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Prabhudas Lilladher Report
We recently met the management of Paramount Communications Ltd. and visited its plants. Paramount Communications incorporated in 1955, is a prominent player in India's wire and cable industry with a diverse portfolio of over 25 products and 2,500 SKUs catering to the power, telecom, railways, and infrastructure sectors.
Paramount Communications' pan-India distribution network has been pivotal to its growth, reaching over 600 institutional clients, 150 channel partners, and 7,000 electricians. With strong pre-qualification credentials, PRMC has a wide presence in both domestic and export markets, with a solid foothold in the US.
The company has made significant strides in reducing its asset reconstruction company debts and aims to be debt-free by FY25.
Paramount Communications delivered a revenue/Ebitda/profit after tax compound annual growth rate of 15.3%/18.7%/34.3% over FY20-24. Notably, the export segment displayed robust performance with a revenue CAGR of 80.4%.
Paramount Communications reported revenue of Rs 10.7 billion with Ebitda margin of 8.3%, PAT of Rs 856 million, and return on capital employed/return on equity of 13.7%/13.7% in FY24. The management expects revenue to reach Rs 13.5 billion by FY25 and Rs 17 billion by FY26 and clock a CAGR of 20% plus over the next five years, driven by its B2C market in the U.S. contributing to ~40% of the total revenue.
The company maintains a healthy order book of Rs 4,951.6 million. We don't have a rating on the stock.
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