X

Sign up for Equitymaster's free daily newsletter, The 5 Minute WrapUp and get access to our latest Multibagger guide (2017 Edition) on picking money-making stocks.

This is an entirely free service. No payments are to be made.


Download Now Subscribe to our free daily e-letter, The 5 Minute WrapUp and get this complimentary report.
We hate spam as much as you do. Check out our Privacy Policy and Terms Of Use.
Keeping the mutlinationals at bay - Views on News from Equitymaster
 
 
  • PRINT
  • E-MAIL
  • FEEDBACK
  • A  A  A
  • May 27, 2000

    Keeping the mutlinationals at bay

    This is one Indian company that has withstood competition from multinationals. Be it durables or telecom services, BPL Limited is setting the standards across the board.

    BPL is one of the largest diversified conglomerates in India. It has 9 manufacturing units and 39 offices in India and employs more than 3,300 people. It has relationships with foreign partners like Sanyo, Toshiba, France Telecom, Siemens and US West (now known as Media One).

    The company has strong retail network in the country with 52 galleries, 240 exclusive showrooms and 229 service centres. Its retail distribution network extends to over 7,000 outlets. BPL has led the market by offering superior performance and features, which have helped in expanding its market share.

    Market Share Overall FY99
    Refrigerators 5.0%
    Washing Machines 22.0%
    Television 25.0%

    The group perceives itself not as a maker of hardware - colour televisions, washing machines, vacuum cleaners - or a provider of mobile telephony services but as being in the `consumer business,' using a strong consumer brand to attain leadership in its operational environment; using it's `consumer franchise' to enter and dominate the emerging `convergence space.'

    Financial year 2000 has been very good for BPL Limited. BPL's colour television (CTV) sales crossed the one million mark and touched 1.12 million sets. Considering the stiff competition in CTV market, these figures are certainly impressive. In terms of volumes, exports of CTVs showed an impressive jump of 165 percent in the first nine months. BPL's alkaline battery sales also showed an improvement of 51.4 percent in terms of volume.

    As for profit margins, there has been an improvement in operating profit margins. While OPM during the third quarter stood at 8.7 percent, for the first nine months, OPM stood at 9.0 percent compared to the last year's figure of 8.3 percent. The company performed well on the cost front. The net profit stood at Rs 280 million in the third quarter, whereas profit for the first nine month stood at Rs 773 million for financial year 2000, up by 10.7 percent.

    Leading the Pack...
    Products FY98 FY99 Change
    Domestic      
    Colour Television &
    Home Theatre Systems
    626,981 824,968 32.0%
    Home Appliances 261,699 350,889 34.0%
    Black & white television sets 558,804 595,106 6.0%
    Refrigerators 109,599 165,783 51.0%
    Audio Systems 830,139 880,695 6.0%
    Total 2,387,222 2,817,441 18.0%

    BPL Limited intends to sell 2 million sets annually by financial year 2001. To meet its increased sales projection, the company is scaling up manufacturing facilities, especially in the north. The company has also planned to increase the number of retails outlets and distribution network to cater more towns for greater market reach.

    It is pertinent to note that the downturn in the fortunes of several consumer electronic companies cannot be solely attributed to the cyclical trends and the overall decline in the economy. It is also due to the entry of the multinationals, which are giving established Indian majors such as BPL, Videocon a run for their money. To counter competition the company has had to spend additionally on the selling front like dealer discounts and advertisement, which has its effect in its margins in the past.

    A survey by market research agency ORG shows that while the market share of BPL remains more or less static at 19.4 percent compared with 19.8 percent during January-March 1998, the multinationals are gaining considerably.

    The other apprehension is the diversified businesses of the group. Apart from home appliances, mobile telephony services, the group has ventured into power and telecom. These are very much capital intensive businesses and require large-scale investments. This could have a telling effect on the company since BPL limited itself is a working capital intensive business.

    The advent of the Internet and multinational competition is likely to change the face of the Indian market in coming years. BPL's management has shown its proactive approach in taking on important issues in the past. Already it is talking of 'convergence'. Whether it will emerge as a winner after the Internet has taken over the Indian market place cannot be said with certainty. But given the company's track record, one should not discount the group as yet.

     

     

    Equitymaster requests your view! Post a comment on "Keeping the mutlinationals at bay". Click here!

      
     

    More Views on News

    Sorry! There are no related views on news for this company/sector.

    Most Popular

    Demonetisation Barely Made Any Difference to Tax Collections(Vivek Kaul's Diary)

    Aug 7, 2017

    The data tells us quite a different story from the one the government is trying to project.

    A 'Backdoor' to Multibaggers: It's Like Investing in Asian Paints Ten Years Ago(The 5 Minute Wrapup)

    Aug 10, 2017

    Don't miss these proxy bets on growing companies or in a few years you will be looking back with regret.

    Should You Invest In Bharat-22 ETF? Know Here...(Outside View)

    Aug 8, 2017

    Bharat-22 is one of the most diverse ETFs offered so far by the Government. Know here if you should invest...

    Signs of Life in the India VIX(Daily Profit Hunter)

    Aug 12, 2017

    The India VIX is up 36% in the last week. Fear has gone up but is still low by historical standards.

    7 Financial Gifts For Your Sister This Raksha Bandhan(Outside View)

    Aug 7, 2017

    Raksha Bandhan signifies the brother-sister bond. Here are 7 thoughtful financial gifts for sisters...

    More
    Copyright © Equitymaster Agora Research Private Limited. All rights reserved.
    Any act of copying, reproducing or distributing this newsletter whether wholly or in part, for any purpose without the permission of Equitymaster is strictly prohibited and shall be deemed to be copyright infringement.

    LEGAL DISCLAIMER: Equitymaster Agora Research Private Limited (hereinafter referred as 'Equitymaster') is an independent equity research Company. Equitymaster is not an Investment Adviser. Information herein should be regarded as a resource only and should be used at one's own risk. This is not an offer to sell or solicitation to buy any securities and Equitymaster will not be liable for any losses incurred or investment(s) made or decisions taken/or not taken based on the information provided herein. Information contained herein does not constitute investment advice or a personal recommendation or take into account the particular investment objectives, financial situations, or needs of individual subscribers. Before acting on any recommendation, subscribers should consider whether it is suitable for their particular circumstances and, if necessary, seek an independent professional advice. This is not directed for access or use by anyone in a country, especially, USA or Canada, where such use or access is unlawful or which may subject Equitymaster or its affiliates to any registration or licensing requirement. All content and information is provided on an 'As Is' basis by Equitymaster. Information herein is believed to be reliable but Equitymaster does not warrant its completeness or accuracy and expressly disclaims all warranties and conditions of any kind, whether express or implied. Equitymaster may hold shares in the company/ies discussed herein. As a condition to accessing Equitymaster content and website, you agree to our Terms and Conditions of Use, available here. The performance data quoted represents past performance and does not guarantee future results.

    SEBI (Research Analysts) Regulations 2014, Registration No. INH000000537.

    Equitymaster Agora Research Private Limited. 103, Regent Chambers, Above Status Restaurant, Nariman Point, Mumbai - 400 021. India.
    Telephone: +91-22-61434055. Fax: +91-22-22028550. Email: info@equitymaster.com. Website: www.equitymaster.com. CIN:U74999MH2007PTC175407
     

    Become A Smarter Investor In
    Just 5 Minutes

    Multibagger Stocks Guide 2017
    Get our special report, Multibagger Stocks Guide (2017 Edition) Now!
    We will never sell or rent your email id.
    Please read our Terms

    BPL LIMITED SHARE PRICE


    Aug 18, 2017 (Close)

    TRACK BPL LIMITED

    • Track your investment in BPL LIMITED with Equitymaster's Portfolio Tracker. Set live price alerts, get research alerts and more. Get access now...
    • Add To MyStocks

    MARKET STATS