Interview with Hindware Home Innovation Limited

Interview with Hindware Home Innovation Limited

by 5paisa Research Team Last Updated: Dec 13, 2022 - 10:28 pm 24.5k Views
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Rising crude and commodity inflation has affected and will continue to affect the margins and to manage that, we are building operational efficiencies, says Sandeep Sikka, Group CFO, Hindware Home Innovation Limited.

The consumer durables industry is hit lately as depreciating Indian rupee against the US dollar has made imports costlier for manufacturers. Are worries over the same likely to continue in FY23 and what measures are you taking to overcome the same?

Yes, the depreciating Indian rupee against the US dollar has impacted the consumer appliances sector. Margins will be slightly benign, largely on the expected line given the elevated input commodity inflation. Owing to the recent acquisition made by the company of the manufacturing Building Products Division in a slump sale, we now have a judicial mix of owned and outsourced manufacturing capabilities. In addition to it, we are also developing the vendor base in India to reduce imports from China and other countries.

The building products business takes up over the majority of your revenue mix. Can you brief us regarding the segment's performance since its acquisition? And, will the rising crude and commodity inflation affect the performance of the segment in coming quarters? 

Marketing and Distribution of Building Products including sanitaryware, faucets, tiles and plastic pipes & fittings business has always been a part of Hindware Home Innovation Limited. Hindware Limited (100% of Hindware Home Innovation Limited) acquired the manufacturing of Building Products business in a slump sale and this transaction was consummated effective closing business hours of 31st March 2022.

The rising crude and commodity inflation has affected and will continue to affect the margins and to manage that, we are building operational efficiencies, and implementing price hikes to reduce the impact on our margins.

The company works with a judicial mix of owned and outsourced manufacturing capabilities. Can you throw some colour on the leverages the company holds following this practice?

Over the last few years, our businesses especially the Building Products Business which houses sanitaryware, faucets, and plastic pipes &fittings business has delivered rapid growth. Owing to Covid, the macro environment has also changed where became imperative for the company to have significant control over the entire value chain, including manufacturing, supply chain, etc. to drive sustained sector outperformance in the future. With the emerging market scenario, we undertook a refreshed strategy including critical manufacturing to enable the company to make agile decisions for enhanced market serviceability, achieve greater business security, and drive strong profitable growth going forward.

What are the company's current top three strategic objectives?

Our three strategic objectives are clear and well-defined. We will continue to invest in our existing high-growth categories to solidify our leadership position in India's building products and consumer appliances segment. Over the past few years, we have increased our focus on innovation to offer our customers a well-differentiated and diverse suite of products that use cutting-edge technology and have a strong distribution network. We understand that we need to be closer to our customers than ever before and our increased investment in distribution and retail expansion, including e-commerce and D2C channels is helping us drive profitability for the company.

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