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Systematix Research Study Report
Elin Electronic devices Ltd.’s weak Q1 outcome was driven by all sectors. After a most likely soft Q2, management anticipates healthy revival in H2 on expectations of great joyful need and strong item launch pipeline.
Hence, for FY24, management restated low-to-mid-teens profits development, with Ebitda margin reaching 7%. A Rs 2.25 billion capex (Q1: Rs 416 million) will be to establish capability for economy-mid sector items, generally in little devices.
Mixer mill capability for entry and mid-range items is anticipated to be functional by Sep 2023. Backwards combination through production connected reward plan for LED lighting might drive margins.
We maintain our quotes and anticipate 15%/ 29%/ 53% substance yearly development rate in revenue/Ebitda/profit after tax over FY23-25E, after a weak 11%/ 6%/ -1% CAGR over FY20-23, with Ebitda margin broadening 160 bps to 7.7%.
Return on invested capital too must broaden 580 bps to ~ 17% in FY25E. On expectation of a healthy revival in organization efficiency, we preserve ‘Purchase’ on Elin with a the same target cost of Rs 197, based upon 15 times FY25E EPS of Rs 13.1.
Healthy development is vital for the scrip to get re-rated.
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