crore, said Dinesh Chhabra, CEO, Usha International. In an exclusive interaction with FinancialExpress.com, Chhabra said that while the last one year has seen a degrowth in the economy, there has been a growth, particularly in the products segment in the mid-segment and upper mid-segments, which is expected to continue in the future. “The economy will stabilise at the current level and the mid-segment and upper mid-segment growth would continue. The industry may see overall volume growth to be lower than the value growth,” he said. Here are the edited excerpts from the interview:
How is Usha International performing (in terms of growth rate and revenue generation) currently and what is your outlook for this fiscal?
Our aim is to go up the value ladder focusing on the mid- to premium- segments rather than focusing on volume market share. With growing consumer awareness about energy efficiency, we believe the 5-star rated fan segment has strong growth potential. We recently launched 82 SKUs, including 54 SKUs of BEE 5-star rated BLDC motor fans. We want to consolidate our rural segment and capture and move up the value stream at the urban level. Our distribution strength is close to about 55 per cent of the retail counters in the country. Now having attained this kind of distribution strength, our aim is to consolidate our positions in the segments wherein we were slightly weaker, which is the mid-segment and upper mid-segment. So, those would be our growth drivers for the coming year.
Which among – rural and urban areas – are performing better in terms of demand and sales?
Almost 30 per cent of our sales is attributable to rural India and we are very formidable in terms of our rural infrastructure. We started investing in rural infrastructure about 5 years back wherein we created separate teams for Rural Bharat’ and we created a rural team. We are touching close to about 37,000 touch points in rural India today.
What are your projections for the summer season? What are your estimates for the rest of the year?
If I see the GDP, the way the projections are, it would keep growing at 6-6.5 per cent or at the max 7 per cent. Fan, as an industry, has grown either at par with GDP or has grown slightly higher than the GDP traditionally. But the only surge can happen through the realty sector. If the reality sector booms, fan market would grow at 1.5X of GDP. We do expect a rise in sales during the coming season. We have rejuvenated our urban distribution infrastructure and that should support our new product launches.
What were the most sold categories this year (percentage share in terms of volume sales from categories and revenue generation from categories)?
We, at Usha, deal in primarily home appliances, fans, sewing machines. These are the three primary categories we have apart from Tisva, which is a new lighting brand we created about 4-5 years ago. Fans generally contribute close to about 45 per cent of our sales and the rest of the categories contribute about 55 per cent of our sales.
Will there be a price hike by the company in the coming months?
The last 1.5 years have been very difficult for most of the brands, specifically the entry level brands. Commodities have played havoc. All brands have sacrificed a bit of margin. We tried recovering that but a substantial portion of recovery would happen through moving up the price ladder or moving up the value ladder rather than increasing the prices. So, I don’t think we’ll be taking any price increases. We believe commodities have stabilized now. But if there are any challenges being faced due to geopolitical reasons or otherwise, one may have to take action but that’s very speculative. But I don’t see any major surge in the prices. There have been price hikes of almost 5-20 per cent depending on the categories.