Prevest Denpro Limited, started in 1999 at Jammu & Kashmir, develops, manufactures and markets a comprehensive portfolio of dental materials for diagnosing, treating and preventing dental conditions as well as improving the aesthetics of the human smile. The breadth and depth of the product offerings address majority of the dentists' clinical needs for consumable dental materials. The product portfolio covers a wide spectrum of materials for endodontics, prosthodontics, orthodontics, periodontics, restorative dentistry, aesthetic dentistry and laboratory consumables. In FY21, they generated total sales of Rs. 27.44 Cr, of which approximately 60.24% sales were from markets outside India. The products are sold in over 75 countries in the regions of Europe, Asia, South America, Middle East and Africa. The manufacturing facility is located at Kartholi, Samba (Jammu & Kashmir), comprising of over 27,000 sq. ft. area and has an installed capacity of 200 MT p.a. for manufacturing of dental materials. Further, as per the diversification plans, they are currently expanding the existing manufacturing unit by setting up another manufacturing facility in over 16,000 sq. ft. area adjacent to the existing unit for manufacturing new line of products that will include hygiene products (sanitisers and disinfectants), oral hygiene products (mouth washes and mouth rinses), oral care products (medicated ointments, gels and creams for dental treatment) and bio-materials (i.e. bone augmentation materials). The proposed facility will be well-equipped with latest machineries and will be commissioned in Fiscal 2022. As on date, Prevest Denpro has collaboration with five reputed dental universities and institutions of India for exchange of technical knowledge and conducting training & research on dental materials. Also, they have entered into licence agreement with Sree Chitra Tirunal Institute for Medical Sciences & Technology, Trivandrum for obtaining the know-how and rights to enable them to manufacture bioactive bone cement based on calcium sulfate and calcium phospho-silicate composite (HA-BG) Granules. Prevest Denpro Limited has posted turnover/net profits (loss) of Rs.19.77 Cr. / 2.99 Cr. (FY19), Rs. 24.56 Cr. / 5.01 Cr. (FY20), Rs 29.51 Cr. / Rs. 7.43 Cr. (FY21). So company has shown good results consistently. For the last three years, company has posted average EPS of Rs. 6.67 and RoNW of 32.11%. The issue is priced at a P/BV of 3.26 based on its NAVs of Rs. 25.74 on 31.03.21. As per FY20 earnings and on post issue equity, IPO is valued at P/E of around 20.13 and for FY21 earnings, PE of around 13.55 which looks fully priced. Comparison between listed peers is shown in above table, but they are not strictly comparable. On BRLM's front, GRETEX CORPORATE SERVICES LIMITED associated with this SME IPO and handled 10 IPOs in last 3 years. From last 10 IPOs, one opened below issue price and remaining above or on issue price. As of now from 10 IPOs, one is trading below issue price and remaining are trading above issue price. ( As on 13.09.21 ) For Prevest Denpro Limited results are good, RoNW is 32.71%, P/E is around 13.55 for FY21, so issue looks fairly priced. But in this challenging time such result raises concerns and if company may maintain same margins in future is very important. Performance of BRLM is good. So we give NEUTRAL rating to this SME IPO.
✍️ Post a Comment