Acrysil – Kitchen sinks

I have a different opinion on product line expansion. As someone who has been in startup world businesses do not have a lot of luxury to present your approach in the most articulate and strategic manner. Sometimes you just try few new things and see what works. You drive your core business but you also try to see other avenues of growth.

Here i do see some sense in the way management is thinking. They are targeting the kitchen setup budget that the home owners have while building their house. They have a broad sum of money which they spend on sinks, hobs, ovens and other appliances. Generally this spending is done together so it makes sense to target this consumer need occasion. If you have the distribution strength and a brand you can leverage your association with overseas partners to expand your share of the kitchen budget pie. Bathroom sinks are also is an extension of this and probably a more immediate opportunity as product is much more similar to existing core portfolio. My feeling is that some things will work and some will not. Things like Oven and Dishwashers have strong established brands and it is easy to choose their products. There is also a strong after sales service and trust required in these products so are much harder to break this market. But sometimes decisions are made by architects or builders who may see some incentives in buying the bundle and that maybe and entry point for management.

I think company also would be aware of their strengths and weaknesses and in some cases it could be a distribution partner and be more of a trading channel for some newly launched international brand in some of these categories.

It would be interesting to see how it plays out and finally the proof will be in the execution over long term. Right now this will not move the needle on the performance but will come to play over a longer term time horizon.

Disclosure: Invested