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Uniparts India IPO  Fundamental Analysis

Uniparts India IPO

  • Uniparts is a global manufacturer of engineered systems and solutions and is a leading suppliers of systems and components for off-highway market in agriculture and construction, forestry and mining and aftermarket sectors on account of presence across over 25 countries.
  • The product portfolio includes core product verticals of 3-point linkage systems like in tractors used for agriculture, precision machined parts as well as adjacent product verticals of power take off fabrications and hydraulic cylinders or components thereof. It offers fully integrated engineering solutions from conceptualization, development and validation to implementation and manufacturing of the products.
  • The Issuer has an estimated 16.68% market share of the global 3PL market for FY22 in terms of value and an estimated 5.92% market share in the global PMP market in the CFM sector for FY22 in terms of value. The Issuer also caters to the aftermarket segment especially for 3PL product range. The Issuer provides replacements of 3PL parts to organized aftermarket retailers and distributors in North America, Europe, South Africa and Australia.
  • The customer base comprised over 125 customers in over 25 countries globally for FY22. Revenue generated from agriculture and CFM segments together constituted 95.74% (FY20), 96.07% (FY21) 95.35% (FY22) and 95.13% (3MFY23), respectively of total revenue from operations.
  • The Issuer has long-term relationship with global OEM players in the agriculture and CFM sectors, such as Tractors and Farm Equipment Limited, Doosan Bobcat North America , Claas Agricultural Machinery Private Limited , Yanmar Global Expert Co., Ltd and LS Mtron Limited. It also provides services to several organized aftermarket players and large farm and fleet retail store chains in Europe and the US, such as Kramp Groep B.V. and Tractor Supply Company .
  • The Issuer has five manufacturing facilities in India, two at Ludhiana, Punjab, one at Visakhapatnam, Andhra Pradesh, and two at Noida, Uttar Pradesh and a distribution facility in Noida, Uttar Pradesh. In the US, it has a manufacturing, warehousing and distribution facility at Eldridge, Iowa, and a warehousing and distribution facility at Augusta, Georgia. The Issuer has also set up a warehousing and distribution facility in Hennef, Germany, which serves as base for serving key European customers.

Financial Review

    Uniparts posted total revenues of Rs 347.76 crore for Q1FY23 and PAT of Rs 50.52 crore for the same period. During FY22, the total revenues increased by 30% to 1231.04 crore from Rs 947.69 crore in FY21. PAT increased to 166.89 crore in FY22 from 93.15 crore in FY21. The profitability margins are strong and increasing throughout the last three fiscals as can be seen from the table.

    Debt to Equity ratio is low at 0.20x as on 31st March 2022 which is another strength of the Issuer.

Table 1 - Financials and Ratios (Amount in Rs Crore)
Financials and Ratios

Amount in  INR Crores

Q1FY22 FY22 FY 21 FY 20
Total revenue 347.76 1231.04 947.69 938.84
Rev from operations 346.84 1227.42 903.14 907.22
PAT 50.52 166.89  93.15  62.64 
EBITDA 76.12 271.66 163.93 127.81
Total Assets 1063.51 1031.18 893.27 898.75
Net Cash generated from operations 55.23 84.88 152.76 130.5
EBITDA Margin 21.95% 22.13% 18.15% 14.09%
Net Margin 14.57% 13.60% 10.31% 6.90%

Valuation and Peer Comparison

The IPO is valued at 12.63x times with annualized EPS of 45.68 for Q2FY22, calculated at the upper price band of Rs 577. However, with FY22 EPS of 37.74, P/E is 15.29x. The industry average P/E is 27.26x. It peers and their (respective P/E) are Balkrishna Industries (26.44), Bharat Forge (36.73), Ramkrishna Forgings (18.60) as per RHP. P/BV is 3.80 (Q1FY22) and 3.65 (FY22). On comparing the P/E, it seems that valuations are reasonable.

Table 2 - Listed Peer Comparison
Particulars Balkrishna Industries> Bharat Forge Ramkrishna Forgings Uniparts India
Face Value 2 2 2 10
Revenue from operations for FY22 (INR Crores) 8295.12 10461.08 2320.25 1227.42
EBITDA 2446.67 2363.63 518.45 271.66
PAT 1435.38 1077.06 198.03 166.89
EPS 74.25 23.23 12.43 37.74
NAV per share 358.63 142.33 67.45 151.82
Return on net worth 20.70% 16.25% 18.36% 24.35%
P/E (FY22) 26.44 36.73 18.6 NA
Debt to equity ratio (in times) 0.36 0.86 1.48 0.20
P/BV 5.96 4.97 2.34 NA
CMP (as on 29th Nov 2022)> 2035 846.5 221.1 NA

Issue Details

Uniparts India IPO (Rs 835.61 crore) opens on 30th Nov- 2nd Dec 2022 with a price band of 548-577 per share. Retail quota is 35% and investors can apply with minimum bid of 25 shares (Rs 14,425). Maximum lot size is 325 shares (Rs 1,99,080).The issue is wholly OFS by promoter shareholder group and investors, Ashoka Investments Holdings Limited and AmbaDevi Mauritius Holding Limited. The Issue is expected to list on 12th Dec 2022.

Conclusion and Investment Strategy

Uniparts is an Indian based global manufacturer of engineered systems and solutions. The Group is a leading supplier of systems and components for the off highway market and operate out of six manufacturing facilities and four warehousing locations across US, Europe and India with its products reaching 25 countries.

Reviewer recommends Subscribe to the issue.

Review By CA Priyanka Choudhary on 10th Oct 2022

Review Author

About CA Priyanka Choudhary

CA Priyanka Choudhary, a freelance chartered accountant

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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