TVS ELECTRONICS LTD – Get, Set, Go

Import, Indianize, and Sell should be the mantra for TVS Electronics Ltd (TVSE). One of
the few keyboard and DMP manufacturing companies in the country, TVSE posted revenues of
Rs 114.33 crore for fiscal 1997-98 as opposed to Rs 115.6 crore in the previous

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DIRECTOR: S Shreenivasa Rao * PRODUCTS AND SERVICES: Peripherals, Accessories * TECHNICAL COLLABORATION: Citizen, OKI, IMV, Kevtronics * AGENCY OPERATIONS: Lexmark *
START-UP YEAR: 1986 * EMPLOYEES: 486 *
QUALITY CERTIFICATION: MAIT Quality Recognition * ADDRESS:
DP-34, Gouth Phase, Guindy Industrial Estate, Chennai 600032 *
TEL: 2325506 * FAX: 2327577 *
WEB SITE: www.tvs-e.com

PERFORMANCE HIGHLIGHTS

  • l Group revenue up by 31.0 percent, from Rs 133.6 crore in 1996-97 to Rs 174.9 crore in
    1997-98.
  • l Net profits up from Rs 2.0 crore to Rs 4.2 crore in 1997-98.

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year. Although at the outset, this represents a negative growth, in terms of
actual performance the company added another Rs 60.61 crore to its Group, through the two
marketing companies spun off during the last year.

Established in 1986, as part of the diversified TVS Group, the company’s strategy has
been to import manufacturing technologies, indigenize, and mass produce, taking advantage
of the domestic low-cost base. One of its most important collaborations has been with
Citizen, Japan, for manufacture of dot matrix printers. The company has indigenized and
sold the product under the TVSE brand name, and maintained a leading share. In 1997-98, it
had a 38 percent unit share of the domestic market.

Similarly, TVSE extended its strategy to keyboards through its tie-up with Cherry and,
in 1997-98, produced 99,000 keyboards for the domestic market. In case of UPSs, TVSE tied
up with the Netherlands-based Invertomatic Victron, and adopted the reverse strategy of
contract manufacturing for export market before launching it in the country. A benefit of
the indigenization effort has been its ability to replace and repair its products for
channel partners. This has created a strong brand loyalty for all products marketed under
the TVSE brand name.

With the dot matrix technology shifting to the slow lane in comparison to inkjets, the
company has extended its expertise to manufacture of application specific impact printers.
In order to ensure a future growth in the printer market, the company has also tied up
with Lexmark for distribution of inkjet and laser printers. In the keyboard segment, the
company is well on its way to launching membrane keyboards. With its relatively lower
cost, the company plans to position it as an alternative to the mechanical keyboard for
the Home and SOHO segment.

While the present performance of the company looks comfortable, it needs to watch out
for some concern areas. To start with, the company appears to be under-utilizing its
strong domestic manufacturing infrastructure. In the second case, it appears to have
limited export market outlets. This is evidenced by the negative export growth in 1997-98,
when Invertomatic Victron actually drew 18 percent less units. With the company’s
performance currently dependent on dated technologies and limited market base, the company
does not appear to be looking sufficiently far ahead. While its past drive to acquire
technologies has propelled it on the forefront of the domestic market, it needs to gear up
fast to become a global player.

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