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Various macro economic indicators, though improving, are yet to translate into demand in rural areas, according to Bajaj Electricals MD & CEO Anuj Poddar.
In an interaction with CNBC-TV18, Poddar said that people will spend more when they have some extra cash to do so. He cited recovery of FMCG (fast moving consumer goods) segment as a primary indicator for rural demand recovery, adding that it will take another quarter before demand revival starts to reflect in the FMEG (fast moving electronic goods) space.
A recent newspaper report suggested that Bajaj Electricals is looking at boosting exports to 5 percent of the overall revenue within the next three to five years and grow it to 10-15 percent by 2030.
In the financial year 2020-21, it had exports worth Rs 40 crore which reached Rs 75 crore in financial year 2022. For the current year, the company is targeting exports worth Rs 125 crore. Poddar cited macroeconomic challenges and a depreciating currency for this year being tough for exports.
"Strategically, long term, we are looking at exports as a growth area and that is why the guidance of 10-15 percent by 2030," the MD & CEO of the electrical equipment manufacturer said. "We will use this period to expand our relationships in terms of channel and distribution networks across some of these markets."
Poddar is hopeful of exports becoming a more meaningful revenue stream over the next 3-5 years.
The contribution of premium fans to Bajaj Electricals' overall sales has grown from 6 percent earlier to over 19 percent now. Without going into specific numbers, Poddar said that he is expecting the contribution from premium fans to go up to 30 percent over the next two years. The company intends to start having a more "optimal product mix" within the fans business.
Within the electrical fans market, the company is now moving closer to breaking into the top four players from the current No.6 or No.7 position. Over the next couple of years, Poddar wants to continue to improve the ranking over the next couple of years.
However, Poddar mentioned that for a double-digit margin it will take at least another 18 months, despite the raw material prices coming off. As far as the ongoing demerger process for its power transmission and power distribution business, Poddar said the company is well on track.