Established in 1996, Marvel Decor Limited, is Jamnagar, Gujarat based company, engaged in design, manufacture and sell wide range of window covering products like Blinds, Curtain Rods and Tracks. MDL is manufacturing of venetian blinds components and supplying it to the company making venetian blinds. It is one of the largest production houses of window covering industry which is producing about 810 components of different type, size and colors as per customer requirement. They make 14 types of blinds and more than 900+ shades. Company sells its products PAN India level under the brand name "Marvel". Marvel started its second manufacturing unit in 2013-14 at Plot No. 211, GIDC Phase II, Dared, Jamnagar, Gujarat. Company also introduced 'Gallery' concept for marketing its blinds, making it a point to be a known brand providing niche range to its channel partners. Today, Marvel has marked its presence nationwide having 338 galleries, in 224 cities of 24 states. In the year 2016-2017, MDL started expanding its second manufacturing unit to Plot No. 210, GIDC PhaseII, Dared, Jamnagar, Gujarat to increase its production capacity with ultra modern machineries. In order to eliminate the time constraint for delivering the products to the clients on/ before committed time frame, Marvel has introduced Market Organizers in 14 strategic locations across the nation who function as a mini factory to Marvel. The operating factories are designed and constructed as per company standards with adequate equipped machineries and are being in a stringent audit on a regular basis with equivalent quality check as per the company norms. Manufacturing of the highly demanded 4 products viz. Roller, Roman, Luzon and Vertical blinds takes place here whereas the semifinished materials are provided from its factory. Marvel specializes in Roller Blinds, Roman Blinds, Vertical blinds, Bamboo Blinds, Wooden Venetian Blinds,Luzon Blinds, Grayson Blinds, Eton Blinds, Patricia Blinds, Aric Blinds, Colby Blinds, Meliso Blinds, DorrenBlinds, Sierra Blinds, Curtain Rods, Automation and Tracks, with the State of the Art technology creating itspresence globally. On financial performance front, MDL has posted turnover/net profits of Rs. 23.63 cr. / Rs. 1.7 cr. (FY13), Rs. 27.74 cr. / Rs. 1.51 cr. (FY14), Rs. 22.41 cr. / Rs. 1.29 cr. (FY15), Rs. 28.80 cr. / Rs. 0.84 cr. (FY16) and Rs. 30.16 cr. / Rs. 1.30 cr. For H1 of 2018, it has reported net profit of Rs. 1.42 cr. on a turnover of Rs. 17.74 cr. So, its top-line has shown upward trends with normal growth rate except FY15, but bottom-line remain zig-zag, and there is sudden jump in bottom-line for H1 of FY18, which is surprising. For last three fiscals it has posted an average EPS of Rs. 0.92 and an average RoNW of 9.67%. Asking price is at a P/BV of 2.5 (on its NAV of Rs. 22.84 post issue). If we annualise latest earnings and attribute it to fully diluted equity post issue, then asking price is at a P/E of around 34. As per offer documents, it has no listed peers. Issue looks priced on higher end as per current market scenario. On the merchant banker's front, this is the 30th IPO in last three fiscals. Out of last 10 listings, 2 opened at discount to offer price, 2 at par, 5 with a premium ranging from 4% to 20% and 1 main board IPO with a premium of 140% on the listing day (Salasar TechnoEngineering Limited). As per financials, company has shown normal growth rate in top-line while bottom-line remain zig-zag, RoNW is 9.67% for last three fiscals and issue looks fully priced as per latest earnings. There is jump in earnings of H1 FY18, which is also surprising. But, company is well placed to generate higher growth in coming years due to its PAN India presence and unique product range with less competition. So, we give NEUTRAL rating to this SME IPO.
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