Expecting strong summer demand as partners have begun stocking: Indkal CEO

On the cusp of another hot Indian summer season, brands and retailers are stocking up with air conditioners and other cooling solutions as orders have already started flowing in, Anand Dubey, Chief Executive Officer of Indkal Technologies told DH’s Sonal Choudhary in an interview. The consumer electronics manufacturer is also set to launch Acer’s smartphones in the Indian market after months of delay due to a slump in demand, Dubey said. Edited Excerpts:

How are you anticipating this summer to be?

I think there is a very comprehensive optimism about the AC season, it looks very promising. We're seeing strong demand from our distribution partners to stock up and then sell to retailers. So I think there's a general optimism that is floating in the market for the summer season. The only consideration that we have to have is on the supply side as there have been some issues with regards to the supply of compressors like the change in guidelines by the Bureau of Indian Standards and then there are various issues affecting it.

The Acer smartphone was planned to be launched in mid 2024. What caused this delay? What range of smartphones are you focusing on and why?

The reason we delayed the launch was a weak demand in the market for electronics and smartphones in general.The segment that we are eyeing saw a degrowth in the market in 2024 but we know that it is more of a temporary slump and now that is happening on March 25. We feel strongly that products ranging between Rs 18,000 - 20,000 will do better this year as these segments are starting to see growth in the market even in terms of volume. For products priced above Rs 20,000, we will see a double digit growth in terms of volume this year.

Are there any more deals in the pipeline as well as talks for the next round of fundraise?

We will re-evaluate our fundraise plans once we close this financial year. For 2025, smartphones are where we will park most of our efforts hence there won’t be much action on new brands and product lines. Our expectation is to strengthen our current portfolio, air conditioning obviously we will look to capture a significant market share this year. Hence, you will see us strengthening the existing portfolio more than launching something new this year.

Are you on track to achieve revenue and production targets, because that’s your cue for scaling up further?

We had to make an adjustment to our previous gross revenue target of Rs 20,000 crore and reduced it to Rs 15,000 - 16,000 crores after Diwali, as we saw a substantially softer demand in the market. We've also seen a lot of competition because there was a lot of liquidation that happened in the market which has obviously impacted profitability not just for us but every other brand. I think we will still remain profitable, however, its degree will come down for sure.

There's a big focus on retail expansion too, which is presently at 12,000 locations. We are trying to reach more pin codes and have a retail presence whether through physical or through e-commerce or both and a big part of our effort this year to get the growth is to try and improve our offline retail presence by at least 50%.

A majority of your manufacturing is being done locally, have you managed to scale that up? Have you faced any headwinds in local manufacturing?

It's evolving for each product, like for ACs and washing machines it's higher than 70% while slightly lower for refrigerators and television. It’s improving with time and we will be higher than 70% presently because we started sourcing more products locally. A big part of this gap will get covered once the semiconductor capability is built, probably in the next couple of years, hence, a lot of our supplies on these components will become local. At least 30% of our exports will get covered in products like televisions and smartphones.