Manoj Ceramic Limited

Manoj Ceramic Limited (MCL) is into the business of trading of ceramic tiles and Tiles Adhesive under their own brand 'MCPL' through dealer network, Retail showroom, wholesale as B2B and export. MCL is in to the business since 1991 in the names and styles of ‘Manoj and Company’, ‘Manoj And Company Trading Private Limited’, ‘Manoj Ceramic Private Limited’ in the beginning of the year 2019, the company transitioned from a private limited into a public limited company under the name and style ‘Manoj Ceramic Limited’, as certified vide certificate of incorporation dated January 22, 2019. The Company has also been allotted an Importer-Exporter Code in pursuance of which the Company has also explored the market for exporting tiles to states such as Vancouver in Canada and London in United Kingdom. At present the company has a dealer network of in Western and Southern region of India mainly Maharashtra, Goa, Tamil Nadu, and Karnataka. They provide the goods to dealer for display at their showroom and as a customer visits the store and expresses interest in a particular product, the showroom owner then places an order with the Company for the exact quantity required by the customer. To make the presence in the retail market, they have established the retail showroom at strategic location of Mumbai and Bangalore i.e. Mumbai at Ghatkopar, Andheri, and at Bangalore in Raja Rajeshwari Nagar. As per financial performance, Manoj Ceramic Limited has posted total income / net profits of Rs 37.30 Cr / Rs 0.08 Cr (FY21), Rs 44.99 Cr / Rs 0.94 Cr (FY22), Rs 74.93 Cr / Rs 3.62 Cr (FY23) and Rs 43.74 Cr / Rs 3.02 Cr (upto Q2 FY24). So as per previous financials data, company has shown good growth, but sudden rise in net-profit is very surprising. Company has posted an average EPS of Rs 3.57 and average RoNW of 17.32% for last three fiscals. Issue is priced at a P/BV of 1.69 as per NAV of Rs 36.68 as on post issue. If we attribute latest earnings of FY22, FY23 and annualised FY24 earnings on fully diluted equity post issue, then asking price is at a P/E of around 54.68, 14.26 and 8.56 respectively, which looks fairly priced. As per RHP, comparison between listed peers is shown in above table. On BRLM's front, Swaraj Shares and Securities Private Limited is associated with this IPO and handled 4 SME IPOs in last 2 years. From last 4 IPOs, one opened below issue price and remaining opened above issue price or at par on the day of listing. As of now from last 4 IPOs, one is trading below issue price and remaining are trading above issue price. ( As on 26.12.23 ) As per financials, Manoj Ceramic Limited has shown good growth, RoNW is 27.67% and P/E is respectively 54.68, 14.26 and 8.56 as per FY22, FY23 and annualised FY24. So, issue looks fairly priced. But sudden rise in net profit just before IPO and higher issue expenses raises doubts. Company is in business of trading of ceramic tiles and tiles adhesive, which is highly competitive and fragmented segment. Performance of BRLM is good. So, we give NEUTRAL rating for this IPO. Readers must consult a qualified financial advisor prior to making any actual investment decisions.

• 1 Mr. Manoj Dharamshi Rakhasiya
• 2 Mrs. Anjana Manoj Rakhasiya
• 3 Mr. Dhruv Manoj Rakhasiya
• 4 Mr.Akash Manoj Rakhasiya
• 5 Mrs. Manasvi Dhruv Rakhasiya
• 6 Manoj D Rakhasiya HUF