Signify Innovations India Limited

Saturday, Mar 16, 2024

ISIN
INE045U01015

Face Value

Rs. 10

Total Shares

57,517,242

P/E of the share

34.72

Market Capitalization

Rs. 8,052.41 Crores

Industry

Consumer Discretionary

Book Value

103.98

P/B of the share

Rs. 13.46

Category

Pre-IPO

IPO Status

Expected Soon

DRHP Status

Not filed yet

Promoter’s Holding

96.13%

About Signify Innovations India Limited

Signify Innovations India Limited, formerly known as Philips Lighting India Limited, is a prominent player in the lighting industry, renowned for its innovative lighting solutions and commitment to sustainability. As a subsidiary of the global leader in lighting, Signify N.V., Signify Innovations India Limited has made significant strides in offering advanced lighting systems, energy-efficient lighting products, and cutting-edge lighting solutions that brighten workplaces, homes, and public spaces alike. With its commitment to technology, sustainability, and customer-centricity, it has established itself as a frontrunner in the lighting industry of India.

Background

Signify Innovations India Limited is an unlisted public company having its registered office at PS Arcadia Central, 3A, 3rd floor, 4A, Abanindranath Thakur Sarani (Camac Street), Kolkata- 700017. The company was initially incorporated under the name and style ‘Philips Lighting India Limited, in the year 2015’ which was later rebranded as Signify Innovations India Limited in 2018 after its acquisition by the Signify Group (formerly Philips Lighting). Since the medical technology business of Philips accounted for more than 40% of its total revenue whereas its lightning solution business was a major money-spinner in the industry, Philips decided to demerge in 2016 forming Signify Innovations India Limited which continues to use the brand name ‘Philips’ for its products.

Board of Directors and Management

Mr. Mahesh Iyer- Chairman of the Board and Audit committee and also a member of other committees •
Mr. Sumit Joshi- Vice Chairman, Managing Director and CEO
Mr. Vinayak Deshpande- Independent and Non-executive Director
Ms. SangeetaPendurkar- Independent and Non-executive Director
Mr. Vikas Malhotra- Whole-time Director
Mr. Nitin Mittal- Head of Legal & Company Secretary
Mr. DibyenduRaychaudhury- Chief Financial Officer

Products Range

The Company deals with the manufacturing of light fixtures, electric lights and connected lighting systems for professionals, consumers and the Internet of Things (IoT) market. Some of its products include:

LED and Smart Lights
Decorative lights and lamps
Indoor and outdoor Luminaries
Installation services
Switches and accessories
LED Downlights
High Bay Lights
LED Panel Lights
Floodlights, garden lights, streetlights, and area lighting
Connected Lighting Systems
Emergency Lighting
Solar Lighting Solutions
Retrofit Solutions

It has manufacturing plants situated at Vadodara in Gujarat.

Awards & Achievements

Signify Innovations India Limited had a remarkable journey since its incorporation as the Company has garnered several prestigious awards and accolades, cementing its position as a leader in the lighting industry. Some of its recent awards include:

For the fourth time in a row in the Financial Year 2021-22, the company has been recognized as one of the 100 Best Companies to Work for in India in a survey which was conducted by the Great Place to Work Institute.
The company has received the India Design Mark Award for its outstanding product designs and excellent user experience, aesthetics, and functionality.
The company was bestowed with the Green Company of the Year Award for its focus on eco-friendly practices, sustainability, and energy-efficient lighting solutions.
In recognition of its contribution to smart city projects, it has received the Smart City India Award for implementing intelligent lighting solutions that enhance efficiency and safety in urban areas.
Signify Innovations India Limited was also recognized with the National Energy Conservation Award for its attention to driving sustainable practices and promoting energy-efficient lighting solutions.

Developments:

Signify Innovations India Limited illuminated one of the largest cricket stadiums in India, Baroda Cricket Stadium with its Philips LED Floodlighting system.
The company was also involved in illuminating Navi Mumbai’s DY Patil Sports Stadium, one of India’s premier football and cricket stadiums, with 408 SportsStar LED Flood luminaires which were enabled with the DMX networking control system.
The Company has recently launched its first hexagonal-shaped LED downlighter Philips HexaStyle in India in 2021-22
Chennai’s iconic landmark – The Ripon building is one of the most significant projects of the company.
It has more than 225 smart light hubs across India offering a first-hand experience to its customers.
The company has also launched certain new products such as an EcoLink range of fans across India and Philips Skyline e-Way which is a highly efficient lighting solution for safer highways and expressways.

Projects

Signify Innovations India Limited has been at the forefront to transform the lighting landscape of India by illuminating the nation with projects that cater to diverse needs. The company have introduced three programs under the initiative of ‘Lighting up the new India.’ These programs include:

HarGaon Roshan Lighting up villages- to ensure rural development by offering solar energy-based lighting solutions in rural villages
Humanitarian Relief project- 120 Oxygen Concentrators were donated to 10 TB hospitals across India under the COVID-19 Relief project
Swasthya Kiran Lighting up Hospitals- creating a safer environment in hospitals through UV-C lighting-based disinfection of hospitals’ common areas.

Financial Results

Here is the financial information of the company for the last three years:

(Figures in Crores)

Particulars	F.Y. 2021-22	F.Y. 2020-21	F.Y. 2019-20
Total Income	2824.40	2515.60	2919.50
Profit Before Tax	315	342.50	276
Profit after Tax	231.90	267.50	181.70
Earnings Per Share	40.32	46.51	31.59
Total Equity	592.70	720.90	499.80
Total Assets	1591.20	1865.30	1331.70

Trends and Industrial Outlook

The industrial outlook of the Company remains positive due to increasing market demand, technological advancements and emphasis on infrastructure and smart cities. India is amongst the largest lighting markets providing a lucrative opportunity to the lighting producers such as Signify Innovations India Limited to establish operations and make profit.

Strengths

The company is amongst the leading ongoing developments of connected lighting services and systems. They are transforming homes, urban places and bridges by leveraging the Internet of Things.
Technology and Innovation: The company has a strong focus on technology and innovation and has been a pioneer in introducing connected lighting solutions and advanced lighting technologies in the market.
There is an increase in the liquidity ratio of the company in the Financial Year 2021-22 signifying a strong liquidity position to meet its immediate working capital requirements.
Diverse Product Portfolio: Signify Innovations India Limited have a diversified portfolio of products for every customer. Be it home, commercial, private or social space. It offers a wide range of products catering to various segments, including professionals, consumers, and IoT applications.
Brand Recognition: The company has a renowned and long-established legacy in the Indian market. It enjoys a strong brand reputation of Philips Lighting and its continued commitment to quality.
Effective Management Team: The Company is well-equipped to make strategic decisions and drive growth. The impactful actions of the company such as stringent cost measures, effective price management, working capital management and curtailment of capital expenditure have increased its efficiency ratio in the Financial Year 2020-21.

Shortcomings

Competition: The lighting industry is highly competitive, and Signify Innovations India Limited has to withstand tough competition from both emerging local brands and established players.
Price Sensitivity: Indian consumers are often price-sensitive, and competition in the market creates pressure on profit margins and pricing.
Decrease in interest coverage ratio: There has been a downfall in the interest coverage ratio of the company since Financial Year 2019 at a rate of -44.4%. The company should take adequate steps to avoid further falls and try to increase its earnings.

Opportunities

LED Transformation: The transformation of its LED lights is one of its most significant opportunities with LED products constituting 82% of its total sales revenue. The rapid growth of the automobile industry provides an opportunity for the company to use its LED transformation in turn signals, headlamps, rear lamps and brake lights.
Innovation: Signify Innovations India Limited is known for its world-class innovative products. Using creativity and innovation, the company has significant scope to capture the market. The company has introduced several innovative products, such as Philips Motion Sensor T-Bulb and Philips HexaStyle downlight, India’s first hexagon-shaped LED downlight in 2021-22.
Infrastructure Development: As India continues to invest in the development of infrastructure, there is an opportunity for the company to increase its infrastructure investments and offer lighting solutions for transportation, smart cities, and public spaces.
Shift to Renewable Energy: With an increase in the emphasis towards renewable energy sources and sustainability, the demand for energy-efficient lighting may rise, benefiting the company.

Threats

Technological Disruptions: The increasing advancements in lighting technologies and the entry of new players may pose a threat to the company's market position.
Instance Competition: The Chinese manufacturers flooding the market with cheap and low-quality products is a threat to the business of the company since the prices of their LED are very low diverting the customers and making the local manufacturers get low margins.
Regulatory norms: Changes in government regulations, policies, or import/export norms could impact the company's profitability and operations. Further, the high rate of the tax also impacts its profits such as GST on the LED lights and its raw materials ranging from 18% to 28%.

Trends

Signify Innovations India Limited has registered a growth of 12% in the Financial Year 2021-22 in comparison to the previous year's de-growth of 14%. The Company has not made any major fund-based borrowings in 2021-22 and has managed working capital requirements from internal cash generation. Further, the company has also announced an interim dividend of 37.50/- per equity share i.e. 375% on the face value of `10/- each for the financial year ended March 31, 2022. The company has also entered the fans category with our EcoLink brand for the first time expanding its portfolio beyond lighting switches. The Company has expanded its Philips Smart Light Hubs network to 225 stores across India and added switches and 3D printed luminaires portfolio in these stores.

IPO expectations and Future Outlook

Signify Innovations India Limited continued its leadership in sustainability and is proud of its inclusion in the DJSI World Index for the fifth year running. With its Brighter Lives, Better World 2025 program, the company is beyond carbon neutrality as it is working to double its positive impact on society and the environment.

The current Signify Innovations India Limited share price of its unlisted shares Rs.1,575 per share which is available to be issued in a lot size of 50 shares. The company has not yet filed the Draft Red Herring Prospectus for Initial Public Offering (IPO). Thus, Signify Innovations India Limited Pre-IPO shares can be bought through unlisted markets.