Micromax’s profit triples to Rs 365.8 crore in FY17

KOLKATA: In the last fiscal year, Micromax reported a 42% revenue decline that the country’s largest home-grown mobile phone maker attributed to a sudden and pronounced consumer switch in favour of 4G phones, and undercutting by Chinese rivals.

Financial data accessed from the Registrar of Companies (RoC) show that Micromax Informatics’ revenue in FY17 was Rs 5,614 crore (Rs 9,825.5 crore in 2015-16). In fact, the company’s revenue almost halved in the past two fiscal years: In 2014-15, it was Rs 10,450.5 crore when competition from the northern neighbour started peaking.

Micromax follows the second largest homegrown brand Intex in sales decline last year, with the latter reporting a 30% fall to Rs 4,364.1 crore. Financials for Karbonn and Lava are yet to be published by RoC, but industry executives said they, too, are expected to report lower sales. Micromax MD Rahul Sharma said the fall was due to lack of 4G phones in the portfolio and a conscious decision taken to not join the Chinese players in the rat race and bleed.

“Some of the Chinese brands were selling a smartphone worth Rs 20,000 at just Rs 12,000. While we have been all throughout fighting the competition, last year we decided to hold back and not participate until the dust settles. We instead focused on building our back-end with our fourth factory coming up, built service infrastructure and invested in 10 startup companies. We are a long-term player and want profitable growth,” he said.

Incidentally, Micromax almost tripled its profit in FY17 to Rs 365.8 crore, as compared to the year before. The company has tightened costs and marketing expenses.