DLINK: Small Company with a Big Brand

Dear Mr pankajs,

Reviewed the Annual Report FY16. Net profit of Rs.33.19 crores vis-a-vis 16.39 crores of net cash from operating activities. This works out to around 50% . Is there thumb rule on margin between CFO and net profit ?

Regards

Few pointers…
De-growth : People moving to mobile intrenet and not router internet
Margin pressure : Commercial and Govt consumers are price sensitive

But…
Opportunity : Roll out of public WiFi systems

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There was a time when I used to buy the latest and greatest router and keep upgrading every couple of years or so and stuck mostly to D-Link. They had a brand which was recognisable in a sea of chinese devices. But now broadband companies like Airtel get their own router installed free of charge to the Customer and these are some cheap OEM chinese brand and so the Customer almost never has the need to go and buy a router for himself. I think this has pretty much killed sales growth for companies like D-Link.

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ICICI report on latest results - http://static-news.moneycontrol.com/static-mcnews/2017/05/IDirect_DLink_CoUpdate_May17.pdf

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True. So, it seems the only market available for D-Link is public WiFI systems. Not sure when this will roll out.

Heartening to see the encouraging ICICI report on DLink. Thanks!

HDFC research has also issued a report recently with a buy rating on D-Link. I don’t have the report handy but it is available in their pick of the week section which has a very high rate of success.

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That’s an encouraging news as I have taken a small position . What are all the main convictions in the report for the buy call. I also heard that D-link would get re rated in view of the TEJAS’s IPO listing.

Here’s the report
dlink.pdf (288.8 KB)

Thanks for sharing the report. Shall review and revert.

Any views on D-link at current levels from a medium term perspective?

One additional question i have is D-link vis-a-vis Sterlite Technologies. What are your thoughts? Which one will be a better beneficiary of the digital initiatives from GOI?





DLINK - Another Chart perspective::

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Q2FY23 Net Profit Of 23 cr
VS
Q1FY23 Net Profit Of 16 cr
VS
Q2FY22 Net Profit Of 13 cr

QOQ Net Profit Growth Of 44%
YOY Net Profit Growth Of 77%

Share Holding Pattern
#DLINK cmp 205 Mr ASHISH KACHOLIA
Enters 1st time Directly with
3.34 % Equity
Previously never held

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I could not find any concalls or management interviews. I guess so far they have been just importing the end product and selling in India. But recently they are contract manufacturing and selling. thereby they are able to increase their profit margin. But just want to confirm how much is it true and what is the future of this. Are they going to substitute all their imports with local manufacturing then its a big positive for the company. Is this one of phenomena or the trend is in bold.