MOSER BAER: Growth King, Again

MD Deepak Puri Startup-Year 1983 Products & Services Magnetic & optical recordable media Branches 4 Dealers 175 Address 43A, Okhla Industrial Estate, New Delhi 110020 Tel 51635201-7, 26911570-4 Fax 51635211 Website www.moserbaer.com

Deepak Puri Managing director Ratul Puri Executive director PM Pai President Phiroz Vandrewala Executive V-P Rakesh Govil Head (corporate strategy and treasury) Ramesh Sanka Financial controller & CIO Brian Bartholomoues V-P (strategic initiatives) VC Agerwal V-P (manufacturing)

European Commission drops anti-dumping and anti-subsidy investigation Tieup with Imation to bring in $100 mn annually Launched its own brand of optical media in the domestic market Feasibility studies for a plant in East Germany under way

Amongst the lowest-cost manufacturers worldwide Strong R&D team helps it stay ahead with indigenous technology

Still an OEM–getting an entry into the branded league is the current challenge

Moser Baer has been defying convention for long now, putting up impressive
performances for years now. It did it again in 2002-03, notching up the industry’s
fastest growth rate–53%. The hardware exporter grew faster than TCS, Wipro and
Infosys, India’s top software exporters. And if that doesn’t make news,
Moser Baer has done this for the second year running–last year, it received
the DQ Top 20 Award for the ‘Fastest Growing IT Company’. It’s growth rate
then–102%. If this still doesn’t impress you, consider this–the 53% growth
was achieved in a year when the other hardware exports major, Celetron, saw
revenues crash 67%.

Moser Baer has established itself as the one of the top three manufacturers
in the worldwide optical data storage market. Currently, the company is
expanding its production capacities to 1.1 billion units. Once these capacities
go online, over 80% of the company’s total capacities will become CD-DVD-flexible,
at a low incremental cost.

The company’s had its knocks as well. While revenues jumped 53%, post-tax
earnings took a knock–growing a meager 13.6% (59% growth in 2001-02). Post
9.11, fall in consumer offtake on the back of sluggish global demand led to a
sharp build-up in inventory levels. The negative impact of this can be seen in
the financial performance in the second and third quarters of 2002-03, and this
affected overall margins. By the end of third quarter, however, demand showed
signs of a turnaround, and the fourth reaffirmed this, numbers bounced–Q4
alone accounted for 32% of total sales.

In perspective, despite the fall in net profits, the year was a good one for
the company. A tieup with global leader Imation is expected to contribute $100
million to Moser Baer’s kitty every year–as it contains a commitment to
purchase 25-30% of production over the next three years, at least. This also
gives Moser Baer access to the US market, one of the largest for optical media.

Secondly, the European Commission dropped its anti-dumping and anti-subsidy
investigation against the company in January. The goal now–to ramp up capacity
to 1.1 billion units, from 730 million units. The company is also planning to
renegotiate its selling price with key customers in the first half of 2003-04.