Walton grows riding on TV and AC business

With a 66% share of the refrigerator market already in its hand, Walton is now inching towards sealing the leading positions in television and air conditioner sales as well.

Over the last four consecutive financial years till FY21, AC business jumped by 273% to Tk349.56 crore and TV sales grew by 112% to Tk784.18 crore during the period, according to Walton's audited financial statements.

Even the 66-day shutdown could not dampen its growth in TV and AC businesses – 93% and 55% respectively in FY20. But the country's electronics and home appliance giant registered a 39% fall in its refrigerator sales that year.

On the other hand, Walton's nearest competitor, Singer, engaged in electronics and home appliance business since 1979, suffered losses owing to the pandemic.

Firoj Alam, chief marketing officer at Walton, told The Business Standard that Walton has put its foothold in the global market after meeting local demand.

With a vision "Go Global 2030", Walton wants to become one of the best global electronics brands by the next nine years, said Walton Hi-Tech Industries' Managing Director Golam Murshed at a roadshow, which was organised by the Bangladesh Securities and Exchange Commission in Switzerland on 22 September.

TV market

According to the research firm LightCastle Partner, the country's TV market stands at Tk3,500 crore at the end of the 2020, with Walton holding a market share of 27%. 

Apart from Walton, other local companies are Rangs, Vision, Singer and MyOne, whereas foreign brands include Sony, Samsung, Panasonic, Toshiba, Philips and LG.

At present, Walton's TV production capacity is 8 lakh units annually. It also exports TV to European countries such as Romania, Poland and Greece.

Firoj Alam said, TV export is easier than that of refrigerators. So, the company is trying to increase TV exports to European countries.

AC market

Increased urbanisation, increased global warming and increased purchasing power are the factors driving the growth in the country's AC industry. In the summer season, the highest sales of AC are generally witnessed. 

Currently, 25 local and foreign companies are selling ACs in the country.

In the last five years, AC demand has increased at the rate of 20%-25% per annum. The current AC market size stands at Tk2,000 crore, while local companies have a 40% market share, as per the LightCastle Partner.

The major player in this sector is Esquire Electronics, which offers AC from the General brand. Its total market share is 35%.

Since 2010, Walton has started manufacturing and assembling ACs at affordable prices and its market share stands at 17%. At present, its production capacity is 1.50 lakh units annually.

Future plan

Walton made a Tk5,000 crore new investment plan last year. It has submitted its plan to Bangladesh Economic Zones Authority to acquire 300 acres of land at the Bangabandhu Sheikh Mujib Shilpa Nagar in Chattogram. The newly-built facility will be its second unit along with its current manufacturing facility in Chandra, Gazipur. The investment will be made over a period of eight years.

Stock performance

Walton got listed on the stock exchanges in 2020. Its share price fell by 1.59% and closed at Tk1,296 at the end of the Sunday's trading session.

For the last fiscal year, it declared a 250% cash dividend to general shareholders and a 170% cash dividend to sponsors and directors.

In the last fiscal year, its earnings per share was Tk54.21, which was 124% higher than in the previous year.

Out of the total share, its sponsors and directors hold 99.03% shares, institutional investors have 0.39%, foreign investors have 0.10% and general investors have 0.48%.

The Bangladesh Securities and Exchange Commission directed the company to offload 10% share in the capital market.  Following the commission's directive, Walton's share price dropped by 16% within four days. Due to the bad impact of the securities regulator's decision, the company seeks more time two offload the share.