Moser Baer India sees better profit earnings in 2001-02

New Delhi, Jan 4: Moser Baer India Ltd, the world’s fifth-largest optical compact disc maker, said it saw a jump in earnings and revenue for the year to March 2002, causing its shares to rise sharply.

The New Delhi-based company said it saw earnings rising to Rs 2.0-2.2 billion ($41.4-45.5 million) from Rs 1.38 billion a year ago and revenue jumping to Rs 6.0-6.5 billion from Rs 3.34 billion a year ago.
"Our guidance for the entire year is broadly Rs 6.0-6.5 billion in revenue and between Rs 2.0-2.2 billion in earnings," Moser Baer executive director Ratul Puri said on Thursday.

Moser’s shares rose as much as nearly 12 per cent on the news to an intra-day high of Rs 305, but later retraced to close up 4.31 per cent at Rs 284.35. The main Bombay index ended up 2.05 per cent.

Mr Puri said that the company had stuck to its guidance despite weak global prices for its main product -- recordable compact discs (CDRs) -- because it saw prices rising on increased demand for disks and their drives.

Global prices have fallen by five to seven percent after the September 11 attacks in the US from about 30 cents per disc before that, he said. "We expect pricing pressure to continue through the end of this financial year, but they (prices) will revive in the first quarter of 2002/03 because of robust CDR drive sales and after temporary excess inventory is eaten out of the system," Mr Puri said.
He expected global demand for CDRs to surge to about Rs 16 billion units in 2004 from Rs 5.8 billion now, largely on the back of an equally healthly rise in CD drive sales. About 85 per cent of Moser Baer’s revenue comes from exports, while domestic sales account for the remaining 15 per cent. Europe, Middle East and Africa account for half of total sales, the US and South America for a quarter, Japan accounts for five per cent, while the rest of Asia for another five per cent.

Mr Puri said the company planned in 2002 to tap surging domestic demand and also increase business from the US and South America.
Domestic demand for CDRs had leapt as the Indian consumer’s storage needs grew exponentially, he said. "The focus is on the local market, which has better margins for certain," Mr Puri said. "We’ve seen this market grow nearly three times in the last 12 months.The domestic market is growing much faster than the international one, as it is less mature. More Indians than before are now downloading music from the Internet and backing up software."

Moser Baer’s domestic sales for the past year to March 2001 accounted for 7.25 per cent of total revenue, while they now account for about 15 per cent.

— Reuters