i. Hanskumar Shamji Shah is the promoter, Chairman and Managing Director of the company. He was originally appointed on the board since incorporation.He is under-graduate. He has an overall experience of around35 years in healthcare products and services sector. He is currently involved in importing, manufacturing and marketing healthcare products and services. He oversees the entire business operations and overall functions of the Company and is responsible for overseeing the strategic growth initiatives and expansion plans. ii. Kaushik Hanskumar Shah is the promoter and Whole- Time Director of the company. He has completed his B.com from Commercial University Limited in the year 2006 and is having an experience of over 15 years in importing, manufacturing and marketing healthcare products and services. At present, he is responsible for the Finance, Accounting, Product Development and Quality in the company. We believe that his vast business acumen will provide the requisite value addition to the company. iii. Hemant Praful Shah is the promoter and Whole- Time Director of the company. He has a work experience of around 25 years in Product Development and Manufacturing of Healthcare and Surgical products.He is a high integrity energetic leader known for ability to envision and create successful outcomes in complex situations.

A) Balance Sheet

Particular (Lakh)	2021	2022	2023
Equity Share Capital	₹200	₹200	₹768
Reserves	₹653	₹1,114	₹1,591
Borrowings	₹1,446	₹973	₹711
Trade Payables	₹1,269	₹2,069	₹2,418
Other Liability	₹720	₹1,079	₹1,000
Total Liability	₹4,289	₹5,437	₹6,490
Fixed Assets Block	₹1,189	₹1,157	₹1,315
CWIP	₹0.00	₹0.00	₹0.00
Investments	₹118	₹81	₹36
Other Assets	₹424	₹436	₹468.02
Total Non-Current Assets	₹1,732	₹1,675	₹1,819
Receivables	₹427	₹1,565	₹1,719
Inventory	₹1,483	₹1,284	₹1,480
Cash and Cash Balance	₹151	₹582	₹845
Other Assets	₹0.00	₹0.00	₹0.00
Total Current Assets	₹2,062	₹3,432	₹4,046
Total Assets	₹4,289	₹5,437	₹6,490

B) P&L Statement

Particular (Lakh)	2021	2022	2023
Sales	₹5,976	₹10,357	₹10,914
Sales Growth	₹0.00	₹0.73	₹0.05
COGS	₹4,747	₹8,169	₹8,046
COGS % of Sales	₹79%	₹79%	₹74%
Gross Profit	₹1,229	₹2,187	₹2,868
Gross Margins	₹21%	₹21%	₹26%
Employee Benefit & Other Expenses	₹921	₹1,557	₹1,821
S&G Sales %	₹1%	₹15%	₹17%
EBITDA	₹307	₹629	₹1,047
EBITDA Margins	₹5%	₹6%	₹10%
Interest Cost	₹180	₹163	₹191
Interest %of Sales	₹3%	₹2%	₹2%
Depreciation	₹63	₹74	₹84
Dep %of Sales	₹1%	₹1%	₹1%
EBIT Margins	₹4%	₹5%	₹9%
Other Income	₹88	₹220	₹234
Earnings Before Tax	₹152	₹611	₹1,005
EBT % Sales	₹3%	₹6%	₹9%
Tax	₹37	₹149	₹240
Effective Tax Rate	₹25%	₹25%	₹24%
PAT	₹114	₹461	₹765
NPM	₹2%	₹4%	₹7%
No. of Equity Shares	₹20	₹20	₹76
Earning Per Share	₹5.73	₹23.07	₹9.96
EPS Growth %	₹0.00	₹3.03	-₹0.57
Dividend Per Share	₹0.00	₹0.00	₹0.00
Dividend Payout Ratio	₹0.00	₹0.00	₹0.00
Retained Earnings	100.00%	100.00%	100.00%

C) Cash Flow Statement

Particular (Lakh)	2021	2022	2023
Cash-Flow From Operations	-₹27	₹1,206	₹864
Cash-Flow from Investing	-₹232	-₹5.41	-₹159
Cash-Flow from Financing	₹51	-₹770	-₹441
Net Cash Flow	₹151	₹582	₹845

 

Review and Recommendation of Hemant Surgical SME IPO by IZ team is 6/10 1. Hemant Surgical manufacture, import, assemble and market a comprehensive portfolio of medical equipments and disposables.

2. Their product offerings cover a wide spectrum of equipments and disposables required for Renal Care, Cardiovascular disease, Respiratory disease, Critical Care and Radiology and Surgical disposables. 3. Their wide range of products include some of the indigenously manufactured products along with some other products that are imported from countries like: Japan, China France and Australia and are further processed in their assembly units. 4. In Fy23, 33% of the revenue comes from single product i.e. Mediatapes. 5. They have one manufacturing unit located at Achhad Industrial Estate and two assembly units located at Atgaon, Japan and Bhiwandi, India. Unit I at Achad Industrial Estate manufactures dialysis solutions, sterilants, purified water, and sanitizers. Unit II in Atgaon assembles medical devices under the brand name "Aero Plus" and processes imported catheters. Unit III in Bhiwandi assembles various medical equipment including infusion sets, ECG machines, ultrasound machines, and ventilators 6. The company has a significant dependency on imported products, raw materials, and components for its manufacturing and assembly line process. In recent years, import purchases accounted for a high percentage of total purchases, ranging from 69.10% in 2021 to 76.28% in Fiscal 2023. This heavy reliance on imports exposes the company to risks associated with international trade, such as changes in import regulations, supply chain disruptions, and currency fluctuations. It is crucial for the company to closely monitor and manage these risks to ensure the stability and continuity of its operations. 7. Revenue has grown from 60 Cr in Fy21 to 110 Crores in Fy23. It is growing at CAGR of 35% in the last 3 years. 8. Gross Margin in the business is between 21%-26%, which is decent enough. 9. EBITDA margins have grown considerably from 5% in Fy21 to 10% in Fy23. 10. PAT has increased from ~1.14 Cr in Fy21 to 7.65 Cr in Fy23. 11. Debt on books is ~7 Crores which is quite manageable. 12. Asking P/E is 12x based on Fy23 numbers. 13. ROE considering post-IPO net-worth stands at 14% based on Fy23 profit. Which is decent enough.

Hemant Surgical Industries Limited 502, 5th Floor, Ecstacy Business Park, Co-Op Society Limited, J.S.D. Road, Mulund (West), Mumbai – 400 080 Phone: 022-25915289/ 022- 259127 Email: cs@hemantsurgical.com Website: http://www.hemantsurgical.com/