Sattrix Information Security Limited

Sattrix Information Security Limited is in the business to develop customer-centric cyber security solutions, they aim to deliver end-to-end cybersecurity services to enterprises in the India, USA and Middle East (UAE). With a decade of experience, the company has established itself as a trusted partner in providing a comprehensive range of cyber security solutions. They help organizations to protect their data from unauthorized access against and protect against security threats. The data security solutions aim to eliminate data privacy risks to make business processes secure and run smoothly. They design and build data security solutions on cloud and on-premise based on the client requirement. They use best available technologies to develop cyber security solution, the aim is to develop agile cyber security solution which helps in constant upgrade and the solutions adopt to the changing requirement of the client. Following the list of Services they offer: 1) Assessment Services, 2) IT Infrastructure Management, 3) Hybrid IT Services & Solutions and 4) Managed Security Services (MSS). As per financial performance, Sattrix Information Security Limited has posted total income / net profits of Rs 21.20 Cr / Rs 1.94 Cr (FY21), Rs 23.49 Cr / Rs 2.14 Cr (FY22), Rs 37.76 Cr / Rs 4.00 Cr (FY23) and Rs 30.61 Cr / Rs 2.51 Cr (upto Q3 FY24). So as per previous financials data, company has shown good growth. Company has posted an average EPS of Rs 6.07 and average RoNW of 31.75% for last three fiscals. Issue is priced at a P/BV of 2.27 as per NAV of 53.31 as on Post issue. If we attribute latest earnings of FY22, FY23 and annualised FY24 on fully diluted equity post issue, then asking price is at a P/E of around 38.43, 20.56 and 24.62 respectively, which looks fully priced. As per RHP, comparison between listed peers is shown in above table. On BRLM's front, ISK Advisors Private Limited is associated with this SME IPO and handled 5 SME IPOs in last 3 year. From last 5 SME IPOs, one opened below issue price and remaining opened above issue price or at par on the day of listing. As of now from last 5 SME IPOs, one is trading below issue price and remaining are trading above issue price. ( As on 30.05.24 ) As per financials, Sattrix Information Security Limited has shown good results, RoNW is 33.51% and P/E is respectively 38.43, 20.56 and 24.62 as per FY22, FY23 and annualised FY24 earnings. So, issue looks fully priced, but higher issue expenses raises some doubts. Company is in the business of to develop customer-centric cyber security solutions, which is highly competitive and fragmented 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 Mr. Sachhin Kishorbhai Gajjaer
• 2 Mrs. Ronak Sachin Gajjar