Started in 2010, Uniinfo Telecom Services Limited is Indore, Madhya Pradesh based company, which provides services to telecom industry players ranging from telecom equipment manufacturers (OEM's) to telecom operators. Company offers support, services and solutions to address the Network Life Cycle requirements of Telecom industry. UTSL provides services for Network Survey and Planning, Installation and Commissioning, Network Testing and Optimisation, In Building Solutions and WiFi and Managed Services for network maintenance. UTSL is a telecom support services company providing services to the telecom operators and OEMs. All the services provided to its clients are executed by its employees wherein all the telecom equipments are provided by respective clients as per the requirement. As on December 31, 2017 UTSL had 740 permanent employees on its payroll. Company's services can be divided into the following five categories: 1. Network Survey & Planning2. Installation & Commissioning3. Network Testing & Optimisation4. In Building Solutions & WIFI5. Managed (Maintenance) Services On financial performance front, UTSL has posted turnover/net profits of Rs. 1.02 cr. / Rs. - (0.03) cr. (FY13), Rs. 1.51 cr. / Rs. 0.01 cr. (FY14), Rs. 6.23 cr. / Rs. 0.10 cr. (FY15), Rs. 14.31 cr. / Rs. 0.23 cr. (FY16) and Rs. 27.90 cr. / Rs. 1.08 cr. For H1 of 2018, it has reported net profit of Rs. 2.16 cr. on a turnover of Rs. 17.02 cr. Thus it has shown consistent growth in top-line and bottom lines for all these years, but there is sudden jump in bottom-line for H1 of FY18 is surprising. For last three fiscals it has posted an average EPS of Rs. 97.02 and an average RoNW of 52.08% on an equity base of Rs. 0.23 crore. Current ly, UTSL has around Rs 16.5 Cr of long term and short term borrowings and amount from issue will be used to repay it and for its working capital requirement. This may increase it profitability in upcoming quarters. If we annualise latest earnings and attribute it to fully diluted equity post issue, then asking price is at a P/E of around 13.62. Asking price is at a P/BV of 1.96 (on its NAV of Rs. 28.13 post issue). As per offer documents, there is no listed peers which can be compared with it. So issue is reasonably priced as per latest earnings. Company has done Pre-IPO placement of 8,04,000 shares at price of Rs 55. On merchant banker's front, this is the 3rd mandate in last three fiscals. Out of last 2 listings, all opened with premiums ranging from 15% to 20% on the day of listing. As per financials, company's growth is very good, RoNW is 52.08% for last three fiscals and issue looks reasonably priced as per latest earnings. Company is in service sector related telecom industry and telecom sector requires continuous upgradation, so there is lot of growth potential. But current situation in telecom sector is not much promising, that's a thing to concern. So, we give SUBSCRIBE rating to this SME IPO.
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