Samsung India Revenue Grows, Profit Falls

Fighting Chinese competitors with lower priced phones saw Samsung India’s net profit fall by as much as 11 percent but revenues grew by 10 percent to cross the milestone of Rs 60,000 crore in FY18. While the South Korean giant did not attribute any reason behind the performance in its regulatory filings to the Registrar of Companies (RoC), two senior industry executives said the fall in profitability was due to Samsung India’s focus on launching price-aggressive smartphones at relatively lower margin to combat Xiaomi, Oppo, Vivo and OnePlus. Total income touched Rs 61,065.6 crore in 2017-18 from Rs 55,511.9 crore in the previous year, while net profit dipped by 10.7 percent to Rs 3712.7 crore, as per its latest filings.

The world’s largest handset maker also continued the high pace of sales growth seen in its mobile phone business in India growing 37 percent to touch Rs 37,349 crore, maintaining its revenue lead in the Indian smartphone market. Rival Xiaomi’s sales in FY18 was Rs 22,947 crore, Oppo Mobiles India was Rs 11,994 crore and Vivo Mobile India Rs 11,179 crore. Apple India’s FY18 sales were Rs 13,097 crore. Though the mobile business gross profit dipped in FY18 to Rs 3,415.9 crore from Rs 3474.1 crore in the fiscal earlier, Samsung continues to be the most profitable consumer electronics and smartphone maker in India. Though competitors Xiaomi, Sony LG and Huawei are profitable, they are far behind whereas Oppo and Vivo are in losses.

Samsung’s television business, however, took a hit last fiscal with sales declining by as much as 3% to Rs 4512 crore, though gross profit improved by 88 percent to about Rs 222 crore. Industry executives attributed this to the intense competition and sales taking a hit in the 32-inches segment – which accounts for almost 50 percent of total TV market — from the online focused brands like Vu, BPL, Xiaomi and Thomson. Samsung had decided to focus on the higher margin premium and large screen TV models. An email sent to Samsung India did not elicit any response till Tuesday press time. Last fiscal the company sold its printer business to HP India.

Samsung said in the filing that it was not a major line of business. Samsung also commenced a new line of business in India related to semi-conductors and device solutions during the year, without elaborating. In the filings with the Registrar of Companies, Samsung said it is the largest brand in televisions, frostfree and side-by-side refrigerators in India. As per Hong Kong-based tracker Counterpoint Research, Xiaomi became the market leader in the Indian smartphone market for the first time ever in the October-December quarter of 2017. As of period from July to September, Counterpoint estimates that the Chinese company Xiaomi had 27 percent share followed by Samsung with 23 percent share.― The Ghana Guardian News

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