Started in 2004, Diksha Green Limited is Kolkata - WB based company, engaged in the business of trading of timber, wooden logs, sawn timber and manufacturing of veneer sheets. In the year 2006 the company obtained Importer-Exporter code (IEC) and started importing the wooden logs and timber from countries such as Malaysia, Vietnam, and Burma in Asia, Nigeria, Ghana and Ivory Coast in Africa, Ecuador, Salvador, and Costa Rica in America, Solomon Island, Papua and Guinea etc. Company has godown cum Factory located in Baidyabati, Hooghly, West Bengal from where the logs are sold in raw form as well as the sawn timber (the logs are converted into the different shapes and sizes of timber as per the requirements of the customers) and veneer sheets are produced to suit varied customer preferences. In the year 2018, the company acquired a state of art multi commodity cold storage located Hooghly, West Bengal, India having capacity of 5000 MT with two pre cooling chambers and reefer vans towards storage of seasonal produce from various parts of the country and abroad. The company has 9 employees on its payroll, as on September 30, 2018. As per financial performance, DGL has posted total income/net profits of Rs 53.01 cr. / Rs. 0.39 cr. (FY14), Rs 54.25 cr. / Rs. 0.40 cr. (FY15), Rs 54.23 cr. / Rs. 0.46 cr. (FY16), Rs 54.47 cr. / Rs. 0.64 cr. (FY17) and Rs 41.83 cr. / Rs. 0.55 cr. (FY18). For upto Q2 of FY19, company has posted net profit 0.41 cr. with total income of 12.56 cr. So the top line of company remained almost static for FY15 to FY17 and a setback in FY18. Trade receivable are 7.69 Cr for FY18 which is around 18% of FY18 total earnings and same was around 32% for FY17 total earnings. For last five fiscals, it has posted an average EPS of Rs 0.97 and an average RoNW of 5.03%. Issue is priced at a P/BV of 1.38 on the basis of NAV of Rs. 21.71 as on 30.09.18 and at a P/BV of 1.20 on the basis of post issue NAV of Rs 25.05. If we consider latest earnings and attribute it on fully diluted equity post issue, then asking price is at a P/E of around 36 plus. So issue looks very highly priced. As per RHP company has shown Snowman Logistics, Agri Tech India and Greenply Industries as listed peers and these stocks are currently trading at P/E pf 139, 75 and 15 respectively (as on 21.11.18). But these stocks are not strictly comparable with DGL. On BRLM's front, for Finshore Management Services Limited this is the 6th SME IPO. From last 4 IPOs, 2 opened below issue price and 2 above issue price with less than 1% gains. As of now from last 4 IPOs, three are trading below issue price and one above. ( As on 21.11.18 ) As per financials, it looks very average, RoNW is 5.03% and issue looks very highly priced with respect to current earnings. Performance of BRLM is poor. So we give AVOID rating to this SME IPO.
✍️ Post a Comment