Recode Studios Limited beauty and personal care ('BPC') company operating in the beauty, cosmetics and personal care segment in India. The business primarily involves the branding, procurement and distribution of beauty and personal care products under the 'Recode' brand. They operate through an omnichannel distribution network, which comprises Company-Owned Company-Operated ('COCO') retail stores, Franchisee-Owned Franchisee-Operated ('FOFO') stores, third-party e-commerce platforms and the proprietary website and mobile application. They offer a diversified portfolio of products across make-up, skincare, body care and beauty accessories, catering to a wide range of consumer preferences and usage occasions. As of the date of this RHP, the Company offers approximately 350+ Stock Keeping Units ('SKUs') across multiple categories and price points. The product portfolio includes face make-up, eye make-up, lip makeup, face and body care products and beauty accessories. The Company commenced its offline retail operations in 2022 with the opening of its first franchisee store in Raipur, Chhattisgarh. Since then, the Company has expanded its offline retail presence across various regions in India. As of the date of this RHP, the Company operates 22 physical retail stores, comprising 3 COCO stores and 19 FOFO stores. In addition, the Company operates six warehouses across India, which are used for storage, packaging and dispatch of products to its COCO stores, FOFO outlets and customers purchasing through online channels. The Company’s products are manufactured through third-party manufacturers located across various states in India. In addition, certain products are sourced through imports from international markets. The Company does not own any manufacturing facilities, and its operations are primarily focused on product sourcing, branding, marketing and distribution. As per financial performance, Recode Studios Limited has posted total income / net profits of Rs 22.43 / 0.69 Cr (FY23), Rs 36.93 / Rs 0.27 Cr (FY24), Rs 47.93 Cr / 3.30 Cr (FY25) and Rs 57.45 Cr / 9.06 Cr (upto Q3 FY26). So as per previous financials data, company has shown good growth, but sudden rise in net-profit just before IPO raises concerns. Also net-cash flow is negative for FY23 and FY24. Company has an average EPS of Rs 2.29 and average RoNW of 22.71% for last three fiscals. Issue is priced at a P/BV of 7.21 as per NAV of Rs 21.91/- as on 31.12.26 If we attribute latest earnings of FY24, FY25 and annualised FY26 on equity post issue, then asking price is at a P/E of around 613.13, 50.92 and 13.92 respectively. As per RHP, comparison between listed peers is shown in above table. On BRLM's front, Seren Capital Private Limited is associated with this IPOs, and has handled 5 IPOs in last three fiscal years. From last five IPOs, all opened above issue price or at par, on the day of listing. As of now, from last 5 IPOs, three are trading below issue price and remaining all are trading above issue price or at par. (as on 29.04.26 ) As per financials, Recode Studios Limited has shown good results, RoNW is 37.64% and P/E is 613.13, 50.92 and 13.92 respectively as per FY24, FY25 and annualised FY26 earnings. So issue looks fully priced. But, sudden rise in net-profit just before IPO. Company is engaged in business of branding, procurement and distribution of beauty and personal care products under the 'Recode' brand, which is highly competitive business segment. Performance of BRLM is poor post listing. So, we give NEUTRAL rating for this IPO. Readers must consult a qualified financial advisor prior to making any actual investment decisions.
✍️ Post a Comment