Z-Tech (India) Limited originally designs civil engineering products and services with state of the art specialty in Geo Technical Specialised Solutions in the field of infrastructure and civil construction projects to India. It includes a range of techniques, methodologies, and technologies aimed at optimizing the performance and stability of structures built on or in the ground. In addition to this, they are actively engaged in the waste management sector, where the focus involves creating theme parks through the utilization of recycled scrap materials. Simultaneously, they are dedicated to implementing innovative waste water management solutions for industrial units, employing the cutting-edge GEIST technology. This dual commitment underscores the holistic approach to sustainable practices, transforming discarded materials into recreational spaces while efficiently managing industrial wastewater through state-of-the-art technology. The Company is engaged in providing innovative, safe and eco-friendly engineering solutions to the customers. These solutions include three major categories: 1. Sustainable Theme Park Development 2. Industrial Waste Water Management 3. Geo Technical Specialised Solutions Sustainable Theme Park Development includes but not limited to creating beautification artwork and infrastructure, landscape designing, sourcing and execution of waste materials and transforming them into meaningful and attractive show pieces. It involves incorporating environmentally friendly practices and responsible resource management throughout the planning, design, and operational phases of the project. It goes beyond traditional development approaches by prioritizing ecological, social, and economic considerations. Industrial Waste Water Management involves the systematic treatment and responsible handling of wastewater generated by industrial processes. The goal is to mitigate the environmental impact of potentially harmful substances, promote water conservation, and even extract valuable resources from the wastewater. Under this segment, we have acquired GEIST, a water treatment technology, developing solutions for the recovery of chemicals from industrial waste water streams. It offers Turnkey Solutions for achieving profitable zero liquid discharge (ZLD). This technology is also termed as WOOW (Wealth out of Waste) Technologies. Geo Technical Specialised Solutions includes but not limited to reinforcement of soil walls and slopes, slope stabilization, retaining structures, ground improvement, riverside erosion control, coastal protection and similar activities. These services are offered including designing, supplying and construction undertaken by the company’s in-house chartered engineers and backed up by a full indemnity supervision team. The company has major thrust on its high margin business of sustainable theme parks that contributes around 60% it its top lines for last two fiscals. Considering its ongoing projects worth Rs 168+ Cr and many more in pipeline, it is poised for bright prospects ahead. As per financial performance, Z-Tech (India) Limited has posted total income / net profits of Rs 23.96 Cr / Rs 0.70 Cr (FY21), Rs 30.84 Cr / Rs 0.07 Cr (FY22), Rs 25.88 Cr / Rs 1.96 Cr (FY23) and Rs 67.37 Cr / Rs 7.79 Cr (FY24). So as per previous financials data, company has shown zig-zag results, but sudden rise in net-profit just before IPO is very surprising. Company has posted an average EPS of Rs 4.22 and average RoNW of 19.75% for last three fiscals. Issue is priced at a P/BV of 4.52 as per NAV of 24.32 as on 31.03.24. If we attribute latest earnings of FY22, FY23 and FY24 on fully diluted equity post issue, then asking price is at a P/E of around 1902.29, 72.00 and 18.07 respectively, which looks fully priced. As per RHP, comparison between listed peers is shown in above table. On BRLM's front, Narnolia Financial Services Limited is associated with this SME IPO and handled 9 SME IPOs in last 2 year. From last 9 SME IPOs, all opened above issue price on the day of listing. As of now from last 9 SME IPOs, two are trading below issue price and remaining are trading above issue price. ( As on 24.05.24 ) As per financials, Z-Tech (India) Limited has shown zig-zag results, RoNW is 34.18% and P/E is respectively 1902.29, 72.00 and 18.07 as per FY22, FY23 and FY24 earnings. So, issue looks fully priced, but sudden rise in net-profit is very surprising. Current ongoing projects worth Rs 168+ Cr. Company is engaged in providing engineering solution include three major categories: Sustainable Theme Park Development, Industrial Waste Water Management, Geo Technical Specialised Solutions to the customers, which is highly fragmented and competitive business segment. BRLM performance is good. So, we give SUBSCRIBE rating for this IPO. Readers must consult a qualified financial advisor prior to making any actual investment decisions.
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