Subscribe to Opal Luxury IPO, says Ajcon Global

Ajcon Global has come out with its report on Opal Luxury Time Products IPO. The research firm feels premium is justified on IPO pricing. Hence, investors can subscribe to this issue for long term, the firm adds.

Ajcon Global research report on Opal IPO

Opal Luxury Time Products is a Pune based company, into the business of manufacturing and marketing of High-end Designer Wall Clocks and Table Clocks with the brand name OPAL(above Rs. 1500) and CALIBER (price below Rs. 700). The facility for manufacturing of clocks is based at Roorkee, Uttarakhand where all manufacturing and other peripheral activities are carried out. The company has recently started exporting to the United States. Brand 'Opal' has a wide presence with the products marketed by a network of 9 distributors, 242 dealers and 91 organized retailers which include popular brands such as Shoppers Stop, Home Town, etc. The company has also ventured into online sales by way of popular online shopping portals and currently have tie ups with 10 online portals and also have its own shopping portal at opalclocks.com.

The Company's net revenues have witnessed at a two-year CAGR of 26% to Rs. 172 mn in FY12 driven by volume growth, supported by expansion in the distribution network. EBITDA margin too improved from 22.4% in FY10 to 27.2% in FY12 owing to lower raw material and marketing expenses. Raw material costs as a percentage of sales declined because of lower imports coupled with increase in realisation rates of brand Opal. Net income has increased at a two-year CAGR of 41% from Rs.14.5 mn in FY10 to Rs. 28.9 mn in FY12 because of increase in EBITDA margins and income tax benefits available in Roorkee, where the manufacturing unit is located.

OLTP is valued at 16x Annualized EPS/share of Rs. 8.4 on post IPO equity at upper end of the price band. With due consideration to factors like a) premium product portfolio with aesthetic designs commanding higher margins, b) first mover advantage with decent growth, c) consistent product innovation, d)good demand outlook owing to rising discretionary spend, e)superior margins and strong profitability, e)good return ratios, we feel premium is justified on IPO pricing and hence recommend investors to "SUBSCRIBE" the issue for long term as the Company has a big journey ahead of capturing higher market share.

Also Read: SME: Ashapura Intimates IPO to open on March 28

Disclaimer: The views and investment tips expressed by investment experts/broking houses/rating agencies on moneycontrol.com are their own, and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.

Anda sedang membaca artikel tentang

Subscribe to Opal Luxury IPO, says Ajcon Global

Dengan url

https://rokokkanker.blogspot.com/2013/03/subscribe-to-opal-luxury-ipo-says-ajcon.html

Rokok Kanker