Started in 2009, Anmol Industries Limited is a Kolkata based branded packaged food company focused on biscuits and cakes and 'Anmol' is its flagship brand. They are the fourth largest biscuit brand and the fifth largest cake brand in India in terms of revenue for Calendar Year 2017. In the eastern parts of India, they rank third across the biscuits segment and fourth across the cakes segment in terms of revenue for Calendar Year 2017. (As per FS Report) Company's diversified product portfolio contains more than 60 varieties of biscuits under categories such as crackers, sweet biscuits, health biscuits, cream biscuits and cookies; and more than 25 varieties of cakes under bar cakes, tiffin cakes, sandwich cakes and cup-cakes. The diversified product portfolio enables them to cater to a wide range of taste preferences and consumer segments. They have products in the premium as well as mass market categories, which makes the products less susceptible to shifts in consumer preferences, market trends and risks of operating in a particular product category. In addition, they also manufacture and export more than 20 varieties of biscuits for other companies from time to time. Company have established an extensive distribution network across 17 states in India comprising of three depots; more than 200 super stockists, who in turn sell the products to more than 2,500 local distributors. Thereafter, the products are distributed to retail outlets that sell to consumers. The biscuits and cakes are being sold in approximately 1.8 million retail outlets in India. (As FS Report) Company's in-house team of more than 400 personnel manage the distribution network. Anmol has six manufacturing facilities which are located at Dankuni and Panchghara in West Bengal, Greater Noida and Ghaziabad in Uttar Pradesh, Hajipur in Bihar and Bhubaneswar in Odisha with an Actual Installed Capacity of 2,94,544 MTPA for biscuits and 8,148 MTPA for cakes; and production of 1,44,430.50 MTPA for biscuits and 2,484.89 MTPA for cakes as at March 31, 2018. They have an additional manufacturing facility at Sambalpur in Odisha with an aggregate installed capacity of 3,600 MTPA for rusk. Company has not yet commenced production at this manufacturing facility and intend to relocate the manufacturing facility from Sambalpur in Odisha. They also outsource manufacturing of its biscuits to Fortune at its manufacturing facility at Sambalpur, Odisha. As at December 31, 2017, company's inventory days were 6 days for biscuits and 12 days for cakes. As at March 31, 2018, they had 2,232 full-time employees and 49 trainees in India. In addition to this, they contract with third party manpower and services firms for the supply of contract labour at the owned and operated manufacturing facilities. As per financial performance, ICFL has posted total income/net profits of Rs. 396.91 cr. / Rs. 112.13 cr. (FY14), Rs. 528.06 cr. / Rs. 149.04 cr. (FY15), Rs. 644.05 cr. / Rs. 191.64 cr. (FY16) and Rs. 719.92 cr. / Rs. 210.80 cr. (FY17). For upto Q3 of FY18, it has reported net profit of Rs. 164.08 cr. on total revenue of Rs. 585.95 cr. So company has posted consistent growth over last couple of years. ICFL has posted an average EPS of Rs. 25.53 and average RoNW of 11.62% for last three fiscals. Issue is priced at a P/BV of 2.17 as per NAV of 263.96 on 31.12.17. If we attribute latest earnings on fully diluted equity post issue, then asking price is at a P/E of around 24. As per RHP, industry average P/E ratio is 28.66 and listed peers comparison shown in above table. So issue looks fully priced. On BRLM's front, five merchant bankers associated with this issue and have handled 58 public issues in the past three years. When we take recent 10 IPOs of each BRLM then out of those 6 issues opened below their offer price and 4 opened at par on listing dates. As per financials, company's growth is consistent and very good, RoNW is 11.62% for last three fiscals and issue is priced at P/E of around 24 as per latest earnings. Company is an NBFC with principal lines of business, namely corporate lending, SME lending, vehicle financing and housing financing. Last two business segments (Vehicle Finance & Housing Finance) are started in recent past and it may give further boost to company's growth, but increasing bond yields and FD rates may put pressure on margins. So we give "SUBSCRIBE FOR LONG TERM" rating to this IPO.
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