Started in 2014, Mumbai based Milestone Furniture Limited is engaged in the business of manufacturing and marketing of Interior and Modular Furniture business. Company has developed expertise in Space & work station Management, designing and innovation in Furniture used in Education, Healthcare and Corporate organisation. Company has successfully executed turnkey projects for design, supply and implementation of Interiors and Modular furniture in Education, healthcare and corporate organisation. Company has regular business from existing clients such as Poddar International School, Architect and Contractors. Its products are the ready to use and provide space management and primarily targeted to clients in Education, healthcare, hospitality, banking, insurance and Info tech companies. MFL has well established and high tech manufacturing equipments and Design facility to manufacture the various combination and size products as per the specification and design of client. Company's facility is located at Saki Naka, Mumbai. The Company currently has 70 employees on its payroll. As per financial performance, MFL has posted total revenue/net profits of Rs. 0.38 cr. / Rs. 0.03 cr. (FY14), Rs. 3.32 cr. / Rs. 0.05 cr. (FY15), Rs. 5.52 cr. / Rs. 0.20 cr. (FY16) and Rs. 8.95 cr. / Rs. 0.33 cr. (FY17). For the period ended on 30.11.17 of FY18, it has earned net profit of Rs. 0.80 cr. on a turnover of Rs. 23.72 cr. So its very high jump in top-line and bottom-line, which is very surprising. Issue is priced at a P/BV of 2.96 on the basis of its NAV of Rs. 15.20 as on 30.11.17. For last three fiscals it has posted an average EPS of Rs. 122.30 and an average RoNW of 44.67% which appears was on an equity base of Rs. 0.01 cr. for FY14 to FY16 and Rs. 3.00 cr. for FY17 and is not considered on fully diluted basis. However, if we annualise latest earnings and attribute it on fully diluted equity post issue then asking price is at a P/E of around 34 against industry composite P/E of 20. As per offer documents it is showing Nilkamal, PIL Italica and Omfurn as its listed peers that are trading at a P/E of around 21, 37 and 8 respectively. So, issue is very aggressively priced. On merchant banker's front, this is the 6th IPO and out of last 5 listings, 1 opened at par, three with 1.4% to 5% and one with 45% premium on the day of listing. 45% premium on opening day was marked by VCU Data which is currently trading at a discount of around 38%. As per financials, company's performance is good, but there is sudden jump in FY18 income and net profit, RoNW is 44.67% for last three fiscals and issue is very aggressively priced as per latest earnings. So, we give AVOID rating to this SME IPO.
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