| Hitachi Home (HHSL; BSE 523398) has during the year launched ACE FOLLOW ME (a feature where the cool draft of air follows the user in the room) and ACE CUT OUT (a feature of auto humidity control and it is in 0.9Tr and 1.2Tr). The company has started making its mark in the premium refrigerators market also.
HHLS has been changing its product mix in line with the change in customer's preferences. There has been a shift towards Split ACs (industry share has gone up to 50%) in the market place due to the narrowing of the price difference when compared to window ACs.
HHSL has introduced Auto Humid Control ACE Split AC, Atom Square and Quadricool to reaffirm its place as the innovative leader in the minds of the Indian consumers. The Ductable Category of products has immense growth potential and in a short period of time the company has made its mark in this segment.
Hitachi Home & Life Solutions (India) Limited (HHLS) is a leading manufacturer of Window ACs, Split ACs, Takumi range of Ductable Split ACs, Self contained packaged air conditioners, Set Free VRF systems and chillers. It is also marketing its range of Refrigerators and Washing Machines.
Not To forget the rural consumption
Emergence of retailers, nuclear families, increase in disposable incomes, growth in Tier II & III class cities all augur well for the growth of this industry.
Rural India's recently discovered fondness to consume everything from shampoo to motor vehicles has introduced a very useful product segment of Consumer Durables.
These consumer durables can be divided into three price baskets - a sort of equivalent of the "premium, regular and low priced" categories. Group I comprises a basket of basics like watches, radios, irons, fans etc., Group II comprises higher priced durables like television, mixers and music systems. Group III where we have concentrated and chosen, comprises of high priced durables like air conditioners, refrigerators, microwaves to mention a few.
The last group appears to be in the infancy stage but is explosively growing and is also a litmus test of whether rural India is integrating into the mainstream of New India Consumerism. The Indian market is fast moving towards high-end customized products, which are aesthetically designed to complement the modern households. The companies are thus concentrating to continuously innovate and come out with product variations across categories to meet the expectations of a varied class of customers.
In a sector where new products are being introduced with increasing frequency and the lifecycle of products getting shorter, research and development plays an important role. Hitachi has remained at the forefront of the air-conditioning industry due to its wide range of products available in the market.
New technological breakthrough allows Hitachi to provide higher quality, efficient and reliable air conditioning solutions.
Due to intensified competition, tight liquidity scenario and demand supply imbalances, the demand for consumer durable products has been under pressure in the recent past. The consequent strain on margins coupled with increased working capital and brand building investments has resulted in an increase in borrowed funds / capital, along with fewer options to protect cash flow for most players.
In future the parents' commitment to their Indian venture, sustenance of their own credit profile and the ability of their subsidiaries to further improve market position will be the key factors influencing their future growth and prospects.
Safe Harbor Statement: Some forward looking statements on projections, estimates, expectations & outlook are included to enable a better comprehension of the Company prospects. Actual results may, however, differ materially from those stated on account of factors such as changes in government regulations, tax regimes, economic developments within India and the countries within which the Company conducts its business, exchange rate and interest rate movements, impact of competing products and their pricing, product demand and supply constraints. Nothing in this article is, or should be construed as, investment advice. |
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