Arham Technologies: A Rising Star in India’s Electronics Sector

Pasal Wealth
6 days ago
3 min read

Stock Snapshot

Previous Close: ₹101
Sector: Consumption
Market Cap: ₹171 Cr
TTM P/E: 23.5x
Sectoral P/E Range: 30–70
P/E Remark: Below sector range, indicating potential undervaluation
NSE: ARHAM (SME, Lot Size: 1,000 shares)

Company Overview

Arham Technologies, headquartered in the Electronic Manufacturing Cluster, New Raipur, has been a key player in Central India’s electronics manufacturing space since 2013. The company specializes in Smart Televisions and has recently expanded into ceiling fans and solar BLDC fans, leveraging innovative technologies like AI and machine learning for digital signage solutions. With a focus on both premium and economical product lines, Arham is carving a niche in the competitive consumption sector.

Website: arhamtechnologies.co.in

Key Growth Triggers

Arham Technologies is poised for growth, driven by strategic initiatives and partnerships:

New Trademark Approval (Dec 2024)
- Launched Aratton, a new brand for economical, high-volume products, complementing the premium Starshine brand. This dual-brand strategy targets diverse market segments, boosting sales potential.
Celebrity Endorsement (Mar 2024)
- Partnered with actress Mona Singh (known for 3 Idiots, Laal Singh Chaddha, and Yeh Meri Family) to promote the Starshine brand across print and digital platforms, enhancing brand visibility.
Fundraising for Expansion (Jan 2025)
- Board approved raising ₹43 Cr through a rights issue, signaling plans for capacity expansion or new product development.
Government Subsidy (Mar 2025)
- Secured a ₹65 L subsidy from the Chhattisgarh government under the Fixed Capital Subsidy Scheme for diversifying its Raipur plant. Funds expected to be credited by H1 FY26.
New Orders and Partnerships (Feb 2025)
- Secured a ₹27.6 L order from Atal Nagar Vikas Pradhikaran to supply Starshine televisions.
- Signed agreements with Express Tradecom, Anil Electricals, and Kuber Bhandar to manufacture ceiling fans under brands like Electrize, 9greens, Ryko, Captaan, and Ego’s Smart. These partnerships ensure advance payments, reducing financial risk.
Google TV Launch (Feb 2024)
- Introduced Google TVs under the Starshine brand, featuring Google Assistant, 10,000+ apps, and personalized entertainment, positioning Arham as a tech-forward player.
AI and Digital Signage Collaboration (Dec 2023)
- Signed an MoU with Magure Softwares to develop AI and ML-powered digital signage and display solutions, tapping into futuristic tech trends.
Financial Performance (Sep 2024)
- H1 FY25 Results: Sales up 20% YoY to ₹32.44 Cr; Net Profit up 55% YoY to ₹2.64 Cr.
- FY24 Results: Sales flat, but Net Profit surged 40% YoY to ₹3.18 Cr, with strong half-on-half growth (Sales +2%, Net Profit +87%).

Key Red Flags

Despite its growth trajectory, Arham faces challenges that investors should monitor:

Rising Trade Receivables
- Increased from ₹10.3 Cr (Mar 2022) to ₹21 Cr (Sep 2024), indicating potential delays in payment collection, which could strain cash flow.
Growing Short-Term Borrowings
- Short-term debt rose from ₹6.5 Cr (Mar 2022) to ₹23.3 Cr (Sep 2024), raising concerns about financial leverage and interest burden.

Financial Performance Overview

Half-Yearly Performance (₹ Cr)

Metric	Sep-23	Mar-24	Sep-24	YoY (Sep-24 vs Sep-23)	HoH (Sep-24 vs Mar-24)
Sales	27.1	27.6	32.1	+20%	+17%
Op Profit	3.1	5.4	4.9	+58%	-9%
Net Profit	1.7	3.2	2.4	+55%	-17%
OPM	12%	19%	15%	-	-
NPM	6%	11%	7%	-	-

Annual Performance (₹ Cr)

Metric	Mar-20	Mar-21	Mar-22	Mar-23	Mar-24	TTM
Sales	13.8	22.8	36.5	48.4	54.7	59.7
Op Profit	1.6	3.8	4.8	6.2	8.5	10.2
Net Profit	0.6	2.0	3.0	3.6	4.9	5.6

Sales Growth: Consistent growth from ₹13.8 Cr (Mar-20) to ₹59.7 Cr (TTM).
Profitability: Operating Profit Margin (OPM) improved to 15% (Sep-24), and Net Profit Margin (NPM) at 7%.
Promoter Holding: Stable at 72.3% (Sep-24), reflecting strong promoter confidence.

Share Price & Volume (Last 1 Year)

Month	Jan-24	Feb-24	Mar-24	Apr-24	May-24	Jun-24	Jul-24	Aug-24	Sep-24	Oct-24	Nov-24	Dec-24
Price (₹)	143	135	89	148	136	142	140	134	162	152	133	135

Price Trend: Volatile, with a high of ₹162 (Sep-24) and a low of ₹89 (Mar-24). Current price (₹101) is near the lower end, potentially offering a value entry point.
Promoter Buying: Promoters consistently increased stakes in Nov-Dec 2024 (e.g., 2k shares at ₹138, 8k at ₹135), signaling confidence in future growth.

Why Invest in Arham Technologies?

Undervalued Valuation: TTM P/E of 23.5x is significantly below the sectoral range (30–70), suggesting room for price appreciation.
Diversified Product Portfolio: Expanding from Smart TVs to ceiling fans and AI-driven solutions, catering to both premium and mass markets.
Government Support: Subsidies and orders from the Chhattisgarh government enhance financial stability.
Strong Financials: Consistent sales growth and improving profitability metrics.
Strategic Partnerships: Collaborations with celebrities, government bodies, and private firms bolster brand and revenue streams.

Risks to Consider

Debt Concerns: Rising short-term borrowings could pressure margins if interest rates rise.
Receivables Risk: Increasing trade receivables may indicate weaker cash flow management.
SME Volatility: As an SME stock, Arham may face higher price volatility and liquidity risks.

Conclusion

Arham Technologies is a compelling growth story in India’s consumption sector, blending innovation, strategic partnerships, and government support.

With a low P/E ratio, diversified product offerings, and strong promoter backing, it presents an attractive opportunity for investors seeking exposure to the electronics manufacturing space.

However, rising debt and receivables warrant caution.

Investors should weigh the growth potential against financial risks and monitor upcoming financials for further clarity.

Disclaimer: This analysis is for informational purposes only. Conduct thorough research or consult a financial advisor before investing.