FIVE CORE ELECTRONICS LIMITED INVESTOR PRESENTATION - SARTHI CAPITAL ADVISORS PRIVATE LIMITED - 5CORE
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Sarthi Capital Advisors Private Limited
Bridging the Gaps
Five Core Electronics Limited
Investor Presentation
August, 2018
Privileged and Confidential
Index
Content Page
Corporate Overview 4 - 13
Operational Overview 15 - 21
Business Outlook & Strategy 23 - 25
Financials 27 - 29
IPO Valuation 31 - 32
2
Corporate Overview
3
Corporate Overview
Business
1. The company was incorporated in the year 2002, as Five Core Electronics Ltd (FCEL).
2. FCEL is into manufacturing and exporting of Public Address Systems (PAS).
3. Company has a line of over 1100 products and each of the products is developed through extensive
R&D and customer feedback. Exports accounts for approximately 90% of the total sales.
Global Clientele
Five core is exporting its PAS to 56 countries covering almost all of the America, Europe, Africa, Asia and
Middle east.
In House Manufacturing
ISO certified company equipped with 3 modern manufacturing/assembling units, 1 in Delhi and 2 in
Bhiwandi (Rajasthan) to produce world-class P.A. Equipment equipped with state of art technology to
develop and create, reliable and value-oriented audio solutions to varied range of customers.
Product Innovation
The company houses highly-qualified R&D team of B-TECH’s and Electrical & Electronics Engineers, which
keep on creating new products and searches the possibilities of extension in the products to maintain the
leadership in the industry.
Presence
FCEL products are installed at Concert Hall, Petrol Pumps, Airport, Auditorium, Railway Stations, Music
Bands, Outdoor Gathering, Stadiums, Malls, Stage Show, Hotels, Restaurants and many more.
4
FCEL and its Subsidiaries
Brief
• FECL is parent company and has five subsidiaries namely, 5 Core Acoustics Pvt
Ltd, Pan Arabian Venture FZE, Ems & Exports pvt ltd, Kaneer Industries Pvt Ltd and
South Asia Exim Pte Ltd.
• 5 Core Acoustics Pvt Ltd: Company was incorporated in the year 1995, with
manufacturing facility at Rajasthan, 5 Core is engaged in manufacturing and selling
of Public Address Systems
• Pan Arabian Venture FZE: Founded in 2017, company is engaged in selling of PAS in
Middle East.
• South Asia Exim Pte Ltd: Incorporated in the year 2016, It’s a Singapore based
subsidiary engaged in selling of PAS.
• Ems & Exports pvt ltd: Founded in the year 2017.
• Kaneer Industries Pvt Ltd: Incorporated in the year 2017
5
Key Achievements and Projects
Achievements Key Projects
Developed and installed 24 carat gold
microphones and stand in Golden Temple
Amritsar. Nairobi Airport, Kenya
First to develop DJ columns in plastic and launch Golden Temple, Amritsar
them in India.
Mosques in Mecca/Medina, Saudi Arabia
It has successfully installed and executed the P.A.
Bangladesh Garment Factories
System at the Kumbh Mela, Ujjain. This event
entitled to be listed in Limca Book of Records for SAARC Conference Center, Kathmandu – Nepal
the largest audio wiring in the world. Mashhad Mosque, Iran
Has successfully supplied megaphones to Delhi South African Churches
police and traffic police.
Columbia Discotheques and Clubs
The only ones to develop speakers from 1” upto
Sri Lankan Army
35” in size.
The United Nations Organisation Centre,
5 core is the largest manufacture of loudspeakers
in India. Ethiopia
Company has successfully launched products on And many More Prominent Places
e-commerce websites like
Amazon, Flipkart, Snapdeal, etc.
6
Products – Public Address Systems
Amplifiers Mixing Console Microphones & Stands
7
Products – Public Address Systems
Speakers & Columns Outdoor PA PA Spare Parts
8
Man Power in FCEL
Production
132
Sales &
R&D
Marketing
6
59
Quality
Purchase Inventory
Control
17 6
6
Advertising Import Export IT
4 3 5 3
HR Accounts Admin
4 16 15
Total
Banking
Work Force
17
294
9
Top 10 Electronics ESC Member Exporters 2016-17
Five Core is among Top 10 Electronic Item Exporters
No. Company Exports Rs cr
1 Videocon Industries Ltd 372.2
2 Samsung India Electronics Pvt Ltd 220.9
3 Moser-Bear India Ltd 198.3
4 Five Core Electronics Ltd 114.4
5 Happy Acoustics Pvt Ltd 86.9
10Certificates and Recognitions – 5 Core
Export House
ISO Certification NSIC Certificate for Export House Recognition to
Purchase Enlistment Recognition EMS & Exports
11Other Business lines of the Group
Group also manufactures Consumer
Electronics Products and Car Audio
Products which includes:
Computer Speakers
Bluetooth Speakers
Home Theatre
Head Phones
Speakers
Car Bass Tubes
12Operational Overview
13Board of Directors
Amarjit Singh Kalra
He is the Promoter and Managing Director of our Company. He holds a Diploma in Engineering. He has an
experience of around 30 years in production and marketing of electronic goods. He was appointed as
secretary of All India Radio and Electronics Associations for several years. He was also appointed as an
executive committee member in Federation of United Nations. He has been selected by the executive
committee of Electronics Hardware & Software Export Promotion Council (ESC).
Surinder Kaur Kalra
is the Promoter and Non-Executive Director of our Company. She is a graduate from Tribhuvan
University, Nepal. She has a rich experience of more than 25 years in production and marketing of electronic
goods. She has planning and organization skills and is aware of the rapid technological changes as per the
demands of the international market which contributes in the overall development of the business. The
major goal of her career is manufacturing and producing fewer more bespoke products with less emphasis
on high volume manufacturing.
Raj kumar Projapati
is the Non - Executive & Independent Director of our Company. He is a commerce graduate. He has more
than 32 years of experience in the field of accounts and taxation. He is also an independent director in Five
Group Company, Five Core Exim Limited.
14Organisation Structure
International
Production Factory Head
Domestic
Sales & Online
Marketing
Recruitment Government Tender
HRD Compliances
System Integration
Export & Procedure &
Import Documentation Company Secretary
Banking
Accounts &
Finance Account/Finance/Tax Team
Board of Managing
Inventory Input Quality Control
Directors Director
Process Quality Control
Quality
Output Quality Control
Admin
Local
Information Import
Technology
Commodities Media
Purchase Print Media
Advertising Digital
Feature Enhancement
R&D New Product Development
15Domestic Foot Print – Five Core Group
Dealers &
Distributers
Online
Domestic
Institutional
System
Integration
16Global Foot Print – Five Core Group
North & South
America
Africa
Over 55
Europe
Nation’s
Australia
Asia
17Domestic and Export Contribution to Sales
FY16 FY17
11% 14%
Domestic Sales Domestic Sales
Export Sales Export Sales
89% 86%
FY18
16%
Domestic Sales
Export Sales
84%
18Digital Presence
19Manufacturing Facility
20Business Outlook &
Strategy
21Why Five Core
USP’s
Wide Range of products for various uses like in office, outdoor, Large
and Small Establishment, Malls, Religious places, Home etc.
More than 1100 items sold under the Brand ‘ 5 Core ‘.
Competitive pricing compared to large MNC like
Harman, JBL, Shure, Peavey, Sennheiser etc.
Cutting Edge Global reach in more than 55 countries.
Quality products, equipped and manufactured with latest
technologies to suit different arena and requirement whether it is
public domain or at the home.
22SWOT Analysis
Strength Weakness
Promoters' extensive experience
led to strong relationships with
customers and suppliers.
Established market position and
brand position with wide product
portfolio. Working capital requirement.
Growing and stable business with
improvement in sales and
operating margins .
Opportunities Threat
Strengthening the domestic
footprints
The group may expand its reach to Industry in highly fragmented.
other countries which will help its Lower bargaining power compared
business to grow. to large players
23Long Term Business Strategy
Organic Growth In the past the sales has grown over ~ 25% CAGR over the past years and
FCEL would continue to accelerate it further in the years ahead.
At present FCEL has footprints in 56 countries, 6 continents and would
further enter to the new geographies / countries adding new distributors
Scaling up the that would top the volume growth and capture market share.
Business and Company would also benefit from the existing dealer network who place
new Footprints repeat and increased orders and by cross selling of products.
Company has laid out dealer network in India which will also contribute
to growth.
Inorganic Growth
FCEL would step in to the strategic investment / acquisition of any small
company that suits the business segment.
Will lead to entry to new market and new clients. New
May also explore consolidating the current unlisted businesses under Acquisitions/
the listed entity. Consolidation of
unlisted entities
24Financials
25Financial Snap Shot – Standalone Five Core Electronics
Sales in Rs cr EBITDA in Rs cr
400.0 335.9 30.0 27.5
25.0
300.0
20.0
200.0 170.7 15.0
122.9 7.0
10.0 4.6
100.0
5.0
0.0 0.0
FY16 FY17 FY18 FY16 FY17 FY18
EBIT in Rs cr PAT in Rs cr
30.0 25.2 14.1
15.0
20.0 10.0
10.0 5.7 5.0
3.8 0.9 1.4
0.0 0.0
FY16 FY17 FY18 FY16 FY17 FY18
FY 18 reflects consolidated numbers including Subsidiaries.
26Financial Statements in Rs cr
Balance Sheet FY16 FY17 FY18
Income Statement FY16 FY17 FY18
Equity Share capital 5.50 5.50 9.29
Sales 122.94 170.65 335.90 Reserve & Surplus 16.38 17.69 58.10
Shareholders Funds 21.89 23.19 67.39
Minority - 0.01 -
Expenditure: Pending Share Application Money - 12.34 -
Long Term Loan 6.80 13.51 16.50
Operating Expenses 107.49 148.91 284.98 Other long term liabilities - 0.12 0.10
Employee Expenses 5.73 7.51 10.40 Current Liabilities
Other Expenses 5.12 7.28 13.05 Short Term Borrowings 15.23 22.47 34.60
Trade Payables 1.10 1.63 27.09
Total Expenditure 118.34 163.70 308.43 Other Current Liabilities 3.32 3.26 3.80
Short term provisions 0.19 0.44 2.30
EBITDA 4.60 6.95 27.47
Total Current Liabilities 19.84 27.79 67.79
Depreciation 0.81 1.22 2.27 Source of Funds 48.52 76.96 151.78
EBIT 3.79 5.73 25.20 Fixed Assets 4.07 11.65 24.57
Loans & Advances 6.04 0.01 0.09
Finance Cost 2.33 3.70 7.60
Other Assets 0.17 0.30 0.32
EBT 1.46 2.03 17.60
Current Assets:
Taxes 0.51 0.67 3.49 Inventories 24.87 36.24 61.38
PAT Before Minority 0.95 1.36 14.11 Debtors 0.41 8.30 19.90
Cash & Equivalents 6.21 12.48 23.37
Less Minority 0.00 0.00 0.00 Loans & Advances 6.75 7.98 22.15
Total Current Assets 38.24 65.00 126.78
PAT After Minority 0.95 1.36 14.11 Application of Funds 48.52 76.96 151.78
FY 18 reflects consolidated numbers including Subsidiaries.
27Ratio Matrix
Ratio Analysis FY16 FY17 FY18
EBITDA Margin 3.7% 4.1% 8.2%
EBIT Margin 3.1% 3.4% 7.5%
EBT Margin 1.2% 1.2% 5.2%
PAT Margin 0.8% 0.8% 4.2%
RoCE 17.3% 24.6% 37.3%
RoNW 4.3% 5.9% 20.9%
Total Debt/Equity 1.01 1.55 0.76
FY 18 reflects consolidated numbers including Subsidiaries.
28Quarterly Data
Income Statement 31-Mar-18 30-Jun-18 Growth %
Sales 90.33 109.01 21%
Expenditure:
Operating Expenses 76.06 93.21 Ratio Analysis 31-Mar-18 30-Jun-18
Employee Expenses 2.37 3.05
EBITDA Margin 8.2% 8.2%
Other Expenses 4.49 3.83
Total Expenditure 82.91 100.09
EBT Margin 4.7% 5.8%
EBITDA 7.42 8.91 20%
Depreciation 0.50 0.53 PAT Margin 4.2% 5.2%
EBIT 6.93 8.39 21%
Finance Cost 2.68 2.04
EBT 4.25 6.35 49%
Taxes 0.42 0.67
PAT 3.83 5.68 48%
29Capital Market Data
Price Data as on 31st July, 2018 INR
Shareholding Pattern as on June, 2018
Face Value 10
Equity Shares Outstanding (Cr) 1.26
EPS as per FY 18 15.2
Others Promoters
Market Price 140.10 30% 70%
Market Cap (INR Cr) 176.81
Trailing PE 9.4
30Disclaimer
All data and information is provided for informational purposes only and is not intended for any factual use. It
should not be considered as an offer of sale of services mentioned in this information memorandum. Neither
Sarthi Capital Advisors Pvt. Ltd. (SCAPL) nor any of its group companies, directors, or employees shall be liable for
any of the data or content provided for any actions taken in reliance thereon. Sarthi Capital Advisors Pvt. Ltd. is
SEBI registered Category-1 Merchant Banker.
This document has been prepared by Sarthi Capital Advisors Pvt. Ltd. as a part of research only. In rendering this
information, we assume and relied upon without independent verification, the accuracy and completeness of all
information that was publicly available, the information has been obtained from the sources we believe to be
reliable as to the accuracy or completeness. This information is given in good faith and we make no
representations or warranties, express or implied as to the accuracy or completeness of the information and shall
have no liability to you or your representatives resulting from use of this information.
This document contains certain “forward-looking statements”. These forward-looking statements can generally be
identified by words or phrases such as
“aim”, “anticipate”, “believe”, “expect”, “estimate”, “intend”, “objective”, “plan”, “project”, “shall”, “will”, “will
continue”, “will pursue” or other words or phrases of similar meaning. Similarly, statements that describe
strategies, objectives, plans or goals are also forward-looking statements. Sarthi Capital Advisors Pvt. Ltd. cannot
assure investors that the expectation reflected in these forward-looking statements will prove to be correct. Given
these uncertainties, investors are cautioned not to place undue reliance on such forward-looking statements and
not to regard such statements as a guarantee of future performance.
31HAPPY TO HELP
SARTHI CAPITAL ADVISORS PRIVATE LIMITED
Bridging the Gap
Corporate Headquarters: Regional Office:
Mumbai New Delhi
159/11, Amar Brass Compound, Vidya Nagari Marg, 411, Pratap Bhawan, 5 Bahadurshah Zafar Marg,
Kalina, Santacruz(E), Mumbai-400098 New Delhi - 110002
Landline: (022) 26528671-72, Fax: (022) 26528673 Landline: (011) 23739426 – 27, Fax: (011) 23739424
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