Elin Electronics Limited 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. Based on overall market, they are projected to be the largest players in this category, with a market share of 12% in Fiscal 2021. In addition, they are 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. Company manufactures and assembles a wide array of products and provide end-to-end product solutions. They serve under both original equipment manufacturer ('OEM') and original design manufacturer ('ODM') business models. Under the OEM model, they manufacture and supply products basis designs developed by the customers, who then further distribute these products under their own brands. Under the ODM model, in addition to manufacturing, they conceptualize and design the products which are then marketed to the customers' prospective customers under their brands. They have developed ODM capabilities with respect to lighting products and small appliances. 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. In addition to the EMS offerings, they also manufacture medical diagnostic cartridges for use in diagnostic devices, and plastic moulded and sheet metal parts and components, largely for customers in the auto ancillary and consumer durables sectors. They manufacture and sell fractional horsepower motors in their own brand name 'Elin'. They offer innovative solutions to the customers, which include leading international and national consumer electronics brands. The Company comprehensive solution suite includes global sourcing, fabrication of components and parts, captive manufacturing and assembly, quality testing, packaging and logistics support, which enables them to partner with leading consumer electronics and appliances brands in India. Their key customers by business verticals include: • LED lighting, fans and switches: Signify Innovations and Eveready• Small appliances: Philips, Bosch, Faber, Panasonic and Usha• Fractional horsepower motors: Havells, Bosch, Faber, Panasonic, Preethi (owned by Philips), Groupe SEB (Maharaja brand) and Usha• Medical diagnostic cartridges: Molbio Diagnostics Private Limited and• Moulded and sheet metal parts and components: Denso and IFB Company has three manufacturing facilities which are strategically located in Ghaziabad (Uttar Pradesh), Baddi (Himachal Pradesh) and Verna (Goa). As on October 31, 2022, their large scale setup included 157 units of molding machines and 104 units of power presses which enable them bringing efficiencies and economies of scale. They have backward integrated the major manufacturing processes. They have developed in-house capabilities in SMT lines, die and mold manufacturing, injection molding, sheet metal components, semi-automated motor assembly, testing labs and surface coating. Company has a centralized R&D centre in Ghaziabad (Uttar Pradesh), recognised by the Department of Scientific and Industrial Research, Ministry of Science and Technology, Government of India ('DSIR') since 1992, focusing on the research and development on all aspects of OEM and ODM models including concept sketching, design refinement, generating optional features and testing. As on October 31, 2022, the R&D team consisted of 171 employees, including engineers, designers and other workers. During Fiscals 2020, 2021 and 2022 and six-month period ended September 30, 2022, expenditure on research and product development including capital expenditure was Rs 65.70 million, Rs 60.46 million, Rs 61.02 million and Rs 31.14 million, respectively. Their revenue from ODM contributed to 11.30%, 11.26%, 8.13% and 8.21% of the revenue from operations in Fiscals 2020, 2021 and 2022 and six-month period ended September 30, 2022, respectively. As on October 31, 2022, they had 2,935 permanent employees and also employed around 1,682 contract labour at manufacturing facilities. As per financial performance, Landmark Cars Limited has posted total income/net profits of Rs 783.37 Cr / Rs 28.75 Cr (FY20), Rs 864.90 Cr / Rs 34.50 Cr (FY21) and Rs 1,094.67 Cr / Rs 40.82 Cr (FY22) and Rs 604.74 Cr / Rs 21.16 Cr (Q1FY23). So as per last three years data, company has shown growth. They have posted an average EPS of Rs 4.85 and average RoNW of 12.90% for last three fiscals. Issue is priced at a P/BV of 3.28 as per NAV of 75.2 on 30.09.22. If we attribute latest earnings of FY22 on fully diluted equity post issue, then asking price is at a P/E of around 31.33 and as per annualized FY23 earnings P/E is around 29.67, which looks fully priced. As per RHP, peers comparison is in shown above table . On BRLM's front, 2 lead managers are associated with this IPO, and have handled around 101 IPOs in last three fiscals.Axis Capital Limited : This is 46th IPO from this BRLM. From last 10 IPOs, 2 opened below issue price and remaining opened above issue on the day of listing. As of now, from last 10 IPOs, 3 are trading below issue price and other are trading above issue price. ( As on 15.12.22 )JM Financial Limited : This is 36th IPO from this BRLM. From last 10 IPOs, 2 opened below issue price and remaining opened above issue on the day of listing. As of now, from last 10 IPOs 3 are trading below issue price and other are trading above issue price. ( As on 15.12.22 ) As per financials, Elin Electronics Limited has shown growth, RoNW is 12.92% and P/E is respectively 31.33 and 29.67 as per FY22 and annualized FY23 earnings, which looks fairly priced. Company is in EMS (Electronics Manufacturing Services) segment, which is competitive but with good growth prospect. Government is also very focused to promote this sector in Bharat. Performance of BRLMs are good. So, we give "SUBSCRIBE FOR LONG TERM" rating for this IPO.
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