MIRC Electronics surged 20%, to Rs 22.10, with the scrip rising on a high volume of 23 lakh shares on BSE.Today the volume was much higher than the average daily volume in the past one year (1.3 lakh shares) on BSE .The stock has surged since early this month on the back of a recovery in small-cap and mid-cap shares. From a low of Rs 15.60 on 7 August 2006, it has gained 41.6% to the current Rs 22.10.
The current price of Rs 22.10 discounts its FY 2006 (year ended 31 March 2006) EPS of Rs 2.30, by a PE multiple of 9.60.
To reduce dependence on a single product for growth, MIRC ventured into the audio, air-conditioner and the home appliances market in recent months to leverage the strength of the Onida brand.
The company enjoys 13% share in the Indian colour television (CTV) market. During the recently concluded soccer world cup, the company initiated an aggressive advertising campaign to promote its premium electronics products along with its low cost products. This will augur well for the company during the coming festive season.
MIRC Electronics competes with leading MNC brands like LG Electronics, Samsung, Sony, Phillips in its core CTV business.
The company’s recent initiative to foray into telecom service is quite interesting. Although the business structure has not been decided on that front, the company may become a MVNO (Mobile Virtual Network Operator). In such an arrangement, the company provides the branded last mile mobile service to customers on a major telecom operators network.
For Q1 June 2006, MIRC Electronics reported 15% growth in net profit to Rs 7.29 crore, on 40% growth in sales to Rs 333.50 crore.