Valiant Laboratories Limited

Valiant Laboratories Limited is an ISO 9001:2015 certified integrated engineering, procurement and construction ('EPC') company with experience in design and construction of various infrastructure projects for the Central and State Government, autonomous bodies, and private bodies across 9 States and 1 Union territory in India. The principal business operations are broadly divided into four categories: (i) Water SupplyProjects ('WSP') (ii) Railway Projects (iii) Road Projects and (iv) Irrigation Network Projects. Company undertakes projects on EPC basis, with or without operation and maintenance services ('O&M'). The scope of the services includes detailed engineering of the project, procurement of key materials, and project execution at the sites with overall project management up to the commissioning of these projects. In addition, they also undertake operation and maintenance of projects in accordance with the contractual arrangements. As on July 15, 2023, they have fifty-one (51) on-going projects with total work awarded amounting to Rs 61,835.81 million, of which Rs 23,840.53 million worth of work has been executed and the remaining work amounting to Rs 37,995.28 million constitutes the Order Book. Out of the fifty-one (51) on-going projects, they are executing thirty-nine (39) projects independently while for the remaining projects they have entered into joint venture arrangements with other infrastructure and construction entities. The revenue from operations increased from Rs 4,857.31 million in FY 2020-21 to Rs 11,684.04 million in FY 2022-23 at a Compounded Annual Growth Rate ('CAGR') of 55.10%, while the profit for the year increased from Rs 189.82 million in FY 2020-21 to Rs 906.43 million in FY2022-23 at a CAGR of 118.52%. As per financial performance, Valiant Laboratories Limited has posted total income / net profits of Rs 183.38 Cr / Rs 30.59 Cr (FY21), Rs 293.47 Cr / Rs 27.50 (FY22) and Rs 338.77 Cr / Rs 28.99 Cr (FY23). So as per previous financials data, company has shown good sales growth, but PAT and net profit margins are declining. Company has an average EPS of Rs 9.43 and average RoNW of 33.01% for last three fiscals. Issue is priced at a P/BV of 4.54 as per NAV of 30.86 as on 31.3.23. If we attribute latest earnings of FY22 on fully diluted equity post issue, then asking price is at a P/E of around 22.12 and as per FY23 earnings P/E is around 20.98, which looks fully priced. As per RHP, peers comparison is shown in above table. On BRLM's front, one lead managers are associated with this IPO, and have handled around 12 IPOs in last three fiscals. Unistone Capital Private Limited : This is 13th IPO from this BRLM. From last 10 IPOs, all 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 or at par. (As on 23.09.2023) As per financials, Valiant Laboratories Limited has shown good sales growth, RoNW is 28.86% and P/E is respectively 22.12 and 20.98 as per FY22 and FY23 earnings, which looks fully priced. Company is in business of manufacturing APIs and bulk drugs with a prime focus on widely used paracetamol, which is highly 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.

• 1  Shantilal Shivji Vora 
• 2  Santosh Shantilal Vora
• 3  Dhanvallabh Ventures LLP