Presstonic Engineering Limited Company manufactures Metro Rail Rolling Stock Products, Metro Rail Signalling Products, Infrastructure Products and supplies to renowned Global and Domestic OEM’s engaged in the Rail and Metro Rail Rolling stock and Signalling equipments manufacturing and servicing companies. Company's manufacturing facility is spread over approx. 28,317.50 sq.ft. situated at Bangalore, Karnataka is equipped with latest machineries, equipment and instruments which is capable of manufacturing of diverse products for Railways and Metros. The manufacturing process includes both through In-house manufacturing and outsourcing model. Through the outsourcing model, they mainly process the following activities i.e. CNC Laser Cutting, Punching, Anodising, Painting etc. In the product manufacturing Stainless Steel Saloon Seats for Metro Coach's Capacity Utilization in FY23, FY22 and FY21 was respectively 59%, 31% and 7%, Aluminium Cable Management Systems for Metro Coach's Capacity Utilization in FY23, FY22 and FY21 was respectively 15%, 12% and 15% and Stainless Steel Grab Pole Systems (Hand Rail, Grab Pole) for Metro Coach's Capacity Utilization in FY23, FY22 and Fy21 was respectively 34%, 8% and 13%. Company is supplying the products to diversified industries along with State Govt. Central Govt. and PSUs. As per financial performance, Presstonic Engineering Limited has posted total income / net profits of Rs 7.69 Cr / Rs (0.16) Cr (FY21), Rs 12.72 Cr / Rs 0.14 Cr (FY22), Rs 21.13 Cr / Rs 2.56 Cr (FY23) and Rs 14.32 Cr / Rs 1.52 Cr (upto Q2 FY24). So as per previous financials data, company has shown good growth, but sudden rise in net profit just before IPO is very surprising. Company has posted an average EPS of Rs 2.91 and average RoNW of 26.92% for last three fiscals. Issue is priced at a P/BV of 1.97 as per NAV of 36.64 as on post issue. 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 394.69, 21.67 and 18.23 respectively, which looks fully priced. Company has order book of Rs 63.89 Cr and new orders worth Rs 4.57 Cr awarded post 01.04.23. As per RHP, comparison between listed peers is shown in above table. On BRLM's front, Finshore Management Services Limited is associated with this SME IPO and handled 22 SME IPOs in last 3 years. From last 10 IPOs, four opened below issue price and remaining opened above issue price or at par on the listing day. As of now from last 10 IPOs, five IPOs are trading below issue price and remaining are trading above issue price. ( As on 07.12.23 ) As per financials, Presstonic Engineering Limited has shown good growth, RoNW is 51.92% and P/E is respectively 394.69, 21.67 and 18.23 as per FY22, FY23 and annualised FY24 earnings. So, issue looks fully priced. Also sudden rise in net-profit and higher issue expenses raises doubts. Company is in business of manufacturing Metro Rail Rolling Stock Products, Metro Rail Signalling Products, Infrastructure Products and supplies to Global and Domestic OEMs. Company has order book of around Rs 64 Cr on 31.03.23. Performance of BRLM is average. 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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