I think the sales staff was professional and atleast the demo he gave across multiple products (mostly home) seemed logical. Whether that technology is unique or not is something I can’t judge. The centre was also well built
3 Likes
If you read the latest conference call transcript on 16th August 2024, the management was asked why the stock price is moving so fast, the management responded that there are investors from early days and they might be booking profit and there is no mismanagement issue and that they are confident enough that they will be growing at 15-30 % CAGR. for the next 2-3 years.
Being an architect I have mixed feeling about this company. No doubt it appears to be an attractive deal at this price. that is Rs 90/share. But also I won’t be allocating more than 2% of my portfolio worth to this stock.
Also last week I talked to one of my friend who is a lighting designer in Germany (who has an office in Bengaluru too) about this company. he said that clients (corporate/retail) are not sure about Indian Companies in the lighting design field. Also, China offers huge competition to this company. and his suggestion was to not invest in this company.
4 Likes
Early investors are exiting… i wonder why they didnt exit at the top ( all time high)
1 Like
You see, I don’t claim to know anything particularly special about the company, nor do I consider it a hidden gem. What I’m pointing out is this:
Imagine making a 50x return just by holding a stock for three years (from 4 to 200). It’s an incredible return in a short period. Then, the stock starts to consolidate (200-160), and you think, ‘Okay, it’s taking a breather, consolidating, getting ready for the next leg up.’ But then, it starts trending downward (below 160-150), and some investors decide to book profits while others hold on. Suddenly, in a short span, the stock drops another 10-20% (down to 125 or lower), and you find yourself losing a significant portion of that 50x gain.
At this point, many investors don’t care about valuations or fundamentals anymore—they just want to protect the remaining 30x they’ve made and cash out
6 Likes
Why are the operating cash flows so horrible over the past 7 years?
2 Likes
Shantilal Bros was converted to ShethVinod Lighting Private Limited in 2018-19 and then assets bought in 2021-2022. AT least conflict resolved
The Company has purchased the business assets/goods/services of ShethVinod Lighting Private Limited (“St/LPL”) by way of"itemized sale". The total value of the transaction(s) reached to Rs. 25 Crore during financial year 2021-22
1 Like
Trade receivables have shot up in FY24.
Receivable being so high YOY in absence of growth.
Either the company doesn’t have the bargaining /pricing power.
Or their inventory is lying on shelves?
Any thoughts?
1 Like
| Q4 FY23-24: INR Cr | Turnover | PAT | PAT% | % Contribution to PAT |
|---|---|---|---|---|
| UAE Subsidiary | 10.48 | 0.89 | 8.49 | 8.27 |
| Singapore Subsidiary | 17.61 | 8.94 | 50.77 | 83.09 |
| Xandos (Indian Subsidiary) | 0 | NA | NA | |
| Standalone | 36.08 | 0.62 | 1.72 | 5.76 |
| Consolidated | 59.61 | 10.76 | 18.05 | 100 |
The Singapore subsidiary has topline of 17.61 cr in Q4 FY23-24 and PAT of 8.94cr which is PAT margin of 50.77%, whereas the indian standalone and UAE subsidiary have Q4 FY23-24 turnover of INR 10.48cr and 36.08cr resp. and PAT of 0.89cr and 0.62cr resp which gives PAT margin of 8.49% and 1.72% resp…
I wonder what is so special in the singapore business that it gives PAT margin of 50% plus and the standalone indian business have a PAT margin of just 1.72% and the UAE business has a PAT margin of 8.49%
To top it i note that the singapore subsidiary has been classified as non material in annual report for FY23-24 and its financials are unaudited based on comment in Q4 result from auditor.
7 Likes
you have rightly pointed out the issue here, the company’s debtor days is increasing every year. that simply means this company doesn’t have the pricing power, and its payment is much delayed and the kind of project this company is entering into gives payment after the completion of the project.
But the issue is with B2B businesses that hire sub-contractors or suppliers they usually don’t delay payment if the product has MOAT. I will try to state an example here, if I’m L&T and I have an airport project. Generally, I will buy the lighting and pay the supplier and invest my money in the project. but with Focus the case turns out that the contractor partner aren’t paying them upfront. and FOCUS’s capital is invested until the project payment is received from the client (mostly Govt).
If you will look at the CFO/EBIDTA ratio of the company it is 0.12 that means for every sale of 100 rupees they are able to get only 12 reflected in their accounts as immediate profit. this small problem here discourages me to invest in it. despite architectural lighting being a good business.
in the recent months the stock price decline could be because of the early investors exiting the company provided they have identified this problematic area. And a company with such dilapidated cash flow is only 1 COVID away from becoming a bad company.
I am not at all saying that this company will not grow. but I will not take it as a great investment.
3 Likes
Sold out today at 15% loss post checking this out. 80% of the company’s Q4 and ~60% of FY25 Q1 profit is coming from an overseas subsidiary which is not audited 
Not sure how common this is, but it’s surely beyond my risk appetite.
4 Likes
I was reading AR of the Company for the first time.
I’ve observed that the aesthetics of the report are not up to mark. It is more or less like their poorly designed website. I see no efforts by the company to make it more attractive or pleasant to read. I was going through the AR of Go Faishon. It was very well designed and was very pleasant to read. Most companies put efforts into AR but I guess Focus is not one of them.
While analyzing an AR report, the aesthetics shouldn’t matter but as I started reading the report I found it amusing. While reading the section about standalone performance, I felt like I was reading an assignment sheet of an essay by a student who copied his essay from ChatGPT or Google Gemini. Here is the picture of the segment-
My Questions to experienced folks here are-
Should a Company not be more specific about factors affecting their performance?
If a company hasn’t been able to analyze it(factors) how can we be sure they will grow in the future?
Thanks.
Still Reading AR.
3 Likes
I was amused after reading one segment, I think in director’s report, some revolutionary groundbreaking technology which will change the landscape of outdoor lighting market. I mean too much heavy words. and the name of the tech is “Optical”. Seriously? hard to separate if this is like an ad/gimmick or actually it will positively impact on ground in business. Can someone expert in LED lighting market shed “light” on this? I read here, mentioned by one of the contributor in this thread, that there is pattern of this kind, of claiming to have achieved a new breakthrough in lighting tech. But never really making a difference.
1 Like
Company cancels concall due to some unavoidable circumstance. Not a good look: https://nsearchives.nseindia.com/corporate/FOCUS_14102024205931_10CancellationofInvestorsMeet14102024s.pdf
1 Like
This was a one on one physical meeting with analysts/investors. These meetings get cancelled/rescheduled all the time. Nothing to read into here.
3 Likes
Observations from Q2 FY25 Result:
| Consolidated (C) | Standalone (S) | C-S | ||||
|---|---|---|---|---|---|---|
| INR cr | Q2 FY25 | Q2FY24 | Q2 FY25 | Q2FY24 | Q2 FY25 | Q2 FY24 |
| Total Income from Operations | 45.89 | 57.86 | 44.46 | 45.93 | 1.43 | 11.93 |
| PAT | 4.91 | 9.61 | 4.48 | 5.57 | 0.43 | 4.04 |
| PAT% | 10.7 | 16.6 | 10.1 | 12.1 | 30.1 | 33.9 |
- Consolidated revenue dropped by ~21% from 57.86 cr (Q2FY24) to 45.89 cr (Q2FY25)
- Consolidated PAT dropped by ~49% from 9.61cr to 4.91cr
- Overseas revenue dropped by 88% from 11.93cr (Q2FY24) to 1.43cr (Q2FY25)
- Interestingly the overseas business (revenue) which had a PAT margin of 33.9% in Q2 FY24 is decimated in Q2 FY25
- Exit by large investors who were offered pref share, Mr Rajendra Shah and Mr Rishi Shah whose shareholding was 9.96% each in Dec23 has reduced to 2.02% and 1.03% respectively.as on Sept24 public shareholding.
3 Likes
This slowdown in result was very much expected, Their India business will suffer from chinese lighting equipment supplies and they operate in government projects where they award project to the lowest bidders…a system where growth is not possible without chori chakari (stealth & theft and fraudulent accounting and billing) … the company is not focused on increasing topline and bottom line. and to be honest I couldn’t understand its overseas operations. i am staying away from this… this is not an investment advice or influence on anyone.
2 Likes