🧠 1. At a Glance
Arham Technologies is a fast-growing smallcap EMS player making smart TVs and appliances for Indian brands. With 26% ROE, 50% PAT growth, and 293 days of inventory, it’s a classic SME paradox—sharp returns, stretched working capital. From IPO darling to post-IPO dump, the stock is down 52% from highs. Is it the next Dixon… or another dud?
🎬 2. Hook – “TV Banana Easy Hai, Lekin SME Mein Margins Banana Mushkil Hai”
They make smart TVs for others. You’ve probably seen their products in someone else’s showroom. But while the products are smart, is the business model scalable? With OPM >18%, revenue of ₹70 Cr, and high ROCE, Arham is ticking boxes—until you see the inventory levels and IPO price drop.
🏭 3. WTF Do They Even Do?
📺 Business Summary:
- EMS player manufacturing smart televisions, mixers, LED products
- Supplies to regional brands across Central India
- Plans expansion into exports and higher-value appliances
- Also doing contract manufacturing + white labeling
🔧 Vertically integrated with assembly, testing, and packaging at Raipur facility.
📊 4. Financials – Growth Toh Hai, Cash Flow Kahan?
| Metric (FY25) | Value |
|---|---|
| Revenue | ₹69.89 Cr |
| Net Profit | ₹7.28 Cr |
| EBITDA Margin | 18.14% |
| ROE | 26.43% |
| ROCE | 23.69% |
| EPS | ₹4.30 |
📈 28% revenue growth
📈 49% PAT growth
🚨 Working capital cycle 316 days = 😬
⚡ Numbers strong, operations tight.
💰 5. Valuation – Cheap, Meh, or Crack?
- CMP: ₹87
- P/E: 20.2x
- Price/Book: 4.72x
- Book Value: ₹18.4
EduFair Value Range™:
- EPS ₹4.30 × 15–18x = ₹64 – ₹77
- FV Range = ₹64 – ₹77
➡️ CMP of ₹87 is slightly expensive unless FY26 sees explosive growth
🔥 6. What’s Cooking – News, Triggers, Drama
- 🏆 Recognized by MoSPI for industry participation
- 📈 FY25 PAT up 50%, Revenue up 28%
- 🏭 Plans for exports + new product lines in FY26
- 💰 ₹9.58 Cr IPO proceeds fully utilized
- 📉 Stock down from IPO high ₹183 to ₹87 (52% correction)
No scandals. Just market meh-ness and liquidity drain.
🧾 7. Balance Sheet – How Much Debt, How Many Dreams?
| FY25 Metric | ₹ Cr |
|---|---|
| Equity + Reserves | ₹31.2 |
| Debt | ₹26.0 |
| Debt/Equity | ~0.83x |
| Fixed Assets | ₹7.9 |
| Total Assets | ₹69.86 |
Moderate leverage, acceptable given ROCE >20%. Asset-light EMS model.
💸 8. Cash Flow – Sab Number Game Hai
| FY | CFO (₹ Cr) | Comment |
|---|---|---|
| FY24 | -₹3.94 | ❌ |
| FY25 | +₹2.08 | ✅ Turnaround |
Cash flow improving, but full-year FCF still not consistent. Trade receivables and raw material inventory dominate working capital.
📐 9. Ratios – Sexy or Stressy?
| Ratio | Value | Verdict |
|---|---|---|
| ROE | 26.43% | 🔥 Sexy |
| ROCE | 23.69% | 🔥 Solid |
| Inventory Days | 293.7 | 🚨 Stressy |
| Debtor Days | 81.1 | 😐 |
| CCC | 316 days | 🚨 |
Efficiency needs work. Otherwise, very strong returns profile.
💵 10. P&L Breakdown – Show Me the Money
| FY | Revenue (₹ Cr) | PAT (₹ Cr) | OPM % |
|---|---|---|---|
| FY24 | ₹54.7 | ₹4.88 | 15.5% |
| FY25 | ₹69.9 | ₹7.28 | 18.1% |
📈 Clear growth
📊 EPS rose from ₹2.89 to ₹4.30
⚠️ But working capital stretch offsetting profitability upside.
🤼 11. Peer Comparison – Who Else in the Game?
| Name | ROE % | P/E | OPM % | Mcap (Cr) |
|---|---|---|---|---|
| Dixon Tech | 32.9 | 113x | 3.9% | ₹87,692 |
| PG Electroplast | 14.9 | 73x | 9.9% | ₹21,052 |
| Cellecor | 25.1 | 26x | 5.3% | ₹805 |
| Arham Tech | 26.4 | 20.2x | 18.1% | ₹147 |
➡️ Arham is margin leader
➡️ Valuation is still reasonable vs peers
➡️ But lacks scale & brand moat
🧬 12. Misc – Shareholding, Promoters
- Promoter Holding: 72.4%
- No FIIs, No DIIs
- Public: 27.6%
- Shareholders: 1,228
- No pledging ✅
- No dividend ❌
SME flavor: tight promoter control, zero dividend, investor patience required.
🧠 13. EduInvesting Verdict™
Arham is a mini Dixon in the making—asset-light, high ROE/ROCE, and expanding aggressively in EMS space.
✅ Financials solid
✅ Margins rising
✅ Cash flow improving
🚨 Inventory + Receivables = still a drag
📉 Stock down 52% from IPO high = underfollowed
FV Range = ₹64 – ₹77
CMP = ₹87
Valuation looks stretched unless FY26 crosses ₹100 Cr revenue + ₹10 Cr PAT.
📺 Verdict: “Promising business model, but wait for operating efficiency before jumping in.”
✍️ Written by Prashant | 📅 July 1, 2025
Tags: Arham Technologies, SME stocks, smart TV stocks, EMS India, Dixon comparison, ROCE 20%+, SME IPO, EduInvesting
