A.O. Smith, the world’s largest water heater maker, is looking to break even in its core category (water heaters) in India by 2019.

However, overall India operations – which include its water purifier business – are yet to break even. Incidentally, the country continues to be amongst the fastest growing markets for the company .

A.O. Smith entered India in 2008, and made its first phase investment with the set up of a water heater manufacturing facility at Bengaluru in 2010.

Four years later, it established a water purifier manufacting line. It also has a full-fledged R&D team here.

According to Parag Kulkarni, MD, A.O. Smith is still in an “investment phase”.

“We are in an investment phase. However, the water heater segment is expected to break even next year. It will be reporting a profit before tax,” he told BusinessLine .

Till date, A.O. Smith India has made an investment of ₹500 crore here across its two verticals, water heater and water purifier and set up a manufacturing unit at Bengaluru. The facility has an annual capacity of making 10,00,000 water heaters and 3,50,000 water purifiers.

The company reported a turnover of ₹95 crore, ₹121 crore, and ₹169 crore for calendar years 2015, 2016 and 2017. (It follows a calendar year for accounting purposes.)

The water heater market in India is pegged at ₹1,800 crore while the water purifier market (which includes reverse osmosis tech, ultra-violet tech and others) stands at ₹4,500 crore.

Focus on purifiers

“While, the first phase of investment in India focussed on the water heater business; the second phase is about water purifiers,” Kulkarni said.

According to him, A.O. Smith has doubled its water heater business and is now looking at a pan-India expansion for the water purification business.

“Encouraged by the consumer response, we are now taking our distribution network (for water purifier) to 46 cities,” he said adding that the product portfolio too will be ramped up.

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