Sharika Enterprises Limited

Started in 1998, Sharika Enterprises Limited engaged in Engineering Procurement Construction (EPC) contracts, specialized assembling, trading activities, Erection Services, representation services to majorly power Generation, Transmission and Distribution sector. SEL has grown consistently over the years and widened its portfolio which covers installing power transmission EHV cables, designing & installing EMS (Energy Management System) and allied distribution automation Equipments such as Autoreclosers, fault passage indicators (FPI) etc., designing and installing of Solar Power Generation plants. SEL is headquartered in the National Capital Region in India and with having assembling unit in Jammu and Noida. SEL operates in the infrastructure sphere in India focusing on the power sector and work with international and Indian power equipment manufacturers and involved in project management/EPC contractors. On performance front, SEL has reported total revenue/net profits of Rs.7.5 cr. / Rs. (0.01) cr. (FY13), Rs.10.81 cr. / Rs. (0.27) cr. (FY14), Rs.17.96 cr. / Rs. (0.48) cr. (FY15), Rs. 18.89 cr. / Rs. 0.97 cr. (FY16), Rs. 25.53 cr. / Rs. 2.02 cr. (FY17). Upto 31.05.17 of current fiscal, it has posted net profit of Rs. 0.49 cr. on total revenue of Rs. 2.72 cr. It has reported an average EPS of Rs. 1.65 and average RoNW of 13.07% for last three fiscals. Issue is priced at a P/BV of 1.91 on the basis of post issue NAV. Till FY15, company has shown losses. Company's top-line is growing consistently and it has shown growth in bottom-line in FY16 and FY17 and there is big jump in bottom line in FY17. If we annualize latest earnings and attribute it on post issue paid up capital, then asking price is at a P/E of around 15.80 plus against peers trading at a P/E ranging from 8 to 79. Thus issue appears to be reasonably priced. On merchant banker’s front, this is 8th mandate from its stable in last three fiscals. Previous 7 IPOs gave positive returns ranging from 2 to 20% in opening on the day of listing.   As per financials, company's growth is good, RoNW is 13.07% for last three fiscals and issue is reasonably priced as per latest earnings, but there is big jump in FY17 bottom line.  Company is proving services to Power Generation, Transmission and Distribution related industry and future of this industry is very bright as Government is focused to provide electricity to every part of country, so we give SUBSCRIBE rating to this SME IPO.

• 1 Mr. Rajinder Kaul
• 2 Mr. Ravinder Bhan
• 3 Mr. Arun Kaul