Amkay Products Limited manufacture, assemble & market a comprehensive portfolio of medical devices, disposables and other Healthcare Products like Face Mask, Alcohol Swabs, Lancet Needles, Nebulizer, Pulse Oximeter, surgeon cap etc. used by healthcare centers, hospitals/clinics, nursing homes etc. widely spread across India. In addition, they are also engaged in branding and marketing of some of the products like Diapers, Plastic Gloves, Suction Machines etc. The company started its operations in year 2008 with manufacturing and supply of one product in a manufacturing unit taken on rent at Vasai in Mumbai, measuring 980 sq. feet. Gradually, more products were added to the portfolio & for further product expansion, over the period, they shifted to bigger manufacturing units from where they entered into branding & trading segment also along with manufacturing. Later in year 2012, they purchased manufacturing unit at Acchad Industrial Area, Thane, measuring around 20,000 square feet, where currently they are manufacturing & supplying products like Face Mask, Alcohol Swab, Nebulizer Mask, Surgeon/Bouffant Cap, Steel/Plastic Lancet, Air Bed, Apron, Digital Thermometer, Shoe Cover, BP Monitor etc. In 2014, they took one warehouse on rent at Acchad Industrial Area, for storage of the finished Goods and then in 2016, they purchased another manufacturing unit at Acchad Industrial Area, Thane, measuring around 6000 square feet, where currently they are manufacturing & supplying Bio Bags. The company’s product portfolio comprises of more than 30 product including Respiratory Disease Related Medical Devices, Surgical Disposables, Home Healthcare Products and Other Healthcare Products. Presently, they are manufacturing more than 20 products along with Branding & trading of more than 10 products. In the period ending December 31, 2023, fiscal 2023, 2022 and 2021, the revenue from manufacturing operations was Rs. 1836.91 lakhs, Rs. 2224.59 lakhs, Rs. 2255.89 lakhs and Rs. 3020.24 lakhs which accounts for 80.76%, 79.84%, 61.80% and 74.21% of total revenue from operation respectively. while the revenue from branding & trading operations was Rs. 437.71 Lakhs, Rs. 561.83 lakhs, Rs. 1394.48 lakhs and Rs. 1049.71 lakhs, which accounts for 19.24%, 20.16%, 38.20% and 25.79% of total revenue from operation respectively. The products are spread across India and they have generated around 99.60%, 98.94 %, 98.97% and 99.18% of the total revenue from domestic sales in period ending December 31, 2023 and fiscal 2023, 2022 and 2021 respectively. Further, the company has also exported small portion of its products to the countries like Bhutan, Nepal & Qatar and generated around 0.40%, 1.06%, 1.03% and 0.82% of the total revenue from sales in period ending December 31, 2023 & fiscal 2023, 2022 and 2021 respectively. As per financial performance, Storage Technologies & Automation Limited has posted total income / net profits of Rs 40.72 Cr / Rs 3.13 Cr (FY21), Rs 36.79 Cr / Rs 1.47 Cr (FY22), Rs 28.25 Cr / Rs 1.51 Cr (FY23) and Rs 23.86 Cr / Rs 2.15 Cr (upto 31.12.23 FY24). So as per previous financials data, company has shown declining results, but sudden rise in net-profit just before IPO raises doubts. Company has posted an average EPS of Rs 2.77 and average RoNW of 28.66% for last three fiscals. Issue is priced at a P/BV of 3.55 as per NAV of 15.51 as on 31.12.23. 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 32.45, 31.53 and 16.58 respectively, which looks fully priced. As per RHP, comparison between listed peers is shown in above table. On BRLM's front, Hem Securities Limited is associated with this SME IPO and handled 39 SME IPOs in last 3 year. From last 10 SME IPOs, one opened below issue price and remaining opened above issue price or at par on the day of listing. As of now from last 10 SME IPOs, one is trading below issue price and remaining is trading above issue price. ( As on 25.04.24 ) As per financials, Amkay Products Limited has shown declining results, RoNW is 19.57% and P/E is respectively 32.45, 31.53 and 16.58 as per FY22, FY23 and annualised FY24 earnings. So, issue looks fully priced. Company is in business of manufacturing, assembling and trading of healthcare products, which is highly competitive and fragmented segment. Performance of BRLM is average. 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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