Sanjay Kumar Pandey, aged 54 years is one of the Founding Promoters and currently designated as Chairperson and Whole-time Director of the Company. He was appointed on the Board of the Company w.e.f November 01, 2006. He does not have any specific qualification & does not hold any Bachelor / Master or any professional degree. He has more than three decades of experience in the field of Moulds and Dies Industry. He is responsible for the manufacturing and overall working of the Company. He sets and evolves the strategic direction for the company and its portfolio of offerings, while nurturing a strong leadership team to drive its execution. Satish Kumar Pandey, aged 51 years is one of the Promoters and currently designated as Managing Director of the Company. He was appointed on the Board of the Company w.e.f October 01, 1993. He has completed his Bachelor degree in Commerce from Mumbai University in the year 1993. He has more than three decades of experience in the field of Moulds and Dies Industry. He has also being appointed as Chief Financial Officer w.e.f May 22, 2023. He is responsible for the implementing the marketing strategy and business development of the company. He has been integral part of the company and responsible for formulating various strategies and providing guidance for its implementation in the Company Ragini Pandey, aged 50 years is one of the Promoters and currently designated as Whole-time Director of the Company. She was appointed on the Board of the Company w.e.f October 01, 1993. She has obtained her Bachelor’s degree in Commerce from Delhi University in the year 1994. She has more than three decade of experience in the field of Moulds and Dies Industry. She is responsible for the day to day operations and Business Development of our Company

Note: - There is no listed companies related to this company.

Review And Recommendation of Sunita Tools SME IPO by IZ team is 2/10

Sector Overview:

The engineering and mould base industry, where Sunita Tools operates, is a critical backbone to various manufacturing sectors in India, such as Automotive, Pharmaceutical, and Electronics. The company specializes in Ground Plates, Mould Bases, and Precision CNC Machining—products that are essentially capital goods with stringent quality requirements. With the Indian government's 'Make in India' initiative, there has been an increased focus on manufacturing, offering a conducive environment for companies like Sunita Tools.

Market Potential:

1. Diverse Client Base: The company serves a range of industries, providing it with a diversified revenue stream. 2. Global Reach: With a presence in countries like the U.K., U.S.A, and U.A.E., the company has international market exposure, which can help cushion against domestic market volatility. 3. Strategic Location: The manufacturing facility in Vasai, Mumbai, offers logistical and infrastructural advantages.

Competitive Strengths:

1. Experienced Management: With more than three decades of experience in the field, the management team has proven expertise. 2. Quality and Setup: The company has established a reputation for quality, bolstered by a well-equipped manufacturing setup. 3. Customer Relations: Long-standing relationships with customers indicate a stable and recurring revenue model.

Financials:

1. The revenue increased from INR 6.66 Cr in 2021 to INR 13.84 Cr in 2023. However, in 2014, the revenue was INR 8.53 Cr and in 2022, the revenue is INR 8.73 Cr. No growth in the business. 2. In Fy23 when Revenue has gone up from INR 8.73 Cr to INR 13.84 Cr, the receivables shoot up INR 2.78 Cr to INR 6.18 Cr. Due to this high receivables the company has not generated a positive cash flow from operations in Fy23. 3. The net-worth is negative. INR 16 Cr debts on books which is high considering they have Negative Net-worth.

Challenges

1. Regulatory Risks: The engineering and mould base industry is subject to various regulations and quality standards, non-compliance with which can result in hefty penalties. 2. Market Competition: The sector is highly competitive, both domestically and internationally. Maintaining a competitive edge in terms of quality and pricing will be crucial. 3. Input Cost Volatility: The industry often relies on various raw materials whose prices can be volatile, impacting the cost of production. 4. Technological Obsolescence: With rapid advancements in technology, there's always a risk of existing machinery or techniques becoming obsolete. 5. Global Economic Factors: Being in a business with international exposure, the company is susceptible to global economic uncertainties, including currency fluctuations and trade barriers. 6. Talent Acquisition and Retention: Skilled labor is essential for maintaining product quality. Any inefficiency in acquiring and retaining talent can impact operations.

Conclusion

Revenue Stagnation:

A lack of revenue growth from ₹8 Cr in 2014 to ₹8 Cr in 2022 suggests that the company has struggled to expand its market presence or increase sales over an extended period. This could be a red flag for potential investors looking for growth.

Increased Receivables:

The spike in sales in FY23 to ₹13 Cr is offset by a significant increase in receivables, from ₹3 Cr in FY22 to ₹6 Cr in FY23. This indicates that the company might be selling more but is not collecting the payments in a timely manner, leading to negative cash flow from operations.

Negative Net Worth:

A negative net worth indicates that the company has more liabilities than assets, which is a concerning sign about its financial stability. Being in a loss for several years is an additional point of concern.

Offer for Sale (OFS):

An OFS by the promoters might suggest that they are trying to exit or reduce their stake, which could be interpreted as a lack of confidence in the company's future prospects. This is often seen as a negative sign, especially for SME IPOs where promoter commitment is critical for the success of the business. Given the stagnant revenue growth, increased receivables, negative cash flows, and negative net worth, along with the OFS from the promoters, the investment in this IPO does seem risky. The financial indicators and actions by the promoters suggest that there might be underlying issues that could affect the company's long-term viability.

Sunita Tools Limited Survey No. 66, Plot No. A, Valiv, Sativali Road, Vasai East, Palghar, Thane - 401208 Phone: +91 9136019995 Email: info@sunitatools.com Website: http://www.sunitatools.com/index.php