Started in 2009, DRS Dilip Roadlines Limited is Secunderabad - Telangana based company engaged in the business of providing high quality logistics services including transportation, packing & moving and renting of warehouses. The company is surface transporters and provide only goods transportation services. They provide Full truck loaded 'FTL' services to all the customers for transporting goods. As on July 15, 2018 company operates and own a fleet of 327 trucks in the name of the Company and have capacity to hire 649 vehicles. They operate through different types of closed container trucks on the basis of size and capacities. The packing and moving business is carried under brand name of 'Agarwal Packers and Movers'. The brand 'Agarwal Packers and Movers' is not owned by the Company. The Company Law Board, Chennai vide its consent terms dated November 14, 2014 the status quo of Right to use this trade name is with both families / groups and the dispute over the use of this trade name has not reached any conclusion. For packing and moving services the Company owns composite container vehicle specially designed to suit the household shifting called ‘CHAPP VAN’ (Car, Households, Artifacts, Plants and Pets). This new-concept composite container vehicle supports transport of Car, Household, Artifacts, Plants and Pets all in one. There is also provision for one person to travel with the vehicle, in case the customer so desires. Company has 234 employees including key managerial persons as on September 30, 2018. As per financial performance front, DRS has posted total income/net profits of Rs. 132.50 cr. / Rs. -(0.41) cr. (FY14), Rs. 146.34 cr. / Rs. 0.44 cr. (FY15), Rs. 153.08 cr. / Rs. 0.50 cr. (FY16), Rs. 141.91 cr. / Rs. 1.08 cr. (FY17) and Rs. 142.62 cr. / Rs. 3.45 cr. (FY18). Thus its top line is almost static around Rs. 140 cr. and net profit increased significantly since FY16. For FY19 upto Q1, it has posted net profit of Rs. 1.39 cr. on a turnover of Rs. 42.14 cr. For last three fiscals, it has posted an average EPS of Rs. 2.38 and an average RoNW of 23.87%. Issue is priced at a P/BV of 8 on the basis of its NAV of Rs. 9.38 as on 30.06.18 and at a P/BV of 2.48 based on post issue NAV of Rs. 30.23. If we annualise FY19 Q1 earnings and attribute it on fully diluted equity post issue, then asking price is at a P/E of around 20, which looks fully priced and if company is able to maintain same level of margins in future that is big question. Also any adverse outcome from Company Law Board related to Agarwal Packers and Movers brand name may significantly effect its packing and moving business. As per offer documents, there is no listed peers. On BRLM's front, for Aryaman Financial Services limited this is the 42nd IPO. From last 10 IPOs, 1 at par and remaining above issue price. As of now, from last 10 IPOs, 2 is trading below issue price and remaining above issue price with gain of around 0 - 12%. ( As on 20.11.18 ) Company's financial performance is not so good, RoNW is 23.87% for last three fiscals and issue looks fully priced. Since FY16, company has shown improved net profits YoY without increase in top-line and if company can maintain same margins in future is very interesting to see. Dispute of brand name in future may be a major concern. Also money from IPO will be used to repay loans from promoters. Performance of BRLM is good. So we give NEUTRAL rating to this SME IPO.
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