Teerth Gopicon Limited is an engineering construction and development company engaged primarily in the construction of roads, sewerage work and water distribution work in the Madhya Pradesh. They have also worked as sub-contractor and constructed residential tower in the city of Indore. Company as corporate have the track record of not more than 5 years. However, the promoter of the Company Maheshbhai Khumbhani has started the Proprietorship in the name of Gopi Construction in the year 2009. As an EPC contractor, the scope of the services includes detailed engineering of the project, procurement of construction materials, plant and machinery, construction and execution of the project and its operation and maintenance in accordance with the contractual provisions. The manpower, resources and fleet of machinery and equipment, together with the engineering capabilities, enables them to execute a large number of projects simultaneously. In the Financial Year 2020-21, 2021-22 and 2022-23 the company has concentrated in Sewage Project and Road Construction Project. After the FY 2023 the company has concentrated in the Water Distribution projects and got the good water distribution projects from the Local Authorities and Government. The order book in terms of value of contracts, including subcontracting assignments, was Rs 1140.34/- Cr as on January 31, 2024, Among the ten (10) projects they are currently executing five (5) projects aggregating to a total contract value of Rs 1034.89/- Cr relates to water supply system, One (1) project of Rejuvenation of Rudrasagar Lake and its surrounds of total value of Rs 14.58/- Cr, One (1) project of Surface Parking, office Building of total value of Rs 9.06/- Cr, One (1) project of Sewage Treatment plant of 25 MLD of total value of Rs 22.70/- Cr, One (1) project of Real Estate Development of total value of Rs 25.71/- Cr and One (1) Project of Road development of Rs 33.40/- Cr. They have to operate and maintain the projects for specific period as per the terms of the Contacts. As per financial performance, Teerth Gopicon Limited has posted total income / net profits of Rs 46.20 Cr / Rs 0.46 Cr (FY21), Rs 31.20 Cr / Rs 0.15 Cr (FY22), Rs 39.14 Cr / Rs 1.79 Cr (FY23) and Rs 69.70 Cr / Rs 7.84 Cr (31.01.24 FY24). So as per previous financials data, company has shown zig-zag results, but sudden rise in net-profit just before IPO raises doubts. The order book of company is around Rs 904/- Cr as on 31.03.24. Company has posted an average EPS of Rs 1.28 and average RoNW of 13.50% for last three fiscals. Issue is priced at a P/BV of 2.22 as per NAV of 50.10 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 872.27, 74.32 and 14.16 respectively, which looks fully priced. As per RHP, comparison between listed peers is shown in above table. On BRLM's front, Interactive Financial Services Limited is associated with this SME IPO and handled 14 IPO in last 3 year. From last 10 IPOs, Two opened below issue price and remaining opened above issue price or at par on the day of listing. As of now from last 10 IPOs, three is trading above issue price and remaining trading below or at par issue price. ( As on 04.04.24 ) As per financials, Teerth Gopicon Limited has shown zig-zag results, RoNW is 22.72% and P/E is respectively 872.27, 74.32 and 14.16 as per FY22, FY23 and annualised FY24 earnings. So, issue looks fully priced, but sudden rise in net-profit just before IPO is very surprising. But current order book is around Rs 904/- Cr as on 31.03.24. Company is in business of construction of roads, sewerage work and water distribution work in the Madhya Pradesh, the segment is very fragmented and competitive. 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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