Consumer electrical and electronics major V-Guard Industries is planning to set up three more factories in Gujarat and Telangana for kitchen appliances, batteries for inverters and fans to strengthen its foray into new fast growing business segments.

V-Guard, which earned about 30% of its annual sales (₹3,487 crore in FY 22) from home wiring and cables and another 15% from the legacy stabiliser business, is focusing on new business segments. "V-Guard now has 11 factories spread across India employing over 4500 people. We plan to add three more factories in Gujarat and Telangana for kitchen appliances, batteries and fans. This will entail an investment of ₹250 crore on machinery alone," Mithun K. Chittilappilly, managing director, tells Fortune India.

This is to focus only on consumer electrical and electronics, which has growth opportunities in the country. V-Guard is evaluating acquisition opportunities in new segments. "India's fast urbanisation and more disposable income with rural population is going to drive the growth of consumer electrical & electronics market in coming years," he says.

V-Guard forayed into kitchen appliances recently with the acquisition of Sunflame Enterprises (SEPL) for ₹660 crore in December last year. The Sunflame brand has a pan India presence with strong brand recall and makes products like cooktops, chimneys, pressure cooker, mixer grinder and small kitchen appliances. The kitchen appliances market in India, which includes mixer grinders, gas stoves, water purifiers and other small kitchen appliances is worth about ₹12,000-14,000 crore and is growing at about 8-10% a year.

The company also forayed into modular switches recently with the acquisition of the Indian business of Simon Group of Spain, a specialist in electrical switches, sockets, fan regulators and home automation products. Currently, the modular switches market in India is worth ₹6,000-6,500 crore and is dominated by companies like Anchor, Legrand and Havells.

Air Coolers, with a market size of about ₹4,500-5,000 crore and growing at about 15-20% a year, is another segment V-Guard is eyeing. The domestic air cooler market is highly fragmented with organised players like Symphony, Bajaj and Voltas accounting for only 30-35% market share.

The company is consolidating its entry into fans recently and has set up a manufacturing unit in Panipat, home for most Indian fan makers. Brands like Usha, Bajaj, Havells, Crompton and Orient are household names even among the rural population, helping the market to grow 5-6% a year to over ₹9,000 crore.

Another fast growing segment for V-Guard is water heaters, which has a market size of ₹2,500-2,600 crore and growing at 10-12%. The company has cornered a market share of about 14-15%. Similarly, solar water heaters is another new growing segment with 14-15% share, in a market of about ₹500-600 crore.

In the case of legacy businesses, Mithun says the company earns about 30% of its annual sales from home wiring cables. Total market size is about ₹16,500-17,000 crore and organised players like Polycab, Finolex and Havells account for about 62-65% of the market. The industry is growing at about 8-10% annually and the company has about 6-8% of the market share. Once the mainstay and first product of the company, it still has 42-45% market share in stabilisers. With technological advancements and solutions for erratic power supply, the stabiliser market in the country is now worth ₹1,700-1,800 crore and competition is from companies like Microtek, Livguard and Bluebird. Another major business segment for V-Guard is DUPS & Batteries, estimated to have a total market size of ₹11,500-12,000 crore and growing at about 8-10% a year. The company is estimated to have about 4-6% market share. Similarly, V-Guard has about 8-10% market share in pumps, which has a total market size of about ₹3,000-3,500 crore a year, says Mithun.

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