Samsung India’s sales grow 19% as revenue crosses $7 billion

Samsung India’s sales grow 19% as revenue crosses $7 billion
 KOLKATA/MUMBAI: Samsung India grew its sales by 19% during fiscal year to March 2016 to cross the $7 billion revenue mark, but its recent Galaxy Note 7 debacle could slow down the pace of growth in the current fiscal.

As per disclosure made to the Registrar of Companies by the South Korean consumer electronics and smartphone maker, the Indian arm posted total turnover of Rs 47,001.4 crore while net profit more than doubled to Rs 3,010 crore during FY15-16. A year ago, it reported sales of Rs 39,443.3 crore and profit of Rs 1,398.5 crore.

However, Samsung’s ambition to become the country’s largest multinational firm in the consumer space would probably take few more fiscals and far higher growth rate since Japanese car maker Maruti Suzuki is far ahead having registered sales of Rs 57,746.3 crore last fiscal.

Two senior industry executives attributed Samsung’s sales growth last fiscal to strong performance in the smartphone segment and profitability to cost management initiatives taken by Samsung during the financial year, including several hundred lay-offs.

“Samsung even grew it’s market share in smartphones to more than 40% in 2015-16 after adopting a strategy to roll out online exclusive models, expanded presence in sub-Rs 10,000 segment where the Chinese brands were getting dominant and strictly impose pricing parity between online-offline trade. It now has a similar strategy for television and appliances as well,” said one senior industry executive.

A Samsung India spokesperson said the company is on course to report record sales this year as well on back of good demand and festival sales. He said locally developed products made in India is the key behind the strong performance.

Executives say Samsung’s growth rate may taper off during the year due to its decision to pull out its marquee Note 7 and it may lose its leadership in premium smartphone segment to Apple. As per estimates, Samsung would take a potential revenue hit of about Rs 420 crore this quarter alone due to absence of Note 7 in its portfolio.
Samsung last month permanently withdrew Note 7 globally citing consumer safety concerns, pulling the plug on the device completely due to incidents of fire erupting even in the models handed out to replace the earlier recalled devices. The company was yet to launch the handset in India.
As per estimates, around 70-75% sales of Samsung India are generated from smartphones, which has been driving the company’s growth. The company is also the market leader in television, but trails LG in appliances.
 The Indian unit of Samsung, world’s second largest tech company, entered India two decades ago but witnessed one of its slowest sales growth during FY2014-15 when it grew low single digit.
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