Marco Cables & Conductors Limited

As per financial performance, Marco Cables & Conductors Limited has posted total income/net profits of Rs 42.82 Cr / Rs 0.12 Cr (FY21) and Rs 56.65 Cr / Rs 0.33 Cr (FY22) and Rs 56.93 Cr / Rs 2.80 Cr (FY23), So company has shown average results, but sudden rise in bottom-line before IPO is very surprising. Also trade receivables are around 50% of FY23 total revenue. Company has posted an average EPS of Rs 0.97/- and average RoNW of 10.40% for last three fiscals. Issue is priced at a P/BV of 2.78 as per NAV of Rs 12.93/- as on Post issue. As per FY22 earnings on fully diluted equity post issue, asking price is at P/E of around 201.55 and as per FY23 earnings P/E is 23.98, which looks aggressively priced. As per RHP, comparison between peers is shown in above table. On BRLM's  front, Shreni Shares Limited is associated with this SME IPO and handled 20 SME IPOs in last 3 years. From last 10 IPOs, one opened below issue price and remaining opened at par or above issue price on the listing day. As of now from last 10 IPOs, all are trading above issue price. ( As on 18.09.23 ) As per financials, Marco Cables & Conductors Limited has shown average results, RoNW is 17.98% and P/E is respectively 201.55 and 23.98 as per FY22 and FY23 earnings. As per FY22 earnings issue looks very aggressively priced and as per FY23 earnings issue looks fully priced. Also sudden rise in net profit and higher value of trade receivables are very surprising. Company is in business of manufacturing and selling wires, cable wires, and conductors in Bharat, which is highly fragmented and competitive segment. Performance of BRLM is very good. So we are giving NEUTRAL rating to this SME IPO. Readers must consult a qualified financial advisor prior to making any actual investment decisions.

• 1  Mr. Sumit Sugnomal Kukreja
• 2  Mr. Sugnomal Mangandas Kukreja
• 3  Ms. Komal Sumit Kukreja