Wipro Consumer Care and Lighting (WCCL), the FMCG arm of IT major Wipro Ltd, expects to make bigger acquisitions and investments following its demerger with the parent company. ?We think it will give us greater flexibility in terms of investments and acquisition plans. However, from a business perspective, it will be business as usual,? Vineet Agrawal, president, WCCL told FE in an interview on Friday.
On Thursday, the $7.37-billion soap-to-software conglomerate, Wipro, had announced its plans to bring about a clear distinction between its IT and non-IT businesses. Under the demerger plan, the company will carve out a separate, unlisted entity (Wipro Enterprises) for its consumer care and lighting, infrastructure engineering and medical equipment divisions.
?The new entity will have a separate board of directors, resulting in greater focus. Now, we are close to 10% of Wipro, which is a reasonable enough size to chart our own course,? said Agrawal, adding that there is no plan to list the entity. ?We think it gives us a lot more flexibility to grow both organically and inorganically. Till it helps us, we will remain an unlisted entity,? he added.
Wipro expects the demerger to be over by April-June next year. ?Till the demerger takes place, we will continue to publish numbers because we will still be part of Wipro. After that, we are not obligated to announce results, but we will be talking about our launches and performance,? said Agrawal.
?We don?t see the demerger having any major impact on us. From a financial perspective, Senapaty will continue to look after the finances of all the businesses, while Pratik Kumar will look after the HR practices,? he noted.
In the second quarter ended September, WCCL posted revenue growth of 26% at R1,008 crore. Year-on-year (y-o-y), profit was up 29% at R113 crore. Santoor, the R1,000-crore flagship brand, reported value growth of 21.5% annually. Yardley India grew 53% year-on-year.
Internationally, China recorded 36% growth year-on-year for the division, while Vietnam grew by 30%, and Indonesia and the Middle East by 55% and 27%, respectively.
?We are seeing pressure in the institutions space because businesses are not growing, and new factories are not coming up. However, in the furniture business, we continue to do well, as we have grown 15% year-on-year.? In our Unza business (largely personal care products), we are seeing pressure in Malayasia and Singapore mainly because of the global slowdown,? said Agrawal.
Last quarter, WCCL announced acquisition of Yardley?s UK and Europe business (excluding Germany and Austria) from the Lornamead Group for about R30 crore. The company also acquired the UK-based heritage brand ?Woods of Windsor? from the Lornamead stable as it plans to ramp up its presence in mature markets. In FY12, Yardley and Woods of Windsor brands clocked revenue of $6.2 million in their home market, the UK.
Earlier this year, WCCL had rebranded several of its products, including Santoor, Wipro honey, Glucovita (Wipro?s energy drink), its CFL lights range and some products under Unza.
