Moser Baer India Ltd is the India’s largest Optical storage media manufacturer and Second largest in the world. It was incorporated in the year 1983 as Time recorder unit, in collaboration with Mauezen Corporation of Japan and Moser Baer Sumsiwald of Switzerland. From 1988, the company started manufacturing Floppy Diskettes.  In 1999, it commissioned a new manufacturing unit for the production of Compact Discs (CDs) and Digital Versatile Discs (DVDs). The company owns a research and development center with cutting edge technologies. The company has a global presence in over 82 Countries. It has many Global clients and earns 75% of its revenue through exports. In 2006, the company made its maiden foray in photovoltaic and Home Entertainment Business. It is expected that the Home Entertainment business will grow to $200 Million by the end of 2010. The company launched a subsidiary Moser Baer Photo Voltaic (MBPV) in 2005 to boost their growth in Solar Energy segment. The company has set up a PV manufacturing unit near Delhi in a tie-up with Applied Materials Corporation. In November 2007, the company signed a Memorandum of Understanding (MoU) with the government of Rajasthan to set up a large solar power project which will cost around Rs.100 Crores with a power generation capacity of 1~5 MW. In February 2008, the company announced its plans of establishing a 600 MW Thin Film PV capacity with an estimated investment of over $ 1.5 billion. In April 2008, it signed an agreement with a China based Solar Firm, LDK Solar for sale and delivery of high quality multicrystalline silicon wafers to MBPV over a ten-year period commencing in mid-2008 through 2017.From 2007; the company started manufacturing IT peripherals and Consumer electronics. It also manufactures the next generation storage devices like Blue ray discs and HD DVD. The company recently got the assent of the board to expand Moser Baer solar Plc, a subsidiary of the company by $150 Million. The company’s Entertainment business segment recently started producing multilingual films. It recently forayed into the business of LCD TVs. At a function in Dubai recently, it launched eight models of its LCD television brand. The models included HD Ready LCD TVs– available in 19, 22, 26, 32 and 42 inches and Full HD LCD TVs available in 40 and 47 inches sizes. The price range of the launched series was between Rs 20,900 and Rs 149,900.

FINANCIALS

The company recently announced its financials for the quarter ended March, 31 2008 recently. The company posted a net loss of Rs.717.2 Million as against the net profit of Rs. 397.2 Million in the corresponding period last year. Operating profit lowered by 15% and stood at Rs.810.2 Million versus last year’s operating profit of Rs. 957.7 Million. Total sales also shrunk to Rs.4710.5 million from Rs.5502.2 posted in the same period last year. The company’s this quarter is below the expectations because of sharp decline in the realizations.

The company’s Q4 results compared with market peers is summarized below

The company stands second in the table. For the last two quarters the company is not posting impressive results. This declination is due to the lowering of average realizations. The cancellation license by Philips also is one of the causes for this quarterly loss. The expansion of optical media segment raised the deprecation provision for this year. But on the other hand the new businesses of the company are doing well. The company got $40 Million from the entertainment business and $42 Million from the Photovoltaic Business. The rise for next generation storage devices like pen drives and Micro chips hinders the sales of CDs. The Pirated CD and DVD sales also remain major concern for the growth of the company. As the company forayed in to new business segments it is expected that the company will post positive results in the forth coming Fiscal.

STOCK OUTLOOK

 The stock is now trading in the region of Rs. 100-120. The company lost nearly 50% in the last month. It is on a sharp declination ever since hitting Rs.300 level in the mid of January. This decline in the stock seems taken a temporary halt at Rs. 100, the key long term support. Both Short term and long term investors may look for an entry at this level.