By IANS,
Chennai : The diversified consumer products and engineering firm Bajaj Electricals is shopping around for companies that would give it technology, market distribution and new products, a top executive said here.
“Our kitty for acquisitions ranges between Rs.100 and Rs.300 crore. Money is not an issue. We are looking out for companies that would provide us the product technologies, products or market reach,” the firm’s executive director R. Ramakrishnan told IANS.
Operating in six verticals – engineering and projects, appliances, lighting, luminaries and Morphy Richards – the Rs.2,252 crore turnover firm is looking at acquisitions to touch the Rs.5,000 crore turnover mark in three years.
“The growth is expected to happen in consumer durables, engineering and projects and luminaries. We are expanding our consumer durable products range. Last year, we launched water pumps and soon we would launch fraction horse power motors,” he added.
He said pumps and motors were fairly large business areas in India.
Test marketing its pressure cookers in Bihar, Pune and Chhattisgarh, Bajaj Electricals hopes to go national with its product in a year’s time and fight it out with established players like TTK Prestige and other regional brands.
The company Monday also launched liquefied petroleum gas (LPG) powered gensets here to cross swords with Honda, Birla and several local brands.
Ramakrishnan said the the company’s engineering and projects division logged growth in both top and bottomlines in the second quarter of the current fiscal.
He said the division’s order book position was around Rs.1,100 crore (projects worth Rs.650 crore in transmission line towers, Rs.250 crore in rural electrification, Rs.100 crore lighting projects, Rs.100 crore high mast galvanised poles) to be executed over the next 15-18 months.
According to him, the division’s revenue for the third quarter was flat due to a high base effect, but the profitability had improved.
The consumer product business was healthy despite cost pressures, he said.
“The input prices have gone up. For instance, copper price is now around $9,000 per tonne, up from $3,000 per tonne not long ago. We do hedge and enter into forward contracts,” Ramakrishnan said.
Being amongst the market leaders in many of the product segments it operates in, the company enjoyed the flexibility of passing on the costs to the consumers, he said.
“We have shifted bulk of our production to excise free zones and import 20 percent of the fans from China to manage the costs,” Ramakrishnan added.
According to president of the fans business unit A.S. Radhakrishna, the company was hoping to sell more than five million units this year, with 2013’s target being one crore units.