Monsoon, pay panel windfall will drive sales: Godrej Appliances

Godrej Appliances expects its sales to grow by 30% in the upcoming festive season on the back of the 7th Pay panel award fueling demand as it eyes a total sales of Rs 3,750 crore in 2016-17.

The group has reasons to believe so. It is expecting higher contribution from semi-urban and rural areas this year on the basis of good monsoon, besides portfolio expansion of its premium brand, NXW.

Last year, it had clocked sales of around Rs 3,000 crore. "This year, we are targeting around Rs 3,750 crore. The increase would largely come from value and volume both," Godrej Appliances Business Head and Executive Vice-President Kamal Nandi told PTI.
 

The company, which has launched AC and refrigerator under brand NXW, will soon roll out washing machines under its premium segment.

"Now, NXW is contributing around 10% of the total sales and we are increasing portfolio in that. Its ratio would go up in coming times," he said.

Godrej Appliances' 65% revenue comes from urban areas and the rest from semi-urban and rural.

"Last year, urban had a higher growth rate, but this year with good monsoon, we expect a faster growth rate coming from semi-urban and rural areas," Nandi reasoned.

Implementation of the 7th Pay Commission recommendations by the government, the company feels, is going to come as a top-up.

"Festive numbers account for around 26% of the total sales of the company and we are targeting 30% growth from this year's festive season," he said.

According to him, average festive sales growth for the industry last year was about 8-10% and this year, it would be 15-20%.

"Consumption of consumer products should go up. With higher affordability, definitely, you would see upgrading to better technology and premium, better-designed and efficient products," he added.

Besides, Godrej Appliances is looking to increase the number of its exclusive brand outlets (EBOs).

"Last year, we have opened around 40 and this year, we are targeting 100 by adding 60. We are targeting 200 in three years," Nandi said.

Godrej Appliances, which exports its refrigerators to SAARC countries, is now focusing on more geographies with its range of medical refrigerators.

It had ventured into this segment last year, in partnership with the UK-based Sure Chill Company.