IPO

Report
“Subscribe with Caution” to
Rishabh Instruments Limited
IPO Report | “Subscribe with Caution” to
Rishabh Instruments Limited
29th Aug. 2023

Issue details
Salient features of the IPO:
• Rishabh Instruments Limited (RIL), who are a global energy efficiency Price band Rs. 418 - 441 per share
solution company focused on electrical automation, metering and
Face value Rs. 10
measurement, precision engineered products, is coming up with an IPO
to raise around Rs. 465.2-490.7cr, which opens on 30th Aug. and closes Shares for fresh issue 0.17cr shares
on 01st Sep. 2023. The price band is Rs. 418-441 per share.
• The IPO is a combination of fresh issue and OFS. RIL will not receive any Shares for OFS 0.94cr shares
proceeds from the OFS portion. From the fresh issue net proceeds, RIL Fresh issue size Rs.71.1 - 75.0cr
will be utilizing Rs. 62.8cr for financing the cost towards the expansion of
Nashik manufacturing facility I. Residual funds will be used for general OFS issue size Rs. 394.1 - 415.8cr
corporate purposes. 1.113cr shares
Total issue size
(Rs. 465.2 - 490.7cr)
Bidding date 30th Aug. – 01st Sep. 2023
Key competitive strengths:
MCAP at higher price band Rs. 1,674.1cr
• Ability to drive technology and innovation through advanced research Enterprise value at higher
and development capabilities Rs. 1,670.9cr
price band
• Global engineering solution provider operating in large addressable
markets and well positioned to benefit from mega industrialization DAM Capital Advisors Limited,
trends Mirae Asset Capital Markets
Book running lead manager (India) Private Limited, and Motilal
• Vertically integrated operations, backed by strong manufacturing
Oswal Investment Advisors
capabilities Limited.
• Track record of successful integration of acquired businesses or entities
across geographies Registrar KFin Technologies Limited
• Diversified product portfolio Sector Engineering solution provider
• Wide customer base
• Well-established and recognised brands
Promoter Mr. Narendra Joharimal Goliya

Risk and concerns:

Issue break-up

• The significant dependence on subsidiaries exposes the company to Percent of issue (%)
significant operational and financial risks. Category
• Foreign exchange fluctuations may adversely affect the company’s
earnings and profitability. QIB portion 50%
• The demand for the products in foreign countries is subject to
international market conditions and regulatory risks that could adversely Non institutional
15%
affect the business. portion

Retail portion 35%

Below are the key highlights of the company:
• Incorporated in 1982, RIL is a global efficiency solution company focused Indicative IPO process time line
on electrical automation, metering and measurement, precision Finalization of basis of allotment 06th Sep. 2023
engineered products, with diverse applications across industries including
power, automotive and industrial sectors. A wide range of products are Unblocking of ASBA account 07th Sep. 2023
available to the company’s customers who want cost-effective solutions
Credit to demat accounts 08th Sep. 2023
for measuring, controlling, recording, analyzing, and optimizing energy
and processes. In addition to providing electrical measurement and Commencement of trading 11th Sep. 2023
process optimization equipment, they design, develop, manufacture, and
Pre and post - issue shareholding pattern
sell an extensive range of devices under their own brand across several
sectors. Pre-issue Post-issue
• The company is a global leader in manufacturing and supply of analog
panel meters, and they are among the leading global companies in terms Promoter & promoter group 80.67% 70.68%
of manufacturing and supply of low voltage current transformers Public 19.33% 29.32%
(Source: F&S Report). Lumel is the most popular brand in Poland for
meters, controllers, and recorders and Lumel Alucast is one of the Total 100.00% 100.00%
leading non-ferrous pressure casting players in Europe (Source: F&S Retail application money at higher cut-off price per lot
Report).
• For customers requiring close-tolerance fabrication (such as automotive Number of shares per lot 34
compressor manufacturers and automation high precision flow meter
Application money Rs. 14,994 per lot
manufacturers), machining, and finishing of precision components, RIL
Research Analyst: Rajnath Yadav
also provides complete aluminium high pressure die casting solutions.
Email: rajnath.yadav@choiceindia.com
Ph: +91 6707 9999; Ext: 912
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Key highlights of the company (Contd…):

• The Company offers a wide range of products primarily categorized under five segments- (a) electrical automation; (b) metering,
control and protection devices (which together with electrical automation comprise industrial panel devices); (c) portable test and
measuring instruments; and (d) solar string inverters. They also offer aluminium high pressure die casting products. In FY23, RIL
generated 9.92% of its revenue from the electrical automation segment, 42.62% of revenue from the metering, control and
protection devices segment, 7.18% of revenue from the portable test and measuring instruments segment, 0.67% of revenue from
solar string inverters segment, and 39.62% of revenue from aluminium high pressure die casting products segment.
• As far as end users of their products are concerned, RIL’s products are used in a variety of industries, including industrial (FMCG,
pharmaceutical, cement, steel, railways), power (generation, transmission and distribution, renewable energy, oil and gas), OEM
industries (transformer, motor, cable and special machine manufacturers) and new applications (data centre, laboratories,
semiconductors, consumer electronics, and building automation).
• The Company generates a substantial amount of revenue from exports. In the last three fiscal FY23, FY22, and FY21, they have served
customers in over 100 countries including India, Germany, the United States, the United Kingdom, and the Middle East. There is no
single country that accounts for more than 20% of global sales in this export-oriented business. As on the date of RHP, the company
has four direct subsidiaries and four indirect subsidiaries.
• The company operates five manufacturing facilities out of which two are located in India and Poland each and one in China. They also
have one modification centre each in the United States and the United Kingdom, respectively. From these five manufacturing
facilities, they manufacture all of their products in-house.
• In India, both manufacturing facilities are located in Nashik, Maharashtra. Nashik Manufacturing Facility I is a vertically integrated
facility with end-to-end product development capabilities from concept design to testing. Nashik Manufacturing Facility II is also a
vertically integrated facility with a tool design facility. Both the Nashik manufacturing facilities hold ISO 9001:2015 certification of
quality management system.
• There are two manufacturing facilities in Poland, both at Zielona Góra. Manufacturing facility I in Poland produces electrical and
electronic products in dedicated facilities. Poland Manufacturing Facility II has an aluminium die casting facility comprising a foundry,
CNC machining, post processing facility (shot blasting, powder coating, painting, and washing lines), tool shop and a laboratory. Both
the Poland Manufacturing Facilities hold various accreditations including ISO 9001:2015, ISO 14001:2015 and IATF 16949:2016.
• The China manufacturing facility located in Shanghai and its production facility and R&D units hold ISO 9001:2015 certification of
quality management system. The products manufactured at the China manufacturing facility are certified by testing laboratories for
the CE, ROHS, and UKCA certifications.
• The company has a wide customer base, including long-standing and diversified companies like ABB Indian ltd., Siemens Ltd.,
Pronutec S.A., Lucy Electric India Pvt. Ltd., and Perel OY. As of May 31, 2023, they have 3000 sales touch points which includes direct
customers and distributors. During FY23, the top 10 global customers contributed only 31.92% of global sales revenue, the top 20
global customers contributed only 42.71% of global sales revenue, and the top 30 customers contributed only 49.28% of global sales
revenue.
• Across 81 districts in India, RIL has 175 distributors with direct sales conducted through 8 sales and marketing offices staffed by 53
engineers and 24 salespeople. The eight sales and marketing offices are located in New Delhi, Kolkata, Mumbai, Ahmedabad, Pune,
Chennai, Bangalore, Hyderabad, with resident sales engineers in 10 cities. Globally, RIL has access to over 100 countries through 5
sales and marketing offices and a 339 strong global network of distributors with as of May 31st, 2023. The company has 164 stockists
to catering to international customers across 70 countries including Germany, USA, UK, Australia, Middle East, etc.
• Lumel has 15 stockists in Poland and 20 stockists outside Poland. Lumel resident sales engineers are in UAE, Hungary, Taiwan, Spain,
Germany & Cyprus. This extensive network allows the company to provide an array of delivery options while servicing multiple
delivery locations despite local-level sales or distribution.
• RIL’s product portfolio consists of over 145 product lines and 0.13 mn stock keeping units as of May 31, 2023. In FY23, FY22, and
FY21, they manufactured an aggregate of 16.21 mn units, 14.02 mn, and 13.35 mn units of products, respectively, across their
product lines.
• In FY23, the installed capacity of its Nashik manufacturing Facility I is 0.33cr units and the capacity utilization is 58.53%, the installed
capacity of its Nashik manufacturing facility II is only 100 units and its capacity utilization is 86%, the installed capacity of China
manufacturing facility is 0.05cr units and the capacity utilization is 77.38%, the installed capacity of Poland manufacturing facility I is
1.33cr units and the capacity utilization is 23.49%, and the installed capacity of Poland manufacturing facility II is 1.18cr units and the
capacity utilization is 66.95%. Currently, the company has five manufacturing plants within which the total installed capacity is 2.89cr
units in FY23. The capacity utilization is 46.19% in FY23.

2
Key highlights of the company (Contd…):

• The company has served many customers in their different segment. In FY23, FY22, and FY21, they have served an aggregate of 280,
297, and 314 from India in the electrical automation products category. In metering, control, and protection devices category, they
have served an aggregate of 842, 565, and 567 customers from India. In the portable test and measuring instruments products
category, they have served to 228, 210, and 203 customers from India. In solar string inverter products category, they have served an
aggregate of 70, 89, and 81 customers from India. In the aluminium high pressure die castings products category, they have served an
aggregate of 82, 61 and 58 customers from Lumel Alucast.
• RIL’s revenue from operations increased by 21.1% to Rs. 569.5cr in FY23 from Rs. 470.3cr in FY22, this growth is primarily driven by
an increase in sales volume of their existing products categorized under metering, control and protection devices and aluminium high
pressure die casting. The revenue from export market grew by 17.3% to Rs. 374.4cr in FY23 from Rs. 319.1cr in FY22. The revenue
from India market grew by 29.1% to Rs. 195.1cr in FY23 from Rs. 151.2cr in FY22. Among total revenue from operations, export sales
accounted for 65.74% in FY23, 67.86% in FY22, and 67.75% in FY21, respectively. Sales from India accounted for 34.26% in FY23,
32.14% in FY22, 32.25% in FY21.
• Over FY20-FY23, the Company reported a 12.4% CAGR increase in revenue to Rs. 569.5cr in FY23 from Rs. 400.7cr in FY20. During the
period, domestic revenue increased by 12.9% CAGR and export revenue increased by 12.2% CAGR. EBITDA has increased at a CAGR of
8.4% to Rs.76.1cr from FY20-FY23 and EBITDA margin has declined by 216 bps from 14.9% in FY20 to 13.4% in FY23 due to increase in
cost of materials. Consequently, reported PAT increase by 16.3% CAGR to Rs. 49.7cr in FY23 from Rs. 31.6cr in FY20. PAT margin
slightly expanded by 85 bps from 7.9% in FY20 to 8.7% in FY23 because of the lower depreciation and finance cost. The debt-to-
equity ratio has improved from 0.29x in FY20 to 0.26x in FY23. Pre-issue RoCE and RoE stood at 13.8% and 12.4%, respectively, during
the period.

Peer comparison and valuation: As per the company’s RHP, there are no comparable listed firms in India or overseas that conduct
business similarly. RIL’s top line consists of 66% of export revenue, this indicates that it has already created a niche place in the global
market for its products. The company’s P/E multiple at a higher price band, after adjusting for post-IPO fully diluted paid-up equity,
comes out to 33.7x (to its FY23 EPS of Rs. 13.1), which seems fully priced.

Despite the company growing its business, the bottom line has remained stagnant, similar to the past number and the margins of the
company have not been stable, and thus we assign a “Subscribe with Caution” rating for the issue.

3
 About the issue:

• RIL is coming up with an IPO with 1.11cr shares (fresh issue: 0.17cr; OFS shares: 0.94cr shares) in offering. This offer represents 29.3%
of the post-issue paid-up equity shares of the company. Total IPO size is Rs. 465.2 - 490.7cr.

• The issue is through book building process with a price band of Rs. 418-441 per share.

• Lot size comprises of 34 equity shares and in multiple of 34 shares thereafter.

• The issue will open on 30th Aug. 2023 and close on 01st Sep. 2023.

• The issue size is Rs. 465.2 - 490.7cr.

• The IPO is a combination of fresh issue and OFS. RIL will not receive any proceeds from the OFS portion. Of the net proceeds from the
fresh issue, around Rs. 62.8cr will be used for financing the cost towards the expansion of Nashik manufacturing facility I. Residual
funds will be used for general corporate purposes.

• 50% of the net issue are reserved for qualified institutional buyers, while 15% and 35% of the net issue is reserved for non-
institutional bidders and retail investors, respectively.

• Promoter currently holds 80.67% stake in the company and post-IPO this will come down to 70.68%. Public holding will increase from
current 19.33% to 29.32%.

Pre and post-issue shareholding pattern (%)

Pre-issue Post-issue (at higher price band)

Promoter & promoter group 80.67% 70.68%

Public 19.33% 29.32%

Source: Choice Equity Broking

Indicative IPO process time line:

Unblocking of
Offer closes on
ASBA account
01-Sep-2023
07-Sep-2023

Commencement
Finalization of Credit to demat of trading
Offer opens on 11-Sep-2023
30-Aug-2023 basis of allotment accounts
06-Sep-2023 08-Sep-2023

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Pre-issue financial performance:

Performance over FY20-23: Over FY20-FY23, RIL was able to report consistent business growth due to its niche product profile. Although,
the company’s top line has been growing but the bottom line remained unchanged for FY22 and FY23.

As a result of consistent growth performance, the company achieved a decent 12.4% CAGR in revenue between FY20 and FY23 with Rs.
569.5cr in FY23 compared to Rs. 400.7cr in FY20. The domestic sales grew by 29.1% during FY23 to Rs. 195.1cr from Rs. 151.2cr in FY22.
Similarly, the revenue from export markets grew by 17.3% to Rs. 374.4cr in FY23 from Rs. 319.1cr in FY22. Export generates an average of
66% of the company’s revenue.

EBITDA has increased at a CAGR of 8.4% to Rs. 76.1cr from FY20-23, but EBITDA margin has shrunk by 216 bps from 14.9% in FY20 to
13.4% in FY23 due to an increase in the cost of materials. Consequently, reported a PAT increase by 16.3% CAGR to Rs. 49.7cr in FY23
from Rs. 31.6cr in FY20, but when compared with FY22 performance, it appeared to be almost the same in FY23 where in FY22, it
reported Rs. 49.65cr and in FY23 it reported Rs. 49.69cr.

PAT margin has increased by 85 bps from 7.9% in FY20 to 8.7% in FY23 because of the lower depreciation and finance cost. The debt-to-
equity ratio has improved from 0.29x in FY20 to 0.26x in FY23. During the period, Pre-issue RoCE and RoE stood at 13.8% and 12.4%,
respectively, which are average ratio signifying a moderate return on shareholder’s capital and an inefficient use of company resources.

Pre-issue financial snapshot (Rs. cr) FY20 FY21 FY22 FY23 CAGR over FY20-23 Y-o-Y (FY23 annual)
Sales of goods 394.64 381.4 453.3 549.6 11.7% 21.2%
Sales of products 3.27 6.0 14.5 16.2 70.5% 11.7%
Other operating revenue 2.781 2.5 2.4 3.8 10.6% 56.5%
Revenue from operation 400.7 390.0 470.3 569.5 12.4% 21.1%
Gross profit 237.4 233.7 273.1 313.2 9.7% 14.7%
EBITDA 59.7 57.5 73.0 76.1 8.4% 4.3%
EBIT 35.6 36.4 53.0 55.6 16.0% 5.0%
Reported PAT 31.5 35.9 49.7 49.7 16.3% 0.1%
Restated reported EPS 8.3 9.5 13.1 13.1 16.4% 0.1%

Cash flow from operating activities 71.7 52.9 13.3 27.5 -27.34% 106.77%
Revenue growth rate (%) -2.7% 20.6% 21.1%
Gross profit growth rate (%) -1.5% 16.8% 14.7%
Gross profit margin (%) 59.2% 59.9% 58.1% 55.0% (425) bps (307) bps
EBITDA growth rate (%) -3.6% 26.9% 4.3%
EBITDA margin (%) 14.9% 14.7% 15.5% 13.4% (153) bps (216) bps
EBIT growth rate (%) 2.2% 45.6% 5.0%
EBIT margin (%) 8.9% 9.3% 11.3% 9.8% 88 bps (150) bps
Restated reported PAT growth rate (%) 13.9% 38.2% 0.1%
Restated reported PAT margin (%) 7.9% 9.2% 10.6% 8.7% 85 bps (183) bps

Inventory days 178.5 192.3 200.7 6.1% 4.4%

Debtor days 60.6 57.6 64.4 3.1% 11.8%
Payable days 133.1 120.3 107.3 -10.2% -10.8%
Cash conversion cycle 106.0 129.6 157.8 22.0% 21.8%
Fixed asset turnover ratio (x) 1.9 1.7 2.1 2.5 10.0% 20.0%
Total asset turnover ratio (x) 0.8 0.8 0.8 0.9 2.3% 5.2%

Current ratio (x) 1.9 1.9 1.9 2.0 3.2% 5.0%

Quick ratio (x) 1.4 1.4 1.2 1.3 -2.1% 7.0%
Total debt (Rs.) 81.8 92.0 96.6 102.9 7.9% 6.5%
Net debt (Rs.) -35.6 -26.0 -8.6 -3.2 -55.2% -62.6%
Debt to equity (x) 0.29 0.31 0.28 0.26 -3.8% -9.6%

RoE (%) 11.1% 12.0% 14.6% 12.4% 128 bps (219) bps
RoA (%) 6.4% 7.0% 8.8% 7.7% 121 bps (115) bps
RoCE (%) 11.4% 12.2% 15.2% 13.8% 235 bps (143) bps

Note: Pre-IPO financial and ratios; Source: Choice Equity Broking

5
 Competitive strengths:

• Ability to drive technology and innovation through advanced research and

development capabilities
• Global engineering solution provider operating in large addressable markets and well
positioned to benefit from mega industrialisation trends
• Vertically integrated operations, backed by strong manufacturing capabilities
• Track record of successful integration of acquired businesses or entities across
geographies
• Diversified product portfolio
• Wide customer base
• Well-established and recognised brands

Business strategy:

• Enhance product innovation, engineering and design competence while focussing on

higher value addition
• Expanding geographical footprint
• Continue to pursue our strategy for inorganic growth
• Target new customers and expand existing customer accounts
• Explore opportunities to tap emerging products and services segments
• Promote product localization

Risk and concerns:

• The significant dependence on subsidiaries exposes the company to significant

operational and financial risks.
• Foreign exchange fluctuations may adversely affect the company’s earnings and
profitability.
• The demand for the products in foreign countries is subject to international market
conditions and regulatory risks that could adversely affect the business.

6
Financial statements:
Consolidated profit and loss statement (Rs. Cr)
FY20 FY21 FY22 FY23 CAGR over FY20-FY23 Annual growth over FY22
Revenue from operations 400.7 390.0 470.3 569.5 12.4% 21.1%
Cost of materials consumed (161.1) (148.9) (201.1) (235.0) 13.4% 16.9%
Purchase of Stock-in-trade (5.1) (6.3) (12.9) (25.9) 72.3% 101.4%
Changes in inventories of finished goods,
2.8 (1.1) 16.8 4.6 17.5% -72.4%
work-in-progress, stock-in-trade and scrap
Gross profit 237.4 233.7 273.1 313.2 9.7% 14.7%
Employee benefits expense (113.0) (114.9) (125.7) (145.1) 8.7% 15.4%
Other expenses (64.7) (61.3) (74.3) (92.0) 12.4% 23.8%
EBITDA 59.7 57.5 73.0 76.1 8.4% 4.3%
Depreciation and amortization expenses (24.0) (21.1) (20.0) (20.5) -5.2% 2.4%
EBIT 35.6 36.4 53.0 55.6 16.0% 5.0%
Finance costs (4.0) (3.2) (3.4) (5.2) 8.8% 50.1%
Other income 8.7 12.5 9.7 10.2 5.7% 6.0%
PBT 40.3 45.8 59.2 60.7 14.6% 2.5%
Tax expenses (8.8) (9.9) (9.6) (11.0) 7.9% 15.0%
Reported PAT 31.5 35.9 49.6 49.7 16.4% 0.1%
Share of Associate 0.0 0.0 0.0 0.0 -15.7% -55.0%
Consolidated PAT 31.5 35.9 49.7 49.7 16.3% 0.1%

Consolidated balance sheet statement (Rs. Cr)

FY20 FY21 FY22 FY23 CAGR over FY20-FY23 Annual growth over FY22
Equity share capital 14.6 14.6 14.6 29.3 26.0% 100.0%
Instruments entirely equity in nature 12.9 10.8 10.8 10.8 -5.8% 0.0%
Other equity 256.4 273.8 315.0 361.0 12.1% 14.6%
Non-Controlling Interest 1.4 2.9 5.6 7.7 74.6% 37.6%
Non current borrowings 31.8 45.5 33.6 25.8 -6.7% -23.2%
Lease liabilities 13.2 6.8 0.1 0.6 -64.0% 945.8%
Net deferred tax liabilities 5.2 5.4 6.2 5.0 -1.3% -19.5%
Provisions 6.4 7.2 7.1 8.2 8.4% 15.6%
Trade payables 51.8 62.1 67.8 82.9 17.0% 22.2%
Current borrowings 49.9 46.5 63.0 77.0 15.5% 22.3%
Lease liabilities 8.6 7.1 6.7 2.4 -34.6% -64.2%
Current net tax liabilities 0.0 1.9 0.1 0.0 0.0% -100.0%
Other financial liabilities 22.7 11.3 14.4 10.6 -22.5% -26.5%
Provisions 4.2 4.9 4.4 6.1 12.9% 36.6%
Other current liabilities 10.1 11.1 14.5 21.7 29.1% 49.7%
Total liabilities 489.3 512.0 563.9 648.9 9.9% 15.1%

Property, plant and equipment 153.4 198.1 194.4 192.6 7.9% -0.9%
Capital work-in-progress 31.6 2.1 5.1 7.6 -37.8% 48.3%
Goodwill 21.1 21.2 21.1 21.3 0.3% 1.4%
Other Intangible Assets 6.1 5.1 4.2 5.3 -4.9% 25.4%
Investments 0.2 0.2 0.2 0.2 8.4% 3.4%
Other non current financial assets 1.0 2.3 3.5 0.7 -11.0% -80.4%
Deferred tax assets 0.8 1.5 1.7 2.1 36.3% 22.3%
Other non current assets 1.2 1.6 1.2 9.3 95.9% 669.6%
Inventories 73.4 79.4 128.4 153.5 27.9% 19.5%
Trade receivables 61.2 68.3 80.0 120.9 25.5% 51.2%
Cash and cash equivalents 117.4 117.9 105.1 106.1 -3.3% 0.9%
Other current financial assets 6.9 2.5 2.4 2.1 -32.3% -10.9%
Current net tax assets 1.2 0.1 0.5 0.9 -9.0% 75.8%
Other current assets 13.8 11.6 16.1 26.3 24.1% 63.3%
Total assets 489.3 512.0 563.9 648.9 9.9% 15.1%

Note: Pre-IPO financials; Source: Choice Equity Broking

7
Financial statements (Contd…):
Consolidated cash flow statement (Rs. Cr)
FY20 FY21 FY22 FY23 CAGR over FY20 - FY23 Annual growth over FY22
Cash flow before working capital changes 65.1 65.4 75.9 89.3 11.1% 17.6%
Working capital changes 16.1 (5.4) (51.5) (48.5) -6.0%
Cash flow from operating activities 71.7 52.9 13.3 27.5 -27.3% 107.1%
Purchase of fixed assets (46.7) (35.4) (15.8) (30.3) -13.4% 90.9%
Cash flow from investing activities (63.5) (20.8) (10.8) (2.7) -65.0% -74.8%
Cash flow from financing activities 21.0 (23.0) (7.1) (4.5) -36.3%

Net cash flow 29.1 9.1 (4.5) 20.3 -11.4%

Opening balance of cash 13.5 42.8 54.3 46.2 50.8% -14.9%
Net foreign exchange difference 0.2 2.4 (3.5) 0.0 -48.3%
Closing balance of cash 42.8 54.3 46.2 66.6 15.8% 44.0%

Consolidated financial ratios

Particulars FY20 FY21 FY22 FY23
Profitability ratios
Revenue growth rate (%) -2.7% 20.6% 21.1%
Gross profit growth rate (%) -1.5% 16.8% 14.7%
Gross profit margin (%) 59.2% 59.9% 58.1% 55.0%
EBITDA growth rate (%) -3.6% 26.9% 4.3%
EBITDA margin (%) 14.9% 14.7% 15.5% 13.4%
EBIT growth rate (%) 2.2% 45.6% 5.0%
EBIT margin (%) 8.9% 9.3% 11.3% 9.8%
Restated adjusted PAT growth rate (%) 13.9% 38.2% 0.1%
Restated adjusted PAT margin (%) 7.9% 9.2% 10.6% 8.7%
Turnover ratios
Inventory days 178.5 192.3 200.7
Debtor days 60.6 57.6 64.4
Payable days 133 120 107
Fixed asset turnover ratio 1.9 1.7 2.1 2.5
Total asset turnover ratio 0.8 0.8 0.8 0.9
Return ratios
RoE (%) 11.1% 12.0% 14.6% 12.4%
RoA (%) 6.4% 7.0% 8.8% 7.7%
RoCE (%) 11.4% 12.2% 15.2% 13.8%

Note: Pre-IPO financial ratios; Source: Choice Equity Broking

8
IPO rating rationale

Subscribe: An IPO with strong growth prospects and valuation comfort.

Subscribe with Caution: Relatively better growth prospects but with valuation discomfort.
Avoid: Concerns on both fundamentals and demanded valuation.

Research disclaimer & disclosure inter-alia as required under Securities and Exchange Board of India (Research
Analysts) Regulations, 2014

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Yes /
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(ies) covered in the Research report

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Rajnath
Digitally signed by Rajnath Budhiram Yadav
DN: c=IN, st=Maharashtra,
2.5.4.20=10b41e42970595818c89a904fbc80b
2b7e0bfebc338ba188f0ce62bb27c8e422,
postalCode=400043, street=Room No 313,

Budhira
1/6,BMC Colony Road,Tata Nagar,
Govandi,Mumbai,Shivaji
Nagar,Mumbai,Mumbai,
pseudonym=16f48c44447554f1e9afcb47a7c
39492,

m Yadav
serialNumber=9d002b6e55a3b08822ad2c58
096b1dd83544dfbf0b76012eae09d943ba909
4e0, title=0690, o=Personal, cn=Rajnath
Budhiram Yadav
Date: 2023.08.29 17:27:26 +05'30'