MUMBAI: The security solutions business of Godrej & Boyce, the flagship of the Godrej Enterprises Group led by Jamshyd Naoroji Godrej after the group’s break-up this April, is looking at a 50 percent increase in the top-line over the next two fiscals at Rs 1,500 crore as it refocuses its export business to the Americas and Europe.
The 127-year-old Mumbai-based firm is the largest manufacturer and marketer of security solutions in the country controlling around 80 percent of the branded market in the B2C segment and around 58 percent in the B2B space. The parent Godrej & Boyce had a turnover of Rs 16,180 crore last fiscal.
“Our top-line stood at Rs 1,000 crore in FY24 and we’ve set a target of taking this to Rs 1,500 crore by FY27. Of the total revenue, as much as Rs 900 crore came in from the safes and vaults business, and the rest from the locks and other security solutions arms. By FY27, this should touch Rs 1,300 crore as we increase our focus more on the Americas and European markets, which control around 60 percent of the global volumes,” Pushkar Gokhale, executive vice-president and head of security solutions business at Godrej & Boyce, told TNIE here Wednesday.
On the reasons for the shift, he cited the lingering geopolitical problems in the Middle East, especially around the Red Sea areas, impacting free westward movement of vessels through the Suez Canal.
Exports contribute around 10 percent of the top line last year but are hit due to the wars in the Red Sea/Middle Eastern area, due to which freight rates have jumped four-fold in recent months, leading to freight cost and longer transit times. From what was around $1,000/container, the freight rates had crossed $4,500 in recent months and are now settling around $3,800/container, he said, adding this has added to shipment cost and longer delivery times as the ships are being re-routed via the Cape of Good Hope in South Africa to reach the American or European shores instead of sailing through the Suez Canal.
The Middle Eastern market contributes around 15 percent of the export revenue now, while the Americas and Europe fetch close to 40 percent of export revenue, Gokhale said, adding by FY27 total share of forex revenue should be 14-15 percent of the targeted Rs 1,500 crore and most of the incremental revenue should come from Europe and Americas which control around 60 percent of the global market of around Rs 15,000 crore.
The company is also tapping domestic jewellers setting up shops in the US, which has seen many instances of armed robberies. "We are telling Indian jewellery brands planning to set up shops there that we will offer them American security compliant safes and vaults along with insurance, which is mandatory there, through our channel partner," Gokhale said.
On the recent regulatory changes in the domestic market, wherein the government had in June issued a quality control order mandating all safes and vaults BIS-complaint, he said this should help branded players like Godrej to corner more market share from unorganised players.
Godrej & Boyce is also the largest supplier of security solutions to several prestigious banking, corporate and public institutions. The division currently exports its products to over 45 countries including the Middle East, Southeast Asia, Far East, East Africa, the US, Europe and the Saarc countries. It manufactures vaults, lockers, and secure room doors for most of the leading public sector and private banks and also makes security products for marine and defence sectors.
Its physical security products businesses offer safe vaults to protect data, documents, currency or other valuables such as fire resistant safes and cabinets, burglary resistance doors and vaults, safe deposit lockers, fire resistant record protection cabinets and safes, cash counting machines and gold testing machines, while the premises security solutions range from full body, touchless scanners, metal detectors, scanning screening solutions, access & entrance control solutions.
It has installed safety doors at the Central Secretariat, the key management system at the Satish Dhawan Space Centre and over 400 marine doors to the Mumbai Trans-harbour Link.