Achyut Healthcare Limited

Achyut Healthcare Ltd (AHL) is engaged in the trading of pharmaceutical products. It is currently trading into 6 to 7 products based on the needs of its customers. The list of pharma products traded includes Cenzure, Arpimune, Azathioprine IP, Everolimus, Mycophenolate Mofetil USP, Mycophenolate Sodium USP, Sirolimus, Tacrolimus USP, Infrared thermometer, Ascorbic Acid Coated Vitamin C, Calcium carbonate oyster, Cellulose acetate Phthalate, Chlorthalidone IP, Cross Carmalose Sod IP/USP, DIBasic Calcium Phosphate IP, DI Ethyl Phthalate, Diltiazem Hydrochloride IP, Easy Coat Fc Titanium Dioxide, Escitalopram IP, Escitalopram Oxalate, Favipiravir among many other products.. Company have developed long-term relationships with their customers in pharmaceutical sector. Company's business with some of more recent customers has increased reflecting their ability to develop and strengthen relationships with customers. They attribute the strength of company's customer relationships to their ability to supply customised products based on Customer specifications and requirements from qualified and experienced manufacturers, as well as our track record of consistent delivery of quality and cost-effective products and solutions through company strategic alignment with  key customers‘ goals and specifications over the years..  As per financial performance,AHL has posted total income/net profits of Rs 0.66 Cr / Rs (0.015) Cr (FY19), Rs 0.34 Cr / Rs 0.014 Cr (FY20), Rs 0.27 Cr / Rs 0.007 Cr (FY21) and Rs 2.72 Cr / Rs 0.13 Cr (H1FY22). So company has shown poor results, but H1 FY22 results are surprisingly very high. Company has posted an average EPS of Rs 0.24 and average RoNW of 2.69% for last three fiscals. Issue is priced at a P/B of 1.47 as per NAV of Rs 13.56 post issue. As per FY21 earnings on fully diluted equity post issue, asking price is at P/E of around 1,822 and as per annualised FY22 earnings P/E is 53.37. As per RHP, Comparison between listed peers are shown in above table.     On BRLM's front, GYR Capital Advisors Private Limited associated with this SME IPO and handled 2 IPOs in last 3 years. From last 2 IPOs. As of now from last 2 IPOs, two are trading below and remaining are trading above issue price or at par. ( As on 23.03.22 ) As per financials AHL, has shown poor results, RoNW is 57.41% and P/E is respectively 1822 and 53 as per FY21 and annualised FY22 earnings, which looks very aggressively priced and sudden rise in profit in H1 result for current FY raises concerns. Performance of BRLM is poor post listing. So we are giving AVOID rating to this IPO.

• 1 Mahendra Chatrabhuj Raycha
• 2 Akshit Mahendra Raycha