CompanyWatch: Mirc Electronics's 'Special Effect'
onida.com
Onida Virtual Arcade
onida-arcade.com
(10/14/99 et)
MIRC Electronics, owners of Onida brand TVs, which is setting new standards in corporate governance, is set to announce an interim dividend at its board meeting on Thursday. The corporate has already announced that, as a policy, it would declare 20 per cent of its net profit as dividend in the years to come. On a projected earnings of Rs 40 crore in the current year, the dividend amount works to Rs eight crore. This would work out to almost 100 per cent dividend for the whole year and the company is expected to announce 25 per cent interim each quarter. It may be reminded that Mirc had declared 25 per cent dividend for Q1 of current fiscal.
Large dividend payouts by companies in consumer electronics segment contradicts the popular perception that the companies in the industry face a pressure on cash flows. Payment of interim dividend, in fact, signals comfortable cash position for the companies.
The new corporate governance credo unveiled by it recently comprises path-breaking measures, aiming at greater transparency, consistent rewards for shareholders and creation of service-oriented infrastructure that proactively informs and helps investors. Mirc will adopt the US GAAP for its financial reporting from the current fiscal. The company has already appointed Anderson Consulting to help rationalise the cost structure and to find avenues for cost saving, supply rationalisation, value engineering, standardisation and extended supply chain analysis.
The company has kept up high growth largely through a strong brand build-up in urban markets. While other leading CTV manufacturers dropped prices of their 14-inch CTVs to meet the challenge from cheap overseas brands, Onida decided to keep the price high and capture the premium segment. The result is reflected in higher margins for the company. Mirc is targeting an expanded market share and the next few years should see the company post aggressive growth in the topline as well as bottomline. |
