Sona Machinery Limited is a diversified agro-processing equipment manufacturer, manufacturing equipments for the processing of rice, pulses, wheat, spices, Barnyard Millet etc. The product portfolio includes Grains Pre-Cleaner machines, Rotary Drum Cleaner, Vibro Classifiers, Stone Separator Machines, Paddy De-Husker, Husk Aspirator, Rice Thick/Thin Grader, Rice Whitener, Silky Polisher, Multi Grader, Length Grader, Belt Conveyer, Bucket Elevator etc. along with the complete projects for rice mills and ethanol distilleries. The services encompass engineering, erection, supervision, and machine commissioning, delivering a comprehensive end-to-end solution for the milling section which includes grain unloading and milling solution upto pre-masher for ethanol distilleries and paddy unloading to rice packaging for rice mill industries. The company started its operations in January, 2021 when it purchased the fixed assets and stock for a consideration of Rs 465.17 lakhs from “M/s Sona Foods India”, which is a proprietorship concern of Narender Kumar, father of the promoter, Vasu Naren. M/s Sona Foods India is a manufacturing concern which is manufacturing agro-processing equipment’s since year 2003. Vasu Naren joined the family business i.e. M/s Sona Foods India in year 2015 and now he is looking after the overall business operations of the company. The company’s product portfolio comprises of various equipments including support services for all the equipments manufactured and supplied by the company. They are manufacturing and supplying agro-processing equipments under various categories like cleaning, grading, blending, material handling etc. Currently, they have a manufacturing unit situated at Ghaziabad, Uttar-Pradesh with a total area of approx. 52,205 sq. ft. and a warehouse for storage of the material and finished goods. The manufacturing facility is equipped with requisite infrastructure including machineries and other handling equipment to facilitate smooth manufacturing process. The products are spread across various parts of India and they have generated 98.87%, 96.88%, 97.61% and 97.85% of the total revenue from domestic sales for the period ending November 30, 2023 and fiscal year ending 2023, 2022 and 2021 respectively. Further, the company has also exported small portion of its products to the countries like Nigeria, Bangladesh, Kenya, Nepal etc. and generated around 1.13%, 3.12%, 2.39% and 2.15% of the total revenue from export sales for the period ending November 30, 2023 and fiscal year ending 2023, 2022 and 2021 respectively. As per financial performance, Sona Machinery Limited has posted total income / net profits of Rs 6.06 Cr / Rs 0.28 Cr (FY21), Rs 44.53 Cr / Rs 3.26 Cr (FY22), Rs 81.18 Cr / Rs 7.68 Cr (FY23) and Rs 62.88 Cr / Rs 6.48 Cr (upto 30.11.2023 FY24). So as per previous financials data, company has shown good results. Company has posted an average EPS of Rs 4.93 and average RoNW of 67.86% for last three fiscals. Issue is priced at a P/BV of 8.11 as per NAV of 17.63 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 60.11, 25.54 and 20.20 respectively, which looks fully priced. As per RHP, there are no listed peers. On BRLM's front, Hem Securities Limited is associated with this SME IPO and handled 40 SME IPOs in last 3 year. From last 10 SME IPOs, all opened above issue price or at par on the day of listing. As of now from last 10 SME IPOs, all are trading above or at par issue price. ( As on 29.02.24 ) As per financials, Sona Machinery Limited has shown good results, RoNW is 67.86% and P/E is respectively 60.11, 25.54 and 20.20 as per FY22, FY23 and annualised FY24 earnings. So, issue looks fully priced. Company is in business of agro-processing equipment manufacturer, which is highly competitive and fragmented segment. Performance of BRLM is good. So, we give "SUBSCRIBE FOR LISTING GAINS" rating for this IPO. Readers must consult a qualified financial advisor prior to making any actual investment decisions.
✍️ Post a Comment