MOSER BEAR: Down, But Not Out

Deepak Puri
CMD

Ratul Puri executive director

Neeta Puri director, Administration

Yogesh Mathur CFO

Rakesh Govil head
(Corporate Strategy & Treasury)

Vivek Chaturvedi
senior VP, International Marketing


VC Agerwal senior VP, Plants

The last financial year for Moser Baer was the sad saga of escalating
polycarbonate prices and dipping revenues. One of the fastest growing IT
companies till FY 2003-04, Moser Baer faced tough times and saw a 10% decrease
in gross revenues and plummeting net profits from Rs 324 crore to Rs 63 crore in
FY 2004-05. Escalating operating costs were a result of globally mounting oil
prices-from around $25 a barrel to $59 a barrel in 2005-that led to a sharp
hike in polycarbonate prices, which make up 70% of optical media manufacturing
costs.

HIGHLIGHTS

Exporting to 82 countries. US and UK exports account for 40% each, and 20%
comes from the rest of the world

Net profit dipped by 80% to Rs 63 cr


Plans to increase optical media manufacturing capacity from 2 bn in 2004
to an anticipated 2.8 bn by 2006


2005-06 will be the year of the DVD


Pricing pressure pulls down revenues and profits

Polycarbonate prices remain a matter of great concern

l Start-up Year:
1983 l Products and Services: Optical and magnetic storage media, audio cassettes/diskettes
and packaging options l Technical Collaboration: IIT Delhi, MKM, Hitachi, Imation
l Branches: 6
l Address: 43 B, Okhla Industrial Estate Phase III New Delhi -110020
l Tel: 51635201-10 l Fax: 51635211
l Website: www.moserbaer.com 

The market, however, started stabilizing in the OND quarter with brisk
international business due to the festive season and a strong JFM quarter given
heavy corporate spending. Moser Baer saw high never-before shipment volumes in
the last two quarters. Rapidly depleting inventories and growing sales volumes
saw the average selling price firming up from November, notching up an increase
of nearly 20% by the end of the fiscal.

Moser Baer is aggressive about reaching its goal of 65% (15% through HP and
50% from Moser Baer’s Pro Range) market share by Apr 2006. With the CD market
stabilizing, the company is betting hard on the DVD market, which has been
seeing three-digit growth and offers better margins. The manufacturing plant at
Noida is in the process of scaling up its capacity, keeping in step with the
company’s plans to increase production from the current 2.4 bn discs to more
than 2.8 bn discs after a total investment of $105 mn during 2005-06. About 10%
of CD manufacturing lines have already been turned into DVD lines.

Last year, Moser Baer entered into an agreement with HP to manufacture
optical media using ‘LightScribe’ technology, the manufacturing for which
began in January 2005. It also entered into another agreement this year with IIT—Delhi
to work on technological innovations.

Given a slow year, Moser Baer’s Germany plans did not materialize, but the
company is still considering options in East Europe to do niche development and
R&D work. 

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