Energy Efficient & Smart Products will be in demand in future: Rakesh Khanna, Orient Electric
Rakesh Khanna, Managing Director & CEO, Orient Electric Ltd, talks about hopes in the new year 2021, market share, PLI Scheme, product launches and UV Sanitech among others during a candid chat with Swati Khandelwal, Zee Business.
Rakesh Khanna, Managing Director & CEO, Orient Electric Ltd, talks about hopes in the new year 2021, market share, PLI Scheme, product launches and UV Sanitech among others during a candid chat with Swati Khandelwal, Zee Business. Edited Excerpts:
Q: Stocks of Orient Electric has provided a return of around 50% since March 2020 and is ready to go beyond. What is your view of 2021 for the company?
A: We are quite optimistic right now. We have seen a good increase in demand after the first quarter across the industry and this off-take is going continuously. We are optimistic for various reasons as this growth will continue and 2021-22 will be very good because COVID has come to an end to a great extent, emotionally, sentiment level and also if you see then the number of cases has come down, the recovery rate is quite good. So, COVID’s effect has been neutralized to a great extent. Due to the strong demand, we are hopeful and very optimistic that the coming year will be great.
Q: Tell us about the market share that you are expecting next year and what are the new products on which you will be focusing? What will be your contribution to the PLI scheme that has been announced by the government?
A: Let me first take the PLI scheme, I think, the government is continuously coming up with very good schemes and it shows its firm determination that a lot of work has to e done for Atma Nirbhar Bharat. And, PLI is also a big step in that direction. PLI applies to LED in our industry and we all know that electronics manufacturing has lagged far behind in India, especially at the component level. As a country, we have always been importing and have been fully dependent on outside India. Be it any electronics, mobiles, laptops, computers and for that purpose LED lamps. This will encourage component manufacturing in the industry and the LED sector will turn more competitive at the global level. That’s a very good thing going forward. Overall, the government’s policies are doing well and based on that we remain very optimistic that going forward things will be fine. As far as targets are concerned, we restrain ourselves on this aspect and don’t provide any forward indications. But, if you have a look on our historical trend of the last few years then in the last 5-6 years, we have consistently increased our market shares, positioning, gained market shares and improved our profitability. And, I am quite confident that the kind of team we have and our group value systems and vision give me confidence that we will be doing well in the coming future.
Q: Update us about the new products and the response of the segments where you are entering and will enter? You have also launched UV Sanitech, so, let us know the way the product has performed?
A: UV Sanitech was a response to the current situation. At that time, it was important to understand our consumer and their needs. It was important to take care of their health and sanitization because there was no such thing that could sanitize the things of everyday use. And, UV Sanitech was a very quick response and a sample of our company’s R&D and manufacturing capabilities. It continues to be one of the best products on on-line if you see. But numbers were not very important in this for us, as it was our response that we are relevant to consumers, we are relevant to the time and are listening to consumers at all times. In terms of new products going forward, energy efficiency is going to be a big thing and once again the government is continuously working towards to become an energy-efficient company to its maximum. AS PLI has been done under PLI and this is a step in that direction. In fans, now, BEE will be applicable and the government is emphasizing more on power efficiency in which all the fans should be of star rating and this will be applicable from January 2022. So, in the coming time, energy-efficient fans will be necessary and all design changes will be towards energy efficiency. Lot of work is happening and I feel that it will be a growth segment for the fans industry. It will lead to two things (i) it will lead to energy efficiency and (ii) replacement demand will increase because its payback period starts in around one and a half year. So, it is very important, if you have an old fan at your house and you replace it with a new fan than your expenditure is recovered in just one and a half year from simple electricity-saving itself. So, I believe, a growth in replacement demand and average selling price will bring good growth to the entire sector. When it comes to lighting products, then there will be a focus on connected products because we are seeing an increase in smart products and it is a fast-growing sector. We have launched a few fans, which are Alexa and voice compatible. It is smart, so you can operate it from anywhere. We have also launched coolers. We have also launched Astro-timing street lights. So, all these smart lightings and smart products will encourage convenience and also save electricity. So, it is good from both sides and will grow.
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