Business Overview
- Company has reported robust performance during the period.
- This growth was mostly with strong supported growth from Electrical and Consumer Durables segment.
- In ECD, fans and water heaters had good demand due to seasonality.
- This cycle is expected to continue in upcoming period.
- During the quarter, there was strong contribution from both south and non-south markets.
- In terms of key margins, they did faced some pressures due to commodity price inflation.
- With Rise in their consumer durables cost all steps were been taken to hedge its effect.
- In water heater, the company did loose their market share few periods back but they have regained their share and are growing due to their upgradation.
- In their pump business, there has been an constant price increase due to passing the cost to customer.
- Now as the margins are improving, they expect a reversal in this business segment.
Financials:
- On YoY levels company has reported strong performance during the period.
- Their gross margins did faced some hit due to pricing pressures but are been taken cared off.
- Company has also taken many cost effective measures towards controlled and effective spending.
- Their CFO generations stood strong due to improved working capital positioning.
- Under their fan space, the premium vs economy mix is around 40 to 50 in premium and rest in economy.
- They expect premium stake to increase.
- They have normalized their adv spending to 2% levels.
- On product likes copper, there was a significant price drop seen which affected their wire margins and expect this to be their in Q2 as well.
- At present, many product prices have seen a reduction from their peak.
- On products pricing, those which are left to come down might make them suffer till Q3 but post their they expect a comfortable levels.
- Looking at their business cycles they are focused towards maintain less inventory avoiding additional costs.
- Leading to better cash flows for more opportunities in the market.
Investments:
- Company did made an investment in auto tech company to improve their supply chain.
- The company did incur 6.5 crores for 26% investments.
- In stabilizer space, there is huge growth pipe for them.
- In inverter and battery business, 2 new factories are been planned to set up, which will improve their gain from 3% market to bigger number in times to come.
- The transaction lead to 74% at start and remaining 26% post 5 years.
- This company is focused towards manufacturing switch gears and supply.
