The total revenue of Tega for Q1FY22 was Rs 179.39 crore and PAT was Rs 11.88 crore for the same period. The total revenues of the Issuer increased by 23% in FY21 to Rs 856.68 crore from Rs 695.54 crore in FY20. The increase was due to the increase in revenue from operations by 17%. Other income rose substantially by 378% due to an increase in net gain from foreign currency fluctuations and the one-time receipt of government grants in FY21. Tega posted an adjusted PAT of Rs 85.25 crore in FY21 (adjusted for other income) as against Rs 65.50 crore in FY20. The profitability margins are strong and show an increasing trend since the last three fiscals as seen in Table 1 below.
The debt to equity ratio was 0.36x as of the end of FY21. Return on equity was 1.91%, 22.25%, 14.43% and 8.33% for Q1FY22, FY21, FY20 and FY19 respectively.
|Cash generated from operations||49.24||170.25||128.38||68.67|
The Issue is priced at 53.93x with annualized EPS of 8.40 calculated at the upper price band of Rs 453 per share. The Issue appears to be reasonably priced with a peer average P/E of 30.25. P/BV is 4.19 at NAV of Rs 108.06 as of the end of Q1FY22. AIA Engineering (share price of Rs 1848.10 as of 28 th Nov 2021) is shown as the peer of the Issuer as per the RHP.
|Particulars||AIA Engineering Ltd||Tega Industries|
|Face value per share||2||10|
|Total income for FY 21 (Cr)||3,053.69||856.68|
|EPS (as on 28 Nov 21)||61.47||24.1|
|NAV per share||449.99||105.04|
|Return on net worth||13.33%||22.23%|
|P/E (As on 28 Nov 21)||30.25||53.93|
|P/B (As on 28 Nov 21)||4.12||4.19|
Tega Industries IPO opens on 1st Dec 2021 with an issue size of Rs 619.23 crore ( 100% OFS ). The Issue has a price band of Rs 443-453 per share, the retail portion is 35% and one application amount is Rs 14949. The objective of the Issue is to reap the benefits of listing and the promoter’s shareholding would come down to 79% from 85%. The Issue closes on 3 rd Dec and is expected to list on 13 th Dec 2021.
The Issuer provides a wide range of products and solutions for processing across different stages of mineral processing and the products are critical to the overall productivity of a mineral processing site. In-house R&D and manufacturing capabilities, including design, process engineering, and manufacturing facilitate customized designs in a short time frame, offer comprehensive solutions and better service standards to the customers, and enable cross-selling of multiple products. The sector in which the Issuer operates is a capital and working capital intensive sector. The Issuer has grown with both organic and inorganic acquisitions in the past. The Issuer has reasonable profit margins and the financials show an increasing trend in the last three fiscals. Looking at the reasonable valuations of the Issue, one may apply to the IPO for the short to medium term.
Review By CA Priyanka Choudhary on 24th Nov 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.
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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