Ador Multi products Chairman: Will see sustained profits on an annualized basis

The personal and skincare industry is among the fastest-growing consumer product sectors in India. The entire beauty and personal care space are estimated to be worth $8 billion by the end of 2021. The government’s Make in India campaign has provided a fillip to the growth opportunity, both in terms of local distribution as well as international exports.

Among the growth stories in the sector is Mumbai-based Ador Multiproducts Ltd, the skincare and beauty vertical of Ador Group. Established in 1908, Ador Group runs nine companies focused on welding, beauty, and e-commerce. Three of its companies are listed on the Bombay Stock Exchange.

Ador Multiproducts is largely focused on third-party or contract manufacturing for a variety of skincare and body care products, with an aim to create its own direct-to-consumer brand products.

In a fireside chat with AlphaStreet, Ador Multiproducts Ltd Chairman Deep Lalvani elaborated on the firm’s financials and growth strategy.

AlphaStreet: How did Covid-19 impact the business?

Deep:  Covid-19 was very unpredictable. During some months the production was going very well and suddenly it stopped. A large part of the consumer base suffered as the offline retail was closed. This had an impact on the distribution, which ultimately slowed down the production.

On the brighter side, the manufacturing of hand sanitizers gave an initial spurt that helped to be flexible on deliveries, MOQs, and understanding of the customer requirements.

AlphaStreet: There was a huge jump in revenues in fiscal 2021. What were the tailwinds that helped?

Deep: In the previous year we had two manufacturing units, one in Bangalore and one in Pondicherry. We streamlined everything in the Pondicherry factory this year, renovated it, automated the plant, and created a cleanroom facility before the Covid-19 hit. This saw some positive impact in terms of productivity as well as scalability.

And the second thing I have to say is obviously the initial demand on hand sanitizers, so that gave us the push to build momentum.

AlphaStreet: Are we going to see sustained profits going ahead?

Deep: We will have sustained profits on an annualized basis. We have built a hybrid model, which would give us regular revenues and inflows from the third party, but we are also heavily investing in our own brands.

 What I will put as a disclaimer is, during some months we would be heavily pushing on the marketing of our brands, which could impact our bottom line on a monthly or quarterly basis.

AlphaStreet: What is going to be the company’s focus over the next 12-24 months?

Deep: So, as you can see, we’re currently using manufacturing capability and the customer experience on R&D formulation to build our house of brands for customers over the period. A large part of the investment will be used to scale up Sublime Life (Ador Multiproduct’s clean beauty platform).

We also are looking at opportunities to acquire a couple of startups brands of the clean beauty space, which can add value. When I say acquire, it may not be 100% acquisition, but it might be taking a majority stake or a significant stake in the startup to help grow it. We might invest a little bit in sub-testing facilities as well, for post R&D kind of testing before we go to market.

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(Written by Nishad Kishore Phanse)