I just came across this company " Dixon Technologies" , could not find any thread about it so starting this new thread.
Dixon is in to contract manufacturing of consumer durables ( LED TV , Lighting ( LED , CFL bulbs ) and Semi Auto washing machines and Mobile phones ).
The manufacture for Panasonic, Philips , Lloyd , Geone etc. brands.
Company derives 78% of its revenues from OEM division which basically is pure play contract (design given by OEMs ) manufacturing and remaining 22% revenues form ODM segment where they design ,R&D , make the products which in turn gets distributed by others under their own individual Brand names.
they seems to be the largest player for LED , CFL and they supply to all the known brands such as Crompton , Philips , Syska , other few.
They are also largest player for security camera and DVR , they have their JV with another company whose name I am not able to recall but have seen their Ad on TV ( tagline - upper wala dekh raha hai )
Company came out with its IPO around a year back ( Aug,2017 ) at around 1760 rs / share. the stock got listed at around 50% listing gain.
currently stock is trading at 2500 rs.
company is growing 30% / year since last 3-4 years and expected to continue the growth momentum for another 3-4 years.
At current price the Market cap is ~2900 cr and annual sales of the company is ~2800 cr.
the operating margin of the company is very low at around 4.5% , however according to management they have done the backward integration for manufacturing of various product line and that along with operating leverage will help improve and increase the OPM.
According to their CFO ( x-VP at PVR ) , while they source/import their raw material but currency depreciation doesn’t impact their OPM much as they have clauses in the contract which allows them to pass it on to the OEMs with leg effect of 2-3 months max.
Management and Board members seems all professionals ( none of the members shares their last name with other members : . seems none from chairman’s family is on the board or at an of the key management position.
I haven’t done too much of research on financials , but it appears to be generating positive cash flows and capable of funding it capex. ( all most all the debts are paid out from the IPO proceeds ). and it does not have any significant debt as of now.
all the expansion required for next 2 years is already planned and expected to go live by next 2-3 months max.
according to their MD ( one one of the interview on CNBC Awaz ) has mentioned that they managing it with negative working capital of 2 days during Q1FY19.
I don’t consider myself very good at analyzing financials so request seniors to please look in to it to validate/suggest.
I could not come up with any significant negative except that , it being a technology business things changes very fast and leader of today can become laggard of tomorrow very quickly , however they aren’t in to niche are as most of the products in the consumer durables are more of a commodity now a days and if they have survived for last 24 years there is no reason they cant survive for another 20 years , specially at the time when the consumer durable segment is expected to grow at 20% CAGR over next few years.
Govt. spend on security camera , LED etc. can provide additional additional impetus to the growth.
this is my first post as I have joined VP just around a week back so would appreciate any suggestion w.r.t it so can work to improve details etc. to be covered in posts.
looking forward to your views.