Diffusion Engineers Limited

As per financial performance, Diffusion Engineers Limited has posted total income / net profits of Rs 208.75 Cr / Rs 17.05 Cr (FY22), Rs 258.67 Cr / 22.14 Cr (FY23) and Rs 285.56 Cr / Rs 30.80 Cr (FY24). So as per previous financials data, company has shown good growth. Company has an average EPS of Rs 9.12 and average RoNW of 17.40% for last three fiscals. Issue is priced at a P/BV of 2.47 as per NAV of Rs 68.06/- as on 31.03.24. If we attribute latest earnings of FY22, FY23, and FY24 on fully diluted equity post issue, then asking price is at a P/E of around 36.89, 28.39 and 20.41 respectively, which looks fully priced. As per RHP, comparison between listed peers is given in above table. On BRLM's front, one lead manager is associated with this IPO, and have handled around 16 IPOs (SMEs & Main Board) in last three fiscals. Unistone Capital Private Limited: This is 17th IPO from this BRLM. From last 10 IPOs, all opened above issue price or at par on the day of listing. As of now, from last 10 IPOs, three are trading below issue price and remaining are trading above issue price or at par. (As on 25.09.24) As per financials, Diffusion Engineers Limited has shown good results, RoNW is 18.52% and P/E is respectively 36.89, 28.39 and 20.41 as per FY22, FY23, and FY24 earnings. So, issue looks fully priced. Company is engaged in the business of manufacturing welding consumables, wear plates and wear parts and heavy engineering machinery for core industries, which is highly competitive and fragmented business segmented. Performance of BRLM is good. So, we give SUBSCRIBE rating for this IPO. Readers must consult a qualified financial advisor prior to making any actual investment decisions.

• 1 Prashant Garg
• 2 Dr. Nitin Garg
• 3 Chitra Garg