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Sector Outlook

There has been strong competition between the major MNCs like Samsung, LG, and Sony.

LG Electronics India Ltd. has announced its extension plan in 2006. The company is going to invest $250 million in India by 2011 and is planning to establish a manufacturing facility in Pune.

TCL Corporation is also planning to establish a $22 million manufacturing facility in India.

The Indian companies like Videocon Industries and Onida are also planning to expand. Videocon has acquired Electrolux brand in India. Also, with the acquisition of Thomson Displays by Videocon in Poland, China, and Mexico, the company is marking its international presence.

According to isuppli Corporation (Applied Market Intelligence), country's fiscal policy has encouraged Indian consumer electronic industry. The reduction on import duty in the year 2005-06 has benefited many companies, such as Samsung, LG, and Sony. These companies import their premium end products from manufacturing facilities that are located outside India.

Indian consumers are now replacing their existing appliances with frost-free refrigerators, split air conditioners, fully automatic washing machines, and color televisions (CTVs), which are boosting the sales in these categories.

Some companies like Samsung Electronics Co. Ltd. and LG Electronics India Ltd. are now focusing on rural areas also. These companies are introducing gift schemes and providing easy finance to capture the consumer base in rural areas.

Sector Financials In Rs

	31/03/2002	31/03/2003	31/03/2004
Sales	37,331m	30,100m	43,096m
Sales Growth	-	-19.4%	43.2%
Gross Profit Margin	10.7%	6.6%	4.3%
Profit After Tax (PAT)	1,019m	940m	-1,202m
PAT Growth	-	-4.3%	-209.5%
Market Capitalization	1,787m	2,392m	2,359m
P/E Ratio	7.0	7.6	-7.9
Return on Capital Employed (ROCE)	13.9%	23.1%	6.9%

Growth in 2005-06

Consumer Durables	Growth
Air Conditioner	20-25%
Refrigerator	5-10%
Microwave Ovens	25%
Washing Machines	5-10%
Color Televisions (CTVs)	15-20%
Black & White Televisions	-20%
Clock	10%
Watch	10%
VCDs	30%
Consumer Electronics (Overall)	9%

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