Incorporated in 1994, Exicom Tele-Systems Limited is an India headquartered power management solutions provider, operating under two business verticals, (i) the critical power solutions business, wherein they design, manufacture and service DC Power Systems and Li-ion based energy storage solutions to deliver overall energy management at telecommunications sites and enterprise environments in India and overseas ('Critical Power Business'); and (ii) the electric vehicle supply equipment ('EV Charger(s)') solutions business, wherein they provide smart charging systems with innovative technology for residential, business, and public charging use in India (“EV Charger Business”) and which commenced commercial sales in the Financial Year ended March 31, 2019. They were amongst the first entrants in the EV Chargers manufacturing segment in India and as of March 31, 2023, they had a market share of 60% and 25% in the residential and public charging segments, respectively. Furthermore, in the Critical Power Business, they occupy a market share of 16% in the DC Power Systems market and are recognized in the market for Li-ion Batteries for application in the telecommunications sector, having a market share of approximately 10% as of March 31, 2023. They aim to be an impact business contributing to the sustainable energy transition by enabling electrification of transportation, and energy stability of digital communication infrastructure. They attribute the growth in revenue and profitability in part to the diversified product portfolio, continuing innovation and the establishment and growth of the EV Charger Business and Li-ion Batteries business. They have been able to grow the revenue from operations of Rs 5,129.05 million in the Financial Year ended March 31, 2021 to Rs 7,079.30 million in the Financial Year ended March 31, 2023, representing a CAGR of 17.48%. As on the date of this Red Herring Prospectus, they have strategically expanded the presence and operations to overseas markets by establishing five Subsidiaries (including direct and indirect), Exicom Tele-Systems (Singapore) Pte. Ltd. in Singapore, HorizonTele-System SDN BHD in Malaysia, Horizon Power Solutions DMCC and Horizon Power Solution L.L.C-FZin U.A.E.and Exicom Power Solutions B.V in Netherlands. Company's operations are vertically integrated with end-to-end product development capabilities from concept to design to engineering to prototype testing, along with two dedicated R&D centres, with the extensive product portfolio manufactured in-house at the three manufacturing facilities in India at Solan, Himachal Pradesh and at Gurugram, Haryana, which have an annual capacity of 12,000 DC Power Systems; 44,400 AC chargers and DC fast chargers, and a total built-up area of 134,351.95 sq. ft. The business is supported by an overall employee base of 1,190 (of which 443 are engaged on contractual basis and not on the rolls) as of September 30, 2023, which includes 732 technically qualified employees (438 diploma holders and 294 engineers). Such employee base includes 50 employees at the Subsidiaries (overseas), as of September 30, 2023. They have a dedicated R&D team of 145 employees, as of September 30, 2023, housed at the two R&D centres located in Gurugram, Haryanaand Bengaluru, Karnataka. The R&D team focusses on power electronics design, firmware, system engineering, EV Charger development and battery pack/BMS development. They attribute the market position in the EV Charger Business to the ability to work backwards from desired customer use-case and experience and develop products with the required technical specifications accordingly, for AC chargers, DC chargers, software solutions. In the Critical Power Business, they focus on products with high efficiency, connectivity, reliability and flexibility which aim to help the customers to power digital communication infrastructure at reduced energy cost. As per financial performance, Exicom Tele-Systems Limited has posted total income / net profits of Rs 524.36 Cr / Rs 12.68 Cr (FY21), Rs 848.96 Cr / Rs 30.40 Cr (FY22), Rs 723.40 Cr / Rs 31.03 Cr (FY23) and Rs 467.21 Cr / Rs 27.46 Cr (Q2 FY24). So as per previous financials data, company has shown growth, but decline in top-line and bottom-line in FY23. With H1 FY24 results company seems to be back in growth track. Company has an average EPS of Rs 3.02 and average RoNW of 12.25% for last three fiscals. Issue is priced at a P/BV of 4.21 as per NAV of 33.7 as on 30.09.23. If we attribute latest earnings of FY22, FY23, TTM and annualised FY24 on fully diluted equity post issue, then asking price is at a P/E of around 56.45, 55.29, 26.29 and 31.24 respectively, which looks fully priced. As per RHP, comparison between listed peers is shown in above table. On BRLM's front, three lead managers are associated with this IPO, and have handled around 10 IPOs in last three fiscals. Monarch Networth Capital Limited : This is 2nd Main Board IPO from this BRLM. From last 1 Main Board IPOs, that opened above issue price on the day of listing. As of now, from last 1 Main Board IPOs, that is trading above issue price.( As on 21.02.2024 ) Unistone Capital Private Limited : This is 7th Main Board IPO from this BRLM and handled 9 SME IPOs in last 3 years. From last 4 Main Board IPOs, all opened above issue price on the day of listing and from last 6 SME IPOs, all opened above issue price. As of now, from last 4 Main Board IPOs, all are trading above issue price and from last 6 SME IPOs, all trading above issue price.( As on 21.02.2024 ) Systematix Corporate Services Limited : This is 4th Main Board IPO from this BRLM. From last 3 Main Board IPOs, one opened below issue price and remaining opened above issue price on the day of listing. As of now, From last 3 Main Board IPOs, all are trading above issue price. ( As on 21.02.2024 ) As per financials, Exicom Tele-Systems Limited has shown good growth, RoNW is 13.38% and P/E is respectively 56.45, 55.29, 26.29 and 31.24 as per FY22, FY23, TTM and annualised FY24 earnings. So, issue looks fairly priced. Company is in business of power management solutions. Performance of BRLMs are 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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