Travels & Rentals Limited

As per financial performance, Travels & Rentals Limited has posted total income / net profits of Rs 2.91 Cr / Rs 0.69 Cr (FY22), Rs 5.79 Cr / Rs 1.51 Cr (FY23) and Rs 8.04 Cr / Rs 2.97 Cr (FY24). So as per previous financials data, company has shown good growth, but sudden rise in net-profit just before IPO raises doubts. Also trade receivables for FY24 is more than total sales (167%), which is very high. Company has posted an average EPS of Rs 2.72 and average RoNW of 19.14% for last three fiscals. Issue is priced at a P/BV of 1.66 as per NAV of 24.12 as on post issue. If we attribute latest earnings of FY22, FY23 and FY24 on fully diluted equity post issue, then asking price is at a P/E of around 64.93, 29.75 and 15.11 respectively, which looks fully priced. As per RHP, comparison between listed peers is shown in above table. On BRLM's front, Finshore Management Services Limited is associated with this SME IPO and handled 26 SME IPOs in last 4 years. 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, all are trading above issue price as on today. ( As on 27.08.24 ) As per financials, Travels & Rentals Limited has shown good growth, RoNW is 20.06% and P/E is respectively 64.93, 29.75 and 15.11 as per FY22, FY23 and FY24 earnings. So, issue looks fully priced. But, sudden rise in net-profit, higher trade receivables in FY24 and high issue expenses raises doubts. Company offers a comprehensive range of travel-related products and services for end-to-end travel solutions, which is highly fragmented and competitive business segment. So, we give NEUTRAL rating for this IPO. Readers must consult a qualified financial advisor prior to making any actual investment decisions.

• 1 Devendra Bharat Parekh
• 2 Karuna Parekh
• 3 Anupama Singhi
• 4 Tushar Singhi