Ikio is an Indian manufacturer of light emitting diode (LED) lighting solutions, focused on sustainability and providing low energy LED products. They are primarily an original design manufacturer (ODM) and design, develop, manufacture and supply products to customers who then further distribute these products under their own brands. They also work with our customers to develop, manufacture and supply products that are designed by their customers.
Their products are categorised as:
(i) LED lighting
(ii) refrigeration lights
(iii) ABS (acrylonitrile butadiene styrene) piping and
(iv) other products. Our LED lighting offerings focus on the premium segment and include lighting, fittings, fixtures, accessories and components. They provide lighting solutions (lights, drivers and controls) to commercial refrigeration equipment suppliers under our refrigeration light segment.
Strengths And Risks
+ Growing LED Market:: Ikio is well-positioned to capitalize on opportunities in the LED lighting market driven by govt. policies for energy saving and environment protection, increasing awareness and growing real estate sector.
+ Diverse & High Margin Products: : As an ODM, Ikio offers products in four segments: (i) LED lighting (ii) refrigeration lights (iii) ABS piping and (iv) other products. Wide range of products capture a larger wallet share of customers and the LED lighting offering focuses on the premium segment.
+ Long Term Client Relationships: : Their largest customer is Signify (Philips), which had a 50% market share in India’s functional decorative lighting category (including LED spotlights, LED downlights and cove lights) and a 10% market share in India’s true-blue decorative lighting segment in 2022. 93.56% of revenue is from repeat customers.
+ Strong R&D Capabilities: : Their R&D department focuses on product designing, tools and mould designing, electronic circuit designing and prototype designing.
+ Strong Operational & FInancial Performance: : Their proforma consolidated revenue from operations has increased at a CAGR of 22.75% from ?2,202.47 million in Fiscal 2020 to ?3,318.40 million in Fiscal 2022.
+ Established Infrastructure with Backward Integration: : Their manufacturing infrastructure is a key driver of business with four manufacturing facilities, one located in the SIDCUL Haridwar industrial park, Uttarakhand and three in Noida.
- Key Customer Risk: : A significant portion of business comes from a single customer, any loss or reduced demand can impact business and cash flows.
- Supplier Risk: : Ikip depends on third party suppliers for key components, materials and stock in trade & support services like repairs, returns. Any disruption or delay can impact business.
- Operational Risk: : As a manufacturing firm, any slowdown or disruption due to unexpected circumstances e.g. Covid or natural disasters or others can impact the business adversely.
- No Long Term Agreements: : Ikio does not obtain firm and long-term volume purchase commitments from customers. If customers choose not to source their requirements from them, it can disrupt the business.
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