Airo Lam Ltd

Started in 2007, Airo Lam Limited manufactures and markets a range of HI pressure decorative laminates in India and internationally. They offers laminated sheets, pre-laminated boards, and laminated floorings under the various brands, such as Classico, Airolam, I-Lam, Airolite, Airoline, I-Lite, Premium Airodoor, Airodoor, Airo Flexi, Airo xterior, Airo Digilam, etc. Company's products mainly used in the kitchen furniture, workshops, bathroom furniture, interior doors, counter tops, and interior wall linings. They serves homes, offices, libraries, schools, colleges, universities, hospitals, laboratories, hotels, restaurants, shopping malls, food courts, store interiors, or airports through a network of dealers. The company also exports its products to various countries including the UAE, Syria, Kuwait, Bangladesh, Dubai, Singapore, Iran, etc. At present they have around 70 distributors and 4 stock points across the country. On performance front, ALLL has posted turnover/net profits of Rs. 64.17 cr. / Rs. 1.48 cr. (FY14), Rs. 67.23 cr. / Rs. 1.60 cr. (FY15), Rs.64.06 cr. / Rs. 1.67 cr. (FY16) and Rs. 71.47 cr. / Rs. 1.89 cr. (FY17). It suffered a setback in top line for FY16 but maintained growth in bottom lines. If we attribute latest earnings on fully diluted equity post issue, then asking price is at a P/E of around 30 plus against peers trading at a P/E of 10 to 45. It's trade receivables has gone up from Rs. 30.47 crore in FY16 to Rs. 36.60 crore in FY17 that raises concern. For last three fiscals, ALL has posted an average EPS of Rs. 1.61 on a paid up equity capital of Rs. 5.50 crore with an average RoNW of 11.13%. Issue is priced at a P/BV of 2.4. Thus issue appears fully priced. On merchant banker's front, this is the 49th mandate from Pantomath in last three years. Out of last 10 recent listings, 1 opened at discount, 1 at par and the rest with 1 to 18% premium on IPO price. As per financials, company's growth is very slow, RoNW is 11.13% for last three fiscals and issue is fully priced. But after demonetization organized players in this sector will get benefit and ALL has PAN India presence with 70 distributors and 4 stock points and this will help them capture more market share,  so we give NEUTRAL rating to this SME IPO.

• 1  Pravinbhai N. Patel
• 2 Sureshbhai Patel
• 3  Pravinbhai A. Patel
• 4 Prafulkumar Patel
• 5 Daxesh Raval