Started in 2012, Felix Industries Ltd is Ahmedabad Gujarat based environmental conservation company with a vision of 'Recycle-Reuse-Recover-Reduce'. The business segments of the company include Water and Waste Water Recycling, Industrial Piping, Nano Products (Membrane Technologies) and E-waste Recycling. Felix through its water treatment division provides its services to industries such as steel, chemical, pharmaceutical, plastic, paper & pulp, leather, automotive, textile & dyes, food and dairy etc. FIL during FY12, was appointed as an authorized distributor and marketing associate of Astral Poly Technik Ltd for its industrial piping sales. Further during same year it also entered into a tie-up with an MNC name The Aliaxis Group to market and distributes their Thermoplastic products with the exclusivity of distributing the products in entire state of Gujarat. Through this division, company provides a range of thermo-plastic pipes, fittings & valves and also provides end-to-end service right from selection of pipes to design, supply and installation. Felix is a government approved e-waste recycling company with a processing capacity of 6000 MT per year and it also has one of the largest recycling capacities in India. The E-Waste collected from pan India is processed at the company‘s plant located at Electronic Estate, Gandhinagar where activities like e-waste collection, storage, dismantling and segregation takes place. The Go-Green concept of Felix Industries magnifies the basic idea of recycling the industrial effluent and reusing it, which provides maximum recovery and thus reduces the discharge of the waste water. On performance front, FIL has posted turnover/net profits of Rs. 4.13 cr. / Rs. 0.05 cr. (FY14), Rs. 2.92 cr. / Rs. 0.04 cr. (FY15), Rs. 3.29 cr. / Rs. 0.11 cr. (FY16) and Rs. 5.19 cr. / Rs. 0.17 cr. (FY17). For first seven months period ended on 31.10.17 of the current fiscal, it has posted net profit of Rs. 0.23 crore on a turnover of Rs. 3.46 crore. First seven months performance is rather surprising. For last two fiscals, it has posted an average EPS of Rs. 2.81 and average RoNW of 14.47%. Issue is priced at a P/BV of 3.19 on the basis of NAV as on 31.10.17. If we annualize latest earnings and attribute it on fully diluted equity post issue, then asking price is at a P/E of around 45 against peers trading at a P/E ranging from 22 to 50. Thus issue is aggressively priced. On merchant banker’s front, this is the 5th mandate from its stable since 2012-13 and out of last 4 listings 1 opened at par, two with a premium ranging from 4 to 5% and one at 45% premium on the day of listing. As per financials, company's growth is good (if we ignore FY14 data), RoNW is 14.47% for last three fiscals and issue is aggressively priced as per latest earnings. Performance of FY18 upto 31.10.17 is surprisingly high. Company is working in segment of environmental conservation which looks very promising as whole World is very much concerned about environmental issues and same thing is started in India also, so we give NEUTRAL rating to this SME IPO.
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