Increasing market share:
V-Guard Industries, over the past few years, has successfully gained market share in allof its product categories. In Stabilizers, it had a market share of about 12% which has now improved to 16% over three years. And in the wires industry, with size of roughly about INR 65bn the company used to be a very smallplayer about three years back having about 1% market share which has now improved significantly to 4%. In thegeyser segment, VGIL has increased its market share to 10% from 3.5%. The company holds number three positionin India in solar water heater segment, enjoying roughly 10% market share. In the single phase domestic water pumpsegment with a market size estimated at about INR 20bn,
VGIL’s market share has improved to 7% from 5% three
Diversified Product Growth:
The success of VGIL lies in its diverse product portfolio which is directly related to
the rise in disposable income of the middle class consumer in India. VGIL’s major chunk of revenue
s in FY12 wasgenerated through cables and stabilizer contributing 30% and 20% respectively. Both the products grew by 36% and20% YoY. Further, LT Cables, Digital UPS and Fans individually registered growth of 39%, 236% and 20%respectively in FY12. During FY12 other products such as Pumps, Water Heaters and Solar Water Heater reportedexpansion in its sales by 25%, 44% and 21% respectively.
Expanding Pan India to de-risk business:
sales are currently predominantly from the southern region led byits strong brand name as well as its distribution network. It had been primarily focusing on these markets and hasbuilt a wide product portfolio. Moreover, over the past few years it has widened its distribution network to pan-India.The company ventured into Maharashtra, Haryana, Madhya Pradesh, Orissa, Himachal Pradesh, Chhattisgarh, Uttar Pradesh and Gujarat in FY10, with an objective to focus on pan-India presence. Going ahead the company wants toexpand its presence in Bihar and the north-eastern states. This strategy, although margin dilutive in the initial yearswould enable VGIL to become a formidable player in all its product categories in a few years from now.
Growing distribution network aid growth
Currently, VGIL’s products are sold through 230 exclusive distrib
utors,1200 Channel Partners and 11,000 dealers with 52% of sales concentrated in four southern Indian states of AndhraPradesh, Karnataka, Kerala and Tamil Nadu. Its network is also spread across all states in India except North Eastand Jammu & Kashmir. The company has a diversified client base which differs from product to product and includes
Cable, 28%Stabilizers, 20%Pumps, 15%WaterHeater, 9%Digital UPS, 7%Fan, 6%UPS, 6%LT Cable, 4%Solar WaterHeater, 3%Others, 2%
% of Revenues