Stanley Lifestyles Limited is a super-premium and luxury furniture brand in India and among the few home-grown super-premium and luxury consumer brands in India operating at scale in terms of manufacturing as well as retail operations. Further, they are the fourth largest player in the home furniture segment in India in terms of revenue in Fiscal 2023. They have the distinction of being among the first few Indian companies to venture into the super-premium and luxury furniture segment and one of the few Indian company present across various price points, i.e., super-premium, luxury and ultra-luxury segment, through the various brands. Company retails the furniture products under the 'Stanley' brand. They opened the first retail store in Bengaluru, Karnataka in 2011. Over the years, they have transitioned from a sales driven model towards design led operations and have transformed into a comprehensive provider of home solutions. They provide a wide range of home solutions offerings, such as sofas, arm chairs, kitchen cabinets, beds, mattresses and pillows, amongst others. Company designs, manufactures and retails the products through the own network of ‘company owned and company operated’ and ‘franchisee-owned and franchisee-operated’ store with pan-India presence. They market and sell the products through the network of stores. As of December 31, 2023, they operated 38 'company owned and company operated' or 'COCO' stores all located in the major metro-cities of Bengaluru, Chennai, New Delhi, Mumbai and Hyderabad and 24 'franchisee-owned and franchisee-operated' or 'FOFO' stores in 21 cities across 11 States and Union Territories in India. In addition, in certain cities in India, they have also experimented with a hybrid concept, where they may have different store formats under one large store in order to efficiently utilize the real estate and provide an opportunity to the customers to experience the complete 'Stanley' brand experience under one roof. For example, one of the existing store located at Hosur Road, Bengaluru, Karnataka includes different store formats, i.e., 'Stanley Level Next' and 'Sofas & More by Stanley' at a single location. As per financial performance, Stanley Lifestyles Limited has posted total income / net profits of Rs 201.71 Cr / Rs 1.92 Cr (FY21), Rs 297.75 Cr / Rs 23.21 Cr (FY22), Rs 425.62 Cr / 34.97 Cr (FY23) and Rs 322.29 Cr / Rs 18.69 Cr (Q3 FY24). So as per previous financials data, company has shown good growth. Company has an average EPS of Rs 4.60 and average RoNW of 11.25% for last three fiscals. Issue is priced at a P/BV of 8.03 as per NAV of Rs 45.97/- as on 31.12.23. 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 90.61, 60.15 and 84.40 respectively, which looks aggressively priced. As per RHP, there is a no listed peers. On BRLM's front, four lead managers are associated with this IPO, and have handled around 128 IPOs in last three fiscals. Axis Capital Limited: This is 34th main board IPO from this BRLM. From last 10 main board IPOs, three opened below issue price and remaining opened above or at par issue price on the day of listing. As of now, from last 10 main board IPOs, two are trading below issue price and remaining are trading above issue price. (As on 14.06.2024) ICICI Securities Limited: This is 43rd main board IPO from this BRLM. From last 10 main board IPOs, three opened below issue price and remaining opened above or at par issue price on the day of listing. As of now, from last 10 main board IPOs, two are trading below issue price and remaining are trading above issue price. (As on 14.06.2024) JM Financial Limited: This is 37th main board IPO from this BRLM. From last 10 main board IPOs, four opened below issue price and remaining opened above or at par issue price on the day of listing. As of now, from last 10 main board IPOs, four are trading below issue price and remaining are trading above issue price. (As on 14.06.2024) SBI Capital Markets Limited: This is 18th main board IPO from this BRLM. From last 10 main board IPOs, four opened below issue price and remaining opened above or at par issue price on the day of listing. As of now, from last 10 main board IPOs, three are trading below issue price and remaining are trading above issue price. ( As on 14.06.2024) As per financials, Stanley Lifestyles Limited has shown good growth, RoNW is 3.14% and P/E is respectively 90.61, 60.15 and 84.40 as per FY22, FY23 and annualised FY24 earnings. So, issue looks aggressively priced. Company is in business of super-premium and luxury furniture provider in India, which is highly competitive and fragmented business segmented. 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.
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