Started in 2003, D. P. Abhushan Limited is engaged in the retail business of various jewelleries and ornaments made out of gold, diamonds and platinum studded with precious and semi-precious stones. Their portfolio includes rings, earrings, armlet, pendants, gajrahs, nose rings, bracelets, chains, necklaces, bangles and other wedding jewellery. Company has four showrooms under the 'D.P. Jewellers' brand located in four different cities of India i.e. Ratlam, Indore, Bhopal and Udaipur, operated and managed by them and premises taken on rental basis. The manufacturing of jewellery products are done through job work from third parties. Further, they also purchase readymade jewellery from independent jewelers. DPAL also entered into an agreement dated May 05, 2015 with R.S. Diamonds Private Limited for sale of their diamond jewelleries under brand of 'Divine Solitaires' from their retail outlets. DPAL has also installed 5 wind turbine generators of 750 KW each in Village Bagia & Naveli, Ratlam, Madhya Pradesh. Company entered into an agreement with MPPMCL (M.P. Power Management Co. Ltd.) for exclusive sale of power, generated from wind turbine generators to MPPMCL. Company has outsourced all operations and maintenance activities relating to wind turbines to a third party. On performance front, DPAL has (on consolidated basis) posted turnover/net profits of Rs. 409.45 cr. / Rs. 2.15 cr. (FY14), Rs. 459.89 cr. / Rs. 1.31 cr. (FY15), Rs. 488.22 cr. / Rs. 3.25 cr. (FY16) and Rs. 453.71 cr. / Rs. 4.88 cr. (FY17). For period of 01.04.17 to 01.05.2017 company has posted 75.90 cr. revenue and 0.80 cr. profit. Company has consistently shown growth in its top line and bottom line. In FY17 top line remain low but bottom line has been improved. DPAL has posted an average EPS of Rs. 2.29 and average RoNW of 19.15% for last three fiscals. Issue is priced at a P/BV of 2.13. Other listed peers are trading in range of 25 to 30 P/E. If we attribute FY17 earnings on fully diluted equity post issue, then asking price is at a P/E of around 12.76. Issue appears to have been reasonably priced. On merchant banker’s front, out of last 10 recent listings, 1 opened at discount and rest with 1 to 20% premium on IPO price. As per financials, company's growth is good except some pressure on top line in FY 17, RoNW is 19.15% for last three fiscals and issue is reasonably priced. And after implementation of GST, organized players will get benefit, so we give SUBSCRIBE rating to this SME IPO.
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