Havells India hoping for a better second half

Fast moving electrical goods maker Havells India recently inaugurated its ₹100 crore water heater facility at Neemrana in Rajasthan.

The Delhi-based company, which reported a consolidated turnover of around ₹8,600 crore last fiscal (FY-15), has 11 manufacturing facilities in India (Baddi, Haridwar, Alwar, Neemrana, Noida, Sahibabad and Faridabad).

The overseas facilities are spread across China, the UK, France, Belgium, Germany, Costa Rica, Colombo and Tunisia. It operates in 17 verticals that include switchgear, cables and wires, lighting and lighting fixtures, fans, consumer durables & appliances and LED lights.

In an interview to BusinessLine, Anil Rai Gupta, Chairman and Managing Director Havells India, spoke about the growth outlook of the company in India and global markets, the integration of LED and solar lighting product-maker Promptec Renewable Energy Solutions and rate cuts. Edited excerpts:

Last year, the slowdown in real estate in the country took a toll on Havells’ growth. How do you see business this year?

Last year, starting from the third quarter (Q3 of FY-15) there was a market slowdown. And the kind of growth that was seen in the first and second quarter of FY-15, suddenly slowed down in the second-half of the fiscal.

I don’t see the ground situation improving that much in the first half of this fiscal (FY16). So, we are hopeful of the second half of the year, that is, Q3 and Q4 should start bringing in growth.

May be we will look at two more quarters (Q2 and Q3) of this fiscal before giving a guidance on the growth we expect.

How are the weak global cues across some markets like Europe expected to impact your international business and exports?

Basically, our exports are not that big. Our international business revenues are to the tune of 40 per cent of our overall business that can get impacted because of a slowdown in Europe. But we can cover it up in the next six months or so. Otherwise in Latin America, except for the fluctuation in currency, it is taking time to recover the growth in those markets.

Overall, I think in the next six months or so, it should be much better. We definitely see things bottoming out there.

Post acquisition you successfully turned around Sylvania. But, in the last fiscal the profitability from its operations was impacted. Your comments.

Yes, profitability was impacted. But, most of it was one-off and non-cash oriented. There were some fluctuations in the pension liabilities in the European markets.

However, if you look this year, overall we will not be making any losses on the operations side in Sylvania.

Speaking of acquisitions, you took controlling stake in Promptec earlier this year. What sort of integration are you looking at?

I believe that Promptec can develop the products as a small set-up much faster. The integration that we are looking to provide is from the finance and administration side.

We want to retain the innovative culture of the company (Promptec).

So that is what has been happening over the last four and five months since we acquired it. The company has already started doing well and with some of the new tenders they have started growing their revenues.

In terms of products, how are you looking to leverage the Promptec buy?

One is the LED street lights on which they focus a lot and then there is solar lighting.

Solar lighting is a new concept that is now coming in. And slowly it should pick up.

Does this mean Havells will develop a range of products for itself? And will you continue with two different brands – Havells and Promptec?

Yes. In certain markets which are distribution and brand-oriented, Havells will be taking the offerings forward.

And the tender-oriented and municipality-driven ones will be taken care of by Promptec.

We are retaining both the brands – one will be Promptec from Havells and the other, Havells.

Do you expect rate cuts in the upcoming monetary policy review on September 29?

I think India is at that stage where we need more investments and a rate cut would be helpful for the industry as well as for the real estate demand to go up.

So yes, we are hopeful either this time or very soon.

(The writer was at Neemrana at the invitation of Havells India)

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