Incorporated in 2018, Cello World Limited is a prominent player in the consumerware market in India. It offers its products across three categories, i.e., consumer houseware, writing instruments and stationery, and moulded furniture and allied products.
The company sells products such as houseware, insulatedware, electronic appliances and cookware, cleaning aids, opalware, and glassware under the consumer houseware category. Similarly, writing instruments and stationery products are marketed under the brand name of Unomax. Meanwhile, moulded furniture and allied products are manufactured under Wim Plast Limited.
As of 30 June 2023, these products are manufactured in 13 manufacturing facilities across five locations in India. The revenue generated by products from the company’s in-house manufacturing accounted for 79% of its total income from operations in FY23. The remaining products, mainly steel and glassware, are manufactured by third-party contract manufacturers. However, a glassware manufacturing facility is being established in Rajasthan.
Large scale manufacturing and supply chain management, helps the company benefit from economies of scale. Further, through technology use, the company is able to maintain optimal inventory levels across its manufacturing facilities.
The company operates a strong pan-India distribution network. As of 30 June 2023, the company’s consumer houseware as well as writing instruments and stationery products are available in more than 50,000 retail shops across India.
Between FY21 and FY23, the company has seen a CAGR rise of over 19% in both its revenue from operations and net profit. During the same period, its EBITDA margin was in the range of 24% to 27%. In FY23, the consumer houseware category contributed over 64% to overall revenue, while moulded furniture business made up 23.4% of total revenue.
Additionally, the Indian consumerware market is expected to grow at a CAGR of 10% between FY22 and FY27 owing to factors such as increasing disposable income, the nuclearization of families, and growing demand for organised and functional kitchen spaces. All of this could be beneficial for the company.
And now, Cello World Limited is coming out with its initial public offer (IPO). The entire IPO will be an offer for sale and the respective selling shareholders will receive all the offer proceeds. Its shares will be listed on the NSE and the BSE.
- A prominent player in the consumerware market in India.
- Offers products across three categories, i.e., consumer houseware, writing instruments and stationary, and moulded furniture and allied products.
- 13 manufacturing facilities across five locations in India as of 30 June 2023.
- Steel and glassware products are manufactured by third party contract manufacturers.
- As of 30 June 2023, the company’s consumer houseware as well as writing instruments and stationery products are available in more than 50,000 retail shops across India.
- CAGR rise of 19% in both its revenue from operations and gross profit in the last three years. EBITDA margin of 27%, 25% and 24% in FY21, FY22 and FY23 respectively.
- Well-established brand name and strong market positions as the brand ‘Cello’ was awarded as one of India’s most trusted brands in 2021 by Commerzify.
- Ability to manufacture a diverse range of products with an installed annual capacity of 57 million units of consumer houseware products, 705 million units of writing instruments and stationery products, and 12 million units of moulded furniture and allied products, as of 30 June 2023.
- Long-term association with the brand. While the company was incorporated in 2018, its promoters are associated with Cello Plastic Industrial Works and the “Cello” brand since 1962.
- Diversified product portfolio with an offering of 15,891 SKUs (stock-keeping units) across different product categories.
- Resilient business model allowed it to progress despite the effect of the COVID-19 pandemic, as its revenue from operations grew from ₹1,049 crore in FY21 to ₹1,796 crore in FY23.
- Presence across multiple channels as general trade accounted for 80.58% of its total revenue from operations, export accounted for 7.80%, online sales accounted for 7.91% and modern trade accounted for 3.71% in FY23.
Risks and threats
- Company depends entirely on third-party suppliers for the supply of raw materials, accounting for 45% of its total expenses in FY23.
- May be affected by raw material prices, especially plastic granules and plastic polymer prices.
- The sale of steel and glassware products accounts for 20% of the total sales which are supplied by third-party contract manufacturers primarily located in China.
- Faces significant competition from large competitors with greater resources to spend on advertising, marketing, and to offer discounts.
- Business is subject to seasonality as well as subjected to the risk of various unfair trade practices, such as selling counterfeit, cloned, lookalike and pass-off products.
- Does not own the trademark and logos of its key brands including Cello, Unomax, Kleeno, and Puro.
You can now apply for the Cello World Limited IPO on Upstox. Click here: Cello World Limited IPO - Details: Cello World Limited IPO date, Share Price, Lot Size, Allotment Status