In this article, we can see Creative Newtech Ltd as a Potential Multibagger Stock as on October 2023.
Creative Newtech Ltd
Creative Newtech Ltd (Formerly known as Creative Peripherals and Distribution
Limited) is a distribution and marketing partner of Global IT, Imaging and Lifestyle brands catering to their distribution requirements through its omni-channel presence. Ketan Patel is the current Chairman & Managing Director. Purvi Patel is the current Whole Time Director.
Revenue Split
IT Peripherals: 51% in FY21 vs 53% in FY19 Imaging: 15% in FY21 vs 43% in FY19
LifeStyle and security: 34% in FY21 vs 4% in FY19
Clients
The Co caters to the distribution requirements of a number of globally renowned brands such as AOC, GoPro, Honeywell, Olympus, Philips, Samsung, Transcend, zeiss, Marvel, panasonic among others.
Migration to NSE Main Board
The Company listed on the NSE SME exchange on 12th April 2017, and subsequently migrated to the NSE Main Board on 5th August 2019.
Contract Manufacturing
The Co entered into a contract manufacturing and distribution agreement with Honeywell in 2016 across multiple product segments. This involves manufacturing products at Honeywell certified factories, Designing and packing of products as per Honeywell global packing guidelines and distribution in SAARC, Middle East and APAC countries. The contract has been extended by five years during FY21.
Website
Location
Creative Newtech Ltd is headquartered in Mumbai. the company had branches in Ludhiana, Delhi, Lucknow, Kolkata, Indore, Nagpur, Hydrabad, Pune, Surat, Ahmedabad, Surat, and Rajkot.
Leaders
Ketan Patel is the current Chairman & Managing Director. Mr. Ketan Patel has worked across various verticals like Product Marketing, Business strategy and Brand management. He has pursued an MBA from IIM-Bangalore and with a corporate experience of more than 25 years, he makes the leadership at Creative Newtech all the more bold, competent and pioneering.
Being the Co-founder and Whole Time Director of Creative Newtech brings a lot of responsibilities to Ms. Purvi’s daily routine. Among other things, she handles Human Resource, Marketing, Logistics and other key business functions. When she’s not doing any of this, she’s busy thinking of how to modernise the business for the nearby future.
Mr.Vijay Advani is the current Whole Time Director. As a result of his close association with large format retailers and online giants like Amazon, Flipkart, Paytm and many others, he gives a special touch to the distribution business in this box moving industry. With years of experience at his side, he manages all major B2B relationships with an ease and competence like no other. He is also the Whole- time director at Creative Peripherals.
Mr.Abhijit Kanvinde is the current Chief Financial Officer. A seasoned Chartered Accountant with over two decades of experience, Mr. Abhijit is renowned for his meticulous attention to detail. Having served as a CFO for more than eight years, he successfully led two IPOs during his career. His rich professional journey includes stints with distinguished brands such as Garnier India, Srinagar Cinemas, and Novartis Consumer Health. His extensive knowledge and skill set are invaluable assets to our organization.
Mr.Tejas Doshi is the current Chief Compliance Officer and Company Secretary. With an MBA in International Finance (UK) and a Professional Company Secretary with over 12 years of experience and also holds a degree in LL.B, Mr. Tejas Doshi, is skilled in IPO, Listing Regulations, Companies Act provisions, SEBI Guidelines, Due Diligence, Corporate Governance of Listed Companies along with handling all legal disputes and litigations, coordinating with the external counsels, assisting in the drafting of petitions, and suits, appearing in the Courts and regulators on behalf of the Company.
Highlights
- One of the key highlights of this year was the successful launch of several new products, which received overwhelming positive feedback from customers.
- The Company was listed on the NSE SME exchange on 12th April 2017, and subsequently migrated to the NSE Main Board on 5th August Therefore, the two comparative share price charts depict stock performance against NSE SME Emerge index from 2017-19, and
against NSE Nifty 50 Index from 2019-23. - Signed a Distribution agreement with Cricut Inc. from the US to distribute their Innovative Products in India. Cricut engages in the design and marketing of a creativity platform that enables users to turn ideas into professional-looking handmade goods. also managing the D2C website and Amazon Brand page of Cricut to extend our support to make it available for its consumers.
- Expanded business operations and added other Lexar memory products to
existing product portfolio. - Signed a distribution agreement with Razer Inc. from the US. Razer is the world’s
largest integrated gamer ecosystem and a pioneer in the industry that offers the widest range
of premium gaming products. With this newly forged partnership with Razer, Creative will
distribute all Razer products. - Successfully renewed and retained ISO 9001:2015 certified status.
- The company extended Dividend payouts to all shareholders at a rate of 5% per share based on face value for the financial year concluding on March 31, 2022.
- The Co has allotted 4,00,000 Equity Shares and 6,00,000 Fully Convertible Warrants at an Issue Price of Rs. 110/- per share/ warrant to Abhinav Capital Services and Shree Sumna Trade, belonging to non-promoter category.
- The Co has allotted 5,80,000 equity shares of FV Rs. 10/-, to Sapri Trading DWC LLC (non-promoter), for share swap, to acquire 2,267 shares of Secure Connections Limited (“SCL”).
- The Co is looking to onboard more clients in the contract manufacturing division leveraging the experience garnered through Honeywell collaboration. It plans to become the digital one-stop-shop for all its customers in the supply chain through the B2B platform Ckart.
Products & Services
- IT/Gaming Products
- Imaging
- Lifestyle and security
Profit & Loss
Expansions
- Appointed Chris Sim as the Regional Director – Southeast Asia to cater and expand business in Southeast Asian countries. She is currently stationed in Singapore. Chris is a seasoned veteran of the industry with over 20 years’ experience and has worked with some of the world’s biggest organisations including Samsung, TPV, Powermatic, AMC to name a few.
- Currently 300+ SKUs in Honeywell and successfully tested another 100+ SKUs which
are in production with factories and will be launched in FY24. - The Creative Connect program continues our legacy of meeting with channel partners and demonstrating our product range in different cities. We chose Tier-2 cities this year where we went to 8 cities and had more than 1000 sellers/dealers participated in the roadshow across these cities.
- Directorate of International Customs, New Delhi has certified Creative Newtech Limited as AEO -T2 status holder in Sept’22.
- strategic roadmap envisions a wider global presence in Honeywell, reaching new horizons and introducing an enriched array of offerings including fast chargers, car air purifiers, home audio products, and a networking category. This expansion mirrors commitment to innovation and customer-centric solutions.
- the company has also been increasing its focus on making our processes digital and introducing the use of AI in Sales. This signifies our proactive approach to adapting to the ever-evolving.
- Expansion into tier 2 and tier 3 cities offers a new consumer base, while collaborations with local designers, artists, and brands can lead to culturally relevant products. Innovative marketing strategies and localization efforts are expected to engage consumers more effectively. The industry’s growth potential remains considerable as brands, entertainment properties, and artists continue to explore licensing opportunities in this dynamic market.
Positives
- Company is expected to give good quarter
- Debtor days have improved from 32.0 to 24.2 days.
- Earnings grew by 26.2% over the past year.
Negatives
- Promoter holding has decreased over last quarter: -6.57%
- Earnings include an other income of Rs.19.6 Cr.
- High level of non-cash earnings
- Volatile share price over the past 3 months
Warren Buffett Checklist
| Factor | Value |
| Economic Moat | Moderate |
| Growth | Good |
| Valuation | Good |
| Debt | Moderate |
| Integrity | Good |
Summary
Based on above evaluation the company have low multibagger properties.
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