Walton managed to control revenue fall amid political unrest, subdued demand

Walton Hi-Tech Industries PLC, the country's leading electronics manufacturer, has experienced a turbulent year in the 2024-25 fiscal year, with overall revenue dropping by nearly 6% to Tk7,082 crore due to subdued consumer demand and political unrest.

While the company managed to post modest growth in refrigerator sales and exports, its core domestic markets for air conditioners and televisions contracted sharply, reflecting the broader economic slowdown.

The year began on a difficult note for Walton, as Bangladesh grappled with slowing economic activity, high inflation, and increased borrowing costs. These factors directly impacted consumer purchasing power, particularly in the premium electronics categories, according to industry insiders.

Air conditioner sales, which had surged in the previous fiscal year due to rising temperatures and rapid urbanisation, could not sustain their growth momentum in FY25.

Annual AC sales had peaked at 6,50,000 units in 2024, up sharply from 4,50,000 units in 2023, but fell back in FY25 as the heatwave was less intense and household budgets came under pressure.

The slowdown was evident in Walton's segment-wise earnings. Sales of air conditioners dropped 32% year-on-year to Tk653 crore, while television sales fell 21% to Tk409 crore. Electrical appliances, another significant revenue source, also declined by 19% to Tk1,016 crore.

In contrast, refrigerators, freezers, and compressors provided some relief, with sales rising 1.79% to Tk4,697 crore. Smaller categories also performed unevenly: elevators surged by 48% to Tk160 crore, home appliances rose by 6% to Tk459 crore, while service parts witnessed a striking 124% jump to Tk62 crore.

Overall, Walton's revenue in FY25 declined by 5.72% from Tk7,512 crore in the previous fiscal year. 

The fall in revenue was attributed largely to weakened domestic demand, which was aggravated by political turmoil during mid-2024. The country experienced prolonged student-led protests over civil service quota reforms between July and August, disrupting economic activity and dampening consumer sentiment.

Despite the slump in the domestic market, Walton found some respite in exports, which grew by 46% year-on-year to Tk75.41 crore.

Freezers, refrigerators, and compressors dominated the export basket, generating Tk62.50 crore, a 41% rise from last year. Its air conditioner exports also saw impressive momentum, jumping by 257% to Tk6.74 crore, while home appliance exports grew more than fivefold to Tk2.72 crore. However, television exports shrank by 36% to Tk2.29 crore, and electrical appliances exports plunged by 55% to Tk0.70 crore.

Looking ahead, consumers are set to face further challenges as the government has doubled the value-added tax (VAT) on refrigerators and air conditioners in the FY26 budget. 

In FY25, production of these items carried a 7.5% VAT, but this increased to 15% from FY26, likely pushing up retail prices and exerting more pressure on household budgets.

Walton's profitability also reflected the strains of the year. Net profit fell by 24% to Tk1,036 crore, compared to Tk1,355 crore in FY24. Earnings per share dropped to Tk34.22 from Tk44.78.

The company recommended a dividend payout of 175% cash and 10% stock, a sharp reduction from the 350% cash dividend distributed in the previous year.

Despite the weaker results, Walton's stock price showed resilience, closing 2.19% higher at Tk419.90 on Tuesday. With a market capitalisation of Tk13,992 crore, Walton remains the fifth-largest listed firm in Bangladesh.

The company is now betting on expansion and diversification to restore growth. Walton Hi-Tech announced that it will merge with its sister concern, Walton Digi-Tech Industries Limited, a non-listed manufacturer and marketer of technology products. Digi-Tech currently produces 123 high-tech products and accessories, including laptops, computers, printers, mobile phones, printed circuit boards (PCBs), and electric bikes.

Through the merger, Walton aims to significantly broaden its product portfolio, strengthen operational efficiency, and reduce costs. 

Company officials said that the integration will enable Walton Hi-Tech to establish a new lithium battery plant and scale up production of eco-friendly electric bikes, an area of growing demand both domestically and internationally. The move is expected to position Walton strongly in the sustainable mobility market while diversifying its revenue base away from traditional consumer electronics.