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Boat Essentials

ISIN

INE03AV01027

Face Value

₹1.00

Total Share

13,48,35,173

Total Income

₹2,886.44 Cr

Profit After Tax

₹68.70 Cr

EPS

₹5.09

P/E

167.98

P/B

16.25

Market Capitalisation

₹11,528.41 Cr

Enterprise Value

₹12,256.78 Cr

Book Value

₹52.62

Intrinsic Value

₹934.00

Earnings Yield

0.60 %

Sector

Consumer Discretionary

Sub-sector

Home Electronics & Appliance

Boat Growth

Compounded Sales Growth

118.67%

1 Year
133.44%

3 Year
127.95%

4 Year

Pro Only

Compounded Profit Growth

-20.61%

1 Year
104.47%

3 Year
84.14%

4 Year

Pro Only

Return On Equity

12.89%

2022
101.03%

2020
51.00%

2019

Pro Only

About Boat

Imagine Marketing Limited ("Boat") manufactures and sells consumer electronics products. It is primarily involved in manufacturing of wired headphones and earphones, wireless headphones, and earphones (neckbands), true wireless stereos (TWS), Bluetooth speakers, home theatre systems, and sound bars, wearables smartwatches, gaming accessories, such as wired and wireless headsets, mouses, and keyboards, personal care appliances, including trimmers and grooming kits, and mobile accessories, such as chargers, cables, power banks, and other accessories.
Boat sells its products under the boat, RedGear, TAGG, Misfit, and DEFY brand names.
Boat also sells its products online. The company was incorporated in 2013 and is based in Delhi, India.

Boat IPO Details

Since the company has raised its funds via warburg and malabar investments, it has abandoned its plans for an initial public offering (IPO).

Boat Merger & Acquisition

Acquisition

Information related to subsidiaries, associates and joint ventures:

Name of the Company	Subsidiary/ Associate/ JV	Date
Dive Marketing Private Limited	Wholly Owned Subsidiary	03.06.2021
Imagine Marketing Singapore Pte Limited	Wholly Owned Subsidiary	29.11.2021
HOB Ventures Private Ltd.	Wholly Owned Subsidiary	31.12.2021
KaHa Technologies Private Ltd.	Wholly Owned Subsidiary	01.02.2022
KaHa Singapore Pte Ltd.	Wholly Owned Subsidiary	09.02.2022
Sirena Labs Private Ltd.	Associate Company	05.11.2019
Kimirica Lifestyle Private Ltd.	Associate Company	23.02.2022
Dixon Technologies	Joint Venture	17.01.2022

Boat Subsidiaries

Subsidiaries:

Dive Marketing Private Limited
Imagine Marketing Singapore Pte Limited
HOB Ventures Private Limited
KaHa Technologies Private Limited
KaHa Singapore Pte Limited

Associates:

Sirena Labs Private Limited
Kimirica Lifestyle Private Limited

Joint Venture:

Dixon Technologies

Boat Business Model

HOB Ventures Private Limited - House the Brands and provide advisory service to FMCG
Imagine Marketing Singapore Pte Ltd - Investment and Trading Company
KaHa Singapore Pte Limited - Develop, design and trading in electronic product

Boat Revenue Segmentation

Revenue generated from audio products
Revenue generated from wearable products

Revenue generated from other operating products
Revenue generated from other operating income

Revenue generated from other income

Boat Product & Services

Product Portfolio:

The product portfolio of the company includes different products under different brands such as:

Brands	Product Category
Boat	Audio, wearables and mobile accessories
Red Gear	Gaming accessories
Defy	Audio and wearables
Misfit	Personal care
Tagg	Audio and wearables

Boat Assets

Assets as on 31 March 2022:

Assets	Amount in Rs. Crores
Plant & Equipment	0.20
Furniture	0.15
Office Equipment	1.08
Computer	1.38
Goodwill	178.38

Boat Industry Overview

Industry Statistics

Hearable Market Overview:

Growing global music industry along with revolutionary breakthroughs in professional audio and wireless connectivity technologies have propelled the demand in the global earphone and headphone market. Popularity of earphones and headphones amongst millennials and young population is also driving the growth of the global earphone and headphone market. Many players and manufacturers have been teaming up with well-known and popular artists, either from cinema or music industries, to promote their new products.

The global headphones market can be segmented based on headphone type, connectivity, application, feature, microphone availability, distribution channel, and region.

Headphone type: In terms of headphone type, the market can be divided into in-ear, on-ear, and over-ear.
Connectivity type: Based on connectivity, the market can be classified into wired headphones and wireless headphones. The wireless headphones segment is further sub-segmented into Bluetooth, radio frequency, and NFC.
Application: In terms of application, the market can be be divided into music and entertainment, gaming, sports and fitness, and others (travel, home & TV audio).
Feature: Based on feature, the headphone market can be split into noise cancelling, water resistance, and others.
Microphone availability: In terms of microphone availability, the market can be segregated into with microphone and without microphone.
Distribution Channel: Based on distribution channel, the market can be bifurcated into online sales channels and offline sales channels. The offline sales channel segment can be sub-divided into hypermarkets & supermarkets, convenience stores, independent electric stores, and department stores.
Region: In terms of region, the global headphones market can be segmented into North America (NA), Europe (EU), Asia Pacific (APAC), Middle East & Africa (MEA), and South America (SA).As of now, Europe and North America dominate the globe but the market in Asia Pacific region is estimated to expand at a rapid pace in the near future, due to a rise in disposable income of consumers in developing countries, such as China and India, in the region.

The entire business of BoAt, is operational in India. So, it is very crucial to understand the Indian Hearables Market. The hearables market comprises wired earphones and headphones, wireless earphones and headphones and truly wireless earphones.

India Hearables Market:

Indian Hearables Market has grown from approximately USD 1.3 billion in 2018 to approximately USD 2.3 billion in 2020, at a CAGR of approximately 31%.
However, when compared to the US (USD 16-19 billion) and South-East Asia region (SEA) (USD 3-5 billion), it shows significant room for growth.
The Truly wireless earphones in US, Europe, the Middle East and Africa (EMEA) make up 95-98% of the total hearables market by value whereas the wireless headphones in India make up 49% and 50% of the total hearables market by value respectively. This indicates the potential of the Indian hearables market and room for further growth.

Worldwide smart personal audio shipments fell by 1.7% year on year in Q2 2022, to 98.1 million units. India, the world's third-largest smart personal audio market, bucked the negative trend and increased shipments by a massive 55%.
TWS was the only smart personal category to grow, recording 8% growth at 63 million units. India is the key driver behind the TWS growth.
Truly wireless earphones has witnessed a significant growth in the country. In Q2 2022, TWS earbuds shipments recorded a 168% year-on-year growth and a 62% quarter-on-quarter growth.

Boat is the current leader of the TWS segment and reported a 46% market share, capturing nearly half of the market. The company reported a staggering 236% year-on-year growth in Q2 2022. The next four positions were captured by noise, Boult, MIVI and pTron.

Growth Drivers:

Rise in the number of portable or smartphone devices, access to video and music content on-the-go, and the rapid expansion of the music industry are key factors boosting the global headphones market.
Most national and international smartphone vendors have discontinued including wired earbuds in their phone boxes in recent years. Consumers are buying hearable products separately as a result of the unbundling, which has opened up significant opportunities for players in the hearables market to innovate beyond the simply wired earphones provided by smartphone companies, and offer a wide range of wired, wireless, and truly wireless earphones and headphones.
Advances in nano-chip technology have prompted manufacturers to reduce the size of the headphones, which has led to the development of wireless headphones that fit seamlessly in the human ear.

Future Prospects:

Hearables are expected to grow at a 25-35% CAGR in the next 5 years and is projected to reach USD 7-10 billion by 2025.

Boat is also involved in the business of Smartwatches. So, it is very crucial to understand the Indian Wearables Market. Wearables market comprises of activity bands and smartwatches.

Wearable Market Overview:

A wearable computing device that closely matches a wristwatch or any other time-keeping gadget is known as a smartwatch. Apart from containing the features of a watch, many of the smartwatches are Bluetooth-enabled. Numerous smart watches have remote correspondence abilities that a client can use from the watches interface to start and answer calls, read messages and messages, get climate forecast refreshes, direct messages or instant messages, or use it as close to home computerized right hand. Expanding interest for remote games and wellness gadgets is driving the global smart watches market. As boAT operates in India, so it is very crucial to understand the Indian Wearables Market.

Indian Wearables Market:

Indian Wearable Market has grown from approximately USD 0.2 billion in 2018 to approximately USD 0.4 Billion in 2020, at a CAGR of approximately 39%.
The US (USD 12-15 Billion) and SEA (USD 1-3 Billion), have relatively more evolved markets.
The sales volume penetration of wearables in India was approximately 2% indicating massive headroom for growth in the future.

Smartwatches constitute around 76% of the Indian wearables market, while in other geographies they constitute much larger shares (approximately 95% in the US and approximately 81% in the MEA region).

This would further be boosted as technological improvements in the wearables market reduce costs and prices causing the market to shift towards advanced product categories, offering better quality and consistency.

Growth Drivers:

Individuals are progressively stressed over their wellbeing and this has prompted an expansion in shipment of wellness trackers. Since each smart watch has a part of a wellness tracker, the prominence development of smart watch is expanding altogether, as it has multi-useful highlights for recording wellbeing parameters.
The early availability of newly launched products and high technology adoption has been critical driving factors to the market growth.

Future Prospects:

The wearables market in India is projected to grow at a high CAGR of 40-55% in the next 5 years and reach a size of USD 2-4 billion by 2025.

Future Prospects

Outlook:

Boat has scaled its business by selling products predominantly through established online marketplaces and continues to expand its online presence through additional online marketplaces and its own website.
E-Retail has been a boon during the pandemic and according to a report by Bain & Company in association with Flipkart ‘How India Shops Online 2022' the e-retail market is expected to grow to $150 billion–$170 billion by 2027.
India is well poised to surpass the US to have the second-largest shopper base (only behind China) in the next one to two years.
India currently has the third-largest shopper base globally, with 180–190 million online shoppers in 2021.
It has acquired two companies named Tagg & KaHa. KaHa is a Singapore-based smart wearable IoT(Internet of Things) development startup. With this acquisition, Boat can continue building innovative products.
The majority of Boat items are produced in China by third-party factories, and in 2020, because of the India-China trade war and COVID-19, company is facing issues in importing products from china and is facing chip shortage. So to solve this issue, under the PLI scheme, they have set up a 50:50 joint venture with Dixon technologies to manufacture some boat products in India.

Government Initiatives

Government Regulators:

An outlay of ₹1,970 billion was announced by the government for the Production Linked Incentive (PLI) scheme across 13 key sectors, including manufacturing of electronics, medical devices, automobiles and auto components among others, to develop manufacturing infrastructure in competing with global markets and to generate employment opportunities.

Boat Awards & Achievements

Awards, Accreditations and Recognitions :

Year	Details
2018	Recognized as a top 50 venture at Startup50 Awards by Smart CEO
2019	Awarded ‘The promising Brand 2019’ by Economics Times Awarded ‘India’s Hottest Entrepreneur’ to Aman Gupta by BW Businessworld Awarded ‘Best in Ear Earphone’ to boAt Bassheads 225 at Mobility Accessories Awards Awarded Gold for #iamaboAthead Digital Campaign at Great Lifestyle Brand Awards Recognized as Rising Stars Entrepreneurs Tech 25 Class of 2019 in the Entrepreneur Magazine to Aman Gupta and Sameer Mehta
2020	Awarded ‘Most Promising Headphones Player’ by BGR Tech Awarded ‘Best Mobile Accessories Brand’ at Mobility Accessories Awards Awarded ‘Best Earbuds Brand’ at DT Awards
2021	Awarded ‘Best FMCD/FMCE Influencer Campaign- Bronze’ by Exchange4media Awarded ‘Most Powerful Brand of the Year-Emerging’ by License India Secured 8th Position in LinkedIn Top Startups to work for Awarded ‘Best Campaign’ - Bronze’ for Use of Mobile and Mobile Monetization by Exchange4media Awarded ‘Best Use of Mobile’ by ET BrandEquity.com Awarded ‘Best Use of Branded Content and Creators-Silver’ for #ItsEffinDope by Social Samosa Secured 1st Prize for R&D Large Scale by Elcina
2022	Ranked #1 in India among the wireless hearables brands by value and volume. Ranked #2 among smartwatch brands in India in terms of volume According to the International Data Corporation (IDC) Worldwide Quarterly wearable device tracker Q3CY2022, Boat ranked #2 in the overall wearable market.

Boat Strengths

Because of its economical and high-quality products, BOAT, the company's flagship brand, has snatched a third of the market, allowing it to become famous among millennials. According to IDC, in the third quarter of 2022, the company had a market share of 32.1%.
The company's digital-first platform capabilities are aimed at enabling expansion and allowing it to maintain a presence across numerous consumer categories.
Audio segment was driven by TWS with a share of 57.6% and 94.4% year-on-year growth and boat was a leader with a share of 41.7%.

Boat Shortcomings

Instead of focusing on one area, the company has diversified its portfolio over other industries, which may have an impact on future sales.
Approximately 10% of their order value gets returned.
As of 3rd Quarter 2022, market share of boat decreased from 42.0% to 32.1% year-on-year.
Only 2 consumers account for more than 50% of total revenue.

Boat Opportunities

In FY20, the company has a big addressable market of approximately 660 Bn dollars, which is expected to expand to approximately 1400-1800 Bn dollars by FY25. So the company has enough opportunity to grow in the future.
When compared to markets in countries, such as the US, where more than 95% of the entire hearables market is made up of TWS, Indian markets have a significant potential for TWS.
The Indian smartwatch market has enormous growth potential, and Mr. Aman Gupta has stated that his company will concentrate on the smartwatch market in the near future.

Boat Threats

Legacy audio and foreign brands, Indian brands, Chinese smartphone OEMs, and marketplace private labels are among the rivals. Because the Indian market is price sensitive, it will continue to pose a challenge to the company in the near future.