BL Interview. We are one to two quarters away from demand coming back, says Anuj Poddar of Bajaj Electricals

Bajaj is an over 80-year-old company and an established brand with credibility and trust among Indian families. Legacy brands need to evolve with changing times. The new Bajaj that is not just a simplistic brand; it is more strategic and contemporary and meant to connect with the younger generation and new India. The needs and expectations of consumer brands are very different.  

I prefer the word aspirational, and we have been known to be a value-for-money brand which is fine. Every consumer, irrespective of the price segment, wants more aspirational products that serve their sense of pride in owning their product. When I say aspirational that is price agnostic, and premium is perceived as an expensive product that differs from what we are trying to do. We ensure that the brand and products are more aspirational across the price segment. Based on your affordability, we will have a wide range of products you can choose from.

We are known to have economy and sub-economy fans, and now we have a whole range of premium fans, including premium efficiency fans, and decorative fans that cater to that market segment. Overall, we are upgrading features across all our products when I say premium is aspirational.

There is softness in the economy and the consumer demand side for some quarters. We keep innovating, and our performance should be better than the average industry. Either we will have better growth in the industry. and if the sector is degrowing, we should be able to mitigate against that. Our market share should be slightly better than the industry.

The focus will be across the entire appliances. The way it operates across all our SKUs is a process, but 70 to 80 per cent of those across 2-3 years will transform for the built-for-life promise that we have. Mixer grinders, water heaters, fans, and others will be durable.

When we started, the company was in a lot of debt. The debt ratio was 2:1. We continued to be the cash which means every month and quarter we had a negative cash flow that was increasing. This was due to the TPC (EPF) business and other projects. It comes down to basic discipline. It is to focus on cash flow and profit. Every week Monday, we looked at the cash collected, similar to a guy sitting at a cash counter. It starts with that discipline, starting with 4-5 hours and now it has come down to 30 minutes a day. We made changes in our business model, EPC and consumer business to build it around cash flow. More structural changes we made on EPC and consumer sides.  

It is continuing, and we have filed the scheme with SEBI and NCLT and are hopeful that by the end of this fiscal we should have the approvals. The approvals we get will be effective on the ground. The current status is that we are waiting for final regulatory approvals.

No, we are not looking into it. Morphy Richard’s is a legacy relationship.

We have not applied and do not intend to do it. It is a good scheme. Some of our partners have applied for it.

There will be no more closures. All our factories are loss-making units, but in the case of these units, we tried for a while to make some changes in the products, product efficiencies, and labour efficiency. Still, after trying for a fair amount, we figured there will be no visibility of it becoming viable in the future. That is when we decided to shut down. The other three plants we have were also at some point stages of losses, but we have to turn it around to profit, or we have a clear roadmap of making it profitable.

People are looking for products, electrical goods and appliances, that are durable and last for a long time. We are now engineering our products to last for a long time. In Mixer grinders, the most important is the blade and we now offer a lifetime guarantee. The blade will not break, but it is covered with a lifetime warranty if it does.

Similarly, for water heaters, this is the first time, we give given ten-year warranty on the tank which is the most important component.

Inflation is the single biggest reason, but there are a couple of other reasons, including fuel, food products, and any commodity. Inflation has impacted people’s purchasing power, but now it seems cooling off for people to adjust to it and return to normal purchasing will take a while. We are one to two quarters away from demand coming back. From April 2023, we should return to good demand cycle.