Ducol Organics And Colours Limited offers a range of pigment dispersions for various industries like Paints, Inks, Textile, Detergent, Paper, Rubber and Plastics, color solutions for various industries like paints, ink, textile, rubber, plastic, leather, paper, soaps, detergents and FMCG. The Company is engaged in the business of manufacturing and selling of pigment dispersions, preparations, concentrates, paste colorants and master batches. They have a pan-India customer base, with integrated operations which involves development, manufacturing, marketing and distribution of a wide range of dispersions & masterbatches primarily to industries such as paints, ink, textile, rubber, plastic, leather, paper, soaps, detergents and FMCG. Company laboratories are well equipped to develop process capabilities and product application techniques. The Company offers following pigment dispersions and preparations:Dutint – water based dispersions for decorative paintsDuplast - MB for plastic industryDuprint – water based dispersion for printing ink formulationsDutex – pigment pastes for textile printing industry Dusperse – for soap and detergent industryDupralin – for paper industryDupren – used in rubber industryDucem – Dry dispersions various general applications Company has three (3) manufacturing units situated near Mumbai out of which two (2) are situated at Taloja MIDC and the third is situated at Mahad MIDC. They have obtained ISO 9001: 2015 certification for our Unit I and Unit II situated at Taluja MIDC. As on October 31, 2022, the Company had 79 permanent employees. As per financial performance, Ducol Organics And Colours Limited has posted total income/net profits of Rs 73.72 Cr / Rs 0.07 Cr (FY20), Rs 78.86 Cr / 2.81 Cr (FY21), Rs 88.94 Cr / Rs 4.91 Cr (FY22) and Rs 48.75 Cr / Rs 4.17 Cr (upto H1 FY23). So company has shown good result, but sudden increase in net-profit just before IPO is very surprising. Company has posted an average EPS of Rs 3.24 and average RoNW of 17.66% for last three fiscals. Issue is priced at a P/B of 2.01 as per NAV of Rs 38.76 post issue. As per FY22 earnings on fully diluted equity post issue, asking price is at P/E of around 23.09 and as per annualised FY23 earnings P/E is 13.59. As per RHP, listed peers are shown in above table. On BRLM's front, First Overseas Capital Limited associated with this SME IPO and handled 13 SME IPOs in last three years. From last 10 IPO one is opened below issue price and remaining are opened above issue price or at par. As of now from last 10 IPOs, four are trading below and remaining are trading above issue price or at par. ( As on 02.01.23 ) As per financials Ducol Organics And Colours Limited, has shown good results, RoNW is 23.50% and P/E is respectively 23.09 and 13.59 as per FY22 and annualised FY23 earnings, which looks fully priced. Company has shown super earnings in FY22 and H1 FY23, but its doubtful if company can manage same margins in future and the business segment is highly competitive and fragmented. Performance of BRLM is good post listing. So we are giving NEUTRAL rating to this IPO.
✍️ Post a Comment