Foray into PC peripherals
*Moser Baer: Hard drive* September 12, 2007
The foray into computer peripheral is a logical extension of the company’s home video business. After diversifying into solar energy and entertainment, Moser Baer has now set its eyes on the computer peripheral business, which is valued at Rs 12,000 crore a year in the country. The company is targeting only a small part of this pie, including the optical disk drive and DVD combo drive.
According to the company, the size of the combo drive and DVD writers market in India is 5,00,000 units a month. Like its foray into the entertainment business, this business is an extension of its core business. The company was already making blank CDs and DVDs, and the video business segment was a logical step for the company. Similarly, selling disk drives is an extension of the optical media business.
The company has tie-ups in place to source the drives, which it will market under its brand. Though it will be able to use some of its existing distribution network, it will need to set up additional distribution to tap the hardware resellers. But this should not be difficult as Moser Baer has succeeded in a similar exercise for its home video business. Moreover, it will be able to leverage this network later when it adds other peripherals, say analysts. In the June 2007 quarter, the company’s income from operations increased just 3.25 per cent y-o-y, but operating profit was up by 40 per cent.
The top line was adversely impacted by the rupee appreciation as well as lower demand from corporates in the first quarter, which is typically a slack season. The operating profit margin improved by 685 basis points as a result of production efficiencies and cost reductions.
