IKIO lightings ltd makes Interesting case study !! If anyone tracking this company kindly share your findings it will be much appreciated.
Compañy recently came up with its sucessful ipo listing and held its maiden earnings call and here are the highlights
- Company primarily operates in the ODM ( Original Design Manufacturer) mainly LED
- Company has a B2B model and are not looking to go into B2C model
- The growth trajectory has been good in the last 5-6 years as the SKUs have grown from 200 to 1000+, the company was heavily dependent on imports but has become backward integrated and export numbers have also grown over the years
- Company has 3 business verticals
︎LED products
︎Commercial refrigeration
︎ Others ( usb chargers, mcb switches, rotary switches, ips containers, drivers) - Company has 4 well integrated manufacturing facilities. 3 in Noida and 1 in Haridwar. The total area of these facilities is ~ 3,00,000 sq feet
- Conpany has repaid 50cr of debt from the ipo proceeds and the consolidated gross debt now stands at 48cr as of June 2023, other items in ipo prospectus include investment in new facility and general corporate purposes, both are in-progress
- CAPEX – Company is building a 5,00,000 sq feet project into three blocks where Block 1 is almost in final stages of completion and is expected to commence operations by end of this FY. Overall completion of all three blocks is expected in next 2 years. Total capex required for the entire project is 212cr. The asset turns expected around 5x with more than 60% plant utilization. The capex is primarily funded by ipo proceeds.
- Company has given good 1st quarter result
Total income 36.19cr
Ebitda 237 million Rs
Ebitda margins 21.7%
PAT 138 million
PAT margins 12.7% - Downsides
︎Small cap company so competition from existing industry giants a threat
︎ Company’s 50% sales are to Signify (Philips) so major dependence on one client
︎ Delay / divergence from capex plans will dent the future prospects
Disc – Recently added to my portfolio (2%) so may be biased
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