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Our strategies for enhancing our competitive position revolve around innovation, customer-centricity, market expansion, strategic partnerships, and operational excellence, enunciates, Vikas Gupta, Managing Director (Operations) - PG Electroplast Limited.
In FY23, the company’s sales surged by 95.7%, while the net profit zoomed 107%. What were the contributing factors to the company’s outperformance?
PG’s product business strategy is playing out with products contributing over Rs 1300 crore. AC and Washing Machines were large contributors to the growth, with the segments growing 180% and 57% YoY, respectively. The capacity expansions the company had undertaken came online as planned and the operations team was able to ramp up even better than we had expected. The outperformance can be attributed to our customers’ faith in our deliveries, our employees’ perseverance and the support of our suppliers.
Can you shed some light and significance on the MoU signed with Jaina Group?
PG has signed an MoU with Jaina Group to enter into a JV to initially undertake ODM manufacturing of Google-certified LED Televisions with an option later to expand the partnership to include products like Refrigerators, IT Hardware, Wearables, and Hearables. The JV Company will be 50% owned by PG Electroplast and 50% owned by Jaina Group. Jaina is a well-established and trusted name in the industry and the new JV will help strengthen our position and increase our addressable market by providing a great alternative for brands looking for manufacturing partners
What is the current competitive landscape for your company, and what are your plans for enhancing your competitive position?
In the current dynamic and evolving market, our company operates amidst strong competition. While we have experienced significant growth and success, we recognise the need to continually assess the competitive landscape and implement strategic initiatives to enhance our position.
Innovation serves as a cornerstone of our competitive strategy. We allocate substantial resources to research and development, enabling us to pioneer cutting-edge technologies and differentiate our products in the market. By remaining at the forefront of technological advancements, we strive to provide unique value propositions to our customers, giving us a distinct competitive advantage.
Customer-centricity is another key driver in strengthening our competitive position. We prioritize understanding the evolving needs and preferences of our customers, allowing us to tailor our products and services accordingly.
Moreover, our proactive approach involves monitoring market trends and seizing emerging opportunities. This enables us to expand into new markets, diversify our product offerings, and capture untapped segments. Strategic partnerships, such as the recent MoU signed with Jaina Group, play a vital role in enhancing our competitive position. Collaborating with industry leaders allows us to leverage complementary strengths, access new distribution channels, and extend our market reach.
We also prioritize operational excellence to gain a favourable position in the market. We continuously optimize our supply chain, streamline processes, and invest in manufacturing capabilities. By maintaining high standards of quality and operational efficiency, we outperform competitors and ensure timely delivery, cost competitiveness, and customer satisfaction.
In summary, our strategies for enhancing our competitive position revolve around innovation, customer-centricity, market expansion, strategic partnerships, and operational excellence. Through these initiatives, we aim to strengthen our presence in the industry, stay ahead of the competition, and deliver sustainable growth and value to our stakeholders.
What are your future capex plans?
Our capex guidance for FY2024 is in the range of Rs 170-180 crores. We are planning to further expand our Room AC capacity by setting up a new Integrated Unit in Rajasthan. We will also be expanding the PCB Assembly facility for RAC controllers in Supa and a new building will be constructed in Supa.
The plan is to focus on enhancing operational capabilities, strengthening infrastructure, and driving innovation. We are also allocating significant capex to research and development initiatives, aiming to develop new technologies and stay ahead of market trends. Upgrading manufacturing facilities to improve efficiency and meet rising demand is a priority for us. Our capex plans prioritise long-term value creation, ensuring sustainable growth and a competitive position in the industry.
The product business contributed 62.4% of the total revenues in FY23. What is your future outlook for this segment?
India’s low penetration levels for most appliances coupled with the government’s strong push for import substitution and local manufacturing is providing the sector with strong tailwinds. Increasing urbanization and nuclearization of the population, coupled with an aspirational, consumption-focused youth demographic with access to easy financing is expected to contribute to sustained high growths for the industry.
Until as recently as just FY20, our product business segment was only Rs 150 crore. It has since grown at a CAGR of 108% and stands at Rs 1341 crore today. We firmly believe that going forwards also, product business will continue majorly drive growth for the company. PG is investing in research and development with a focus to deliver quality products that can help our customers to go win in the market.
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