Ambey Laboratories Limited is engaged in the business of manufacturing of agrochemical products for the protecting of crops and it's been almost four decades the company serving the agrochemical sector. The company manufactures and supplies '2,4-D base chemicals' with an emphasis on quality and strict compliance with Environmental, Health, and Safety (EHS) regulations, within the chemical industry. Company's manufacturing Facility located in Behror, Rajasthan, has been certified with ISO 9001:2015 from Quality Research Organization and ISO 14001:2015 from United Accreditation Foundation, a member of International Accreditation forum to maintain highest quality, environmental and safety practices. The company has obtained certificate of compliance from RoHS Directive (2015/863/EC) European Parliament and commission decision (2005/618/EC) on the restriction of use of certain Hazardous Substance [Lead (Pb), Mercury (Hg), Cadmium (Cd), Hexavalent Chromium (Cr6+), Polybrominated Biphenyls (PBBs) and Polybrominated Diphenyl, Bis (2-Ethylhexyl) phthalate (DEHP), Benzyl butyl phthalate (BBP), Dibutyl phthalate (DBP), Diisobutyl phthalate (DIBP)] ethers (PBDEs) in Electrical and Electrical Equipments. Presently the company manufactures 2,4-D Acid 98% TC, 2,4-D Sodium 95% SP 2,4-D Amine 866 | 720 | 480g/l SL 2,4-D Ethyl Hexyl Ester 96% TC 2,4-D Ethyl Ester 96% TC Chlorpyriphos 97%TC / 20%EC / 50%EC Thiamethoxam 96%TC / 25%WG / 75%SG Pretilachlor 95%TC / 50%EC / 37%EW Metribuzin 97%TC / 70%WS Hexaconazole 92%TC / 5%SC / 5%EC / 10%EC and Metalaxyl 98%TC / 35%WS for the customer base which comprises of large corporates like Aromatic Rasayan Private Limited, JR Jindal Infra-projects Private Limited; SC Formulator Co. Ltd. The Company works within an interconnected network alongside Aromatic Rasayan Private Limited and OFB Tech Private Limited. All the transactions are performed on arms- length basis and the company enters into transactions both in the capacity of suppliers and customers, we procure raw materials from these partners and deliver finalized products for their sale. This dynamic relationship streamlines the supply chain, promotes mutual support, and enhances the efficiency of operations for all involved parties. As per financial performance, Ambey Laboratories Limited has posted total income / net profits of Rs 82.41 Cr / Rs 10.33 Cr (FY21), Rs 85.11 Cr / Rs 3.57 Cr (FY22), Rs 107.43 Cr / Rs 4.56 Cr (FY23) and Rs 100.43 Cr / Rs 6.07 Cr (FY24). So as per previous financials data, company has shown average results. Company has posted an average EPS of Rs 7.17 and average RoNW of 21.40% for last three fiscals. Issue is priced at a P/BV of 3.58 as per NAV of 18.98 as on 31.01.24. If we attribute latest earnings of FY22, FY23 and annualised FY24 on fully diluted equity post issue, then asking price is at a P/E of around 47.46, 37.13 and 23.26 respectively, which looks fully priced. As per RHP, comparison between listed peers is shown in above table. On BRLM's front, Fast Track Finsec Private Limited is associated with this SME IPO and handled 6 SME IPOs in last 3 years. From last 6 SME IPOs, all opened above issue price or at par on the day of listing. As of now from last 6 SME IPOs, two are trading below issue price and remaining are trading above issue price. ( As on 29.06.24 ) As per financials, Ambey Laboratories Limited has shown average results, RoNW is 21.40% and P/E is respectively 47.46, 37.13 and 23.26 as per FY22, FY23 and annualised FY24 earnings. So, issue looks fully priced. Company is engaged in the business of manufacturing of agrochemical products for the protecting of crops, which is highly fragmented and competitive business segment. Performance of BRLM is good. So, we give NEUTRAL rating for this IPO. Readers must consult a qualified financial advisor prior to making any actual investment decisions.
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