Total revenues have increased substantially by 201% for FY21 to Rs 3815 crore from Rs 1265 crore in FY20. This has been due to the impact of the CCVL acquisition. Due to the acquisition of CCVL, the financial results of FY21 are not comparable to other fiscal years. The topline for FY20 has been reduced slightly to Rs 1265.51 crore from Rs 1266 crore. The profitability margins for the company were reasonable for FY20 and FY19.
Debt to equity is at high levels. Return on net worth is negative for FY21.
|Cash and Bank||651.26||112.72||52.25|
|Cash generated from operations||1076.39||166.06||234.21|
The Issue is priced at 17.68x at EPS of 30.6 as of 31st March 2021 and calculated at the upper price band of Rs 541 per share. If we consider the earnings of FY20 (2.04 per share), the issue is exorbitantly priced at 265.20. The peer average P/E is 43.1x indicating overpricing of the Issue.
PI Ind., SRF Limited, Finolex Ind., and Navin Fluorine are the peers of the company as per RHP.
CSL is the third-largest manufacturer of caustic soda and the largest manufacturer of hydrogen peroxide in the South India region, on the basis of installed production capacity as of December 31, 2020, and one of the oldest manufacturers in the chloromethanes market in India.
Caustic soda and hydrogen peroxide are largely used in the textile and paper sectors, where demand continues to be weak and improvement in these sectors is slow. Demand from the stationary sector continues to be affected due to the closure of schools and colleges. The financial performance of the Issuer does not show a true picture of the Issuer for FY21. Financials for FY20 have been hit by the pandemic and the recovery may be slower. Hence, an investor may avoid this IPO.
Review By CA Priyanka Choudhary on 4th Aug 2021
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]
DISCLAIMER: No financial information whatsoever published anywhere here should be construed as an offer to buy or sell securities, or as advice to do so in any way whatsoever. All matter published here is purely for educational and information purposes only and under no circumstances should be used for making investment decisions. Readers must consult a qualified financial advisor prior to making any actual investment decisions, based on information published here. Any reader taking decisions based on any information published here does so entirely at own risk. Investors should bear in mind that any investment in stock markets are subject to unpredictable market related risks. Above information is based on RHP and other documents available as of date coupled with market perception. Author has no plans to invest in this offer.
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