Bajaj plans Rs 500-cr capex in 18 months; new Pulsar by January

MUMBAI: The country's second-largest motorcycle-maker Bajaj Auto will invest Rs 500 crore to add capacity and develop a new variant of the flagship Pulsar over the next 18 months. "We are investing Rs 500 crore till FY'13 for expansion. We had already spent Rs 150 crore last year," Bajaj Auto Finance President Kevin D'sa told reporters here today. The proposed capex will include development cost of the new Pulsar, which will be based on a new technology, and will be launched in December/January, the company Managing Director Rajiv Bajaj told reporters a day after announcing the Q2 numbers. The company reported a muted 6 per cent rise in net income to Rs 726 crore for the September quarter on a revenue of Rs 5,342 crore, which rose 21 per cent as its sales volume grew 16 per cent to 1,164,137 units. The lower numbers were primarily due to a forex loss of Rs 95 crore on valuation of forward contracts that were charged to the profit and loss account in this quarter. With production of over 2.25 million units in the first half, the Pune-based company believes the momentum is in place to end the year at around 4.5 million units. "We expect to produce about 4.5 million vehicles and hope exports will surpass 1.5 million units this fiscal," Bajaj said. Exports make up 35 per cent of total sales, he added. Bajaj pointed out that there are concerns, specifically in terms of domestic motorcycle market share. "Our market share is going to stay at 27 per cent for now, but as the Boxer catches on and as we introduce the new Pulsar in January, I certainly hope that we will gain market share. I hope for 30 per cent market share by the time we finish this year," he said. As to exports, he said Latin America and African markets will be the future growth drivers. Bajaj is present in Argentina, Columbia and Peru, and is looking at entering into Brazil. "Brazil is a very competitive market and we are looking at devising business model there," International Business Head Rakesh Sharma said. It is also eyeing Thailand and Vietnam, but has no plans to enter into the Chinese market due to intellectual property rights issues, Bajaj said. Bajaj received Rs 860 crore in August and is expected to get another Rs 240 crore in the next couple of days, out of Rs 1,100-crore outstanding VAT refunds, D'sa said. The Bajaj counter gained 1.72 per cent to Rs 1,641.30 on the BSE.

Havells to enter small home appliances business

NEW DELHI: Electrical equipment maker Havells India will start selling small home-andkitchen appliances from July, hoping to profit from a Rs 5,200-crore market currently dominated by Philips, Panasonic, Morphy Richards and Bajaj.

Havells' product line-up will include mixers, irons, hand blenders and cooking and brewing appliances.

"The small home appliances segment is all set to boom," said Havells India joint managing director Anil Gupta said, adding that Havells would use its brand recall in the lighting segment to position itself in the home appliance space.

Havells will outsource 70% of manufacturing to local vendors and the rest to its partners in China , where its design centre will be responsible for developing the products.

The company, 30%-owned by QRG Enterprises, plans to invest Rs 70 crore in marketing its small appliances range over the next two to three years. A part of investments will also go into research and development.
Sales of domestic home appliances are growing at 15-18% every year. Premium appliances, which contributes a fifth to the total market, are growing even higher at 30-35%.

Gupta said the products would be priced competitively and will be comparable with those of Philips and Panasonic.
Some other prominent players in the segment include Usha and Maharaja Whiteline.

Havells products will be initially sold in top 40 cities through some 4,000 outlets retailing electrical goods. The products will also be sold through 115 exclusive Havells Galaxy stores, which will be increased to 200 by the end of this financial year.

The company also plans to export its products to Latin America and Thailand using the distribution channel of Sylvania, which it bought in early 2007. This acquisition had catapulted Havells into the top league of lighting equipment makers, behind Philips, Osram and GE.

Havells, which clocked a turnover of. Rs 5,600 crore in the year ended March'11, also sells fans and launched its water heater range in October last year.