Focus Lighting & Fixtures
The new FOMO kid on the block.
It is up by 250% in last one year!
Philips in their marketing pitch says "We can match the quality of Focus"!!
Others give 1-2 year warranty but Focus gives 5-8 years!
Who are these guys really!?
1/n
The new FOMO kid on the block.
It is up by 250% in last one year!
Philips in their marketing pitch says "We can match the quality of Focus"!!
Others give 1-2 year warranty but Focus gives 5-8 years!
Who are these guys really!?
1/n
I have uploaded my notes on the Telegram channel today, so, you can read the detailed version there & hence, I am limiting the current thread to
10 reasons why I like Focus Lighting
3 reasons why I will be cautious
and
10 point summary
So, lets get started!
2/n
10 reasons why I like Focus Lighting
3 reasons why I will be cautious
and
10 point summary
So, lets get started!
2/n
BTW, back in Octβ 22 part of the group study at @ScientificInve6, I had done some basic work on this & later invested & booked 40% profits.
Then in Decβ 22, @SunriseFinanci2 and @shubhfin reminded me again and that's when I got serious!
3/n
Then in Decβ 22, @SunriseFinanci2 and @shubhfin reminded me again and that's when I got serious!
3/n
First Section: Ten reasons why I like Focus Lighting
4/n
4/n
1) Seasoned allrounder
Focus has been in lighting business for years
They were traders/distributors prior to 2005 & since then have developed expertise in Retail Lighting, Home Lighting, Infra lighting (including both Indoor & Outdoor
They have seen both the best & worst
5/n
Focus has been in lighting business for years
They were traders/distributors prior to 2005 & since then have developed expertise in Retail Lighting, Home Lighting, Infra lighting (including both Indoor & Outdoor
They have seen both the best & worst
5/n
2) Future ready
Focus has 80,000 square feet manufacturing facility of which only 50% is being utilized currently.
Plus company has also already invested in R&D and state of the art Testing Laboratory.
So, most of the investments are already done.
6/n
Focus has 80,000 square feet manufacturing facility of which only 50% is being utilized currently.
Plus company has also already invested in R&D and state of the art Testing Laboratory.
So, most of the investments are already done.
6/n
3) Diversified player
Until 2019, Focus was primarily a Retail Lighting shop with 70-80% revenues coming from there.
Since then, they have expanded into Home, Infra, Railways, IoT (emerging). Retail revenue now stands at 50%.
Plus 20% revenues from Exports.
7/n
Until 2019, Focus was primarily a Retail Lighting shop with 70-80% revenues coming from there.
Since then, they have expanded into Home, Infra, Railways, IoT (emerging). Retail revenue now stands at 50%.
Plus 20% revenues from Exports.
7/n
4) Management capability
One needs art and science to take business from 3cr to 160cr.
Ability to deal with crisis - Covid had hurt them bad, being a retail heavy, but bounced back strong.
Ability to diversify.
Ability to acquire big clients.
Getting future ready.
8/n
One needs art and science to take business from 3cr to 160cr.
Ability to deal with crisis - Covid had hurt them bad, being a retail heavy, but bounced back strong.
Ability to diversify.
Ability to acquire big clients.
Getting future ready.
8/n
5) Building Niche
Their lab is NABL accredited (there are only 5-6 NABL labs in lighting industry)
Premium offering (Price 1500/- vs 500/-)
Focus offers 30-40% higher energy efficiency
GMR went to Focus when a German player couldn't execute one of the airport projects!
9/n
Their lab is NABL accredited (there are only 5-6 NABL labs in lighting industry)
Premium offering (Price 1500/- vs 500/-)
Focus offers 30-40% higher energy efficiency
GMR went to Focus when a German player couldn't execute one of the airport projects!
9/n
6) Focus on Quality
Lighting is a commodity business & "Technicals" is the differentiator & that's precisely the focus area of Focus (R&D)
Philips says "We can match the quality of Focus"
Focus gives 5-8 year warranty & others give 1-2 yrs!
Plus IECEE, CE, IP 20/45 etc
10/n
Lighting is a commodity business & "Technicals" is the differentiator & that's precisely the focus area of Focus (R&D)
Philips says "We can match the quality of Focus"
Focus gives 5-8 year warranty & others give 1-2 yrs!
Plus IECEE, CE, IP 20/45 etc
10/n
7) Railways opportunity
Focus may become "Approved Source" by May' 23 which will open up the doors to 80-90% business (from current 20%)
13-14 Lighting Cos work with Railways. Most of them have 2-3 product approval whereas Focus has 16-19 product approvals
11/n
Focus may become "Approved Source" by May' 23 which will open up the doors to 80-90% business (from current 20%)
13-14 Lighting Cos work with Railways. Most of them have 2-3 product approval whereas Focus has 16-19 product approvals
11/n
8) Proxy to India's growth story
As India continues to grow with more airports, railways, malls, entertainment, outdoor spaces, middleclass & above homes, lighting will be one key common numerator across these!
In short, lighting is a proxy to Capex & Life Style Changes
12/n
As India continues to grow with more airports, railways, malls, entertainment, outdoor spaces, middleclass & above homes, lighting will be one key common numerator across these!
In short, lighting is a proxy to Capex & Life Style Changes
12/n
9) Opportunity to step up
For Infra, Railways & Outdoor projects, single order could be 30-40% of the current turnover
Focus is focusing on exports in Asia & Europe by tagging along with their existing customers (IKEA, Mercedes-Benz etc...)
IoT lighting is/has future
13/n
For Infra, Railways & Outdoor projects, single order could be 30-40% of the current turnover
Focus is focusing on exports in Asia & Europe by tagging along with their existing customers (IKEA, Mercedes-Benz etc...)
IoT lighting is/has future
13/n
10) Limited Competition
Niche Lighting is mostly sourced from Europe & China but Europe is expensive & China is unreliable. Focus is offering Europe quality with slightly higher than China price.
Within Railways, there are two players that Focus will be competing with
14/n
Niche Lighting is mostly sourced from Europe & China but Europe is expensive & China is unreliable. Focus is offering Europe quality with slightly higher than China price.
Within Railways, there are two players that Focus will be competing with
14/n
Section 2: Three reasons why I will be cautious
15/n
15/n
Three reasons why I will be cautious
1) Related party transactions & warrants that don't appeal good @janak_lotwala
2) Increasing subsidiaries (including one for Infra lighting with 51% stake)
3) Valuations have run up a bit, so, a poor quarter can hurt the price
16/n
1) Related party transactions & warrants that don't appeal good @janak_lotwala
2) Increasing subsidiaries (including one for Infra lighting with 51% stake)
3) Valuations have run up a bit, so, a poor quarter can hurt the price
16/n
Section 3: Ten point summary
17/n
17/n
Final Summary:
1) Company has good prospects and TAM (multiple verticals, Europe and Asia markets)
2) Even a 50% of the opportunities materialize, they can double their revenues
3) However, due to push into Infra and Railways, QoQ growth may not be linear.
18/n
1) Company has good prospects and TAM (multiple verticals, Europe and Asia markets)
2) Even a 50% of the opportunities materialize, they can double their revenues
3) However, due to push into Infra and Railways, QoQ growth may not be linear.
18/n
4) Management is confident of maintaining PAT in the range of 10-15%
5) Management is confident of growing the business 30% YoY but over a 3 year window.
6) "Approved Source" for Railways would be a key milestone (May' 23) to watch out for
19/n
5) Management is confident of growing the business 30% YoY but over a 3 year window.
6) "Approved Source" for Railways would be a key milestone (May' 23) to watch out for
19/n
7) If they donβt succeed in Infra and Railways, then, revenue growth will collapse.
8) However, considering the fact that, they have some of the best technology plus about to become approved source for Railways, the chances to failure are on the lower side
20/n
8) However, considering the fact that, they have some of the best technology plus about to become approved source for Railways, the chances to failure are on the lower side
20/n
9) Barring correction that might come during a bad QoQ, company does have good probabilities to succed.
10) Thus, I am betting on this company to at least double it's revenues from here if not more.
D: Invested
If you have come this far, hit that like button!
The End.
10) Thus, I am betting on this company to at least double it's revenues from here if not more.
D: Invested
If you have come this far, hit that like button!
The End.
Loading suggestions...