Durlax Top Surface Limited

Durlax Top Surface Limited is engaged in the business of manufacturing of solid surface material, which is sold across India, through an extensive distribution network of distributors and direct customers and also exported to various countries such as Dubai, Bahrain, Greece, Nepal. We operate through two brands namely LUXOR® and ASPIRON®, which provide a wide range of solid surfaces. The LUXOR® brand offers Acrylic UV Solid Surfaces, while ASPIRON® offers Modified Solid Surfaces. Situated in Vapi, the manufacturing facility is equipped with German and South Korean technologies and advanced machinery to produce solid surface materials. They aim to meet the ever-evolving demands of the customers and create functional spaces across various sectors. The solid surfaces find applications in residential, commercial, hospitality, healthcare, exterior, and diverse industries, providing stylish and durable solutions for countertops, vanities, offices, retail spaces, hotels, hospitals, outdoor projects, and more. As per financial performance, Durlax Top Surface Limited has posted total income / net profits of Rs 47.41 Cr / Rs 0.48 Cr (FY22), Rs 66.84 Cr / Rs 2.09 Cr (FY23) and Rs 90.83 Cr / Rs 5.05 Cr (FY24). So as per previous financials data, company has shown good results, but trade receivables is around 33% of FY24 total earnings and inventory level is also very high. Company has posted an average EPS of Rs 2.24 and average RoNW of 16.36% for last three fiscals. Issue is priced at a P/BV of 3.87 as per NAV of 17.58 as on 31.03.24. If we attribute latest earnings of FY22, FY23 and FY24 on fully diluted equity post issue, then asking price is at a P/E of around 233.52, 53.99 and 22.39 respectively, which looks fully priced. As per RHP, comparison between listed peers is shown in above table. On BRLM's front, Expert Global Consultants Private Limited is associated with this SME IPO and handled 8 SME IPOs in last 3 years. From last 8 SME IPOs, one opened below issue price or at par and remaining opened above issue price on the day of listing. As of now from last 8 SME IPOs, 3 are trading below issue price and remaining are trading above issue price. ( As on 13.06.24 ) As per financials, Durlax Top Surface Limited has shown good results, RoNW is 23.12% and P/E is respectively 233.52, 53.99 and 22.39 as per FY22, FY23 and FY24 earnings. So, issue looks fully priced, but trade receivables are very high. Company is engaged in the business of manufacturing of solid surface material, which is highly fragmented and competitive business segment. Performance of BRLM is average. So, we give NEUTRAL rating for this IPO. Readers must consult a qualified financial advisor prior to making any actual investment decisions.

• 1 Shravan Suthar
• 2 Lalit Suthar