Standard Glass Lining Technology Limited is one of the top five specialised engineering equipment manufacturer for pharmaceutical and chemical sectors in India, in terms of revenue in Fiscal 2024, with in house capabilities across the entire value chain. The capabilities include designing, engineering, manufacturing, assembly, installation and commissioning solutions as well as establishing standard operating procedures for pharmaceutical and chemical manufacturers on a turnkey basis. The portfolio comprises core equipments used in the manufacturing of pharmaceutical and chemical products, which can be categorized into: (i) Reaction Systems; (ii) Storage, Separation and Drying Systems; and (iii) Plant, Engineering and Services (including other ancillary parts). They are also one of India's top three manufacturers of glass-lined, stainless steel, and nickel alloy based specialised engineering equipment, in terms of revenue in Fiscal 2024. They are also one of the top three suppliers of polytetrafluoroethylene ('PTFE') lined pipelines and fittings in India, in terms of revenue in Fiscal 2024. Company possess in-house capabilities to manufacture all the core specialised engineering equipment required in the active pharmaceutical ingredient ('API') and fine chemical products manufacturing process. Over the last decade they have supplied over 11,000 products. Company's engineered solutions are used in processes across pharmaceutical, chemical, food and beverage, biotechnology and fertilizer sectors. They customise the products basis the unique process requirements of the customers. They also provide turnkey automated equipment solutions, optimising processes like vacuum distillation, solvent recovery and gas dispersion. Company has a diversified customer base including end users operating in a range of sectors across pharmaceutical, chemicals, paint, bio technology and food and beverages. Their marquee customer base includes 30 out of approximately 80 pharmaceutical and chemical companies in the NSE 500 index as of June 30, 2024. Some of the customers include Apitoria Pharma Private Limited, Aurobindo Pharma Limited, CCL Food and Beverages Private Limited, Cohance Lifesciences Limited, Cadila Pharmaceutical Limited, Deccan Fine Chemicals (India) Private Limited, Dasami Lab Private Limited, Laurus Labs Limited, Granules India Limited, Macleods Pharmaceuticals Limited, MSN Laboratories Private Limited, Natco Pharma Limited, Honour Lab Limited, Hetero Drugs Limited, Hetero Labs Limited, Hazelo Lab Private Limited, Piramal Pharma Limited, Sanvira Biosciences Private Limited, Suven Pharmaceuticals Limited, Tagros Chemicals India Private Limited, Vamsi Labs Limited and Viyash Life Sciences Private Limited. Company operates through the eight manufacturing facilities spread across built-up/floor area of over 400,000 sq. ft., strategically located in Hyderabad, Telangana, the Pharma Hub of India, which accounted for 40.00% of the total Indian bulk drug production in Fiscal 2024. The manufacturing capabilities are complemented by a sales, service and distribution network operating from four sales offices located in Vadodara, Gujarat, Ankleshwar, Gujarat, Mumbai, Maharashtra and Vishakhapatnam, Andhra Pradesh and sales team members in Jhagadia, Gujarat, Chennai, Tamil Nadu, New Delhi, Bengaluru, Karnataka and Vijayawada, Andhra Pradesh with pan-India reach. They also have agency arrangements for sale and marketing of the products in Bangladesh as well as agency and distribution agreement for sale, marketing and distribution of the products in Russia. Further, they have resale arrangements for North America (excluding Cuba), South America, Europe (excluding Belarus and Russia) and certain countries in Asia and Africa. Company has entered into an agreement with HHV Pumps Private Limited ('HHV'), for supply of vacuum pumps along with a private label arrangement. They also have a supply and purchase arrangement for India with Japan based Asahi Glassplant Inc. and GL Hakko Co. Ltd ('GL Hakko') for procurement of specified grades of glass for the glass lining division. Further, they have also entered into an exclusive collaboration with GL Hakko for exclusively purchasing glass lined tubes manufactured by GL Hakko using which the Company will manufacture and sell shell and heat tube exchangers under the name of GL Hakko in India and abroad except Japan. As per financial performance, Standard Glass Lining Technology Limited has posted total income / net profits of Rs 241.50 Cr / Rs 25.14 Cr (FY22), Rs 500.08 Cr / 53.42 Cr (FY23), Rs 549.68 Cr / Rs 60.01 Cr (FY24) and Rs 312.10 Cr / 36.27 Cr (H1 FY25). So as per previous financials data, company has shown good growth, but trade receivables is around 28.15% of FY24 total income. Company has an average EPS of Rs 3.29 and average RoNW of 35.37% for last three fiscals. Issue is priced at a P/BV of 5.74 as per NAV of Rs 24.4/- as on 30.09.24. If we attribute latest earnings of FY23, FY24 and annualised FY25 on equity post issue, then asking price is at a P/E of around 52.28, 46.54 and 38.50 respectively. As per RHP, comparison between listed peers is shown in above table. On BRLM's front, IIFL Capital Services Limited and Motilal Oswal Investment Advisors Limited is associated with this IPO, and have handled around 55 IPOs in last three fiscals. ( As on 03.01.25 ) As per financials, Standard Glass Lining Technology Limited has shown steady growth, RoNW is 20.74% and P/E is 52.28, 46.54 and 38.50 respectively as per FY23, FY24 and annualised FY25 earnings. So issue looks fully priced when compared with peers, but trade receivables is around 28.15% of FY24 total income. Company is a specialised engineering equipment manufacturer for pharmaceutical and chemical sectors in India. So, we give SUBSCRIBE rating for this IPO. Readers must consult a qualified financial advisor prior to making any actual investment decisions.
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