Mithun Chittilapilly came on board as Executive Director of V-Guard in 2006, then took over as Managing Director in 2012. And, over a period of ten years, the company has grown from ₹200 crore in revenues to ₹1,750 crore in the fiscal ending March 2015. Much of this growth is being attributed to the overhaul of the company’s sales structure along with its consistent performance in southern markets of the country over the years.
The revamp was carried out six years ago when the consumer electrical and electronics brand found that 98 per cent of the company’s revenue was coming from sales in south India with stabilisers driving the larger share.
“We realised that if V-Guard needed to grow significantly and develop into a strong brand across India, we would have to expand our portfolio contribution and look beyond core south markets,” Chittilapilly says.
Not just stabilisers
V-Guard’s portfolio consists of 16 products spread across nine categories that include voltage stabilisers, inverters and inverter batteries, solar power systems, electric and solar water heaters, domestic switch gears, power and control cables fans, mixer grinders, induction cook tops and pumps.
However, the earlier sales structure though beneficial for the success of its stabilisers was not ideal for the sales of other categories. Chittilapilly was clear he wanted V-Guard to compete with leading national brands in all its categories.
“Until 2012, we had a small presence in Delhi and didn’t look beyond that. But an aggressive restructuring of the sales teams meant separate sales teams for separate product lines, expanding channel network, opening new branches in the non-South markets, investment in talent, and providing outstanding customer care service across our markets,” he shares, adding that 33 per cent of the company’s revenue now flows in from V-Guard’s new non-South markets.
V-Guard’s business is reportedly supported by over 1,900 employees, 600 distributors, 190 service centres, 29 branches and 20,000 retailers today. Chittilapilly attributes some of the sea change in the company’s reach to a revamp of the company’s brand communications as well — advertising in league with established national brands and large impact properties like IPL used to drive momentum for the brand in new markets.
West, a challenge
Since getting listed in 2007-08, V-Guard has a market-cap of in the range of ₹2,500-3,000 crore. The expansion in its product portfolio and the new sales structure has led to North and East markets yielding a good percentage of revenues compared to some years ago, and the South contributing about 67 per cent to the mix. The West has proven tougher to crack.
“We’re battling established national brands who have a base there. Certain product categories also like stabilisers and inverters — do not have too much of an importance owing to comparatively stable power situation. But we will continue to build our presence in the West… solar water heaters as a segment has ample opportunity to grow,” Chittilapilly explains.
With a pan-India presence now, V-Guard is also no longer a one product wonder. The competition isn’t easy, and yet, it is also fragmented across markets with no one brand necessarily ruling in all categories.
“V-Guard’s growth trajectory is heading towards becoming a top three brand in the various categories we operate in. In the non-South markets we will endeavor to become a leading player in the electrical space,” Chittilapilly says.
V-Guard’s Pebble series of water heaters launched last year has reportedly had “massive success”. Since expanding its portfolio in the kitchen appliances segment and doing well in the South, the company will focus on firming up its foothold in other potential markets, continuing to invest in the segment with new products in the coming months. Net revenue from operations for the first three quarters ended December 31, 2015 was ₹1,348.98 crore, an increase of 3 per cent over corresponding period of last financial year; profit after tax for the same period was ₹69.71 crore, an increase of 38 per cent over the same period in the previous fiscal.
(This news story is from Business Line)