Started in 2009, Kaarya Facilities & Services Ltd is a leading integrated Facilities and Property Management company. They provide their services to corporate, SMEs, Government institutions and Residential Segments. They offer specialized Cleaning and Hygiene services, Housekeeping, Pantry, MEP (Mechanical, Electrical, Handyman services - repair & maintenance), Pest Control, Landscaping, Guest House management to Facade cleaning. Currently majority of its revenues comes from deployment of personnel for soft services comprising of housekeeping services, help desk management, office administration executives, and pantry & steward services. KFSL gradually also developing into suppliers of all aspects of building maintenance and operations services including technical services & other hard services such as tank cleaning, pest control, contracts management & more. They also work towards women empowerment and employment of disable people wherever it is possible and client is alsoagreeable. On performance front, KFSL has posted turnover/net profits of Rs. 4.48 cr. / Rs. 0.01 cr. (FY14), Rs. 8.08 cr. / Rs. 0.15 cr. (FY15), Rs. 8.41 cr. / Rs. 0.19 cr. (FY16) and Rs. 10.67 cr. / Rs. 0.57 cr. (FY17). For four months ended on 31.07.17 of the current fiscal, it has reported net profit of Rs. 0.26 cr. on a turnover of Rs. 2.88 cr. Thus while it scaled up bottom lines on static top line for FY14 to 16, sudden rise in its top and bottom line for FY17 is surprising. It has posted an average EPS of Rs. 1.78 and average RoNW of 20.56% for last three fiscals (on a paid up equity capital of Rs. 0.11 crore. Issue is priced at a P/BV of 3.24. If we annualize latest earnings of FY18 and attribute it on fully diluted equity post issue, then asking price is at a P/E of 23 plus. As per offer documents, it has no listed peers to compare with. Issue appears to have been fully priced. On merchant banker’s front, this is 14th mandate from its stable in last three fiscals. Out of recent 10 listings, 5 opened at discount to offer price, 1 at par and the rest giving 1 to 40% premium to offer price. As per financials, company's top line is almost same for FY14 to FY16 and bottom line is increasing, also there is sudden jump in bottom line is surprising for FY17, RoNW is 20.56% for last three fiscals and issue is fully priced. So we give NEUTRAL rating to this SME IPO.
✍️ Post a Comment