Rajesh Power Services Limited

As per financial performance, Rajesh Power Services Limited has posted total income / net profits of Rs 149.37 Cr / Rs 3.44 Cr (FY22), Rs 211.18 Cr / Rs 6.75 Cr (FY23), Rs 295.06 Cr / Rs 26.02 Cr (FY24) and Rs 317.85 Cr / Rs 27.68 Cr (H1 FY24). So as per previous financials data, company has shown good growth, but trade receivables are around 25% and sudden rise in net-profit raises doubts. Company has posted an average EPS of Rs 10.41 and average RoNW of 30.87% for last three fiscals. Issue is priced at a P/BV of 4.55 as per NAV of Rs 73.66/- 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 89.35, 23.18 and 10.9 respectively, which looks fully priced. As per RHP, comparison between listed peers is shown in above table. On BRLM's front,  ISK Advisors Private Limited is associated with this SME IPO and handled 8 IPOs in last 5 years. From last 8 IPOs, one opened below issue price and remaining opened above issue price or at par on the day of listing. As of now from last 8 IPOs, one is trading below issue price and remaining are trading above issue price as on today. ( As on 19.11.24 ) As per financials, Rajesh Power Services Limited has shown good growth, RoNW is 30.87% and P/E is respectively 89.35, 23.18 and 10.9 as per FY23, FY24 and annualized FY25 earnings. So, issue looks fully priced, but higher trade receivables and sudden rise in profits raises doubts. Company is in business of providing services to Renewable and Non-Renewable segment of Power sector, which is highly fragmented and competitive business segment. Performance of BRLM is very good post listing. So, we give NEUTRAL rating for this IPO. Readers must consult a qualified financial advisor prior to making any actual investment decisions.

• 1 Mr. Rajendra Baldevbhai Patel
• 2 Mr. Kurang Ramchandra Panchal
• 3 Mr. Kaxil Prafulbhai Patel
• 4 Mr. Utsav Nehal Panchal