Anchor Electricals switches to new growth engines

After being a market leader in switches, Anchor Electricals is turning its focus on new segments like LED lighting, solar panels and fans as its next engines of growth.

Anchor Electricals was acquired by Panasonic Corporation in 2007, and since then, its switches have been marketed under the Anchor By Panasonic brand.

As a subsidiary of Panasonic in India, Anchor wants to build its LED lighting portfolio under the Panasonic brand and is targeting revenues of ₹600 crore from the segment by 2018.

“LED as technology was discovered by a former employee of Panasonic in Osaka and we want to succeed in this segment in India and treat it as our next growth driver under the Panasonic brand as the branded LED market is poised to grow from the current ₹7,000 crore to ₹18,000 crore. Today our share is at 4 per cent, but we want to take it up to 10 per cent with revenues of ₹600 crore by 2018,’’ said Dinesh Aggarwal, Joint Managing Director, Anchor Electricals.

However, there is tough competition in the LED lighting segment with stalwarts like Philips (market leader), Crompton Greaves, Wipro, Bajaj and Havells along with Chinese lighting makers flooding the category.

“We want to stay away from the decorative lighting segment since it is a high risk business but focus on professional lighting where we will be competing against the likes of Philips. Currently, we have third party manufacturing, but would consider manufacturing if there are enough volumes,’’ he added.

Another area of focus is going to be the solar rooftop business which it entered about two years ago. “Solar rooftop panels is another line of business which we want to focus.

It currently has a turnover of ₹120 crore and we expect it to go up to ₹500 crore by 2018. We also expect this category to contribute almost half of the company’s turnover by then,’’ he added.

Other categories like fans is also being pushed to garner additional share where it will be pitted against big players like Bajaj and Crompton Greaves.

“We have a 4 per cent share in fans but are aspiring to be one of the top three players and are targeting a turnover of ₹400 crore,’’ he said.

Currently, switches (36 per cent share) command 50 per cent of the company’s turnover of ₹2,900 crore, followed by other segments such as wire and cables and switch gear.

In switches, it has been using both brands of Anchor and Panasonic to address mass and niche offerings respectively and competes against Legrand and CrabTree.

A name change is also being contemplated by the company now that it is a subsidiary of Panasonic.

“While we will continue to keep the Anchor by Panasonic brand name, the name of the company is likely to be Panasonic Electric or Panasonic Eco Solutions in future,’’ he said.