Dangee Dums Limited

Started in 2010, Dangee Dums Limited is Ahmedabad Gujarat based company engaged in the business of cakes, chocolates, and desserts. The company manufactures the following products:1. Cakes and Pastries2. Designer Cake3. Chocolates4. Cupcakes and Ice creams5. Other Bakery Products Dangee Dums has recently introduced ice cream which is receiving a very good response from the customers. The other products are Artisan Breads, Candies, Cookies, Khari Toast, Thick shakes, Softies, Savouries, and beverages. The company has a 25000 square feet manufacturing facility in Ahmedabad. It has 81 outlets across Gujarat with 46 outlets in Ahmedabad, 20 in Surat, 9 in Vadadora, 3 each in Gandhinagar and Anand. The company has 254 permanent employees on its payroll. As per financial performance, on a standalone basis, DDL has posted turnover/net profits of Rs. 2.95 cr. / Rs. – (1.28 ) cr. (FY14), Rs. 5.98 cr. / Rs. – (2.88 ) cr. (FY15), Rs. 11.53 cr. / Rs. – (5.13) cr. (FY16), Rs. 19.96 cr. / Rs. 0.90 cr. (FY17) and Rs. 36.58 cr. / Rs. 1.55 cr. (FY18). For last three fiscals, it has posted an average negative EPS of Rs. – (77.53) and negative RoNW. Issue is priced at a P/BV of 4.84 on the basis of its NAV of Rs. 15.30 as on 31.03.18. If we take latest earnings and attribute it to fully diluted equity post issue, then asking price is at a P/E of around 49 against industry composite of 83 P/E as per prospectus. As per offer documents, it has shown Coffee Day, Jubilant Foods and Vidli Restaurant as its listed peers. Any of these peers are not strictly comparable with the model of DDL. These peers are currently trading at a P/Es of around 59, 101 and NA (as on 13.08.18). Thus issue appears fully priced. On BRLM's front, for Monarch Networth Capital Limited this is the 11th IPO and from last 10 IPOs, one withdrawn midway due to poor response, 2 opened below issue price, 3 at par and other listed with 1% to 20% premium on the day of listing. As of now, from last 9 IPOs, 7 are trading below issue price and remaining above issue price. ( As on 16.08.18 ) As per financials, company's performance is good, RoNw is 13.39% for last fiscal and issue is fully priced as per latest earnings. Company has shown exception increase in top-line all these years and expected to main same over next couple of years by increasing stores in other cities of Gujarat and expanding to Maharastra. Company has very promising outlook for future, but performance of BRLM is also not good. So we give NEUTRAL rating to this SME IPO as per current market situation.

• 1 Mr. Nikul Jagdishchandra Patel
• 2 Mrs. Foram Nikul Patel
• 3 Mr. Ravi Hemantkumar Patel