The real estate industry is yet to stabilise and developers have become cautious, says Crystal Sanitary Fittings chief Gauri Singh Shandilaya. But she also believes that new market segments are opening up for the building materials industry.
By Gyanendra Kumar Kashyap
How do you view the uptick in the real estate industry? How well does it bode for the building materials industry?
The real estate industry has not stabilised as yet; while earlier it was riddled with speculation, one gets the feeling that builders and developers are a little too cautious now. So one can’t really say whether prices are at a stable point or whether there will be more volatility in either direction. The past one year has not been the best for the building materials industry though the future, both short term and long term, might bode well as ease of doing business improves and people come out of their shell.
In a growing nation with a booming economy, a large population and upward mobility towards prosperity and opulence, the real estate sector should show solid growth, be it real or speculative. It should be a sunrise industry for a long time to come as more and more homes will be needed, because of:
- upward mobility
- young people with money
- tendency towards nuclear families
The building material industry is dependent on not only real estate growth but also renovation and rebuilding, both of which contribute in a stable way to this business.
How do you see the government’s focus on affordable housing for all; what opportunities do you see for yourself and the building products industry at large?
Affordable housing is a noble and much needed focus by the government. There are still a vast majority of people for whom survival on a day-to-day basis is a real and urgent issue. Many of these have limited skills and education with which they could have carved out a stable means of living for themselves. For such classes of people it is imperative that the government becomes a provider, a holding hand till they are able to stand on their own with dignity in the society.
We fully support such initiatives by the government and are ready to participate in these by bringing out products that can cater to such segments and if such requirements are directed to us. At present we usually cater to the middle class and above with our products since we deal only in brass fittings and accessories. To cater to the affordable housing segment, one would have to use plastic as a base for fittings and accessories.
Have new real estate laws such as RERA, and implementation of GST, made you more confident about doing business with real estate industry?
We have always been a tax compliant company ever since our formation in the 1960s. We have been paying excise taxes, sales taxes, income taxes, import duties and other central and state level levies,etc, for long since much of our business has been inter-state. We genuinely feel that GST is a positive step towards ease of doing business as it merges many previously existing taxes under one head.
We have had production operations in three states – HP, Chandigarh and Haryana. At times we have been at the receiving end of authorities of one state if our revenue dipped due to less sale or demand. Now that both state and centre get 50% contribution of the GST, one feels that there will be less of such conflicts, and therefore less of such demands made to us.
Which geographical markets and price points are you focusing on, and what growth do you expect in your projects business?
We have been selling well in south India and pockets of western and eastern India. We will continue to focus on these markets and also focus on the smart cities, wherever they might be in India.
We sell largely to the middle class segment but of late have also innovated and developed products for the upper and elite segments. We hope to see a robust and consistent growth for us in these segments.
We expect a lot of demand also in water management products in the future, both long term and short term in institutional as well as retail segments.