In an interaction with Sandeep Sikka, Group Chief Financial Officer, Hindware Home Innovation Limited

This differentiated product mix backed by smart marketing and branding campaigns helps us gain market share and outperform some of the sectors we are in; Says Sandeep Sika, Group Chief Financial Officer, Hindware Home Innovation Limited

What are your views on the performance of the durable goods industry in fiscal year 22?

The consumer appliances sector has undergone a transformation as we have witnessed the increase of the formal sector over the unorganized sector. FY22 saw demand weaken, due to higher input and fuel costs, putting pressure on margins and we expect this pressure to continue over the next few quarters as well. There has been a growing demand for consumer appliances such as air coolers, water purifiers, water heaters, etc. that have emerged from Tier 2 and 3 cities. As the lockdown has forced people to spend more time indoors, there has been a rise in categories such as dishwashers and room water heaters. , which was not considered a core category and we believe we will see continued demand for these devices after this fiscal year as well. Unfortunately, the air cooler category over the past couple of years has been hit hard by the lockdown but given the ease of COVID restrictions in India, we expect this segment to rebound in FY23.

HHIL’s PAT for fiscal year 22 recorded strong year-over-year growth of 271 percent year-over-year. What are the main factors that contribute to excellent financial and operational performance?

We delivered a strong performance this year despite rising input costs and supply side disruptions that continued to weigh on demand. We have continued to invest in high-growth categories such as the construction products and consumer appliances segment, which has helped us solidify our leadership position across different categories such as sanitary ware, faucets, plastic pipes, fittings, kitchen chimneys, etc. Increasing our digital capabilities has helped us create new connections with customers. This differentiated product mix backed by smart marketing and branding campaigns helps us gain market share and outperform some of the sectors we are in.

Can you shed some light on your current and future capital expenditure plans? How do you finance capital expenditures?

Our plastic pipes and fittings sector It is a company focused and manufactured in-house to meet the exponential demand for our products in the market, to ensure better operational efficiencies as well as optimum cost. The plant capacity in Isnapur (Telangana) is currently 35,000 metric tons and is in the process of being expanded up to 45,000 metric tons. As this business continues to grow exponentially and penetrate into new markets, we are setting up a plastic pipe and fittings factory in Rourke (Uttarakhand) with an investment of approximately Rs 180 crore. The plant will span 12 acres and will have a manufacturing capacity of 12,500 metric tons per year, and is expected to be operational by the end of March 2024.

Additionally, we continue to invest in strengthening our retail network and open supply center for all businesses in major cities and towns across India. We are also planning to invest around Rs 50-60 crore annually to develop these showrooms.

Can you explain what products you launched during FY22? Also, illuminating the new product launches that are in preparation for fiscal year 23?

Within our Consumer Appliances segment, we have enhanced existing categories such as Kitchen Chimneys, Dishwashers, Air Coolers and Ceiling Fans. Within our sanitary ware and faucets business, we launched the Aspiro range – a range of high quality faucets, mixers and washbasins that are highly acclaimed in the market. We also launched a large number of touchless products under both sanitary ware and faucets as this is the current demand. During the year we started manufacturing overhead water storage tanks from our plant in Telangana to cater to the south along with a few markets in the west.

What are the company’s earnings forecast for fiscal year 23?

Despite the challenges, we performed exceptionally well in FY22 on the back of strong fundamentals and our business strategy. We are on an exciting growth journey and moving forward, we will continue to unlock significant value for all of our stakeholders.

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