Alphalogic Industries Limited

As per financial performance, Alphalogic Industries Limited has posted total income/net profits of Rs 3.22 Cr / Rs 0.08 Cr (FY21), Rs 7.84 Cr / Rs 0.31 Cr (FY22) and Rs 18.23 Cr / Rs 2.19 Cr (FY23), So company has shown exceptional sales growth and net profit growth. This kind of growth is very difficult to sustain for long term. Company has posted an average EPS of Rs 3.47/- and average RoNW of 44.75% for last three fiscals. Issue is priced at a P/BV of 2.84 as per NAV of Rs 33.79/- Post Issue. As per FY22 earnings on fully diluted equity post issue, asking price is at P/E of around 160.30 and as per FY23 earnings P/E is 22.29. As per RHP, there are no listed peers. On BRLM's front, Finshore Management Services Limited is associated with this SME IPO and handled 34 SME IPOs in last 3 years, Last 10 IPOs, 2 opened below issue price and remaining opened above issue price on the listing day. As of now from last 10 IPOs, 5 are trading below issue price and remaining are trading above issue price. ( As on 26.06.23 ) As per financials, Alphalogic Industries Limited has shown exceptional growth, RoNW is 50.6% and P/E is respectively 160.30 and 22.29 as per FY22 and FY23 earnings, which looks fully priced as per FY23, but very aggressively priced as per FY22. Investors should watch results closely and check if company can sustain the past high growth rate and PAT margins. Company is in business of Industrial and Institutional storage systems, which is highly fragmented and competitive segment. Performance of BRLM is poor post listing. So we are giving NEUTRAL rating to this SME IPO, readers must consult a qualified financial advisor prior to making any actual investment decisions.

• 1 Alphalogic Techsys Limited