Bondada Engineering Limited

As per financial performance Bondada Engineering Limited has posted total income/net profits of Rs 288.32 Cr / Rs 9.20 Cr (FY21) and Rs 334.20 Cr / Rs 10.13 Cr (FY22) and Rs 370.95 Cr / Rs 18.25 Cr (FY23), So company has shown good growth, but sudden growth in net profit just before IPO raises doubts. Company has posted an average EPS of Rs 8.87/- and average RoNW of 20.43% for last three fiscals. Issue is priced at a P/BV of 1.34 as per NAV of Rs 56.06/- as on post issue. As per FY22 earnings on fully diluted equity post issue, asking price is at P/E of around 15.99 and as per FY23 earnings P/E is 8.88. As per RHP, there are no listed peers. On BRLM's front, Vivro Financial Services Private Limited is associated with this SME IPO and not handled any SME IPOs in last 3 years. ( As on 16.08.23 ) As per financials, Bondada Engineering Limited has shown good results, RoNW is 22.77% and P/E is respectively 15.99 and 8.88 as per FY22 and FY23 earnings. As per FY22 earnings, issue looks fully priced and as per FY23 earnings, issue looks reasonably priced. But sudden rise in net profit just before IPO raises doubts. Company is in business of providing EPC and O&M services to companies operating in the telecom and solar energy sector, which is a highly fragmented and competitive. Company has order book of around Rs 1520/- Cr. So we are giving SUBSCRIBE rating to this SME IPO. Readers must consult a qualified financial advisor prior to making any actual investment decisions.

• 1  Raghavendra Rao Bondada
• 2  Neelima Bondada
• 3  Satyanarayana Baratam