Started in 1995, Thane based Anuroop Packaging Ltd (APL) is a manufacturer of the corrugated box (used for packaging). The products offered by the company can be divided into two categories which are corrugated boxes and corrugated sheets/boards. The client segment of the company includes small companies, mid-size companies, corporate clients and many others. Anuroop provides packaging products across various industries such as water treatment, pharmaceutical, metals and stationery. Some of the prominent clients of APL are:- Pepe Jeans London- Himalaya Organics- Mattel Toys India- Ion exchange India- FDC, etc. The company also has clients from stationary industries such as A.W. Faber-Castell (India) and Kokuyo Camlin which are industry leaders. Anuroop Packaging has a single semi-automated unit located at Wada, Thane to reduce raw material wastage and manual labour. Apart from manufacturing corrugated box, the company is also engaged in Gum (Turpentine and Dipentene) trading business which was started by APL in 2017-18. On the financial performance front, for the last three fiscals, on a standalone basis, APL has posted turnover/ net profits of Rs. 2.58 cr. / Rs. 0.03 cr. (FY17), Rs. 3.97 cr. / Rs. 0.73 cr. (FY18) and Rs. 6.68 cr. / Rs. 1.37 cr. (FY19). The current holding period for trade receivables is above 104 days. For the last three fiscals, APL has (on a standalone basis) posted an average EPS of Rs. 2.16 and an average RoNW of 17.10%. As APL has gone in for merger process, on a consolidated basis for FY19 it has reported a turnover of Rs. 10.00 cr. with a net profit of Rs. 1.79. For Q1 of FY20, it has posted a turnover/net profit of Rs. 2.78 cr. / Rs/ 0.56 cr. (on a consolidated basis) and Rs. 1.94cr. / Rs. 0.40 cr. (on a standalone basis). The issue is priced at a P/BV of 0.94 based on its NAV of Rs. 13.78 (consolidated basis) as on 30.06.19. If we annualized FY20 (consolidated) earnings and attribute it to fully diluted post issue equity then asking price is at a P/E of around 3.17. Thus issue pricing looks attractive with its super earnings in pre-IPO and IPO year. Sustainability of the same is a major concern. As per the offer documents, APL has shown Worth Peripherals as its listed peer that is currently trading at a P/E of around 5.3 (as on 07.11.19). However, it is not strictly comparable. On BRLM's front, this is the 19th mandate from its stable in the last four fiscals (including the ongoing). Out of last ten listing, one opened at par and the rest with premiums ranging from 1.92% to 8% on the day of listings. Thus it has an average track record. Company has shown good results and consistent growth, RoNW 15.42% and issue looks attractively priced. Packaging business will grow with growth of economy and companies have bright future. The only concern is super earnings of company and if it can repeat the same performance in future. The performance of BRLM is average, So we give NEUTRAL rating to this SME IPO.
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