All the data's mentioned below will be as of AR2016-17 since 2017-18 is still not published. New information will be updated on monthly basis.
**ABOUT COMPANY**
Eon elect(NSE CODE:EON; BSECODE:532927), after recent fall of 70% from the yearly highs seems like a decent long term bet, it's leading manufacturer of LT Electrical Switchgear Equipment.
Eon electric specialises in many products. The products are mentioned below:
#Gold plus
MCBs
HRMCBs
RCCBs
DBs
#Goldline
Goldline MCBs
Goldline RCCBs
Goldline DBs
Silverline
Silverline MCBs
#Industrial Products
ACBs
MCCBs
Changeover Switches
Switch Disconnector Fuses
HRC Fuses & Fuse Bases
Rewirable Switches
Feeder Pillars
MPCBs
Contactors
Time Switches
Thermal Overload Relays
#Lighting Products
CFLs
FTLs
Energy Meter
Wires and Cables
Modular Wiring
It's manufacturing units are mainly spread over northern region but has set up 3 large plants one for the manufacture of switchgear, other for lighting products and third for manufacture of wires at SIDCUL, Haridwar, the tax free zone of Uttrakhand.
The company has collaborated with Saudi National Glass for setting up a plant in Saudi Arabia for manufacturing of CFL HID Lamps. The company has an all-India marketing network with 30 offices across India and network of over 550 authorized distributors and over 15,000 Electrical Retail outlets spread all over India and overseas.
**FINANCIALS**
As per the data, around 65% of revenue comes from lighting products and 20% from cable wire. (These percentage are almost same every year even if we don't have 2018 reports we can depict a rough picture.)Lighting segment has been allocated highest cap. RMC as a percentage cost of sales is decreasing over years, currently the RMC is 70% which was around 80% 3 years back.
Yearly EPS of 2014 was -15 and of 2017 is 2.49. Yearly EPS of 2018 was 0.27 but it was mainly due to decrease in revenues.
No comments on Cash flow and Balance sheet. Waiting for AR2017-18. As per bal2016-17 investment is around 45 crs and the current mcap is 75 crs.
Operating profit margin for 5 years are
Mar2015:(-14%)
Mar2016:(-0.5%)
Mar2017:(4%)
Mar2018:(5.84%)
PBDIT is 9.3crs vs 7.4crs
Cons:-
1. Operating profit to interest is lowest this qtr along the last 5 qtrs.
2. Debtors T/O ratio(HY) is continuously falling for last 3 years.
3. Cash and cash equivalent (HY) is lowest this qtr in last 3 years.
4. Debt-equity ratio(HY) is 0.78times highest in last 3 years.
5. Quarterly NET SALES, PBDIT, PBT, EPS is lowest in last 5 qtrs.
**SHAREHOLDING PATTERN**
Promoters hold around 62%, main promoter VPM elevtricals Pvt ltd. holds around 35%. Anoyher promoter co VPM industrial services corporation holds around 13%. Promoter holding increased more than 2% in last 4 qtrs. Highest shareholder is Rajasthan global securities Pvt Ltd which holds around 1.05% of the co. They have also invested in Vindhya telelinks which is in the wire industry though Eon is much more diversified.
CONS:-
pledged around 40% (pledged shares increased 8% this qtr)
**Technicals**
After touching multi-year high of 137 it corrected more than 70% making a new yearly low of 39. According to weekly MACD indicator it's bearish and slightly bearish as per monthly MACD indicator. As per weekly Bollinger bands it's mildly bearish, whereas it's bearish as per DMAs. As per 5-year charts it has a fairly strong support around 40-42 zones and a strong support around 31-33 zones.
**MY TAKE**
I feel like CMP45 isn't the bottom and we can see the share price around 35 levels. I feel Q1FY2019-20 is one of the major qtrs. If the company continues to shows the growth which has been shown for FY 2013-14 till 2016-17, then this is one of the underrated multibagger. In my opinion over the span of 3-4 years the share price should be hovering around 140-160.
Any views/information/opinions are accepted and if the information is related to this scrip then it will be updated on the blog.
Any views/information/opinions are accepted and if the information is related to this scrip then it will be updated on the blog.
DISCLOSURE: All the information is based on the writer's own research/gathered from public domains. The writer of this blog is neither a researcher nor related to any brokerage houses. The writer might be himself invested in the stock after his own research so the views might be biased. One must do their own research before investing. The writer isn't advertising any website for his own selfish use. The writer of this blog won't be held responsible for any profit/loss in your investment/trading career.
