- A brand business on the urbanization theme- a very long runway. Brand strength illustrated by improving profitability and reduction in working capital cycle.
- South-India based electrical appliances maker with a portfolio of six successful products. None other than the market leader (Havells) has such a diversified portfolio.
- Large room to improve distribution in non-south geographies that contribute 33% of revenues now (9% in FY09). Non-south revenue per distributor is 1/4th of that of south-based distributor indicating large mining opportunity and better growth outlook.
- Business requires little capex to grow earnings. Impressive cash generation with 70% of EBITDA getting converted to operating cashflow (OCF) and 90% of OCF converting into free cashflow.
- High promoter stake (65.7%), consistent dividend policy and zero debt balance sheet are additional sweeteners.
This insight is part of Smartkarma. For more follow this link.