Godrej Appliances, the consumer durables division of Godrej Group, is targeting a 25 per cent revenue growth to nearly Rs 5000 crore in 2018-19, on higher demand expectation, according to a company official here.
“We should be close to Rs 4000 crore this financial year. We will be targeting a 25 per cent growth next year, at close to about Rs 5000 crore,” Kamal Nandi, Business Head and Executive Vice President, Godrej Appliances told PTI.
“I expect 2018 should be better, because the challenges that we faced in 2017, with both demonetization as well as GST implementation, the overall industry should be growing and demand should be better. We definitely expect that the GST rate change will happen soon from 28 percent to 18 percent and that should propel the industry growth,” he was further quoted by PTI as saying.
The company expects the air conditioner (AC) segment to be a growth driver and aims to increase its overall market share in the segment to 8 percent from 5 percent at present.
The size of the AC market is estimated to be 55 lakh units growing at a compounded rate of 20 percent. However the penetration levels of AC is merely around 3.6 – 3.7 percent in the country, according to industry estimates.
Air conditioners currently contribute to around 20 percent of the company’s revenues and is likely to increase to 21 percent FY19.
Nandi noted that the Tier I to Tier IV cities are driving consumption and with the rural-focused budget, the states with more agri-economy is likely to fuel demand.
“Budget will favour agriculture economy and we can expect consumption to go up in places like Punjab, Odisha, Tamil Nadu, Maharashtra, Assam. Our expectation is that Tier I to Tier IV cities will grow faster than metros is the coming years,” he told PTI.
He also noted that consumption of premium products in tier I to tier IV cities is the highest.
“Our exclusive brand outlets (EBO) set up is also in tier I to tier IV and not in metros. We have 79 EBOs at present and this financial year we will take it to 84. In FY18-19 we should have 125,” he was quoted by PTI as saying.
Metro consumption is around 12 percent, rural at 35 percent and balance is from Tier I to Tier IV cities, he elaborated.