Suich Industries Limited

Incorporated in 2008, Delhi-based Suich Industries Limited was previously known as Delhi Fone N Batteries Pvt Ltd. It is engaged in assembling and marketing of feature & smart phones, batteries, chargers, power bank, LED TV and smart TV under the Suich brand name. The company imports the equipment and assembling parts from China. It has a manufacturing unit at State Infrastructure and Industrial Development Corporation of Uttarakhand Limited (SIIDCUL) in Haridwar where it assembles the products. Recently, the company has also entered into exports business for its products. Suich Industries Limited is also involved in the trading activity of finished products between manufacturers and distributors on-demand basis. Blue Wave Trading H.K. Ltd is the wholly owned subsidiary of the company to procure the raw materials. The company has also set up a Research & Development Centre (R&D) focusing on the expansion of the product portfolio. The competitive strength of the company are:1. Wide product range2. Cost-effective procurement3. Catering to rural areas4. Pocket-friendly products On the financial performance front, Suich Industries has posted turnover/net profits of Rs. 106.57 cr. / Rs. 3.00 cr. (FY16), Rs. 144.36 cr. / Rs. 5.32 cr. (FY17), Rs. 202.78 cr. / Rs. 7.42 cr. (FY18).  For the upto Q3 of FY19, it has earned a net profit of Rs. 11.48 cr. on a turnover of Rs. 140.15 cr. So company has shown healthy growth over the years. Trade receivables for company in FY18 is around Rs 95.35 cr which is around 47% of total income and that's very higher. Suich Industries has posted an average EPS of Rs. 5.38 and an average RoNW of 16.45% for last three fiscals. The issue is priced at a P/BV of 1.61 on the basis of its NAV of Rs. 46.48 as on 31.12.18. If we annualise latest earnings and attribute it on fully diluted post issue equity, then asking price is at a P/E of around 7.5 thus issue appears very reasonably priced and if we take FY18 earnings, then P/E is around 15.38 as per that issue is fully priced. As per RHP, listed peers are shown in above table, but it can't be strictly comparable. On BRLM's front, for Pantomath Capital Advisors Private Limited this is the 57th IPO in last three fiscals and from last 10 IPOs, all opened above issue price with 0.05% to 11% premium on the day of listing. As of now, from last 10 IPOs, 6 are trading below issue price and remaining above issue price. ( As on 30.05.19 ) Company has show very good results, RoNW is 16.45% and issue looks very reasonably priced with respect to latest earnings with P/E of 7.5. If company can repeat the same performance in upcoming years, than only it looks good. But higher value of trade receivables is big concern and also this segment has very high competition from local and international players. Performance of BRLM is poor after listing. So we give NEUTRAL rating to this SME IPO.

• 1 Mr. Gunnit Singh Allagh
• 2  Mr. Sanchit Singh