King Of The Kitchen

In the past two years, the share price of Butterfly Gandhimathi Appliances (BGAL) has gone up fivefold. In March this year, Reliance Capital's private equity arm picked up a 13.7 per cent stake in the company for Rs 100 crore. For the year ending 31 March 2012, the company more than doubled its revenues to Rs 642 crore from Rs 266.52 crore in the previous year. So what's the recipe?

BGAL manufactures kitchen appliances such as LPG stoves, mixer grinders, microwave ovens, table-top wet grinders, pressure cookers, electric kettles and home appliances like air coolers, electric fans, etc. While other appliance makers such as TTK Prestige and Hawkins too have seen good growth, what set BGAL apart was the company's successful bid for the Rs 285-crore order from the Tamil Nadu government to supply table-top wet grinders and mixer grinders to poor people. This, according to chairman and managing director V.M. Lakshminarayanan, has sparked a turnaround in fortunes.

BGAL has used part of the cash from the stake sale to retire Rs 27.5 crore of debt. The rest of the money will be deployed to augment manufacturing facilities and expand its national footprint, says V.M.G. Mayuresan, Lakshminarayanan's nephew.

How has the increase in paper wealth impacted this conservative Chennai-based group? "An increase or decrease in (share prices) does not impact our lifestyle. I would rather focus on taking our company's turnover to Rs 1,000 crore over the next two to three years and build Butterfly into an even stronger brand," says Lakshminarayanan.

(This story was published in Businessworld Issue Dated 30-07-2012)