• JUNE 20, 2000

BPL Ltd subdued demand results in marginal 4% topline growth.

BPL Limited, the flagship company of the BPL group, has posted a 4% growth in sales and a marginal 5% growth in bottomline. The sales for the fourth quarter however were down by 6% from Rs 5,332 m in FY99 to Rs 5,020 m in FY00. The operating margins were up from 9% in FY99 to 10% for FY00 whereas the net profit margin remained at 5.3%.

(Rs m)FY1999FY2000Change
Sales 19,397 20,147 3.9%
Other Income 8 3 -64.3%
Expenditure 17,650 18,216 3.2%
Operating Profit (EBDIT) 1,747 1,930 10.5%
Operating Profit Margin (%)9.0%9.6% 
Interest 404 485 19.9%
Depreciation 212 260 22.9%
Profit before Tax 1,140 1,188 4.3%
Tax 115 117 1.8%
Profit after Tax/(Loss) 1,025 1,071 4.5%
Net profit margin (%)5.3%5.3% 
Earnings per share 37.0 38.7  

The demand for colour televisions was subdued due to lack of major events like the World Cup. Moreover, all the major companies saw their credit periods going up thus affecting their bottomline. Though the market leader in the colour television segment, the company is losing ground to competitors like LG Electronics, Aiwa, Akai, who have advanced technololgy and are more aggressive in the rural market, which has huge potential.

The colour television market grew by 35% compared to 58% for FY99. The import duty on picture tubes, the main component in the colour television, remained at the same level thus making it impossible for the companies to reduce the prices (remember the prices of television are already at their lowest level. For example, the prices of 21' inch colour television is Rs 7,000 now compared to Rs 15,000 and above four years back). This has prevented companies from stimulating demand by slashing prices. .

BPL Limited is planning to introduce a new range, BPL Digital, based on the convergence of Internet and cellular services with the entertainment electronics industry. With the company introducing sophisticated models, the margins are expected to increase.

The share is currently trading at Rs 162 at a P/E multiple of 4.1 on FY00 earnings.

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 (Research Analyst) bearing Registration No. INH000000537 (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, Canada or the European Union countries, 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 (Research Analyst)
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