Enfuse Solutions Limited is engaged in business of providing integrated Digital solutions across various domains including (i) In Data Management & Analytics (ii) E-commerce & Digital Services (iii) Machine Learning & Artificial intelligence (iv) Edtech & Technology Solutions. They provide these service solutions by combining custom-designed data processes, delivery teams that include both generalists and domain specialists, and the in-house software to streamline and automate various processes. They work as consultants for the clients as per the terms of sub-contracting agreements entered with them. For e.g., if the client is desirous of providing digitization services to one of its customers, then, they as consultants will work on behalf of the client to provide said services to their customers. They execute a Statement of Work with the clients which specify the scope of the services to be provided to their customers which includes the term of the project, background and objective of the project and description of services to be provided. The diverse suite of offerings, spanning Data as a Service (DAAS) and software solutions, encompasses an AI platform for tagging audio, video, image, and documents, Edtech AI solutions, data annotation and curation platforms, data engineering, data science, cloud computing, and digital marketing. Through the clients, they have served entrepreneurs ranging from start-up enterprises to established companies, primarily consisting of blue-chip companies operating in sectors such as Technology, BFSI (Banking, Financial Services, and Insurance), Retail, Financial Services (FinTech), Media and Entertainment, Health, Education and various other industries. Recently, they have received work order for System Integrator for Computerization of PACS from the Commissioner for Co-operation & Registrar of Cooperative Societies, Maharashtra, for providing services like Operationalization of the software, Data digitization and migration, UAT and System Test, Setting up of support centres, Compliance reports etc. of Rs. 64.53 Cr. In 2019, they commenced the operations with Delivery Centre-I in Mumbai, Maharashtra. Subsequently, they expanded the operation by setting up Delivery Centre-II in Vikroli, Mumbai. The revenue is generated from a combination of domestic operations within India and international endeavors, with a predominant share originating from the exports of services to countries like USA, Ireland, Netherland, Canada etc. They have generated around 67.87%, 83.47%, 77.72% and 63.58% of the total revenue from export sales and 32.13%, 16.53%, 22.28% & 36.42% of the total revenue from domestic sales for the period ending December 31, 2023 and fiscal year ending 2023, 2022 and 2021 respectively. As per financial performance, Enfuse Solutions Limited has posted total income / net profits of Rs 17.20 Cr / Rs 1.55 Cr (FY21), Rs 25.57 Cr / Rs 1.98 Cr (FY22), Rs 26.10 Cr / Rs 2.93 Cr (FY23) and Rs 28.05 Cr / Rs 3.22 Cr (upto Q3 FY24). So as per previous financials data, company has shown good growth. Company has posted an average EPS of Rs 3.66 and average RoNW of 57.76% for last three fiscals. Issue is priced at a P/BV of 6.44 as per NAV of 14.9 as on 31.12.2023. 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 42.88, 29.02 and 19.75 respectively, which looks fully priced. As per RHP, comparison between listed peers is shown in above table. On BRLM's front, Hem Securities Limited is associated with this SME IPO and handled 40 SME IPOs in last 3 year. From last 10 SME IPOs, all opened above issue price or at par on the day of listing. As of now from last 10 SME IPOs, all are trading above or at par issue price. ( As on 11.03.24 ) As per financials, Enfuse Solutions Limited has shown good results, RoNW is 45.21% and P/E is respectively 42.88, 29.02 and 19.75 as per FY22, FY23 and annualised FY24 earnings. So, issue looks fully priced. Company is in business of providing integrated Digital solutions across various domains, which is highly competitive and fragmented 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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