Kody Technolab Limited

As per financial performance, Kody Technolab Limited has posted total income/net profits of Rs 15.73 Cr / Rs 0.68 Cr (FY21), Rs 21.17 Cr / Rs 1.55 Cr (FY22) and Rs 29.18 Cr / Rs 3.56 Cr (FY23), So company has shown good results, but sudden rise in bottom-line before IPO is very surprising. Also trade receivables are more than 50%. Company has posted an average EPS of Rs 10.55/- and average RoNW of 13.51% for last three fiscals. Issue is priced at a P/BV of 3.22 as per NAV of Rs 49.76/- as on post issue. As per FY22 earnings on fully diluted equity post issue, asking price is at P/E of around 164.22 and as per FY23 earnings P/E is 32.07. As per RHP, comparison between peers is shown in above table. On BRLM's front, Beeline Capital Advisors Private Limited is associated with this SME IPO and handled 14 SME IPOs in last 3 years. From last 10 IPO, all are opened above issue price on the listing day. As of now from last 10 IPO, one is trading below issue price and remaining are trading above issue price. ( As on 12.09.23 ) As per financials, Kody Technolab Limited has shown good growth, RoNW is 67.77% and P/E is respectively 164.22 and 32.07 as per FY22 and FY23 earnings. As per FY22 and FY23 earnings issue looks aggressively priced. Also sudden rise in net profit just before IPO and more than 50% trade receivables generates doubts. Company is in business of software development, which is highly fragmented and competitive segment. Performance of BRLM is very good. So we are giving AVOID rating to this SME IPO. Readers must consult a qualified financial advisor prior to making any actual investment decisions.

• 1  Mr. Manav Subhashchandra Patel
• 2 Mrs. Manali Krunal Patel
• 3 Mrs. Pooja Sunny Patel