Lava International Ltd IPO

Lava International Ltd filed its DRHP with SEBI on 27 September, 2021. The IPO consists of a fresh issue of Rs.500 crore and an offer for sale of up t...

Status: Upcoming
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About Lava International Ltd

Last Updated: 09 February 2022 10:40 AM by 5Paisa

Lava International is an end to end focused mobile handset and mobile handset solutions company. They design, manufacture and distribute tablets, handsets and other electronics accessories under their own brands- “LAVA” and “XOLO”.
It is the third largest feature phone company in the country and has a market share of 13.4% in terms of volume of sales in FY21. According to F&S, Lava International is the fifth largest feature phone globally and has a market share of 5% in the entire world, in terms of sales volume, in FY20.
They have a presence in many emerging markets like Mexico, Thailand, Sri Lanka, The Middle East, Bangladesh, Indonesia and Nepal.
The domestic network of Lava International, as of 31 July 2021, consists of 893 active distributors and 1,16,339 active retailers. Their high market penetration in the Tier 2 and Tier 3 cities of India enables them to roll out new products very frequently. They have 705 service centres and 60 service on wheels in the country. Their call centers operate 7 days a week and have an outsourced repair facility with 95 technicians. They own 98 trademark registrations in India and 12 trademarks, overseas. Their research and development team consists of 83 personnel based in India, and 73 of them are trained engineers. They have also developed a smartphone which has a medical ultrasound application for GE Healthcare.

Lava International Ltd Financial Status

Financials:

Particulars (In Rs cr)	FY21	FY20	FY19
Revenue from operations	5,523.68	5,282.45	5,128.75
PAT	172.61	107.76	73.18
EBITDA	183.12	-	251.21
EPS (In Rs)	3.15	1.97	1.34

Particulars (In Rs cr)	FY21	FY20	FY19
Total Assets	2,437.55	2,384.3	2,380.80
Total Borrowings	103.12	176.77	158.86
Equity Share Capital	124.87	124.87	124.87

Peer comparison:

Particulars (In Rs cr)	Lava International	HFCL Ltd	Vindhya Telelink
Revenue	5,523.68	4,459.09	1,557.37
Net Profit Margin (%)	3.13%	5.56%	5.50%
Total Asset Turnover	2.29	0.85	0.3
Inventory Turnover Ratio	16.21	10.16	3.09
ROE (%)	11.52%	12.47%	9.37%
ROCE (%)	13.60%	23.19%	6.42%
Debt to Equity	0.1	0.45	0.2

Lava International Ltd IPO SWOT Analysis

Strengths

1.   Lava International is a leading end to end mobile handset and mobile handset solutions which has a market share of 3.4% in India and 5% globally, in terms of sales volume
2.   They have a strong track record of new innovations and a high amount of research and development. They have a wide range of products with enhanced functions and features
3.   They have a large state of the art manufacturing and quality service capabilities. They have 12 assembly lines with 3,105 workers and a production capacity of 42.52 million feature phone equivalent handsets, as of 31 August, 2021
4.   Lava International has an extensive distribution network with 893 active distributors

Risks

1.   The industry that Lava International operates in, is open to new entrants and this makes the competition higher and if the company is unable to keep up with the competition, it will adversely affect the financials of the company
2.   If the company fails to keep up with the changing preferences of the customers, the business will be affected
3.   Inability to successfully launch and advertise new products will lead to an adverse effect on the cash flow and financials of the company

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