Micro max founders eye 40% revenue growth in FY17
The promoters of Micro max Informatics have taken full operational control of the company after the departure of some top executives and are focused on taking India’s No. 2 smartphone maker to the top position by dethroning Samsung Electronics in the world’s fastest-growing market. Micro max co founder Rahul Sharma, speaking to ET, described 2015 as an “eventful” year.
That’s when the chairman and the heads of finance, sales and R&D quit, followed by the CEO in early 2016. It was also the year when intense competition, spurred by new entrants from China, hit the company’s shipments, which were down 12.1% year on year and 23.5% quarter on quarter in the October-December 2015 period, according to International Data Corporation. The company’s profit growth in this financial year has been hurt, more so because of its investments in startups.
Talks for potential funding from Alibaba also fizzled out. Sharma said all that’s in the past now and the outlook is strong for the company that he founded with Vikas Jain, Rajesh Agarwal and Sumeet Kumar. “Whatever has had to happen in 2015 has happened. Everybody from China came in. People came in, people went out, yet we are still in the top two,” Sharma said, adding the company isn’t talking to anyone for investments as it generates enough cash.
He downplayed the effects of the top-level exits, saying the promoters had run the company earlier as well — be it product or marketing — and would do so again with the help of business heads. Referring to the acrimonious exit of former chairman Sanjay Kapoor, Sharma said, “Great guy, but somehow it didn’t work out. He came with a team, they all went out together. No big deal.”
Micro max and Kapoor are currently resolving a dispute over his stock options. Sharma quashed speculation that some of Micromax’s foreign investors were looking to exit. Its overseas investors include TA Associates, Sequoia Capital, Sandstone Capital and Madison India Capital. “They have seen tremendous growth. And, as of now, they want to stay because in India, the smartphone market is growing.”
He said that despite the negativity around Micro max, “we are still running the complete race. As an organisation, we will still be profitable (year through March 31)” and close the year with $2 billion (Rs 13,600 crore) revenue, up over 30%. He expects revenue to climb about 40% in the financial year starting April 1, backed by some 50 phone launches and Rs 300 crore in marketing spending.