DOMS Industries Limited designs, develops, manufactures, and sells a wide range of stationery and art products, primarily under our flagship brand 'DOMS', in the domestic market as well as in over 45 countries internationally, as of September 30, 2023. They are the second largest player in India’s branded 'stationery and art' products market, with a market share of ~12% by value, as of Fiscal 2023. The core products such as 'pencils' and 'mathematical instrument boxes' enjoy high market shares; 29% and 30% market share by value in Fiscal 2023 respectively. Company has a wide and differentiated product category, which includes over 3,800 SKUs as of September 30, 2023 and classified across seven categories: (i) scholastic stationery; (ii) scholastic art material; (iii) paper stationery; (iv) kits and combos;(v) office supplies; (vi) hobby and craft; and (vii) fine art products. Company has leveraged the experience and success with the flagship brand 'DOMS' and introduced new brands and sub-brands to the market which complement the flagship brand. For example, to capture the affordable market segment, they launched the brand 'C3' in the year 2012, under which they sell polymer black lead pencils, polymer colour pencils, erasers, sharpeners, chalks, etc. For the for the Fiscal 2023 and the six months period ended September 30, 2023, 'DOMS' contributed 80.38% and 83.18%, respectively, of the Gross Product Sales amounting to Rs 9,900.64 million and Rs 6,461.93 million respectively, and 'C3' contributed 3.96% and 2.96% of the Gross Product Sales amounting to Rs 487.77 million and Rs 230.17 million, during the respective periods. Further, they launched 'Amariz' in the year 2022, which is exclusively focused on fine art products, and 'Fixy Fix' in the year 2023, which is exclusively focused on a range of glues and adhesives. Company undertakes the manufacturing operations from facilities located in Umbergaon (13 Manufacturing facilities), Gujarat and Bari Brahma, in Jammu and Kashmir. The Umbergaon Manufacturing Facilities are spread over approximately 34 acres of land covering approximately 1.18 million square feet, which are equipped with modern and automated production processes. Further, the Jammu Manufacturing Facility is spread across approximately 2 acres of land covering approximately 0.07 million square feet, focussed on producing wooden slats from locally sourced wood. They are vertically integrated with operations such as procurement of raw materials, moulding, assembling, integration of sub-assemblies into finished products being done at the manufacturing facilities in Umbergaon, Gujarat, which has enabled them to gain a competitive advantage by improving productivity and reducing costs. In order to support the growth strategy to expand the manufacturing capabilities, recently they have also acquired 44 acres of land which is adjacent to the existing Umbergaon Manufacturing Facilities. As of September 30, 2023, company has a widespread multi-channel distribution network with a strong pan-India presence and a global footprint catering to over 45 countries, covering the Americas, Africa, Asia Pacific, Europe, and Middle East. In the domestic market, they sell the products through (i) general trade; (ii) modern trade and e-commerce; and (iii) original equipment manufacturer (OEM) & institutions. The domestic distribution network for general trade comprises of over 120 super-stockists, and over 4,000 distributors along with a dedicated sales team of over 500 personnel covering more than 120,000 retail touch points over 3,500 cities and towns. They also cater to the consumers through modern trade and e-commerce. The products are sold through a variety of modern trade platforms such as supermarkets, hypermarkets, mini markets, cash and carry stores. Further, the products are also available on multiple e-commerce platforms. As per financial performance, Doms Industries Limited has posted total income / net profits of Rs 408.79 Cr / Rs (6.02) Cr (FY21), Rs 686.23 Cr / Rs 17.14 (FY22), Rs 1216.52 Cr / Rs 102.87 Cr (FY23) and Rs 764.22 Cr / Rs 73.91 Cr (upto Q2 FY24). So as per previous financials data, company has shown above average growth and company is able to generate sales and profits above pre-covid levels. Company has an average EPS of Rs 9.98 and average RoNW of 15.49% for last three fiscals. Issue is priced at a P/BV of 11.18 as per NAV of 70.69 as on 30.09.23. If we attribute latest earnings of FY22, FY23 and annualised FY24 on fully diluted equity post issue, then asking price is at a P/E of around 279.68, 46.60 and 32.43 respectively, which looks fully priced. As per RHP, comparison between listed peers is shown in above table. On BRLM's front, four lead managers are associated with this IPO, and have handled around 135 IPOs in last three fiscals. JM Financial Limited : This is 43rd IPO from this BRLM. From last 10 IPOs, one opened below issue price and remaining above issue price or at par on the day of listing. As of now, from last 10 IPOs, one is trading below issue price and remaining are trading above issue price or at par. (As on 06.12.2023) BNP Paribas : This is 5th IPO from this BRLM. From last 4 IPOs, two opened below issue price and remaining above or at par on the day of listing. As of now, from last 4 IPOs, one is trading below issue price and remaining are trading above or at par of issue price. (As on 06.12.2023) ICICI Securities Limited : This is 49th IPO from this BRLM. From last 10 IPOs, one opened below issue price and remaining above or at par on the day of listing. As of now, from last 10 IPOs, one is trading below issue price and remaining are trading above or at par of issue price. (As on 06.12.2023) IIFL Securities Limited : This is 42nd IPO from this BRLM. From last 10 IPOs, two opened below issue price and remaining above or at par on the day of listing. As of now, from last 10 IPOs, two is trading below issue price and remaining are trading above or at par of issue price. (As on 06.12.2023) As per financials, Doms Industries Limited has good growth, RoNW is 28.39% and P/E is respectively 279.68, 46.60 and 32.43 as per FY22, FY23 and annualised FY24 earnings. So, issue looks fully priced. Company is in business of stationery and art products, which is highly competitive segment. 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.
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