Saraswati Saree Depot Limited

Saraswati Saree Depot Limited is a key player in sarees wholesale (B2B) segment and the origin into the sarees business dates back to the year 1966. We are also engaged in the wholesale business of other women’s apparel wear such as kurtis, dress materials, blouse pieces, lehengas, bottoms, etc. On an average of more than 90% of our total revenues are generated from sale of sarees. In Fiscal 2024, we have served over 13,000 unique customers and our product catalogue consists of more than 3,00,000 different SKUs. The sarees are sourced from different manufacturers across India. Over the years, they have developed relationships with these manufacturers in hubs like Surat, Varanasi, Mau, Madurai, Dharmavaram, Kolkata, and Bengaluru. They regularly source sarees and other women's apparel from more than 900 weavers/suppliers across different states in India. Currently, the product catalogue lists more than 300,000 different SKUs. Company currently operates from two stores which are located in Kolhapur, Maharashtra and Ulhasnagar, Maharashtra. As per financial performance, Saraswati Saree Depot Limited has posted total income / net profits of Rs 550.30 Cr / Rs 12.30 Cr (FY22), Rs 603.51 Cr / 22.97 Cr (FY23) and Rs 612.58 Cr / Rs 29.52 Cr (FY24). So as per previous financials data, company has shown nominal sales growth, but net-profit increased suddenly. Company has an average EPS of Rs 7.39 and average RoNW of 60.92% for last three fiscals. Issue is priced at a P/BV of 8.16 as per NAV of Rs 19.61/- as on 31.03.24. If we attribute latest earnings of FY22, FY23, and FY24, then asking price is at a P/E of around 51.48, 27.58, and 21.46 respectively. As per RHP, comparison between listed peers is shown in above table. On BRLM's front, one lead managers are associated with this IPO, and have handled around 13 IPOs ( Mainboard and SME ) in last three fiscals. Unistone Capital Private Limited: This is 14th IPO from this BRLM. From last 10 IPOs, all opened above issue price on the day of listing. As of now, from last 10 IPOs, two are trading below issue price. (As on 07.08.23) As per financials, Saraswati Saree Depot Limited has shown average results, RoNW is 45.49% and P/E is 51.48, 27.58, and 21.46 respectively as per FY22, FY23, and FY24 earnings. So, issue looks aggressively priced. Company is in trading business of Sarees with very long history, which is a very fragmented and competitive business segment. Performance of BRLM is good. So, we give NEUTRAL rating for this IPO. Readers must consult a qualified financial advisor prior to making any actual investment decisions.

• 1 Shankar Dulhani
• 2  Mahesh Dulhani
• 3 Rajesh Dulhani
• 4 Vinod Dulhani