WCCL's Agarwal: Soapware story

It's tough to believe that Wipro was originally an acronym for Western India Products. It's even more difficult to believe that Wipro began life as a manufacturer of vanaspati and laundry soap. And if you do harbour doubts about those origins, take a look at the Rs 10,625-crore it services giant's consumer business, internally known as Wipro Consumer Care & Lighting (WCCL). These days, other than soap and vanaspati, WCCL also has in its portfolio energy drinks, switches, honey, laxatives, and for good measure, furniture too. So much so, the mother brand Wipro Sunflower Vanaspati contributes just 5 per cent to WCCL's sales (and 0.3 to Wipro's). The assorted activities helped WCCL double revenues over the past three years. The topline stood at Rs 601 crore in 2005-06, and operating profits at a little over Rs 80 crore.

Kumar Chander, Vice President (Marketing), WCCL, claims that if the latest quarter's numbers are considered, WCCL, as a standalone business, is larger than Godrej Consumer Products (which reported net sales of Rs 164 crore for the quarter ended March 2006). "We have a 6.6 per cent share in the Rs 5,000-crore plus toilet soaps business. Santoor, our flagship brand, is the second largest selling toilet soap brand in the country by value (after Lux)," claims Chander.

A deft combination of organic growth and acquisitions has helped WCCL become a name to reckon with in the consumer industry. In April 2003, it brought Glucovita, a glucose energy drink, from HLL for around Rs 2.5 crore. The second was a Rs 29-crore buyout of Ayurvedic soap brand, Chandrika. And last fortnight, Wipro announced the acquisition of North West Switches for Rs 102.2 crore. "We make acquisitions where we feel we can grow the brand substantially. For instance, Glucovita has more than doubled its sales since our acquisition," says Vineet Agarwal, President, WCCL.

In toilet soaps, WCCL has three main brands-Santoor, Chandrika and Milk & Roses. It now hopes to add a fourth by joining the rush of wooers for Mysore Sandal Soap, the flagship brand of the ailing Karnataka Soaps & Detergents Ltd. Mysore Sandal is a bestseller in South India, and has numerous extensions that range from baby soaps to incense sticks.

A soap acquisition doubtless makes sense for WCCL, which derives half of its revenues from that category. But why modular furniture, and why laxatives? Well, there are explanations. "There was no pan-India national brand in furniture...We will continue to invest. It (WCCL) might look unglamorous, but it more than earns its keep," says Agarwal. Any wagers on which category the next acquisition will be in?