Started in 1993, Genius Consultants Limited, is one of the leading providers of human resources ('HR') solutions in India. Company caters to manpower requirements of a diverse client base, spanning several industry segments including telecommunications, IT, logistics, infrastructure, engineering, retail, FMCG and pharmaceuticals, among others. As on February 5, 2018 company had over 800 clients with whom they had in place an aggregate of 1,100 contracts. Company provides a broad range of HR solutions to clients, including marquee clients, such as Bharti Airtel, Bosch, Hathway Cable and Datacom ('Hathway'), Tata Consultancy Services ('TCS') and PayTM, among others. Its comprehensive HR solutions covering the life-cycle of the HR solutions value chain include permanent and flexi staffing solutions, payroll processing, compliance management, background checks and verification services, HR management services ('HRMS') and FMS as well as sale of HR software. GCL is focused on providing consultancy services to clients in the sphere of HR solutions, including providing placement opportunities to job seekers and customised solutions to their corporate clients. Company helps corporate clients source middle and senior level personnel through its permanent staffing solutions, while flexi staffing solutions outsource associates on a temporary basis, allowing its clients to focus on core areas of their business and operations. Permanent and flexi staffing solutions, together, contributed to 95.13% and 95.19% of their revenue from operations for the nine months ended December 31, 2017 and fiscal 2017, respectively. Over time, company has diversified into various HR Solutions covering flexi staffing solutions, payroll processing, compliance management, background checks and verification services, HRMS and FMS as well as sale of HR software over a period of 24 years. Company further plans to foray into security services and HR business process outsourcing ('HR BPO'). As of February 5, 2018 they were managing payroll processing for over 90 clients, conducting compliance management for over 100 clients and undertaking background checks for over 230 clients. GCL has a pan-India presence through 15 branch and area offices across 14 states, including its Registered and Corporate Office at Kolkata, covering over 950 locations across the country as on February 5, 2018. They are present across major cities in India, including Kolkata, Delhi, Mumbai, Chennai, Bengaluru and Hyderabad, among others. As on February 5, 2018 they had 392 full time core employees on the payrolls. Further, as on February 5, 2018, 50,057 employees on their payrolls are hired by them as temporary or contract workers to be placed as 'Associates' with their clients under the flexi staffing solutions. As per financial performance, ICFL has posted total income/net profits of Rs. 396.91 cr. / Rs. 112.13 cr. (FY14), Rs. 528.06 cr. / Rs. 149.04 cr. (FY15), Rs. 644.05 cr. / Rs. 191.64 cr. (FY16) and Rs. 719.92 cr. / Rs. 210.80 cr. (FY17). For upto Q3 of FY18, it has reported net profit of Rs. 164.08 cr. on total revenue of Rs. 585.95 cr. So company has posted consistent growth over last couple of years. ICFL has posted an average EPS of Rs. 25.53 and average RoNW of 11.62% for last three fiscals. Issue is priced at a P/BV of 2.17 as per NAV of 263.96 on 31.12.17. If we attribute latest earnings on fully diluted equity post issue, then asking price is at a P/E of around 24. As per RHP, industry average P/E ratio is 28.66 and listed peers comparison shown in above table. So issue looks fully priced. On BRLM's front, five merchant bankers associated with this issue and have handled 58 public issues in the past three years. When we take recent 10 IPOs of each BRLM then out of those 6 issues opened below their offer price and 4 opened at par on listing dates. As per financials, company's growth is consistent and very good, RoNW is 11.62% for last three fiscals and issue is priced at P/E of around 24 as per latest earnings. Company is an NBFC with principal lines of business, namely corporate lending, SME lending, vehicle financing and housing financing. Last two business segments (Vehicle Finance & Housing Finance) are started in recent past and it may give further boost to company's growth, but increasing bond yields and FD rates may put pressure on margins. So we give "SUBSCRIBE FOR LONG TERM" rating to this IPO.
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