Started in 2011, Gujarat based Jinaam's Dress Limited is a manufacturer, distributor and supplier of Indian fusion and ethnic apparels for women. It has a PAN India presence through distribution network across 19 states and 4 UTs in the country. The company focuses on new designs considering current market trends. Retail Market:Lately, the company has entered the retail market with the help of a retail outlet in Gujarat. To improve retail presence, it tied-up with Mandola e-Trade Pvt Ltd to use its e-commerce platform for online marketing and selling women apparels.. Net Profit:From FY 2015-16 to FY 2017-18, the net profit of the company was improved from Rs 2.13 Cr to Rs 7.82 Cr on the restated financial statement basis at CAGR of 54.14% Manufacturing Unit:It has a manufacturing unit producing 5,00,000 meters/month capacity for apparel material. The manufacturing process of the company includes dying, cutting, embroidery, printing, stitching, sewing, finishing, and packing. Products:The company offers a wide range of Indian ethnic and fusion apparel for women such as sarees, dupatta, kurti, lehenga-choli, and scarfs. From casual wear to party wear for the woman, it provides different products in different fabrics (such as wool, silk, velvet, crepe, georgette, cotton and chiffon). Brand Portfolio:The company has a brand portfolio which includes FORMM, TIARAA, ZAREEN, ASMIRA, ROMA, BAHNI, HEROINE, FLORAL CREATION and JINAAM. International Presence:The company also exports fabrics to different countries namely Nepal, UK, Afghanistan, Mauritius, and Dubai through international dealers and merchants.: Future prospects for the company are: 1. Enhance retail presence2. Increase Brand awareness3. Venture into Home furnishing4. Take corrective measure5. Increase customer base by expanding distribution reach The competitive strengths of the company are: 1. Innovative product designs2. Diversified Product Portfolio 3. In-house Manufacturing facility On the financial performance front, Northern has posted turnover/net profits of Rs. 136.49 cr. / Rs. 2.14 cr. (FY16), Rs. Rs. 135.02 cr. / Rs. 2.88 cr. (FY17), Rs. 154.25 cr. / Rs. 7.82 cr. (FY18). For the H1 of FY19, it has earned a net profit of Rs. 4.17 cr. on a turnover of Rs. 95.24 cr. Since FY17, company has seen exponential rise in top-line and bottom-line. Trade receivables for company in FY18 is around 8.30 Cr which is around 32% of total income. Jinaam's has posted an average EPS of Rs. 3.52 and an average RoNW of 18.62%. The issue is priced at a P/BV of 2.14 on the basis of its NAV of Rs. 27.60 as on 30.09.18 and at a P/BV of 1.54 on the basis of post issue NAV of Rs 38.17 post issue. If we annualise latest earnings and attribute it on fully diluted post issue equity, then asking price is at a P/E of around 15.76 thus issue appears fully priced and if we take FY18 earnings, then P/E is around 16.80. Comparison with listed peers is given in above table. On BRLM's front, for Finshore Management Services Limited this is the 11th SME IPO. From last 10 IPOs, 4 opened below issue price and remaining above issue price with listing gains around 1% - 20% listing gains. Currently from last 10 IPOs, 5 are trading below issue price and remaining above issue price. ( As on 06.04.19 ) Company has shown good results, RoNW is 18.62% and issue looks fully priced with respect to current earnings with P/E of 15.76. As per the latest result trends, it's expected this rising trend will continue as retail industry is growing at good rate, but there will be very tough competition from organised and unorganised sector. Also, performance of BRLM is poor. So we give NEUTRAL rating to this SME IPO.
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