Chairman's Message

The new entity is born out of our commitment to become a leading force in the consumer space and marks a new strategic direction for us. The Company consolidates the marketing and distribution of Building Products, Consumer Products, and Retail divisions, and leverages their collective brand equity, innovation power and distribution muscle, to target the massive opportunity present in India today.

Dear Shareholders

I am delighted to present the inaugural Annual Report of Somany Home Innovation Limited (SHIL) for the financial year 2019-20.

The new entity is born out of our commitment to become a leading force in the consumer space and marks a new strategic direction for us. The Company consolidates the marketing and distribution of Building Products, Consumer Products, and Retail divisions, and leverages their collective brand equity, innovation power and distribution muscle, to target the massive opportunity present in India today.

The Company’s product portfolio spans leading brands across key consumer categories and price points, ensuring that we are able to participate in every consumption opportunity in the market. The COVID-19 pandemic has been a sobering moment for the world at large. It has injected uncertainty into the macro environment, exacerbating the cyclical slowdown in the Indian economy and putting to test our resilience, as individuals and as organisations.

Consequently, the rules of ‘normal’ are being rewritten every day. Business models are being challenged and traditional ways of working are being upended. Countries will have to reimagine its contribution to a world that is likely to be radically different than the one we have known so far. The corporate narrative will have to reinvent itself to stay relevant in the post-pandemic world order. Companies that will survive and prosper in this uncertainty are those that have the resilience to adapt rapidly to changing circumstances, and the commitment and culture to deliver broader societal value.

At SHIL, we see ourselves as enablers of a better life for consumers. All our brands have their own character and operate as an independent entity in the market but united by a common goal – to offer world-class products. Every innovation under our roof is a perfect blend of intelligence, functionality and aesthetic design, and specifically tailored to appeal to discerning consumer segments. With more people working from and staying in their homes, we are providing Indian families and households with products that will accentuate their sense of comfort, ease and elegance.

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Performance Review

SHIL’s diversification across various business streams signifies the Company’s competitive advantage and its ability to deliver results even through economic and industry cyclicality. In its first year of operations (post demerger), the Company recorded a consolidated revenue from operations of C1,613 crore with a consolidated EBITDA of C112 crore. Of the total revenue, the Consumer Products Division contributed ~ C362 crore, the Retail Division contributed ~ C90 crore and the Building Products Division contributed ~ C1,161 crore.

We made great strides this year in several key areas, we launched new innovative products designed to deliver outstanding consumer experiences. We reinforced our leadership in the consumer appliances industry, translating our vast customer insights into a superior array of offerings. We continued to improve our cost efficiency as well as execute on cross-business synergies throughout the Company to set the foundation for profitable growth in the years ahead.

Growth Drivers

The momentum round the year, was anchored around three interlocking themes.

Our first growth driver is tech-enabled products. With greater network connectivity, data speeds will become even faster, and computing technology will evolve as well. These two changes are bringing about the Internet of Things (IoT), where everything is connected. Smart, remote-controlled and connected appliances allow us to remain in closer contact with the consumer throughout the lifespan of the product. In a sense, this is an attempt to rebuild the traditional bond between an enterprise and its customers, in a way that present times demand. We are strengthening our initiatives for providing futuristic devices and solutions. Our breakthrough iPro IoT range includes India’s first ever IoT-enabled chimney, water purifier and water heater. The possibilities for connected devices and IoT technology at home or in our workspaces are endless, and we are working to bring more such smart products to the market.

Immersive shopping experiences represent our second growth driver. The advent of online marketplaces has compelled stores to play to their strengths and provide a truly enthralling and memorable shopping experience for customers. To this end, our kitchen galleries and Lacasa concept stores cement customers’ affiliation for our brands and products, immersing them in a world of possibilities for their dream kitchens and homes respectively.

Our third and final growth driver is our foray into new businesses. During the year, we forayed into the new segment of super-premium and premium tiles in Building Products. We introduced ‘NEOM’ as a niche neo-modern brand to break the clutter in the tiles category. We also leveraged the established ‘Hindware Snowcrest’ brand to launch ceiling fans under Consumer Products to cater to the premium as well as mass segment. Furthermore, we partnered with the Italian company Formenti & Giovenzana (FGV) to supply quality fittings for modular furniture and kitchen arrangements in India. Consistent expansion into new categories helps us find opportunities for growth and allows us to address preferences across the consumption spectrum, evolve best practices and recognise different market maturities and the role our brand portfolios plays in each of the markets.

In particular, our Lacasa chain of concept stores showcases the best range of our bathware and tile products and help consumers envision their dream spaces by experiencing the product performance and features first-hand. In this financial year, we launched the sixth Lacasa store in Delhi – a 7,000 sq ft art gallery that takes customers, influencers, architects and interior designers across an effortless journey harmonising the best parts of our range of luxury and premium sanitaryware, bath fittings and premium and super-premium tiles. And our 102 kitchen galleries enable customers to experience our complete kitchen appliances range under one roof.

Looking Ahead

We are successfully harnessing the power of information technology to drive better business integration and continuous improvements across the businesses. We are evolving a cohesive ecosystem of reputed brands, trusted community of suppliers, vendor partners and influencers, exemplary stores and strong marketing outreach, to collectively withstand the challenges, tap into the emerging opportunities and achieve results that are profitable for all our stakeholders.

We will continue to use our brand strength to support investments in consumer-driven product innovation, target specific consumer trends and develop new generations of products with a clear proposition. We will also continue to focus on expanding our presence in the emerging cities and maintaining a robust position in the existing ones. The hard work and commitment of our highly skilled team of experts, creative thinkers and go-getters, are essential to meet operational excellence targets and move toward profitable growth. As a top priority, we are taking incremental steps to institute a clear company purpose and culture that attracts and engages new talent.

Positioned for Impact

Every day, we come to work with the singular objective of how to turn houses into homes, supporting the dreams and ambitions of aspiring Indians. More than anything, the new world order will emphasise the importance of having a home that makes us happy.

Today, we are a stronger company with diversified and growing businesses, applying our learnings across the spectrum. While there is more work to be done, as I look around in the Company, I am confident in our strategy and plans to deliver sustainable top and bottom-line growth in 2020 and beyond.

I thank you, our shareholders, for your trust and confidence throughout our transition. And I am excited about the future, as we set out to extend our horizons further, trace a higher growth trajectory and set new benchmarks for excellence.

Warm regards

Sandip Somany