Platinum Industries Limited is a multi-product company engaged in the business of manufacturing stabilizers. The business segment includes PVC stabilizers, CPVC additives and lubricants. They operate in the speciality chemicals industry. The products find their application in PVC pipes, PVC profiles, PVC fittings, electrical wires and cables, SPC floor tiles, Rigid PVC foam boards, packaging materials, etc. They are the third largest player of PVC stabilizer in terms of sales with an ~13.00% market share for the financial year 2022-23 in the domestic market. Amongst the considered peers in the industry, the Company has in the fiscal 2023 recorded the highest Revenue CAGR (FY20- FY23) of 48.8%, Gross profit increased with a CAGR of 92.4%, EBITDA margin of 145.5%, PAT margin of 185.60%, respectively. The gross margin improved significantly between fiscals 2020 and 2023, from 15.6% to 37.5%, thereby recording the highest gross margin vis-à-vis all peers in fiscal 2023. PVC stabilizers are chemical additives used in the production of polyvinyl chloride (PVC) based products to enhance the performance and durability of PVC. The Manufacturing Facility is located at Palghar, Maharashtra which is spread across an aggregate parcel of land admeasuring about 21,000 sq. ft. (“Manufacturing Facility”). The Manufacturing Facility has obtained ISO 9001:2015 certification for quality management systems. The Manufacturing Facility which is strategically situated in close proximity to JNPT (Nhava Sheva) Port, Maharashtra (JNPT) from where they receive the supply of imported raw materials as well as export out finished goods to the international market. The business model is aimed at consistently expanding the product portfolio by introducing new products to cater to multiple end-use applications. With strict focus on product quality and good track record in the distributor network, they have an established brand image which helps in penetrating new product categories. Company, through the subsidiary Platinum Stabilizers Egypt LLC, intend to establish a project in Egypt, which shall be spread over an aggregate parcel of land admeasuring about 10,000 sq. mtrs ('Proposed Facility 1(Egypt)') and shall venture into manufacturing of PVC stabilizers (both lead based and non-lead based). Further, they are in a process of setting up a new manufacturing facility at Palghar, Maharashtra which shall be spread across an aggregate parcel of land admeasuring about 14,800 sq. mts. ('Proposed Facility 2(Palghar)') which shall be used to manufacture of PVC stabilizers (non-lead based). As per financial performance, Platinum Industries Limited has posted total income / net profits of Rs 89.53 Cr / Rs 4.82 Cr (FY21), Rs 189.24 Cr / Rs 17.75 Cr (FY22), Rs 232.56 Cr / Rs 37.58 Cr (FY23) and Rs 123.73 Cr / Rs 22.84 Cr (Q2 FY24). So as per previous financials data, company has shown growth, but decline in net-profit in FY23. Company has an average EPS of Rs 6.39 and average RoNW of 75.06% for last three fiscals. Issue is priced at a P/BV of 8.09 as per NAV of 21.13 as on 30.09.23. If we attribute latest earnings of FY22, FY23 and annualised FY24 on fully diluted equity post issue, then asking price is at a P/E of around 52.92, 24.99 and 20.57 respectively, which looks fully priced. As per RHP, comparison between listed peers is shown in above table. Unistone Capital Private Limited : This is 7th Main Board IPO from this BRLM and handled 9 SME IPOs in last 3 years. From last 4 Main Board IPOs, all opened above issue price on the day of listing and from last 6 SME IPOs, all opened above issue price. As of now, from last 4 Main Board IPOs, all are trading above issue price and from last 6 SME IPOs, all trading above issue price.( As on 21.02.2024 ) As per financials, Platinum Industries Limited has shown good growth, RoNW is 61.26% and P/E is respectively 52.92, 24.99 and 20.57 as per FY22, FY23 and annualised FY24 earnings. So, issue looks fairly priced. Company is engaged in the business of manufacturing stabilizers. Performance of BRLM is good. So, we give SUBSCRIBE rating for this IPO. Readers must consult a qualified financial advisor prior to making any actual investment decisions.
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