Sanitaryware makers’ fortunes are tied up with fate of bulk purchases by large real estate players
Hindustan Sanitaryware and Industries, now called HSIL, country’s biggest building material and sanitaryware maker, sees a gradual uptick in its key business dependent upon real estate sector in most parts of the country except the NCR region.
“Generally the business is reviving for us, for our building material business with growth rates improving. The business got impacted by the large moves by the government – demonetization, GST and Rera – but the market is settling down. These factors have reduced our growth rate but it is picking up now,” Sandip Somany, vice chairman and managing director of HSIL, said.
“The real estate business is doing well in the southern region. The western part of India is coming back again. In the East, there wasn’t any problem as the market there didn’t go up like a rocket. The only problem is in the NCR region where too much of over-construction has happened and as a consequence, there is still large unsold stock of apartments. Until the time the consumption doesn’t pick up and the old stock gets sold, it wouldn’t be very lucrative for them to build new apartments.”
HSIL is also present in glass and plastic packaging and has ventured into home and kitchen appliances in a bid to reduce its dependency on institutional sales of realty companies.
“We have a clear roadmap to be among the top three players in all the seven appliances and kitchenware product areas. This means we need to have a double-digit market share in each of these categories in the next three-four years,” Somany said at a product launch.
In water-heaters, HSIL claims a market share of 6%, garnered since its launch two years back. In chimneys, it has a double-digit market share and claims to be the second largest player in the auto-clean variant.Building material is HSIL’s largest business division that generates 54% of its revenue.
With a 40% market share, the division, consisting of tiles and sanitary ware, is expected to grow by 15-20% a year.
“Our objective is to grow our packaging business, our second biggest contributing 38% of revenue, by 10-12% a year, the core Hindware branded building material business, which has a 40% market share, is expected to grow 15-20% a year, and the consumer business to grow by about 100% a year over the next three years. Overall the company would grow by 20-25% a year.
The consumer business is now worth Rs 150 crore and is expected to touch Rs 1,000 crore in five years’ time, Somany said.
CONCRETE GAINS
- Sanitaryware makers’ fortunes are tied up with fate of bulk purchases by large real estate players
- The real estate business is doing well in the southern region while western region is seeing revivial
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HSIL is also present in glass and plastic packaging and has ventured into home and kitchen appliances in a bid to reduce its dependency on institutional sales of realty companies.
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