Started in 2003, Cian Healthcare Limited is a multinational manufacturing company certified by WHO-GMP & ISO -9001:2015 and Food and Drug Control Administration to work in the area of Food supplement, Sexual Wellness, Cosmeceuticals, Nutraceutical, Ayurvedic, and Pharmaceutical products. The manufacturing process of the company complies with the prescribed rules and regulations of the World Health Organization. The company is engaged in developing, manufacturing and commercialising the pharmaceutical products under 12 therapeutic divisions and 10 sales division. The company operates the business under the brand and is also involved in government supplies, export and third-party manufacturing activities. Products:The product list of the company includes Sachet, Gels, Lotions, Creams, Ointments, Liquid Orals, Capsules, and Tablets. Apart from this, the company also owns a special licence to manufacture veterinary products such as Venky's and SAVAvet. The company manufactures pharmaceutical products for both the foreign and domestic markets. Category wise sales:As on 31st March 2018, the total company sale was comprising 37% from contract manufacturing, 24% from government supplies, 23% from franchise business, and 16% from export sales. As on 31.12.18, CIAN has an order book of Rs. 150 cr. plus for the tender business segment as it has over 100 products out of 800 in BPPI essential medicine list. CIAN is an active supplier under Pradhan Mantri Jan Aushadhi Pari Yojana as well as Madhya Pradesh Public Health Services Corp. Ltd. (MPPHSCL). It has also entered into contracts with AFMS, BARC, HLL etc. The competitive strengths of the company are: 1. PAN India presence2. Promoters' 15 years of experience in the field3. Good purchasing power 4. Strong distribution network5. Low-cost operations On the financial performance front, Cian Healthcare has posted turnover/net profits of Rs. 47.15 cr. / Rs. 1.54 cr. (FY16), Rs. 51.85 cr. / Rs. 2.31 cr. (FY17), Rs. 59.59 cr. / Rs. 3.87 cr. (FY18). For the upto Q3 of FY19, it has earned a net profit of Rs. 5.25 cr. on a turnover of Rs. 44.48 cr. So company has show good growth. Trade receivables for company in FY18 is around 25.57 Cr which is around 43% of total income, which is very high. Company promoter is taking around Rs 0.84 Cr as Salary annually. Cian Healthcare has posted an average EPS of Rs. 1.69 and an average RoNW of 19.01% for last three fiscals. The issue is priced at a P/BV of 4.39 on the basis of its NAV of Rs. 14.79 as on 31.12.18 on upper value of price band. If we annualise latest earnings and attribute it on fully diluted post issue equity, than asking price is at a P/E of around 21.69 thus issue appears fully priced and if we take FY18 earnings, then P/E is around 40.42. Comparison with listed peers is given in above table. On BRLM's front, for Fedex Securities Limited this is the 8th SME IPO. From last 6 IPOs, 1 opened below issue price and remaining all opened above issue price with 1% to 40% gains. As of now from last 6 IPOs, 4 are trading below or at issue price and remaining above. ( As on 26.04.19 ) Results of company is very impressive, RoNW is 19.01% and issue looks fully priced with respect to current earnings with P/E of 21.69. Healthy order book, ongoing expansion are some of the positives where as high value of trade receivables and future growth with same high rate are some of the negatives. Performance of BRLM is poor. So we give NEUTRAL rating to this SME IPO.
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