S A Tech Software India Limited

S A Tech Software India Limited ('SAT') centered in Pune and Bengaluru, is an IT consulting Subsidiary Company of foreign body corporate SA Technologies Inc, USA. They are an AI-driven IT consulting company, offering scalable IT outsourcing solutions and Global Development Centers (GDCs) that enhance business agility and efficiency. Company's services range from individual support to largescale enterprise transformations, providing the flexibility to scale from 1 to 1000 professionals as needed. The company has entered into a Service Partnership with the holding Company to cater to the needs of foreign clients.  Company's primary business line is Services ('Services') which includes providing outsourced Technological services and digital transformation services to some Fortune 500 clients helping them conceive, design, develop and deliver better products. The Company has partnership with some Giant Tech Partners (such as Microsoft and Google) thereby cementing its reputation and showcasing its experience and dedication in the tech industry. As per financial performance, S A Tech has posted total income / net profits of Rs 41.54 Cr / Rs (5.48) Cr (FY22), Rs 56.73 Cr / Rs 1.08 Cr (FY23), Rs 72.38 Cr / Rs 3.68 Cr (FY24) and Rs 23.97 Cr / Rs 2.48 Cr (Q1 FY25). So as per previous financials data, company has shown good growth, but sudden rise in net-profit just before IPO raises doubts. Company has posted an average EPS of Rs 1.42 and average RoNW of 6.73% for last three fiscals. Issue is priced at a P/BV of 3.82 as per NAV of 15.45 as on 31.06.24. If we attribute latest earnings of FY23, FY24 and annualised FY25 on fully diluted equity post issue, then asking price is at a P/E of around 70.94, 20.89 and 7.76 respectively, which looks fully priced. As per RHP, comparison between listed peers is shown in above table. On BRLM's front, GYR Capital Advisors Private Limited is associated with this SME IPO and handled 27 SME IPOs in last 3 years. From last 10 SME IPOs, all opened above issue price and remaining above or at par on the day of listing. As of now from last 10 SME IPOs, one is trading below issue price and remaining above issue price. ( As on 24.07.24 ) As per financials, S A Tech Software India Limited has shown good growth, RoNW is 31.63% and P/E is respectively 70.94, 20.89 and 7.76 as per FY23, FY24 and annualised FY25 earnings. So, issue looks fully priced, but sudden rise in net-profit just before IPO raises some doubts. Company is engaged in the business of IT consulting, which is highly fragmented and competitive business segment. Performance of BRLM is good. So, we give SUBSCRIBE rating for this IPO. Readers must consult a qualified financial advisor prior to making any actual investment decisions.

• 1 SA Technologies Inc., USA
• 2 Mr. Manoj Joshi
• 3 Mrs. Priyanka Joshi
• 4 M/S Mindpool Technologies Limited
• 5 Mr. Ritesh Sharma
• 6 Mrs. Poonam Sharma