Panache Digilife Ltd.
Company Overview:
- Panache DigiLife Limited is an ICT & IoT devices design, manufacturing, distribution and services company.
- Only Indian Design-to-Manufacturing company with more than 2 decades of experience of IT Hardware & Telecom with Testing & Lifecycle Management services.
- Panache Digilife Ltd. is a Mumbai-based small-cap company incorporated in 2007
- Its product portfolio spans smart computing (laptops, mini PCs, thin clients), smart education solutions (digital classrooms, interactive tools), telecom products (switches, routers), and retail IoT (POS terminals, kiosks). The company also offers contract manufacturing (OEM/ODM) services, positioning it as a niche player in India’s growing tech hardware ecosystem.
Why this caught my attention:
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PLI Scheme Tailwinds: Panache is tapping into the Production Linked Incentive (PLI) schemes for telecom and IT hardware, including laptops. They’ve already signed an agreement to manufacture and supply laptops for a renowned global brand, and recently signed a supply agreement for CCTV solutions (4th Dec 2024 press release is a must read). The market opportunity of CCTVs and surveillance equipment is something to look out for especially in India. As per my understanding, the government is pushing hard for Make in India surveillance equipment given that this market is majorly dominated by imported Chinese brands with a Chinese source code leading to risk of data leakage.
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EDLA with Google: Not a lot of data available here but as per my understanding they seem to have an exclusive agreement with Google to supply enterprise devices in India. A 380 crore market cap company working with a global giant is unheard of.
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AI Servers: They also provide components to companies that manufacture servers for Data Centers.
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Diverse Product Mix: From education-focused laptops to retail POS systems and telecom gear, Panache isn’t betting on a single horse. This diversification mitigates risk but also complicates execution.
Financials and Guidance:
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Borrowings have greatly reduced. I believe the fundraise that took place at 81 Rs (27.74Cr) helped them repay their debt and reduce interest cost
( Interest coverage ratio was at 1- March’24, Current TTM is at 3 ) -
Seems like the company is able to do higher margins since it is in the Design Led Manufacturing segment that takes care of product design to prototyping to manufacturing
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The management is confident of achieving a 50% CAGR growth over the next 3 years. In FY24, they closed around 100 odd crores. And in 9MFY25, they have only executed around 56 Crores. Historically Q4 is the strongest so next quarter should give us a much better picture over the execution capabilities of the management.
Disclaimer: Not invested. Waiting for Q4 numbers to understand execution capabilities.
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