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Corporate Report

Published on: Sept. 6, 2021, 4:08 p.m.
Calcom makes a great comeback
  • Sushil Kumar: seeing light at the end of the tunnel

By Lancelot Joseph. Executive Editor, Business India

On August 11th 2021, Noida based Calcom Vision – a fully integrated lighting manufacturer, announced its offer for sale with its promotor selling 6.88 lakh shares or 6.53 per cent of his stake at a floor price of Rs34 per share. The issue was oversubscribed to the tune of 142.22 per cent in the non-retail category and 519.31 per cent in the retail category to their respective allocation size – with the bids being received in the range of Rs34 to Rs42. 

With the conclusion of this OFS, the shareholding of the promotors changed to 75 per cent while the public continues to hold 25 per cent in the company. This OFS comes at a time when the Indian lighting industry is limping back from the aftermath of lockdowns and global raw material shortage owing to the second wave of Covid. Despite the initiatives around capacity expansion, higher efficiency and sustained cost reductions, the company recorded an operational loss for the quarter ended 30 June 2021.

In the past three years, the financial parameters have suffered a jolt owing to the Covid pandemic. However, the company has persisted and focused on regaining the momentum displayed in 2018-19. Sample this, as compared to 2018-19, the company’s total income for 2020-21 is up by 10 per cent to Rs57.81 crore (from Rs52.40 crore in 2018-19) – but the EBIDTA is down from Rs4.80 crore in 2018-19 to Rs3.65 crore in 2020-21. The net profit for 2020-21 stood at Rs75.8 lac as compared to Rs3.01 crore in 2018-19. However, the company has continued to improve from its nadir of 2019-20. The company has a legacy of ups and downs and bouncing back across its journey of four and half decades.

For starters, Calcom was set up by Sushil Kumar Malik, an electronics engineer and MBA by qualification. Even though he came from a services background, he had big dreams and set up Calcom in 1976. Now a listed company, it was founded with a capital of only Rs5,000. With a keen focus on technology and development, Calcom started its journey by manufacturing computers.

Probably ahead of their time, they were unable to sell any in India, and subsequently started manufacturing calculators. It became the first company in India and third in the world, to manufacture and export scientific calculators. A highpoint being that, some of these calculators found their way to NASA and the Russian Space Program.

Although successful at making calculators, Malik had an even bigger vision for Calcom and in the mid-80s, the company rode the burgeoning demand for black & white and colour TVs. Owing to great business decisions, high quality standards and strong client relations, Calcom became a well-known name in the industry. Along the way, Calcom collaborated with Samsung and Philips as their global supply partner and were manufacturing well over one million TV sets a year, making them the largest TV manufacturer in the country.

In 1990, the company went public and was listed on the BSE as Calcom Vision Ltd. It maintained its public status with 12 factories spread across the country and was clocking a turnover of Rs450 crore. However, unfavourable policies and a drastic change in technology led to a sudden exit of its customers and ultimately a collapse of the business. “We suffered heavy losses. One of our customers went bankrupt. We had no way of recovering our dues and pay our creditors, lenders and employees,” says Pramod Kumar, CFO at Calcom.

While for many entrepreneurs, coming back from such collapse would be a distant dream, Malik – a first generation entrepreneur – persisted. “A company is not only about the product it makes, but also the people who work there. I could not have shut down the livelihoods of so many people. I was responsible for them,” explains Malik.

Over the next 10 years, Malik with his family, close aides and the employees of Calcom, repaid all dues, consolidated the company, went back to bootstrapping and to the drawing board. What largely helped the company was its established brand equity among its vendors and customers.

“Positive reviews of our earlier customers and deep-rooted relationships with the companies helped us reinvent ourselves. By 2008, a new chapter had begun in Calcom’s journey. We embarked on our revival stage – Calcom 2.0,” says Abhishek Malik, Executive Director at Calcom adding that, “we entered the lighting industry through our strengths. Calcom was known for its electronics designing and development. This helped us weather the storm by focusing on niche products”.

While expanding its product portfolio in lighting, the company developed a few unique products for Osram, Germany and became their approved vendor. Over the years, many products and customers were added to its portfolio,

The past five years have accelerated the revival of the company. In 2020, Calcom entered the mass volume segment of LED bulbs. It is now the approved manufacturer for Panasonic and for a host of other leading brands such as Bajaj, Osram, Ledvance, Great White, etc. 

Their LED portfolio now includes a range of products from LED bulbs (all wattages), LED Battens (emergency battens and industrial battens), LED downlighters, panels, floodlights and streetlights to LED drivers etc.

With the second generation taking on the reins, fresh ideas have been injected into Calcom’s vision. “As a strategy, we are now focusing on the future. Energy-efficient electronics are in high demand and being adopted across the country. We want to be part of this growing segment and have already developed Smart Bulbs, Smart Plugs and other IoT based products. Along with that we are also diversifying our products portfolio by developing solutions for Brush Less Direct Current (BLDC) fans and drivers,” points Abhishek.

Although the pandemic has been a challenge, the company is resilient. While their P&L suffered due to global supply chain constraints, they used this opportunity to increase their capacity, upgraded their infrastructure and garnered five new customers. “In the last one year, we expanded our production capacity to three million bulbs per month. By the end of the year, we are all set to ramp it up to five million bulbs per month,” adds Malik

Now, Calcom is eyeing its 3.0 phase – ready to unleash its new incarnation into the lighting industry by building a long-term future on a deep-rooted legacy. The company closed FY21 with net sales of Rs57 crore and a PAT of Rs76 lakh which was considerably hit by the grinding halt in the economy due to the pandemic. However, the company’s market cap at BSE stands at Rs37 crore which, for some investors, makes it an attractive consideration. “One of the oldest companies that has not yielded to its own brand play and operates in a growing segment, deserves the attention that it is getting,” says an analyst. 

For Malik, it is indeed a long way from the grim reality the company faced in the early 2000s. “There is always light at the end of the tunnel for those who choose to persevere,” concludes Malik. By that logic, Calcom has the right switch in its palm

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