Started in 2003, Mumbai based Dhruv Consultancy Services Limited is engaged in the business of infrastructure consultancy providing design, engineering, procurement, construction and integrated project management services for Highways, Bridges, Tunnels, Architectural, Environmental Engineering, and Ports. The services of the company include Preparation of DPR and feasibility studies for infrastructure projects, Operations & Maintenance Works, Project Management Consultancy Services, Independent Consultancy, Project Planning, Designing, Estimation, Traffic and Transportation Engineering, Financial Analysis, Technical audits, Structural Audit, Inspection of bridges and Techno-Legal Services. Dhruv's clientele include Ministry of Road Transport and Highways, National Highways Authority of India, The City and Industrial Development Corporation of Maharashtra Ltd., Jawaharlal Nehru Port Trust, Maharashtra State Road Development Corporation, Mumbai Metropolitan Region Development Authority, Public Works Department,Maharashtra Tourism etc. As per financial performance front, DCSL has posted total income/net profits of 5.11 cr. / Rs. 0.35 cr. (FY143), 9.17 cr. / Rs. 1.13 cr. (FY14), Rs. 9.74 cr. / Rs. 0.79 cr. (FY15), Rs. 15.15 cr. / Rs. 1.32 cr. (FY16) and Rs. 30.46 cr. / Rs. 3.08 cr. (FY17). For upto Q3 of FY18 it has earned net profit of Rs. 5.40 cr. on a turnover of Rs. 33.52 cr. As on 31.12.17 it had an order book of Rs. 131 cr. plus. It has posted an average EPS of Rs. 2.13 and an average RoNW of 28.85% for last three fiscals. Issue is priced at a P/BV of 2.07 on the basis of its post issue NAV of Rs. 26.08 per share. Company suffered a setback in bottom line for FY15 and then after it has shown exceptional growth. For last five fiscals, DCSL has shown healthy CAGR of 56.27% in revenues and CAGR of 72.85% in net profits. If we annualise latest earnings and attribute it on fully diluted equity post issue, then asking price is at a P/E of around 11 against industry average of 73. Thus issue is priced very reasonably. As per offer documents it has shown Artefact Projects and MITCON Consultancy as its listed peers and they are trading at a P/Es of around (0) and 24 (as on 25.04.18). Artefact has incurred losses for quarter ended 31.12.17. On merchant banker's front, this is 47th IPO in last six fiscals. Out of last 10 listings, 1 open at a discount to offer price and the rest opened with a premium ranging from 2.7% to 20% on the day of listing. As per financials, company's performance is very good, it has shown consistent and healthy growth, RoNW is 28.85% and issue is reasonably priced as per latest earnings. So based on performance, order-book and future prospect of the company, we give SUBSCRIBE rating to this SME IPO.
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