| Description | Net profit | Rationale |
|---|---|---|
| Enterprise Business | 35 | Steady Cash cow business the company can do 2% margin and management has presented it’s content to continue to do the same since the same is -Ve working capital cycle business Implying the growth rate of 4-5% the company can do 1750 crores of EB sale which is bare minimum |
| Brand Licensing Business | 60.9 | Assuming that company does 500 crores of honeywell business and 300 crores of Cyber power business the NP margin can be 12% (15% EBITDA and 16% tax for Hongkong) @77% stake and for cyberpower @51% stake doing 10% PAT margins |
| 95.9 |
Did a bit modeling for picture how the same will look 2.25 years down the line
I think 1750 crores of sales is extremely possible in EB segment can even go above 2000 crores
Now for Honeywell They have targeted the sales of 500 crores 2.25 years down the line but 270 crores 1 year down the line, couldn’t get the chance to ask non linear Jump in earnings
Execution to be tracked in Cyber power did some review check from gamer friends of US who said it’s comparatively cheap and hence less performance but low or middle income house hold in US prefer the same buying the same from Costco
One thing to be kept in mind that there is still B2B market place model Just like Indiamart which is capitvely used and management have given their intention to expand it or spin it off
B2B startup generated around 400 crores of internal revenue (notional revenue) for Creative the same if valued at 2.5x will be 1000 crores and if not listed safely applying 50% DLOM it’ll still be worth 500 crores
So if you are valuing using Table above please include above 2 lines also
Disclaimer – Invested, Biased and Can sell anytime
Please do your own Due diligence
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