Fidel Softech Limited

Started in 2003, Fidel Softech Limited, is a Pune - Maharashtra based company and LangTech Consulting firm offering technology services with local language UI/ UX. The services offered by our Company includes IT services including Software development, Infrastructure & Cloud support, Localization including translation, interpretation, software localization & multilingual data creation and Consulting & Staffing services including training. Company is a LangTech Consulting firm helping the clients with either Technology-Languages- People. The Company offers Software development & Cloud infrastructure support services, localisation services; such as Translation, Interpretation, Content creation, Multi lingual data creation, transcription & Annotation for training AI engines, Video subtitling and other video audio services, Data engineering, testing, scripting & tooling services and Consulting & Staffing services. The customer base is spread across the globe with presence in countries like Argentina, Belgium, China, Cyprus, Czech Republic, Dubai, Egypt, Germany, Hong Kong, Ireland, Italy, Japan, Kingdom of Saudi Arabia, Malaysia, Mauritius, Netherlands, New Zealand, Poland, Portugal, Russia, Singapore, South Africa, South Korea, Spain, Sweden, Taiwan, Ukraine, United Arab Emirates, United Kingdom, and United States of America. The sales through exports contributed 86.09%, 86.89% and 82.40% respectively from the revenue from operation for the year ended March 31, 2022, 2021 and 2020 respectively. As per financial performance, Fidel Softech has posted total income/net profits of Rs 22.80 Cr / Rs 3.15 Cr (FY20), Rs 26.21 Cr / Rs 3.45 Cr (FY21) and Rs 26.87 Cr / Rs 4.56 Cr (FY22). So company has shown good result, but sudden rise in net profit in IPO year raises doubts. Company has posted an average EPS of Rs 3.92 and average RoNW of 34.12% for last three fiscals. Issue is priced at a P/B of 1.79 as per NAV of Rs 20.64 post issue. As per FY21 earnings on fully diluted equity post issue, asking price is at P/E of around 15 and as per FY22 earnings P/E is 11. As per RHP, there are no listed peers.   On BRLM's front, Shreni Shares Private Limited associated with this SME IPO and handled 9 IPOs in last 3 years. From last 10 IPOs, 7 opened above issue price and remaining below or at par of issue price. As of now from last 10 IPOs, 9 are trading above issue price and remaining is trading below issue price. ( As on 26.05.22 ) As per financials Fidel Softech Limited, has shown good results, RoNW is 30.68% and P/E is respectively 15 and 11 as per FY21 and FY22 earnings, which looks fully priced. But sudden rise in profit raises doubts. This business segment of LangTech has good opportunities as all Softwares are coming with multiple language support. Performance of BRLM is good. so we are giving NEUTRAL rating to this IPO.

• 1 Sunil Sudhakar Kulkarni
• 2 Prachi Sunil Kulkarni