Synoptics Technologies Limited

As per financial performance, Synoptics Technologies Limited has posted total income/net profits of Rs 22.11 Cr / Rs 1.82 Cr (FY20), Rs 34.80 Cr / Rs 2.36 Cr (FY21), Rs 50.97 Cr / Rs 4.32 Cr (FY22) and Rs 34.47 Cr / Rs 5.25 Cr (9M FY23), So company has shown good results. But sudden rise in net profit in IPO year raises doubts. Company has posted an average EPS of Rs 4.65/- and average RoNW of 19.48% for last three fiscals. Issue is priced at a P/BV of 3.49 as per NAV of Rs 68/- post issue. As per FY22 earnings on fully diluted equity post issue, asking price is at P/E of around 46.48 and as per annualised FY23 earnings P/E is 28.69. As per RHP, comparison between listed peers are shown in above table. On BRLM's front, First Overseas Capital Limited is associated with this SME IPO and handled 15 SME IPOs in last 3 years. From last 10 SME IPOs, 1 opened below issue price and remaining opened above issue price on the listing day. As of now from last 10 IPOs, 5 are trading below issue price and remaining are trading above issue price. ( As on 22.06.23 ) As per financials, Synoptics Technologies Limited has shown good results, RoNW is 23.04% and P/E is respectively 46.48 and 28.69 as per FY22 and annualised FY23 earnings, which looks aggressively priced. Also sudden rise in net profit in IPO year raises doubts. Company is in IT infrastructure business, which is fragmented and highly competitive. Also there is nothing special in this company and sector. Performance of BRLM is average. So we are giving NEUTRAL rating to this SME IPO, readers must consult a qualified financial advisor prior to making any actual investment decisions.

• 1 Mr. Jagmohan Manilal Shah 
• 2 Mr. Jatin Jagmohan Shah
• 3 Mrs. Janvi Jatin Shah