The company also plans to raise the prices of some of its consumer durables marginally, he said.

However, the price rise will not affect demand, he added. About 70 percent of consumer durables are bought in cash and 30 percent through finance, he told reporters on the sidelines of a banking conference.

“Interest rate rise will not affect demand, but rise in input costs are a concern,” he added.

Source: Reuters India

Update 1

MUMBAI, Aug 1 (Reuters) – Consumer durable maker Videocon Industries Ltd expects to start its direct-to-home (DTH) television services mid-September, its top official said on Friday.

The company joins Dish TV India Ltd and Tata Sky in offering the service that allows users receive television signals direct via satellite. Bharti Airtel Ltd and Reliance Communications Ltd are also planning an entry.

“DTH is a synergic business for any TV manufacturer”, Chairman Venugopal Dhoot told reporters on the sidelines of a banking conference.

He added that the company has a 30 percent share in the television market.

The company, which also makes DVD players, washing machines, air conditioners and refrigerators, plans to increase prices of some of its products marginally, Dhoot said.

“Some of the items we will hold, some of the items will go up not only because of interest rates but input prices have also gone up,” he said.

Banks in India have been increasing their prime lending rate after the central bank raised the benchmark rate by 50 basis points, the third rise in two months, and the cash reserve ratio by 25 basis points.

In India, about 30 percent of consumer durables are bought through credit and higher interest rates could cause people to reconsider purchases, he said.

Still, with 70 percent of consumer durables bought with cash and GDP growth still strong, buyers with disposable income will keep demand strong, Dhoot said.

The price increases will not affect demand, he added.

Prices of crude oil CLc1, used in plastics, hit a record of above $147 a barrel on July 11, and have since fallen to about $123.

RETAIL

The Videocon group runs 600 consumer electronics stores under the name ‘Next’ and 300 music stores under the name ‘Planet M’. The retail count will go to 1,000 by Diwali, Dhoot said.

Diwali, the Indian new year festival, typically starts end-October.

It also plans to set up cash-and-carry outlets and has already set up warehousing and transport arrangements in all the metros and semi metros, he added.

The first stores will start in southern India, Dhoot said.

Source: Reuters India