TVS Electronics looks at Bangalore for expansion

Venkatachari Jagannath
03 February 2004

According to Gopal Srinivasan, director, the low sales tax (2 per cent) in Karnataka as compared to Tamil Nadu (4 per cent) is what prompted the idea of setting up the new assembly line in Bangalore. However, the investment for expansion will be very marginal, he adds. According to Srinivasan, the company is prepared for zero duty regime for the dot matrix computer printer segment, in which it has a 40 per cent market share.

Speaking about the company''s performance in the point of sales terminal segment Srinivasan claims to have a significant market share. "We have installed around 25,000 terminals which is a sizeable number. However data is not available as to the total number of terminals sold in the country."

Meanwhile the company closed it financial year ending December 31, 2003 with a turnover of Rs.261 crore and a net profit of Rs.3.61 crore as compared to Rs.220 crore and Rs.2.18 crore registered during 2002. The total expenditure for 2003 stood at Rs.250 crore (2002: Rs.205 crore).

The increase in the after tax profit for the year 2003 is largely due to a sharp fall in the interest outgo. Interest cost came down by Rs.4.41 crore to Rs.5 crore.

TVS Electronics has made major in roads into the growing public sector -banks, insurance companies- markets. "The Life Insurance Corporation alone has bought 18,000 printers. In addition we have Punjab National Bank, Central Bank of India and others who are computerising their operations in a major way," says Srinivasan.

The products and solutions division contributed Rs.215 crore towards the overall turnover while the electronic manufacturing services business group (involved in contract manufacturing for others) contributed the balance. The divisions contribution would have been higher but for the uncertainty in the set top box market. TVS Electronics had made sizeable investment to manufacture set top boxes.