Latteys Industries Limited

Started in 2013, Ahmedabad - Gujarat based, Latteys Industries Limited is a company engaged in the business of manufacturing of pumping solutions for homes, agriculture & industrial sectors. Pumps include Submersible, Self-Priming, Centrifugal, Shallow and Horizontal Pumps. The Company manufactures more than 700 models of pumps as its portfolio. These pumps are widely used by Domestic and Industrial sectors. Latteys Industries started manufacturing in the year 2004 in Chatraal, Gujarat and moved to GIDC Naroda, Gujarat with an area of 5,718 sq. meters in the year 2011. The Company currently has an installed production capacity of 1,59,500 pumps p.a. and its operating at around 83% utilisation. It has 76 employees at its manufacturing facility and registered office. LIL requires raw materials like EC Grade, winding wire and cable, stainless steel pipe, electrical sheet stamping, etc. which are procured from various industries from domestic market. Company's customers are mostly dealers and direct users. Company has branch offices in 9 locations across India. Company's major market is Gujarat, UP and Bihar. As per financial performance, LIL has posted total revenue/net profits of Rs. 18.56 cr. / Rs. 0.14 cr. (FY14), Rs. 21.53 cr. / Rs. 0.14 cr. (FY15), Rs. 26.05 cr. / Rs. 0.31 cr. (FY16) and Rs. 35.77 cr. / Rs. 0.56 cr. (FY17). For upto H1 of the FY18 it has earned net profit of Rs. 0.3 cr. on a turnover of Rs. 15.27 cr. So company has shown good performance. For last three fiscals it has posted an average EPS of Rs. 1.30 and an average RoNW of 15.01%. The issue is priced at a P/BV of 2.52 on the basis of post issue NAV of Rs. 26.16. If we annualise latest earnings and attribute it on fully diluted equity post issue then asking price is at a P/E of around 52. As per offer documents, industry average P/E is 50.88. So, issue looks fully priced as per latest earnings.  On BRLM's front, for Pantomath Capital Advisors Private Limited, this is the 63rd IPO since last three fiscals and out of recent 10 listings, 1 listed at par and remaining with 1% to 40% premium on the day of listing. As of now from last 10 IPOs, 6 are trading above issue price and remaining below issue price or at par. So track record of BRLM is good. As per financials, company's performance is good, RoNW is 15.01% and issue is fully priced as per latest earnings. So we give NEUTRAL rating to this SME IPO as per current market situation.

• 1 Mr Kapoor Chand Garg
• 2 Mr Pawan Garg