Dish antenna maker Nucleus Satellite doubles FY18 rev to Rs 79.7 cr

Nucleus Satellite Communications Madras, a dish antenna maker for direct to home (DTH) operators, has doubled its FY18 revenue to Rs 79.7 crore on a provisional basis.

This is a significant jump from Rs 39.3 crore it earned in FY17.

Nucleus had surpassed the FY17 revenue in seven months of its operations in FY18. For H1FY2018, it had reported revenue of about Rs. 31.3 crore and for H2FY18 the revenue was about Rs. 48.5 crore.

Ofcourse, the company’s revenue had seen a 32% decline in FY17 compared to Rs 57.38 crore in FY16.

According to Acuite Ratings and Research (formerly Smera Ratings), the company’s revenue for FY17 and FY16 had got impacted due to floods in Chennai in November 2015 and Cyclone Vardah in December 2016.

Further, the operations got impacted due to plant shifting during January – March 2017.

The company posted a net profit of Rs 7.39 crore in FY17 as against Rs 30 lakh in the previous fiscal. In FY15, the net profit was Rs 1.03 crore.

EBITDA for FY17 was in the negative at Rs 4.13 crore compared to Rs 3.43 crore and Rs 3.39 crore in FY16 and FY15 respectively.

As per Telecom Regulatory Authority of India (TRAI) records, Nucleus had a market share of about 40% in DTH antenna market in the year 2015, before the same dropped to about 20% in 2017.

The drop in the market share was due to shifting of its manufacturing unit from Kanchipuram (Tamil Nadu) to Sri City (Andhra Pradesh).

The unit was setup at a capital outlay of Rs. 34.73 crore in March 2017, with term debt of Rs.13 crore while the balance came through proceeds from sale of land of Rs.17.50 crore and out of internal accruals and unsecured loans from promoters.

Sri City is an integrated business city located in Andhra Pradesh 55 km from Chennai providing locational advantage to Southern states of India.

In order to reduce its dependence on the dish antenna business, Nucleus has diversified. It has started supplying telecommunication antennas to players who are into defence and other segment.

Also, the company registered itself as Tier II Vendor of Samsung India Electronics for supply of metal based powder coated body parts for use in Home Appliances such as air conditioners and refrigerators.

Nucleus is primarily engaged in metal fabrication of KU band antennas, which has low entry barriers with presence of organised and unorganised players.

The company faces revenue concentration risk, since it received 93.79% of revenue from DTH business in year 2017.

Smera has assigned long term rating of ‘Smera BB+’ and short term rating of ‘Smera A4+’ (read as SMERA A four plus) on the Rs. 21 crore bank facilities of Nucleus. The outlook is ‘Stable’.

Nucleus is promoted by V Raman and his brother V Lakshmanan. Raman is a Chartered Accountant, and worked as Chief Financial Officer in overseas markets of Dubai and UAE.

Lakshmanan is a Mechanical Engineer and has about two decades of experience in fabrication industry before starting Nucleus.

Nucleus started its operations in the year 2003 with first supplies to Dish TV in the year of product launch. Over a period, Nucleus became approved vendor to all the six players in India.

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