Pennar Engineered Building Systems Ltd IPO Reviews and Recommendations are as Under.
Philip Capital has the following Recommendation,
At the upper band of Rs 178, the stock is priced at 28x FY15 earning and P/BV of 5x. The company has healthy margins and a strong balance sheet and return ratios. Considering leadership position and growth opportunities in sectors such as infrastructure, warehousing, solar, and industrial development, we recommend Subscribe.
IndiaNivesh Capital has the following Recommendation,
Outlook and Valuation: PEBS is a strong company with healthy balance sheet and technology advantage in the Indian PEB market. At higher price band of Rs 178, Company is available to FY15, FY16E and FY17E, PE multiple of 28.2x, 19.2x and 14.4x. Company has reported average ROE of 22.2% for the FY11-15 period, which justifies the given PE multiple. We recommend subscribe for the PEBS Issue.
NirmalBang has the following Review
At the upper band of IPO price of Rs178, PEBSL is attractively placed at 15.5x/7.6x FY17E P/E and EV/EBITDA, respectively. Likely revenue/EBITDA/PAT CAGR of 22.7%/24.4%/32.4% to Rs8,311mn/Rs901mn/Rs510mn, respectively, coupled with a decline in working capital requirement from 16.9% to 11.8% leading to a healthy operating cash flow of Rs1,319mn, debt-free status with a cash surplus of Rs918mn and a 371bps improvement in post-tax RoIC to 24.9% from 21.2% over FY15-FY18E should command a premium valuation of 22x-25x FY17E P/E. Based on 22x/11.1x FY17E P/E and EV/EBITDA, the one- year target price of PEBSL is seen at Rs252, up 42% from the upper IPO price band of Rs178. We recommend subscription to the IPO at the upper price band.
