DLINK: Small Company with a Big Brand

What is the cost difference that they are getting thru local outsourcing than imports from Taiwan.

P.S- The company needs to improve their disclosures and investor services

I feel, we need to find a China Free Company, that even Chinese companies can’t come into. Might be compare Havells and Polycab. No Chinese companies can come into their way.

As it’s said:
Data is the New Oil.
If its true, then the companies which enter into this segment early, will benefit the most.
D-Link seems to be doing the same.
Prepared some notes, have a look.

D-Link India Ltd.docx (5.9 MB)

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PnL Statement: (last 9 years)
· Low sales growth except for 2019/22/23
· Low OPM except for 2023/24
· Other income high from 2020
· Low NPM except for 2023/24
· High capex 2020/23
· Low growth of Net Fixed Assets
· Fluctuating receivable days
· Fluctuating Inventory Turnover
· Low RoE except for 2023/24
· Low RoCE except for 2023/24
· High Dividend payout

Highly Competitive Indian Market. Jio, Airtel & others providing their own router.

The revenue & profitability improvement in the year2023 is because of the below factor. Although when we see the year2024 revenue/profitability, there is not much further improvement or progress.

Looks like a highly commoditized market with low profitability margins.

Positive-
D-Link (India) Limited is strongly focusing on local products as part of its ‘Make in India’ initiative. “Make in India,” and localization of products are two important initiatives of the Indian government that are closely linked. D-Link (India) has been granted exclusive rights/ license by the parent company to use the D-Link trademark for such
locally manufactured products. The Company had made strategic decisions on manufacturing certain products locally through third-party or contract manufacturing with its own brand names, under its own proprietary designs, quality control and supervision.
The Company has made noteworthy progress in this direction and has entered into arrangements with local manufacturers.

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Great work. The notes were really helpful. Wanted to know does they able to gain some orders from data center companies in India?

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Dlink Q2 Numbers

Rev at 336cr vs 308cr,
Q1 at 346cr PBT at 35cr vs 31cr,
Q1 at 35cr PAT at 27cr vs 24cr
OCF at 5cr vs 42cr

Here’s the data organized into a table format for clarity:

Quarterly Results Sep 2021 Dec 2021 Mar 2022 Jun 2022 Sep 2022 Dec 2022 Mar 2023 Jun 2023 Sep 2023 Dec 2023 Mar 2024 Jun 2024 Sep 2024
Standalone Figures in Rs. Crores View Consolidated
Revenue 241 235 269 293 291 278 309 298 306 292 332 344 335
Net Revenue 225 223 254 272 261 242 283 271 276 263 301 316 303
Operating Profit 16 11 15 21 30 35 26 27 30 28 31 28 33
OPM % 7% 5% 6% 7% 10% 13% 9% 9% 10% 10% 9% 8% 10%
Other Income 1 2 2 1 1 2 3 3 3 3 4 5 4
Interest 0 0 0 0 0 0 1 0 0 0 0 0 0
Depreciation 1 1 1 1 1 1 1 1 2 2 2 2 2
Profit before tax 16 12 16 21 30 36 27 28 31 30 33 31 35
Tax % 26% 26% 26% 26% 25% 25% 27% 25% 26% 26% 25% 26% 24%
Net Profit 12 9 12 16 22 27 20 21 23 22 25 23 26
EPS in Rs 3.37 2.48 3.28 4.40 6.24 7.56 5.56 5.84 6.52 6.28 6.93 6.57 7.43
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Is there a potential upside for Dlink here ?

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Dlink has nothing to do with data centre business

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