At Rs 2014.67 crore, income from operations increased marginally by 3.86 per cent. Though there is significant growth in terms of volume, lower realisations have offset the same. Interestingly, the company has been able to improve its operational efficiency by a relatively lower factor in the expenditure. This is the reason why its operational profit margins could grow even though sales growth was negative in the second and fourth quarters. Inventory levels declined significantly from Rs 36.66 crore inthe previous year to Rs. 7.66 crore this fiscal.

There has been a 28 per cent increase in staff costs, which have shot up to Rs 47.54 crore, from Rs 37.14 crore in the previous year. Operational profit figures stood at Rs 193.04 crore, showing a reasonable rise of 10.5 per cent. However, this was partially negated by an increase in interest and depreciation costs by 20 and 23 per cent respectively. The net profit after tax rose by over 4.5 per cent to Rs 107.13 crore.

During the last quarter of FY00, net profits declined by 7.59 per cent to Rs 29.85 crore. This is primarily due to industry-wide price cuts of about 15 per cent undertaken by CTV manufacturers to boost falling volumes. This is despite the fact that there has been a gradual rise in input costs. During the past one year, the cost of colour picture tubes, a key component in CTVs, has been on the rise. According to recent reports, there is also a semiconductor shortage as these are being routed to meet the requirements of mobile phonemanufacturers.

Apart from the CTV business which contributes around 50 per cent to BPL's turnover, other major businesses like refrigerators and home appliances, have not been doing any better because of highly competitive market conditions. Revenue from the home appliances division has declined by about 9 per cent during the fiscal ended March 2000. The company has the option of merging these two businesses with BPL Refrigeration and BPL Sanyo respectively, as these are by and large in the same line of business.

Such a move will prevent BPL brands from competing with each other.The company's announcement that it would launch a "Convergence TV" under the name BPL Digital might generate some interest in this quarter. The yet-to-be launched television will be a convergence product that will combine the Internet and cellular services with a television's traditional features.

Other BPL group companies like BPL Mobile and Bplnet.com will help develop the new product. There is always the threat of newplayers entering into the rapidly developing market for convergence products. However, the product has been doing very well in domestic and overseas markets. On the export front, BPL will get a big boost from the UK-based Dixon group as it has a well-developed marketing network overseas.

Quantitative Restrictions
With less than a year to go for a near total withdrawal of Quantitative Restrictions (QRs), industry bigwigs, particularly those from the automobile industry, are stressing on the need for negotiations that could fetch a better deal for India. Many prominent members of the Confederation of Indian Industry (CII) and the Society of Indian Automotive Manufacturers (SIAM) have expressed their concerns about the threat to the domestic automobile industry from second hand car imports.

The issue is simple - India is a signatory to the World Trade Organisation (WTO). Therefore, between 2000 and 2002, India has to comply with the treaty and remove restrictions on the import of second-hand carsunder Phase II of the WTO regime. On a more positive note, Indians will be able to buy bigger, and better used cars cheaply.

The on-going debate between government mandarins and the industry's representative bodies seems to go on endlessly. However, there exists a paradox - the government on the one hand pays lip service to reforms and liberalization. On the other hand, the commerce minister vows to protect the nascent domestic automotive industry. As a matter of fact, the CII representatives (and the MNCs) are proposing high import duties on second-hand cars to neutralise the price disadvantage that domestic manufacturers will face.

In addition to high tariffs, non-tariff measures such as tough environmental norms and road-worthiness certificates are being proposed to protect the local automotive industry.

Be it the government or the automotive industry bigwigs, no one seems to be talking about consumer interests. The question arises - why should the consumer pay a much higher price for an outdatedlocal vehicle when he can buy more advanced and better second hand imports? This apart, the protectionist regime has not upgraded technology in the public transport sector for the past 50 years.

Inspite of all the new cars in the market, the consumer has been paying too high for too little. The liberals argue that the cheap second hand imports will provide huge opportunities for the component / spares part industry. Moreover, imports of used cars will actually result in saving of valuable foreign exchange. This is because of the lower level of indigenisation in the case of most new cars available in the country. Quite clearly, car imports will pass on a cost benefit to consumers, thereby tilting the balance in favour of consumers. With the WTO regime in place, the industry biggies do realize that it is impossible to completely avoid imports.

Perhaps, the government could do better than attempt to alter the level playing field and take a more holistic perspective with keeping the interests of theconsumers in mind.

KSESH (With contributions from Manish Joshi and Gaurav Dua)