ADESHWAR MEDITEX LIMITED

Incorporated in 2007, Adeshwar Meditex Limited is an Indian company, engaged in the manufacturing of surgical dressings and external preparations products of wound care & wound management including sterile surgical wound dressing, tulle dressing, medical disposable, adhesive bandages, absorbent gauze, plaster, disinfectants, medical kits etc. Company's manufacturing facility also has sophisticated facilities for quality testing, research & development, storage and packaging. The company has an in-house R&D facility for on-site process improvement and for bettering company's present products offered as well as products under innovation and testing laboratory which ensures that company's products are certified and any major defects in the products are identified on real time basis and rectified before the final dispatch. Company has registered 18 trademarks in India. The company cater to both, the domestic as well as international markets. It is noteworthy that company's products are exported to several countries against tenders and promoted to private markets through Marketing Agents and Distributors. On the financial performance front, AML reported turnover/net profits (loss) of Rs. 58.69 cr./ 2.56 cr. (FY18), Rs. 54.73 cr./ 2.25 cr. (FY19) and Rs. 56.39 cr. / Rs. 2.01 cr. (FY20). For upto Q3 FY21, company has posted 52.09 Cr total income and 1.38 Cr net profit. So company has shown almost static results. For the last three years, company has posted average EPS of Rs. 2.25 and RoNW of 13.25%. The issue is priced at a P/BV of 1.2 based on its NAVs of Rs. 20.76 post issue. As per FY20 earnings, issue is priced at P/E of 18 and if we annualise FY21 earnings, then P/E is 19.5 on fully diluted equity post issue. So issue looks fully priced. As per RHP, comparison between peers are as above table. On BRLM's front Aryaman Financial Services Pvt. Ltd. has handled 25 IPOs in last three fiscals. From 10 IPOs, 2 are opened below and remaining are opened above issue price. As of now from 10 IPOs, 3 are trading below and remaining are trading above issue price . ( As on 11.06.2021 ) For Adheshwar Meditex Limited, results are almost static, RoNW is 10.71%, P/E is around 17.91 for FY20 and if we annualise FY21 earnings, then P/E is 19.5. So issue looks fully priced. Company has huge growth opportunity as market of surgical items is very big and mostly dominated by SMEs, also future growth of sector is expected to be good.  Performance of BRLM is good. So we give NEUTRAL rating to this SME IPO.

• 1 Siddharth Talati