Cello World IC Dec23

BUY
CMP: INR 787 Target Price: INR 920  17% ICICI Securities Limited is the author and distributor of this report
29 December 2023 India | Equity Research | Initiating Coverage
Cello World
White Goods
Unique consumption play; initiate with BUY
Cello has developed strong competitive advantages in the commodity-plus category of plastic-moulded products. Cello and
Unomax brands, with a portfolio of sub-brands, generate EBITDA margins/ RoCE of >25%/30%. It has developed multiple
manufacturing units (helps it reduce freight cost) and established a pan-India multi-channel distribution network. Moreover,
it has tied up with the global media house Disney to strengthen the brand equity. We model Cello to benefit from: (1) industry
growth of 10%+ p.a. and (2) formalisation of the sector, as the unorganised market share is still ~35%. Cello has been working
on a strong template of steady distribution expansion and differentiated product launches; the same template could continue
to help register 18.7% revenue CAGR over FY23-26E. Crude oil price correction offers margin tailwinds. We initiate with a
BUY rating and a DCF-based target price of INR 920 (implying 36x FY26E earnings). Execution miss, if any, is the key risk.
Strong competitive advantages Manoj Menon

Cello’s key competitive advantages: (1) Market-leading strong brands of Cello manoj.menon@icicisecurities.com
and Unomax. (2) Sub-brands like Kleeno, Duro, Puro, H2O. (3) Established +91 22 6807 7209
Aniruddha Joshi
pan-India distribution network. (4) Five manufacturing units across India that
aniruddha.joshi@icicisecurities.com
help reduce freight cost. (5) Product portfolio of 15,841 SKUs. (6) Umbrella Karan Bhuwania
brand positioning of Cello. karan.bhuwania@icicisecurities.com
Nilesh Patil
Industry growth likely at 10%+ CAGR in FY23-27
nilesh.patil@icicisecurities.com
All three industries – consumer houseware, writing instruments and moulded
furniture – are expected to grow at 10%+ CAGR over FY23-27 (Technopak
report). We believe industry growth and sector formalisation (current share of Market Data
unorganised sector is ~35%) offer growth tailwinds. Cello has a market share Market Cap (INR) 167bn
of less than 3% in Consumer Houseware; industry consolidation will help drive Market Cap (USD) 2,008mn
market share expansion. Bloomberg Code CELLO IN
Reuters Code CELO.BO
Multi-pronged strategy 52-week Range (INR) 837 /749
Cello is working on: (1) Distribution expansion. (2) Expansion of opalware Free Float (%) 17.0
capacity; commencement of glassware facility at Rajasthan. (3) Improvement ADTV-3M (mn) (USD) -
in capacity utilisation/operating leverage. (4) Differentiated marketing

campaigns to connect with a larger consumer base. (5) Steady launches of
Price Performance (%) 3m 6m 12m
differentiated products. Cello has launched ~200 products each year over
Absolute - - -
FY21-23. (6) Drive exports growth with China+1 strategy. We also see margin
Relative to Sensex - - -
tailwinds in the near term with a correction in crude oil prices.
Valuation and key risks

Financial Summary
We model revenue and PAT CAGR of 18.7%, 23%, over FY23-26. Our DCF
Y/E March
based TP is (INR
INR mn) FY23A
920 [implied P/E FY24E
of 36xFY26E]. FY25E
Execution FY26E
miss, if any, is the
Net Revenue
key risk. 17,967 21,407 25,537 30,044
EBITDA 4,205 5,337 6,596 7,881
EBITDA Margin (%) 23.4 24.9 25.8 26.2
Net Profit 2,662 3,265 4,058 4,953
EPS (INR) 13.6 16.7 20.8 25.4
EPS % Chg YoY 30.5 22.7 24.3 22.1
P/E (x) 57.7 47.0 37.8 31.0
EV/EBITDA (x) 36.5 28.7 22.7 18.4
RoCE (%) 34.5 33.7 32.1 31.5
RoE (%) 65.8 46.7 38.1 32.7
Please refer to important disclosures at the end of this report

Cello World | Initiating Coverage | 29 December 2023
Table of Contents
Investment summary ........................................................................................................................... 4

Established competitive advantages......................................................................................... 4
Industry growth drivers .................................................................................................................. 4
Cello’s growth strategy .................................................................................................................. 4
Valuation and key risks .................................................................................................................. 5
Business Overview ............................................................................................................................... 6
About the company ......................................................................................................................... 6
Corporate structure ......................................................................................................................... 6
Segment-wise revenue and EBIT breakup of the company .............................................. 7
Timeline of the company................................................................................................................ 7
Competitive advantages .................................................................................................................... 8
Established brands .......................................................................................................................... 8
Creation of sub-brands .................................................................................................................. 8
Distribution network ........................................................................................................................ 8
Distribution network across peers .............................................................................................. 9
Breakup of revenues across channels....................................................................................... 9
Presence across multiple segments and umbrella effect ................................................ 10
Cello’s manufacturing units ....................................................................................................... 10
Ad-spend as % of net sales ....................................................................................................... 11
Association with global media house – Disney ................................................................... 11
Industry overview .............................................................................................................................. 12
Indian consumerware market ................................................................................................... 12
Consumer glassware market .................................................................................................... 15
India’s stationery Market ............................................................................................................ 16
Writing instrument market ......................................................................................................... 16
India’s moulded furniture market ............................................................................................. 18
Growth strategy of the company.................................................................................................. 19
Multi-pronged growth strategy ................................................................................................ 19
Usage of marketing campaigns to strengthen connect with consumers ................... 19
Commencement of Rajasthan unit for glassware ............................................................. 20
Improve capacity utilisation and benefit from operating leverage ............................... 20
Steadily gaining market share in India .................................................................................. 20
Steady launches of new products ........................................................................................... 21
Drive exports growth ................................................................................................................... 21
Correction in crude oil prices provide margin tailwinds ................................................... 22
Peer group comparison .................................................................................................................... 23
Financial overview ............................................................................................................................. 24
Key financials ...................................................................................................................................... 27
India | Equity Research 2
Valuations and key risks .................................................................................................................. 28

DCF valuation ................................................................................................................................. 28
Peer group comparison ............................................................................................................... 28
Key risks ........................................................................................................................................... 28
Promoters and management ......................................................................................................... 29

Investment summary
Established competitive advantages
Cello has developed multiple competitive advantages, such as: (1) brands like Cello
and Unomax; (2) sub-brands like Kleeno, Puro, Duro, H2O; (3) established distribution
for all the products across general trade, modern trade and e-commerce; (4) five
manufacturing units (and sixth planned at Falna, Rajasthan) which are likely to help
reduce freight costs. It also benefits from umbrella advertising. Further, Cello has
developed a large product portfolio of 15,841 SKUs.
Exhibit 1: Established competitive advantages

Key competitive advantage Particulars
Brands Cello, Unomax
Sub-brands Kleeno, Puro, Duro, H2O
58,716 outlets for Consumer Houseware and strong presence in MT and
Distribution network
E-commerce
Manufacturing units Five manufacturing units across India and sixth unit under construction
Large portfolio 15,841 SKUs and steady launches of ~200 SKUs each year
Association with global media
Tie-up with Disney to showcase Disney characters on lunch boxes
studio
Source: Company data, I-Sec research
Industry growth drivers

The consumer houseware, writing instruments and moulded furniture industry is
growing at a steady pace of 10%+ p.a. However, we note the industry is extremely
fragmented and Cello has less than 3% share in consumer houseware market. With
steady launches of new products and commencement of the Rajasthan unit for
glassware, we model Cello to potentially gain market share. The share of unorganised
market is ~35% across sub-segments. Formalisation of the sector also offers growth
tailwinds.
Exhibit 2: Industry growing at 10%+ CAGR

18% Industry CAGR over FY23-27
15.6%
16%
14.0%
14%
12% 10.6%
10%
8%
6%
4%
2%
0%
Consumerware Stationery Moulded Furniture
Source: Company data, Technopak, I-Sec research
Cello’s growth strategy

The company is focussing on multiple growth strategies: (1) Distribution expansion. (2)
Expansion of opalware capacity by 10,000 tonnes and commencement of glassware
facility at Rajasthan with installed capacity of 20,000 tonnes. (3) Improvement in
capacity utilisation and benefits of operating leverage. (4) Differentiated marketing
campaigns to connect with larger consumer base. (5) Steady launches of new
products. Cello has introduced ~200 products each year over FY21-23. (6) Drive
exports growth. We also model margin tailwinds with a correction in crude oil prices.
Exhibit 3: Multi-pronged growth strategy

Strategy Particulars
Distribution Expansion Potential to expand reach by 3-5% per annum till FY26
New plant at Rajasthan for glassware and Capacity expansion for
Capacity expansion
Opalware
Current utilisation is below 70% for consumer houseware and moulded
Better capacity utilisation
furniture
Differentiated campaign Campaigns like Cello - Companion for life; Cello - Rishta Zindagi bhar ka
Drive Exports growth Exports likely to step up in stationery due to China + 1 story
Steady launches of new
Cello launches ~200 new SKUs each year to tap new consumers
products
Scope to expand market share Current market share is less than 3%. Scope to gain share
Correction in Crude oil prices Gross margin tailwinds
Valuation and key risks

We value the company on the DCF-based methodology. We see Cello generating
revenue/PAT CAGR of 18.7%/23% over FY23-26. We also expect the company’s return
ratios to steadily improve over FY23-26. At our DCF-based target price of INR 920, the
implied P/E on FY26E earnings works out to 36x.
Key risks: (1) Steep increase in commodity prices and increase in competitive intensity.
(2) The brands are owned by promoter entities. Any adverse impact on Cello brand
may impact the earnings expectations. (3) Execution miss (if any).
Exhibit 4: DCF valuation

Particulars Amt (INR mn)
Cost of Equity 10.9%
Terminal growth rate 5.0%
Discounted interim cash flows 49,062
Discounted terminal value 1,30,338
Total equity value 1,79,400
Value per share (INR) 920

Business Overview
About the company
Cello is present in consumer houseware, writing instruments and moulded furniture
segments in India. It is also exporting some products (largely writing instruments)
largely to the Middle East. Cello World operates under the brand Cello and Unomax. It
sells consumer houseware and moulded furniture under the Cello brand and writing
instruments under Unomax. The company has also developed sub-brands such as
Kleeno to sell cleaning products.
Cello had 15,841 SKUs at end of FY23 and has five manufacturing units pan-India. It
is also in the process of setting up one more manufacturing unit at Rajasthan.
Exhibit 5: Products portfolio of the company

Product categories Brands Product range
Houseware
Insulatedware
Electronic appliances and cookware
Consumer Houseware Cello Cleaning aids
Opalware
Glassware
Porcelain
Writing instruments
Writing Instruments and Stationery Unomax
Stationery
Moulded furniture
Moulded Furniture and Allied Products Cello
Allied products
Corporate structure
Cello World Ltd is the ultimate holding company of the group. The company has
created multiple entities specialising in different business segments. While it owns
100% stake in consumer houseware and writing instruments, it owns 54.9% stake in
moulded furniture business.
Exhibit 6: Corporate structure

Dealing in houseware
Cello World Limited (CWL) Insulatedware electronic
appliances and cleaning aids
100% 100% 100% 100% 100% 54.9%
Cello
Cello Household Cello
Cello Industries Houseware Unomax Wim Plast
Products Consumerware
Private Limited Private Limited Stationery Limited (BSE
Private Limited Private Limited
(CIPL) (CHPL) Private Limited Listed entity)
(CHPPL) (CCPL)
100% 100% 100%
Unomax Unomax
Wim Plast
Writing Sales &
Moulding
Instruments Marketing
Private Limited
Private Limited Private Limited
Manufactures Manufactures Manufactures To Manufactures & deals in Manufactures &

and deals in houseware & houseware & Manufactures writing instruments & deals in
opalware & insulatedware insulatedware glassware stationery products moulded
glassware products products products furniture &
products allieds

Segment-wise revenue and EBIT breakup of the company

The company has three segments, within which consumer houseware accounted for
65.74% of revenues in FY23. Writing instruments and moulded furniture accounted for
15.86% and 18.4% of revenues, respectively, in FY23. We note consumer houseware
generates the highest EBIT and accounted for 69% share of FY23 EBIT.
Exhibit 7: Segment-wise revenues (FY23) Exhibit 8: Segment-wise EBIT (FY23)
Revenue EBIT
Moulded Furniture and Moulded Furniture and
Allied products Allied products
18% 14%
Writing
Instruments and
Writing Stationery
Instruments and 17%
Stationery Consumer
16% Houseware Consumer
66% Houseware
69%
Source: Company data, I-Sec research Source: Company data, I-Sec research
Timeline of the company

The group has a long history of operating in moulded products. It has strong brand
equity established over more than past six decades.
Exhibit 9: Timeline of the company

Launched Investment
Glassware Entered by Tata
Incorporated and Writing Capital and
Wim Plast Opalware Instruments ICICI Venture
1962 1988 2009-15 2017 2018 2019 2022 2022 2023
Late Ghisulal Sold Writing Incorporated Group IPO

Rathod Instruments Cello World restructuring
associated under Cello
with Cello
brand

Competitive advantages
Established brands
The company has two established brands as Cello and Unomax. It sells consumer
houseware and moulded furniture under the Cello brand and sells writing instruments
under the Unomax brand. It also sells cleaning products under the Kleeno sub-brand.
We note that the company has steadily created a portfolio of 15,841 SKUs across
segments. We believe a large product portfolio under established brands augurs well
to tap consumers across income levels and generate healthy margins.
Exhibit 10: Cello brand Exhibit 11: Unomax brand
Creation of sub-brands
Apart from the key brands such as Cello and Unomax, the company has created
multiple sub-brands such as Puro, Chef, H2O, Modustack, Kleeno, Maxfresh and Duro
in consumer houseware. It has also created sub-brands in writing instruments such as
Ultron2X and Geltron.
Exhibit 12: Portfolio of sub-brands

Segment Sub-brands
Consumer Houseware Puro, Chef, H2O, Modustack, Kleeno, Maxfresh, Duro
Writing Instruments Ultron2X, Geltron
Distribution network
Cello has established distribution across channels. However, the major channel for the
company still remains general trade. It operates three separate channels for all three
segments. It has a distribution network of 58,716 outlets to distribute consumer
houseware and 60,826 outlets to distribute writing instruments. It distributes its
moulded furniture products through 6,500 outlets.
Exhibit 13: Distribution network

Product Categories Distribution Network at end of FY23
Consumer Houseware 717 distributors, 58,716 retailers
Writing Instruments and Stationery 1,509 distributors, 60,826 retailers
Moulded Furniture and Allied Products 1,067 distributors, ~6,500 retailers

Distribution network across peers

While Cello has stronger distribution than most peers, we note it still has scope to
expand. We reckon distribution expansion could drive growth and improve the reach
of the brands in coming quarters.
Exhibit 14: Distribution network across peers

Consumerware - Retail Outlets Stationery - Retail Outlets
60000 250000
50000
200000
40000
150000
30000
100000
20000
50000
10000
0 0
Cello Milton LaOpala Borosil Unomax Camlin Linc
Breakup of revenues across channels

Cello generates revenues across all channels, but general trade is still the largest
channel accounting for ~80% of revenues. Modern trade and e-commerce accounted
for 3.7% and 7.9% of revenues, respectively in FY23. The company has also started
exports to global customers and generated 7.8% of FY23 revenues from exports. We
believe presence across channels allows the company to reach consumers across
income levels and offer differentiated products with superior brand communication.
Exhibit 15: Revenue breakup across channels (FY23)

Modern trade
3.7%
Online
7.9%
Exports
7.8%
General trade
80.6%

Presence across multiple segments and umbrella effect

We note that the company operates in multiple segments, but it still uses the brand
Cello for most of the products. Hence, we believe umbrella advertising is beneficial. The
manufacturing process is also similar for most products. Also, the company sells
products such as water bottles, tiffin boxes for kids, plastic containers and casseroles
for usage in kitchens and furniture for in-home and office usage.
Exhibit 16: Presence across multiple segments and umbrella effect

Products Reaching to
School tiffin Kids
Lunch boxes Office employees
Furniture Office and home usage
Pens Students
Kitchen appliances Women
Plastic containers and casseroles Usage in kitchens
Exhibit 17: Brands in Durables and acceptance among consumers

Products Higher acceptance with
Cello All consumers
Havells, Crompton, Polycab, Orient Male consumers
Prestige, Pigeon, Butterfly, Hawkins Female consumer
Cello’s manufacturing units

The company’s five manufacturing units in India manufacture more than 80% of its
products. With Cello manufacturing a large number of products in-house, it is able to
offer a large variety to consumers while maintaining strong product quality.
Exhibit 18: Manufacturing units across India

Manufacturing unit Products
Daman Moulded furniture, Household and Insulatedware, Opalware, Glassware, Stationery
Haridwar Moulded furniture, Household, Insulatedware, Melamine
Baddi Plastic extrusion sheet
Chennai Moulded furniture
Kolkata Moulded furniture
Falna -Rajasthan* Glassware
Source: Company data, I-Sec research *Likely to commence operations by end of FY24

Ad-spend as % of net sales

The company spends ~1% of net sales on ad-spend. It also invests aggressively in
promotions and trade spends. As per our channel checks, the company spends ~30%
of its MRP as trade spends, which is among the highest in consumer products.
Exhibit 19: Ad-spend as % of net sales

Ad-spend as % of net sales 1.3%
1.4%
1.2%
1.0% 0.9%
0.8%
0.8%
0.6%
0.4%
0.2%
0.0%
FY21 FY22 FY23
Association with global media house – Disney

The company has tied up with Disney to use its world famous cartoon characters on
children’s products such as school tiffin and water bottles. It allows Cello to maintain
a strong connect with young consumers.
Exhibit 20: Association with Disney

Industry overview
Indian consumerware market
The Indian consumerware market was valued at INR 348bn in FY22. The market has
steadily grown over the years with market size increasing to INR 348bn FY22. It has
grown at a CAGR of 6.9% over FY20-22. Higher disposable income, nuclearisation of
families, and growing demand for organised and functional kitchen spaces have led to
strong growth of the consumerware market in India.
Exhibit 21: Market size of Indian consumerware industry
Market share of Indian Consumerware Industry (In INR bn)
600
10.2%
500
10.6%
400
6.9% 8.4%
INR bn
300 7.6%
200
100
0
FY15
FY20
FY22
FY23
FY27E
Source: Technopak Analysis
Consumerware market segmentation

The Indian consumerware market is broadly divided into two categories, houseware
and glassware. These are further segmented into various sub-categories –
Consumer Houseware: Hydration, Cookware, Insulated Ware, Lunchboxes, Storage
Containers, Melamine, Small Kitchen Appliances and Cleaning Products.
Consumer glassware: Opalware, glassware and Porcelain
Exhibit 22: Segmentation of consumerware market (market size-FY22)

Hydration (INR
50bn))
Cookware (INR
75bn))
Thermoware
(INR12bn)
Lunch Boxes
Consumer (INR 20bn)
Houseware (INR
318bn) Storage
Containers (INR
24bn)
Melamine (INR
5bn)
Small Kitchen
Indian Appliances
Consumerware ((INR 125bn)
Market (INR 348bn)
Cleaning
product (INR
7bn)
Opalware (INR
12bn)
Consumer
Porcelain (INR
Glassware (INR
2bn)
31bn)
Glassware (INR
17bn)

Consumerware trade channels

While General trade remains a major market, Modern trade and Ecommerce have
steadily grown over past seven years.
Exhibit 23: consumerware market- Channel-wise breakup
General Trade Modern Trade E-commerce
120%
100% 2.0% 9.0% 12.0%

1.5%
6.0%
80% 9.0%
(%)
60%
96.5%
40% 85.0% 79.0%
20%
0%
FY15
FY22
FY27E
Branded consumerware market

As of FY22, branded players accounted for ~60% of the consumerware market in India
up from ~52% in FY15 (CAGR of 9.6%).
Exhibit 24: Market share breakdown - branded vs unbranded consumerware
Branded Unbranded
120%
100%
4.1% 6.5%
4.6%
80%
INR bn
60% 13%
9.6% 11.3%
40%
20%
0%
FY15
FY22
FY23
FY27E
Key growth drivers

Rising aspiration levels
There is steady shift from houseware being perceived as utilitarian essentials to view
them as lifestyle-enhancing accessories. Change in aspirations is leading to stronger
growth.
Product differentiation
Branded players in the Indian consumerware market are making significant
investments in R&D to drive technological innovation. Steady launches of
differentiated products are leading to growth of the industry.

Awareness among consumers regarding safety and quality

Improving consumer awareness about safety and quality has become a significant
driver of growth in Consumerware market. There is higher acceptance about the
branded products which offer quality, safety and trust.
Scale benefits
Branded players are also leveraging their scale of operations to improve distribution
efficiencies and expand their reach into new markets. We believe brands like Cello,
Prestige and Milton have been investing in branding due to scale benefits.
Consumer houseware market
The Indian houseware market was valued at INR 318bn in FY22. The market size grew
at a CAGR of 6.6% from INR 280bn in FY20.
Exhibit 25: Market size of consumer houseware market
Market size of Indian Consumer Houseware Market (In INR bn)
600
500
9.6%
400
10%
INR bn
300 8.0%
6.6%
200 7.3%
100
0
FY15
FY20
FY22
FY23
FY27E
Category-wise segmentation
The consumer houseware market in India includes a diverse range of products with
small kitchen appliances accounting for 39% of total sales in this market in FY22.
Cookware was 24% and hydration products accounted for 16%.
Exhibit 26: Category-wise share – Indian consumer houseware market
Hydration Cookware Insulated ware

Lunch Boxes Storage Containers Melamine
Small Kitchen Appliances Cleaning products
120%
100%
80%
(%)
60%
40%
20%
0%
FY27E
FY15
FY20
FY22
FY23

Consumer glassware market

The Indian glassware market was valued at INR 31bn in FY22. The market size was
INR 15bn in FY15. It grew at a CAGR of 11.6% over FY20-22.
Branded vs unbranded
As of FY22, branded products generated ~62% of the revenues of glassware market.
It indicated increase in market share from ~56% in FY15, (CAGR of 12.7%).
Exhibit 27: Breakup of branded vs unbranded in consumer glassware market
Branded Unbranded
120%
100%
8.8% 8.1% 12.1%
80%
(%)
60%
12.7% 14.6% 18.6%
40%
20%
0%
FY27E
FY15
FY22
FY23
Source: Technopak Report
Glassware
Glassware refers to a range of products made from glass, such as tumblers, wine
glasses, serving glasses etc.
Opalware
Opalware is a type of glass-like ceramic dinnerware that is produced from a mixture
of natural raw materials, such as quartz, feldspar, and bone ash.
Porcelain
Porcelain is a type of ceramic dinnerware that is known for its strength and delicate
appearance. It is made from a mixture of kaolin, feldspar, and quartz, and is fired at
high temperatures.
Key growth drivers of the Indian consumerware market
• Favourable demographics: Steady shift in demographics is resulting in people of
all ages and genders contributing to kitchen work. Rising number of working
women and nuclear families also drive growth of Indian consumerware.
• Higher discretionary spends: Expansion of online platforms and launch of EBOs
and MBOs in smaller cities is providing access to different brands.
• Innovative products: Consumers are shifting towards fashion based
consumerware in order to transform the product from the functional kitchen tool to
part of a lifestyle.
• Shorter replacement cycle: Consumers moving into new houses or re-modelling
their existing homes often prefer the latest collections to match kitchen interiors.
• Gifting culture: Gifting of consumerware products has been a key trend over the
years. It is given as housewarming gift or as wedding gift or in different functions.

India’s stationery Market

Indian Stationery Market Size
The Indian stationery market has exhibited consistent growth over the years, with a
market value of INR 244bn in FY15, (6% CAGR over FY20-22).
Exhibit 28: Stationery Market Exhibit 29: Paper Stationery Market
Indian Stationery Market – By Value (INR Bn) in FY Notebook Papers
700 300
600 250
500
200
400
INR bn
INR bn
150
300
100
200
100 50
0 0
FY15
FY20
FY22
FY23
FY15
FY20
FY22
FY23
FY27E
FY27E
Source: Technopak Analysis; This does not include exports Source: Technopak Analysis
Trends shaping the stationery market

Acceptance of branded products
In FY22, branded products had ~35% (~INR 98bn) of the stationery market in India. It
represents a rise from the market share of ~28% (~INR 69bn) in FY15.
‘China +1’ strategy
During post-pandemic recovery in 2021, China's Zero-Covid policy and supply chain
disruptions affected their ability to meet global demand. As a result, many global
companies are now considering diversifying their business. It may help India’s
stationery companies.
Shift towards differentiated products
Indian stationery market is witnessing higher demand for innovative products across
price segments. There is shift in consumer mindset towards products which are
aesthetically designed.
Rising penetration of e-commerce
With the advent of e-commerce, buying behaviour of consumers for stationery
products have transformed to a certain extent.
Writing instrument market

Writing instrument market size
Writing instrument market in India comprises of pens, pencils and markers and
highlighters. It has exhibited continuous growth over the years, with a market value of
INR 66bn in FY15, which increased to INR 101.5bn in FY20, representing a CAGR of
9%.

Exhibit 30: India’s writing instrument market
Pens Pencils Markers & Highlighters
300
250
200
INR bn
150
100
50
FY23
FY15
FY20
FY22
FY27E
Source: Technopak Analysis; Note-This does not include exports
Exhibit 31: Key sub-categories of Indian writing instruments industry (FY22)

Market Share by Value
Market Share by Value
Sub-Category in Indian Writing Product Type
in sub-category
Instruments industry
Ballpoint 68%
Pen 80% Gel 20%
Rollerball 12%
Wooden 97%
Pencil 12%
Mechanical 3%
Markers and
8% - -
Highlighters
Source: Secondary Research and Technopak Analysis
Exhibit 32: Share of branded in Indian writing instrument market
Branded Play Unbranded Play
120%
100%
80%
(%)
60%
40%
20%
0%
FY15
FY20
FY22
FY23
FY27E

India’s moulded furniture market

Indian furniture market
The Indian retail furniture market had a market value of INR 800bn in FY15. It increased
to INR 1,260bn by FY20, representing a CAGR of 9.5%.
Exhibit 33: Breakup of India furniture market Exhibit 34: India’s retail furniture market (FY22)
Organised Unorganised Total Furniture: INR 1350 Bn
120% Others
Cane/Bamb
(glass, fibre,
oo, 4%
100% resin etc),
4%
Plastic, 9%
80%
(%)
60%
40%
20% Metal, 17% Wood, 66%
0%
FY15
FY20
FY22
FY23
FY27E
Source: Technopak Analysis Source: Technopak Analysis
The Indian furniture market is further segmented into material types. Furniture made
out of wood accounted for 66% share. Demand for wooden furniture in the Indian
market is mainly driven by the residential sector, and this market is predominantly
dominated by the unorganised sector.
Organised sector includes players like Godrej Interio, Durian, Pepperfry etc. As wood is
costly, metal and plastic furniture have become popular. It is durable and cost effective.
India’s plastic moulded furniture market
The plastic moulded furniture market in India was valued at INR 68bn in 2015. The
market size grew at a CAGR of 10.8%, reaching INR 113bn in FY20. The market size
was valued at INR 122bn in FY22.
Exhibit 35: Market share of branded vs unbranded plastic moulded furniture

market
Branded Unbranded
120%
100%
6.3% 15.2% 14.2%
80%
(%)
60%
18.1% 19.6%
40% 10.7%
20%
0%
FY27(P)
FY15
FY22
FY23

Growth strategy of the company

Multi-pronged growth strategy
The company is operating on a multi-pronged growth strategy as it: (1) wants to sell
existing products in its core regions to gain market shares; (2) plans to introduce new
products in core regions to benefit from established distribution; (3) will also launch
existing products in new regions to benefit from established brand equity; and (4) it
will also introduce new products suitable in new regions.
Exhibit 36: Multi-pronged growth strategy

Existing products
Focus on market share gains To leverage the brand equity
Existing region New Region
To leverage distribution network To try to place products
New products
Usage of marketing campaigns to strengthen connect with consumers

The company has effectively used multiple tag lines to drive growth and wants to
continue using tag lines to penetrate further. It has successfully used taglines earlier
such as Cello – Companion for Life, Cello – Rishta zindagi bhar ka, Hot chahiye to Cello
and Don’t just write – Glide.
We believe many global brands such as Pepsi and Cadbury have used tag lines to
differentiate and connect with Indian consumers. We believe the effective brand
communication to be a key growth driver ahead.
Exhibit 37: Marketing campaigns to strengthen connect with consumers

Brand Marketing campaigns
Cello Companion for life
Rishta Zindagi bhar ka
Hot Chahiye to Cello
Unomax Don’t just write - Glide
Cadbury Kuch Meetha ho Jaaye

Amul Chocolates A gift for someone you love
Pepsi Ye Dil Maange More
Yehi hain right Choice

Commencement of Rajasthan unit for glassware

The company has plans to commence facility at Rajasthan to manufacture glassware
in-house. Initially the plant is expected to have installed capacity of 20,000 tonnes.
Cello is also in process to expand its opalware facility from 15,000 tonnes at end-FY23
to 25,000 tonnes by end-FY25 at its existing manufacturing units. Additional
production facilities will help Cello launch multiple variants and brand extensions.
Exhibit 38: Investments in production capacity

Plant Particulars
Rajasthan plant To commence glassware facility with 20,000 tonnes
Existing plants To expand Opalware facility to 25,000 tonnes from 15,000 tonnes
Improve capacity utilisation and benefit from operating leverage

As of now, the existing production units are operating at utilisation level are less than
90%. We note the capacity utilisation of writing instruments and moulded furniture is
68.1% and 69.7%, respectively at end of FY23. We believe there is potential to steadily
expand the utilisation levels resulting in benefits of operating leverage.
Exhibit 39: Scope to improve capacity utilisation

Segment/ Capacity Utilization FY21 FY22 FY23
Consumer Houseware 43.3% 61.4% 79.2%
Opalware and glassware 69.9% 94.4% 88.2%
Writing Instruments and Stationery 40.2% 50.3% 68.1%
Moulded furniture 66.9% 70.5% 69.7%
Steadily gaining market share in India

The company has a market share of less than 3% in India. We believe there is potential
to gain market share as there is a steady shift from unorganised to organised sector.
Launches of new products as well as capacity expansion for glassware and opalware
will also likely result in higher market share for the company.
Exhibit 40: Potential to gain market share

3%
Market shares in Consumerware
2-3%
2%
1-2%
2%
1%
1%
0%
FY22 FY23

Steady launches of new products

The company has steadily introduced multiple products each year. It has introduced
397, 169 and 380 new products in FY21, FY22 and FY23, respectively. Overall, it has
created a portfolio of 15,841 SKUs at end-FY23. We believe steady launches of
multiple variants, brand extensions and SKUs allow the company to tap recent trends
and also launch products in vibrant colours.
Exhibit 41: Steady launches of new products

450 New products
Total SKUs = 15,841
400
397
350 380
300
250
200
150 169
100
50
0
FY21 FY22 FY23
Drive exports growth

We believe there is steady growth potential for India’s exports of plastic moulded
products as well as stationery products considering steady demand in global markets.
This is coupled with the China +1 story. We note Cello is also able to steadily expand
its exports and we model exports to be a key growth driver ahead.
Exhibit 42: Exports to grow at steady pace due to China + 1 strategy

Exports as % of Total Sales
10.0% 9.3%
9.0%
7.8%
8.0%
7.0%
6.0%
5.0% 4.3%
4.0%
3.0%
2.0%
1.0%
0.0%
FY21 FY22 FY23

Correction in crude oil prices provide margin tailwinds

The key raw material for Cello is crude oil and its derivatives. We note correction in
commodity prices augurs well for the margin expansion. We model the company to
retain partial benefits and pass on most benefits to trade and consumers.
Exhibit 43: Key raw material prices

160 HDPE* 10000 Crude oil
140 9000
8000
120
7000
100 6000
(INR/bbl)
80 5000
(INR/kg)
60 4000
3000
40
2000
20 1000
0 0
Dec-12
Dec-19
Dec-11
Dec-14
Dec-17
Dec-20
Dec-23
Dec-13
Dec-14
Dec-15
Dec-16
Dec-17
Dec-18
Dec-20
Dec-21
Dec-22
Dec-23
Jun-12
Jun-13
Jun-14
Jun-15
Jun-16
Jun-17
Jun-18
Jun-19
Jun-20
Jun-21
Jun-22
Jun-23
Jun-13
Jun-16
Jun-19
Jun-22
Sep-12
Mar-14
Sep-15
Mar-20
Mar-17
Sep-18
Sep-21
Mar-23
*Packaging material Source: I-Sec research, Bloomberg

Source: I-Sec research, Bloomberg

Peer group comparison

Exhibit 44: Revenues Exhibit 45: EBITDA
(INR mn) FY21 FY22 FY23 CAGR (%) (INR mn) FY21 FY22 FY23 CAGR (%)
Cello 10,495 13,592 17,967 30.8 Cello 2,767 3,336 4,205 23.3
Borosil 5,848 8,399 10,271 32.5 Borosil 991 1,682 1,511 23.5
La Opala 2,113 3,227 4,532 46.5 La Opala 765 1,414 1,940 59.3
Hamilton (Milton) 14,543 18,594 - - Hamilton (Milton) 2,454 2,787 - -
TTK Prestige 21,869 27,225 27,771 12.7 TTK Prestige 3,679 4,610 4,042 4.8
Exhibit 46: EBIT Exhibit 47: PAT

(INR mn) FY21 FY22 FY23 CAGR (%) (INR mn) FY21 FY22 FY23 CAGR (%)
Cello 2,278 2,860 3,702 27.5 Cello 1,512 2,040 2,662 32.7
Borosil 637 1,343 1,119 32.6 Borosil 424 852 902 45.9
La Opala 642 1,277 1,722 63.7 La Opala 496 874 1,230 57.5
Hamilton (Milton) 1,922 1,984 - - Hamilton (Milton) 1,334 1,532 - -
TTK Prestige 3,279 4,168 3,511 3.5 TTK Prestige 2,368 3,048 2,527 3.3
Exhibit 48: Gross margin Exhibit 49: EBITDA margin

(% ) FY21 FY22 FY23 (% ) FY21 FY22 FY23
Cello 50.3 50.1 50.2 Cello 26.4 24.5 23.4
Borosil 58.4 63.3 59.9 Borosil 17.0 20.0 14.7
La Opala 73.0 80.4 82.5 La Opala 36.2 43.8 42.8
Hamilton (Milton) 40.4 40.4 - Hamilton (Milton) 16.9 15.0 -
TTK Prestige 42.0 41.4 40.2 TTK Prestige 16.8 16.9 14.6
Exhibit 50: PAT margin Exhibit 51: RoCE

(% ) FY21 FY22 FY23 (% ) FY21 FY22 FY23
Cello 14.4 15.0 14.8 Cello 82.6 37.7 34.5
Borosil 7.3 10.1 8.8 Borosil 9.7 18.4 12.0
La Opala 23.5 27.1 27.1 La Opala 9.3 16.3 16.0
Hamilton (Milton) 9.2 8.2 - Hamilton (Milton) 20.1 19.1 -
TTK Prestige 10.8 11.2 9.1 TTK Prestige 22.0 24.2 18.1

Financial overview
Revenues and growth rates
Cello reported revenue growth of 32.2% in FY23 YoY. We expect the company to report
revenue CAGR of 18.7% over FY23-FY26 led by distribution expansion, premiumization
of portfolio and differentiated launches.
Exhibit 52: Revenue and growth rates

35000 Revenues
30000
25000
20000
INR mn
15000
10000
5000
0
FY21 FY22 FY23 FY24E FY25E FY26E
EBITDA margin to remain strong ~25%

The company will likely benefit due to a correction in commodity prices. We believe the
strategy of offering higher working capital to generate strong margins has worked well
for the company. Cost-saving initiatives and operating leverage will also likely lead to
better margins over FY23-26.
Exhibit 53: EBITDA margin to remain strong

EBITDA margin Average +1SD -1SD
27.0
26.5
26.0
25.5
25.0
24.5
(%)
24.0
23.5
23.0
22.5
22.0
Strong PAT growth rates

We model PAT growth to remain strong led by strong revenue growth as well as
improvement in EBITDA margins. We also model strong FCF generation on balance
sheet to result in higher other income leading to higher PAT growth than
revenue/EBITDA growth. We model effective tax rate of 25.5% over FY24-26.

Exhibit 54: Net profit and growth rates

6000 PAT
5000
4000
INR mn
3000
2000
1000
0
Return ratios above cost of capital

The return ratios are strong and above cost of capital. We model it to remain strong
ahead too led by margin expansion. However, cash accumulation on balance sheet
may impact the return ratios as the company does not pay dividends (as of now).
Exhibit 55: RoE and RoCE are above cost of capital

70 RoE RoCE
60
50
40
(%)
30
20
10
0
FY23 FY24E FY25E FY26E
Net working capital days

Net working capital days are ~65 and are likely to be similar going forward too. From
our channel checks, we understand that the company does not engage in channel
financing and hence, the working capital days on the balance sheet may appear higher
than some of the peers.

Exhibit 56: Net working capital days

Net working capital days
68
66
66
64
64 63
62
61
(days)
60
57
58
56
54
52
FY22 FY23 FY24E FY25E FY26E
FCF generation remains strong

The company has negligible capex, and the OCF and FCF generation is likely to remain
strong ahead. We model the FCF/PAT to be in excess of 75% over FY25-26 led by
strong earnings and negligible capex.
Exhibit 57: FCF generation remains strong

FCF/PAT
120
102
100
87
78
80
62
(%)
60
44
40
20
20
0

Key financials
Exhibit 58: Key financials
INR mn FY22 FY23 FY24E FY25E FY26E
Net Sales 13,592 17,967 21,407 25,537 30,044
Growth (%) 29.5 32.2 19.1 19.3 17.6
Gross margin (%) 50.1 50.2 51.4 51.7 52.1
EBITDA 3,336 4,205 5,337 6,596 7,881
EBITDA margin (%) 24.5 23.4 24.9 25.8 26.2
PBT 2,991 3,852 4,666 5,763 7,003
PBT margin (%) 22.0 21.4 21.8 22.6 23.3
Tax rate (%) 26.6 26.0 25.5 25.5 25.5
PAT 2,040 2,661 3,265 4,058 4,953
PAT margin (%) 15.0 14.8 15.3 15.9 16.5
PAT growth (%) 34.9 30.5 22.7 24.3 22.1
Capex (522) (1,143) (2,200) (1,000) (800)
Net Working capital days 61 57 66 64 63
Operating cash flow 1,819 2,184 2,908 4,367 5,324
Free cash flow (563) (2,987) 708 3,367 4,524
OCF/ EBITDA (%) 54.5 51.9 54.5 66.2 67.6

Valuations and key risks

DCF valuation
We have valued the company as per DCF based methodology. We model the company
to generate revenue and PAT CAGR of 18.7% and 23%, respectively over FY23-26. We
also model the company to steadily improve the return ratios over FY23-26. At our DCF
based target price of INR 920, the implied P/E on FY26E earnings works out to 36x.
Exhibit 59: DCF valuation

Particulars Amt (INR mn)
Cost of Equity 10.9%
Terminal growth rate 5.0%
Discounted interim cash flows 49,062
Discounted terminal value 1,30,338
Total equity value 1,79,400
Value per share (INR) 920
Peer group comparison

Exhibit 60: Peer group comparison
CMP RoE (%) RoCE (%) CAGR FY23-25E (%) P/E (x)
Company
(INR) FY24E FY24E Revenues EBITDA PAT FY24E FY25E
Cello World 787 46.7 33.7 19.2 25.2 23.5 47.0 37.8
3M India 37,309 31.5 38.4 12.1 21.5 19.4 71.8 65.4
Amber 3,135 9.7 9.8 19.4 27.3 35.1 52.1 36.8
Bajaj Electricals 988 9.1 9.7 3.2 4.9 5.0 63.3 47.7
Bluestar 947 19.0 21.2 18.0 24.7 35.1 52.8 39.6
Crompton Cons 311 16.5 15.8 7.8 5.3 7.3 43.1 37.1
Dixon 6,567 22.5 24.5 26.0 26.6 32.9 118.7 86.2
Eureka Forbes 508 2.6 3.6 11.2 33.9 66.1 76.0 63.0
Havells 1,368 18.5 21.6 13.6 25.0 27.0 62.4 49.6
Orient Electric 227 16.4 19.4 13.9 33.5 36.5 50.3 34.2
Polycab 5,485 24.4 28.8 21.2 25.3 28.3 45.3 39.1
Syrma SGS 671 9.9 9.6 42.2 31.6 36.1 73.0 53.7
TTK Prestige 741 10.4 11.5 4.2 5.8 6.0 48.6 35.8
V-Guard 292 14.2 15.8 16.2 30.3 29.3 49.3 39.9
Voltas 978 10.2 9.8 18.8 22.4 37.3 56.2 45.7
Whirlpool 1,367 6.7 6.4 6.5 29.4 23.2 71.9 52.2
Key risks
Steep increase in commodity prices and /or material increase in competitive intensity
may impact the earnings estimates.
The brands are owned by the promoter group entities. Any impact on the brands may
impact the company’s earnings estimates.

Promoters and management

Cello is present in consumer houseware, writing instruments and moulded furniture
segments in India. It is also exporting some products (largely writing instruments). Cello
World operates under the brand Cello and Unomax. It sells consumer houseware and
moulded furniture under the Cello brand and writing instruments under Unomax. The
company has also developed sub-brands such as Kleeno to sell cleaning products.
Exhibit 61: Key managerial personnel

Person Role
Pradeep Ghisulal Rathod Chairman and Managing Director
Pankaj Ghisulal Rathod Joint Managing Director
Gaurav Pradeep Rathod Joint Managing Director
Gagandeep Singh Chhina Non-Executive Director
Piyush Sohanraj Chhajed Independent Director
Pushap Raj Singhvi Independent Director
Arun Kumar Singhal Independent Director
Sunipa Ghosh Independent Director
Manali Nitin Kshirsagar Independent Director
Atul Parolia Chief Financial Officer - Cello World
Hemangi Trivedi Company Secretary and Compliance Officer
Rajesh Bang Chief Financial Officer - CHPPL
Sreyas Jain Chief Financial Officer - USPL
Madhusudan Jangid Chief Financial Officer - WPL
Mahesh Kedia General Manager - Finance and accounts - CIPL
Satish Pancholi General Manager - Finance and accounts - Cello World
Source: Company data, I-Sec research; CHPPL: Cello Household Products Private Limited, USPL: Unomax Stationery
Private Limited, WPL: Wim Plast Limited, CIPL: Cello Industries Private Limited
Exhibit 62: Shareholding pattern Exhibit 63: Price chart

% Nov‘23 830
Promoters 78.1 810
Institutional investors 14.5
MFs and others 9.8 790
FIs/Banks 0.8
(INR)
770
Insurance 1.1
FIIs 2.8 750
28-Dec
12-Dec
16-Dec
20-Dec
24-Dec
6-Nov
10-Nov
14-Nov
18-Nov
22-Nov
26-Nov
30-Nov
4-Dec
8-Dec
Others 7.4
Source: Bloomberg Source: Bloomberg

Financial Summary
Exhibit 64: Profit & Loss Exhibit 67: Cashflow statement
(INR mn, year ending March) (INR mn, year ending March)
FY23A FY24E FY25E FY26E FY23A FY24E FY25E FY26E

Net Sales 17,967 21,407 25,537 30,044 Operating Cashflow 2,184 2,908 4,367 5,324
Operating Expenses 13,762 16,070 18,941 22,164 Working Capital Changes (1,150) (1,056) (611) (667)
EBITDA 4,205 5,337 6,596 7,881 Capital Commitments (1,032) (2,200) (1,000) (800)
EBITDA Margin (%) 23.4 24.9 25.8 26.2 Free Cashflow (2,987) 708 3,367 4,524
Depreciation & Amortization 503 699 921 1,038 Other investing cashflow (4,542) (200) (200) (200)
EBIT 3,702 4,638 5,676 6,843 Cashflow from Investing
(5,574) (2,400) (1,200) (1,000)
Interest expenditure 18 28 21 2 Activities
Other Non-operating Issue of Share Capital 4,599 - - -
167 56 109 161
Income Interest Cost - - - -
Recurring PBT 3,852 4,666 5,763 7,003 Inc (Dec) in Borrowings (1,265) - (1,500) (1,500)
Profit / (Loss) from Dividend paid - - - -
0 - - -
Associates Others - - - -
Less: Taxes 1,001 1,190 1,470 1,786 Cash flow from Financing
3,334 - (1,500) (1,500)
PAT 2,851 3,476 4,294 5,217 Activities
Less: Minority Interest 189 211 236 264 Chg. in Cash & Bank
(57) 508 1,667 2,824
Extraordinaries (Net) - - - - balance
Net Income (Reported) 2,662 3,265 4,058 4,953 Closing cash & balance 306 1,007 2,675 5,498
Net Income (Adjusted) 2,662 3,265 4,058 4,953
Source Company data, I-Sec research
Exhibit 68: Key ratios
Exhibit 65: Balance sheet (Year ending March)
(INR mn, year ending March)
FY23A FY24E FY25E FY26E
FY23A FY24E FY25E FY26E Per Share Data (INR)
Total Current Assets 10,136 12,427 16,159 21,236 Reported EPS 13.6 16.7 20.8 25.4
of which cash & cash eqv. 499 1,007 2,675 5,498 Adjusted EPS (Diluted) 13.6 16.7 20.8 25.4
Total Current Liabilities & Cash EPS 16.2 20.3 25.5 30.7
6,808 7,535 8,989 10,576
Provisions Dividend per share (DPS) - - - -
Net Current Assets 3,327 4,891 7,170 10,661 Book Value per share (BV) 17.3 34.0 54.8 80.2
Investments 2,588 2,788 2,988 3,188 Dividend Payout (%) - - - -
Net Fixed Assets 2,537 4,247 4,326 4,089
ROU Assets - - - - Growth (%)
Capital Work-in-Progress 209 - - - Net Sales 32.2 19.1 19.3 17.6
Total Intangible Assets - - - - EBITDA 26.1 26.9 23.6 19.5
Other assets - - - - EPS (INR) 30.5 22.7 24.3 22.1
Deferred Tax assets - - - -
Total Assets 8,661 11,926 14,484 17,937 Valuation Ratios (x)
Liabilities P/E 57.7 47.0 37.8 31.0
Borrowings 3,261 3,261 1,761 261 P/CEPS 48.5 38.7 30.8 25.6
Deferred Tax Liability 37 37 37 37 P/BV 45.6 23.2 14.4 9.8
provisions - - - - EV / EBITDA 36.5 28.7 22.7 18.4
other Liabilities - - - - P / Sales 8.5 7.2 6.0 5.1
Equity Share Capital 975 975 975 975 Dividend Yield (%) - - - -
Reserves & Surplus 2,390 5,654 9,712 14,665
Total Net Worth 3,365 6,629 10,687 15,640 Operating Ratios
Minority Interest 1,999 1,999 1,999 1,999 Gross Profit Margins (%) 50.2 51.4 51.7 52.1
Total Liabilities 8,661 11,926 14,484 17,937 EBITDA Margins (%) 23.4 24.9 25.8 26.2
Source Company data, I-Sec research Effective Tax Rate (%) 26.0 25.5 25.5 25.5
Net Profit Margins (%) 14.8 15.3 15.9 16.5
Exhibit 66: Quarterly trend NWC / Total Assets (%) 38.4 41.0 49.5 59.4
(INR mn, year ending March) Net Debt / Equity (x) 0.0 (0.1) (0.3) (0.5)
Net Debt / EBITDA (x) 0.0 (0.1) (0.6) (1.1)
Dec-22 Mar-22 Jun-23 Sept-23
Net Sales - - 4,718 4,890 Profitability Ratios
% growth (YOY) - - - - RoCE (%) 34.5 33.7 32.1 31.5
EBITDA - - 1,192 1,203 RoE (%) 65.8 46.7 38.1 32.7
Margin % - - 25.3 24.6 RoIC (%) 34.5 33.7 32.1 31.5
Other Income - - 81 107 Fixed Asset Turnover (x) 4.6 4.0 3.6 3.8
Extraordinaries - - - - Inventory Turnover Days 99 95 95 95
Adjusted Net Profit - - 777 801 Receivables Days 107 103 103 103
Source Company data, I-Sec research Payables Days 157 139 139 138

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BUY

29 December 2023 India | Equity Research | Initiating Coverage

Unique consumption play; initiate with BUY

Strong competitive advantages Manoj Menon

in capacity utilisation/operating leverage. (4) Differentiated marketing

Valuation and key risks

Please refer to important disclosures at the end of this report

Investment summary ........................................................................................................................... 4

Valuations and key risks .................................................................................................................. 28

India | Equity Research 3

Exhibit 1: Established competitive advantages

Industry growth drivers

Exhibit 2: Industry growing at 10%+ CAGR

Source: Company data, Technopak, I-Sec research

Cello’s growth strategy

Exhibit 3: Multi-pronged growth strategy

Valuation and key risks

Exhibit 4: DCF valuation

India | Equity Research 5

Exhibit 5: Products portfolio of the company

Exhibit 6: Corporate structure

100% 100% 100% 100% 100% 54.9%

100% 100% 100%

Manufactures Manufactures Manufactures To Manufactures & deals in Manufactures &

Source: Company data, I-Sec research

India | Equity Research 6

Segment-wise revenue and EBIT breakup of the company

Exhibit 7: Segment-wise revenues (FY23) Exhibit 8: Segment-wise EBIT (FY23)

Timeline of the company

Exhibit 9: Timeline of the company

1962 1988 2009-15 2017 2018 2019 2022 2022 2023

Late Ghisulal Sold Writing Incorporated Group IPO

Source: Company data, I-Sec research

India | Equity Research 7

Exhibit 10: Cello brand Exhibit 11: Unomax brand

Exhibit 12: Portfolio of sub-brands

Exhibit 13: Distribution network

India | Equity Research 8

Distribution network across peers

Exhibit 14: Distribution network across peers

Breakup of revenues across channels

Exhibit 15: Revenue breakup across channels (FY23)

Source: Company data, I-Sec research

India | Equity Research 9

Presence across multiple segments and umbrella effect

Exhibit 16: Presence across multiple segments and umbrella effect

Exhibit 17: Brands in Durables and acceptance among consumers

Cello’s manufacturing units

Exhibit 18: Manufacturing units across India

India | Equity Research 10

Ad-spend as % of net sales

Exhibit 19: Ad-spend as % of net sales

Source: Company data, I-Sec research

Association with global media house – Disney

Exhibit 20: Association with Disney

Source: Company data, I-Sec research

India | Equity Research 11

Exhibit 21: Market size of Indian consumerware industry

Market share of Indian Consumerware Industry (In INR bn)