Started in 1985, Yasho Industries Limited is engaged in manufacturing of varied re-engineered chemicals over 2 (two) decades. It manufactures AromaRange, Food Antioxidant Range, Rubber and Lubricant Additive Range & Specialty Range chemicals. Company markets, sells and distributes its wide range of products to its diverse customers based in India and abroad. Company has established sales network both in domestic and international markets. Its products are exported to various countries i.e. USA, South America, Europe, Iran, Australia, South Africa, Singapore, Germany, Asia. etc. For H1 of FY18, from its total sales 46.95% is in domestic market and 53.05% is export. Company has 2 manufacturing units located close to each other at Vapi, Gujarat. It is certified by ISO 9001:2015, which is assessed and certified by Bureau Veritas Certification Holding SAS- UK Branch which confirms to the requirements of the management standard for manufacturing of various chemicals. Company has pre-registered certain products under REACH (Registration, Evaluation, Authorization and Restriction of Chemicals) Regulation. Company has total 372 employees as on December 2017. On financial performance front, YIL has posted turnover/net profits of Rs. 119.26 cr. / Rs. - (3.86) cr. (FY13), Rs. 157.02 cr. / Rs. - (1.47) cr. (FY14), Rs. 171.35 cr. / Rs. 0.06 cr. (FY15), Rs. 180.08 cr. / Rs. 1.53 cr. (FY16) and Rs. 198.40 cr. / Rs. 3.67 cr. (FY17). For H1 of FY18, it has earned net profit of Rs. 1.95 cr. on a turnover of Rs. 109.59 cr. From financials, company has shown consistent growth over the years. Issue is priced at a P/BV of 3.86 on the basis of NAV of Rs. 25.91 post issue. For last three fiscals, it has posted an average EPS of Rs. 2.58 and an average RoNW of 14.47%. If we annualise latest earnings and attribute it on fully diluted equity post issue, then asking price is at a P/E of around 28 against industry composite of 31. As per offer documents, it has indicated listed peers as NOCIL Limited, Himadri Speciality Chemical Limited, Amines & Plasticizers Limited, Camphor and Allied Products Limited, S H Kelkar and Company Limited and Transpek Industry Limited that are trading at a P/E of around 28, 81, 24, 22, 52 and 24 respectively as on 16.03.18. So issue is fully priced as per latest earnings. On merchant banker's front, this is 29th IPO in the past three years (includes 1 main board IPO and the rest SME). Out of last 10 listings, 4 opened at discount, 1 at par, 4 with the premium ranging from 1% to 20%. The only main board listing (Apollo Micro) opened at a premium of around 73.8% on the day of listing and then price decreased near to issue price. As per financials, company's growth is good, RoNW is 14.47% for last three fiscals and issue is fully priced as per latest earnings. So we give NEUTRAL rating to this SME IPO.
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