Philips aims at Rs 5,000 cr revenue

Philips Electronics India is eyeing acquisition opportunities in India to almost double its revenues to Rs 5,000 crore by 2011, Executive Director and Chief Executive Officer designate Murali Sivaraman said.

A subsidiary of the Netherlands-based Royal Philips Electronics, the company closed 2006 (Jan-Dec) with a turnover of Rs 2,649 crore.

Sivaraman said the company has already initiated dialogue with a couple of domestic players. "Work is in progress and there is a sense of urgency," he said without putting a timeframe.

He said the company expected 60-70 per cent of the targeted revenue (Rs 5,000 crore) to be achieved by organic growth. "The balance will come by way of mergers and acquisitions," Sivaraman said.

He said Philips India had about Rs 500-600 crore cash surplus, which it would use for acquisitions. He said the company's revenues were expected to grow 15-16 per cent year-on-year in 2007.

Sivaraman, who formally takes over as the CEO after two weeks, said the healthcare division and the consumer lifestyle divisions would be the growth drivers for the company.

"The healthcare business has been growing 30-33 per cent in the last two-three years and we expect a similar growth till 2010," he said. The aim to double revenues by 2011 is part of the restructuring programme of Philips wherein it is targeting higher profitability with operating profit margins in excess of 10 per cent globally.

"We are well on track to achieve operating margins of more than 7.5 per cent following the successful implementation of the 2004-07 strategic plan," Gerard Kleisterlee, president and chief executive officer, Royal Philips, had said in a statement last week.