IGI Logo

Elin Electronics Ltd : Neutral

* Company Background: Incorporated in 1982, Elin Electronics 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 is of the largest fractional horsepower motors manufacturers in India.

* De-Risked Business Model: Elin has diverse products, product vertical and customer base. Philips, Bosch and Panasonic leaders in their respective products are their customers which is positive. Further, provides customers with customized and diversified product portfolio which helps in maintaining relationship with clients as well as mitigate the risk of dependence on single product.

* Well-positioned to capture opportunity: The demand for motor-driven appliances including small and kitchen appliances is on the rise largely driven by rising disposable income, electrification across India, decreasing prices due to increasing competition and government initiatives such as power for all and housing for all. Further, the company will benefit from this opportunity on the back of its strong presence in house power motors, strong product portfolio and robust R&D as well as expansion plan of manufacturing units.

* Relationship with Marquee clients: Elin has established longstanding relationships with well-known domestic and multi-national customers across its product verticals. Over the years, the company is able to retain and maintain relationships with customers because of one-stop-shop facilities, high standard manufacturing products and continuous focus on quality and addition in product portfolio. As on September 30, 2022, they have been serving 11 out of the top 20 for over 10 years.

* Strategies going forward: Going ahead, Elin plans to focus on increasing the customer base by expanding into newer products as well as exploring cross selling opportunities. Besides, it has plans to expand revenue share by focusing on ODM business and maintaining relationships with clients. Further, It will look to expand operations in medical diagnostics cartridges and manufacturing facilities.

* Financial: The company’s financial seems decent, wherein its revenue and PAT grew by 18% and 19.3% CAGR over FY20-22. On the valuation front, Elin P/E trades at 25x FY22 EPS.

* Key Risk: 1) Operates in a highly competitive market. 2) Majority of revenue is earned from a few clients.

To Read Complete Report & Disclaimer Click Here

Please refer disclaimer at https://www.religareonline.com/disclaimer

SEBI Registration number is INZ000174330

Views express by all participants are for information & academic purpose only. Kindly read disclaimer before referring below views. Click Here For Disclaimer