Archives: Ipos

The FIBC market is set for significant growth, driven by increasing demand across various industries and the expanding e-commerce sector. Since their introduction in India in the early 1990s, FIBCs have become a key export product, with Indian production reaching nearly 65 countries. This growth is supported by strong domestic demand in sectors such as chemicals, food products, construction materials, and agriculture, coupled with favorable government policies like Make-in-India that enhance manufacturing and international trade. Shree Tirupati Balajee Agro Trading Co. Ltd. has established itself as a prominent player in the FIBC and industrial packaging sector, benefiting from substantial market demand and a global footprint. Despite facing risks from regulatory changes affecting plastic use, raw material supply fluctuations, and regional concentration of manufacturing facilities, the company has demonstrated steady financial growth. It reported a revenue CAGR of 10.2%, increasing from Rs. 4,442 million in FY22 to Rs. 5,397 million in FY24. EBITDA margins improved from 7% in FY22 to 11% in FY24, while PAT rose from Rs. 137 million in FY22 to Rs. 361 million in FY24, with an EPS of Rs. 5.7 in FY24. The current issue is priced at a P/E ratio of 14.5x on upper price band based on FY24 earnings, aligning well with its peers. Given the industry’s promising growth trajectory and the company’s strategic focus on capacity optimization, new product development, and expansion in domestic and global presence, we recommend a “SUBSCRIBE” rating for the issue with a medium to long-term investment perspective.  

GPEL has a rich 30 years of experience in designing, manufacturing and application engineering of highperformance standardised and customised disc springs and strip springs. The industry in which the company operates has a significant entry barrier, owing to the stringent and lengthy qualification process for production of technical springs and fasteners due to the criticality of their usage. With the help of GPEL’s rich experience as precision component manufacturer, the company is a qualified and established supplier to
OEMs, Tier 1 and channel partners. With its highly equipped manufacturing units, GPEL is able to meet its clients’ different requirements, simultaneously enjoying the competitive advantage it gains owing to the inhouse facilities that it hosts alongside technological integration. With the Indian DSS, CSS, and WLW market expected to grow driven by key sectors like industrials, mobility and renewables, and with the rapid growth trend witnessed in urban and rural economy, the company is well positioned to benefit from the economic tailwinds. The company’s plan to set up a new manufacturing unit, purchase of new machinery for its existing units as well as the aim to replace European imports in the market aligns well with the economic development and paves way for the company to enjoy increased market-share. On the financial front, company’s Revenue/EBITDA/PAT grew at a CAGR of 18.1%/40.4%/83.5%, respectively between FY22 and FY24. The company maintains a ROCE of 21.15% and ROE of 23.27 (before exceptional item). The company has a D/E ratio of 0.53, and further plans to reduce its debt by using the amount raised to pay off its debt and make prepayments of some of the borrowings the company availed. On the upper price band, the issue is valued at a P/E of 24.3x based on FY24 earnings which we feel is fairly valued compared to its listed peers. Therefore, we recommend a SUBSCRIBE rating to the issue from a medium to long term perspective.

BSRL, a leading one-stop shop in Eastern and North-Eastern India, has achieved substantial growth, increasing its store count to 162 across nine states, registering a CAGR of 35.8% during 2017-24 period. This expansion has enabled BSRL to capture significant market share of 3.0% in West Bengal and 2.2% in Odisha in the organized value retail sector. The company’s cluster-based expansion strategy has been instrumental in its recovery from the pandemic, driving a 23% revenue increase from Rs. 7,879 mn in FY23 to Rs. 9,729 mn in FY24, with around 38% of this revenue coming from private labels. Net profit also grew substantially, from Rs. 51 mn in FY23 to Rs. 219 mn in FY24. Currently, BSRL has a total debt of Rs. 1,782 mn, comprising Rs. 291 mn in current borrowings and Rs. 1,491 mn in non-current borrowings, with plans to reduce this debt. Despite these strengths, BSRL faces notable risks, including intense competition in the retail sector, frequent shifts in consumer trends, and a heavy reliance on apparel, which constitutes approximately 84% of its revenue. Additionally, the company depends on a broad network of third-party suppliers without long-term agreements, posing potential operational risks. The company commands a high valuation with a P/E ratio of 124x at the upper price band based on FY24 earnings. However, given the company’s efforts to enhance its financial performance, increase profitability through private labels, and expand market penetration, we recommend a “SUBSCRIBE” rating for the issue, considering its growth prospects and strategic initiatives.

ECOS Mobility and Hospitality is primarily engaged in the business of providing CCR and ETS, catering to corporate clients, including Fortune 500 companies in India, for over 25 years. The CCR segment operates as a B2B2C business, serving corporate companies whose end consumers are their employees, visitors, or clients. Through the ETS segment, ECOS offers solutions for managing employee ground transportation. ECOS stands as the largest and most profitable chauffeur-driven mobility provider for corporates in India. ECOS’s strong client relationships and high retention rate of 89.8% underscore its reliability and market position. Their integrated technology, including the Online Booking Tool and RentNet Application, boosts service efficiency and client satisfaction. As the industry embraces digital solutions, ECOS is well-positioned to leverage its operational excellence and advanced technology for continued growth and leadership. The market growth in the CCR and ETS segment is driven by the transition from remote work to in-office work, rise in corporate travel, expansion of office spaces and development of tier-II and tier-III cities as more corporates are willing to set up their offices in these cities owing to lower building and rental cost, enhanced mobility efficiency and greater transparency with vendor. These trends are favorable for ECOS, as the company is well-prepared to capitalize on these opportunities. The company aims to strengthen its market position by expanding into tier-II and tier-III cities, enhancing penetration in existing markets, leveraging technology for operational efficiency, and expanding globally to capitalize on future growth opportunities. The company’s financials show robust growth over three fiscal years, with total revenue increasing from Rs. 1,473.4 million in FY22 to Rs. 5,544.1 million in FY24, reflecting a CAGR of approximately 94.0%. EBITDA and PAT also saw significant rise during FY2022-24 period, with CAGR of approximately 123.2% and 151.7%, respectively, to reach Rs. 899.6 million and Rs. 625.3 million . Due to the asset light model, the company is able to reduce the cost and liabilities associated with the ownership of fleets. ECOS’s strong customer and vendor relationships, established brand presence, robust financial performance, and advanced technological ecosystem position the company favorably to capitalize on industry tailwinds. On the upper price band, the issue is valued at a P/E of 32.1x based on FY24 earnings which we feel is fairly valued. We, thus, recommend a SUBSCRIBE rating to the issue from a medium to long term perspective.

Premier Energies Limited (PEL), a prominent player in integrated solar cell and module manufacturing, has shown impressive growth and financial performance over its 29-year history. As of March 31, 2024, PEL stands as the second-largest integrated solar manufacturer in India, with an annual installed capacity of 2 GW for solar cells and 4.13 GW for solar modules. For FY24, the company reported revenues of Rs. 31,437.93 million, displaying a CAGR of 105% from FY22, reflecting its strong market presence and operational efficiency. PEL’s order book, valued at Rs. 59,265.65 million as of July 31, 2024, highlights its robust demand and strategic customer relationships. The company’s net income for FY24 was Rs. 2,303 million notably positive, demonstrating a turnaround from past losses of Rs. 146 million in FY23 and indicating strong profitability. Additionally, PEL has invested heavily in expanding its manufacturing capabilities, including a new 4 GW TOPCon solar cell and module line. Despite challenges such as underutilized capacity and intense industry competition, PEL reported a profit of Rs. 1,982 million in FY24 reflecting its solid market position and growth potential. The company has demonstrated consistent enhancement in its Return on Capital Employed (ROCE), progressing from 3.6% in FY22 to 25.6% in FY24. The company’s diversified customer base, which includes major domestic and international clients, further underscores its market strength and prospects for continued expansion. The company is valued at a PE ratio of 82.1x on the upper price band based on FY24 earnings, which is reasonable compared to its peers. Given its strategic investments, strong financial recovery, and substantial order book, the company is well-positioned to capitalize on growth opportunities in the solar energy sector. Therefore, we recommend a “SUBSCRIBE” rating for medium to long-term investment. 

Orient Technologies is engaged in IT solutions and related services across business verticals. Its expertise, enhanced over the years, combined with the strength of its collaborative efforts with technology partners, enables it to provide customized IT solutions to customers. It also tracks developments in its business segments to stay well-informed of emerging trends and capitalize on new business opportunities. The company’s business operations are concentrated in India, and revenues are predominantly generated from India. While they cater to a large number of multinational companies and transnational corporations and have a branch in Singapore, they are yet to expand their international operations significantly. The (Indian) IT Services industry is predominantly export-oriented, with exports accounting for 85% of the total revenue, with North America and Europe being key geographies. The company demonstrated consistent Rev/EBITDA/PAT growth at a compound annual growth rate (CAGR) of 13.7%/12.9%/11.2% during FY2022-24 period, respectively. The company has experienced sustained growth in financial performance commensurate with the broadening of its product range and increased customer base. As we advance, Orient Technologies’ financial performance is likely to be driven by expanding its product and services portfolio, increasing its global footprint, long-term relationships with customers and collaboration with technology partners, thereby heightening its ability to design and innovate products and provide solutions tailored to specific customer requirements. The issue is valued at a P/E of 20.7x on the upper price band based on FY24 earnings, which is deemed fair compared to its peers. Therefore, we recommend a SUBSCRIBE rating for the issue. 

Interarch Building Products Ltd. designs, manufactures, and sells PEBs through two main offerings. Firstly, the company provides PEB Contracts, delivering complete PEBs on a turnkey basis, which includes on-site project management for installation and erection. Secondly, Interarch offers PEB Sales, encompassing metal ceilings, corrugated roofing, PEB
steel structures, and light gauge framing systems. In PEB construction, various primary and secondary building components are manufactured at the company’s plant and transported in a completely knocked-down form for assembly and erection at the customer’s site. Interarch’s extensive experience and vertically integrated manufacturing operations ensure
efficient, cost-effective, and high-quality delivery of PEBs. With a robust market position, diverse and loyal customer base, and a proven track record of quality and efficiency, Interarch is well-positioned to continue its growth trajectory and maintain its leadership in the PEB industry. The company’s strategic control over the entire PEB lifecycle, from design to installation, minimizes reliance on external parties, further enhancing its competitive edge. With the government’s continued focus on infrastructure, as evidenced by increasing central and state budget allocations to capital expenditure, and further growth driven by urbanization, industrial capital expenditure, planned capacity expansions, and government-led initiatives, Interarch is well-positioned to capitalize on the growth of the PEB industry in India. The company’s extensive track record, domain expertise, established brand presence, and strong market position, combined with its integrated facilities for design and engineering, manufacturing, and on-site project management for the installation and erection of PEBs, provide a solid foundation for leveraging these growth opportunities. Financially, the company achieved impressive growth between FY22 and FY24, with Revenue, EBITDA, and PAT growing at a CAGR of 24.6%, 80.2%, and 124.4%, respectively. The company’s revenue breakdown for FY24 shows that 75.7% came from PEB contracts, while 23% was generated from PEB sales. Interarch’s strong market position, integrated operations, and diverse customer base ensure costeffective and timely project execution, thereby positioning the company for success in the PEB industry. On the upper price band, the issue is valued at a P/E of 15.3x based on FY24 earnings which we feel is fairly valued compared to its peers. We, thus, recommend a SUBSCRIBE rating to the issue from a medium to long term perspective.