A. balance Sheet

Particular (In Lakhs)	Mar-21	Mar-22	Mar-23
Equity Share Capital	20	20	720
Reserves	669	804	440
Borrowings	166	206	134
Trade Payables	37	28	40
Other Liabilities	355	409	325
Total Liabilities	559	644	499
Net Block	409	543	485
Other Assets	0.4	0.4	0.2
Total NC Assets	409	543	485
Receivables	508	459	613
Inventory	100	160	211
Cash & Bank	81	159	228
Other Assets	25	30	24
Face value	10	10	10

B. Profit & Loss Statement

Particular (In Lakhs)	Mar-21	Mar-22	Mar-23
Sales	1,553	2,102	2,904
Raw Material Cost	365	502	793
Change in Inventory	-49	12	-75
Employee Cost	838	991	1,223
Other Expenses	253	312	461
Other Income	20	16	15
EBITDA	166	301	517
EBITDA Margin	10.69%	14.33%	17.79%
Depreciation	54	64	85
Interest	12	16	24
Profit before tax	97	221	481
Tax	29	66	125
Net profit	69	155	356
NPM (%)	4.37%	7.33%	12.20%

C. Cash Flow Statement

Particular (In Lakhs)	Mar-21	Mar-22	Mar-23
Cash From Operating Activity
Profit From Operation	225	311	464
Receivable	-97	49	-153
Inventory	-24	-60	-51
Payable	-4	-9	12
Loans And Advances	1.5	2.8	2.6
Other WC Items	-14	34	39
Working Capital Changes	-138	17	-150
Direct Taxes	-46	-69	-107
Net Cash Inflow from Operating Activity	41	258	206
Cash from Investing Activity
Fixed assets purchased	-45	-198	-27
Investments purchased	-17	-4.7	0
Other investing items	8	18	6
Net cash inflow from investing activities	-54	-184	-21
Cash from Financing Activity
Proceeds from borrowings	61	90	0
Repayment of borrowings	0	-50	-73
Intrest paid fin	-12	-16	-24
Dividends paid	0	-20	-20
Net Cash Flow	35.38	78.30	68.62

 

Note: - There are no listed companies in India that are engaged in a business similar to this Company.

Review and Recommendation of Holmarc Opto-Mechatronics SME IPO by IZ team is 5/10

Company Overview

Holmarc Opto-Mechatronics Limited is a specialized manufacturer of a wide range of scientific and engineering instruments. Their product portfolio includes Imaging Instruments, Spectroscopy, Opto-mechanics, and Lab Instruments among others. The company is ISO 9001:2015 certified and is situated in Kerala, India, with a 29,984 sq.ft manufacturing facility.

Strengths

1. Diverse Product Line: Holmarc's diverse product offerings may make it resilient to market changes, as it isn't overly dependent on a single product segment. 2. Quality & Certification: Being ISO certified and having implemented quality management systems adds credibility to the company's operations. 3. Experienced Team: Skilled and experienced professionals in optics design, manufacturing, and R&D are a significant asset. 4. Organizational Stability: The firm appears to be stable with a well-defined organizational structure and smooth operations.

Financials

1. Growing Revenue: Sales have grown from ₹15 Cr in Mar-21 to ₹29 Cr in Mar-23. 2. Profitability: Net Profit Margin has improved from 4.37% in Mar-21 to 12.20% in Mar-23. 3. EBITDA Margin: Shows an improving trend from 10.69% to 17.79%. 4. Reduced Borrowings: Borrowings have decreased from ₹1.66 Cr in Mar-21 to ₹1.34 Cr in Mar-23, indicating better financial management.

Risks and Concerns

1. Working Capital: Negative working capital changes over the years suggest that the company might be facing issues in managing its short-term obligations. 2. Inventory: A rising inventory level, from ₹1 Cr to ₹2 Cr, may indicate either growing business or poor inventory turnover. 3. Issue Price: At ₹40 per equity share, the IPO is priced at 11x p/e which looks reasonable priced.

IPO Details

The IPO aims to raise ₹11.40 Cr with a lot size of 3000 shares. The company intends to use the funds for capital expenditure, working capital requirements, and general corporate purposes.

Conclusion

Holmarc Opto-Mechatronics Limited shows promise in terms of product diversity, quality, and financial growth. The improving profitability and reduced borrowings are positive signs. However, the company does have some areas of concern, such as working capital management for which they are raising funds. The valuation looks reasonable priced. Investors looking for a long-term investment in a specialized manufacturing company may consider this IPO. However, it would be advisable to dig deeper into the company's financials, assess the issue price carefully, and also look at market competitors before making an investment decision

Holmarc Opto-Mechatronics Limited Building No. 11/490, B-7, HMT Industrial Estate, Kalamassery, Kanayanoor Taluk, Ernakulam – 683503 Phone: +91 484 2953780 Email: cs@holmarc.com Website: https://www.holmarc.com/