BPL Limited, the flagship company of the BPL conglomerate has posted a marginal 5% increase in the net profit on a turnover growth of 4% for the year ended FY00.
On a roller-coaster ride…
The company had a roller coaster ride during the year in sales and operating margins. Looking back, the sales of the company in the 2QFY00 dropped by 4% compared to the respective quarter in the previous year. However in the 3QFY00, as the company introduced new schemes and discount offers during the festive season, the sales went up by 11% indicating the pick up in demand. Remember BPL introduced hire purchase schemes for each product as well as for the whole ‘home range’ home appliances, which reportedly had a good response.
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The performance of the company has been disappointing for this year. This can be attributable to the fact that the colour television demand during the year has dropped dramatically. Consumer durable companies were also facing cash crunch with credit period zooming to more than two months from 15 days. After a whopping 35% growth in sales for consecutive two years, thanks to the world cup fever, the demand has come to realistic levels.
During the last year, refrigerator sales went past the television sales as in the hierarchy of consumer preferences the former has surpassed the later. The colour television sales during the year are expected to be around 10%-12%.
The upside for the company is new launches based on the concept of ‘web television’, which supposedly has huge potential. But recent diversification seems to be a source of concern. One such venture is into power, which involves substantial outlays.
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