The past two fiscals are ones that Priya would like to forget. In 2003-04, the company's overall turnover slid by a further 42% over the previous fiscal's drop of 14%. Its agency revenues was a saving grace, as the company posted
Rs 86.20 crore in 2003-04, which was slightly better than the previous fiscal's Rs 85.49 crore.

As a damage control reaction, Priya decided to streamline its product portfolio. The management at Priya decided to concentrate on profitability, rather than turnover growth in an effort to put the company back in the black.

It did away with those brands that were not offering good margins. Priya had to stop selling TraxData products, after the company was globally declared bankrupt. At the same time, it added brands like Western Digital, AMD and Philips monitors, which were offering better margins. Though AMD and Philips were new inclusions to Priya's portfolio, they are already contributing 30% to the company's overall agency revenues.

Priya blames the overcrowding of the distribution market and the subsequent price-cutting for its negative growth. "Due to the overcrowding of the market, distributors often have to stick with brands that don't yield good profits," says Aditya Bhuwania, Executive Director, Priya Ltd. "This is why we decided to stop selling LG, as we were not making any money in it, though we were one of its leading distributors."

Priya has also limited its credit to the channel to enhance its cash flow. It adhered to a policy if offering only 30 days credit to most of its dealers, barring a few large OEMs. It has a dealer network of 3,000 partners across 22 cities. It opened offices in five cities last fiscal.

The company has also has service centers in 20 locations, most of which also double up as warehouses, with a turnaround
time of 48 hours. "In most cases, we offer over the counter replacement. But where repairs are necessary we get the product back to the customers within two working days," notes Aditya.

Priya expects that an extensive service network will give it a competitive edge over other distributors, who don't offer quick service. This is another reason why the company invested into an ERP system, so that all the logistics are well-aligned.

Priya wants to ramp up its volumes, especially for the newly included brands, but is prudently waiting for this to happen gradually. This fiscal, the company wants to ensure that there is no negative growth, even if there is no increase in turnover. "Profitability has already increased in the past two quarters and we were in the black in the second half of last fiscal," says Aditya.

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