Comrade Appliances Limited

As per financial performance, Comrade Appliances Limited has posted total income/net profits of Rs 26.04 Cr / Rs 0.20 Cr (FY21), Rs 29.73 Cr / Rs 0.39 Cr (FY22) and Rs 26.99 Cr / Rs 1.64 Cr (FY23), So company has shown almost static results, but the sudden rise in net profit is very surprising. Company has posted an average EPS of Rs 2.01/- and average RoNW of 15.83% for last three fiscals. Issue is priced at a P/BV of 2.48 as per NAV of Rs 21.79/- post issue. As per FY22 earnings on fully diluted equity post issue, asking price is at P/E of around 104.86 and as per FY23 earnings P/E is 24.86. Issue expense of around Rs 2.79/- Cr is very high and generates doubts. As per RHP, comparison between listed peers are shown in above table. On BRLM's front, Gretex Corporate Services Limited is associated with this SME IPO and handled 14 SME IPOs in last 3 years. Gretex Corporate Services Limited : This is 15th IPO from this BRLM. From last 10 IPOs, two opened below issue price and remaining opened above issue price or at par on the day of listing. As of now, from last 10 IPOs, two are trading below issue price and remaining are trading above issue price. ( As on 02.06.23 ) As Per financials, Comrade Appliances Limited has shown average results, RoNW is 23.73% and P/E is respectively 104.86 and 24.86 as per FY22 and FY23 earnings, which looks aggressively priced. Also sudden rise in net profit & higher issue expenses raises concerns. Company is in highly competitive and fragmented business segment, with many big brands. Performance of BRLM is good. So we are giving AVOID rating to this SME IPO, readers must consult a qualified financial advisor prior to making any actual investment decisions.

• 1 Mr. Khursheed Alam
• 2 Mr. Mehboob Alam
• 3 M/s Troupe Technologies Private Limited