Sathlokhar Synergys E&C Global Limited

Sathlokhar Synergys E&C Global Limited are an integrated engineering, procurement and construction ('EPC') (design and build) & infra turnkey contracting company providing specialized services for construction of buildings and infrastructure facilities for industrial, warehousing, commercial, institutional, pharmaceutical projects, solar projects, hospitals, hotels, resorts & villas etc. They are having experience in design and construction of various projects across states in India i.e. Tamil Nadu, Karnataka, Uttar Pradesh, West Bengal and Pondicherry. They also undertake EPC projects for government entities through tender offering process. Company provides the services across the value chain ranging from detailed designing, planning, procurement of all the materials except specialized work material, engineering of the project and project execution - the site work with overall project management and completion of all works upto commissioning and delivering or taking over for their intended purpose. They also provide the installation of Mechanical, Electrical and Plumbing Networks in construction projects. They are also an authorised channel partner for TATA Power Solar Systems Ltd, for providing installation, sales, commissioning and maintenance services of its products as per mutually agreed terms in relation with its Solar Power Projects. As of April 2024, the order book comprised of projects across the states of Tamil Nadu, Karnataka and Uttar Pradesh, now in Jammu aggregating to Rs. 66,978.53 Lakhs approx. As per financial performance, Sathlokhar Synergys E&C Global Limited has posted total income / net profits of Rs 58.51 Cr / Rs 0.87 Cr (FY22), Rs 87.15 Cr / Rs 5.45 Cr (FY23) and Rs 247.32 Cr / Rs 26.21 Cr (FY24). So as per previous financials data, company has shown good growth. Company has posted an average EPS of Rs 8.61 and average RoNW of 64.68% for last three fiscals. Issue is priced at a P/BV of 6.04 as per NAV of 23.16 as on 31.03.24. If we attribute latest earnings of FY22, FY23 and FY24 on fully diluted equity post issue, then asking price is at a P/E of around 384.58, 61.94 and 12.89 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 26.07.24 ) As per financials, Sathlokhar Synergys E&C Global Limited has shown good growth, RoNW is 64.68% and P/E is respectively 384.58, 61.94 and 12.89 as per FY22, FY23 and FY24 earnings. So, issue looks fully priced and order book as on 31.04.24 is around Rs 670/- Cr. Company is an EPC company, which is highly fragmented and competitive business segment. Performance of BRLM is good. So, we give SUBSCRIBE rating for this IPO. One may apply for listing gains. Readers must consult a qualified financial advisor prior to making any actual investment decisions.

• 1 Sangeethaa Thiyagu
• 2 G Thiyagu
• 3 Dinesh Sankaran