Sahana System Limited

As per financial performance, Sahana System Limited has posted total income/net profits of Rs 3.31 Cr / Rs 0.16 Cr (FY21), Rs 12.17 Cr / Rs 1.41 Cr (FY22) and Rs 24.14 Cr / Rs 6.40 Cr (FY23), So company has shown exceptional results. But the sudden rise in net profit is very surprising. Company has posted an average EPS of Rs 6.64/- and average RoNW of 55.74% for last three fiscals. Issue is priced at a P/BV of 6.97 as per NAV of Rs 19.38/- as on 31.03.23. As per FY22 earnings on fully diluted equity post issue, asking price is at P/E of around 76.46 and as per FY23 earnings P/E is 16.88. As per RHP, there are no listed peers. On BRLM's front, Unistone Capital Private Limited and Interactive Financial Services Limited are associated with this SME IPO and handled 14 SME IPOs in last 3 years. Unistone Capital Private Limited : This is 9th IPO from this BRLM. From last 8 IPOs, one opened below issue price and remaining opened above issue price on the day of listing. As of now, from last 8 IPOs, all are trading above issue price. ( As on 02.06.23 )Interactive Financial Services Limited : This is 8th IPO from this BRLM. From last 7 IPOs, 2 opened below issue price and remaining opened above issue price or at par on the day of listing. As of now, from last 7 IPOs 5 are trading below issue price and remaining are trading above issue price. ( As on 02.06.23 ) As Per financials, Sahana System Limited has shown good results, RoNW is 59.24% and P/E is respectively 76.46 and 16.88 as per FY22 and FY23 earnings, which looks fully priced. Company is in IT & Hardware trading business and also wants to foray into EV Charging, but this segment is very competitive and it may be difficult to maintain same growth rate and margin in future for company. Performance of one BRLM is good, but worse for another. So we are giving AVOID rating to this SME IPO, readers must consult a qualified financial advisor prior to making any actual investment decisions.

• 1 Mr. Pratik Ramjibhai Kakadia