BQ Prime's special research section collates quality and in-depth equity and economy research reports from across India's top brokerages, asset managers and research agencies. These reports offer BQ Prime's subscribers an opportunity to expand their understanding of companies, sectors and the economy.
Systematix Research Report
Elin Electronics Ltd.'s weak Q1 result was driven by all segments. After a likely muted Q2, management expects healthy revival in H2 on expectations of good festive demand and strong product launch pipeline.
Thus, for FY24, management reiterated low-to-mid-teens revenue growth, with Ebitda margin reaching 7%. A Rs 2.25 billion capex (Q1: Rs 416 million) will be to set up capacity for economy-mid segment products, mainly in small appliances.
Mixer grinder capacity for entry and mid-range products is expected to be operational by Sep 2023. Backward integration through production linked incentive scheme for LED lighting could drive margins.
We retain our estimates and expect 15%/29%/53% compound annual growth rate in revenue/Ebitda/profit after tax over FY23-25E, after a weak 11%/6%/-1% CAGR over FY20-23, with Ebitda margin expanding 160 bps to 7.7%.
Return on invested capital too should expand 580 bps to ~17% in FY25E. On expectation of a healthy revival in business performance, we maintain 'Buy' on Elin with an unchanged target price of Rs 197, based on 15 times FY25E EPS of Rs 13.1.
Healthy growth is essential for the scrip to get re-rated.
Click on the attachment to read the full report:
DISCLAIMER
This report is authored by an external party. BQ Prime does not vouch for the accuracy of its contents nor is responsible for them in any way. The contents of this section do not constitute investment advice. For that you must always consult an expert based on your individual needs. The views expressed in the report are that of the author entity and do not represent the views of BQ Prime.
Users have no license to copy, modify, or distribute the content without permission of the Original Owner.
Essential Business Intelligence, Continuous LIVE TV, Sharp Market Insights, Practical Personal Finance Advice and Latest Stories — On NDTV Profit.
