Started in 2011, Mumbai based A B Infrabuild Limited is mainly engaged in providing Road Over Bridge (ROB ) and Foot Over Bridge (FOB) related services. The company also offers services in the area of new station infrastructure, civil & structural work, track formation, track linking, gauge conversion, and new railway lines. It is also involved in building road contracts, Infrastructure, and steel grinder bridges. A B Infrabuild is a contractor with the PWD Maharashtra and the Municipal Corporation of Greater Mumbai. As a contractor, it has an AA grade for dealing with the creation of infrastructure and operating a ready mix concrete plant. The major customers of the company are GCC Hotel Private Ltd, Sky Way Infrastructure Private Limited, Krypton Corp, Dev Engineers, Dedicated Freight Corridor Corporation of India Ltd., Central Railway, Mumbai Metropolitan Region Development Authority, Western Railway, Mumbai Railway Vikas Corporation Ltd, and Municipal Corporation of Greater Mumbai. The order book of the company consists of around 52% of the orders with Western Railway. The competitive strengths of the company are: 1. Cost efficient and quality services.2. A long-standing relationship with the clients.3. New techniques 4. Advanced machinery As per the financial performance front, AB Infrabuild has posted turnover/net profits of Rs. 75.16 cr. / Rs. 0.33 cr. (FY16), Rs. 73.99 cr. / Rs. 0.16 cr. (FY17) and Rs. 61.08 Cr / Rs. 3.15 Cr (FY18). For upto Q3 of FY19, company has posted net profit of Rs 2.70 Cr on total revenue of Rs 40.33 Cr. So company has shown growth in bottom-line, but top-line is almost static or declining over the years. Sudden increase in bottom-line since FY18 creates doubts. Trade receivables for FY18, is around 19.48 Cr which is 32% of total revenue of FY18. Company has pending order book of around Rs 307.34 Cr with most of projects completing in FY20 and FY21. The issue is priced at a P/BV of 1.63 on the basis of its NAV of Rs. 17.80 post issue. If we annualise latest earnings and attribute it on fully diluted post issue equity than asking price is at P/E of 10.19 and as per FY18 earning P/E is 11.68, So this issue looks reasonably priced. As per RHP, listed peers are shown in above table, but it can't be strictly comparable. On BRLM's front, for Mark Corporate Advisor Private Limited this is the 5th IPO in last three fiscals and from last 4 IPOs, one opened below issue price and remaining opened above issue price with 1% to 20% premium on the day of listing. As of now, from last 4 IPOs, all are trading below issue price. ( As on 26.06.2019 ) Company has shown average results, RoNW is 28.14% and issue looks reasonably priced with respect to current earnings. Performance of BRLM is very poor. Future prospect of company looks very good as focus of Government on railway development will lead to more projects and current order book is also very good. So we give NEUTRAL rating to this SME IPO.
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