Garuda Construction and Engineering Limited

As per financial performance, Garuda Construction and Engineering Limited has posted total income / net profits of Rs 77.03 Cr / Rs 18.78 Cr (FY22), Rs 161.02 Cr / 40.79 Cr (FY23), Rs 154.47 Cr / Rs 36.44 Cr (FY24) and Rs 11.88 Cr / 3.5 Cr (30.04.24 FY25). So as per previous financials data, company has shown inconsistent results and trade receivables is higher than total sales of FY24.  Also, the order book as on RHP date is Rs 1,408.27 Cr. Company has an average EPS of Rs 4.67 and average RoNW of 39.26% for last three fiscals. Issue is priced at a P/BV of 5.8 as per NAV of Rs 16.39/- as on 30.04.24. If we attribute latest earnings of FY23, FY24 and annualised FY25, then asking price is at a P/E of around 21.67, 24.26 and 21.03 respectively. As per RHP, comparison between listed peers is shown in above table. On BRLM's front, one lead managers are associated with this IPO, and have handled around 2 IPOs in last three fiscals. Corpwis Advisors Private Limited: This is 3rd IPO from this BRLM. From last 2 IPOs, all opened above issue price or at par on the day of listing. As of now, from last 2 IPOs, one is trading below issue price and remaining are trading above issue price. (As on 05.10.24) As per financials, Garuda Construction and Engineering Limited has shown inconsistent results, RoNW is 30.62% and P/E is 21.67, 24.26 and 21.03 respectively as per FY23, FY24, and annualised FY24 earnings. So, issue looks fully priced as compared to listed peers and order book is also very strong. Company is in business of end-to-end civil construction business, which is very competitive and fragmented business segment. So, we give NEUTRAL rating for this IPO. Readers must consult a qualified financial advisor prior to making any actual investment decisions.

• 1  Saurabh Vidyadhar Gadgil
• 2  Radhika Saurabh Gadgil
• 3 SVG Business Trust