Globesecure Technologies Limited

Globesecure Technologies Limited is a digital transformation company in Bharat with a focus on cyber security. Company has executed several cyber security transformation projects, infrastructure, and digital transformation projects for various institutions and also provide similar independent services to the clients. Through the wide range of offerings across multiple verticals, they possess capabilities spanning the digital lifecycle of services ranging from consultation, architecture, solution design, and implementation, to monitoring and providing managed services. Company classifies the business into the following lines of business: (i) Cyber Security, (ii) Integrated Enterprise Solutions, and (iii) Managed Services.For Cyber Security company provides Managed Security Services, Managed Detection and Response (MDR) Services, Cloud Security Services, Data Protection Services, End Point Security, Email Security and Office 360 Security. For Integrated Enterprise Solutions company provides Cyber Security Solutioning, Information Audit Services, etc. Managed IT services, or outsourced IT, company provides infrastructure, IT, and other technical support to organizations. As per financial performance, GSTL has posted total income/net profits of Rs 10.43 Cr / Rs 0.61 Cr (FY19), Rs 19.24 Cr / Rs 0.12 Cr (FY20), Rs 19.23 Cr / Rs 1 Cr (FY21) and Rs 11.17 Cr / Rs 1.11 Cr (9M FY22). So company has shown growth in top-line, but bottom-line remained zig-zag and sudden rise in profit raises doubts. Company has posted an average EPS of Rs 1.28 and average RoNW of 9.59% for last three fiscals. Issue is priced at a P/B of 1.32 as per NAV of Rs 22.04 post issue. As per FY21 earnings on fully diluted equity post issue, asking price is at P/E of around 26 and as per annualised FY22 earnings P/E is 18. As per RHP, there are no listed peers.     On BRLM's front, Fast Track Finsec Private Limited associated with this SME IPO and not handled any IPOs in last 3 years. ( As on 17.05.22 ) As per financials Globesecure Technologies Limited, has shown zig-zag results, RoNW is 13.55% and P/E is respectively 26 and 18 as per FY21 and annualised FY22 earnings, which looks fully priced. But sudden rise in profit raises doubts. This business segment of digital transformation is highly competitive with huge opportunities. so we are giving AVOID rating to this IPO.

• 1 Mr. Ragavan Rajkumar
• 2 Mr. Saravanan Narayanasamy