🧠 At a Glance
OSEL Devices makes LED displays and hearing aids, with 30%+ ROE and 111% profit CAGR over 3 years. But behind the glowing numbers? Cash flows are broken, debt is rising, and working capital days have exploded. Your LED screen might flash profit, but the cash register isn’t ringing.
1. 🎬 Introduction – The LED Startup With a Hearing Problem?
OSEL Devices sounds like that cool tech startup uncle brags about:
“Bro they do LED billboards and hearing aids… double sector exposure bro!”
But behind the dual-sector buzz is a tale of decent profits, poor cash flows, and dangerously rising debt.
📈 FY25 sales hit ₹186 Cr
📊 ROE = 30%
💀 CFO = -₹38 Cr
So… is this an early-stage multi-bagger tech disruptor, or a hardware-heavy cash trap with blinking lights?
2. 🔌 WTF Do They Even Do?
OSEL operates in two distinct segments:
A) 💻 LED Display Systems (~70% of revenue)
- Commercial LED boards for:
- Advertising media
- Conference rooms
- Command centers
- Shopfront signage
- Comes with content management system (CMS) support
Basically, your next “50% OFF SALE” board at a mall might be made by OSEL.
B) 🦻 Hearing Aids & Audiology Equipment
- Still a smaller part of the pie
- But growing due to distributor partnerships (like Frye Electronics)
Sounds diverse. But managing two hardware businesses with wildly different cycles? That’s tough.
3. 📈 Financials – Profits On Display, But Where’s The Cash?
| Metric | FY23 | FY24 | FY25 |
|---|---|---|---|
| Revenue (₹ Cr) | 82 | 132 | 186 |
| PAT (₹ Cr) | 5 | 13 | 20 |
| OPM (%) | 11% | 17% | 18% |
| ROE (%) | 25% | 54% | 30% |
| ROCE (%) | 35% | 54% | 31% |
📈 3-Year PAT CAGR = 111%
📈 3-Year Sales CAGR = 42%
On paper, it looks like a capital-efficient growth engine.
But you know what else looks good on paper? Government budgets.
4. 💸 Valuation – Cheap, Meh, or Crack?
At CMP ₹285
💰 Market Cap = ₹460 Cr
📉 P/E = 22.9x
📚 P/BV = 4.26x
📦 Book Value = ₹66.9
🧠 Fair Value Range: ₹250–₹275
Based on 20–22x PAT for FY25 (~₹20 Cr), adjusting for:
- Weak CFO
- SME tag
- Capital structure risk
- Asset-light CMS illusion vs real infra costs
Valuation’s okay, not mouthwatering. Stock’s been volatile (₹170–₹344) already.
5. 🚨 What’s Cooking – News, Hype, Drama
- 🔊 June 2025: Signed distributor deal with Frye Electronics for hearing aid analyzers
- 🧾 June 28: Issued 4.85 lakh warrants @ ₹268 to promoter (convertible in 18 months) = future dilution?
- 🛠️ Balance sheet grew massively in 2 years (₹49 Cr → ₹198 Cr)
- 📉 NSE asked for clarification on Q4FY25 results (👀)
Red flags + green shoots = grey zone investor trap.
6. 🧾 Balance Sheet – From Startup to Debt-Packed
| Metric | FY23 | FY24 | FY25 |
|---|---|---|---|
| Equity Capital | ₹2 Cr | ₹12 Cr | ₹16 Cr |
| Reserves | ₹10 Cr | ₹14 Cr | ₹92 Cr |
| Borrowings | ₹18 Cr | ₹25 Cr | ₹50 Cr |
| Total Assets | ₹49 Cr | ₹99 Cr | ₹198 Cr |
📈 Debt has nearly tripled in 2 years
🆙 Equity expanded sharply → recent IPO + warrants
📉 Heavy asset ramp-up = LED infra buildout?
Looks less like “profitable bootstrapper,” more like “scaling via borrowed adrenaline.”
7. 💵 Cash Flow – Reality Slaps
| FY | CFO (₹ Cr) | FCF | Remarks |
|---|---|---|---|
| FY23 | -₹11 Cr | ❌ | Working capital bleed |
| FY24 | +₹12 Cr | 🔄 | Temporary bounce |
| FY25 | -₹38 Cr | 💀 | System failure |
So while PAT grew 54%, cash ran out the door.
They raised ₹53 Cr via financing to plug this.
Cash Conversion Cycle = 156 days
That’s basically half a year to recover cash for a product already sold.
8. 📊 Ratios – Sexy Profits, Stressy Liquidity
| Metric | FY25 |
|---|---|
| ROE (%) | 30.1 |
| ROCE (%) | 31.1 |
| Debtor Days | 128 |
| Inventory Days | 104 |
| Payable Days | 77 |
| Working Capital Days | 257 |
| CCC | 156 |
These numbers are amazing on profitability, scary on liquidity.
“They make screens, but can’t collect screens ke paise.”
9. 🧾 P&L Breakdown – Show Me The Money
FY25 Snapshot:
- Revenue: ₹186 Cr
- EBITDA: ₹33 Cr
- PAT: ₹20 Cr
- EPS: ₹12.43
- OPM: 18%
No dividends. No other income. No fluff.
Solid ops. But CFO doesn’t match up, which breaks the flow.
10. ⚔️ Peer Comparison – How Does OSEL Stack Up?
| Company | P/E | ROE % | Sales (Cr) | PAT (Cr) |
|---|---|---|---|---|
| Poly Medicure | 66.3 | 16.0 | 1,670 | 338 |
| Prevest Denpro | 30.7 | 18.7 | 63 | 18.2 |
| Laxmi Dental | 88.8 | 22.5 | 239 | 26.9 |
| OSEL Devices | 22.9 | 30.1 | 186 | 20.1 |
📌 OSEL has:
- Best ROE in the pack
- Lowest P/E
- Worst cash flow metrics
A contrarian might say: “This is a value buy.”
An analyst might say: “This is a value trap with LEDs.”
11. 👥 Shareholding – Who’s Watching the Screen?
| Holder | Mar 2025 |
|---|---|
| Promoters | 71.53% |
| FIIs | 1.83% |
| DIIs | 5.38% |
| Public | 21.26% |
📉 FII holding fell (from 4.13% → 1.83%)
🧾 Promoters holding steady—but now subscribing to preferential warrants too. Hmm…
12. 🧠 EduInvesting Verdict™
OSEL Devices is:
✅ Growing FAST (41% revenue CAGR)
✅ Highly profitable on paper (30%+ ROE/ROCE)
✅ Diversified biz (display + healthcare)
But…
❌ Massive working capital mess
❌ Negative CFO despite PAT growth
❌ Dilution risk (warrants)
❌ Valuation already fair, not cheap
Verdict™:
“Looks like a tech-savvy LED stock. Smells like a cash-burning industrial startup. Buy the display, not the story.”
🏷️ Tags:
OSEL Devices, LED display stocks, hearing aid stocks India, SME hardware stocks, working capital trap, high ROE SME, cash flow red flags, EduInvesting analysis
✍️ Written by Prashant | 📅 July 1, 2025
