Started in 2007, Mumbai based V R Films & Studios Limited is engaged in offering a complete range of localisation services for digital, film and TV industry. Ranging from content editing, subtitling, dubbing, content localisation and mixing, the company provides assistance work for TV programmes, games, documentaries, movies, and audiobooks, in international and Indian regional languages. The company also does dubbing (post-production process) work for Chinese and Hollywood films to change in Indian regional languages and then provide it to sub-distributors through sub-licence in licensed areas and the licensed languages. The films of the company are sub-licensed to Zee TV, Sony TV, etc. The company has a registered office in Mumbai and 3 dubbing studios. The future goals of the company are: 1. Expand client base2. Increase Process Services 3. Maintain a strong relationship with existing clients Some of the famous clients of the company are: 1. Viacom 18 Media Private Limited, 2. Sony Pictures Networks India Private Limited, 3. Zee Entertainment Enterprises Limited, 4. Discovery Communications India, 5. Paramount Pictures Corporation, 6. Paramount Pictures International Limited The key strengths of the company are as follow: 1. Advance equipment set up2. Technically Sound Operation 3. A large number of clients4. A wide range of services offered On the financial performance front, V R Films has posted turnover/net profits of Rs. 6.28 cr. / Rs. 0.03 cr. (FY16), Rs. Rs. 6.11 cr. / Rs. 0.27 cr. (FY17), Rs. 12.83 cr. / Rs. 0.98 cr. (FY18). For the upto 31.10.18 of FY19, it has earned a net profit of Rs. 0.34 cr. on a turnover of Rs. 3.67 cr. So top-line remained almost remained static all these years except FY18. Trade receivables for company in FY18 is around 1.34 Cr which is around 10% of total income, which is very reasonable. V R Films has posted an average EPS of Rs. 5.85 and an average RoNW of 21.2% for last three fiscals. The issue is priced at a P/BV of 1.83 on the basis of its NAV of Rs. 33.25 as on 31.10.18 and at a P/BV of 2.52 on the basis of post issue NAV of Rs 24.24 post issue. If we annualise latest earnings and attribute it on fully diluted post issue equity, then asking price is at a P/E of around 14.32 thus issue appears fully priced and if we take FY18 earnings, then P/E is around 8.58. As per RHP, there is no listed peers. On BRLM's front, for Hem Securities Limited this is the 34th SME IPO. From last 10 IPOs, 2 opened below issue price, 1 at part and remaining above issue price with listing gains around 2% - 20%. Currently from last 10 IPOs, 6 are trading below issue price and remaining above issue price. ( As on 09.04.19 ) Results of company not consistent and impressive, RoNW is 21.2% and issue looks fully priced with respect to current earnings with P/E of 14.32. But if company may repeat or improve performance with respect to FY18, is very important. Performance of BRLM is poor. So we give NEUTRAL rating to this SME IPO.
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