Purple United Sales Limited

As per financial performance, Purple United Sales Limited has posted total income / net profits of Rs 16.56 Cr / Rs 1.77 Cr (FY22), Rs 25.71 Cr / Rs 1.49 Cr (FY23), Rs 42.92 Cr / Rs 4.82 Cr (FY24) and Rs 30.52 Cr / Rs 3.29 Cr (H1 FY24). So as per previous financials data, company has shown good growth, but trade receivables are around 66% of FY24 total income that is very surprising. Company has posted an average EPS of Rs 4.57 and average RoNW of 23.47% for last three fiscals. Issue is priced at a P/BV of 3.73 as per NAV of Rs 33.81/- as on 30.09.24. If we attribute latest earnings of FY23, FY24 and annualized FY25 on fully diluted equity post issue, then asking price is at a P/E of around 81.14, 25.15 and 18.39 respectively, which looks fully priced. As per RHP, comparison between listed peers is shown in above table. On BRLM's front, Expert Global Consultants Private Limited is associated with this SME IPO and handled 13 SME IPOs in last 3 years. From last 10 IPOs, all opened above issue price or at par on the day of listing. As of now from last 10 IPOs, three are trading below issue price and remaining are trading above issue price or at par as on today. ( As on 03.12.24 ) As per financials, Purple United Sales Limited has shown good growth, RoNW is 27.78% and P/E is respectively 81.14, 25.15 and 18.39 as per FY23, FY24 and annualized FY25 earnings. So, issue looks fully priced, but higher trade receivables raises doubts. Company is in business of premium apparel, footwear, and accessories for children of all ages with contract manufacturing, which is highly competitive and fragmented business segment. So, we give NEUTRAL rating for this IPO. Readers must consult a qualified financial advisor prior to making any actual investment decisions.

• 1 Mr. Jatinder Dev Seth
• 2 Mrs. Bhawna Seth
• 3 Mr. Manish Dev Seth
• 4 Mrs. Monica Seth
• 5 InnovationM Mobile and Web Technologies Private Limited