Financial Daily from THE HINDU group of publications
Thursday, Jun 06, 2002
Corporate - Outlook
TVS-E sees signs of recovery in Q2 -- Reduces staff strength by 20 pc
CHENNAI, June 5
AFTER two successive quarters of decline in sales, the city-based TVS-Electronics (TVS-E) is hopeful of making a `neutral' growth during the second quarter (April-June) of 2002, Mr Gopal Srinivasan, Director, TVS-E, told the company's shareholders here on Wednesday.
``In the second quarter, we will definitely reverse the trend,'' he added.
In Q3 of 2001, sales was down 22 per cent compared to the corresponding quarter of 2000 and Q4 sales declined by 12 per cent when compared to Q4 of the previous year. In the first quarter of 2002, sales declined by 23 per cent when compared to Q1 of 2001, he said at the company's annual general meeting.
Meanwhile, as part of cost cutting measures, the company has managed to reduce the staff strength by around 20 per cent to the current level of 600, as against 750 a year back, Mr Srinivasan said.
There is a sign of recovery in the second quarter with the domestic market picking up for printers and UPS. The TVS-E Gold keyboard sales almost doubled to 21,000 in May compared to previous month, and in June the figure is likely to be over 25,000. ``Keyboard sales is good indicator of recovery for us,'' he added.
The company reported a net profit of Rs 1.63 crore on a turnover of Rs 216.13 crore for the year ended December 31, 2001, as against a net profit of Rs 3.84 crore on a turnover of Rs 224.31 crore the previous year.
The company meanwhile exited from the distribution and service of Lexmark printers in India Lexmark contributed about 15 per cent of TVS-E revenue. ``We found out that our business model does not fit into trading in products,'' said Mr Gopal Srinivasan. ``The TVS-E brand would be known for its own development and manufacturing,'' he added.
One of the country's largest manufacturers of computer peripherals like keyboards and dot matrix printers, TVS-E had a strategic partnership with the US-based Lexmark for distribution and service of the latter's laser, inkjet and dot matrix printers and associated supplies for the office and home markets in India. According to Mr Gopal Srinivasan, during the year there would be a `strong' focus on contract manufacturing (done by TVS eServices business group). ``We expect 25 per cent of sales coming from contract manufacturing which also includes packaging, design and procurement this year," he added. The company's clients for contract manufacturing include GE, IMV Victron, Netherlands, Tyco and Zipphone.
In his opening remarks, the company's Chairman, Mr Venu Srinivasan, said in the current year, the company was on track to cross Rs 100 crore in sales revenue for the first six months.
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