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Compuage Infocom Ltd, a Mumbai-based information technology and mobility products (smartphones, tablets) distributor having revenues of over Rs 3,000 crore, expects sales to grow at a robust rate of 40 per cent in FY17.
With 28 vendors or clients, the company (smaller but comparable peer to Redington (India)) plans to increase its presence from 485 cities catering to 9,000 channel partners to 750 cities and 11,000 channel partners in FY17. It has already added eight-nine new vendors in the first half of FY17.
The company targets to become a billion dollar company by FY19 by adding four-five vendors every year, brands (filling product gaps), enter new markets/ cities and increase the share of fast-growing smartphones in revenues.
Low penetration of personal computers in India (annual sales of 9-10 million compared to 50-60 million in case of China), the government’s ‘Make in India’ campaign and higher economic activity also provide an opportunity and will help in higher penetration of personal computers.
The current wafer-thin margins at 0.6 per cent (in first half of FY17) are also expected to improve to 1 per cent in the next three years due to better operational efficiency (following higher revenue growth) and savings in interest cost on account of shift in revenues towards mobility products which require lesser working capital. Roll-out of goods and services tax scheduled from April 1 will also aid in cutting costs (logistics and warehouses related).
Atul Mehta, Chairman and Managing Director, said the revenue mix, which is 85 per cent and 13 per cent respectively for IT and mobility products respectively, will become 60:40 over the next three-four years due to the faster growth of the Indian smartphone market (ahead of comparable countries) and relatively smaller business size for Compuage (started only four years back).
In FY16, India’s IT sector declined by 8.9 per cent while the company’s revenues grew 31 per cent to Rs 3,107 crore as it forayed into newer geographies, reinforced its reseller base, widened its domestic footprint, signed three new clients, trebled sales of CISCO products in India and SAARC countries (via Singapore).
Compuage Infocom is listed both on the Bombay Stock Exchange and National Stock Exchange. Amid a subdued market session today, the company's shares, which are up 37 per cent in the last one year, closed up 3.3 per cent to Rs 202.45 on NSE today.
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