Archives: Ipos

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.

Saraswati Saree Depot Ltd. operates a distinctive B2B saree wholesale model, offering an extensive range of over 300,000 SKUs sourced from more than 900 weavers to a network of over 13,000 semi-wholesalers and retailers. The company’s core business focuses heavily on sarees, which generate more than 90% of its revenue. Recently, SSDL has diversified its product offerings to include kurtis, dress materials, and branded men’s suiting and shirting, which now contribute to the remaining revenue. Financially, SSDL has demonstrated robust growth over the past three fiscal years. In FY22, the company reported a revenue of Rs. 5,496 million and a net profit of Rs. 123 million. This grew to Rs. 6,109 million in revenue and Rs. 296 million in net profit in FY24. The company reported a healthy ROCE of 64.5% in FY24 and reduced its borrowings to Rs. 435 million in FY24 from Rs. 666 million in FY22. The company has maintained positive growth in both revenue and profit, with current EPS of Rs. 8.9. Given the company’s strategic focus on strengthening inventory management, expanding into men’s ethnic wear, and enhancing its e-commerce presence, we remain optimistic on the company’s growth prospects. Considering its reasonable valuation with a P/E of 17.9x based on FY24 earnings, we recommend a “SUBSCRIBE” rating to the issue from a medium to long-term perspective.

Unicommerce eSolutions Ltd. is India’s largest e-commerce enablement software as a service (SaaS) in the transaction processing or nerve centre layer, in terms of revenue for FY2021-23 period. The company helps in efficiently managing the e-commerce operations of its client through its suite of products which has led to healthy financial growth for the company. The market for ecommerce presents a substantial and growing opportunity and is expected to experience significant growth in the coming year. With increased exposure to internet, e-commerce demand is expected to improve from the rural and Tier II cities of India. Such an increase will help in scaling of e-commerce, in turn increasing the demand of SaaS platform by small and medium enterprises. The company plans to take advantage of the growth opportunity that India provides by capitalizing on such emerging market trends and participating in industry forums focused on D2C, retail, supply chain, and the e-commerce industry as a whole, holding regular events and webinars for its current clients and prospective clients to share information and knowledge about industry developments and trends. These events bring together various D2C brands, retail organisations, e-commerce leaders, SMBs, marketplaces, and service providers to discuss the e-commerce and retail industry and help participants build a strong online presence. On the financial front, Revenue/EBITDA/PAT grew at a CAGR of 33.5%/65.8%/47.5% between FY22 and FY24. On the upper price band, the issue is valued at a P/E of 93.1 x based on FY24 earnings. Though the issue looks rich in terms of valuation, we believe that the company’s strong business performance along with industry tailwinds provide an opportunity from a medium to long term perspective. We, therefore, recommend a SUBSCRIBE rating for the issue.

FirstCry, a prominent player in the multi-channel retail market for children’s and maternal products, showcases impressive customer engagement and operational efficiency through its well-integrated physical and online platforms. The company benefits from strong network effects driven by rich user-generated and expert content, complemented by its centralized inventory management and supply chain network, which further enhance operational effectiveness. However, despite these advantages, FirstCry faces significant challenges. Persistent negative cash flows, driven by working capital issues and substantial investments, alongside regulatory non-compliance and legal troubles, pose risks to its reputation and stability. Financially, while the company achieved a topline growth of 15% in FY24, increasing revenue from Rs. 5,731.3 crores to Rs. 6,575.1 crores, it has continued to struggle with consistent losses, reporting loss of Rs. 321.5 crores in FY24 with no immediate signs of recovery. Additionally, the company’s debt surged from Rs. 176.5 crores in FY23 to Rs. 462.7 crores in FY24. The current fund raise is intended for operational purposes rather than debt reduction. Given the rising debt levels and persistent loss-making status, we recommend an “Avoid” rating for the issue. We will reassess our recommendation if there is a sustained improvement in financial metrics in future.

Ola Electric Mobility Limited is a pure EV and core EV component manufacturer, with its primary focus on production of E2W. The company has a robust distribution platform alongside an adaptable manufacturing & supply chain platform and strong emphasis on R&D and technology, which cumulatively helps the company to drive down its cost and optimize capital expenditure on development of EVs. The trend towards adoption of electrical mobility can be mainly attributed to the increasing affordability of EVs, reducing battery prices, improved driving range and favourable regulatory environment. Ola Electric is in a favourable position to be the main beneficiary of all these factors as the company is able to manufacture majority of the core components in-house which is required to manufacture E2W, including cells at its new and soon to be operable Gigafactory in Tamil Nadu along with support from the government in terms of subsidies and tax benefits. The company also plans to enter international markets where the EV demand is yet to be fulfilled. The key markets include ASEAN, LATAM, and Africa, which are already a thriving market for the Indian 2W exporters. On the financial front, revenue grew from Rs. 4,562.6 million to Rs. 52,432.7 million between FY22 and FY24, while net loss widened from Rs. 7,841.47 million to Rs. 15,844 million during the same period.  On the upper price band, the issue is valued at a Market Capitalization/Sales of 6.4 x based on FY24 sales. On account of positive EV market outlook, favourable regulatory environment, large quantum of fresh issue in the IPO, announcement of new models along with the upcoming cell manufacturing unit (Gigafactory), we have a positive view for the company from a medium to long term perspective. We, therefore, recommend a SUBSCRIBE rating for the issue.

Ceigall India Ltd. is one of the fastest growing EPC companies in terms of three-year revenue CAGR, among the companies with a turnover of over Rs. 1,000 crores in FY24 and over 20 years of experience in the industry. Over the last two decades, the company has transitioned from a small construction company to an established EPC player, demonstrating expertise in the design and construction of various road and highway projects, including specialized structures across ten states in India. The company is well positioned to take advantage of industry tailwinds, with significant experience in roads and highways and selective expansion of other infrastructure. The roads and highways infrastructure sector has a high growth potential, and the company’s experience and track record in the construction business provide them with a competitive advantage in pursuing future opportunities. The Indian economy is on the path of USD 10.00 trillion of gross domestic product (GDP) by FY30, with the infrastructure sector expected to play a significant role with Rs. 52,962 billion investments in the infrastructure industry between FY24 and FY28. Ceigall India is well positioned to take advantage of industry tailwinds and has significant experience in roads and highways and selective expansion of other infrastructure. Considering the financial performance, the company’s Revenue/EBITDA/PAT grew at a CAGR of 43.9%/17.1%/3.3% during the FY22-24 period.  As we advance, Ceigall India’s financial performance is driven by its continued focus on road projects and specialized structures, ability to successfully bid and win new projects, efficient business model, consistent growth in order book and preferred partner for NHAI projects. The company has recently joined hands with Delhi Metro for rail infra developments, which enables it to tap significant opportunities. The issue is valued at a P/E of 20.7x on the upper price band based on FY24 earnings, which is deemed fair. Therefore, we recommend a SUBSCRIBE rating for the issue.

Akums Drugs and Pharmaceuticals is a contract development and manufacturing organization (CDMO), offering a comprehensive range of pharmaceutical products and services in India and overseas. The company carries out operations across the pharmaceutical value chain, operating as a CDMO, marketer of formulations, and manufacturer of APIs. Akums Drugs’ presence in the Indian pharmaceutical landscape is augmented by a strong domestic CDMO presence and amplified through global export initiatives. This provides a competitive edge in the industry, allowing it to navigate growth opportunities across multiple markets. Moreover, adherence to global regulatory standards reinforces the ability to contribute to global healthcare solutions, expanding its footprint in overseas markets. In addition to CDMO business, the company markets its branded formulations domestically and overseas, as well as the markets trade generics and products under its brand through distributors and alternative channels on a pan-India basis. Operating through subsidiaries, the company promotes its brands across India and other countries, primarily in Southeast Asia, Africa and the Commonwealth of Independent States. Akums Drugs and Pharmaceutical’s financial performance is driven by leveraging its leadership position to increase market share and consolidate position in the CDMO market, expand global presence through strategic initiatives, scale API business, focus on R&D and strong manufacturing capabilities, all of which have supported robust growth.  Excluding adjusted put call liabilities, the IPO is valued at a reasonable P/E of 29.7x. Therefore, we recommend a SUBSCRIBE rating for the issue.

Sanstar has the fifth largest capacity in the Indian maize-based speciality products and ingredient solutions industry. It is well on its way for an expansion of an additional 1,000 tons per day at the Dhule facility. After the expansion, it is estimated to be the third largest manufacturer of maize-based speciality products and ingredient solutions in India. To cater to the growing demand for products from existing customers and to meet the requirements of new customers, they intend to expand manufacturing capacities for existing products. Sanstar has established long-term relationships and serves over 525 customers, with 162 new customers during FY24. The company plans to expand its customer base by leveraging relationships with existing customers in India and globally while simultaneously pursuing opportunities to develop new relationships. The company demonstrated consistent growth in terms of revenues and profitability at a compound annual growth rate (CAGR) of 45.4% and 104.8% between FY2022-24, respectively. The company experienced sustained growth in various financial indicators, including revenue, profitability, cash flows and returns, and consistent     improvement in balance sheet position in the last three financial years. As we advance, Sanstar’s financial performance is driven by its established market position in the industry, increasing global footprint, high entry barriers, expanded manufacturing capacities to capture additional market share, and long-lasting customer relationships, which enable it to tap the significant opportunities in existing and future products. The issue is valued at a P/E of 20.0x on the upper price band based on FY24 earnings, which is deemed fair. Therefore, we recommend a SUBSCRIBE rating for the issue.

Bansal Wires along with its subsidiary, Bansal Steel & Power Limited (BSPL), offers products primarily in three segments, i.e., high carbon steel wire, mild steel wire and stainless steel wires. The company boasts strong customer diversification to de-risk impact on revenue along with diversified product portfolio serving different sectors with their different needs effectively. The demand for wires is mainly driven by its major end-user industries such as automotive, construction, power, and agriculture, with infrastructure holding the highest demand for wires. The increase in consumption of steel across infrastructure, automobile and housing sectors can be seen with the positive economic trends domestically. Owing to such growth, steel manufacturers are expected to be the direct beneficiary of this growth. To follow up with the growing trends, the company is planning set up a new manufacturing unit which will be the largest steel wire manufacturing plant in India. The company is also aiming to expand its reach to other regions, i.e. south and east to garner additional market share. On the financial front, Revenue/EBITDA/PAT grew at a CAGR of 5.9%/16.5%/17.3% between FY22 and FY24. On the upper price band, the issue is valued at a P/E of 41.4 x based on FY24 earnings, which we feel is fairly valued. We, therefore, recommend a SUBSCRIBE rating for the issue.