V-Guard Eyes 25 Per Cent Jump in Revenue at Rs 1,700 Crore This Fiscal

Online, August 13, 2013 (Newswire.com) - "Last fiscal our sales revenue stood at Rs 1,360 crore. We have set a target of netting in Rs 1,700 crore this fiscal, which is a growth of 25 per cent over the previous year," Managing Director Mithun Chittilappilly told PTI here.

To achieve higher sales target, the company will be focusing on non-south markets, which has been its staple since the beginning, in a big way, Chittilappilly said.

He, however, ruled out getting into the whitegoods space saying it is too competitive a segment. Similarly, he also ruled out an aggressive rollout in Mumbai saying its not worth the effort considering the high rentals and other costs.

Currently, cable business is Kochi-based V-Guard's largest revenue contributor with 28 per cent share, followed by stabiliser at 18 per cent, inverters chip at 15 per cent and water heater business at over 11 per cent share.

Chittilappilly also said the company will be putting in Rs 30 crore in capex this fiscal, most of which will be spent on marketing and capacity expansion, which includes Rs 18 crore already invested on the Kashipur plant and the Rs 10 crore into the Perumbadurai, Coimbatore plant that manufactures solar water heaters.

V-Guard, which entered the market with voltage stabilsers way back in 1977 with just two people, has over the years become a household name in the South.

In 2000s, the company went on an aggressive diversification into invertors & digital UPS systems, pumps, house wiring/LT cables, electric water heaters, fans, solar water heaters and induction cookers and switchgears, which it launched very recently.

Today, the company has over 1,750 employees and a nationwide presence with 28 branches, over 230 distributors, 2,500 channel partners and 13,000 retailers serving over 50 million customers.

32-year-old Chittilappilly, who took over the mantle from his father Kochauseppu in 2012, further said the company will be investing heavily in marketing as it increases its focus to the Northern and Western states
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The company nets 21 per cent of its revenue from non-south markets, and the rest 79 per cent come the Southern markets, he said, adding, out of this 28 per cent comes from Kerala, 15 per cent each from TN and Karnataka and the rest from Andhra. In FY 2008, the southern market share stood at 95 per cent of revenues.

"Our focus in South will continue. Tamil Nadu and AP are critical markets for us. With our new offering -- Pebble brand of induction cooktops -- we will be able to drive more volumes from the premium segment of the market," Chittilappilly said, adding, in the non-South markets the focus will be on offering a full range in lower and middle income products.

He said V-Guard currently has a 15 per cent market share in the water heater market, out of which 70 per cent comes from Southern markets.

V-Guard, which outsources 60 per cent of its products, some from China too, has manufacturing facilities at Coimbatore in Tamil Nadu, Kashipur in Uttaranchal and Kala Amb in Himachal, apart from R&D labs in Kochi and Coimbatore.

In the June quarter, V-Guard reported a 28 per cent spike in revenues while net profit fell 17 per cent to Rs 17.6 crore, which Chittilappilly attributed to heavy spend on the last IPL matches.