We're expecting 3-5x growth from domestic initiatives: JSLL Lifestyle
The company sees a massive potential for expansion and growth in the coming years on increasing demand for stainless steel in home decor, plumbing and infra space
In recent years, stainless steel has seen another avatar. Consumers have shifted from traditional crockery choices to stainless steel to the extent that it has become a lifestyle, if not a luxury, option for them. Today, stainless steel is fast emerging as a desirable lifestyle accessory. Rajesh Mohata, Chief Executive Officer and Executive Director, JSL Lifestyle (JSLL), in an exclusive interview with Bizz Buzz, says, "there is an increased demand for stainless steel not just in domestic households (home decor, crockery, utensils, and more) but in major infrastructure projects such as railway, airports, metro lines, and more"
JSLL is looking into the expansion of its current projects and aims to include manufacturing components pertaining to pharmaceutical companies, boiler industries, agriculture, food processing industries, and more
The company expects a ballpark of 2500 crore in the next three years as a whole, and 5 crore owing to our novel lifestyle sector expansion. Thus, overall, we are anticipating positive performance in the next three financial years
What is the roadmap you have set for the company?
At JSLL, we believe in planning meticulously on the basis of future potential, growth projections, and an impressive novel product line-up. In an effort to capture a larger chunk of stainless steel applications in the lifestyle market, we have begun the process of enhancing our capacity and diversification.
Our primary aim is to contribute to the government's overall vision to facilitate seamless last-mile connectivity and ensure the smooth mobility of people, goods, and services from one transport to another. To this effect, we have been involved in various infrastructure projects propelled by the PM's Gati Shakti Masterplan, which includes railways, airports, metro lines, and more.
Most of our growth plans and investments have been geared towards improving ESG and incorporating practices that prove beneficial to our overall business.
Another segment we have recently ventured into has been real estate, since there are ample opportunities and new projects around the country. The years have brought us stellar demand from the infrastructure and homeware segment.
JSLL is always looking into the expansion of its current projects and aims to include manufacturing components pertaining to pharmaceutical companies, boiler industries, agriculture, food processing industries, and more. The scope for stainless steel fabricated equipment is spreading rapidly, creating opportunities for the economy as a whole.
With our new Lifestyle segment, we aim to achieve a ballpark of 2500 crore (overall: tentative numbers) in the year 2025. With this merger, we aim to not only expand our reach in the country but also offer quality lifestyle choices to its people. We are committed to creating an 'aspirational stainless culture' in India operating in both B2C and B2B domains.
How is the company positioned in the marketplace?
Stainless steel is now emerging as a much-preferred choice among lifestyle options. It is user-friendly, is not reactive to food or drink, and easy to maintain. Yet, stainless steel makes up for a rather minuscule portion of the market share - roughly 0.3 per cent, only because consumption is lower than production.
However, we predict this usage can constitute up to 3-5 per cent of the market share if used properly, especially with the advent of our merger. JSL's overall investment blueprint for the US market, to produce American melted and manufactured steel at a total of 4 mtpa is estimated up to $1 billion. The company has also ventured into the European market, making its mark on the world (Indonesia, Italy, etc).
A whopping 33 per cent of our business comes from the B2B segment where we supply our manufactured products to various businesses. JLLS is a White Labeler for such firms or we provide them with OEM supplies. Early steel supplies from China, such as for wind turbines, are now being replaced with Indian-made stainless steel, which we provide.
After the merger, the company is estimated to be counted among the top 10 stainless steel manufacturers worldwide. JSLL is estimated to produce returns of at least 5 crore in three years (especially the lifestyle venture).
Lastly, the company's exploration of commercial kitchens has catapulted into increased demand for the same by hoteliers and chefs alike. We have manufactured and set up a minimum of twelve kitchens in a year, and the number is still expanding.
What are the Investments and growth opportunities for JSLL?
JSLL is persistently looking for viable investment and growth opportunities so as to enhance our value offering. Currently, a substantial amount of infrastructure development with respect to railways, airports, metro lines, etc. is underway.
In novel efforts to expand our two railway coach manufacturing plans - in Gurgaon and Chennai, we have undertaken advanced stages of commissioning. This particular venture is estimated to be complete in the next financial year. These expansions will assist us in meeting any additional demands from the railway. JSLL is constantly looking to work on technological collaborations in order to provide larger components to manufacturing firms.
There are burgeoning opportunities in the infrastructure sector. The introduction of the Prime Minister's Gati Shakti initiative has given a great impetus to infrastructure building. In addition, the real estate sector continues to flourish, giving rise to greater infrastructure requirements across India. Coupled with the trend of embracing more aesthetics and better quality and the increasing needs in the home decor, plumbing and infrastructure space, we see massive potential for expansion and growth in the coming years.
What are JSLL's Plans for 2022 and the next 3 years?
For the current fiscal year, it is safe to say that we are being cautiously optimistic as the revenue projection stands at around 20–22 per cent; our projected numbers sit at approximately 40-50 crore per annum.
As a company, we've been fortunate to experience strong growth over the last year; our revenue grew by almost 52 per cent with a projected turnover of approximately Rs 450 crore for the last fiscal year (2021–2022).
In the next three years, we plan to expand our existing plants so as to facilitate larger components in manufacturing. Our contribution and involvement in the PM's Gati Shakti initiative has ensured we have a substantial amount of infrastructure development taking place in terms of railway stations, airports, metro lines, etc.
Our estimates state JSLL will preside over at least 5-6 per cent of the total market share if our marketing strategies and product quality are appreciated by our audiences. Coupled with the trend of embracing aesthetics and the increasing demands in the home decor, plumbing and infrastructure space, we see a massive potential for expansion and growth in the coming years.
The company expects a ballpark of 2500 crore in the next three years as a whole, and 5 crore owing to our novel lifestyle sector expansion. Thus, overall, we are anticipating positive performance in the next three financial years.
What has been the organic growth of the company and are you looking at inorganic growth?
JSLL is looking at organic and inorganic growth in both domestic and international markets. Inorganic growth has been a significant part of our growth and we look forward to exploring strategic opportunities, in both the domestic and global markets.
Some of our inorganic plans for the domestic market include a tie up with Numetal in order to purchase stressed assets through NCLT. In the year 2021, JSL predicted expenditure of 45,000 crore in the domestic market so as to end capacities at Vijayanagar and Dolvi units and enhance or expand capacities of downstream business.
Our efforts extended toward integrating business with the US and Europe has shed some light on beneficial inorganic growth. The natural growth for the company can be estimated as 6-7 per cent, including our initiative with the Government of India. We are expecting 3x-5x growth from our other domestic initiatives since the audiences are now more focused on a better lifestyle, and we intend to manufacture this lifestyle for them.
The company has also ventured into commercial kitchens, eventually creating a steady market for the same. JSLL is estimated to achieve a ballpark of 5 crore in 3 years' time.
What is the Demands/consumption scenario in the past and coming years?
In recent years, stainless steel has seen another avatar. Consumers have shifted from traditional crockery choices to stainless steel to the extent that it has become a lifestyle, if not a luxury, option for them. Today, stainless steel is fast emerging as a desirable lifestyle accessory.
Stainless steel is also arguably the most user-friendly material available. The highly lustrous material only needs a regular wash with water and a dishwasher to keep its shine. It doesn't need regular polishing or special attention. It is non-reactive to almost all food groups, which means one can use it for any food or drink. In other words, it ensures form, function, and durability.
This has caused an advent in the way the country utilizes metal. There is an increased demand for stainless steel not just in domestic households (home decor, crockery, utensils, and more) but in major infrastructure projects such as railway, airports, metro lines, and more.
Product innovation is an ongoing process among employee teams at JSLL; their product propositions stem from their personal experiences. For example, after visiting a plant site the team came across a village using plastic tanks for water retention. This gave them the idea to begin production on stainless steel tanks so as to facilitate healthy water habits, hygiene, and development. We have also seen considerable demand through the digital space since we are listed on Amazon, Flipkart, Myntra, Tata Cliq, and more.