Query: I want to know the future prospectus of MIC Electronics, is the company is fundamentally good? Kindly also give me short term and long term targets, can I purchase more at current levels?? ManjuThebullishtrends: MIC Electronics(CMP:Rs.647) is involving in business of design, development and manufacturing of LED Video Display systems. MIC is also into telecom products for wireline and wireless applications with focus on telecom software. MIC Electronics the company has also forayed into LED lighting and embedded energy management solutions for power sector.
MIC will get huge benefits from its business of power saving LED based technology which provides very cost effective and high impact display and lighting solutions.
Thus broadly the business can be divided into media, information technology (IT), and communications and electronics. This is how the name MIC has been derived.
The media group is primarily responsible for the development, production and sales of video displays, text, graphic animation displays and display services including lease/rental of LED (light emitting diodes), and indoor/outdoor video walls. The company also plans to venture into LED based flat screen televisions and LED digital theatres.
Thus broadly the business can be divided into media, information technology (IT), and communications and electronics. This is how the name MIC has been derived.
The media group is primarily responsible for the development, production and sales of video displays, text, graphic animation displays and display services including lease/rental of LED (light emitting diodes), and indoor/outdoor video walls. The company also plans to venture into LED based flat screen televisions and LED digital theatres.
Notably, the company is more of an embedded software and solutions company and less of an hardware company. The company imports most of its hardware requirement.
There is a tremendous scope in outdoor and indoor LED video walls and in digital display screen business. Lot of advertising is happening through such digital screens, which is very economical, eye-catching and consumes least power. MIC Electronics is enjoying the monopoly market share in the country.
There is a tremendous scope in outdoor and indoor LED video walls and in digital display screen business. Lot of advertising is happening through such digital screens, which is very economical, eye-catching and consumes least power. MIC Electronics is enjoying the monopoly market share in the country.
Also the MIC Electronics is having LED signage business where, LED based technology is used to show the direction of arrows, kms, distance etc. LED signage market is expected to grow at 26% p.a. The use of signages is increasingly finding place in all forms of public communication.
The LED display/lighting is finding applications in advertising, shopping malls, product launches, sport stadiums , sport perimeter, musical concerts (Indian Idol show).
The LED display/lighting is finding applications in advertising, shopping malls, product launches, sport stadiums , sport perimeter, musical concerts (Indian Idol show).
As per the reports the current global LED display market size is around US$ 3.55 billion and is expected to reach US$ 3.9 billion by 2007. The LED market has shown a CAGR of 15.98% from FY 2004 to FY 2007. Internationally, LED display renting is one of the fastest growing segments in the live entertainment industry, with a size of around US$ 210 million and is expected to grow by 12.5% year on year. LED renting industry is expected to be around US $ 210 M and expected to grow by 13% p.a.
In line with global trend, Indian market is also growing fast. The company has just started development of LED based screens, which will be leased out to various distributors from where the company will earn the rental income. Of the 30 screens planned, 26 screens will be rented out by Dec’07 and the balance by Mar’08. These contracts have already been signed for 15-18 years. One can expect rental income of Rs 2 lac per day. The entire LED screen has a pay back period of 2 years.
MIC is having very good order book position and it has set up a subsidiary in USA and its foray into global markets will help the company to grow better in the future. It has completed it's expansion of LED based screens manufacuring capacity very recently, now it has ready to show the gains of this business.
You can enter into this scrip at current levels. This stock is having the stoploss of Rs.610 and we are expecting that this stock will touch Rs.700-745 once the market recovers.
