Macfos Limited is primarily an e-commerce based Company focused on the marketing of a broad range of electronic components which finds application in basic and advanced engineering products & projects, including emerging technologies such as IoT, Robotics, Automations, Drone, Electric Vehicles, 3D Printing and Auto Guided Vehicles. Their broad portfolio consists of over +12,000 SKU’s of electronics components and parts that facilitate consumers such as manufacturers, electrical & mechanical engineering students, educational institutions, researchers and developers, to turn their ideas into reality as well as to speed up their product R&D and prototyping cycle. Through the e-commerce website and mobile application, Robu.in, they sell a broad range of electronic items, including robotic parts, drone parts, E-bike parts, IoT & Wireless items, 3d printer & parts, DIY learning kits, development boards, raspberry Pi (Single board computers & Peripherals), sensors, motors, motor drivers, pumps, batteries, chargers, electronic modules & displays and various other mechanical and electronic components. As on September 30, 2022, they are connected with over +140 overseas and domestic vendors for sourcing the electronic items and parts. They also have a portfolio of 3 owned brands ( SmartElex, Orange, Easymech ), which are manufactured/procured from third parties based on the specifications through the R&D efforts. With the dedicated fulfillment Centre in Pune, Maharashtra comprising of 7,900 sq. ft. area and third-party logistics services, they are capable to deliver the products across India as well as overseas. In F.Y. 2021-22, they have served over 2 lakh orders from all the 28 states of India and 6 Union Territories of Bharat. For F.Y. 2021-22, company's revenue from operations were Rs. 5551.47 lakhs of which 62.59% were from online mode (website and mobile application) and 37.41% were through offline channel. For six months period ended September 22, they derived 51.47% of the revenue from online mode (website and mobile application) and 48.53% through offline channel. Under the offline channel, they generally serve Corporates and large enterprises. Some of the esteemed customers which have been served by them include ONGC, M&M, Hindustan Aeronautics Ltd., Tata Power Solar Systems Ltd., Central Electronics Engineering Research Institute, Pilani, Wipro Enterprises Pvt. Ltd., Bharat Forge Ltd., Tata Communications Ltd., Schneider Electric India Private Limited etc. As on November 30, 2022, the Company has employed 94 employees at various levels of the Organization. Additionally, as November 30, 2022, they also utilized the services of 38 persons engaged as contract labour. As per financial performance, Macfos Limited has posted total income/net profits of Rs 16.22 Cr / Rs 0.32 Cr (FY20), Rs 27.33 Cr / Rs 1.58 Cr (FY21), Rs 55.87 Cr / Rs 6.01 Cr (FY22) and Rs 36.05 Cr / Rs 2.95 Cr (upto H1 FY23). So company has shown exceptional results. Company has posted an average EPS of Rs 4.07 and average RoNW of 60.41% for last three fiscals. Issue is priced at a P/B of 7.46 as per NAV of Rs 13.67 post issue. As per FY22 earnings on fully diluted equity post issue, asking price is at P/E of around 14.99 and as per annualised FY23 earnings P/E is 15.10. As per RHP, there are no listed peers. On BRLM's front, Hem Securities Limited associated with this SME IPO and handled 19 SME IPOs in last 3 years. From last 10 SME IPOs opened above issue price or at per on the listing day. As of now from last 10 IPOs, one are trading below and remaining are trading above issue price or at par. ( As on 13.02.2023 ) As per financials Macfos Limited has shown average results, RoNW is 65.93% and P/E is respectively 14.99 and 15.10 as per FY22 and annualised FY23 earnings, which looks fairly priced. Company has shown exceptional results in IPO year and it may be difficult to maintain same margins in future. Company is in marketing of electronic components, which is high growth sector. Performance of BRLM is very good. So we are giving SUBSCRIBE rating to this IPO for listing gains.
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