ET Now: Could you give us an understanding about the demand trends across categories like home appliances, grooming products etc.?
Ravindra Singh Negi: Looking at last financial year there are clearly two distinct phases that we see; one is during the lockdown where we saw a lot of DIY products, in-home experimentation that brought in a surge in demand for products like air fans, OTG, mixer grinders. Post the lockdown, demand for seasonal products was seen. There was a demand for fans that came in with increased renovation activities.
In Q3, industry growth was pushed up by seasonal and a pent up demand. This demand trend will continue, if not at the same level but at well above the pre-Covid levels.
ET Now: Are there any changing consumer trends in rural and urban areas?
Ravindra Singh Negi: The market has changed its dynamics from offline to online. Most of the demand came in from tier-2, tier-3 and rural economies during the lockdown. Post the lockdown, we have seen growth came back to the metros and cities also. This is the first time we are seeing online growth surging past offline across categories. Consumers are looking for different value propositions, it is not just simply the price that they are looking at, they are looking at a holistic approach towards brand.
ET Now: According to IMD forecast hotter days are expected across North, Eastern and Western India, are you expecting the demand orders of AC, coolers to be much higher?
Ravindra Singh Negi: Let me talk about the seasonal products like fans and ACs, 45 percent of sales happened between March to June last year. It was a complete wash out. As the IMD forecast coming in for a slightly hotter summer this year, there is going to be pent up demand and with us launching new products, we are very hopeful. We are looking forward for a season which is going to be different than the last one.
ET Now: What is the revenue expectation this summer, will you be back to the pre-COVID levels in Q4?
Ravindra Singh Negi: We do not forecast for the season but as I said we will not be able to come back to the pre-COVID levels, but we are growing. If you were to look at the industry as a whole, fans in particular, the industry lost the season last year, de-growth is likely. However, brands have been able to gain market share as they have managed to solve supply chain and capacity issues.
Havells has also seen growth coming from consumer durable category and we have been outperforming in the segment. We hope to continue this trend and gain market share in the coming season.
ET Now: We are clearly seeing raw material inflation, so could the company consider taking price hikes?
Ravindra Singh Negi: In the last couple of months, commodity prices have really shot up and as an industry we have no option but to pass on to the consumers. However, the complete commodity rise has not been passed on to the consumers. I think if the commodity prices and pressure continue to stay the same, we will have to hike prices in the times to come.
ET Now: To what extent do you think you can pass on this rise in input cost ensuring that the demand remains intact?
Ravindra Singh Negi: We need to balance the demand and the price equilibrium. We have passed almost 50% of the commodity price increase. If you look at fans, everybody has passed on in two phases about 7% to 8% price increase. Being a large player with manufacturing capacity, we look at our own efficiencies to cushion the balance. Prices will have to be passed on to consumers if this trend continues in commodities.