TECH PACIFIC INDIA: On the Plateau

CEO K Jaishankar Startup-Year 1986 Products & Services Distributors for HP, IBM, Acer, Epson, Canon, APC, Iomega, 3Com, Cisco, Samsung, Microsoft, Adobe, Macromedia, Symantec, Palm, Sun, Oracle, Autodesk and Avaya Branches 31 Address Gate 1A, Godrej Industries Premises, Off Eastern Express Highway, Vikhroli (E), Mumbai 400 079 Tel 55960101 Fax 55960102 Website techpaconline.com

K Jaishankar CEO K Venkat Executive V-P (value division) Deepak Ashar Director (finance) M Mohapatra, Sanjay Achwal, Bimal Das Business unit heads Aloysius Fernandes V-P (sales)

Systems sales grew 11% to Rs 460 crore ‘New HP’ business alone amounted to Rs 453 crore–26% of overall revenues Dropped Intel, took up AMD

A robust business model–which doesn’t forsake the bottomline for the topline Presence of stable and healthy financial investors like CVC

Inherent credit risk in Tier 1 distribution model remains a vulnerability area Large enterprise access through VAR/SI, but limited access to SME

The year could have been definitely better for Tech Pacific
India, the country’s largest top-tier IT distributor. With a marginal growth
of 3% in revenues this fiscal, Tech Pac notched up Rs 1,721 crore in revenues.
Although the growth rate has been marginal, the increase in demand over
subsequent quarters hints at a recovery in the IT market. The first quarter was
tough, with growth being severely impacted by weak demand–and pricing
pressures were highest, with branded PCs losing marketshare to white boxes and
assembled units. More important, the HP-Compaq post-merger consolidation was on.
By September, however, demand started looking up and the HP-Compaq channel and
product integration efforts were nearly complete.

Proof: Of total systems sales of Rs 460 crore, the ‘New HP’
brand brought in Rs 261 crore, signifying the strength and impact of the
HP-Compaq merger. Overall, the systems portfolio grew by 11% in revenue terms,
despite price drops during the year. This was also an index of the recovery in
the market.

The strategy aimed at inorganic growth–and one that worked
well–was the signing of exclusive distribution agreements with niche product
vendors 3Com, Autodesk, APC, Adobe and Symantec. For many of these companies,
Tech Pac carries out market development and demand generation activities, apart
from demand fulfillment, paving the way for total ownership of the business. The
direct impact of this was an increase in both revenues and profitability. Tech
Pac has since invested in a separate division staffed with people trained in
configuring technology solutions, delivering marketing programs and recruiting
channels.

Drivers for growth in the coming year are likely to be
storage, wireless, security and cellular handsets. Credit management by the
channel continues to be the most vulnerable part of the business. But Year
2002-03 saw profits grow faster than revenues. And the company now feels that
the growth in demand over the quarters is a sure signal that the slowdown has
come to an end.