Sharp Chucks And Machines Limited

As per financial performance, Sharp Chucks And Machines Limited has posted total income/net profits of Rs 135.83 Cr / Rs 3.30 Cr (FY21), Rs 152.52 Cr / Rs 4.52 Cr (FY22) and Rs 179.31 Cr / Rs 5.06 Cr (FY23), So company has shown good growth. Company has posted an average EPS of Rs 4.69/- and average RoNW of 9.32% for last three fiscals. Issue is priced at a P/BV of 1.08 as per NAV of Rs 53.91/- as on post issue. As per FY22 earnings on fully diluted equity post issue, asking price is at P/E of around 13.79 and as per FY23 earnings P/E is 12.32. As per RHP, comparison between peers is shown in above table. On BRLM's front, Fedex Securities Private Limited is associated with this SME IPO and handled 17 SME IPOs in last 4 years. From last 10 IPO, two opened below issue price and remaining opened at par or above issue price on the listing day. As of now from last 10 IPO, 4 are trading below issue price and remaining above issue price. ( As on 29.09.23 ) As per financials, Sharp Chucks And Machines Limited has shown average results, RoNW is 9.68% and P/E is respectively 13.79 and 12.32 as per FY22 and FY23 earnings. So, issue looks fully priced. But, higher value of issue expenses is very surprising. Company is in business of manufacturing of forging products, casting products, and machined components, which is highly fragmented and competitive segment. Performance of BRLM is average. So we are giving SUBSCRIBE rating to this SME IPO. Readers must consult a qualified financial advisor prior to making any actual investment decisions.

• 1  Ajay Sikka
• 2  Gopika Sikka