Hexaware Technologies Ltd.
12-Feb-25HTL's business has undergone significant transformation over the last decade, driven by its adaptive business strategy. Over a period of time, It has expanded its offerings and customer base, broadened its global delivery footprint, increased focus on innovation and technology. Shares are available at a P/E of 37.8x and EV/EBIDTA of 23.3x CY24A earnings which seems reasonable thus recommend ‘Subscribe for Long Term’ to the issue.
Laxmi Dental Ltd.
13-Jan-25Laxmi Dental is one of the prominent players in the dental industry, which has a vertically integrated business model ensuring cost efficiency. The Company faces competition from unorganized market in India where it expects consolidation over the near to medium term. Also, it focuses on existing B2B2C model, which is expected to support its future growth with strong R&D for product innovation and services.
The issue is valued at a P/E valuation of ~70x based on adjusted H1FY25 annualised earnings, which is believed to be a relatively high price. The company is operating a business model which has no relative listed peers in the industry. It has delivered a remarkable performance over the last few years with a strong growth (revenue growth at ~19% CAGR between FY22-24) and healthy return ratios (H1FY25 Ann ROE: 50.3% and ROCE: 33.4%). Company has delivered consistent margin expansion on operating level over the last few years. Debt reduction worth ~Rs. 28 cr is expected to support bottomline growth to an extent. We expect future business growth backed by favorable industry dynamics, company’s potential expansion plans with an aim to extend its reach in the global market. Thus, we recommend SUBSCRIBE to the issue.
Quadrant Future Tek Ltd.
07-Jan-25Quadrant Future Tek Limited has secured a strong order book, including a notable ?979 Cr contract for KAVACH implementation, which highlights its robust revenue visibility. Strategic partnerships, such as with RailTel for KAVACH deployment, bolster its position in domestic and international markets. With favourable industry tailwinds and increasing demand for its offerings, Quadrant is well-positioned for sustained growth. Based on peer comparison, Quadrant Future Tek Limited stands out with a healthy 24% EBITDA margin and impressive returns, including a 21% ROCE and 33% ROE, which highlight its profitability and operational efficiency. The company’s EV/order book ratio is reasonable at 1.3x. Considering these factors, along with its advanced technology, expanding order book, and long-term growth prospects, we assign a Subscribe rating to this IPO.
Standard Glass Lining Technology Ltd.
06-Jan-25Standard Glass Lining Technology Limited is a leading player in engineering equipment manufacturing. With its market position, technical expertise, and reliable customer base, the company offers good potential for investors. With a 50% revenue CAGR (FY22-24) surpassing the peer average of 19% and an EBITDA margin of 17% exceeding the industry average, its ROCE (17%) and ROE (15%) remain competitive, It’s P/E ratio of 47 appears reasonable compared to the industry average of 58. Considering its high growth potential, efficient operations, and reasonable pricing, we recommend a Subscribe rating for this IPO.
Unimech Aerospace and Manufacturing Ltd.
23-Dec-24Unimech Aerospace’s advanced manufacturing capabilities, digital integration, and expertise in high-barrier sectors establish it as a leading player in precision engineering. The company’s strong financial performance is driven by operational efficiency, and global OEM partnerships. With a revenue CAGR of 140% (FY22-24), industry-leading EBITDA margin of 38%, and ROCE of 57.6%, it outperforms peers in growth and profitability. While its valuation multiples EV/EBITDA of 51x and P/E of 69x are more reasonable than its competitors, they reflect its strong fundamentals and growth potential. Thus we recommend subscribing to the issue.
Senores Pharmaceuticals Ltd.
20-Dec-24SPL’s financials include the impact of the acquisition of Havix and RPPL, thus, its revenue growth in FY24 is not comparable. However, company has performed well in H1FY25 based on annualized financials. It has delivered ~25% of healthy operating margin in H1FY25. Also, return ratios (i.e. ROE and ROCE) are at decent level of ~15-16%. The same is expected to improve backed by growth in its acquired businesses and overall reduction in finance cost followed by ~Rs. 94 cr of debt reduction.
The issue is valued at 39.6x P/E valuation based on annualized H1FY25 financials which is considered to be fairly valued when compared with industry average. However, we are positive on the company’s future business prospects given the distinctive business model, product pipeline of 51 ANDAs and expected improvement in overall profitability on account of operational efficiencies and finance cost savings. Thus, we recommend SUBSCRIBE to the issue.
Ventive Hospitality Ltd.
20-Dec-24VHL operates as a luxury hospitality player In association with renowned brands like JW Marriott, Hilton, Ritz Carlton, etc. There are also marquee clients in its Annuity assets business from whom the company generates ~41% of revenues. Company’s consolidated revenues/EBIDTA have grown at a CAGR of 26%/33% during FY22-24. However, Co has incurred losses at bottom-line due to higher finance costs. Post IPO, it will be utilizing Rs 1,400 cr to repay debt which will help reduce finance cost and improve profits going forward. At upper price band, Stock is available at an EV/EBIDTA of 22.8x for FY24 and we recommend ‘Subscribe’ to the issue.
Transrail Lighting Ltd.
19-Dec-24Transrail Lighting Limited has established a strong presence in the power transmission and distribution sector, with an extensive order book valued at approximately ?10,213 crore, including significant international projects. The company's involvement in government infrastructure initiatives ensures a reliable revenue stream. It has demonstrated superior operational metrics, boasting the shortest working capital cycle among its peers, which enhances its liquidity. With CAGR of 32%, exceeding the industry average of 25%, and a ROCE of 26%, well above the peer average of 17%, the company showcases robust financial performance. Additionally, it enjoys an attractive valuation with an EV/EBITDA ratio of 13.1. We recommend a subscribe rating for the IPO.
DAM CAPITAL ADVISORS LIMITED
19-Dec-24Dam Capital Ltd. is a rapidly growing merchant bank in India, with a revenue CAGR of 39% from FY22 to FY24 and the highest profit margin in FY24. Based on the peer comparison Dam Capital, stands out among its peers with exceptional growth and profitability. It has achieved a superior ROE of 43.4%, higher than the peer average of 24.1%. Its EBITDA margin of 59.1% is above the peer average of 50.3%, reflecting operational efficiency. Its PE Multiple is at 28.4x slightly higher than its peers. Given its strong fundamentals and focus on high-margin investment banking we recommend to subscribe to the issue.
Mamata Machinery Ltd.
19-Dec-24Mamata Machinery Ltd. leverages advanced manufacturing facilities, and automation to maintain a quality-driven and cost-competitive edge. Its focus on R&D, innovation in recyclable solutions, and patents strengthen its market position. Financially, the company outshines peers with an EBITDA margin of 19.9%, ROCE of 33.2%, and ROE of 27.3%, reflecting superior efficiency. Its valuation multiples, including EV/EBITDA at 12.9x and P/E at 16.6x, are well below peer averages, indicating undervaluation. Based on its strong fundamentals and competitive positioning, we recommend to Subscribe to the issue.
International Gemmological Institute. - IPO Note
13-Dec-24IGI holds a dominant position in lab-grown diamond certification with a 65% global market share, positioning it to benefit from the growing consumer preference for sustainable options. The affordability of lab-grown diamonds enhances their growth prospects, while natural diamond certifications expects to foresee steady growth. In India, IGI collaborates with domestic as well as international jewellery retailers for co-branded reports which enhances their overall market presence. There are no listed comparable peers globally having similar business dynamics. However, IGI has delivered strong financial metrics – i) Revenue growth of 32% between CY21-23, ii) attractive operating margin profile of ~65-70%, and iii) ROE and ROCE stood at 56.6% / 91.5%, respectively. Further, IGI’s has a strong market position and has a potential to benefit from anticipated demand in the diamond certification sector. Thus, we believe issue is valued at a reasonable valuation of ~42x to 9MCY24 annualized earnings and recommending SUBSCRIBE to the issue.
Inventurus Knowledge Solutions. - IPO Note
12-Dec-24IKS offers comprehensive features taking care of the non-discretionary functions of the Healthcare providers significantly reducing their non-core activities. The company has huge opportunity to cross sell its gamut of services to the huge clientele of recently acquired entity ‘Aquity Holdings’. IKS’s robust financial performance over the last two years, maintaining high PAT and EBITDA margins, signifies its capability to navigate and thrive in the evolving healthcare landscape. Company has guided to reach to its earlier margins (mid-thirties) in the coming quarters, and we believe it will be able to maintain its historic organic revenue growth of ~ 20%. At upper price band, stock is available at an annualised P/E of 55x and EV/ EBIDTA of 45x which seems fully priced in given the superior growth and margin trajectory. Nevertheless, we recommend ‘Subscribe’ to the issue for long term with positive bias towards its business landscape.
Vishal Mega Mart Ltd. - IPO Note
11-Dec-24VMML is one of the largest organized retail players having large presence in tier-2 and tier-3 Indian towns in India. Aggressive store expansion plans with thrust for both online and offline channels bodes well for the company to drive same store sales growth in the coming years. At the upper price band, the stock is available at 28x its FY2024 EV/ EBIDTA, which is at a discount to close peers and large retailers in the value retail space and thus we recommend ‘Subscribe’ to the issue.
ONE MOBIKWIK SYSTEMS. - IPO Note
11-Dec-24One Mobikwik Systems Limited is well-positioned in India’s fintech sector with scalable operations, profitability, and strong consumer loyalty, reflected in its low CAC of ?32.87 and 90.3% repeat usage rate. The company reported ?875 Cr in revenue and ?14 Cr net profit in FY24, with a 4.2% EBITDA margin, highlighting operational efficiency compared to peers like Paytm. Mobikwik stands out with a 24% PPI wallet market share, With an attractive valuation at 2.3x EV/Sales the company is well-positioned for future growth. We recommend a Subscribe rating for the IPO based on its profitability, scalability, and strong brand presence.
Sai Life Science Limited. - IPO Note
11-Dec-24Sai Life Science is one of the leading players in CRDMOs in India. It has demonstrated a strong financial performance, with a revenue CAGR of 30% and EBITDA CAGR of 51% between FY22 to FY24. Company’s operating margins improved from 14% in FY22 to ~19% in FY24. As a result, ROE and ROCE have also improved to 8.5% and 11.6% in FY24, respectively (FY22 ROE: 0.7% and ROCE: 3.6%).
The issue is offered at a valuation of 39.5x EV/EBITDA based on FY24 Financials which is at discount when compared to 51.5x of average industry valuation. Although company’s operating margin profile is lowest among its peers, it has a potential to improve it backed by their investments in R&D, talent development and operational excellence. Further, debt repayment worth Rs. 720 cr will result in lower finance cost in the future which will improve its overall profitability. Thus, we recommend SUBSCRIBE to the issue with a long-term investment horizon.
