Recently went for some scuttlebutt to some of the local dealer of safety shoes. These were stores which had multiple brands.

Mallcom is a brand that has been in the market and is selling under the brand Tiger for more than 15-20 years so every worker thinks that’s a good product. The brand recall is super strong but that is slowly fading as majorly they are doing hand-stitched shoes and players like Karam and T- Torp is changing the game by launching more and more machine-stitched shoes. Mallcom shoes get torn and the sole of the shoe also comes off (Surprisingly this was told by 2-3 suppliers which are multi-brand suppliers. So this should be a big question on their quality)

Karam shoes come in the range of 1300-1600 (Very high and good quality)
T Torp shoes are 1000-1200 (Mid price range and good quality)
Mallcom shoes are for 800-1000 (Lower price okayish quality)

There are players like Allen, and Tata (Tagra) but they are very premium and very expensive so if you give bulk orders the dealer can tell them.

Mallcom shoes are taken by workers who can’t afford higher quality products. They don’t understand that it will give them ankle pain in the long run as Karam shoes have a comfort cushion.

There are few spaces where certificates do matter (The distributor indirectly said to me we can give you whatever certificates you need which means there can be fake certifications by unorganized but not sure about this if this is a general market phenomenon as sample size is small)

Concall Notes – Feb 2024

Industry Outlook:

• India’s construction market is growing, especially in infrastructure projects and renewable energy.
• Focus on hydro power sector.

Budget Impact:

• Government proposed increase in infrastructure outlay.
• Positive outlook for the sector.

Order Book:

• Currently at Rs.19,000 Crores.
• Orders from various sectors including hydro, irrigation, tunneling, and road projects.

Recent Projects:

• Sela pass tunnel project nearing completion.
• Expected to provide connectivity in Arunachal Pradesh.

Financial Performance:

• Revenue and net profit showing significant growth.
• Operating EBITDA improving.

Debt Position:

• Consolidated gross debt reduced.
• Plans to repay term debt over next three to four years.

Arbitration Awards:

• Expecting Rs.150-200 Crores in next quarter.
• Will help in working capital requirements.

Future Outlook:

• Expect revenue to continue growing at 15% annually.
• Focus on maintaining operating margins.

QIP Plans:

• Enabling provision taken for QIP of up to Rs.500 Crores.
• Post-elections to raise funds for working capital and growth.

Employee and Equipment Base:

• Increased in anticipation of upcoming orders in renewable energy sector.

International Projects:

• Limited projects in Nepal.
• Focus on strategically important projects for India.

Land Monetization:

• Plans to sell land parcels gradually to reduce debt and improve financial position.

Bid Capacity:

• Sufficient capacity to increase order book by 15-20% in the next year.

Courtesy – screener…

Expert may throw light

Note: invested little, for traking…

IKIO Lighting –

Company overview and Q3 FY 24 highlights –

India’s leading ODM ( Original Designer and Manufacturer ) of LED lighting products sold under various customer brand names. Makes the following –

High end home decorative lightings

Indoor and Outdoor lights

Lighting for Commercial Refrigeration appliances and recreational vehicles

Rotary Switches

Fan regulator assemblies

Switches

USB chargers

Lithium Battries

Solar Panels and ABS pipes for recreational vehicles

Manufacturing facilities –

Haridwar – 42k Sq Ft – LED lights, regulators and switches

Noida – 1 – 80k Sq Ft – Regulators, Switches, Backward integration processes like – tool room, injection moulding, powder coating, CNC machining

Noida – 2 – 112k Sq Ft – Refrigeration LED lighting, LED modules, LED – lighting drivers

Noida – 3 – LED lighting for RVs, Solar panels for RVs, ABS pipes for RVs

Q3 financials –

Sales – 117 vs 115 cr

EBITDA – 26 vs 29 cr ( margins @ 22 vs 25 pc )

PAT – 19 vs 18 cr ( due lower interest outgo and higher other income due utilisation of IPO proceeds )

Company is net debt free with net cash levels @ 200 cr

Q3 Concall highlights –

Lighting business did display some demand weakness in Q3. Demand from export markets continued to be strong – for recreational vehicle products

Planning to launch highly innovative products in the ODM lighting segment in next 3-4 Qtrs. Have hired additional ppl for the same. Hence the employee costs in Q3 are elevated

Have been in talks with a lot of clients in the GCC region. Results likely to be visible by Q2 next FY. Negotiations are in advanced stages. A lot of sampling work has already happened

Sales of RV lighting showing very good pick up in the US mkt

Company expects Q4 to be better than Q3

Sales breakup –

ODM sales – 50 pc of total sales ( this is the business that company does for Signify Lighting – selling Phillips decorative lighting in India )

Display lighting – 32 pc of total sales

Others – 3 pc of sales

Exports – 15 pc of sales

Phase – 1 of new capex is likely to hit optimum capacity utilisation of 60-70 pc in about 24 months from now. At 60-70 pc utilisation, company is able to generate fixed assets turnover of 4-5 times that would amount to 300-350 cr in sales

Dependence on China for procurement of Raw Materials @ 42 pc ( at company level ) – primarily the Diaodes and Semiconductors which are currently not being made by anyone in India – this is also a key business risk

Industry wise slowdown in LED lighting industry in Q3 is perplexing. Even the company could not point out the reasons for it

Expecting Q4 to be better than Q3

Disc : bought recently, biased, not a buy / sell recommendation, not SEBI registered

How much impact of govt.’s anti dumping duty on para tertiary butyl phenol ??

Great One Om.

Had been tracking Thermax for a year now. Did not get the confidence to invest,

Obviously a big mistake.