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Dharmaj posted total revenues of Rs 221.17 crore for 4 months ended July 2022 and PAT of Rs 18.36 crore for the same period. During FY22, the total revenues increased by 30% to 396.29 crore from Rs 303.57 crore in FY21. PAT increased to 28.69 crore in FY22 from 20.96 crore in FY21. The EBITDA margins show an increasing trend being 12.15%, 11.72%, 10.59% and 9.37% for Jul 31st 2022, FY22, FY21 and FY20 respectively. Net margins also have an increasing trend for the Issuer as can be seen in the table.
Debt to equity ratio is 0.50x as on 31st March 2022.
Financials and Ratios | Amount in INR Crores | |||
|
Jul 31st 2022 | FY22 | FY 21 | FY 20 |
Total revenue | 221.17 | 396.29 | 303.57 | 199.17 |
Rev from operations | 220.94 | 394.21 | 302.41 | 198.22 |
PAT | 18.36 | 28.69 | 20.96 | 10.76 |
EBITDA | 26.85 | 46.19 | 32.04 | 18.58 |
Total Assets | 305.76 | 219.55 | 128.87 | 92.58 |
Net Cash generated from operations | -2.33 | 16.41 | 12.88 | 2.05 |
EBITDA Margin | 12.15% | 11.72% | 10.59% | 9.37% |
Net Margin | 8.31% | 7.28% | 6.93% | 5.43% |
The IPO is valued at 10.62x times with annualized EPS of 22.32 for 4 months ended 31st July 2022, calculated at the upper price band of Rs 237. However, with FY22 EPS of 11.62, P/E is 20.40x. The industry average P/E is 24.04x. Rallis, India Pesticides, Punjab Chemical, Bharat Rasayan, Ascetic Lifesciences, and Heranba are its listed peers and their respective P/E can be seen in the peer comparison table. It should also be noted that Dharmaj is quite smaller in terms of revenues when compared to its peers.
P/BV is 5.78 (4 months ending July 31st 2022) and 7.06 (FY22). Valuations appear to be reasonable.
Listed Peer Comparison | |||||||
Particulars | Rallis | India Pesticides | Punjab Chemical | Bharat Rasayan | Astec Lifesciences | Heranba | Dharmaj |
Face Value per share | 1 | 1 | 10 | 10 | 10 | 10 | 10 |
Total Income for FY22 (INR Crores) | 2603.93 | 716.14 | 933.46 | 1301.16 | 676.57 | 1450.4 | 220.9 |
EPS | 8.44 | 13.78 | 68.07 | 423.52 | 45.87 | 47.25 | 7.4 |
NAV per share | 87.25 | 55.39 | 184 | 1853.11 | 202.33 | 178.55 | 40.99 |
Return on net worth | 9.68% | 24.76% | 36.99% | 22.85% | 22.66% | 26.46% | 18.15% |
P/E (FY22) | 27.45 | 18.53 | 17.51 | 24 | 45.92 | 10.8 | NA |
Debt to equity ratio (in times) | 0.03 | 0.02 | 0.39 | 0.23 | 0.70 | 0.07 | 0.50 |
P/BV | 2.73 | 4.85 | 7.92 | 6.57 | 8.66 | 3.39 | NA |
CMP (as on 24th Nov 2022) | 241.35 | 249.9 | 1173.6 | 10102 | 2130 | 518.9 | NA |
Dharmaj Crop Guard IPO (Rs 251.15 crore) opens on 28th Nov- 30th Nov 2022 with a price band of 216-237 per share. Retail quota is 35% and investors can apply with minimum bid of 60 shares (Rs 14,220). Maximum lot size is 840 shares (Rs 1,99,080).The issue is both fresh issue (Rs 216 crore) an offer for sale (Rs 35.15 crore) by promoter shareholder group. Net proceeds would be used to repay the NCDs (Rs 644 crore) and rest towards corporate purposes. The Issue is expected to list on 8th Dec 2022. Net proceeds of the offer to fund capex ( Rs 104.97 crore), funding working capital (Rs 45 crore) and repayment of certain borrowings of Rs 10 crore.
Dharmaj Crop Guard has a diversified portfolio of agrochemical products. The Issuer has established distribution network with branded products. It also has exposure to institutional sales of agro chemical products across India and international markets. The Issuer has a pan-India sales and dealer presence in 17 states with a dedicated sales force that provides customer service and undertakes product promotion. As of September 30, 2022, the network comprised over 4,362 dealers having access to 16 stock depots. Financial profile of the Issuer is growth oriented with increasing trends in revenues and its profitability margins over the last three fiscals. The Issuer seeks to increase its manufacturing capacity with the net IPO proceeds. Hence one shall Apply to the Issue.
Review By CA Priyanka Choudhary on 12th Nov 2022
About CA Priyanka Choudhary
Priyanka Choudhary Jain is a Chartered Accountant and an experienced credit analyst. She has worked with CRISIL as Senior Credit Analyst on ratings assignments including business and financial analysis in Corporates as well as the Public Finance Sector.
Email: [email protected]
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