PASSION AND PREPAREDNESS MAKES ALL THE DIFFERENCE
THE PRINCIPAL MESSAGE THAT I WISH TO SEND OUT TO OUR STAKEHOLDERS IS THAT INDIASIT SECTOR IS AT AN INFLECTION POINT AND COMPUAGE IS COMPETENTLY PREPARED TO MAKE THE MOSTOF THE PLETHORA OF OPPORTUNITIES EMERGING ACROSS THE SECTORAL LANDSCAPE.
I am optimistic about the Company's prospects because of a number of reasons. Onedisposable incomes and aspirations are rising progressively. Two a personal computer hasevolved from a luxury to a necessity for the country's aspiring millions. Three personalcomputers are being increasingly used by the country's agricultural sector whichrepresents the decisive democratisation of the product category. Four personal computerprices have declined to a level where they are now equivalent to a family's monthlyincome.
These 'slow burn' factors have existed for a number of years and are likely to endurein the years ahead. This is precisely why I'm confident that the country's IT sectorshould continue to report steady growth.
However the biggest game-changer is the impending broadband revolution (2017 onwards).The advent of Reliance Jio is expected to emerge as a landmark event in India's ITrevolution story.
Reliance Jio is not going to be just another broadband offering. Instead it willtransform sectoral dynamics encourage information democratisation make the aam aadmidigital native render geographic barriers irrelevant and bring the rural marginalisedinto the mainstream.
The emerging pan-India transformation will represent no less massive a revolution - infact bigger - than the mobile telephony revolution of the last two decades where Indiajumped an entire technology generation increased teledensity from a mere 10.37 to 145.46(2014) moderated tariffs down to the world's lowest and emerged as the world'ssecond-largest mobile handset market.
A similar revolution is afoot in the country's IT hardware sector too. We see ascenario where the age-old mantra of 'roti kapda aur makaan' will extend to 'roti kapdamakaan mobile aur PC'. This is likely to generate an unprecedented demand for personalcomputers IT peripherals and accessories. The importance of the fact that the countryenjoys extensive headroom for growth cannot be overemphasised. Case in point: PCpenetration in India stands at 9% compared to 50% in China and 60% in the US indicating asustainable growth opportunity. In such a backdrop India represents one of the mostattractive IT hardware opportunities in the world. We believe that MNC brands will findIndia an ideal destination when it comes to introducing newer products. Consequently theywill need to engage with specialised and dependable distribution intermediaries likeCompuage. The result: we will be able to carve out a larger share of the market faster.
Passion and preparedness
At Compuage we possess two of the most decisive credentials that are necessary tocapitalise on this unprecedented opportunity. One we possess the passion that has allowedus to outperform the sector time and again. Two we have proactively invested in ourpeople processes products and partnerships to enhance our sense of preparedness.
THIS PASSION WAS FAITHFULLY REFLECTED IN OUR FY2015-16 PERFORMANCE: DURING A YEARWHEN THE BROAD IT HARDWARE SECTOR GREW BY 7% WE GREW OUR REVENUES BY 30.48%
At Compuage we do not just claim that we are among the five largest IT productdistribution companies in India; we are among the most passionate as well.
Why do we say that? Because we stretch ourselves continually; because we run ourCompany virtually like a bank; because we come up with pioneering practices that becomesectoral benchmarks; because we ensure that our people productivity remains among thehighest in the industry.
This passion was faithfully reflected in our FY2015-16 performance. During the yearwhen the broad IT hardware sector grew by 7% we grew our revenues by 30.48%. In asluggish economy Compuage's profitable growth was reflected in a 23.16% growth in PAT. Weturned our inventory around faster we recovered outstanding debts promptly we lessenedbad debts on our books and we reported Rs. 9493 lac worth of cash on our books.
At Compuage we have invested proactively in our business so that when the sectoralsurge transpires we will be at the right place at the right time armed with the rightproducts.
As a means to this end we have laid out plans to grow our presence from 450 cities to700 in 2016-17; increase the proportion of our resellers in India's Tier-II III and IVcities from 55% to 75%; make our presence felt in every Indian town with a population ofat least 200000.
Over the last couple of years we ^have plugged gaps in our operating model and intendto continue doing so with the objective to cement out reputation as a one-stop shop. Werecruited more professionals (accountants sales and service teams) to address our growingnumber of clients. We garnered superior margins by moderating our working capital usageand interest outflow. We invested in top-of-the- line automation to double our scalewithout incurring any additional investments. We segregated product delivery and resellerengagement touch points to strengthen our understanding of ground realities.
It is this combination of passion and preparedness that provides us with the confidencethat we will be able to replicate the growth that we reported in the 27 years of ourexistence in only three years.
We believe that this will reinforce our position as one of the fastest- growing and oneof the most exciting IT product intermediaries in India.
With warm regards
Chairman & Managing Director