Started in 2010, Bright Solar Limited, is a Ahmedabad - Gujarat based company, engaged in assembling of DC/AC Solar Pumps and Solar Pump Systems under the registered brandname of 'PUMPMAN', 'BRIGHT SOLAR', and 'BRIGHT SOLAR WATER PUMP'. Company is also engaged in EPC contracts of Solar Photovoltaic Water pumps which include supplying, installing and commissioning of the pump system along with comprehensive maintenance contract for a specific period of 1-5 years. In the year 2017-18, BSL has started providing consultancy services for acquiring projects and tender bidding after identifying competent client on tender to tender basis. In addition, they have added water supply, sewerages and infra project in their service portfolio. Company is in process of acquiring land ad-measuring area of 18,209 Square meters at Kheda, Gujarat and on which company is planning to set up manufacturing unit for Solar PV modules/panels. Company has already executed agreement to sale on February 15, 2018 and paid 43.00 Lakhs towards earnest money for acquisition of land. Company is also planning to set up water treatment plant assembling unit at Patna (Bihar). To sum up, BSL are into assembling of DC/AC Solar Pumps and Solar Pump Systems, EPC contracts of SolarPhotovoltaic Water pumps, consulting of Projects and tenders, Water supply and Sewerages Infra Project. They are planning to commence Solar Module manufacturing and water treatment plant assembling unit. The company has 18 permanent employees on its payroll. As per financial performance, company has posted total income/net profits of Rs. 22.39 cr. / Rs. 0.38 cr. (FY13), Rs. 28.46 cr. / Rs. 0.54 cr. (FY14), Rs. 47.84 cr. / Rs. 1.97 cr. (FY15), Rs. 15.47 cr. / Rs. 0.71 cr. (FY16) and Rs. 18.12 cr. / Rs. 1.71 cr. (FY17). For the period upto 31.01.18 of FY18, it has earned net profit of Rs. 5.34 cr. on a turnover of Rs. 28.27 cr. So there is very much increase in net profit for FY18 and this generates doubts. Also, the performance remained zig-zag. For last three fiscals, it has posted an average EPS of Rs 0.97 and an average RoNW of 19.08%. Issue is price at P/BV of 2.10 based on its NAV of 17.14 post issue. If we annualise latest net profit of FY18 and attribute it on fully diluted equity post issue, then asking price is at a P/E of around 11 plus, which looks good at first sight. But if company may be able to repeat same performance in future also, on consistent basis, is a big question. As per RHP, it has shown Urja Global and Shakti Pumps as its listed peers which are trading at a P/E of around 0 and 29 respectively (as on 19.06.18). On BRLM's front, for Swastika Investment Limited, this is the 16th IPO and from last 10 IPOs, 2 listed at below issue price and remaining with 2% to 20% premium on the day of listing. As of now, from recent 10 IPOs, 5 are trading below issue price and remaining above issue price. ( As on 19.06.18 ) As per financials, company's performance is zig-zag and shown inconsistency, RoNw is 19.08% for last three fiscals and issue is reasonably priced as per latest earnings. Performance of FY18, has shown very much increase in bottom-line and its sustainability is major concern. Performance of BRLM in recent past is poor and most IPOs which listed above issue price are trading below issue price. So we give AVOID rating to this SME IPO as per current market situation.
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