After having reported a 18 percent growth in Q3, S V Krishna, chief financial officer, Redington says the company is poised for better days as Apple sales in the country are still at 2 percent (at a time when competitor Samsung’s sales are 26 percent).
In an interview to CNBC-TV18, Krishnan says the company, that is the distributor of Apple products in India, saw a 22 percent growth in revenues. Krishnan, however, dismisses any talks of falling market shares on reports that Apple has roped in global retail major Brightstar to sell its devices in India.Below is the verbatim transcript of V Krishnan's interview with Sonia Shenoy & Reema Tendulkar on CNBC-TV18.
Reema: The India business has delivered very strong growth this quarter, is it sustainable according to you?
A: Overall for the quarter that went by, we have grown at a consolidated level at a very good rate by about 18 percent in terms of topline and about 16.6 percent in terms of our earnings. As you mentioned India also contributed good growth. In terms of revenue we grew by about 22 percent and on the ground the reality hasn’t changed too much. We made sure that this growth was possible because we have had tie-up with vendors who had seen good growth in this space last quarter.
Sonia: What is the exact market share that you enjoy in the distribution of Apple products and now that there is a new authorized distributor that will come into fray Brightstar. How much could that market share be challenged?
A: Today we have majority market share and Apple is an important brand in our space and even for Apple, Redington is their largest distributor. They are growing at a very fast pace. In the last three years they have had an excellent growth and if you look at their market share as far as smart phone category is concerned, it is still at about 2 percent or so. If you compare with Samsung, which is at about 26-27 percent, they are still quite low. The potential for their growth is very high as a market smart phone is growing at a very high growth rate.
Sonia: I am not talking about Apple’s market share. I am talking about your own market share in distribution of products. Now that there is new distributor that will come on board, Brightstar, what kind of competition do you expect to see and will you be able to see the same 20 percent plus India growth that you have been clocking in?
A: I am coming to that. I thought it is important for you to know the background so that your question is answered. There is a very high potential in terms of growth for Apple products. We think Apple as a brand is going to do exceeding well and we being very large distributor for them irrespective of whosoever comes in, I am sure our growth is going to be good while I do not want to comment on any specific growth rates, I can very clearly tell you that we are gung-ho about the growth in India and we think we will do well.
Reema: There was one-off of about Rs 100 crore due to a land sale which benefited the company’s bottomline. Will the company be looking to do more such land sales? What will be the non core assets?
A: That wasn’t Rs 100 crore. That was about Rs 12 crore. It happened in Q2 of current year. We are not in the real estate business. We had a parcel of the land. We initially thought it will used for our office space and since we didn’t find that comfortable, we had decided to sell because it did not had any utility for us, but I do not think in terms of future you will see any extraneous income because of the land sale etc.
Sonia: Can you give us an estimate of what the overseas revenue will be in the next couple of quarters. Will it continue to be at 15 percent or given that we have seen some political turmoil in some of the markets like Middle East, Turkey etc, this growth will slowdown, the overseas growth?
A: We have grown at a good rate as far as overseas markets are concerned in the last many quarters and hope you will acknowledge that this in spite of various geopolitical risks which are there and also the crude price dropping to six year low. We have done well, these concerns still exist. We are definitely cautious in terms of those markets but since we have done well, in all fairness we should do well in future also and a great credit should go to the team there in terms of having done what they have done all along. We are optimistic but we are cautiously optimistic as far as overseas growth is concerned.
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