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Elin Electronics Limited : SUBSCRIBE

Incorporated in 1969, Elin Electronics Limited is a leading electronics manufacturing services (“EMS”) manufacturer of end-to-end product solutions for major brands of lighting, fans, and small/ kitchen appliances in India, and are one of the largest fractional horsepower motors manufacturers in India. The Company’s key diversified product portfolio in EMS includes (i) LED lighting, fans and switches including lighting products, ceiling, fresh air and TPW fans, and modular switches and sockets; (ii) small appliances such as dry and steam irons, toasters, hand blenders, mixer grinders, hair dryer and hair straightener; (iii) fractional horsepower motors, which is used in mixer grinder, hand blender, wet grinder, chimney, air conditioner, heat convector, TPW fans etc.; and (iv) other miscellaneous products such as terminal block for air conditioners, stainless steel blade for mixer grinders, die casting, radio sets..

* The Company manufacture and assemble a wide array of products and provide end-to-end product solutions. It serve under both original equipment manufacturer (“OEM”) and original design manufacturer (“ODM”) business models.

* It’s comprehensive solution suite includes global sourcing, fabrication of components and parts, captive manufacturing and assembly, quality testing, packaging and logistics support, which enables it to partner with leading consumer electronics and appliances brands in India.

* Based on its overall market, it is projected to be the largest players in this category, with a market share of 12% in Fiscal 2021.In addition, it is one of the key players in LED lighting and flashlight with EMS market share of approximately 7% in Fiscal 2021, and are also one of the key players in small appliances vertical with EMS market share of 10.7% in Fiscal 2021.

Outlook & Valuation: Electronics is one of the fastest-growing industries in the country. The domestic production of electronics accounted for around 74% of the total electronics market in FY21, which is expected to reach around 96% by FY26. Elin Electronics Limited is a leading electronics manufacturing services (EMS) provider in the country. The company has an established market position and strong customer relationships. It also has consistent financial performance with strong revenue growth and a stable margin. However, the company is operating in a highly competitive market, and the majority of its revenue is derived from a limited number of customers. The issue is coming at a P/E valuation of 25.75, which is attractively priced when compared to its peers. After considering all the factors we recommend to SUBSCRIBE this issue for long term.

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