THREE TO TANGO
It is not a small feat for a regional distributor in Bihar to achieve a turnover of ` 80 crore, but Navin Gupta, Director, Krishna Group, along with his two brothers, has created a company that is regarded as the best distributor in the region
Patna-based Krishna Group that started as stationery retail and distribution business transformed into completely different avatar over the years.
The group is regarded as one of the largest IT regional distributors in Bihar, with presence in retail and corporate reselling. It is among the first IT resellers and is credited with creating IT awareness at a time when the region had no concept of IT.
Navin Gupta, Director, Krishna Group, joined family business after completing BA Hons in 1974, and started looking for opportunities to expand. The opportunity struck in 1980 when he partnered with DCM Data Products as reseller. “We were distributing DCM calculators and had a good connect with the government, PSU and commercial establishments. Although IT was at a nascent stage, we realized its potential in the beginning,” he shares.
He was ably supported by older brothers, Satish, Sudhir and Rajesh Gupta, Directors, Krishna Group. By 1982, the company entered office automation and added franking machines from Kilburn and Mitsubishi photo copiers to its portfolio.
The company saw major turnaround in 1985 when it organized first IT expo in Patna. “The expo was inaugurated by Chandra Shekhar Singh, then Chief Secretary of Bihar. He was quite impressed and issued letters to all the HODs to visit the expo. That gave huge impetus to our IT business, and we bagged several deals for 1-3 PCs and servers,” recalls Sudhir.
Seeing the rapid growth, the company in 1985 carved out a separate company, Krishna Agencies Pvt Ltd (KAPL), to handle the IT business.
It became first Xerox dealer in India in 1987. “Office automation was just taking off in Bihar and the demand was rising for photo copiers and fax machines. Our Xerox business grew gradually. By 1993, we were selling 150 photocopiers and 100 fax machines per annum, which rose to 250 copiers and 600 fax machines yearly by 1996,” shares Rajesh.
The company also ventured in IT retail in 1987. “We were targeting both the commercial and home consumers with the retail store. It was the hunger to grow further that prompted us to tie-up with Compaq in 1997. The same year, we became authorized service partner for Compaq,” says Navin.
In the meantime, eldest brother Satish left the business in 1994 and started a real estate business in Delhi.
Krishna saw retail picking up after tie-up with HP in 2000. “HP was quite aggressive on pricing and hence we partnered with it for commercial as well as retail. It doubled our retail revenue to ` 2 crore in FY2000-01,” he adds. The same year, it formed Krishna Consultancy Services (KCS) to cater to services and consumables business.
Later, the company entered IT distribution in partnership with Dell, in 2008. “That was a turning point for us. We leveraged our expertise in distribution of stationery products. Additionally aggressive marketing from Dell enabled us to sell 150-200 PCs per month in 2009,” shares Navin.
Dell distribution enabled Krishna to grow 76 percent from ` 25 crore in FY2008-09 to ` 44 crore in FY2009-10.
The Krishna Group now constitutes three entities, Krishna Agencies dealing with distribution, KAPL for retail and KCS for corporate reselling and services.
The Krishna Group, now managed by three brothers, registered 12 percent growth posting a topline of ` 66 crore in FY2011-12. It further grew 21 percent to ` 79.5 crore in FY2012-13.
The company credited the growth in the last couple of years to increasing focus on Dell distribution, large government deals and services focus.
The distribution business added ` 57.9 crore last fiscal, and largely grew due to higher focus on existing products and channel expansion in Bihar. Krishna Agencies is a
“Partners will stop seeing value, if all you are doing is fulfillment. We must understand that channel attention spans are short, hence we need to create a difference”
Dell Master Sales Affiliate for Bihar and regional distributor for Xerox consumables. Nearly 80 percent of its topline came from Dell and consumables contributed about 20 percent. “In 2008, we began with 20 partners and over the years have increased the count to 125 partners. This expansion has facilitated the growth of our distribution business,” discloses Navin.
The corporate reselling business contributed ` 11 crore last fiscal; almost 55 percent of it came from government and 45 percent from education. “The Bihar government introduced several large IT projects in the last couple of years. Many government offices were also revamped, and new ones cameup; this created large opportunities. Moreover, we benefitted with many new educational projects,” he adds.
The company won a large deal to supply 300 PCs worth ` 1.7 crore across 38 offices of Municipal Corporation in Bihar in 2012. It won an order worth ` 1 crore for 20 photocopiers from a medical college. It also supplied 400 PCs to a large government university in Bihar.
The retail business contributed about ` 10 crore last fiscal due to product expansion and services focus. The company added Dell accessories in 2012, and opened an all-brand service center for PC, printers and UPSs. In addition, it bagged AMCs from corporate customers, which contributed ` 40 lakh.
Krishna Agencies focuses on managing credit better for more inventory cycles, adding to the turnover. “We have categorized partners according to their credit worthiness. While we ask many of our partners to pay advance cheques, we have about 50 partners who pay in advance through RTGS. This way, we have been able to ensure zero defaults,” informs Rajesh.
One of the key strategies has been to go beyond the vendor in all aspects of channel management. “I believe partners will stop seeing value in you, if all you are doing is fulfillment. Also, we understood that channel attention span is short, hence we need to create a difference,” elaborates Navin.
He advises peers to be passionate about business,
“You cannot hold on to a business because it gave you good returns some time back but is losing money today. The same applies to some vendor relationships”
but not just about one business. “You will need to change with the times. You need to have a sense of detachment too; you cannot hold on to a business because it gave you good returns some time back—but is losing money today. The same applies to some vendor relationships. I give more importance to human relationships than vendor relationships.”
The company is targeting revenue of ` 100 crore in the current fiscal. “We have already achieved almost 80 percent of our target riding on our distribution business. The Dell distribution is likely to add ` 65 crore this fiscal.”
It is also planning to add tablets to its distribution portfolio in the next fiscal.
Krishna expects ` 15 crore from its corporate reselling business. It added UneeCops smart class solution in 2012 and executed 5 orders worth ` 4 lakh-`5lakh; two are under execution. “Moreover, we have executed 12 deals of ` 15lakh` 20lakh in the current fiscal. However, majority of business is expected in Dec-Jan as the government is expected to release large DGS&D orders during that time,” shares Navin.
In addition, the company is also collaborating with system integration division of Ricoh. “We are participating in three large government and education deals worth ` 5 crore-`10 crore with Ricoh. The ORC in these deals will significantly boost our revenues,” he discloses.
Further, Sudhir expects ` 12 crore from retail and services. “We are having roaring sales in the festival season and retail has already added ` 7 crore to the business. Dell accessories are contributing significantly to the growth.”
On a personal note
The trio sees their father Late RS Gupta who started the stationery business in 1964 as role model. “We have worked on his principle of promising less and delivering more. He always taught us to pay debts on time for a flourishing business,” shares Navin.
Navin is the founder member and Vice President of Confederation of Indian IT Associations and Secretary of the Bihar IT Association. He is also active in Rotary International.
The three brothers have a common hobby of travelling and make sure to travel at least once a year. “The best part in travelling is the quality time spent with family and friends,” concludes Rajesh.