Kaka Industries Limited

As per financial performance, Kaka Industries Limited has posted total income/net profits of Rs 78.79 Cr / Rs 3.03 Cr (FY21), Rs 117.10 Cr / Rs 4.98 Cr (FY22) and Rs 158.88 Cr / Rs 7.19 Cr (FY23), So company has shown good growth. But company has high debt. Company has posted an average EPS of Rs 6.02/- and average RoNW of 38.50% for last three fiscals. Issue is priced at a P/BV of 2.96 as per NAV of Rs 19.57/- as on 31.03.23. As per FY22 earnings on fully diluted equity post issue, asking price is at P/E of around 15.92 and as per FY23 earnings P/E is 11.03. As per RHP, comparison between listed peers are shown in above table. On BRLM's front, Hem Securities Limited is associated with this SME IPO and handled 23 SME IPOs in last 3 years, Last 10 IPOs, All opened above issue price on the listing day. As of now from last 10 IPOs, All are trading above issue price. ( As on 04.07.23 ) As per financials, Kaka Industries Limited has shown average results, RoNW is 36.72% and P/E is respectively 15.92 and 11.03 as per FY22 and FY23 earnings, which looks fairly priced. But company's debt is increasing and for growth company will require more debt as company required to maintain. Company is in business of polymer based profile manufacturing, which is highly competitive and fragmented. This sector is expected to do well in next 3-5 years. Performance of BRLM is good. So we are giving SUBSCRIBE rating to this SME IPO, readers must consult a qualified financial advisor prior to making any actual investment decisions.

• 1 Rajesh Dhirubhai Gondaliya
• 2 Bhavin Rajeshbhai Gondaliya
• 3 Rajeshkumar Dhirubhai Gondaliya (HUF)