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Our Bureau

Chennai , Jan. 25

TVS Electronics on Tuesday reported a 36-per cent drop in net profit to Rs 38 lakh for the quarter ended December 2004 compared to Rs 60 lakh for the same period in the previous year. Revenues grew about one per cent to Rs 68.44 crore (Rs 67.78 crore).

Addressing the media, Mr Gopal Srinivasan said, "We have grown about 17 per cent in revenues over the September quarter of 2004. (The company reported revenues of Rs 58.2 crore in that quarter). We had several institutional orders." He added that with the WTO agreement coming into effect on March 1 this year, the company has been seeing the prices of products decline. "We have already started pricing our products based on the new regime. We see a price drop of at least 9 per cent across products."

According to him, "This is not a bad performance, for, the price levels reflect the market in the post-WTO scenario." He added that the company had also held costs at a good level. "In some cases, we have brought down fixed costs."

For the coming quarter, he said that there would be no significant change in revenues but that profits would be better because of improved management of costs. "The coming quarter would be turbulent for the industry because of the zero duty regime as well as the introduction of the value-added tax from April 1. So, most purchases, by clients, would be deferred."

Commenting on the loss of Rs 30 lakh that the electronic manufacturing services (EMS) business showed in the December quarter compared to a profit of Rs 1.3 crore in the same quarter of the previous year, Mr Srinivasan said, "The profit for this business is affected because of the transfer pricing arrangement we have internally." He added that the EMS business would not see a loss in the coming quarter.

The company's market share in the dot matrix printer business has fallen to about 32 per cent from 44 per cent in June 2004. Mr Srinivasan said, "There has been some aggressive competition and pricing in this segment." "Our focus in the next three or four quarters would be on the launch of new products."

The company has re-launched its point of sale cash and billing terminal for retail outlets at a price point of Rs 9,000. It also plans to launch a free-to-air set top box for the end customer in February this year.

The accounting year for the company will change from Jan-Dec to April-March.

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