Quadrant Future Tek Limited is a research oriented company, engaged in developing new generation Train Control and Signalling Systems under KAVACH project of the Indian Railways that offers the highest level of safety and reliability to rail passengers and also possess a Speciality cable manufacturing facility with Electron Beam Irradiation Centre. The speciality cables manufactured by the Company is used in Railways rolling stock and Naval (Defence) industry. Their facility also possess end to end infrastructure capabilities for production of Solar & EV Cables. The Company has one facility for manufacturing, testing, researching, and developing specialty cables and also to manufacture the hardware required for Train Control & Signalling Division, which is situated at Village Basma Tehsil Banur, Distt Mohali. The Company offers Speciality Cables for the industrial usage and other applications where fire and safety, light weight and long term performance are of utmost importance. The higher temperature bearing capacity enables the industry users to specify lower cross-section conductor / cable sizes that enables significant weight reduction. Thus, these Speciality cables are the ultimate choice for rail vehicles, trains, naval ship vessels & submarines, electric vehicles and fuel cell electric vehicles. The Speciality cables also has major application in Solar & Wind installations where thermal resistance, long term durability & extended warranties are the key factors. They have installed a 2.5 MeV Electron Beam Industrial Accelerator for cable manufacturing plant which helps them to offer Speciality cables with improved mechanical properties, abrasion and thermal resistance, flame propagation resistance and deformation resistance properties without producing heat and an increased life as compared to chemically cross linked cables. They have a wide product portfolio which includes railways rolling stock cables, naval defence, marine cables, solar PV cables, automotive cables, and connectors & junction boxes. They also provide end to end solutions for electrical connectors and wiring harness with the complex arrangement of various wires and cables as per the demand of the client. For the Speciality Cable division, the Company had an installed capacity of 1,887.60 metric tonnes as on September 30, 2024, 1,887.60 metric tonnes as on March 31, 2024, 1,638.00 metric tonnes as on March 31, 2023 and 1,500.72 metric tonnes as on March 31, 2022, which was utilised at a capacity of 25.03% (not annualised), 49.42%, 54.26% and 57.62% respectively. Company has received a purchase order on December 12, 2024 from CLW for the supply, installation, testing, and commissioning of On-board Kavach equipment in 1,200 locomotives for an aggregate value of Rs 9,786.06 million (including taxes). Further, after completion of the warranty period under the said purchase order, they will receive a maintenance charge equivalent to a sum of 3% (Three percent) per annum of the total Capital cost of Onboard Kavach equipment supplied by the Company for the maintenance period of 11 years thereafter. Before the supply of material under the said order, the Company shall obtain the final approval from RDSO for Ver 4.0 of Kavach System subsequent to ISA (Independent Safety Assessment) Certificate. For the Train Control & Signalling division, the Company had an installed capacity of 4,492 Station TCAS, 2,264 Locomotive TCAS and 3,744 Remote Interface Unit, based on the estimated speed of the SMT machine installed at the factory at Basma, Mohali. However, no production has been undertaken by the Company. As per financial performance, Quadrant Future Tek Limited has posted total income / net profits of Rs 104.29 Cr / Rs 1.94 Cr (FY22), Rs 152.95 Cr / 13.90 Cr (FY23), Rs 151.82 Cr / Rs 14.71 Cr (FY24) and Rs 65.14 Cr / (12.11) Cr (H1 FY25). So as per previous financials data, company has shown good growth, but trade receivables is around 21% of FY24 total income. Also, company has shown loss in H1 FY25. Company has an average EPS of Rs 4.09 and average RoNW of 34.41% for last three fiscals. Issue is priced at a P/BV of 25.46 as per NAV of Rs 11.39/- as on 30.09.24. If we attribute latest earnings of FY23, FY24, TTM and annualised FY25 on equity post issue, then asking price is at a P/E of around 83.43, 78.84, NA and NA respectively. As per RHP, comparison between listed peers is shown in above table. On BRLM's front, Sundae Capital Advisors Private Limited is associated with this IPO, and have handled only one SME IPO in last three fiscals. ( As on 03.01.25 ) As per financials, Quadrant Future Tek Limited has shown good growth, RoNW is 33.4% and P/E is 83.43, 78.84, NA and NA respectively as per FY23, FY24, TTM and annualised FY25 earnings. So issue looks aggressively priced when compared with peers, also trade receivables is around 21% of FY24 total income. Company is engaged in developing new generation Train Control and Signalling Systems under KAVACH project of the Indian Railways. So, we give SUBSCRIBE rating for this IPO for listing gains only. Readers must consult a qualified financial advisor prior to making any actual investment decisions.
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