(i) Deccan Healthcare has a diversified product portfolio with product basket consisting of more than 1,500 products used for various purposes such as hair care, skin care, heart care, immunity building, etc.
(ii) The company supplies products in various forms such as tablets, capsules, gel, liquids, ointments, powder, pastes, etc. It mainly develops and markets differentiated healthcare products specializing in nutraceutical and cosmeceutical products, which it commercializes through different revenue channels.
(iii) As on the date of the Draft Red Herring Prospectus, it has more than 140 distributors and around 5,000 marketing agents. To expand its reach, it has also entered into two distributorship agreements with foreign distributors situated in Kenya and Tanzania respectively.
(iv) In 2010, it set up its manufacturing facility at SIDCUL Pantnagar Rudrapur, Uttarakhand. The facility complies with GMP and WHO GMP for its health/diet supplements and ayurvedic products. It has also obtained FSSAI license for its products. The company is also an ISO 9001:2008 certified for Quality Management System for manufacturing and supply of Nutraceutical & Pharmaceutical Products. It Spread over 3,536 Sq. mts., the manufacturing facility is equipped with the requisite plant and machinery including Effluent Treatment Plant and other resources required for a manufacturing process.
(v) The Company sells products via Online mode and Offline Mode. 72% of the sales come from Offline and 28% comes from Online. For online they have an e-commerce platform. In FY18, their sales were close to 39 Cr, out of which 29 Cr comes from Offline and 10.50 Cr from Online. The company is targeting e-commerce revenues of Rs. 100 crore in 5 years from Rs. 10.50 crore in FY18.
Objects of the Deccan Health Care Limited IPO:
Deccan Health Care Limited IPO
1. Repayment/Prepayment of certain Secured Borrowings availed by the Company.
2. Purchase of Plant & Machinery and related civil work.
3. General Corporate Purposes.
Promoters of Deccan Health Care Limited Company are:
Mr. Minto Purshotam Gupta
Mr. Hitesh Patel
Financials of Deccan Health Care Limited IPO:
A> Growth of the Company
The company has shown excellent Growth in the last 3 years in terms of Revenue, PAT and EPS.
B> Valuation of the Company (Post Issue)
The Valuation in terms of EV/EBITDA, Mcap/Sales and P/E*P/B looks stretched.
[ If EV/EBITDA>10, Mcap/Sales>2, and P/E*P/B>22.5, we may conclude the Valuations are stretched ].
C> Leverage Ratio(Based on FY18 Financials)
Interest Coverage Ratio
The Leverage Ratios in terms of D/E and Interest Coverage Ratio are quite comfortable.
D> Margins and Return Ratios
The Company has shown excellent growth in OPM and NPM in the last 3 years. The Return Ratios of ROE and ROCE are also excellent.
Comparison With Peers:
Note: The Financials of FY18 has been used for peer comparison.
Source: DRHP and Moneycontrol
Recommendation on Deccan Health Care Limited IPO:
Review and Recommendation of Deccan Health Care Limited IPO from our side is: 4/10[ The Company has shown excellent growth in the last 3 years. However, the asking Price at 100 looks stretched. The company has a lot of Outstanding Litigation and Criminal Cases against the promoter which does not augur well for the company. ]