Good set of results from Focus Lighting with EPS for fy 17 mentioned in result at 16 anounced on 5 July 17.
I liked the co & had bought on listing & subsequently as well due to
1) Young promoter in right age of 40s with 75% stake.
2) Good ratios like ROCE OF 53%,ROIC 45%,PE 9
3) Good sales growth of 47% & profit growth 196% (Screener) ,Sales & Net Profit has increased from 18 Cr & 0.44 Cr in FY 13 to 71 Cr & 4 Cr in Fy 17.
4) Promoter is 2nd gen whose family is in lighting business since last 50 years having good reputation in lower chawl are which is the lighting market of Mumbai
5) Had left lot on table for retail investors as IPO was at PE of 5 only.DE post issue of 0.2 as per RHP. .
6) Now foraying into manufacturing with 2 units from earlier import from China though having its USP of good design of its own thanks to its agreement with leading designers of Germany & Europe.
7) Own Brands like Pluslight & TRIX having good demand in the lighting mkt over mass products inspite of being priced 40-50% higher over nass chinese imported products based on some limited scuttlebutt..
8) Gives good quality product with extended warranty as high as 5 years giving an edge
9) Good & increasing opp size for Focus with mktcap at lowly 49 Cr only vs sales of 71 Cr in FY 17.OPM of 10% which may go up as per MD once own manfg starts
10)Increasing exports mainly to Middle east which now are 15-17% of turnover showing its capability of countering Chinese import threats even in other countries.
11) Good clientele like Shopper Stop, Raymond,Croma, RIL amongst 250 others.
12) MD Amit Sheth says can easily grow at 25-30% CAGR due to huge opp.His linkedin profile is impressive showing him to be very focussed n well abreast of all development in LED lighting business world over.
13) May shift to main board in 2 years like other SME cos have done & maybe a smart move on part of promoter to get listed with v little expense vs IPO on main board.Promoter stake is healthy 75%
14) Risks include high working capital requirement, small size of co,increasing competition from established players like Phillips,Osram & on pricing fromy by Chinese importers,low liquidity in SME like NSE Emerge,big lot size of 3000 shares. Need to closely track whether this nanocap can execute well & become a midcap over next few years.
RHP can be read at http://www.chittorgarh.com/ipo/focus-lighting-and-fixtures-ipo/646/