Samsung has overtaken ITC to become India's second-largest consumer-facing products company by revenues, and now looks set to better Maruti this fiscal to take the top slot. The South Korean consumer electronics and smartphone maker reported revenues of Rs40,392 crore from its India operations for 2013-14, 45% higher than the previous year, according to latest filings with the Registrar of Companies. As per industry estimates, around half of Samsung India's revenues came from 'made in India' products.
Tobacco-to-FMCG conglomerate ITC's total income for last fiscal stood at Rs 34,345.74 crore while carmaker Maruti Suzuki had reported revenues of Rs 44,523.53 crore. Samsung India management is confident about overtaking Maruti Suzuki in sales this fiscal, with its sales, driven by mobile phones, continuing to grow in double digits even as the car market is struggling, industry insiders said. "A couple of months of poor sales will not have any immediate impact on Samsung and the company is confident to become the country's largest consumer-facing firm and MNC this fiscal, more so since the automobile sector is still grappling with poor sales," said one of the top trade partners of Samsung India.
RC Bhargava, chairman at Maruti Suzuki, recently told Reuters that the carmaker's growth this fiscal will average out at about 10% due to poor sales. Samsung, too, faced slower offtake of smartphones in the April-August period, but sales picked up from September and grew in double digits in the just-concluded festive season, two top trade partners of the company told ET. Samsung India declined to comment on the company's financials.
Interestingly, while Samsung has topped ITC in terms of revenue, it's nowhere near the Indian firm in profitability. Samsung India's net profit grew 54% last fiscal at Rs 2,636.8 crore while ITC reported net profit of Rs8,785.2 crore for the same period. Hindustan Unilever which Samsung overtook in revenues in 2012-13 and Maruti Suzuki, too, reported higher net profits than Samsung last fiscal at Rs3,867.5 crore and Rs2,783 crore, respectively.
Mobile handsets remain a low-margin business in India due to cut-throat price war led by competitors such as Motorola, Xiaomi and Micromax who have launched high-performance smartphones in the sub-Rs 0,000 price segment. The smartphone business has been a game changer for Samsung India, helping the company grow sales upwards of 40% a year in last two fiscals. A Samsung India spokesman said the company is committed to India and will continue to focus on product and service innovation with more than 180 million consumers in the country. As per estimates, the mobility business, comprising mobile phones and tablets, accounts for almost 70% of its revenue. Every third smartphone sold in the country is a Samsung, according to latest data from GfK. The brand also accounts for one-fourth of overall handset sales in India.
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