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Micromax, the largest home-grown handset maker with a 12 per cent market share, according to IDC, reported Rs 190 crore net profit, 6.1 per cent of its Rs 3,106 crore revenue in 2012-2013. Its profit before tax was Rs 280 crore, about nine per cent of its revenue.
Lava International, which has a five per cent market share, in 2012-13 reported a net profit of Rs 55 crore — that comes to 5.6 per cent of its Rs 972-crore revenue. Its profit before tax stood at Rs 83 crore, which was 8.5 per cent of its revenue.
Karbonn, which also has a 12 per cent share of the Indian mobile handset market, according to IDC, posted a loss of Rs 8,059 crore in 2012-2013. Jaina Mobiles, one of the Jaina Group companies that owns Karbonn, however, reported a net profit margin of 22 per cent during the year. Karbonn’s Managing Director Pradeep Jain declined to reveal sales figures. According to Voice&Data, Karbonn’s revenue in 2012-13 was Rs 2,297 crore.
The world’s largest smartphone makers, Samsung and Apple, operated at net profit margins of 13.22 per cent and 21.42 per cent, respectively, in their previous accounting year. Their operating margins were, respectively, 15.9 per cent and 28.57 per cent.
The two companies make cellphones among various other lines of business, however, and their margins reflect this.
Samsung has a 20 per cent volume share in Indian handset market, according to IDC. Apple's market share estimated at 7.3 per cent in Indian handset market by value in the quarter ended December 2013, according to IDC. It did not indicate Apple's market share by volume.
According to market estimates, Micromax, Karbonn, Lava, and Intex are expected to grab close to half the estimated Rs 40,000 crore handset market in India.
“The numbers reflected in the 2012-13 results are dominated by feature phones. The results for 2013-14 will show a different picture with the share of smartphone increasing in overall sales. Both the operating and profit margins will go up substantially,” said SN Rai, co-founder of Lava Mobiles.
Listed Indian cellphone service providers Bharti Airtel, Idea Cellular and Reliance Communications also operate at low profit margins of 3-8 per cent.
The country’s largest operator Bharti Airtel’s profit margin stood at 3.23 per cent in 2012-13, while Reliance Communications posted 5 per cent and Idea Cellular 7.45 per cent. According to market estimates, Micromax, Karbonn, Lava, and Intex are expected to grab close to half of the estimated Rs 40,000 crore handset market in India.
