Wipro Consumer Care and Lighting has begun considering a different stage of acquisitions as it works to consolidate its portfolio in high-growth segments. The reserve that the company has is 6,000-7,000 crore, and this can be increased when the need arises. Chief executive Vineet Agrawal stated that the company is still evaluating regional brands, which have good consumer traction and the ability to scale its operation in the competitive FMCG market in India.
Wipro Consumer has established its reputation through its acquisition strategy to increase its presence in personal care, home care, and food product lines. It has already acquired almost 21 brands, both in India and abroad, including Glucovita, Yardley, Chandrika, Nirapara, and Brahmins. According to Agrawal, internal earnings can assist the business to stay in a good financial position, thus it does not have to depend on external stock much when it enters into a deal.
He described that the reinvested profits have empowered the company acquisition fund since the promoter family will not receive dividends. Such a strategy will provide Wipro Consumer with a large chest and agility to strike when the appropriate targets are found. The leadership is continuously looking at three or four possible brands at a time as part of its strategy.
It intends to purchase regional brands that have a high level of loyalty within particular states or cultural groups. When compared to the creation of new brands, Agrawal noted that regional players tend to be faster to be accepted in the market and offer an efficient manner of reaching scale.
The company will move further to develop higher-end personal-care divisions more aggressively. They are liquid detergents, fabric conditioners, body products, and fragrance-related products. According to Agrawal, such categories are still rising at a higher rate than older product lines, and they have a higher margin; thus, they are capable of long-term growth.
Wipro Consumer is also considering packaged food brands, such as regional spice companies, amongst others. The business is, however, guarded in areas where the structural margins are low. Brands such as Southern Spice are up-and-coming with high demand and low profitability; consequently, they are less appealing compared to personal care and hygiene products.
Agrawal indicated that the company would always consider the prospects of growth, margin structure, and scalability before making any acquisition final. He also stated that regional attraction and a high level of consumer awareness are the essential drivers of the acquisition strategies by Wipro Consumer.