NEW DELHI: Auto component maker Sandhar Technologies on Monday made a decent debut as the scrip got listed at Rs 346.10 on the NSE, a 4.25 per cent premium to the issue price of Rs 332. On BSE, the stock got listed at Rs 345.
The company's Rs 512-crore IPO, which was open for subscription during March 19-21, was subscribed 6.2 times.
Sandhar Technologies is into designing and manufacturing a diverse range of automotive components, parts and systems, largely focused on safety and security systems of vehicles.
The company is the leader in the two-wheeler locking systems and the commercial vehicle rearview market in India. It's one of the two leading companies dealing in commercial vehicle locking and two-wheeler rear view systems.
It has 29 manufacturing facilities across eight states in India, two in Spain, and one in Mexico.
Angel Broking in its IPO note says, "Sandhar is continuously diversifying its product portfolio and expanding its customer base by offering high value-added products and focusing on exports. In terms of valuations, the pre-issue P/E works out to 25x 1HFY2018 annualized earnings (at the upper end of the issue price band), which is lower compared to its closest peer Minda Corporation (trading at 30x its 1HFY2018 annualized earnings)."
On financial front, consolidated revenue of the company increased from Rs 1,369.81 crore in FY14 to Rs 1,764.96 crore in FY17 reporting a CAGR of 8.8 per cent. EBIDTA grew to Rs 145.81 crore in FY17 from Rs 116.31 crore in FY14 with margins remaining range bound at 9 per cent in FY17. PAT grew from Rs 33.24 crore in FY14 to Rs 34.57 crore in FY17 and PAT margins improving from 2.6 per cent to 3.5 per cent over the same period. EBIDTA/PAT displayed a CAGR of 7.8 per cent/6 per cent over FY14 to FY17.
"We believe the company is well poised to capture market opportunities and benefit from expected growth in the automobile segment in India, especially growth expected in commercial vehicle segment and off-road vehicles on account of increase in infrastructure and agriculture activities," said brokerage KR Choksey in its report. In terms of valuation, on the upper price band of Rs 332, the company trades at a P/E of 29.2x on FY18E(annualized basis). We believe the issue is fairly valued and we recommend to “SUBSCRIBE for the long term”, it said.