V-Guard Industries is up 28% in 2021. The company, which is a major player in the South India market, is now venturing into new geographies and making significant investments to improve its distributor base.

Mithun Chittilappilly, MD of the company said that they are hoping to achieve a 50-50 split between the South and non-South market in the next 5 years.

“We are seeing the non-South market growing faster and that has been the case for last many years. We hope that in the next 5 years we can hit 50-50 split. We will always have a higher South skew because we are constantly launching new products and we traditionally launch them in Southern markets first before taking them to our newer markets and so always the skew will be slightly tilted towards the South. But if we achieve a 50-50 split, I think we can say that we are truly achieved the goal to become a pan India company,” he said in an interview with CNBC-TV18.

Chittilappilly also said that they would like to increase gross margin by 1% every two years.

“We have indicated that we would like to increase gross margins by about 1% every two years and we are well on track with that primarily on two reasons. One is that we are constantly working on improving efficiencies in supply chain and moving from outsourcing to own manufacturing. The third thing is the newer categories that we have got into in the last 7-8 years, which is gaining scale, they all come with higher inherent gross margin vis-à-vis the traditional category. So, these are the three reasons why this will happen,” he said.

He also said that currently, 50-55% is own manufacturing. But he expects it to rise up to 60% in coming years.

He said that the company has increased prices by 5-7% in Q4 due to an increase in input prices. “Most players in the industry at varying times in Q4 have taken price increases because of an increase in commodities has been sharp and it has been very quick. So, we have no option but to increase,” he said.

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(Edited by : Abhishek Jha)