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www.onida.com (Mirc Electronics Ltd)
MIRC Electronics Limited (MIRC) takes into account comfortable capital structure with low overall gearing and
sufficient liquidity cushion available with the company backed by moderate
working capital utilization levels. Ratings also derive strength from
comprehensive product portfolio spanning over TVs, Washing machines, ACs and
microwaves with brand equity presence for more than over three decades as well
as experienced management.
MIRC’s deteriorating operational performance in FY19 and
Q1FY20 marked by declining total income and profitability, inherent business
risk characterized by higher competition in the industry, technology
obsolescence risk and operating profit susceptibility to volatile forex rates.
Going forward, MIRC’s ability to improve its scale of
operations and profitability in the wake if increasing competition as well as
maintain the capital structure with efficient working capital management.
MIRC is promoted by Mr Gulu. L. Mirchandani (Chairman) and
Mr Vijay. J. Mansukhani (MD). Promoters of the company have been associated
with the consumer durable industry since more than three and half decades.
Promoters of the company are supported by professional management team for
heading different divisions of the company
TVs and ACs contributed 82% to the revenues in FY19 as
compared to 87% in FY18. However, AC and washing machine segments are growing
majorly, further mitigating the dependence on one particular product segment.
ACs were the major contributor to revenue in FY19 as compared to TVs in FY18.
MIRC has brand recognition in Indian Electronic consumer
durable market as “Onida” since 1981. MIRC has a robust network of dealers
throughout the country. As on March 31, 2019, MIRC has 3000
dealers/distributors across pan India. Besides the offline channels, the brand
“Onida” also has online presence through e- commerce retailers.
MIRC operates in a very competitive industry dominated by
large MNCs with global presence. Presence of large number of players and low
product switching cost results in low brand loyalty from consumers. Company
faces technology obsolescence risk, thus efforts on product innovation and
differentiation is needed which in turn further increases cost. Effective
marketing strategies for product penetration is necessary to compete in the
industry. There is an import threat in domestic consumer durable markets,
especially from Chinese competitors. To compete and mitigate the competitive intensity,
MIRC has relaunched brand “IGO” with a view to target millennials and will be
available on online platform.
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