Alphalogic Techsys Limited

Started in 2008, Alphalogic Techsys Limited is Pune based Software Consulting Firm. Till 2016, it was proprietorship company, than it was converted to partnership firm and in Sept 2018, it was converted to public limited company. It is engaged in offering end-to-end technology solutions, technology consulting services and support. Alphalogic Techsys has clients in India and multiple locations such as Australia, USA and UK. The services range of the company includes mobile application development, data analytics services, UI/UX consulting, web application development, and business intelligence. The services offered by the company covers various sectors including Software-as-a-service (SAAS Software), Healthcare, Social Networking, Fintech, E-commerce, and many others. Alphalogic Techsys improves the services offered to the clients by customizing the offerings from time to time based on clients' needs. The total strength of manpower as on 31st March 2019 was 29 employees including executive directors for Alphalogic. As per the financial performance front, Alphalogic has posted turnover/net profits of Rs. 1.90 cr. / Rs. 0.34 cr. (FY17), Rs. 2.21 cr. / Rs. 0.37 cr. (FY18) and Rs. 5.10 cr. / Rs. 2.19 cr. (FY19). Company has shown good growth, but extra ordinary growth of FY19 generates doubt. According to management, since the preliminary work and expenses were already incurred in previous years for a big contract executed in FY19 with good margins has resulted in boosting its bottom line by over 43%. However, the company hopes to maintain better margins coupled with growth in top lines going forward. For last three fiscals, Alphalogic has posted an average EPS of Rs. 6.25 and an average RoNW of 200.16%. The issue is priced at a P/BV of 2.78 on the basis of its NAV of Rs. 30.25 post issue. If we take FY19 earnings and attribute it on fully diluted post issue equity, then asking price is at a P/E of around 16.84, thus issue appears fully priced. Comparison between listed peers is shown in above table, but they are not strictly comparable. On BRLM's front, for Finshore Management Services Limited this is the 14th IPO in last three fiscals and from last 10 IPOs, 3 opened below issue price, one at issue price and remaining opened above issue price with 0% to 20% premium on the day of listing. As of now, from last 10 IPOs, 8 are trading below issue price and remaining above issue price. ( As on 22.08.2019 ) Company has shown good results, RoNW is 200.16% for last three fiscals and issue looks reasonably priced with respect to latest earnings. Main concern is sudden rise in top-line and bottom-line and if company can maintain it in future or not. Performance of BRLM is not good. So we give NEUTRAL rating to this SME IPO.

• 1 Mr. Anshu Goel
• 2 Mr. Dhananjay Subhash Goel