Started in 1995, Dolfin Rubbers Limited is Ludhiana Punjab based company engaged into manufacturing of Auto and ADV (Animal Driven Vehicle) tubes supporting the tyre industry. Its range of rubber tubes, suitable for tyres of various types of vehicles viz., Mopeds, Scooters, Motorcycles, Cars, Jeeps, Buses, Trucks and Tractors with the use of Butyl rubber. Company carries out the production through our manufacturing unit situated at village Gaunspur, Humbran -141102, Ludhiana, Punjab. Dolfin offers the wide range of tubes for almost all the fast-moving sizes tubes for Mopeds, Scooters, Motorcycles, Cars, Jeeps, Tractors, Small Commercial Vehicles, Light Commercial Vehicles, Animal Driven Vehicles(ADV) and Trucks. Company offers tubes made with Butyl Rubber in Heat Resistant Compound. Dolphin has footsteps in most parts of India through wide network of distributors. Company has presence in 27 states and union territories in India through these distributors who assist them in supplying the products to a wide network of retail suppliers. Company has also started tapping in international market by making our products available in Egypt and Nepal. As on the May 31, 2018 company has 284 employees including labour who looks after the business operations, production, quality control, commercial, finance, marketing & sales etc. As per financial performance, Dolphin has posted total income/net profits of Rs. 28.57 cr. / Rs. 0.57 cr. (FY14), Rs. 32.55 cr. / Rs. 0.67 cr. (FY15), Rs. 40.92 cr. / Rs. 0.53 cr. (FY16), Rs. 43.09 cr. / Rs. 0.69 cr. (FY17) and Rs. 54.02 cr. / Rs. 1.34 cr. (FY18). So company growth in top-line, but bottom-line remain almost static and just before IPO sharp jump in bottom-line in FY18. Trade receivables stands near to 15% of total revenue in FY18. Promoters and their family members paid approx Rs 1.44 Cr as salary for different positions in company for FY18 and total employee related expenses of company was 4.24 Cr whereas total net profit was 1.34 Cr. For last three fiscals it has posted an average EPS of Rs. 1.79 and an average RoNW of 14.29%. Issue is priced at a P/BV of 1.54 on the basis of NAV of Rs. 16.89 post issue. If we consider latest earnings and attribute it on fully diluted equity post issue, then asking price is at a P/E of around 15 and there is no listed peers as per RHP. But Innovative Tyres and Tubes which may be taken as peers and trading around P/E of 9. So issue looks fully priced. On BRLM's front, for Guiness Corporate Advisors Private Limited this is the 28th IPO. From last 10 IPOs, 1 opened below issue price and remaining above issue price with 0.1 to 30% premium. As of now, from last 10 IPOs, 5 are trading below issue price and remaining above issue price. ( As on 24.09.18 ) Company has not so impressive financials, RoNW is 14.29% and issue looks fully priced with respect to current earnings. The rubber tube market is highly competitive and fragmented, and company faces competition from various organised and unorganised players. Also tubeless tire is capturing market very fast and most of new vehicles comes with tubeless tires, this may create major concern for the industry. Performance of BRLM also not so good. So we give NEUTRAL rating to this SME IPO.
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