ET NowIn a chat with ET Now, Achal Bakeri of Symphony, shares his thoughts on the 7th Pay Commission recommendations. Excerpts:
ET Now: Could such moves increase consumption of white goods products at large?
Achal Bakeri: Yes. One lakh crore is being pumped into the economy just by the central government employees. On top of that, you may have twice the amount of money going in from the state government employees and autonomous institutions. The combined effect of that amount and then the multiplier effect of that when the money goes through the economy would be several lakh crores of rupees.
So not just white goods, but two wheelers, automobiles, housing etc will get a boost. Most of our customers are middle income customers from tier two to tier four towns. There are some towns where majority of the middle class homes are government employees, so this will certainly be a boost to our company. Hopefully we will see the beginnings of good times ahead.
ET Now: What are you at Symphony targeting in terms of revenues for the entire year?
Achal Bakeri: This Pay Commission does not really change what we would do or what our expectations are from the future. Symphony will continue to grow at a CAGR, which is an extrapolation of its historical CAGR. This is one development that does not change what Symphony’s future is going to be like.
ET Now: In the past what we have seen that if disposable income increases, people tend to upgrade their preferences. So if the large market is unorganised, they might move to the organised sector. If they move a notch or two within the organised space, could that help companies like yours which is largely dominated by the unorganised market?
Achal Bakeri: What you are saying is absolutely right. At times like these, consumers stand to upgrade from the unorganised to the organised sector. Even within the organised sector, they move from lower brands to higher brands, so this is likely to happen.
ET Now: Are you enjoying a 55% market share currently? Do you sense that you could see a sizable uptick even there?
Achal Bakeri: We would rather want the size of the pie to increase. The market share per se is really an abstract number. What really matters is that the size of the pie increases. With new competitors getting into this category, the size of the business will be growing. So what happens to the market share remains to be seen but the overall category will grow and as that happens, Symphony will be the biggest beneficiary, considering the fact that we are the largest manufacturers. So it will certainly have a positive impact for the company.
ET Now: Could such moves increase consumption of white goods products at large?
Achal Bakeri: Yes. One lakh crore is being pumped into the economy just by the central government employees. On top of that, you may have twice the amount of money going in from the state government employees and autonomous institutions. The combined effect of that amount and then the multiplier effect of that when the money goes through the economy would be several lakh crores of rupees.
So not just white goods, but two wheelers, automobiles, housing etc will get a boost. Most of our customers are middle income customers from tier two to tier four towns. There are some towns where majority of the middle class homes are government employees, so this will certainly be a boost to our company. Hopefully we will see the beginnings of good times ahead.
ET Now: What are you at Symphony targeting in terms of revenues for the entire year?
Achal Bakeri: This Pay Commission does not really change what we would do or what our expectations are from the future. Symphony will continue to grow at a CAGR, which is an extrapolation of its historical CAGR. This is one development that does not change what Symphony’s future is going to be like.
ET Now: In the past what we have seen that if disposable income increases, people tend to upgrade their preferences. So if the large market is unorganised, they might move to the organised sector. If they move a notch or two within the organised space, could that help companies like yours which is largely dominated by the unorganised market?
Achal Bakeri: What you are saying is absolutely right. At times like these, consumers stand to upgrade from the unorganised to the organised sector. Even within the organised sector, they move from lower brands to higher brands, so this is likely to happen.
ET Now: Are you enjoying a 55% market share currently? Do you sense that you could see a sizable uptick even there?
Achal Bakeri: We would rather want the size of the pie to increase. The market share per se is really an abstract number. What really matters is that the size of the pie increases. With new competitors getting into this category, the size of the business will be growing. So what happens to the market share remains to be seen but the overall category will grow and as that happens, Symphony will be the biggest beneficiary, considering the fact that we are the largest manufacturers. So it will certainly have a positive impact for the company.
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