Zeal Global Services Limited

As per financial performance, Zeal Global Services Limited has posted total income/net profits of Rs 76.71 Cr / Rs 1.33 Cr (FY20), Rs 60.95 Cr / Rs 1.69 Cr (FY21), Rs 121.28 Cr / Rs 5.24 Cr (FY22) and Rs 95.05 Cr / Rs 8.26 Cr (10M FY23), So company has shown good results, but sudden rise in net profit just before IPO raises doubts. Company has posted an average EPS of Rs 4.54/- and average RoNW of 43.52% for last three fiscals. As per FY22 earnings on fully diluted equity post issue, asking price is at P/E of around 26.15 and as per annualised FY23 earnings P/E is 13.82. As per RHP, there are no listed peers. On BRLM's front, Expert Global Consultants Private Limited is associated with this SME IPO and handled 3 SME IPOs in last 2 years. From last 3 IPOs, one opened below issue price and remaining opened above issue price on the listing day. As of now from last 3 IPOs, 2 are trading below issue price and remaining are trading above issue price. ( As on 25.07.23 ) As per financials, Zeal Global Services Limited has shown good results, RoNW is 43.52% and P/E is respectively 26.15 and 13.82 as per FY22 and annualised FY23 earnings, which looks fully priced. But company hasn't provided results for complete FY23 which is surprising and sudden rise in net profit just before IPO, generates doubts. Also issue expenses are high. Company is in business of providing logistics solutions in Air Cargo Industry, which is a highly fragmented and competitive. So we are giving AVOID rating to this SME IPO. Readers must consult a qualified financial advisor prior to making any actual investment decisions.

• 1  Mr. Nipun Anand
• 2  Mr. Vishal Sharma