EON ELECTRIC

(532658 & NSE) (70) (FV.5)

Eon Electric started operation in 1958 with LT switchgear as Indo Asian Fusegear. The company name was changed to “Eon Electric Limited” in 2011. After the sale of switchgear division, company acquired two factories at Haridwar for setting up plants for LED lighting, mobile phone accessories, lithium – ion batteries, electrical fans and Geysers. 

COMPANY PROFILE

Eon Electric Limited manufactures, markets, and sells electrical products used for the distribution, protection, control, and conservation of electrical energy in India. It operates through Cable and Wires, Lighting, Electrical Consumer Durables, and Others segments. The company offers cables and wires, including co-axial TV, telephone switch board, PVC insulated, three core flat, and PVC insulated multicore cables; and lighting products, such as compact fluorescent lamps, fluorescent tube lights, LEDs, retrofit and non-retrofit products, HID-lamps, consumer luminaries, halogen lamps, and accessories. It also provides fans comprising ceiling fans, domestic exhaust fans, and portable fans/TPW; mobile phone accessories, including USB data cards, handsfree products, card readers, Bluetooth headsets, chargers, platinum batteries, and power banks; water heaters, such as stationary storage and instant water heaters; and lithium ion batteries.

PRODUCT PORTFOLIO

It has state-of-the-art manufacturing plants in Haridwar, using world-class technology and quality checks. With a deep understanding of economic stimuli and customer needs, EON is determined to not only repeat its history of achievements. But also scale new heights of growth to become the nation's most preferred brand. And the energy behind people's smile.

ORDER BOOK OF EON ELECTRIC IS VERY ROBUST

Eon was successful in securing government orders to replace conventional street lights in Aligarh and Jodhpur worth Rs.51 Crores. Further to completion of these orders EON got extended orders for 33K street lights in Jodhpur and also in Aligarh. Besides this, EON has also won the contract in Varanasi. The latest order they have got from the Rajasthan Governement which is worth Rs.40 crores to install LED street lights in other cities including Gangapur, Jaisalmer, Sri Ganga Nagar etc. Another order of 22cr was won by the company very recently in LED segment.

As per the management, in next 5 years, there will be government contracts to replace 20 million street lights and Eon is expecting a bigger pie of that.

TRIGGERS

Maharashtra Government has recently taken a decision that all buildings coming up in urban and rural areas will have to use only LED lights, according to the State government's Energy Conservation Policy which was cleared last week. This policy will be followed by all the states one after the other as this is the necessary step to promote energy saving and hence protect the environment. The other policy of replacement the traditional lights by LED lights in Government and Semi Government buildings is also underway by Govt. of India and many State Governments.

http://economictimes.indiatimes.com/wealth/personal-finance-news/new-buildings-must-comply-with-energy-efficiency-guidelines-maharashtra-government/articleshow/58940641.cms

http://www.thehindu.com/news/cities/mumbai/led-lights-a-must-for-new-buildings-govt/article18662569.ece

RETAIL BUSINESS

·        Eon’s retail business is also doing very well. They have dealers and retails outlets in every state of India.

·        It has retail partners 1.25 lac +, and channel partners more than 900.

·        EON has tied up with Flipkart, Snapdeal, Amazon etc. for selling their products online. Retail LED business is also doing exceptionally well.

EXPORTS

Eon has tied up with European LED makers OMS with whom they have also started a company in India which manufactures high quality light fixtures in India and other Asian countries. If management commentary to be believed Eon is going to start exporting their LED lights in Europe through their partner

MEDIA COVERAGE  

ADVERTISING CAMPAIGNS

FINANCIAL SNAPSHOT

It has an equity capital of just Rs.8.03crore supported by reserves of around Rs.105 crore.  Market Cap of the company is 112 Cr. The promoters hold 59.74% of the equity capital, which leaves 40.26% stake with the investing public. It has a share book value of Rs.72.7 & price to book value ratio is just 1 which is impressive. Company has investment of 62 cr in mutual funds. If we calculate reserves and Mutual funds comes to 167 cr, so this means you are getting electrical business free of cost at current valuations. Recently promoters have allotted convertible warrents (~ 8 lakh shares) to themselves at exercise price of Rs 66.5.

On consolidated basis company has given a turnaround in FY17 from loss to profit as the company has posted a PAT of Rs 4 cr on sales of 189.28 Cr which leads to an EPS of Rs 2.5 against the loss of 4.02 Cr on sales of 174.67 Cr and a negative EPS of Rs -2.5 in FY16 as the margins have improved significantly.

During Q4FY17, EON posted PAT of Rs.1.05 crore against sales of Rs.47.66 crore fetching an EPS of Rs.0.65. During Q3FY17, EON posted PAT of Rs.0.97 crore against sales of Rs.47.38 crore fetching an EPS of Rs.0.60.During Q2FY17, EON posted PAT of Rs.0.91 crore against loss of Rs.2.49 crore on higher sales of Rs.43.69 crore fetching an EPS of Rs.0.57.