Credo Brands Marketing Ltd. IPO

Credo Brands Marketing Ltd. IPO - SWOT Analysis

Strengths

The company's showrooms are strategically located and the product portfolio is diversified across price points and categories. The business has an established heritage and legacy spanning over two decades with efficient systems and procedures to mitigate risk. In the last 3 years, revenue growth has been robust and growing. However, what stands out about Credo Brands MarketingLtd. is that the company's net profits have more than doubled in the past two years.

Weaknesses

The concentration of credit risk concerning trade receivables is considerably high, needing regular monitoring and control through loan approvals and setting limitations. The company is primarily exposed to foreign currency risk against the USD, although the sensitivity analysis shows that a 10% change in exchange rates has little impact on profit or equity.

Opportunities

The company has a strong brand equity with a presence across a wide category of products, that de-risks the business model. The business model is also scalable and is a largely asset-light model; so, any expansion from here can be done on minimal investments.

Threats

While the corporation designs its items in-house, the final product is manufactured elsewhere. Any inability to obtain sufficient quantities of apparel of the required quality in a timely and acceptable manner, or any slowdown in the performance of such third-party manufacturing partners, could have a negative impact on its business, cash flows, results of operations, and financial condition. Aside from that, one of the company's non-executive directors serves on the board of directors of Arvind Fashions Limited, a company in the same industry as Mufti.

Financial Snapshot - Credo Brands Marketing IPO

Check out the financial performance of Credo Brands for recent years: