Industry Monitor

Consumer Durables

Vol.906 June 2009

CONTENTS

INDUSTRY AT A GLANCE ....................................................................................................2 

KEY DEVELOPMENTS ..........................................................................................................3 
MARKETING .......................................................................................................................3 
INVESTMENT......................................................................................................................4 
OPERATIONS ......................................................................................................................5 
MERGERS & ACQUISITIONS ............................................................................................6 
INDUSTRY STATISTICS .........................................................................................................7 
PRODUCT FOCUS ...................................................................................................................8 
LCD TV .................................................................................................................................8 
LCD TV Advantages:..........................................................................................................8 
Indian Scenario ...................................................................................................................8 
Global Scenario...................................................................................................................9 
Outlook ..............................................................................................................................9 
COMPANY SCAN...................................................................................................................10 
IFB Industries .......................................................................................................................10 
Business Strategies ............................................................................................................10 
Performance Analysis........................................................................................................11 
Common Size Comparison ...............................................................................................12 
Cost Structure Analysis .....................................................................................................12 
Stock Market Performance................................................................................................12 
Outlook ............................................................................................................................13 
STOCK SCAN .........................................................................................................................14 
UPCOMING EVENTS ...........................................................................................................16 

© Cygnus Business Consulting & Research Pvt. Ltd. 2009 1

Industry Monitor – Consumer Durables June 2009

INDUSTRY AT A GLANCE
MARKETING
¾ Philips confirms margin targets for businesses, Netherlands
¾ Air conditioner and refrigerators sales spike 30-35%, India
¾ LG Electronics India revises upwards revenue targets
¾ AC makers eye govt projects to beat the heat, India
¾ Nikon plans to increase its market share to 45%, India
¾ Colour TVs brighten up big picture; sales grow 2%, India
¾ Microwave sales to pick up steam on product upgrades, innovations, India
¾ Sony India targets 30% share in LCD TV market, India
¾ 22% air conditioners in false ads, Taipei
¾ LG targets aircon growth in downturn, South Korea

INVESTMENT
¾ Durables trio line up funds for expansion, India
¾ Videocon to invest up to Rs2bn on marketing, India
¾ Whirlpool to invest Rs1bn for development of products, India
¾ Samsung to invest US$5m in India
¾ Lincoln Electric invests US$20m on India unit
¾ Samsung to build LCM plant in Shenzhen, China

OPERATIONS
¾ Sony to halve parts suppliers to cut costs, USA
¾ Royal Philips plans to make India its manufacturing hub

MERGERS & ACQUISITIONS

¾ Philips acquires Italian espresso maker Saeco, Italy
¾ Crompton Greaves eyes overseas acquisition, India
¾ Eveready to acquire Uniross from CG Holding, India

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Industry Monitor – Consumer Durables June 2009

KEY DEVELOPMENTS
MARKETING

Europe
Netherlands: Philips confirms margin targets for businesses
Netherlands-based Philips Electronics reiterated margin targets for its businesses as it was on track with
cost cuts in a difficult market environment. Europe's biggest consumer electronics maker would target
earnings before interest, taxes and amortisation (EBITA) of 15 to 17% for its healthcare unit. For Philips'
consumer lifestyle business, the company is targeting an EBITA margin of 8 to 10% and for lighting 12 to
14%. The targets were detailed in presentation materials for a conference in Florida.

Asia Pacific
India: Air conditioner and refrigerators sales spike 30-35%
Air conditioner (AC) and refrigerators sales spiked 30-35% in April compared to same month last year on
the back of rising mercury levels in the country. Consumer durable firms said demand was particularly
strong in the northern and southern parts of the country. The growth in AC sales was largely driven by
the split models which has over the years been selling more compared to the cheaper window ACs. In the
case of refrigerators, growth was led by the mass direct cool segment. All top brands including LG,
Samsung, Whirlpool, Voltas, Carrier and Godrej have switched to star-rated products on a scale of 1-5
depending on their energy consumption. Higher energy efficiency, gives a product higher star rating.

India: LG Electronics India revises upwards revenue targets

Unfazed by the slowdown, LG Electronics India has revised upwards its revenue and recruitment targets
for 2009. The Korean consumer electronics firm expects revenue to grow by 20-25% against the original
target of 15%. It also plans to ramp up its recruitment and create 3,500 jobs this year compared to its
earlier estimate of 2,200 jobs. LG India is the country’s largest consumer electronics firm by way of
revenue. The company’s latest projections come on the heels of LG India achieving sales growth upwards
of 22% since January. In April and May 2009, the company saw a near 50% sales growth.

India: AC makers eye govt projects to beat the heat

The economic slowdown is prompting air conditioner manufacturers to bank on resilient segments such
as government-funded infrastructure projects, hospitality and healthcare to prop up the declining
institutional sales. The rising sales of residential air conditioners — split and window ACs — this summer
has come as a relief to AC manufacturers who are sweating it out in the B2B segment. According to
industry players, the size of the domestic AC-equipment market is estimated at around US$1 billion in
2008, growing at a CAGR of 20%. The institutional segment — including commercial ACs used in retail
stores, airports and corporate buildings — accounts for an estimated 15-20% of this.

India: Nikon plans to increase its market share to 45%

Imaging products maker Nikon plans to increase its market share in the Indian digital SLR cameras
market to 45% by 2010 with new product launches. The company claimed to have garnered 37% market
share in the digital SLR segment last year. Besides, the sales points will be scaled up to 1,000 this year
from 550 last year. India’s SLR cameras market is expected to grow 25% to 15,000 units this year from
12,000 units last year. In the compact cameras category, the company is eyeing 10% market share by 2010
from 7% at present.

India: Colour TVs brighten up big picture; sales grow 2%

Television makers seem to have been spared the gloom of slowdown. Thanks to consumer spends, both
in urban and rural markets, colour televisions have seen an uptick in sales, growing 2% to 2.8m units in
the January-March period. The high-priced LCD TV segment grew 86% to 0.2m units, followed by

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Industry Monitor – Consumer Durables June 2009

plasma at 54% to 0.1m units; flat TVs showed a marginal growth of 1% at 1.83m units. Conventional
TVs took the maximum hit, where the sales declined 8.4% to 0.76m units. Colour TVs account for over
half of the consumer durable market.

India: Microwave sales to pick up steam on product upgrades, innovations

India's microwave market — its growth had slowed down last year — is expected to pick up steam as the
year progresses, with consumer durable majors, including LG Electronics, Samsung and Godrej
Appliances, all targeting growth of anywhere between 22% and 50%. Companies are driving sales by
introducing newer models, focusing on product innovation and a series of below-the-line (BTL) activities.
According to Consumer Electronics and Appliances Manufacturers Association (CEAMA) secretary
general Suresh Khanna, the microwave segment is anticipated to grow at 20% this year.

India: Sony India targets 30% share in LCD TV market

Sony India is targeting 30% of LCD TV market in the country this year with LCD TVs expected to
account for 50% of the total CTV industry. Sony is planning to sell 0.45m units compared with 0.28m
units last year. It is investing Rs600m to strengthen the brand image. In Kerala, Sony India is planning to
raise its share in the LCD TV market to 45% from the current 38%. According to Sunil Nayyar, GM,
sales of Sony India, LCD TV market size is predicted to increase by 50% from 1m to 1.5m units this year.
The company is looking at 30% share, up from 28% in last year.

Taipei: 22% air conditioners in false ads

22% of the air conditioners have been marketed using false or exaggerating advertisements. The
Consumers' Foundation studied the advertising materials of 32 air conditioners available in the country
and found that seven of them were being advertised falsely. Brochures handed out by stores describing
four air conditioners did not correspond to the descriptions on labels displayed in the stores. One of the
products was a 2-in-1 air conditioner and heater system from a famous Japanese brand sold at Elife
Mall's. 44% of the air conditioners were found to have incomplete descriptions in shop leaflets.

South Korea: LG targets aircon growth in downturn

South Korea's LG Electronics Inc aims to increase its air conditioner sales this year even as the global
market is expected to contract by up to 30%. LG, the world leader in residential air conditioners, is also
seeking a 15 to 20% annual revenue growth in commercial air conditioners until 2012, according to Lee
Jeong-seok, head of marketing strategy department at LG's air conditioning business. In January, LG said
it was aiming for a 10% increase in this year's air conditioner sales, after posting a 4% growth in 2008 to
UA$5 billion.

INVESTMENT

Asia Pacific
India: Durables trio line up funds for expansion
Hopes of a healthy rise in demand have spurred consumer durables firms such as LG, Samsung and
Godrej to infuse fresh capital into the Indian market. Each of these companies are investing between
Rs800m and Rs1 billion. LG said it was investing in customising products for India, which would help
them tap various segments and ensure better profitability. Samsung, too, has planned an investment of
Rs1 billion to increase the capacity of its Noida facility. Homegrown Godrej Appliances has earmarked an
investment of Rs1 billion in the current fiscal to expand the capacity of its five manufacturing plants.

India: Videocon to invest up to Rs2bn on marketing

Consumer durables firm Videocon would invest up to Rs2 billion on marketing this fiscal, with special
focus on reaching rural markets and expanding product portfolio across categories. Videocon has lined up
new products in LCD TVs, frost-free refrigerators and automatic washing machines, besides plans to

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Industry Monitor – Consumer Durables June 2009

increase the number of exclusive stores 11-fold to around 100. Stores would be set up at the regional level
aimed at reaching rural markets.

India: Whirlpool to invest Rs1bn for development of products

Home appliances maker Whirlpool will invest up to Rs1 billion in the next two-three years on product
development and diversification into new segments such water purifier and modular kitchen products.
The investments would be made in upgrading technology, adding features to existing models and in
making changes in the production line. Besides, expanding the product portfolio of its non-core segments
such as water purifier, Whirlpool will also focus on in-built appliances. The company has around 22%
share in the total 4.6m units per annum refrigerators market in the country and around 15% share in 2m
units washing machine market.

Samsung to invest US$5m in India

Samsung Electronics will invest US$5m at its India manufacturing facility this calendar. This is over and
above US$24m has already been invested at the Noida facility. According to Sunil Dutt, the country head
for Samsung’s mobile division, bulk of the investment will go into mobile moulds required for cellphones
of different sizes. The company expects to release nearly two dozen models in 2009, he said adding that
Aamir Khan will continue to be the brand’s envoy.

Lincoln Electric invests US$20m on India unit

US-based welding equipment manufacturing company Lincoln Electric inaugurated its manufacturing unit
for the Indian market at Chennai. The NASDAQ listed company has invested US$20m on the plant,
located inside the Mahindra World City special economic zone at Maramalainagar near Chennai. The
company, which has been selling premium segment welding equipment imported from its plant at
Cleveland, USA, in India, will manufacture mid-segment welding consumables in this plant for selling
locally. Consumables are raw material like electrodes, rod, wires and fluxes which are ‘consumed’ during
the welding process.

Samsung to build LCM plant in Shenzhen, China

Samsung Electronics will cooperate with players in southern China to build a new LCD module (LCM)
plant in Shenzhen. Samsung will also concentrate on promoting LED-backlit TV, and in terms of size the
40-inch-and-larger LCD TV segment in the China market starting in the second half of 2009. Samsung
LCD will remain the mainstream technology, and shipments of 40- to 50-inch LCD TVs will account for
30% of its total LCD TV shipments in 2010, and shipments of 60-inch-and-above models are estimated
to reach one million worldwide in 2012.

OPERATIONS

Americas
USA: Sony to halve parts suppliers to cut costs
Sony Corporation is planning to cut number of parts suppliers in half next year. It's part of the company's
overall plan to turn around the recent financial losses from the poor economy. The company will cut
from 2,500 suppliers this year to 1,200 next year. The remaining suppliers will get more business, which
Sony plans to leverage for better prices on parts. This is certainly bad news for certain suppliers who
relied on Sony contracts, but should help Sony's health as a whole. In the long run, it's this kind of move
that might lead to cheaper manufacturing costs and price drops.

Asia Pacific
Royal Philips plans to make India its manufacturing hub
Royal Philips Electronics, Europe’s biggest consumer electronics group, plans to make India a hub for
developing and manufacturing products for global markets and sourcing components across its core areas

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Industry Monitor – Consumer Durables June 2009

of lifestyle, healthcare and lighting. The group’s global management is evolving a long-term plan, running
until 2015, to invest in and grow its Indian business. The strategic shift towards markets like India comes
in the wake of the company recently reporting a 15% drop in sales in the more mature US and western
European markets during the first quarter of 2009.

MERGERS & ACQUISITIONS

Europe
Italy: Philips acquires Italian espresso maker Saeco
Royal Philips Electronics NV said it plans to acquire Saeco International Group SpA, Europe's largest
maker of espresso machines, for an undisclosed sum. Based in Gaggio Montano, Italy, Saeco had sales of
€318m over the 12 months ended March 31, Philips said. Saeco makes machines branded under the Saeco
and Gaggia names, as well as making machines for Lavazza and others. Saeco is controlled by private
equity firm PAI Partners. Philips said the deal is contingent on reaching a deal with Saeco's creditors on
assuming the company's debts.

Asia Pacific
India: Crompton Greaves eyes overseas acquisition
Crompton Greaves is looking at acquiring an industrial automation company overseas. This will help it
graduate from merely selling motors (to manufacturing industries) to offering a complete automation
solution. Crompton has earmarked a Rs2 billion capital expenditure plan this fiscal. Of this, Rs1.1 billion
will be for the domestic business and the balance overseas. The company sees good demand for
transformers in these geographies. Since March, there has also been good demand from the wind energy
business for transformers.

India: Eveready to acquire Uniross from CG Holding

Eveready Industries India (EIIL), the BM Khaitan Group flagship company, is buying out France’s
rechargeable battery maker Uniross from CG Holding for €10m (Rs600m approx). This is EIIL’s first
overseas acquisition in the offshore battery turf. The Khaitans have entered into a term sheet agreement
with Paris-based CG Holding to acquire a controlling bloc of some 80% in Uniross. CG Holding is the
parent company of Uniross. As per the agreement, Uniross will issue fresh company shares in favour of
EIIL and help the latter buy at least 80% in Uniross. Post-issuance of shares, CG Holdings’ stake in
Uniross will get diluted to 20% from the existing 65% holding.

© Cygnus Business Consulting & Research Pvt. Ltd. 2009 6

Industry Monitor – Consumer Durables June 2009

INDUSTRY STATISTICS
Index of Industrial Production – Use based

Consumer Consumer
Month
goods durables
2007-08 2008-09 2007-08 2008-09
Apr 290.90 315.60 341.80 352.90
May 288.80 310.30 380.30 391.00
Jun 266.90 293.20 357.90 374.40
Jul 274.50 290.80 351.50 400.50
Aug 266.80 283.90 379.70 394.50
Sep 273.40 293.70 388.90 445.90
Oct 280.60 278.10 431.90 424.80
Nov 273.50 299.20 368.40 369.50
Dec 320.80 326.10 353.70 338.90
Jan 335.20 346.40 383.40 390.80
Feb 327.60 320.40 389.60 412.30
Mar 324.00 321.50 408.40 442.50
Source: CSO, Cygnus Research

500 Consumer Durables Index of Industrial

Production - 2008-06

450
Index

400

350

300
Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar

Source: CSO, Cygnus Research

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Industry Monitor – Consumer Durables June 2009

PRODUCT FOCUS
LCD TV
Liquid-crystal display televisions (LCD TV) are television sets that use LCD
technology to produce images. Benefits of LCD technology include lower weight
and reduced power requirements when compared to other display types. Often,
LCD television screens can also be used as computer monitors. Moving pictures on
a CRT TV do not exhibit any sort of "ghosting" because the CRT's phosphor,
charged by the strike of electrons, emits most of the light in a very short time, under
1ms, compared with the refresh period of e.g. 20ms (for 50fps video). In LCDs,
each pixel emits light of set intensity for a full period of 20ms (in this example), plus
the time it takes for it to switch to the next state, typically 12 to 25ms. The second time (called the
"response time") can be shortened by the panel design (for black-to-white transitions), and by using the
technique called overdriving (for black-to-gray and gray-to-gray transitions); however this only can go
down to as short as the refresh period.
LCD TV Advantages:
¾ Screen life - Some industry claims that LCD can last twice as long as plasma (around 40 years at
4hrs a day versus 20 years at 4hrs of use a day). Even though we suspect that such claims show a
distinct LCD bias on the part of the source, it does seem that LCD can last a bit longer than
plasma.
¾ No screenburn - Plasma screens are suspectible to something called screenburn, which occurs
when a bright image, like the sky news logo, is displayed on screen for an extended period of
time. The constant saturation 'tires' plasma's phosphors, leaving a permanent shadow of the
bright image behind. LCD technology is pretty much immune to this problem.
¾ Slimness - Because there is no need for gas filled or heavy glass fronts in a LCD screen, LCDs
tend to be slimmer and lighter than plasmas.
¾ Brightness - LCD technology can generally deliver brighter pictures than a plasma - though more
brightness isn't automatically better if it is used to disguise a lack of Major Players
contrast.
• Samsung
¾ Power consumption - LCDs generally use less power than plasma TVs
because they don’t need to power hundreds of electrodes to stimulate • Sony
phosphors. • LG

Indian Scenario
With a global trend of dumping the CRT TVs, India is of no exception to the trend with the market of
LCD TVs growing nearly at a rate of
100% per year. According to Display Market Shares-2008-09
Search analysis the LCD TV market of
India will surpass the CRT TV market by
2012. This growth is mainly driven by the
introduction of digital broadcast like Others
DTH, IPTV, STB cable etc. There are Samsung
35%
30%
some major brands in Indian Market like
Samsung, Sony, LG and Philips and some
local Indian Brands like Videocon and
Sony
Onida. The leader in LCD TV market in
LG 19%
India is Samsung with 30% market share.
16%
The main competitor is Sony with 19%
market share, followed by LG with 16%.
Source: Web Sources; Cygnus Research

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Industry Monitor – Consumer Durables June 2009

Global Scenario
Currently, the Korean LCD TV makers (Samsung, LG) are expanding in terms of market share based on
their brand power and competitive power in price. In China, local makers use regional channels to focus
in small and medium TV sales and expand their market shares. On the other hand, Japanese and
European TV makers expect results that are equal to 2008 or of negative growth. The LCD industry may
radically change upon aggressive
promotions by TV makers. It is because a
Global Market Shares-2008
radical TV price reduction by one or two
makers had led to price reductions by
other TV makers and LCD makers in the
past. The 2009 LCD TV market expects Sony
LG
16%
10 to 25% growth upon sales. The TV 10%
market may infinitely change upon Samsung
20% Sharp
strategies by maker (price, region, size
10%
mix, product mix, and inventory). The
LCD industry will definitely change Philips
accordingly. Due to global recession 9%
Others
continuing to place pressure on 35%
discretionary spending, global TV
shipments declined 6% Y/Y in Q1'09 to
43.3M units. This was a decline of 25%
Source: TV Maker; Cygnus Research
from Q4'08 on seasonal trends. Revenues
fell even more, down 12% Y/Y to US$22.1 billion.

Strategies during recession

Recently, there are rumors upon Japanese makers' line buy outs and Taiwanese makers' M&A. Though,
they are unrealistic in terms of synergy and economic aspect that they have minor effects in the market.
On the other hand, careful considerations upon large line investments that makers are currently preparing
may have positive effect in the market. In reality, makers delay investments and reduce investment
capacity. They may have positive effect in the LCD industry in the second half of 2009 and 2010.

Outlook
Worldwide LCD TV revenues are expected to fall year-on-year for the first time since LCD TV was
launched in 2000, because the ongoing economic turmoil is unlikely to improve in 2009. In 2009, the
LCD TV market is forecast to reach 119.9 million units, for 17% YoY growth–and a reduction of 11.5
million units from the Q3 ‘08 forecast for 2009. Unit growth in developed regions such as Japan, North
America, and Western Europe will be just 2% YoY, largely due to the impact of the economic crisis. LCD
TV growth in emerging regions will be 45% YoY in 2009, lower than the 68% YoY growth in 2008.

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Industry Monitor – Consumer Durables June 2009

COMPANY SCAN

IFB Industries
IFB Industries (IFBINDUS) produces fine blanking tools, press tools and fine blanked
components that are needed by precision engineering industries. In addition, the
company has installed or acquired facilities for producing several other products like
FHP motors and microwave ovens. The company also produces fully automatic washing
machines. Its plants are located at different locations in West Bengal, Bangalore, Goa and
Bhopal. The company’s facilities in Kolkata and Bangalore have been certified under ISO
9001 and ISO 9002 respectively and also under QS9000.

Business Strategies Product Profile

• The company has service network in almost all states of India, which • Washing Machines
caters to the basic needs of the customers all over India. • Microwave Owens
• IFB is one of the market leaders of the home appliances brand in India • Dish Washer
and puts all efforts and hard work to become the first choice when it • Dryer
comes to being an integral part of household.

Company’s Performance at a Glance

Performance at a Glance
Item (Rs m) 2003-04 2004-05 2005-06 2006-07 2007-08
Net Sales 1895.30 2531.80 2553.10 3247.50 4226.20
OPM (%) -1.93 -0.24 2.55 1.00 5.57
NPM (%) -45.19 -13.59 -5.41 10.86 8.84
Depreciation 217.50 208.10 183.20 128.20 84.50
Interest 599.40 610.60 120.40 0.00 0.00
PAT -853.50 -824.80 -245.30 -106.00 139.70
Source: BSE India; Cygnus Research

Key Financial ratios

Key Ratios at a Glance

2003-04 2004-05 2005-06 2006-07 2007-08
Debt-Equity Ratio 0.00 0.00 0.00 0.00 0.00
Long Term Debt-Equity Ratio 0.00 0.00 0.00 0.00 0.00
Current Ratio 0.46 0.51 0.53 0.51 0.46
OPM (%) -1.93 -0.24 2.55 1.00 5.57
NPM (%) -45.19 -13.59 -5.41 10.86 8.84
ROCE (%) 0.00 0.00 0.00 -2.47 2.73
RONW (%) 0.00 0.00 0.00 11.58 7.34
Source: BSE India; Cygnus Research

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Industry Monitor – Consumer Durables June 2009

Performance Analysis
Performance Analysis
Quarterly Performance Financial Year Performance
OND08 OND07 Var (%) 2007-08 2006-07 Var (%)
Sales 1451.90 1322.00 9.83 4226.20 3247.50 30.14
Other Income 9.50 26.90 -64.68 138.70 113.90 21.77
PBIDT 137.30 47.20 190.89 235.40 32.50 624.31
Interest 0.00 0.00 0.00 0.00 0.00 0.00
PBDT 137.30 47.20 190.89 235.40 32.50 624.31
Depreciation 18.00 21.80 -17.43 84.50 128.20 -34.09
PBT 119.30 25.40 369.69 150.90 -95.70 -257.68
Tax 3.30 4.30 -23.26 11.20 10.30 8.74
PAT 116.00 21.10 449.76 139.70 -106.00 -231.79
Source: BSE India; Cygnus Research

During 2007-08, the net sales of the company have registered an increase of 30% to reach Rs4226.2m
from Rs3247.5m in 2006-07. The operating profit of the company has shown a major increase from
Rs32.5m in 2006-07 to Rs235.4m. the profit before tax during 2007-08 was Rs235.4m which was negative
in 2006-07 at Rs95.7. The profit after tax was negative in 2006-07 at Rs106m and has reached to
Rs139.7m in 2007-08.

During OND08, the net sales of the company have increased by 10% to reach Rs1451.9m from Rs1322m
in OND07. The operating profit has shown an increase of 191% at Rs137.3m from Rs47.2m in OND07.
The profit after tax for the quarter has increased to Rs116m from Rs21.1m in OND07.

4500 Product Mix 2007-08

Net Sales
Rs m

Fine
Blanked
C ompo-
3000 nents
Home
18%
Applian-
ces
78% Services
4%

1500
2003-04 2004-05 2005-06 2006-07 2007-08

Source: BSE India; Cygnus Research

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Industry Monitor – Consumer Durables June 2009

Common Size Comparison

The raw materials consumption of the Common Size Comparison for 2007-08 (% of sales)
company stood at 51.7% as a IFB Whirlpool Value Ind.
percentage of sales during 2007-08,
while it is 42.82% and 60.84% for Other Income 0.44 3.28 0.13
Whirlpool and Value Industries Raw Material Consumed 51.70 42.82 60.84
respectively. The other expenses of the Other Expenses 16.06 22.92 8.12
company stood at 16.06%, which is Staff Expenses 6.77 7.48 1.39
higher than that of Value Industries at
8.12% and lower than that of Whirlpool Advertising Expenses 0.00 5.79 0.00
at 22.92%. The staff cost of the Discounts 13.79 12.92 0.00
company stood at 6.77% while it is Interest 1.17 10.13 4.27
7.48% and 1.39% for Whirlpool and Depreciation 2.07 2.00 6.12
Value Industries respectively.
PBT 1.60 3.57 0.96
The profit before tax for the company Tax 0.19 0.27 0.33
stood at 1.6% while it is 3.57% and PAT 1.80 8.84 0.62
0.96% for Whirlpool and Value Source: BSE India; Cygnus research
Industries respectively. The profit after
tax for the company stood at 1.8% while it is 8.84% and 0.62% for Whirlpool and Value Industries
respectively.

Cost Structure Analysis

Cost Structure as Percentage of Net Sales

2003-04 2004-05 2005-06 2006-07 2007-08
Raw Material Consumed 47.43 50.45 44.46 49.65 42.82
Other Expenses 53.08 52.36 47.90 48.26 22.92
Staff Expenses 6.94 5.94 6.92 6.45 7.48
Advertising Expenses 0.00 0.00 0.00 0.00 5.79
Purchase of Finished Goods 0.00 0.00 0.00 0.00 9.08
Trade Scheme & Discounts 0.00 0.00 0.00 0.00 12.92
Interest 11.48 8.22 7.18 3.95 2.00
Depreciation 31.63 24.12 4.72 0.00 0.00
Tax Charges 0.00 0.00 0.27 0.32 0.27
Source: BSE India; Cygnus Research

The raw materials consumption cost of the company has declined by 683 basis points during the year
2007-08. The other expenditure of the company has declined sharply by 2534 basis points. The staff cost
of the company has increased by 103 basis points. The advertising expenditure of the company stood at
5.79% as a percentage of sales for 2007-08. The finished goods purchases of the company stood at
9.08%. The tax paid by the company has declined slightly by 5 basis points.

Stock Market Performance

The stock market has started recovering. There are positive changes in the index of industrial production
and the inflation has also declined. All these factors have contributed to the upward movement of the
Sensex during the quarter JFM09. The BSE Sensex has registered a decline of 30% during the period May

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Industry Monitor – Consumer Durables June 2009

2008 to April 2009. The share prices of the company have declined by 26% for the same period. The
highest price registered during the period was Rs40.5 and the lowest was Rs20.05.

105 Relative Market Cap Share Holding Pattern

Performance
90
IFB Insti-
BSE Sensex tutions
75 Public 3%
BSE C D 28%
60

45 Pro-
moters
30 69%
May-08

Aug-08

Sep-08

Nov-08

Dec-08

Jan-09

Feb-09
Mar-09

Apr-09
Jun-08

Jul-08

Oct-08

Source: BSE India; Cygnus Research

Outlook
The net sale of the company is expected to increase by 12-15% during the year 2008-09 and is expected to
maintain same growth rate for the year 2009-10. The company’s main revenue is from the home
appliances segment, which has contributed 78% to the revenues. In India the home appliances segment is
growing at a double digit rate. Hit by the global meltdown, the domestic home appliances market is
estimated to grow at 10% this year against 15% last year. Moreover, the refrigerators and air-conditioners
market had been heavily impacted due to short summer and early monsoon this year. Thus, the home
appliances segment is expected to lead the growth of the company.

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Industry Monitor – Consumer Durables June 2009

STOCK SCAN

140 Relative Market Cap Performance

130 Sensex Blue Star

Voltas BSE C D
120

110

100

90
16-Apr
17-Apr
18-Apr
19-Apr
20-Apr
21-Apr
22-Apr
23-Apr
24-Apr
25-Apr
26-Apr
27-Apr
28-Apr
29-Apr
30-Apr
1-May
2-May
3-May
4-May
5-May
6-May
7-May
8-May
9-May
10-May
11-May
12-May
13-May
14-May
15-May
150 Relative Market Cap Performance
Sensex MIRC
140
BPL BSE C D
130

120

110

100

90
16-Apr
17-Apr
18-Apr
19-Apr
20-Apr
21-Apr
22-Apr
23-Apr
24-Apr
25-Apr
26-Apr
27-Apr
28-Apr
29-Apr
30-Apr
1-May
2-May
3-May
4-May
5-May
6-May
7-May
8-May
9-May
10-May
11-May
12-May
13-May
14-May
15-May
Source: BSE India; Cygnus Research

16 Apr – 25 Apr 26 Apr – 02 May 03 May – 09 May 10 May – 15 May

SENSEX Sensex gained The Sensex posted sharp The Sensex posted The Sensex posted
during this period gains during this week sharp gains during gains during this
under consideration aided by sustained this week aided by period due to rise
due to strong cues buying support from positive cues from in FIIs.
in European foreign institutional the overseas
markets. investors (FIIs). markets.
BSE CD During this week, During this week, the During this week, The benchmark
the bench mark CD had further declined the CD index had index for CD had
index for consumer by 5 points. increased by 117 further increased
durables (CD) had points. by 109 points
declined by 34
points.
Blue Star During this week During this week, the The share prices The share prices
the share prices of share prices of the have further have increased by
the company have company have increased increased by 9% 17% during this
increased by 7.38%. by 1%. during this week. week.

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Industry Monitor – Consumer Durables June 2009

The share prices The share prices of theShare prices have

The share prices
have increased by company have declined further declined by
have increased by
Voltas
10.3% during this by 3.5% during this 0.8% during this
2.6% during this
week. week. week. week.
The share prices Share prices have
The share prices
Share prices have
have increased by further declined by
have declined by
MIRC declined by 9% during
17% during this 2.3% during this
1.5% during this
this week.
week. week. week.
Share prices have
Share prices have The share prices have Share prices have
further increased
BPL declined by 3.75% further declined by 4.5% increased by 17%
by 2.1% during
during this week. during this week. during this week.
this week.

© Cygnus Business Consulting & Research Pvt. Ltd. 2009 15

Industry Monitor – Consumer Durables June 2009

UPCOMING EVENTS
1. Event Elektro Internatonal Exhibition 2009
Date Jun 08-11, 2009
Venue Expocentr Krasnaya Presnya Fairgrounds, Moscow, Moskva
Elektro Internatonal Exhibition 2009 is Russia's leading trade fair for
Highlights electronics & electricals industry. Elektro International Exhibition 2009 will
take place at Expocenter Krasnaya Presnya Fairgrounds.
ZAO Expocentr, 14 Krasnopresnenskaya, Moscow, Russia
Contact Details Tel: +(7)-(095)-2553799; Fax: +(7)-(095)-2057210
E-mail: centr@expocentr.ru; Web: www.expocentr.ru
2. Event China International Consumer Electronics Show (SINOCES
Date Jul 09-12, 2009
Venue Qingdao International Convention & Exhibition Center, Qingdao, Shandong
China International Consumer Electronics Show (SINOCES) is China's most
prominent consumer electronics exhibition. As an influential, annual CE event,
Highlights
SINOCES serves as a good platform for consumer electronics companies to gain
global exposure for their new products, new technologies, brand and vision.
Consumer Electronics Association, 2500 Wilson Blvd., Arlington, United
Contact Details States Of America. Tel: +(1)-(703)-9077600; Fax: +(1)-(703)-9077675
E-mail: cea@CE.org; Web: www.ce.org
3. Event Systems Integration Philippines
Date Aug 20-22, 2009
Venue SMX Convention Center, Seashell Drive, Mall of Asia Complex, Philippines
Systems Integration Philippines is the only trade show in the country which
covers today's shift toward business integration and convergence in its entirety.
Highlights
This is the place where ideas are turned into deals. System Integration
Philippines will be the breeding ground for innovations.
Global-Link Marketing & Management Services, Inc.Unit 1003, Antel 2000
Contact Details Corporate Center, 121 Valero Street, s Alcedo Village, Makati City, Philippines
Tel: +(63)-(2)-7508588; Fax: +(63)-(2)-7508585, Web: www.globallinkph.com
4. Event Fan Expo Canada
Date Aug 28-30, 2009
Venue Metro Toronto Convention Centre, 255 Front Street West , Toronto
Fan Expo Canada is Canada's leading trade fair for Electronics & Electrical
Goods industry. Fan Expo Canada will be held at Metro Toronto Convention
Highlights
Centre in month of august this year asked for a vote of suggestion from the
participants, asking for the suitable venue for holding the Fan Expo.
A. C. F. Organisation. Av. Chateau De Walzin 10A- 1180, Bruxelles, Brussels,
Contact Details
Belgium. Tel: +(32)-()-24130383; Fax: +(32)-()-24101994
5. Event Bathroom + Kitchen
Date Sept 15-18, 2009
Venue Belexpo-14, Pobediteley ave.14, Pobediteley Avenue, Minsk, Belarus.
Bathroom + Kitchen is the largest Household exhibition in Minsk. It provide
the ultimate choice for all procurement needs like -Bathroom Fittings,
Highlights Bathroom Furniture, Cabinets & Joinery, Ceramics & Tiles, Design Bathrooms
will be targeting Kitchen, Bathroom & Interior Designers, Architects, Kitchen
& Bathroom Planners/Specifiers, Design Consultants.
Expoforum Exhibition Company, 15, Chelyuskintsev Street, Minsk, Belarus.
Contact Details
Tel: +(375)-(17)-2912326

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Industry Monitor – Consumer Durables June 2009

6. Event Houseware Central Asia

Date Sept 25-27, 2009
Atakent International Exhibition Centre, 42, Timiryasev Str., Almaty,
Venue
Almaty [City], Kazakhstan.
Houseware Central Asia gives manufacturers the ability to do business with
independent retailers in a focussed, one of a kind, environment. The show
Highlights
also gives exposure to the new hardware or home improvement retail
channel, because of its co-location with the National Hardware Show.
Central Asia International Exhibitions
Contact Details Dostyk Avenue, 105, Business Center, Alatau, Office, Almaty, Kazakhstan.
Tel: +(7)-(3272)-584022; Fax: +(7)-(3272)-581668
7. Event RF & Hyper
Date Oct 06-08, 2009
Venue Paris Nord – Villepinte, Paris, Ile-De-France , France
RF & Hyper is the largest exhibition in France specialised in radio
frequencies, microwaves, wireless, optical fiber and their applications. RF &
Highlights Hyper gathers all optical communication systems, equipment and devices -
each exposing its maximum technological advancement and latest trends in
the industry.
Exposium. 38/40 avenue de New York, Paris, France.
Contact Details
Tel: +(33)-(1)-49685100; Fax: +(33)-(1)-49685232
8. Event Bangkok Refrigeration Heating Ventilation & Air Condition
Date Oct 07-11, 2009
Venue Impact Exhibition & Convention Centre, Bangkok, Krung Thep, Thailand
Bangkok Refrigeration, Heating, Ventilation & Air Condition (Bangkok
RHVAC) with its countless brand and designer products is a major visitor
Highlights attraction. But innovations in the fields of ceramic, piping, sewerage systems
and concealed installation make Bangkok Refrigeration, Heating, Ventilation
& Air Condition Thailand's trade fair highlight.
Ministry Of Commerce. 22/77, Rachadapisek Road, Chatuchak, Thailand.
Contact Details
Tel: +(66)-(2)-5116020 to 30; Fax: +(66)-(2)-5116008 to 10
9. Event China Shunde Household Electrical Appliances Exhibition
Date Oct 19-22, 2009
Venue Shunde Exhibition Centre, Shunde, China.
China Shunde Household Electrical Appliances Exhibition is a golden
opportunity for buyers to come face-to-face with household electrical
Highlights
appliances manufacturers, dealers, purchasers and suppliers from mainland
China and overseas.
Koelnmesse GmbH. Messeplatz 1 Koeln, Deutschland, Germany.
Contact Details
Tel:+(49)-(221)-8212313; Fax:+(49)-(221)-8212105
10. Event Du Und Deine Welt-The Great Consumer Exhibition
Date Nov 14-22, 2009
Venue Hamburg Messe und Congress, Hamburg, Germany.
DU UND DEINE WELT, one of Germany's biggest and most profitable
consumer exhibitions, has offered exhibitors and visitors an attractive forum.
Highlights
It is a sales and information exhibition with event character mainly for
consumers from Hamburg, Schleswig-Holstein and Lower Saxony.
Hamburg Messe und Congress GmbH. St. Hamburg, Germany.
Contact Details
Tel:+(49)-()-+(49)-(40)-3569-0; Fax:+(49)-(40)-3569-2180

© Cygnus Business Consulting & Research Pvt. Ltd. 2009 17