2. (A). Sector information: -
1. INFORMATION:- LLOYD LED TELIVISION COMES UNDER THE “FMCD SECTOR” (FAST MOVING
CONSUMABLE GOODS).
• WHITE GOODS: - WHITE GOODS MAINLY INCLUDES AIR CONDITIONER, REFRIGRETORS, WASHING
MACHINE, AUDIO EQUIPMENTS AND SPEAKERS.
• BROWN GOODS: - BROWN GGODS MAINLY INCLUDES KITCHEN APPLIANCES LIKE CHIMNEY, GRINDER,
MICROWAVE OVENS, MIXER AND ELECTRIC FANS.
• CONSUMER ELECTRONICS: - THIS CATEGORY INCLUDES MP3 PLAYER, DVD PLAYER, VCD PLAYER, MOBILE
TELEPHONES AND TELEVISION.
2. CONTRIBUTION TO GDP: -
• INDIA IS THE 5TH LARGEST POSITION IN THE CONSUMER DURABLE MARKET. BESIDES AN IMPROVEMENT IN
THE CONSUMER DEMAND, FACTORS INCLUDING RISING DISPOSABLE INCOME, EVOLVING LIFESTYLE
HABITS AND REDUCTION IN GOODS AND SERVICES TAX (GST) EXPANSION. THIS YEAR HAS ALSO BROUGHT
IN NEW TRENDS THAT ARE SLOWLY TRANSFORMING THE COUNTRY’S FMCD INDUSTRY.
• CONSUMER DURABLES CONTRIBUTE 12% IN INDIAN GDP.
3. 3. MARKET OVERVIEW: - INDIA’S CONSUMER MARKET WAS RIDING THE CREST OF THE COUNTRY’S
ECONOMIC BOOM. DRIVEN BY YOUNG POPULATION WITH ACCESS TO DISPOSABLE INCOME AND EASY FINANCE
OPTION, THE CONSUMER MARKET HAS BEEN THROWING UP STAGGERING FIGURES. THE MARKET SHARE OF MNC’S
IN CONSUMER DURABLES SECTOR IS 65%. MNC’S OFFER SUPERIOR TECHNOLOGY TO THE CONSUMERS WHEREAS
THE INDIAN COMPANIES COMPETE ON THE BASIS OF FIRM GRAPS OF THE LOCAL MARKET, THEIR WELL
ACKNOWELEDGED BRANDS, AND HOLD OVER WIDE DISTRIBUTION NETWORK.
30%
18%
13%
5%
34%
MAJOR CONSUMER DURABLES: VOLUME SHARE
CLOUR TVS REFRIGERATORS AIR CONDITIONERS
WASHING MACHINE OTHERS
60%
40%
INDIAN CONSUMER DURABLE INDUSTRY
URBAN RURAL
4. 4. GROWTH PATTERN: -
• THE CONSUMER DURABLES SECTOR IN INDIA IS EXPECTED TO GROW 8.5% IN 2018-19. CONSUMER DURABLES INDEX
UNDER THE INDEX OF INDUSTRIAL PRODUCTION (IIP) HAS GROWN 5.6% YEAR-ON-YEAR BETWEEN APE-OCT 2018.
• AS OF FY18, WASHING MACHINE, REFRIGERATOR AND AIR CONDITIONER MARKET IN INDIA WERE ESTIMATED AROUND
RS. 7000 CRORE, RS. 19500 CRORE AND RS. 20000 CRORE RESPECTIVELY.
4.90%
5.60%
4.00%
3.40%
2.90%
0.80%
5.60%
0.00%
1.00%
2.00%
3.00%
4.00%
5.00%
6.00%
FY13 FY14 FY15 FY16 FY17 FY18 FY19
Y-O-Y GROWTH IN CONSUMER DURABLES PRODUCTION AS PER IIP
5. 5. REASON BEHIND GROWTH: -
• DEMAND FOR CONSUMER DURABLES IN INDIA HAS BEEN GROWING ON THE BACK OF RISING INCOMES; THIS TREND IS
SET TO CONTINUE EVEN AS OTHER FACTOR LIKE RISING RURAL INCOMES, INCREASING URBANISATION, A GROWING
MIDDLE CLASS AND CHANGING LIFESTYLE AID DEMAND GROWTH IN THE SECTOR.
• SIGNIFICANT INCREASE IN DISCRITIONARY INCOME AND EASY FINANCING SCHEMES HAVE LED TO SHORTENED
PRODUCT REPLACEMENT CYCLE AND EVOLVING LIFE STYLE WHERE CONSUMER DURABLES, LIKE ACS AND LCD TVS, ARE
PERCEIVED AS UTILITY ITEMS RATHER THAN LUXURY POSSESSIONS.
• GROWTH IN ONLINE RETAILING IS A KEY FACTOR TO REACH OUT AS A NEWER CHANNEL FOR BUYER, WITH INCREASE IN
DEMAND.
1482 1486
1610 1639
1749
1983
2135
2334
2539
2762
3007
3274
0
500
1000
1500
2000
2500
3000
3500
2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023
GDP PER CAPITA AT CURRENT PRICES (US$)
6. 6. PORTER’S FIVE FORCE MODEL OF SECTOR: -
COMPETITOR
RIVALRY
(HIGH)
THREATS OF
NEW
ENTRANTS
(LOW)
SUBSTITUTE
PRODUCT
(MEDIUM)
BARGAINING
POWER OF
SUPPLIERS
(LOW)
BARGAINING
POWER OF
BUYERS
(HIGH)
COMPETITIVE RIVALRY
CONTINUOUS INNOVATION LEADS TO INTENSE RIVALRY
HOMOGENEITY IN PRODUCT AND LOW SWITCHING COST
THREATS OF NEW ENTRANTS
HIGH CAPITAL INTENSIVE
MAJOR PLAYER HAVE DEVELOPED
BRAND EQUITY
BRABD LOYALTY IS MODERATE
SUBSTITUTE PRODUCTS
TECHNOLOGY ADVANCEMENTS
BUYERS HAVE HUGE
PROPENSITY TO SUBSTITUTE
BARGAINING POWER OF SUPPLIER
PRODUCT DIFFERNTIATION IS
VERY LOW
BY CHANGING THE INPUT, FIRMS
CANNOT DRASTICALLY
DIFFERENTIATE ON PRICE
BARGAINING POWER OF BUYER
USE OF INTERNET TO GET ALL
THE INFORMATION ENABLES
CUSTOMERS TO BE POWERFUL
BUYER’S SWITCHING COST IS
VERY LESS
7. (B). COMPANY INFORMATION: -
1. COMPANY SNAPSHOT: - LLOYD ELECTRICAL & ENGINEERING LTD. WAS INCORPORATED ON 10TH NOVEMBER,
1987 AS A PRIVATE LIMITED COMPANY AND WAS CONVERTED IN PUBLIC LTD IN 1994. IT SET UPED IT’S FIST PLANT IN BHIWADI,
RAJASTHAN. THE MANUFACTURING FACILITY OF THE OMPANY IS SITUATED AT A-146, RICCO INDUSTRAIL AREA, BHIWADI,
RAJASTHAN. HERE, THE COMPANY MANUFACTURES CONDENSOR AND EVAPORATOR COILS FOR AIR CONDITIONER OF VARIOUS
CAPACITIES. AT PRESENT, THE COMPANY HAS AN INSTALLED CAPACITY TO MANUFACTURE 125000 COILS FOR STANDARD
AIRCONDITIONER AND 10000 COILS FOR AIRCONDITIONER OF CAPACITY OF 15 TONS. THE COMPANY IS SELLING ITS PRODUCT
TO THE LEADING MANUFACTURERS OF AIRCONDITONERS LIKE VOLTAS. SHRIRAM INDUSTRIAL ENTERPRISE LTD., MITSUBISHI
AIRRCOMMAND AND AMERTEX ECT.
LLOYD IS AN EXISTING, PROFIT MAKING, DIVIDEND PAYING COMPANY ENGAGED IN THE MANUFATURER OF CONDENSOR COILS
AND EVAPORATOR COILS WHICH ARE USED AS ORIGINAL EQUIPMENT IN WINDOW, PACKAGE, AUTOMOTIVE AND SPLIT
AIRCONDITIONERS. THE COMPANY HAS BEEN ENGAGED IN THIS BUSINESS SINCE 11/03/1988.
2002- LLOYD HAS INFORMED THAT MR K LALL HAS BEEN APPOINTED AS ADDITIONAL DIRECTOR OF THE COMPANYNIN THE
MEETING OF THE BOARD OF DIRECTORS HELD ON JANUARY 30, 2002.
2003- BOARD HAS APPROVED DELISTING OF THE SHARES FROM JAIPUR AND DELHI STOCK EXCHANGES.
MR. BHARAT RAJ PUNJ RESIGNED FROM DIRECTORSHIP.
MR. PAVANJIT SINGH RESIGNED FROM DIRECTORSHIP.
2006- LLOYD ENTERNS INTO MOU AITPL.
2008- LLOYD HAS IN FORMED THAT THE BOARD OF DIRECTORS OF THE COMPANY AT ITS MEETING HELD ON APRIL 26, 2008,
INTER ALIA, HAS CONSIDERD AND APPORVED APPOINTMENT MS. RASHMI SACHDEV AS NOMINEE OF IFCI LTD ON THE BOARD
OF DIRECTORS OF THE COMPANY IN PLACE OF MR. SANJAY BEHARI, THE ERSTWHILE NOMINEE WITH IMMEDIATE EFFECT.
2009- LLOYD COMPLETION OF ACQUISITION OF ASSETS OF JANKA RADOTIN A.S.
8. 2010- LLOYD HAS BEEN APPOINTED OF DR. GEETA AJIT TEKCHAND AS ADDITIONAL, NON EXECUTIVE INDEPENDENT DIRECTOR OF
THE COMPANY. MR. MUKAT BIHARI SHARMA HAS BEEN APPOINTED AS ADDITIONAL, WHOLE TIME DIRECTOR OF THE COMPANY.
2011- LLOYD HAS RECOMMENDED DIVIDEND OF RS. 1.5 PER EQUITY SHARE (15%)
2012- LLOYD HAS RECOMMENDED DIVIDEND OF RS. 1 PER EQUITY SHARE.
2013- LLOYD HAS BEEN APPOINTED OF MR. BRIJ RAJ PUNJ AS MANAGING DIRECTOR OF THE COMPANY.
2016- LLOYD ACQUIRED THE RAIL & VEHICLE BUSINESS OF NOSK E-KAESER GROUP BASED IN GERMANY. LLOYD ACHIEVED A
MILEST ONE BY SELLING 200000 UNITS OF AIR CONDITIONERS UNDER “LLOYD” BRAND IN 88 DAYS OF THE CURRENT QUARTER.
LLOYD BAGS $18 M CONTRACT FROM GE TRANSPORTATION. IT IS AWARDED MAJOR INDIA LOCOMOTIVE HVAC CONTRACT.
IN 2017 THE HAVELLS ACQUIRED LLOYD ELECTRICAL & ENGINEERING LTD.
2. PRODUCT PORTFOLIO: - CURRENTLY LLOYAD HAS FOUR TYPE OF PRODUCT IN IT’S PORTFOLIO-
• AIR CONDITIONER: - LLOYD HAS 3 TYPES OF AIR CONDITONERS IN ITS PORTFOLIO-
(1) SPLIT AC (3) WINDOW ACs
(2) CONVERTIBLE AC
9. • WASHING MACHINE: - LLOYD HAS 3 TYPES OF WASHING MACHINE IN ITS PORTFOLIO-
(1) FULLY AUTOMATIC TOP (2) FULLY AUTOMATIC FRONT (3) SEMI AUTOMATED
LOADED LOADED
• LED TELEVISION: - THERE ARE 2 TYPES OF LED TELEVISION IN LLOYD’S PORTFOLIO-
(1) LED TV (2) ANDROID LED TV
10. CHEST FREEZER: - THERE ARE ONE TYPE OF FREEZER IN LLOYD’S PORTFOLIO-
11. (C). MARKETING ASPECT: -
(1). SWOT ANALYSIS OF COMPANY: -
STRENGTH
WELL KNOWN BRAND
VARIOUS PRODUCT IN PORTFOLIO
GOOD DEALER NETWORK
PRODUCT AVAILABLE IN ALL OVER INDIA
GOOD SERVICE
WEAKNESS
LESS MARKET SHARE
LESS GROWTH
MORE COPETITOR
OPPORTUNITY
IT SHOULD EXPAND Its BUSINESS GLOBALLY
IT SHOULD ADD MORE PRODUCT IN ITS
PORTFOLIO
THREATS
PEOPLE ARE SWITCHING TO OTHER BRAND
BETTER QUALITY PRODUCT AVAILABLE IN
MARKET
MORE GOVT. RULES & TAXES
13. (3). PLC OF THE LLOYD: -
(4). SEGMENTATION OF MARKET: -
LLOYD DOES SEGMENTATION ON THE BASIS INCOME GROUP. IT FOCUSES ON MIDDLE &
UPPER CLASS PEPOLE.
14. (D). FINANCE ASPECT OF LLOYD: -
• GROSS & NET PROFIT MARGIN: -
GROSS PROFIT/NET SALES ×100 = 7514000000/23306000000×100
GROSS PROFIT MARGIN = 32.24%
PAT/NET SALES ×100 = 5100000000/23306000000×100
NET PROFIT MARGIN = 21.8%
• DIRECT & INDIRECT COST: -
DIRECT COST = COST OF MATERIAL CONSUMED + PURCHASE OF STOCK IN TRADE + CHANGES IN INVENTORIES +
EMPLOYEE BENEFIT EXPENSES
DIRECT COST (2018) = 2406.12+270.13-57.16+178.77 = 2797.86 cr.
DIRECT COST (2017) = 1349.85+47.76+502.72+175.49 = 2075.82 cr.
CHANGE IN DIRECT COST= (2797.86-2075.82)/2797.86×100
= 25.80%
INDIRECT COST= FINANCE COST + DEPRECIATION EXPENSES + TAX EXPENSES + OTHER EXPENSES + EMPLOYEE
BENEFIT EXPENSES
INDIRECT COST (2018) =119.95+48.96+18.28+259.61+178.77= 625.57 cr.
INDIRECT COST (2017) =68.73+45.17+172.61+160.80+175.49 =622.80 cr.
CHANGE IN INDIRECT COST= (625.57-622.80)/622.80×100=0.444%
15. • FIXED ASSETS ADDED DURING THE YEAR: -
2018-2017= 765.18 -422.19 = 342.99cr.
• WORKING CAPITAL OF THE YEAR: -
WORKING CAPITAL= CURRENT ASSETS - CURRENT LIABILITIES
WORKING CAPITAL = 1722.84-1032.26= 690.58 CR.
• DEBT EQUITY RATIO: -
TOTAL LIABILITIES/SHARE HOLDERS EQUITY= 2488.02/ (40.34+1275.39) = 1.82
GROSS PROFIT MARGIN 32.24%
NET PROFIT MARGIN 21.8%
DIRECT COST 2797.86 cr.
INDIRECT COST 625.52 cr.
CHANGE IN DIRECT COST 25.80%
CHANGE IN INDIRECT COST 0.44%
FIXED ASSET ADDED 342.99cr.
WORKING CAPITAL 690.58cr.
DEBT EQUITY RATIO 1.82
QUICK RATIO 1.46
CURRENT RATIO 2.76
CASH RATIO 0.05
CURRENT SHARE PRICE 2.85
NET CASH FLOW -676 M