Power Of Legrand [Mar 2012]

Palash Nandy, Vice President – Marketing, Legrand Group India shares his views on the power industry and the factors that facilitate the group to be on topMr. Nandy, could you share your perspective on the electrical and power industry?Fundamentally, we are quite bullish about the industry because of many reasons. One of the reasons being India is clearly a power deficit country; therefore we have to build more power generating devices. Secondly, owing to increase in urbanisation and with people moving from rural to urban India, the need for power will only increase. This deficit can keep growing unless and until enough power is generated. Apart from that, as far as Indian Government is concerned they are investing in terms of rural electrification. This will again need more generation of power. As a consequence, the power industry will go up and there will be little difficulties now and then.
Primarily, we see the electrical products industry growing. On the other hand, this industry is also dependant on the construction industry and we see in the last 6-7 years, the construction index has been two times the GDP. So in the current financial year, it would be to the tune of 15 per cent assuming that the GDP would be around 7.5. If the construction industry is growing at 15 per cent it would require electrical and data products because today in any building, data and electricity both are required. That’s exactly the business which we are into.
What kind of opportunities are you expecting from increased expenditure in the power sector?For us, we are in the final leg of distribution, so we are into final distribution, extra voltage and data. As long as the construction industry continues to grow, our opportunity will continue to grow. Secondly there is a value addition that is happening within every home or office. Till yesterday people needed simple switches and sockets and now they are moving upwards in terms of value products and are looking for smart products in terms of home automation. In office spaces, people are talking about energy efficiency and therefore lighting management solutions. So there is an upgradation that is happening – our aspirations are changing, disposable income is increasing – all of these combined together spells good news for us.
Did you launch any new products recently?We have recently launched 5 products – 3 of them are in the power and enclosure segment namely a panel, a range of capacitors, and a range of metering devices. We have also launched a multi-apartment door entry system and an anti-bacterial range of wiring accessories.
Could you highlight the impact of recent economic volatility on your sector?We don’t see any problem. Today, with the rapid urbanisation, the demand of residential spaces is ever increasing. Though there is a negative sentiment apparent now especially in the tier 1 cities, the things will start getting better soon. However, the volatility has no impacts over the performance of residential real estate industry in tier 2 and tier 3 cities. The scenario remains same for the commercial spaces as well. Therefore, with the growth of residential and commercial space sectors, we do not see much negative impacts.
Brief us on your expansion plans.We intend to continue to grow aggressively and for that whatever is required in terms of investment, capital expenditure, manpower etc., we will do. That’s an ongoing process and will keep on happening. 
We have been extremely successful in the past quite a few years and the statistics show in the last 10 years we multiplied our turnover by 10 times. That gives an idea of how much we have grown which amounts to 29 per cent CAGR growth year on year. This year we have grown by 35 per cent. It’s been a tremendous performance and the reason for this performance is for us to introduce the right products suitable to the Indian conditions.
In addition, the Indian consumer mindset is getting changed from being price conscious to being value conscious – it’s no more the case of buying cheapest products. Also, in India, we have 25 offices, 3 factories, 700 stockists, close to 5,000 retailers, and 1,000 people working for us. So, we have a good infrastructure in place which we intend to utilise, take advantage of the opportunities that India can show.

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