Bharat FIH shuts R&D and supply chain subsidiary amid revenue decline

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Bharat FIH shuts R&D and supply chain subsidiary amid revenue decline

Bharat FIH shuts R&D and supply chain subsidiary amid revenue decline

Industry News
Nov 21,24

In 2021, Bharat FIH had established two subsidiaries—Bharat Taiwan Corporation and Rising Stars Hi-Tech—to enhance research, product development, and engineering capabilities.

Bharat FIH shuts R&D and supply chain subsidiary amid revenue decline

Bharat FIH, part of the Foxconn Group, has decided to shut down Bharat Taiwan Corporation, a subsidiary launched three years ago to focus on R&D and supply chain services, due to ongoing revenue declines. The decision, confirmed in a recent filing, comes after years of decreasing revenues, prompting the company to consolidate its operations and reduce costs.

In 2021, Bharat FIH had established two subsidiaries—Bharat Taiwan Corporation and Rising Stars Hi-Tech—to enhance research, product development, and engineering capabilities. However, the company is now scaling back its operations amid a slump in revenue and profitability. This marks the first public acknowledgment of Bharat FIH’s challenges, which stem from a slowdown in orders from its primary client, Xiaomi, following increased scrutiny of Chinese businesses in India.

Xiaomi has historically accounted for the majority of Bharat FIH’s revenue, contributing up to 96% of its income in 2021. The company’s income dropped significantly in recent years, with total income falling from Rs 266.69 billion in FY20 to Rs 121.28 billion in FY23, resulting in a net loss of Rs 330 million.

Founded in 2015 as Rising Stars Mobile India, Bharat FIH initially focused on manufacturing mobile devices and components. The company expanded its operations to multiple locations in Tamil Nadu and has since employed over 25,000 people, with 90% of them being women. However, reports suggest that it may also close its manufacturing facility in Sri City, Andhra Pradesh, due to a sharp decline in orders.

Despite these setbacks, Bharat FIH is exploring new business opportunities beyond mobile manufacturing, such as in electric vehicles, televisions, and other high-growth sectors. However, the company has not specified a timeline for these plans. Additionally, Bharat FIH has experienced leadership departures, including its former Managing Director, Josh Foulger and several independent directors.

(Financial Express)