Premium Pick Unlocked: 3X Multibagger Stocks As Value Pick · Phoenix Lamps Ltd. · May16

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Phoenix Lamps Ltd.

Value Pick : Summary

About Business :

Phoenix Lamps Limited primarily manufactures halogen lamps for the automobile industry. PLL’s customer base ranges from aftermarket buyers to original equipment manufacturers (OEMs) and also includes contract manufacturing for international brands. PLL has more than 60% of its turnover coming from international markets ie, mostly Europe also Phoenix lamps dominates the domestic automotive lamps industry with more than 50% share in 2 wheelers, 4 wheelers(Cars) and commercial vehicles (CVs).

Last year promoters of Phoenix Lamps Limited have changed upon acquisition of 51% stake by Suprajit Engineering Limited (SEL) on June 18, 2015.

Further during Financial Year 2016, SEL had acquired 61.93% stake in PLL for a total consideration of 154.3 Crore. Which means they paid effective 89 / Share. Consequent to this acquisition, PLL became a subsidiary of SEL.

I got a admire the management skills of SEL that they now are running Phoenix Lamps Ltd. as an independent entity ie, it will keep working the way it was with no interference or some shady creativity coming from Parent Company, that clearly shows how much SEL believes in strength of business model & longevity of Phoenix Lamps ltd.

SWOT Analysis :

Strengths

  • Phoenix Lamps ltd. is leader in automotive halogen bulbs ie, headlamps and tail-lamps in India.
  • Approx. 50% share in passenger vehicles.
  • 70% share in Commercial vehicles (CVs).
  • & 70-80% in 2 Wheeler OEMs (Original Equipment Manufacturers).
  • It has positioned itself in top 5 Globally in this segment.
  • Well known Indian & European bands

weaknesses

  • Running plants at full utilization for many products as market demands are higher than the company can deliver.
  • Cross-currency risk ie, Euro depreciating against Rupee has eaten major chunk of net profits for the business.
  • Diss-allowance of expenses by Tax department since FY05-06 bahut ulte seedhe kharche daale honge inhone, pakki baat hai, it has reached to approx. 100 Crore. as contingent liabilities.

opportunities

  • Capture business from global increasing demand of halogen bulbs for automotive.
  • New OEM products to be researched and launched.

threats

  • Raw material price fluctuations.
  • Substitute lamps of low quality (Chinese LEDs).

Business Verdict :

Phoenix Lamps Limited has a quite stable business model with proven records & strong distribution network . It definitely has multibagger potential as a value pick. With Suprajit Engineering Ltd. taking over as promoters shows that it has got the thrust needed to excel into new countries as an auto ancillary .

Lights are essential part of all the vehicles be it a 2-wheeler or 4-wheeler Bina light ke to koi gaadi chal hi nai sakti . Thanks to Stock brokers who hasn't found it for recommending for sattebaaji yet . I see stable turnovers & healthy profit margins maintained. Phoenix Lamps is a Multibagger stock in India available deeply undervalued. ValueGuyz Phoenix Lamps is a definite value pick to consider.


Official Website

Quality Analysis
Value Matrix

What are Value Picks ?

Value picks are stocks of companies that are believed to be undervalued at NSE or BSE. It is an outcome of huge sattebaaji directed by Stock brokers in that stock making Markets overreact to good and bad news, resulting in stock price movements that do not correspond with the company's long-term business or fundamentals.

You can learn Value Pick Multibagger Stock course & start your own research in depth. After completing the Value Pick Multibagger Stock course You have to apply methods & circle of competence on your researched Value Picks.

Is Value Pick Tax Free ?

YES, Profit arising from holding Equity shares for 1 Year or more is covered under Long Term Capital Gain ( LTCG) as per Income Tax Act 1961 ( Section 54 )

regards,

jasmeet singh

Founder & Investor

SEBI Regd.(INH100004951)

Jasmeet Singh

About me :

Currently managing assets of 5 Crore+ & still sleep like a baby every night because Valueguyz makes life simpler.

I am passionate about 3 things in my life Financial System, Fitness & Photography

I got introduced to Financial system through Forex Trading back in 2007 during my 3rd Year of Engineering & It was too complex yet magnificent. Officially I entered Indian Stock Market in early 2008 at the very beginning of Global Financial Crisis, but what the hell did I know for me it was the last semester & time to get serious about my passion ie, Counter Strike

Legends :

RoCE : Return on Capital Employed (Effective)

PAT(Avg.) : Net Profit after tax ( Average )

CMP : Current Market Price

MoS : Margin of Safety

DISCLAIMER

This analysis is my personal opinion shared on public media (Blog) & is not a recommendation of any sort in any manner. I am currently not registered with SEBI in any capacity but in process of being a registered Research Analyst with SEBI. I have no financial interest in aforesaid company & don't hold any stock on the date of writing this post.