Krystal Integrated Services Limited is one of India’s leading integrated facilities management services companies, with a focus on healthcare, education, public administration (state government entities, municipal bodies and other government offices), airports, railways and metro infrastructure, and retail sectors. The range of service offerings include soft services such as housekeeping, sanitation, landscaping and gardening, hard services such as mechanical, electrical and plumbing services, solid, liquid and biomedical waste management, pest control and facade cleaning and other services such as production support, warehouse management and airport management services (including multi-level parking and airport traffic management). They also provide staffing solutions and payroll management to the customers, as well as private security and manned guarding services and catering services. They are a key solutions provider to the government sector and have a track record of executing large contracts and are among select companies in India to qualify for and service large, multi-location government projects. For Fiscals 2021, 2022 and 2023 and six months ended September 30, 2023, the revenue from government contracts amounted to Rs 3,271.12 million, Rs 4,050.85 million, Rs 5,212.75 million and Rs 3,444.33million, respectively, aggregating to 69.41%, 73.30%, 73.66% and 76.27% of the revenue from operations. They provide services to key government customers in the healthcare, education, airport, railways and metro infrastructure sectors, including to Maha Mumbai Metro Operation Corporation Limited and Education Department, Brihanmumbai Municipal Corporation. As of September 30, 2023, They provided the services to 135 hospitals and medical colleges, 228 schools and colleges (other than medical colleges), one airport, four railway stations and 30 metro stations, along with catering 198 services on certain trains/ train routes. They operate on a B2B model. In Fiscals 2021, 2022 and 2023 and six months ended September 30, 2023, they served 262, 277, 326 and 309 customers, respectively. In the same period, the number of customer locations serviced by them has grown from 1,962 as on March 31, 2021, to 2,240 as on March 31, 2022 to 2,427 as on March 31, 2023 and 2,160 as on September 30, 2023. During Fiscals 2021, 2022 and 2023 and six months ended September 30, 2023, they on boarded 76, 70, 89 and 57 new customers, respectively. Four of the top 10 customers, based on revenue generated in Fiscal 2023, have been associated with them for longer than 10 years. For the six months ended September 30, 2023, three customers (who have been associated with them for longer than 10 years) contributed to 17.06% of the revenue from operations. As on September 30, 2023, they serviced customer locations in 16 states and two union territories in India. They have also set up 21 branch offices across India, as on September 30, 2023, to expand the geographical reach. The wide geographic presence enables them to offer services to customers who prefer a single service provider for their operations at multiple locations. They believe that locating the branches in proximity to the customer premises also results in greater focus on, and attention to, the customers as well as higher quality and customized service delivery. As per financial performance, Krystal Integrated Services Limited has posted total income / net profits of Rs 474.31 Cr / Rs 16.82 Cr (FY21), Rs 554.86 Cr / Rs 26.27 Cr (FY22), Rs 710.97 Cr / Rs 38.44 Cr (FY23) and Rs 455.67 Cr / Rs 20.58 Cr (Q2 FY24). So as per previous financials data, company has shown good growth. Company has an average EPS of Rs 26.64 and average RoNW of 19.17% for last three fiscals. Issue is priced at a P/BV of 4.49 as per NAV of 159.39 as on 30.09.23. If we attribute latest earnings of FY22, FY23 and annualised FY24 on fully diluted equity post issue, then asking price is at a P/E of around 38.02, 25.99 and 24.27 respectively, which looks fully priced. As per RHP, comparison between listed peers is shown in above table. Inga Ventures Private Limited: This is 2nd Main Board IPO from this BRLM. From last 1 Main Board IPOs, that opened above issue price on the day of listing. As of now, from last 1 Main Board IPOs, that is trading above issue price.( As on 06.03.2024 ) As per financials, Krystal Integrated Services Limited has shown good results, RoNW is 23.53% and P/E is respectively 38.02, 25.99 and 24.27 as per FY22, FY23 and annualised FY24 earnings. So, issue looks fully priced compared to peers. Company is in business of integrated facilities management services, which is highly competitive and fragmented segment. So, we give NEUTRAL rating for this IPO. Readers must consult a qualified financial advisor prior to making any actual investment decisions.
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