Quality Power Electrical Equipments Limited

Dr. Agarwal's Health Care Limited provides a comprehensive range of eye care services, including cataract, refractive and other surgeries; consultations, diagnoses and non-surgical treatments; and sell opticals, contact lenses and accessories, and eye care related pharmaceutical products. They had a market share of approximately 25% of the total eye care service chain market in India during the FY 24. As of September 30, 2024, they have a network of 209 Facilities. 737 doctors served the patients across the Facilities as of September 30, 2024, and during the Financial Year 2024, they served 2.13 million patients and performed 220,523 surgeries. They served 1.15 million patients and performed 1,40,787 surgeries during the six months ended September 30, 2024. They categorize the Facilities as Primary Facilities (which are non-surgical eye care facilities); Secondary Facilities (which are surgical Facilities); and Tertiary Facilities (which are super-specialty surgical Facilities and include three centres of excellence - COEs), depending upon the nature of services provided. The business operations are structured as a 'hub and spoke' model. As of September 30, 2024, the network in India includes 28 'hubs' and 165 'spokes'. So, they have 193 Facilities in India spanning 14 states and 4 union territories. The Primary Facilities provide initial eye care diagnosis and clinical investigation services. The Secondary Facilities at the spokes provide select services including cataract surgeries and clinical investigations while the Tertiary Facilities have super-specialty surgical capabilities including retinal, corneal, and refractive surgeries. The COEs, in addition to being Tertiary Facilities, also offer academic programs in ophthalmology and provide continuous training for their doctors, optometrists, and counsellors, among others. Company commenced the international operations in 2012 and as of September 30, 2024, operate16 Facilities across nine countries in Africa, where they provide a range of eye care services, including treatments for cataract, glaucoma, diabetic retinopathy, retinal detachment, and dry eye, along with refractive surgeries, and paediatric and neuro ophthalmological treatments. As per financial performance, Dr. Agarwal's Health Care Limited has posted total income / net profits of Rs 713.78 Cr / Rs 43.16 Cr (FY22), Rs 1,031.49 Cr / 103.23 Cr (FY23), Rs 1,376.45 Cr / Rs 95.05 Cr (FY24) and Rs 837.94 Cr / 39.56 Cr (H1 FY25). So as per previous financials data, company has shown good sales growth, but net-profit is very zig-zag. Company has an average EPS of Rs 3.21 and average RoNW of 11.06% for last three fiscals. Issue is priced at a P/BV of 7.63 as per NAV of Rs 52.73/- as on 30.09.24. If we attribute latest earnings of FY23, FY24, TTM and annualised FY25 on equity post issue, then asking price is at a P/E of around 123, 133, 123 and 160 respectively. As per RHP, comparison between listed peers is shown in above table. On BRLM's front, four lead managers are associated with this IPO, and have handled around 70 IPOs in last three fiscals. ( As on 27.01.25 ) As per financials, Dr. Agarwal's Health Care Limited has shown good sales growth, RoNW is 6.21% and P/E is 123, 133, 123 and 160 respectively as per FY23, FY24, TTM and annualised FY25 earnings. So issue looks aggressively priced when compared with peers and there is margin pressure even if company enjoys good market share (nearly 25% of total eye care service chain). Company provides a comprehensive range of eye care services and sell eye care related pharmaceutical products, which is fragmented business segment and very competitive. So, we give AVOID rating for this IPO. Readers must consult a qualified financial advisor prior to making any actual investment decisions.

• 1 Thalavaidurai Pandyan
• 2 Chitra Pandyan
• 3 Bharanidharan Pandyan
• 4 Pandyan Family Trust