Xelpmoc Design and Tech Limited

Started in 2015, Xelpmoc Design and Tech Limited is a Bengaluru based company and provider of professional and technical consulting services, offering technology services and end-to-end technology solutions and support. They also occasionally provide business support to some of the clients to enable them to set-up their operations. The clients of Company, range from entrepreneurs and start-up enterprises to established companies, engaged in e-commerce, transportation and logistics, recruitment, financial services, social networking, and various other industries. They provide a wide range of services, including, mobile and web application development, prototype development, thematic product development and data science and analytics assistance. They grow the portfolio of services and products as the needs of the clients evolve. As of June 30, 2018, the company has served over 23 clients in India. The company intends to leverage its existing business model to enter newer geographies such as the Middle East and North Africa (MENA), United States, United Kingdom, Asia Pacific and Australia. As of June 30, 2018, they had 65 full-time employees. In addition, as of June 30, 2018, they had four personnel who work on a consultant/ contract basis. As per financial performance, Xelpmoc has posted total income/net profits of Rs. 1.97 cr. / Rs. - (2.86) cr. (FY17) and Rs. 5.52 cr. / Rs. - (3.50) cr. (FY18) . For upto H1 of FY19, it has reported net profit of Rs. - (2.17) cr. on total revenue of Rs. 3.77 cr. So company has posted consistent growth over last couple of years, but company is making consistent loses. Trade receivables for FY18 is around 2.08 Cr which is around 38% of total revenue and for service industry, this is not good sign. Xelpmoc has posted an average EPS of Rs. - (97.75) and average RoNW of - (41.33)% for last three fiscals. Issue is priced at a P/BV of 2.24 as per NAV of 29.47 on 31.03.18. As per RHP, there is no listed peers.  On BRLM's front, for ITI Capital Limited this is the 3rd IPO in last three fiscals and from last 2 IPOs, one opened below issue price and another above issue price. As of now, from last 2 IPOs, one is trading below issue price and remaining above issue price. ( As on 22.01.19 ) As per financials, company's growth is consistent but making loses, RoNW is - (28.28)% for last two fiscals. Company is provider of professional and technical consulting services, which is fast growing sector. So there is good scope for growth but very highly competitive market. Also the stock will list in T-Group. For BRLM, this is just 3rd IPO. So we give AVOID rating to this IPO.

• 1 Mr. Sandipan Chattopadhyay
• 2 Mr. Srinivas Koora
• 3 Mr. Jaison Jose