Transrail Lighting Limited is an Indian engineering, procurement and construction ('EPC') company. The Company primarily focuses on power transmission and distribution business and integrated manufacturing facilities for lattice structures, conductors, and monopoles. They have a track record of four decades in providing comprehensive solutions in the power transmission and distribution sector, on a turnkey basis globally. They have completed more than 200 projects in power transmission and distribution vertical since the inception. They have a footprint in 58 countries like Bangladesh, Kenya, Tanzania, Niger, Nigeria, Mali, Cameroon, Finland, Poland, Nicaragua etc. including turnkey EPCs or supply projects. As of June 30, 2024, they have undertaken EPC of 34,654 circuit kilometers ('CKM') transmission lines and 30,000 CKM distribution lines, domestically and internationally. They provide EPC services in relation to substations up to 765 kilovolts ('kV'). Company provides services and EPC projects related to power transmission and distribution, civil construction, poles and lighting and railway services. Over a period of time, they have steadily invested into backward integration by adding manufacturing units for towers, conductors and poles to the business and have developed the ability to provide comprehensive solutions including designing, manufacturing, procuring, testing and supplying of conductors, towers etc. for the EPC projects and also towards direct supplies. Company caters to a wide client base in India including central public sector undertakings under the Ministry of Power of India, state government run and private power transmission and distribution companies. They generally take export orders which are either funded by multilateral funding agencies (which include organisations like World Bank, African Development Bank, Asian Development Bank etc) or backed by letters of credit. As on June 30, 2024, the Order Book is Rs 1,02,130.66 million, which comprises of international projects and domestic projects and is a healthy client mix with typically governmental authorities of various countries such as India, Bangladesh, Kenya, Tanzania, Niger, Nigeria, Mali, Cameroon, Philippines, Suriname, Nicaragua etc. Company's first manufacturing facility in Vadodara, Gujarat, where they manufacture galvanized lattice steel towers, was established in 1994. The manufacturing facility located in Deoli, Maharashtra, for manufacturing of galvanized steel towers was established in the year 2009. In parallel, they expanded the business by setting up two manufacturing facilities in Silvassa, Dadra and Nagar Haveli, in 2007 and 2010, for manufacturing conductors and poles, respectively. The factories are fitted with advanced computer numerical control ('CNC') machines, plasma / gas-cutting machines, shearing machines, welding facilities, large sized galvanizing baths, wire drawing machines and furnaces. As of June 30, 2024, they have supplied 1.3 million metric ton ('MMT') of towers, 194,534 kilometer ('KM') of conductors and 458,705 poles. Further, the Company has an in-house tower testing facility located in Deoli, Maharashtra which houses the research and development team providing tower testing services with provisions for online viewing of the tower tests. The tower testing facility can test towers with a maximum height of 85 meters and they have tested towers up to 1,200 kV in this facility. They have tested 486 towers in-house as on June 30, 2024. This totals to approximately 12,500 MT and includes various types of towers such as 414 of self-support, 11 guyed towers, 56 monopoles, 3 railway portals and 2 telecom masts. Out of the aforementioned towers, more than half are for foreign clients including those based out of Canada, Mexico, Malaysia, Philippines, Korea, Oman, Chile, Italy, Botswana, Nigeria, Ethiopia, Mozambique, Bangladesh, Cameroon, Liberia, etc. Some of the key customers are WAAP- West Africa and other central public sector undertakings under the Ministry of Power, state government run and private power transmission and distribution companies. As per financial performance, Transrail Lighting Limited has posted total income / net profits of Rs 2,357.19 Cr / Rs 64.71 Cr (FY22), Rs 3,172.03 Cr / 107.57 Cr (FY23), Rs 4,129.99 Cr / Rs 233.21 Cr (FY24) and Rs 929.70 Cr / 51.74 Cr (Q1 FY25). So as per previous financials data, company has shown good growth. Company has an average EPS of Rs 14.88 and average RoNW of 17.69% for last three fiscals. Issue is priced at a P/BV of 4.69 as per NAV of Rs 92.02/- as on 30.06.24. 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 53.92, 24.87 and 28.02 respectively. As per RHP, comparison between listed peers is shown in above table. On BRLM's front, four lead managers are associated with this IPO, and have handled around 56 IPOs in last three fiscals. ( As on 12.12.24 ) As per financials, Transrail Lighting Limited has shown good growth, RoNW is 21.7% and P/E is 53.92, 24.87 and 28.02 respectively as per FY23, FY24 and annualised FY25 earnings. Company has shown good growth and valuations also fully priced. The confirmed order book as on 30.06.24 is Rs 1,02,130.66 million. Company is an Indian engineering, procurement and construction ('EPC') company and focuses on power transmission and distribution business and integrated manufacturing facilities for lattice structures, conductors, and monopoles. 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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