Mr. Sanjay Gupta, is the Managing Director and one of the Promoters of the Company. He has been on the Board of Directors of the Company since March 12, 2008 and was appointed as the Managing Director and Chairman of the Company since March 10, 2022.He holds a Bachelor of Commerce from the University of Delhi. He possesses approximately 26 years of experience in electrical industry. He has been instrumental in planning and formulating the overall business and commercial strategy and developing business relations of the Company. He oversees the entire planning of the manufacturing, sales and finance departments of the Company. Mrs. Sonia Gupta, is a Whole-time Director one of the Promoters of the Company. She has been on the Board of Director of the Company since March 21, 2008. She holds a degree in Bachelor of Arts (Honours) from University of Delhi. She has approximately 26 years of work experience in the electrical industry. She has been instrumental in planning and formulating the overall business and commercial strategy and managing the financial planning of the Company Mr. Aditya Gupta, is a Whole-time Director of the Company. He has been associated with the Company since March 31, 2019. He holds a degree in Bachelor of Arts from Wesleyan University. He has approximately 7 (seven) years of work experience in the electrical and solar industry. He manages the sales planning of the Company along with planning and implementing the business strategies.

A. Balance Sheet

Particular (In Million)	Mar-21	Mar-22	Mar-23
Equity Share Capital	38.19	305.52	305.52
Reserves	357	150	225
Borrowings	433	401	397
Trade Payables	103	109	105
Other Liabilities	62	76	89
Total Liabilities	992	1041	1121
Net Block	196	228	228
Capital Work in Progress	0	0	28
Other Assets	13	15	11
Total NC Assets	209	243	267
Receivables	466	443	521
Inventory	286	309	299
Cash & Bank	0.1	0.1	3
Other Assets	32	46	30
Face value	10	10	10

B. Profit & Loss Statement

Particular (In Million)	Mar-21	Mar-22	Mar-23
Sales	1,454	1,768	1,825
Raw Material Cost	1,131	1,386	1,346
Change in Inventory	-4	-9	49
Employee Cost	80	109	116
Other Expenses	139	149	157
Other Income	2	2	1
Depreciation	12	13	13
EBITDA	111	134	158
EBITDA Margin	7.62%	7.55%	8.66%
Interest	37	34	42
Profit before tax	61	86	103
Tax	19	27	28
Net profit	42	60	75
NPM (%)	2.91%	3.37%	4.11%

C. Cash Flow Statement

Particular (In Million)	Mar-21	Mar-22	Mar-23
Cash From Operating Activity
Profit From Operation	113	137	160
Receivable	-170	21	-81
Inventory	6	-23	10
Payable	10	6	-4
Other WC Items	34	-16	24
Working Capital Changes	-121	-11	-51
Direct Taxes	17	15	23
Net Cash Inflow from Operating Activity	-24	110	86
Cash from Investing Activity
Fixed assets purchased	-13	-44	-12
Fixed assets sold	3	0	0
Other investing items	2	1	-27
Net cash inflow from investing activities	-8	-42	-39
Cash from Financing Activity
Proceeds from borrowings	71	0	0
Repayment of borrowings	0	-32	-4
Intrest paid fin	-37	-34	-42
Other financing items	-1.9	-1.9	-0.5
Net Cash Flow	0.01	-0.02	-0.01

 

Name of the Company	Revenue (In Crore)	PAT (In Crore)	EPS ( in Rs)	P/E	CMP	Mcap (In Crore)
Plaza Wires Limited	182	8	1.71	31.5	54	236
Cords Cable Industries Ltd	526	7	5.58	17.9	101	131
Ultracab (India) Ltd	107	6	0.61	26.4	16	153
V-Marc India Limited	245	10	4.59	21.7	99.4	226
Dynamic Cables Limited	669	31	14.09	28.6	457	1,006
Paramount Communications Limited	794	48	2.46	26	64.5	1,440

* All the data is as per FY23.

Review and Recommendation of Plaza Wires by IZ team is 5/10

A) Business Model Overview Plaza Wires operates under the umbrella of multiple brands like "PLAZA CABLES," "Action Wires," and "PCG." The company is certified under ISO 9001:2015 and 14001:2015, signaling a commitment to quality and environmental sustainability. Their diversified product range includes wires, cables, FMEG (Fast Moving Electrical Goods), and more.

B) Financial Snapshot

Plaza Wires Limited exhibits a robust financial position, characterized by consistent revenue growth, improving operational efficiency as indicated by rising EBITDA, and an upward trajectory in net profits. The company's balance sheet is resilient, marked by a declining Debt-to-Equity ratio, which suggests reduced financial risk. The current ratio remains strong, highlighting excellent liquidity. Moreover, Plaza Wires has turned its operational cash flow positive in recent years, further strengthening its financial health. Return metrics like ROE at 13.5% is impressive, indicating an efficient allocation of equity and capital. Overall, the company appears to be financially sound and operationally efficient, based on the available data.

C) Objectives of the IPO

1. Capital Expenditure: To fund a new manufacturing unit. 2. Working Capital: To meet the company's working capital requirements. 3. General Corporate Purposes: Miscellaneous needs.

D) Comparison with Peers and Valuation

When compared to peers, Plaza Wires has a higher P/E ratio of 31.5. This signal that the stock is slightly overvalued. The Mcap is ~236 Cr.

E) Prospects and Challenges in the Wire and Cable Sector in India

1. Growth Prospects a) Infrastructure Boom: With India eyeing to become a $5 trillion economy, the demand for electrical infrastructure will surge, positively impacting the wire and cable industry. b) Green Energy: The push towards renewable energy sources like solar and wind energy will necessitate a robust cable and wire infrastructure. c) Smart Cities: The Smart Cities Mission in India will require advanced electrical systems, thereby increasing demand. d) Automotive Sector: The rise in electric vehicles will also lead to increased demand for specialized cables and wires. 2. Challenges 1. Raw Material Price Fluctuation: The industry is susceptible to fluctuations in the prices of raw materials like copper and aluminum. 2. Unorganized Market: A significant portion of the market is unorganized, which impacts the pricing strategy and profitability of organized players. 3. Regulatory Hurdles: Compliance with various quality standards can be challenging and time-consuming. 4. Technology Upgradation: Continuous investment in technology to meet evolving standards is required, which can strain finances.

F) Conclusion and Recommendations

Plaza Wires appears to be a steadily growing company with a focus on product diversification and quality. However, the slightly higher P/E ratio and the company's borrowings could be points of concern. Given the positive growth prospects in the wire and cable sector in India, an investment in Plaza Wires may offer reasonable returns, but potential investors should exercise caution and delve deeper into the company's financials and future plans.

Plaza Wires Limited A-74 Okhla Industrial Area, Phase-2 New Delhi South Delhi - 110020 Phone: 011-66369696 Email: compliance@plazawires.in Website: https://www.plazawires.in/