Vijay J. Mansukhani, managing director, Mirc Electronics. Photo: Abhijit Bhatlekar/Mint
Mumbai: Onida House, the suburban Mumbai address that hosts the headquarters of the eponymous television brand, may go on the block with the company divesting non-core assets to pursue growth, a top executive said.
Mirc Electronics Ltd, which owns the Onida brand, was one of the leading consumer electronics companies in the 1980s, and had popularized its colour televisions with the tagline of “Neighbour’s envy, owner’s pride”. However, the company ceded much of its ground in the 1990s with the entry of multinational consumer goods makers.
“Today, we can’t survive with operational excellence alone. We are open to looking at strategic partners and collaborative growth. We are prepared to explore. Today, you can’t stand alone. It requires extremely deep pockets to stand alone,” said Vijay J. Mansukhani, managing director, Mirc Electronics.
In December, the company had raised ₹144 crore in equity and warrants from stock market investor Ashish Kacholia.
Divestments of non-core assets are also on cards. “This (Onida House) is a ₹100-crore asset that we have. We could rent a similar asset for much lesser,” said Mansukhani.
Of late, large corporate houses have been selling non-core assets, including land parcels. Last year, Glaxosmithkline (GSK) sold 60 acres at Thane for ₹555 crore to Oberoi Realty. Mondelez International’s (formerly Cadbury) eight acres in Thane is also up for sale.
Over the last six quarters, Mirc Electronics has demonstrated profitable growth, inspiring much optimism among its owners. “We have seen a few ups and downs. But we have come back again,” said Gulu Mirchandani, chairman, Mirc Electronics, adding that the company today claims a premium for its products as it focuses on strong R&D and creating products that don’t exist in the market.
The company closed 2017-18 with a profit of ₹23.49 crore against a loss of ₹23.73 crore a year ago. Net sales, however, were stagnant at ₹728.12 crore, against ₹728.79 crore a year ago.
For fiscal 2019, Mansukhani is looking at growing the air conditioners and television businesses by 20%, each, and the washing machines business by over 80%.
Mirc Electronics also hopes to benefit from the rising tempo over trade wars, as it has its own manufacturing capacities. “We expect 10% of our revenues this year to come from captive manufacturing,” said Mansukhani, adding Mirc has already signed its first customer, a brand that used to previously import panel televisions is now working with them. “We see more opportunities coming,” he said.
India’s ₹72,000 crore consumer durables industry grew at 7.5-8.5% in financial year 2018 and is expected to grow in double digits during the current financial year, according to the Consumer Electronics and Appliances Manufacturers, an apex all-India body of the consumer electronics, home appliances and mobile industry.