📌📌Canarys Automations solutions✅ has provided Business applications to over 1000+ customers. Besides India, the company has serviced customers from USA, UK, Canada, Germany, Singapore, Malaysia, Brunei, Australia, Srilanka and Indonesia 💫. These customers come from diverse industries.
▪️The company span across various industry sectors, including BFSI, Aviation, Energy, Education, logistics, Retail, Healthcare, Pharmaceutical, Manufacturing, Insurance 🔥, and more.
📌📌 ➡️ ➡️
▪️Incorporated in 1991, Canarys Automations Limited✅ provides IT solutions in the space of Digitalization, Modernization, Automation, and Intelligence.
📌The company has two business verticals:
➢ Technology solutions: This includes a multiple array of consulting solutions in Digitalization, Modernization, Cloudification, Automation, Transformation, and Intelligence.
Technology expertise includes DevOps Consulting (Azure, GitHub, Atlassian, GitLab, etc.), Cloud Consulting (Azure, AWS, GCP), Digital Enterprise Solutions using SAP, MS Dynamics 365, RPA, Digital Applications, and Mobility Solutions. (60% of Revenue✅)
➢ Water Resource Management Solution: This involves automation solutions to modernize irrigation water conservation and improve water use efficiency, Turnkey flood risk assessment and mitigation, cloud-based water utilization process automation for water sharing in rivers and canals, and SCADA gate control systems.(40% of Revenue✅).
▪️CAL is a Niche player💫 in IT automation solutions and Water Resource Management.
➢ The company posted PAT margins of 8.21 % (FY21), 8.85% (FY22), and 11.44% (FY23). This indicates the bright prospects ahead for this company.
📌GROWTH OF COMPANY:
1991:Incorporation
2002:Setup US office.
2004:Entered Partnership with multiple MNC's✅.
2010: Start of WRM services.
2018:DevOps partner of the year award from Microsoft.
2020:Secured national hydrology projects from multiple state government.✅
2023:Recognition as the "most innovative DevOps company, leaders in devops soltuions.
📌📌
▪️IPO price: Rs.31
▪️IPO size: Rs. 47.03CR (Anchor allocated 10Cr (lockin), so effective Size is 37Cr)
▪️CMP:Rs 39.25
▪️Market cap: 220CR
▪️P/E: 25✅
▪️EPS:Rs.1.52
▪️52 Wk High: 44.9
▪️52 Wk Low: 39.25
▪️RoNW: 31.64%
▪️Assets:Rs.63.77Cr
▪️Total Borrowing:14.15Cr (Reserves and Surplus:16.09Cr)
📌FINANCIALS:
▪️FY23 revenue is 75.47 CR as compared to 51.99 CR(FY22), 46%✅ growth yoy.
▪️FY23 PAT is 8.52 CR as compared to 4.55 CR(FY22), 88%✅ growth yoy.
▪️193%🔥 growth in revenue in last 2 years.
▪️305%🔥 growth in PAT in last 2 years.
(It has orders on hand worth Rs. 57.93 cr. as of August 31, 2023.✅)
➢FY24 Target-100Cr🔥
➢Fy25 Target-130Cr🔥 (as per the rhp)
📌Anchor Investors:(22% of IPO size allocated to them):-
➢Negen Undiscovered Value Fund allocated 12.92L shares
➢Finavenue Growth Fund allocated 9.68L shares
➢Saint Capital Fund allocated 6.48L shares
➢VPK Global Ventures Fund allocated 3.24L shares
( At price Rs.31✅)
📌IPO funds:
From the net proceeds of the IPO funds, it will utilize Rs. 11.00 cr. for solution development for digital transformation and water resources management solutions, Rs. 8.94 cr. for upgrading existing facility and creation of a new delivery center including related infrastructure✅, Rs. 15.00 cr. for working capital and the rest for general corporate purposes.
📌PEERS:
As per the offer documents, the company has shown All T Technologies, and Happiest Minds as their listed peers. They are trading at a P/E of 30.56 and 62.74✅ (as of September 25, 2023). However, they are not comparable on an apple-to-apple basis.
📌CLIENTS:
SIEMENS, ABB, PHILIPS, MICROSOFT, Price water house Coopers International Limited🔥.
📌SECTOR GROWTH:
▪️In FY2023, India’s technology industry revenue including hardware is estimated to cross $245 Bn(8.4% y-o-y growth), an addition of $19 Bn over last year. Exports at $194 Bn, are expected to grow at 9.4% in reported currency terms and 11.4% in constant currency terms. Domestic technology sector is expected to reach $51 Bn, growing at 4.9% y-o-y✅.
▪️IT services is expected to grow to 8.3% in FY 2023 compared to last year. The key drivers of growth include Application Modernization, Cloud Migration, Platformization, and Cybersecurity.
▪️ The Government is also playing a key role as an enabler of technology by building public platforms, digital public infrastructure and other projects, making the 'Digital India' initiative a reality.
▪️Central Water Commission✅ has taken up a new initiative “Support for Irrigation Modernization Program (SIMP)” with technical assistance from the Asian Development Bank (ADB) to modernize Major / Medium Irrigation (MMI) projects in the country.
▪️The Jal Jeevan Mission✅ - Urban launched on 2nd February 2021 was rolled-out to provide a comprehensive and holistic approach to achieve a water-resilient future for India and tackle water risks which are more intense and frequently occurring. ✅
📌STRENGTH:
➢High Quality Standards✅ (complying with Hydrology, Meteorology and IT consulting space)
➢Sustainability✅ (provides future proof solution)
➢Skilled and Experienced Senior Leadership.
➢Value Creation Approach (Enhancing operational efficiency)
📌FUTURE PLAN:
▪️International Expansion🔥 (currently 51% international Revenue).
▪️Market specific technology offerings (category leadership in 3-4 Niche technology soltuions).
▪️Expansion of Water Resource Management Solutions business ( Jal Shakti Ministry of the Government of India and Central Water Commission initiatives are leading to a significant investment in Water Resource Management and Automation projects in the country).
📌Disclosure: Not a buy recommendation. only for study and education purpose. Please consult your financial advisor before investing.
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