Once again Unicorp surpassed expectations and crossed the Rs 300-crore mark. At Rs
314.60 crore and a growth of over 50 percent, the performance is commendable at a time
when the entire economy was going through a crisis.
On the domestic front, where 40 percent of its business
comes through channels, Unicorp had good success as far as sales were concerned. Its
overall hardware business went up to Rs 215.95 crores in 1997-97, a growth of over 43
percent over the previous year. Its Compaq business grew by over 70 percent in terms of
number of machines and by over 25 percent in terms of revenues. Among the major orders was
the Rs 10.5-crore order from Allahabad Bank for total branch automation. Other important
clients of Unicorp were TCS, Gap Int’l, Escotel, NIIT, and Jardine Fleming.
The company also did fairly well with its own Unicorp range of computers. At
1,100 servers, and over 14,100 PCs, Unicorp’s business from own brand went up by over
149 percent in terms of numbers and over 200 percent in terms of revenues. Alongwith the
systems, Unicorp also sold about 4,000 dot matrix printers and 47 line printers, and
21,000 network interface cards. However, while the company did well with Compaq, where it
was primarily selling boxes, the company failed to achieve results with IBM PCs and
servers as well as Apple Macs.
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However, behind all the success there are
confirmed reports that in its zeal to sell, Unicorp has considerable amount of money stuck
in the form of receivables. This has, reportedly, led the company into a tight cash
situation and financial crunch. The company had to raise substantial amount of money
through various sources to meet the crisis. Cost-cutting measures are also being adopted
and several committees have been set up to look at expenditures in various departments.
Considering the decreasing margins in PC business:
Unicorp has been for sometime trying to move into solutions and high-end machines.
However, it could not sell any Sequent machines or any IBM AS/400s for which it was a
distributor. Earlier, after it had performed wonders with Compaq, Unicorp was said to be a
highly sought-after vendor among MNCs wanting to establish their brands in India. But it
was primarily lack of performance because of which the sales tie-ups with IBM, Sequent,
and Apple were finally discontinued.
Clearly, it is time for rethinking and consolidation at
Unicorp. As a strategy to move away from distribution and box-selling, Unicorp wants to
move up the value chain both in terms of the services they offer as well as higher
margins. The company is planning a product mix, where only about 20 percent of revenues
come from distribution activities, and wants to build up its own strengths in the areas of
services, software development, and training to contribute the balance. The primary task,
therefore, will be to enhance and strengthen the companys focus on providing
solutions in the high end. The company has identified banking, finance, and insurance
segments as the key markets where it will target in the coming year. Toward that end, it
has already tied up with ICS of UK, for banking applications, and another UK-based vendor,
JBA Systems, for the ERP segment.
In line with the decision to move up the value chain was
the decision to form Unisoft for software development. With offices in Singapore and
Dubai, Unisoft, which specializes in Oracle, Solaris, networking, and firmware, has
already got over 50 people on board. Unisoft will be taking up both on-site as well as
off-shore development work, and will stress on projects. As per plans there will be over
200 people at Unisoft by the end of this year.
The third line of high profitability business that
Unicorp will do is training. To be started sometime in September this year, Unicorps
training activities will be centered around Microsoft, AS/400, and ERP. The objective is
not only to have revenues from this activity, but also build a pool of software
professionals for Unisoft.
Unicorps hardware exports dipped last year due to
the Asian economies meltdown, from Rs 54 crore in 1996-97 to Rs 31.91 crore last year. The encouraging point
here is that while a bulk of export revenues in 1996-97 had come from export of SIMMs and
the rest from computers, in 1997-98 export of computers grew by as much as 76
percentfrom Rs 18.15 crore to Rs 31.91 crore. And Unicorp plans to continue its
thrust on exports to countries like the CIS countries, Vietnam, Hong Kong, Dubai, Sri
Lanka, Emirates, Egypt, and Saudi Arabia.
The current year will be action-packed for this Top 20
veteran. Remixing its product portfolio, expanding its ambit of activities from
box-centric to solution-centric, getting into new businesses like training and software
development…will take a lot of doing. Which could be quite daunting if its reported
financial problems continue, as all these activities will call for a significant amount of
funding. In the middle of all this, the company has moved its corporate headquarters as
well as manufacturing facility from Delhi to its 60,000 sq. ft complex in neighboring
Gurgaon. Unicorp has a spare capacity of about 8,000 units per month and it wants to take
up contract manufacturing.
A full plate indeed for the current year.