On the other hand, Fan industry remains highly competitive with several organized players and a number of relatively smaller regional producers. It is therefore not possible always to pass on these increased costs to the market. Therefore, successful players not only need to continuously achieve higher volumes but also to reduce costs through regular value engineering, while maintaining quality and product innovations to attract customer preference.

According to CSO production of fans grew healthy 20% in quarter ended June 12 against 27% growth in the corresponding previous year. Crompton Greaves, Orient Paper, Havell's India and V guard industries, Khaitan Electricals, Polar International, Usha International are the leading players in this sector.

Crompton Greaves (CG), the electrical equipment major registered 8% rise in its consolidated earnings (after minority interest) to Rs 85.90 crore for the quarter ended June 2012 and its revenue was up by 15% to Rs 2811.14 crore. Growth at bottom-line for the quarter despite weak operating level performance where operating profit fell by 8% (to Rs 166.75 crore on 160 bps contraction in operating margin) was largely on account of lower depreciation and lower taxation. The company changed its accounting policy effective April 1, 2012 in respect of goodwill arising on acquisition of business. The company would be doing an annual impairment testing for goodwill instead of the current practice of amortization.

Consumer products business of the company has registered 20% rise in segment revenue to Rs 652.07 crore but hurt by contraction in margin, the growth at segment profit was limited to 11% to Rs 83.40 crore. Contraction in margin is largely on account of fierce competition in the market place and efforts of the company to retain its market share at the cost of margin.

Orient Paper & Industries

Orient paper & Industries, a Birla group multiple product company, has presence in paper, cement and fans business. The company has reported faded performance in the quarter under review with 18% decline in the net profit at Rs 48.88 crore over 23% increase in the total income from operations at Rs 668.45 crore. Revenues from electric fans which constituted 28% of the total revenues grew 18% to Rs 184 crore in the quarter under review. However, segment margins crashed 420 bps to 3.7% and pulled the segment profits down 45% to Rs 6.73 crore.

The Fan industry remains highly competitive with several organised players and a number of relatively smaller regional producers. So, despite wide fluctuations in the prices of key inputs like copper, aluminium, paints etc, the industry was not able to adequately pass on these increased costs to the market. As a result, the frontline players not only focusing on achieving higher volumes but are also intensifying focus on reducing costs through regular value engineering, while maintaining quality and product innovations to attract customer preference.

Orient Paper & Industries plans to install new high Speed Press for ceiling fans laminations, new energy efficient Powder coating plant cover motors, installation of 2 Automatic Stator at vendor place. It also plans to improve the OEE of various shops, relaying of Ceiling Fan assembly line etc. The company has also lined up various proposals for capacity enhancement for Portable fans, Hi perm ceiling and portable fan stators and portable rotor machining etc. These initiatives would help in reducing energy consumption, and enhanced capacity and productivity of the fan unit of the company.

Orient Paper & Industries introduced 900/1050 mm ceiling fan 'Quasar Orno in 4 shades to complete the range. 4 Blade 1200 mm Quadro orna ceiling fans in 4 shades, 1200 mm deco premium ceiling fan 'Adonis' in 5 new shades, 1200 mm High speed 'Speed King' Ceiling fan with innovative Nano painting, 1200 mm Dec premium ceiling fan Lenora in 4 new shades etc were launched The company also introduced 400 mm sweep low cost fan, 400 mm sweep high speed all purpose fan, 450 mm sweep Tornodo stand fan in plating finishes. Besides, it introduced Jet Cool Decor model fan for UAE, New Super air for Bahrain, New hurricane & subaris under light fan for Lebanon export & TPW fans as per SLS standard for Sri Lanka market. The company up graded TPW fans (7 Models) as per IEC standard for export market.

V Guard Industries

V - Guard Industries posted robust growth for the quarter. The Company net sales grew by 37% y-o-y in Q1'FY 13 to Rs 329.15 crore and robust 67% rise in net profit by to Rs 20.65 crore. The growth in sales is on the back of the sharp 59% growth in Electronics (40% of sales) to Rs 130.32 crore coupled with good 28% growth in Electrical/ Electro-mechanical business to Rs 194.22 crore (59% of sales). Operating margins improved by 90bps y-o-y to 10.4% and this led to sharp 51% jump in the operating profit to Rs 34.28 crore.

At PBIT level, margins from the Electronics slipped 120bps to 14.9% with this segment profit grew by robust 47% to Rs 19.43 crore. However, the margins from Electrical/ Electro-mechanical business expanded by 290 bps YoY to 7% and accordingly segment profit grew by sharp 119% to Rs 13.68 crore.

Focus for the coming years is to introduce more number of models in ceiling fan category and also energy saving models in category including TPW, increasing the dealer net work, obtaining star rating for the products etc. The Company is doing regular value engineering activities at the pilot production unit at Kala Amb, Himachal Pradesh and is expected to improve its performance in the coming years.

Havells India

Havells India (HIL) is fastest growing FMEG company (Fast moving electrical goods). Havells owns prestigious global brands like Crabtree, Sylvania, Concord, Luminance and Standard. Its 14 state-of-the-art manufacturing units in India located at Haridwar, Baddi, Noida, Faridabad, Alwar, Neemrana, and 6 state-of-the-art manufacturing plants located across Europe, Latin America & Africa churn out globally acclaimed products.

Net Income grew by 26% to Rs 1033 crore during the first quarter ended June 30, 2012 compared to Rs 822 crore in the corresponding quarter ended June 30, 2011. During the period under review EBIDTA grew by 36% to Rs 128.1 crore as against Rs 94.3 crore in the corresponding quarter previous year ended June 30, 2011. Net Profit grew by 24% to Rs 80 crore for the period ended June 30, 2012 compared to Rs 65 crore in the corresponding quarter previous year. All business segments have shown healthy growth during the first quarter with significant improvement in operating cash flows and ratios. Sales of switchgear division rose 15% to Rs 241 crore compared to Rs 210 crore achieved in the corresponding quarter of the previous year. The Cable & Wire division showed a healthy growth of 21% in net sales to Rs 431 crore as against Rs 356 crore. Lighting and fixtures segment registered revenue of Rs 150 crore as against Rs 121 crore showing a growth of 24%. The Electrical consumer durables grew by whopping 57% with revenue of Rs 210 crore as against Rs 134 crore in the corresponding quarter of the previous year. Fans division registered a strong growth of 42% quarter under review.

During the quarter, the company has launched (a) premium and unique range of Crabtree-Xpro range in South Indian Market (b) new products in the market - Solar Cables, Mixer Grinder and Home Safe Protection Devices Fitted With MCB (c) Expands the Havells Galaxy chain by opening 9 more stores in Guwahati, Nagaon, Meerut, Jaipur, Mirzapur, Bareilly, Chikmagalur, Ghaziabad and Bhubaneswar taking the total galaxy figure to 142.

Outlook

With expected increase in construction activities during the last 2 quarters that domestic demand for fans is expected to have a healthy growth again in FY13. However, the segment will remain highly competitive and pricing power is likely to be limited. Costs for the industry always remain under pressure because of fluctuations in prices of commodities like copper, aluminum, paints etc. While Aluminum prices are firming up marginally, subdued rise in copper prices gives breather to the industry in the current scenario. Upheaval in demand is the main important factor this sector growth.

Production of Fans in India