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Unlisted Shares

BoAt Essentials

As of July 13, 2024, BoAt Imagine Marketing, Unlisted Shares are trading at ₹1470.00 per share, with a 52-week high of ₹1535 and 52-week low of ₹780. The minimun lot size is 150 shares, and the shares are traded on NSDL and CDSL.

ISIN

INE03AV01027

Face Value

₹ 1

Total Share

9,60,96,300

Total Income

₹ 3,376.79 undefined

Profit After Tax

₹ ****

EPS

₹ ****

P/B

****

Market Capitalisation

₹ 14,126.16 Cr

Enterprise Value

₹ ****

Book Value

₹ 55.73

Intrinsic Value

₹ ****

Earnings Yield

-0.91 %

Sector

Consumer Discretionary

Sub-sector

Home Electronics & Appliance

Category

Upcoming IPO

Cashflow - Operations

2,023

Cashflow - Financing

-₹ 75.08

BoAt Growth

Compounded Sales Growth

1 Year

3 Year

5 Year

Return On Equity

2019

2021

2023

Highlights

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Secures Dominant Position in Global Audio and Wearable Market, Ranked Second Worldwide Following Apple and Leadership in India: As of Q3FY23, Boat maintains a dominant position in the overall Indian market with a 29.7% share. In the True Wireless Stereo (TWS) category, it sustains leadership with a 37.9% market share, while securing the 3rd position in the smartwatch category with a 14.2% market share.  

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Revenue Growth: Due to consistent rise in brand awareness, the company has experienced revenue growth, increasing from ₹2,872.9 crore in FY22 to ₹3,376.8 crore in FY23, reflecting a growth rate of 17.5%. The five-year Compound Annual Growth Rate (CAGR) stands at 99.7%. The firm's ability to offer cost-effective products has played a crucial role in establishing a robust brand presence in the market.

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Profitability Ratios and Margins: The company's Return on Equity (ROE) decreased from 12.9% in FY22 to -24.2% in FY23, and the Profit After Tax (PAT) margin decreased from 2.4% in FY22 to -3.9% in FY23. This was mainly because of significant marketing expenses, which increased from ₹99.1 Crore in FY22 to ₹427.7 Crore in FY23. This elevated marketing expenses from 3.4% of revenue in FY22 to 12.7% in FY23.

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Initiatives for Domestic Manufacturing The company initiated a joint venture named "Califonix Tech and Manufacturing Private Ltd." in partnership with Dixon Technologies, with both Imagine Marketing and Dixon holding 50% stakes in the JV. The joint venture focuses on the local manufacturing of audio products in India.

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Investment Thesis:


High Debt to Equity: As of FY23, total debt of the company stands at ₹1,255 Crore out of which ₹733 Crore is the short term borrowings that the company raised to meet the working capital requirements. Additionally, the company reclassified the series C CCPS issued to raise ₹500 Crore in October 2022 as a financial liability in long-term borrowings, although no interest is applicable post this adjustment. The debt-to-equity ratio for FY23, considering adjustments as if the company had not reclassified CCPS, stands at 1.07. Out of the ₹130 Crore loss in FY23, ₹78 Crore is the interest expense on these working capital loans.


Appreciable Working Capital Management: In FY23, the company demonstrated exceptional management of its working capital, evident in the Cash Conversion Cycle* reducing to 59 days, compared to a 5-year average of 88 days. If this positive trend continues, it is anticipated that the company's short term borrowings to meet the working capital will reduce over the years and eventually the margins of the company will improve.

*Cash conversion states the the time taken by the company to convert inventory into sales. Lower the CCC, better for the company


Operating Efficiency: ​ As of FY23, the audio segment contributed 70%, smartwatches contributed 27%, and the other segment contributed only 3%. Looking ahead, the company is directing its focus on the smartwatch segment, recognizing its lower margins, the key challenge lies in how the management aims to enhance these margins.


Product Quality: In FY23, the company allocates around 10.3% of its revenue to cover expenses related to product returns and warranties. Although this percentage has reduced from 13.0% in FY22, it still reflects on the product quality, ultimately influencing the brand's value and customer retention.


Final Verdict: A decline in the overall market share, aggressive salary hikes of top management, significant advertising expenditures to promote products, rising Debt to Equity Ratio, and a decrease in the asset turnover ratio raise some concerns. However, taking into account the resilient brand reputation, slight improvements in product returns and warranty claims, and improved working capital management, the company has received an overall rating of 3 stars. The company is planning to come with an IPO in 2024.


Business Rating

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Managment

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Accounting Practice

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Profatibility

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Solvency

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Growth

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Valuation

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Overall Ratings

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Recommendation

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Our Team

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, Min. Investment: ₹